Ruiz vs Cabahug (G.R. No.

L-9990)
Constitutional Law
ENRIQUE J. L. RUIZ and JOSE V. HERRERA, in their behalf and as minority stockholders of the Allied
Technologists, Inc., plaintiffs-appellants,
vs.
HON. SOTERO B. CABAHUG, Secretary of National Defense, Col. NICOLAS JIMENEZ, Head of the
Engineer Group, Office of the Secretary of National Defense, THE FINANCE OFFICER of the Department
of National Defense, the AUDITOR of the Department of the National Defense, PABLO D. PANLILIO and
ALLIED TECHNOLOGISTS INC., defendants-appellees.

Ponente:
LABRADOR, J.

Action:
Appeal from a judgment of the Court of First Instance of Manila dismissing plaintiffs' amended complaint

Facts:
On July 31, 1950 Hon. Sotero B. Cabahug (Secretary of National Defense) accepted the bid of the Allied
Technologists, Inc., to furnish the architectural and engineering services in the construction of the Veterans
Hospital at a price of P302,700. The plans, specifications, sketches and detailed drawings and other architectural
requirements submitted by the Allied Technologists through its architects, Enrique J. L. Ruiz, Jose V Herrera and
Pablo D. Panlilio were approved by the United States Veterans Administration in Washington, D.C. When the
officials of the Department of National Defense paid the Allied Technologists the contract price for the
architectural engineering service, they retained 15 per cent of the sum due, for the reason that Mr. Panlilio has
asserted that he is the sole and only architect of the Veterans Hospital to the exclusion of his fellow architects
Ruiz and Herrera, an assertion aided and abetted by Col. Nicolas Jimenez. This action deprived Mr. Ruiz and
Mr. Herrera monetary value of their professional services and damaged their professional prestige and standing.

Issues:
Whether or not the government can be sued for withholding the 15% of the sum and depriving the plaintiffs of
their share.

Ruling:
The order of dismissal is hereby reversed and set aside, and the case is remanded to the court a quo for further
proceedings. With costs against the defendants-appellees.

Ratio Decidendi:
The case is a not a suit against the government, which could not be sued without its consent. It was found that
the government has already allotted the full amount for the contract price; it was the defendant-officials which
were responsible for the allegation. This was to be directed to the officials alone, where they are compelled to act
in accordance with the rights established by Ruiz and Herrera or to desist from paying and recognizing the rights
and interests in the funds retained and the credit for the job finished. The order of dismissal was reversed and
set aside and the case was remanded to the court a quo for further proceedings with cost against the
defendants.