The Doctrine of State Immunity

3. Ruiz vs. Cabahug – 54 O.G.351

Facts:

The Secretary of National Defense, defendant Hon. Sotero B. Cabahug, accepted the bid of Allied
Technologists, Inc. on July 31, 1950 for the furnishing of the architectural and engineering services in the
construction of the Veterans Hospital at the price of Php 302, 700. The architectural requirements were
submitted by Allied Technologies through Enrique Ruiz, Jose Herrera and Pablo Panlilio and were
approved by the United States Veterans Administration and a contract was signed due to the technical
objection to the capacity of the said company in the practice of architecture and upon the advice of the
Secretary of Justice. The defendants allegedly took 15% of the sum due to Allied Technologies, Inc. at
the time of the payment of the contract price for the reason that Panlilio asserted that he is the sole
architect of the Veterans Hospital, excluding Ruiz and Herrera, the assertion of which was abetted by
defendant Jimenez (the first cause of action). The plaintiffs were to be deprived of their share of
professional services and their professional prestige and standing were to be gravely damaged unless
the defendants are prevented from recognizing Panlilio as the sole architect. Furthermore, the second
cause of action is Title II of the contract where at any time prior to six months after completion and
acceptance of the work under Title I, the Government may direct Allied Technologists, Inc. to do the
services stated in said Title II yet nevertheless the completion the government declined to direct the
plaintiffs to perform the job.

Issue:

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

Ruling:

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 them 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 costs against the defendants.