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Lyons vs. US

The case is all about the APPEAL from an order of the Court of First Instance of Manila.

FACTS

The !laintiff brou"ht this action before the Court of First Instance of Manila to collect several sums ofmoney arisin" from a contract entered into bet#een !laintiff and defendant.

$efendant filed a Motion to $ismiss on the "round that the court has no %urisdiction over defendant andover the sub%ect matter of the action. The court SUSTAI&E$ the motion on the "rounds that '() the

court LAC*S +U,IS$ICTI-& over defendant it bein" a soverei"n state #hich cannot be sued #ithout

its consent/ and '0) !laintiff failed to e1haust the administrative remedies !rovided for in Article 22Iof the contract. Plaintiff too3 the case on a!!eal directly to this court.

(st issue $ismissal for lac3 of %urisdiction due to state4s immunity from suit.

It a!!ears that !laintiff and defendant entered into a contract for stevedorin" service at the US &aval

5ase Subic 5ay Phili!!ines. The contract #as entered into !ursuant to the !rovisions of Section 0 'c)

'() of the Armed Services Procurement Act of (678 of the United States of America 'Public La# 7(9:;th Con"ress).

<It is an established !rinci!le of +uris!rudence in all civili=ed nations restin" on reasons of !ublic !olicy because of the inconvenience and dan"er #hich #ould follo# from any different rule that the

soverei"n cannot be sued in its o#n courts or in any other #ithout its consent and !ermission.

Accordin"ly other than those instances #here the US has consented to be sued US is immune from

suit u!on claims a"ainst it or debts due by it. The only ,EME$> is by an APPEAL to Con"ress.?

<In the case of Sy@uia v Lo!e= an action #as brou"ht a"ainst he Army -fficers for the recovery of

 !ossession of certain a!artments but also to collect bac3 rents. e held that the claim and %ud"ment#ill be a char"e a"ainst and a financial liability to the US Bovt since the officers has acted in their

official ca!acities as a"ents of the said "overnment. Conse@uently the !resent suit should be re"arded

as a"ainst the US Bovt. Therefore suit cannot be entertained by the trial court for lac3 of %urisdiction.?

o#ever it is contended that #hen a soverei"n state enters into a contract #ith a !rivate !erson the

state can be sued u!on the theory that it has descended to the level of an indiviadual from #hich it can be im!lied that it has "iven its consent to be sued under the contract. Thus $efendant sites Santos v

Santos

<If the State or its Bovt enters into a contract throu"h its a"ents for a le"itimate aim #hereby mutualor reci!rocal benefits accrue and ri"hts and obli"ations arise therefrom and the la# "rantin" the

authority to enter does not !rovide for the officer a"ainst #hom action may be brou"ht in the event of a

 breach the state itself may be sued even #ithout its consent. In order to !reserve the di"nity of thestate the sacredness of the institution the res!ect for the "overnment must be !reserved and the

dra""in" of its name in a suit to be !revented the le"islative de!artment should name the officer of

a"ent a"ainst #hom the action may be brou"ht in the event of breach of the contract entered into underits name and and authority. The lac3 thereof is not an im!ediment on the !art of the individual to

 !ursue le"al action a"ainst the state. The descend of the soverei"n state to the level of the individual or

citi=en #ith #hom it entered into a contract and its consent to be sued im!lied from the act of enterin"

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into such contract.?

e a"ree to the contention that the US Bovt throu"h its a"ency at Subic 5ay entered into a contract

#ith a!!ellant for stevedorin" and miscellaneous labor services #ithin the Subic 5ay area. The Trialcourt therefore has %urisdiction to entertain this case in so far as a!!ellee is concerned.

0

nd

 issue failure to e1haust administrative remedies first before an action could be ta3en in courta"ainst the US Bovt.

A,T 22I. Disputes.

(.  Any dispute concerning of a fact arising under this contract which is not disposed of by

agreement shall be decided by the Contracting Officer.

0. Within 30 days from the date of receipt of the decision, the Contractor may appeal to the

 Secretary of the Navy where he would be afforded an opportunity to be heard and to offer

evidence in support of its appeal.

9.  Decision of the Secretary shall be final and conclusive unless determined by the court ofcompetent !urisdiction to have been fraudulent, arbitrary, capricious, or so grossly erroneous

as necessary to imply bad faith."

ence it is only after the claim has been decided on a!!eal by the Secretary that !laintiff can resort to

a court of com!etent %urisdiction.

EL$ It a!!earin" in the com!laint that a!!ellant has not com!lied #ith the !rocedure laid do#n in

Article 22I of the contract re"ardin" the !rosecution of its claim a"ainst the US Bovt or stated

differently it failed to first e1haust its administrative remedies a"ainst Bovt the lower court acted

properly in dismissing this case.

EFFECTIVE NATIONALITY LIN D is used to determine #hich of the t#o states of #hich a

 !erson is a national #ill be reco"ni=ed as havin" the ri"ht to "ive di!lomatic !rotection to the holder ofdual nationality. 'The &ottebohm Case Liechtenstein v. Buatemala)

Althou"h each state has the ri"ht to decide #ho are its nationals usin" either the !rinci!le of !us sanguinis or !us soli or nationali=ation la#s. o#ever for a state to claim a !erson as a national the

state must have reasona!le connection or an e""ecti#e lin$  #ith that !erson. The consent of the

individual alone is not enough for him to be reco"ni=ed by other states as a national of the state to#hich he claims to belon".

<&ottebohm #ith the sole aim of thus becomin" #ithin the !rotection of Liechtenstein but not of

 becomin" #edded to its traditions its interests its #ay of life or of assumin" the obli"ations D otherthan fiscal obli"ations D and e1ercisin" the ri"hts !ertainin" to the status thus re@uired Buatemala is

under no obli"ation to reco"ni=e a nationality "ranted in such circumstances. Liechtenstein

conse@uently is not entitled to e1tend its !rotection to &ottebohm.