Lyons Vs US

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Harry Lyons, Inc. vs.

The United States of America


September 26, 1958

Facts:

Plaintiff and defendant entered into a contract for stevedoring service at the U.S. Naval Base, Subic Bay.
The contract was to terminate on June 1956. The contract entered into was pursuant to the provisions
of Section 2 (c) (1) of the Armed Services Procurement Act of 1947.

Plaintiff (Lyons) brought action to collect sums of money arising from the contract entered between
plaintiff and defendant (US). Action was filed in the Court of First Instance of Manila.

Defendant US filed a motion to dismiss on the ground that the Court has no jurisdiction, it being a
sovereign State which cannot be sued without its consent.

US contends that it is an established principle of jurisprudence that sovereign cannot be sued in its own
courts, or in any other, without its consent and permission.

Issue: Whether or not the trial has jurisdiction over the case

Ruling:

Yes. The Court ruled that Trial Court has jurisdiction over the case considering that the US Government
through its agency at Subic Bay entered into a contract with appellant, it can be sued upon the theory
that it has descended to the level of an individual from which it can be implied that it has given its
consent to be sued under the contract.

Discussions: If, where and when the state or its government enters into a contract, through its officers
or agents, in furtherance of a legitimate aim and purpose and pursuant to constitutional legislative
authority, whereby mutual or reciprocal benefits accrue and rights and obligations arise therefrom, the
state itself may be sued even without its consent, because by entering into a contract the sovereign
state has descended to the level of the citizen and consent to be sued is implied from the very act of
entering into such contract.

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