EPG CONSTRUCTION VS VIGILAR

ISSUE:  Whether or not the Principle of State Immunity is applicable in the case at bar. 

FACTS:  (1983) The herein petitioners-contractors, under contracts with DPWH, constructed 145 housing units but coverage of construction and funding under the said contracts was only for 2/3 of each housing unit. Through the verbal request and assurance of then DPWH Undersecretary Canlas, they undertook additional constructions for the completion of the project, but said additional constructions were not issued payment by DPWH. With a favorable recommendation from the DPWH Asst. Secretary for Legal Affairs, the petitioners sent a demand letter to the DPWH Secretary. The DPWH Auditor did not object to the payment subject to whatever action COA may adopt.(1992) Through the request of then DPWH Secretary De Jesus, the DBM released the amount for payment but (1996) respondent DPWH Secreatry Vigilar denied themoney claims prompting petitioners to file a petition for mandamus before the RTCwhich said trial court denied. Hence, this petition.Among others, respondent-secretary argues that the state may not be sued invoking the constitutional doctrine of Non-suability of the State also known as the Royal Prerogative of Dishonesty 

DECISION:  Petition Granted 

​RATIO DECIDENDI:  The respondent may not conveniently hide under the State's cloak of invincibility against suit, considering that this principle yields to certain settled exceptions. The State's immunity cannot serve as an instrument perpetrating injustice