Republic of the Philippines SUPREME COURT Manila SECOND DIVISION G.R. No.

L-32667 January 31, 1978 PHILIPPINE NATIONAL BANK, petitioner, vs. COURT OF INDUSTRIAL RELATIONS, GABRIEL V. MANANSALA and GILBERT P. LORENZO, in his official capacity as authorized Deputy sheriff, respondents. Conrado E. Medina for petitioner. Gabriel V. Manansala in his own behalf. Jose K. Manguiat, Jr. for respondent Court.

FERNANDO, J.: The issue raised in this certiorari proceeding is whether or not an order of the now defunct respondent Court of Industrial Relations denying for lack of merit petitioner's motion to quash a notice of garnishment can be stigmatized as a grave abuse of discretion. What was sought to be garnished was the money of the People's Homesite and Housing Corporation deposited at petitioner's branch in Quezon City, to satisfy a decision of respondent Court which had become final and executory. 1 A writ of execution in favor of private respondent Gabriel V. Manansala had previously been issued. 2 He was the counsel of the prevailing party, the United Homesite Employees and Laborers Association, in the aforementioned case. The validity of the order assailed is challenged on two grounds: (1) that the appointment of respondent Gilbert P. Lorenzo as authorized deputy sheriff to serve the writ of execution was contrary to law and (2) that the funds subject of the garnishment "may be public in character." 3 In thus denying the motion to quash, petitioner contended that there was on the part of respondent Court a failure to abide by authoritative doctrines amounting to a grave abuse of discretion. After a careful consideration of the matter, it is the conclusion of this Tribunal that while the authorization of respondent Lorenzo to act as special deputy sheriff to serve the notice of garnishment may be open to objection, the more basic ground that could have been relied upon — not even categorically raised, petitioner limiting itself to the assertion that the funds "could be public" in character, thus giving rise to the applicability of the fundamental concept of non-suability — is hardly persuasive. The People's Homesite and Housing Corporation had a juridical existence enabling it sue and be sued. 4 Whatever defect could be attributed therefore to the order denying the motion to quash could not be characterized as a grave abuse of discretion. Moreover, with the lapse of time during which private respondent had been unable to execute a judgment in his favor, the equities are on his side. Accordingly, this petition must be dismissed. The order of August 26, 1970 of respondent Court denying the motion to quash, subject of this certiorari proceeding, reads as follows: "The Philippine National Bank moves to quash the notice of garnishment served upon its branch in Quezon City by the authorized deputy sheriff of this Court. It contends that the service of the notice by the authorized deputy sheriff of the court contravenes Section 11 of Commonwealth Act No. 105, as amended which reads:" 'All writs and processes issued by the Court shall be served and executed free of charge by provincial or city sheriffs, or by any person authorized by this Court, in the same manner as writs and processes of Courts of First Instance.' Following the law, the Bank argues that it is the Sheriff of Quezon City, and not the Clerk of this Court who is its Ex-Officio Sheriff, that has the authority to serve the notice of garnishment, and that the actual service by the latter officer of said notice is therefore not in order. The Court finds no merit in this argument. Republic Act No. 4201 has, since June 19, 1965, already repealed Commonwealth Act No. 103, and under this law, it is now the Clerk of this Court that is at the same time the Ex-Officio Sheriff. As such Ex-Officio Sheriff, the Clerk of this Court has therefore the authority to issue writs of execution and notices of garnishment in an area encompassing the whole of the country, including Quezon City, since his area of authority is coterminous with that of the Court itself, which is national in nature. ... At this stage, the Court notes from the record that the appeal to the Supreme Court by individual employees of PHHC which questions the award of attorney's fees to Atty. Gabriel V. Manansala, has already been dismissed and that the same became final and executory on August 9, 1970. There is no longer any reason, therefore, for withholding action in this case. [Wherefore], the motion to quash filed by the Philippine National Bank is denied for lack of merit. The said Bank is therefore ordered to comply within five days from receipt with the 'notice of Garnishment' dated May 6, 1970." 5 There was a motion for reconsideration filed by petitioner, but in a resolution dated September 22, 1970, it was denied. Hence, this certiorari petition. As noted at the outset, the petition lacks merit.

according to Justice Sanchez in Ramos v.' Accordingly. as such.. the Irrigation Service Unit which was sued was an office and agency under the Department of Public Works and Communications. As was explicitly stated in the opinion of the then Justice." 7 The similarities between the aforesaid case and the present litigation are patent. 12 as well as Commissioner of Public Highways v. 244). yet they never exempt the corporation from being sued. There was likewise a writ of execution and thereafter notices of garnishment served on several banks. through the then Solicitor General." The tone was thus irresolute..L. and exercises no other power in the management of the affairs of the corporation. Hence the filing of a petition for certiorari. If properly understood they can easily be distinguished. To repeat. Concepcion: "The allegation to the effect that the funds of the NASSCO are public funds of the government. the Court declares null and void the two questioned orders of respondent Court levying upon funds of petitioner Bureau of Public Highways on deposit with the Philippine National Bank. and waives an the privileges of that character. by implication. Manila Hotel Company. a 1916 decision 20 Since then such a principle has been followed with undeviating rigidity. The plea for setting aside the notice of garnishment was promised on the funds of the People's homesite and Housing Corporation deposited with petitioner being "public in character. as amended. refer to Merritt v. 13 did not help the cause of petitioner at all The decisions are not applicable. As is clear in the opinion of Justice J. obtained a favorable money judgment. is untenable for. the governmnent divests itself pro hac vice of its sovereign character. we think. that are expressly given by the incorporating act. not to a government-owned or controlled corporation with a separate juridical personality. It acts merely as a corporator. could be traced to the belief that there was a waiver of "governmental immunity and. It became final and executory." 17 To levy the execution of such funds. so as to render the corporation subject to the rules of law governing private corporations." 11 The National Shipyard and Steel Corporation case. By engaging in a particular business thru the instrumentality of a corporation.1. Palacio. according to the opinion. San Diego. Both the Palacio and the Commissioner of Public Highways decisions. later Chief Justice. through Justice Ozaeta. it was stressed by justice J. the opinion being penned by the great Chief Justice Marshall. the opening paragraph of Justice Teehankee was quite specific as to why there could be neither execution nor garnishment of the money of petitioner Bureau of Public Highways: "In this special civil action for certiorari and prohibition. Even if there were. 8 this Court." 16 There was no such waiver. In a 1941 decision. the funds of which could thereafter be held liable to execution and garnishment in the event of an adverse judgment. the ruling was quite categorical Garnishment was the appropriate remedy for the prevailing party which could proceed against the funds of a corporate entity even if owned or controlled by the government. That is what happened in this case. the Bank of the United States v. 21 promulgated in 1973. As was pointed out by him: "It is. Planters' Bank. and takes that of a private citizen. the NASSCO has a personality of its own. Manila Hotel Employees Association v. Villasor. and the matter was elevated to this Tribunal The Republic was sustained. 356." 23 Then it can sue and be sued. The case was tried and plaintiff Ildefonso Ortiz. 4.. Insular Government." 14 Such a motion to dismiss was denied. 10 was promulgated by the American Supreme Court as early as 1824. distinct and separate from that of the Government. consent to the suit. 9 Wheat. It has pursuant to Section 2 of Executive Order No. . it may sue and be sued and may be subjected to court processes just like any other corporation (Section 13. The invocation of Republic v. according to him.. insofar as they reiterate the doctrine that one of the coronaries of the fundamental concept of non-suability is that governmental funds are immune from garnishment. 34 Phil 311). Thus. held: "On the other hand. court of Industrial Relations 6 is squarely in point.B. Palacio. The state of Georgia. Planters' Bank. 6 L. and to the business which is to be transacted. The infirmity of the decision reached by the Court of Appeals. Petitioner was similarly a government-owned corporation. of its sovereign character. 22 the office or entity is "possessed of a separate and distinct corporate existence. it is well settled that when the government enters into commercial business." 19 The funds appertained to a governmental office. Reyes in Republic v. As a member of a corporation. so far as respects the transactions of the bank. Court of Industrial Relations. as a government owned and controlled corporation. that when a government becomes a partner in any trading company. attached or levied upon. are not suable even in their own courts. moved for the dismissal of such complaint. so far as concerns the transactions of that company. dated October 23. merely reaffirmed one of the oldest and soundest doctrines in this branch of the law. It is an entirely different matter if. alleging that it "has no juridical personality to sue and be sued. many states of this Union who have an interest in banks. Instead of communicating to the company its privileges and its prerogatives. by giving to the bank the capacity to sue and be sued. Insular Government." There was not even a categorical assertion to that effect. In neither case therefore was there an entity with the capacity to sue and be sued. therefore. by virtue of the fundamental precept that government funds are not subject to execution or garnishment.L. (Merritt v. This emphatically is not the law. The Republic of the Philippines. the latest case in point being Republic v." 2. would thus "amount to a disbursement without any proper appropriation as required by law " 18 In Commissioner of Public Highways v. the same may not be garnished. San Diego. Act No. 3. but it was denied. it abandons its sovereign capacity and is to be treated like any other corporation.the approach difficult The premise that the funds could be spoken of as public in character may be accepted in the sense that the People's Homesite and Housing Corporation was a government-owned entity It does not follow though that they were exempt from garnishment. there was an urgent motion to lift such order. its funds may be levied upon or garnished. its property and funds become liable to seizure under the legal process. Reyes: "It is apparent that this decision of the Court of Appeals suffers from the erroneous assumption that because the State has waived its immunity. 1950 . The prevailing parties were the employees of petitioner. a sound principle. It is only the possibility of its being "public in character. There was an objection to such a move and the ruling was adverse to the National Shipyard and Steel Corporation. A certiorari and prohibition proceeding was then filed with the Court of Appeals. included as private respondent in the Supreme Court proceeding. It is worth noting that the decision referred to. (Bank of the United States v. The principal respondent was the Court of Industrial Relations. pursuant to which the NASSCO has been established — 'all the powers of a corporation under the Corporation Law . National Shipyard and Steel Corporation v. it divests itself. 1459).ed. voluntarily strips itself of its sovereign character. and that. 904. and takes the character which belongs to its associates.B. Thereafter. Thereafter.. it descends to a level with those with whom it associates itself. The legality of the issuance of such execution and punishment was upheld. it appeared that the Solicitor General was served with a copy of the writ of execution issued by the lower court followed by an order of garnishment 15 Again. a government never exercises its sovereignty.

but undoubtedly one committed in good faith. No costs. It would be to carry technicality.5. the other objection raised. hardly needs any extensive decision. With the crucial issue thus resolved in favor of the correctness of the order assailed. That is to achieve justice according to law. however. the then Judge Joaquin M. to say the least. on the assumption that such Clerk of Court lacked such competence. It is true that in the aforesaid Commissioner of Public Highways opinion. assuming that it is. the petition for certiorari is dismissed. There is to be sure no thought of deviating from the principle announced in the Commissioner of Public Highways case. It would be. . this Court held that there is no authorization in law for the appointment of special sheriffs for the service of writs of execution. what is important is that the judgment be executed. namely that respondent Court acted erroneously in having a special sheriff serve to the writ of execution. 1970 by the then Clerk of Court of respondent Tribunal as the authorized sheriff. further delay would get be imposed on private respondent by characterizing the order sought to be nullified amounting to a grave abuse of discretion. That is as it ought to be. The point raised in the petition that it should be the sheriff of Quezon City that ought to have served the writ of execution would thus clearly appear to be inconclusive. WHEREFORE. Even if. therefore.24 In the order sought to be nullified. Salvador of respondent Court pointed out that under a later Act. unfair and unequitable if. to an absurd length if just because of such a mistake. there is sufficient justification for the infirmity attributed to respondent Court by virtue of such a ruling. a new writ of execution had to be issued by the proper official At any rate. 25 the Court of Industrial Relations Act was amended with the proviso that its Clerk of Court was the ex-oficio sheriff. it clearly does not call for the nullification of the order in question. still considering all the circumstances of this case. What cannot be denied is that the writ of execution was issued as far back as May 5.

LOPEZ ESPINOSA. Benjamin Chavez. 964. SIMEON ESTRELLA. 1980. CIRIACO CASTILLO.R... ANTONIO MENESES. MARIA. ALEJANDRA SISON. 1979 dismissing all their complaints as against the respondent corporation thereby leaving the superintendent of the Angat Dam. LUCIO FAJARDO. precipitate and simultaneous opening of said floodgates several towns in Bulacan were inundated. opened or caused to be opened simultaneously all the three floodgates of the Angat Dam. MATIAS PEREZ. No." it is "performing a purely governmental function". Benjamin Chavez. REYNALDO CASIMIRO. MARCELINO DALMACIO.. MAMERTO BERNARDO. who were among the many unfortunate victims of that man-caused flood. 981. L-55273-83 December 19. pp. CRISPINIANO TORRES. PEDRO BARTOLOME. JULIANA GARCIA. This flood was unprecedented in Norzagaray. EUFRACIO TORRES. RODELIO JOAQUIN. And as a direct and immediate result of the sudden. LEBERATO SARMIENTO. the present petition for review on certiorari under Republic Act No. 9. 1981 GAUDENCIO RAYO. BERNARDINO CRUZ JOSE PALAD .: The relevant antecedents of this case are narrated in the petition and have not been controverted. 959. . GODOFREDO PUNZAL. CRESENCIO CRUZ. 5440. STA. petitioners.. Hardest-hit was Norzagaray.. . On July 29. PROTACIO BERNABE. ROGELIO BARTOLOME. TOMAS MANUEL.Republic of the Philippines SUPREME COURT Manila SECOND DIVISION G. 953.. ELIZABETH ABAN. acting through its plant superintendent. J. 5. 8. Apart from traversing the material averments in the complaints and setting forth counterclaims for damages respondent corporation invoked in each answer a special and affirmative defense that "in the operation of the Angat Dam. hence it "can not be sued without the express consent of the State. 4. Section 3 (d) of Republic Act No. About a hundred of its residents died or were reported to have died and properties worth million of pesos destroyed or washed away. 1980 petitioners filed with the respondent Court a motion for reconsideration of the questioned order of dismissal. SM-950 951. INOCENCIO DE LEON. 958. CRISOSTOMO CRUZ. MARIANO ANDRES. it can sue and be sued in any court. filed with the respondent Court eleven complaints for damages against the respondent corporation and the plant superintendent of Angat Dam. Hence. Respondent corporation filed separate answers to each of these eleven complaints. BUENAVENTURA CRUZ. The respondent Court denied petitioners' motion for reconsideration in its order dated October 3.. LORENZO LUCIANO and GREGORIO PALAD. . FRANCISCO RAYOS. during the height of that infamous typhoon "KADING" the respondent corporation.) The Order of dismissal dated December 12. vs. 3-6. namely: 3. At about midnight on October 26. reads as follows: .. RODOLFO BERNARDO. BRANCH V.. GAUDENCIO CASTILLO. APOLINARIO BARTOLOME. GREGORIO CRUZ. . MARCOS EUSTAQUIO. 1978. 6395. JUAN SANTOS. 966. (Rollo. On August 7. BIENVINIDO PASCUAL. ANGEL TORRES. EUTIQUIO LEGASPI. APOLONIO CASTILLO. ABAD SANTOS. as the sole party-defendant. 1980 petitioners received a copy of the questioned order of the respondent Court dated December 21. docketed as Civil Cases Nos. . NORBERTO TORRES. PEDRO AQUINO. EPIFANIO MARCELO. Benjamin Chavez." . CARLOS CORREA. respondents. HERMOGENES SAN PEDRO. On motion of the respondent corporation a preliminary hearing was held on its affirmative defense as though a motion to dismiss were filed. MARIANO CRUZ. ROMAN SAN PEDRO. MARCELINA BERNABE.. 965. These complaints though separately filed have a common/similar cause of action. Petitioners. 6. 1979.. ANTONIO GENER. 982 and 983.. and NATIONAL POWER CORPORATION. PABLO LEGASPI. 7. Petitioners opposed the prayer for dismissal and contended that respondent corporation is performing not governmental but merely proprietary functions and that under its own organic act. COURT OF FIRST INSTANCE OF BULACAN. VICENTE PASCUAL.

and said court is ordered to reinstate the complaints of the petitioners.) The Order dated October 3. is not tenable since the same refer to such matters only as are within the scope of the other corporate powers of said defendant and not matters of tort as in the instant cases. (Rollo. A motion for a ninth extension was similarly denied on November 18. put money in it and has allowed it to sue and be sued in any court under its charter. that the Solicitor General filed the required comment. the cases against defendant NPC are hereby dismissed. 115. It being an agency performing a purely governmental function in the operation of the Angat Dam. are set aside. (Rollo. 1979 and October 3. 1980. Whether the power of respondent National Power Corporation to sue and be sued under its organic charter includes the power to be sued for tort. p. 8 SCRA 781.. et al. We required the parties to file simultaneous memoranda within twenty (20) days from notice. 1980.) As a government owned and controlled corporation. 60. The decision in this case is therefore. p. 74. Costs against the NPC. We granted the seventh extension with a warning that there would be no further extension. 1980. 1979. 6395. vs. The petition is highly impressed with merit. the charter provision that the NPC can "sue and be sued in any court" is without qualification on the cause of action and accordingly it can include a tort claim such as the one instituted by the petitioners. pp. To sue said defendant for tort may require the express consent of the State. 118-125. (See National Shipyards and Steel Corp. We required the respondents to comment. CIR. (Rollo. (Rollo. Plaintiffs' opposition to said motion to discuss.A.) The petition to review the two orders of the public respondent was filed on October 16. it has a personality of its own. relying on Sec. 1980. the motion was simply denied for lack of merit. and on October 27.) On May 27. Sec.) The Solicitor General filed a number of motions for extension of time to file his memorandum. said defendant was not given any right to commit wrongs upon individuals. Despite the warning the Solicitor General moved for an eighth extension which We denied on November 9. August 31. 1981.Under consideration is a motion to dismiss embodied as a special affirmative defense in the answer filed by defendant NPC on the grounds that said defendant performs a purely governmental function in the operation of the Angat Dam and cannot therefore be sued for damages in the instant cases in connection therewith. The parties are agreed that the Order dated December 21. 1981. distinct and separate from that of the Government. It is sufficient to say that the government has organized a private corporation.) Petitioners filed their memorandum on July 22. . denying the motion for reconsideration filed by the plaintiffs is pro forma. and 2. p. No. 1963. It was only on April 13. raises the following issues: 1. (R. WHEREFORE. 107-114. 3 (d). SO ORDERED. 3 (d) of Republic Act 6396 which imposes on the NPC the power and liability to sue and be sued in any court.) Moreover. It is not necessary to write an extended dissertation on whether or not the NPC performs a governmental function with respect to the management and operation of the Angat Dam. after a number of extensions. without the memorandum of the Solicitor General. 1981. the petition is hereby granted. 1981. 1980. (Rollo. L-17874. Whether respondent National Power Corporation performs a governmental function with respect to the management and operation of the Angat Dam. the Orders of the respondent court dated December 12. pp. WHEREFORE.

101. in their Answer traversed the material allegation of the Complaint and as affirmative defense alleged that the collision was caused by the negligence. vs. 1974 until fully paid. but upon reaching the railroad crossing at Barrio Balungao. from Manila. INC. semaphores.511. MELO. Bidin (P). Ordering the defendants. Ordering the defendants jointly and severally to pay the plaintiff attorney's fees in the amount of P5. respondents. injury and damage claimants. Bulacan on August l0. The Solicitor General for petitioner. 1974. and BALIWAG TRANSIT.642. Plaintiff alleging that the proximate cause of the collision was the negligence and imprudence of defendant PNR and its locomotive engineer. Veloso. 2.52 as actual damages. (PNR) coming from San Fernando. Romeo Hughes. 3. filed the instant action for Damages against defendants. Ordering the defendants to pay the cost of this suit.03 as reimbursement for the damages paid by the plaintiff to death. Ordering the defendants. 1993 PHILIPPINE NATIONAL RAILWAYS and HONORIO CABARDO. INTERMEDIATE APPELLATE COURT. 000. Ordering the defendants jointly and severally to pay the plaintiff P436. p. Bulacan at about 1:30 in the afternoon of August 10. 000. 4. imprudence and lack of foresight of plaintiff's bus driver. Ordering the dismissal of the defendants' counterclaim for lack of factual and legal basis. La Union and bound for Manila and a passenger bus of Baliwag Transit. Record on Appeal.: The imputation of culpa on the part of herein petitioners as a result of the collision between its strain. J. got stalled and was hit by defendant's express train causing damages to plaintiff's bus and its passengers. flagman or switchman to warn the public of approaching train that would pass through the crossing. petitioners. Ordering the defendants jointly and severally to pay exemplary damages in the amount of P50.00 to the plaintiff. in operating its passenger train in a busy intersection without any bars. (p. signal lights. jointly and severally to pay the plaintiff the amount of P179.). bound for Manila from La Union. 103. JJ.R. 7. 70547 January 22. . through the Fourth Civil Cases Division (Sison. 6. Bulacan. vis-a-vis the decretal portion handed down by the court of origin in: 1. Leopoldo Sta. Maria for private respondents. jointly and severally to pay the plaintiff interest at the legal rate on the above amounts due the plaintiff from August 10.00. which was on its way to Hagonoy. with a Baliwag transit bus at the railroad crossing on the road going to Hagonoy. No. eighteen (18) of whom died and fifty-three (53) others suffered physical injuries. Inc. is the subject of the petition at bar directed against the judgment of affirmance rendered by respondent court. 1974.. Honorio Cirbado. Calumpit.) Culled from the text of the assailed disposition are the facts of the case at bar which are hereunder adoptedverbatim: The case arose from a collision of a passenger express train of defendant Philippine National Railways. Rollo. The defendants. 5.Republic of the Philippines SUPREME COURT Manila THIRD DIVISION G.

9. and is likewise engaged in transporting passengers and cargoes by trains and buses and that. 1066. that. That immediately after the said accident Major Manuel A. 1974. there was only one sign of railroad crossing "Stop. Calumpit. and particularly from Manila to Hagonoy. 73 hit and bumped the right mid portion of the plaintiff's passenger bus No. Chief of the Municipal Police of Calumpit. 1066 and Plate No. Bulacan was 1:41 P. .At the pre-trial conference held on June 23. with no stop at Calumpit. 73 in Manila was 2:41 P. Bulacan and return in the month of August. Bulacan was under construction. Bulacan at about 1:30 o'clock in the afternoon. 73 driven by Train Engineer Honorio Cabardo alias Honorio Cirbado stopped after passing the railroad crossing at a distance of about 50 meters from the said intersection after the collision on August. 10.M. together with some of his policemen conducted an investigation of the accident. 73 was the one that hit and bumped the right rear portion of the said bus. and its expected arrival at Calumpit. driver of the Baliuag Transit bus docketed under Crim. Bulacan where the accident took place there is no railroad crossing bar. 741. 6. the Baliuag Transit Bus with Body No. are as follows: 1 That plaintiff is a duly constituted corporation registered with the Securities and Exchange Commission engaged in the business of transportation and operating public utility buses for the public with lines covering Manila. the parties agreed on a partial stipulation of facts and issues which as amplified at the continuation of the pre-trial conference. 4. La Union from Manila and return. a Baliuag Transit Bus with Body No. passing along the intersection of Barrio Balungao. Malabon. That on August 10. while the rear portion of said bus was at the railroad track and its direction was towards Hagonoy. Bulacan. That the expected time of arrival of said Train No. at about 1:20 o'clock in the afternoon. on July 12. in going to San Fernando.M. and signal lights that would warn the public of the approaching train that was about to pass through the intersection and likewise there was no warning devices to passing trains showing that they were about to pass an intersection in going to Manila from San Fernando. 1974. 5. Look and Listen" placed on a concrete slab and attached to a concrete post existing at the approach of the railroad track from the Highway going towards Hagonoy. Bulacan. 73. and its departure time from San Fernando. while the train Engineer Honorio Cabardo alias Honorio Cirbado was not included as an accused in said case. 1066 driven by Romeo Hughes was damaged and eighteen (18) of its passengers died and the rest who were more than fifty three (53) passengers suffered physical injuries. 8. however. That at the time of the collision there was a slight rainfall in the vicinity of the scene of the accident and that there was at said intersection no bars. Quezon City. That after the investigation the Chief of Police of Calumpit. 2 That defendant Philippine National Railways is a purely government owned and controlled corporation duly registered and existing virtue of Presidential Decree No. 1976. Bulacan and that after the said railroad track there was a designated jeep parking area at the right side in the direction from the Highway to Hagonoy Bulacan. filed a criminal case of Reckless Imprudence Causing Multiple Homicide with Multiple Physical Injuries and Damage to Property against Romeo Hughes y Parfan. 2392. Bulacan. Rizal. 3. said passenger train No. Bulacan. Bulacan. with capacity to sue and be sued. Calumpit. l974 passing thru the town of Calumpit Bulacan. La Union and back. That at the railroad crossing in Calumpit. 73 was operated by Train Engineer Honorio Cabardo alias Honorio Cirbado and at the railroad intersection at Barrio Balungao. it operates a train line between San Fernando. La Union was 9:00 A. Pampanga and Nueva Ecija. Caloocan City. La Union and Manila particularly Passenger Express Train with Body No. That the train No. although his train No. temporarily while the bridge at Hagonoy. XS-929 PUB-Bulacan '74 was driven by its authorized driver Romeo Hughes and PNR Train No. That on account of said collision. Bulacan. however.M. Macam. during the pre-war days there was a railroad crossing bar at said intersection. 7. Case No. semaphores. 1976.

144). or whether or both were negligent? Could either of the companies Baliuag Transit Incorporated and the Philippine National Railways be held accountable for the collision because of negligence? The defendants presented several statements or affidavits of alleged witnesses to the collision. 4. such facts conclusively indicate that the train was speeding. the bus driver did not take the necessary precaution in traversing the track. Mananquil. ( Annex A. plaintiff's bus drivers and conductors are enjoined to observe such a precautionary measure in seminars conducted by the company. 90) Except the testimony of the train engineer Cabardo. the tendency of the train. 79-82.A. it was shown by plaintiff that the bus driver Romeo Hughes took the necessary precautions in traversing the track. as aptly said. Moreover. 13. it would not run some 190 meters after impact and throw the bus at quite a distance especially so when it is claimed that the train's emergency brakes were applied. Note that he first noticed the bus when it was only 15 meters away from him. that likewise which of said companies was negligent at said railroad intersection. 4). 1976. p. 16. otherwise known as the Land Transportation and Traffic Code for failure to "stop. 14. and the bus driver ignored such a warning and must assume the responsibility for the result of the motion taken by him (U. Incorporated and the train engineer Honorio Cabardo alias Honorio Cirbado of the Philippine National Railways was negligent or whether or not both are negligent. he could not have possibly noticed the position of the bus before negotiating the track. that the bus driver was in fact violating Section 42(d) of R. respondent court deemed it necessary to reflect the salient findings of the case for damages as formulated by the trial court: Posed for resolution are the following issues: Who between the driver Romeo Hughes of the Baliuag Transit Incorporated and Honorio Cabardo. especially when it is pulling seven coaches loaded with goods and passengers. (TSN. that it is incumbent upon him to take the necessary precautions at the intersection because the railroad track is in itself a warning. 4136. the statements are hearsay evidence (Azcueta v. 11. 18 and 19. the train engineer had testified that before reaching the station of Calumpit the terrain was downgrade and levelled only after passing the Calumpit bridge (TSN. That another additional issue is whether the Baliuag Transit Incorporated has exercised the diligence of a good father of the family in the selection and supervision of its employees. September 23. 14 ). That the principal issue in the instant case is who between the driver Romeo Hughes of Baliuag Transit. 17. 6. the Court cannot consider the averments in said statements as testimonies or evidence of truth. 42 Phil. July 28. October 2l. The evidence disclosed that the train was running fast because by his own testimony. several passengers were injured and at least 20 died. Defendants endeavored to show that the proximate and immediate cause of the collision was the negligence of the bus driver because the driver did not make a stop before ascending the railtrack. 1976. because if it were moving at moderate speed. 1976. train Engineer of the Philippine National Railways was negligent in the operation of their respective vehicles. at most they be taken as proof only of the fact that statements of said persons were taken and that investigation was conducted of the incident.S. 5. (pp. Cabangbang. 12. the conductor had done just that and made a signal to proceed when he did not see any oncoming train. the bus loaded with passengers was dragged and thrown into a ditch several meters away. the train had stopped only after the engine portion was about 190 meters away from the fallen bus. — 45 O. before crossing the railtrack. pp. the Court is at a loss as to why the persons who gave the said statements were not presented as witnesses during the trial of the case. On the other hand. . and listen" at the intersection. 85-87. Record on Appeal). The bus driver had stopped before traversing the track and in fact asked the conductor to alight and made a "Look and Listen" before proceeding. 15. 3. p. look. specifically Exhibits 2. Petition. (TSN. pp. coming from a high point is to accelerate as the gravity will necessarily make it so.G. v. 26-27). he did not heed the warning or shoutings of bystanders and passengers and proceeded in traversing the railtrack at a fast speed. upon impact. there is no admissible evidence to show that indeed. Rollo) In addition.SIMPLIFICATION OF ISSUES 11.

M. and SFR Co. 253 App. not only when a collision is inevitable but even if no hindrance is apparent on the way. the vicinity is utilized as a parking and waiting area for passengers of jeepneys that ply between the barrios. the bus could have been halved into two because of the force of the impact. Contributory negligence may not be ascribed to the bus driver. 2d 167). or semaphores is evidence of negligence and disregard of the safety of the public. Ry.R. It must regulate its speed with proper regard for the safety of human life and property (Johnson v. Co. if not impossible. Swdyk v. This he failed to do even if the nature of his job required him to observe care exercised by a prudent man. he could have noticed that it is a very busy intersection because the crossroad leads to the Calumpit Poblacion as well as to the neighboring town of Hagonoy. and others). This was evident because the part of the bus hit by the train was the rear since the bus fell on a nearby ditch. flagman or switchman. Delaware L. at San Fernando. or to maintain signals at every intersection. there was a parking lot by the side of the track whereat passengers board jeepneys for the neighboring barrios and towns. As has been amply discussed. D. the plaintiff argues constitute negligence on the part of the Philippine National Railways. under the circumstances. Otherwise. T. App. since there is no other railtrack going North except that one passing at Calumpit. 8. considering the surrounding circumstances particularly the nature of the locality (Atchinson. It may be argued that a railroad is not subject to the same restrictions to the speed of its train as a motorists (Mckelvey v. A portion of the intersection is being used as a parking area with stalls and other obstructions present making it difficult. even if there is no law or ordinance requiring it. 148 F. or 4 1/2 hours after it left La Union. The stipulation of facts between the parties show that there was no crossing bar at the railroad intersection at Calumpit. that there were no signal lights.Further. but it does not follow that a train will be permitted to run fast under all conditions at any rate of speed it may choose. and W. slacken his speed almost for the protection of motorists and pedestrians.. the plaintiff contended and the defendants did not deny. the frequency with which trains pass over it and the view which could be obtained of trains as they approach the crossing. the condition of the weather was such that even if for this reason alone. LISTEN" warnings would not be sufficient protection of the motoring public as well as the pedestrians. Indiana Harbor Belt R. semaphores. there was a railroad crossing bar at the said intersection (Par-8. Stipulation of Facts). it was evident that he had taken the necessary precautions before passing over the railway track.M. Los Angeles. 288 p. the abandonment thereof . or signal light. if the bus was hit. the train engineer should have foreseen that danger of collision lurked because of poor visibility of slippery road. trains pass over it frequently. there was an intermittent rain at the time of the collision (see stipulation of facts and photographs).V. he should have taken extra precaution by considerably slackening its speed. in the light of aforesaid jurisprudence.M. there were vehicles to his left which prevented him in swerving towards that direction. Stipulation of Facts). surely. It appears that it was a self imposed requirement which has been abandoned. the train was an express train. All the wheels at the bus have already passed the rail portion of the track and only the rear portion of the bus' body occupied or covered the railtrack. Bulacan at the time of collision (par. his bus stalled in view of the obstructions in his front where a sand and gravel truck stopped because of a jeep maneuvering into a garage up front. the crossroad at the intersection at Calumpit is one which is a busy thoroughfare. A railroad is not required to have a gate (crossing bar) or a flagman. In a case it was held that where the use of a flagman was self imposed. It can be said also that. the absence of such devices. The parties likewise have stipulated that during the pre-war days. The failure of the Philippine National Railways to put a cross bar. its departure was 9:00 A. flagman or switchman thereat. the flow of vehicular traffic thereat is huge. the collision occurred at 1:30 P. stalls abound in the vicinity and bystanders congregate nearby. Corporation (Cal A2d) 128 p2d 563. it was for reasons beyond the control of the bus driver because he had no place to go. A prudent train operator must. what is considered reasonably necessary will depend on the amount of travel upon the road. Nicks (Arts) 165 p. in the said intersection. clearly. v. if the bus was really hit in mid-body. La Union and expected in Manila at 2:41 P. 300 NYS 1263 ). it leads to the Poblacion at Calumpit and other barrios as well as the town of Hagonoy. 2d 795. 109. because public safety demands that said devices or equipments be installed. Moreover. to see approaching trains (see photographs). and other conditions (Pari v. Southern Pacific Company (Cal. Co. In the opinion of this Court the X sign or the presence of "STOP. 81). only at such places reasonably necessary. Cabardo's route included the passage over the said intersection. LOOK. the train could have not negotiated such a distance in so short a time if it were not running at fast speed.

758). knowing fully well that the vehicles following the jeep could not move away from the path of the train. in essence. July 28. This being so. incidental or conducive to the attainment of the purpose of the corporation. Co. 83-89. by virtue of its sovereign nature and as reaffirmed by constitutional precept. respondent court observed that the bus was hit by the train at its rear portion then protruding over the tracks as the bus could not move because another truck at its front was equally immobile due to a jeep maneuvering into a nearby parking area. 4 General Powers — The Philippine National Railways shall have the following general powers: (a) To do all such other things and to transact all such business directly or indirectly necessary. MRR. and pipelines. in conjunction with Section 2(b) of Presidential Decree No. 2). but respondent court was far from persuaded. 198 ARDC 290. (Decision. it was perceived below that the train was running fast during the entire trip since the train stopped 190 meters from the point of impact and arrived at Calumpit. and other kinds of land transportation. and thus barred from invoking immunity from suit. 1082 SCRWARTZ. Inc.Rollo). vessels. passengers. or indicated implicitly. not to mention the fact that such plea in avoidance was not asserted in the answer and was thus belatedly raised on appeal. PNR was perforce estopped from disavowing the prejudicial repercussion of an admission in judicio. and Philippine Airlines. trucklines. pages 94-100. 39 Phil. pp. The bone of contention for exculpation is premised on the familiar maxim in political law that the State. respondent court continued. to exercise all powers of a railroad corporation under the Corporation law. incorporates similar disputations anent PNR's immunity from suit and the attempt to toss the burden of negligence from the train engineer to the bus driver of herein private respondent. bus lines. subways. respondent court blamed the train engineer who admitted to have seen the maneuvering jeep at a distance (TSN. respondent court agreed with the conclusion reached by the trial court that the absence of a crossing bar. Concerning the exercise of diligence normally expected of an employer in the selection and supervision of its employees. Hence. 741: (b) To own or operate railroad transways. A railroad company has been adjudged guilty of negligence and civilly liable for damages when it failed to install semaphores. equally conceded is the legal proposition that the acquiescence of the State to be sued can be manifested expressly through a general or special law.. cited in Sec. Sr. 4156 as amended by Republic Act No. Petitioner moved to reconsider. or where it does not see to it that its flagman or switchman comply with their duties faithfully. respondent court nonetheless opined that such prerogative was implied from the general power to transact business pertinent or indispensable to the attainment of the goals of the railroad company under Section 4 of Republic Act No. apart from the fact that the lawyer of petitioner agreed to stipulate inter alia that the railroad company had capacity to sue and be sued. Even as the laws governing the creation and rehabilitation of the PNR were entirely mute on its power to sue and be sued.W. On the aspect of whether the Philippine National Railways enjoys immunity from suit. the abandonment by the PNR of the use of the crossing bar at the intersection at Calumpit constitutes negligence. to operate the locomotive. respondent court initially noted that an exculpation of this nature that was raised for the first time on appeal may no longer be entertained in view of the proscription under Section 2. Thus. respondent court characterized the railroad company as a private entity created not to discharge a governmental function but. the petition before Us which. 128 S. signal light. flagman or switchman to warn the public of an approaching train constitutes negligence per the pronouncement of this Court in Lilius vs. (Fleming v. 1976. At any rate. However. 2d 286 and others. In brushing aside petitioners' asseveration that the bus driver outraced the train at the crossing. to the effect that the power to sue and be sued is implicit from the faculty to transact private business. Moreover. who finished only primary education and became an engineer only through sheer experience. Under these tight conditions. Missouri and A. for the purpose of transporting for consideration. and (b) Generally. 6366: Sec. is insulated from suits without its consent (Article 16. to motorist injured by a crossing train as long as he had crossed without negligence on his part (Lilius vs.may constitute negligence. Teodoro. 1987 Constitution). page 18) and had the last clear chance to apply the brakes. 203 [1952]). Vol. Ry. as when the State commences litigation for the purpose of . as its installation has become imperative. respondent court expressed the view that PNR was remiss on this score since it allowed Honorio Cabardo. Apart from these considerations. respondent court utilized the doctrine of implied powers announced in National Airports Corporation vs. among other things. Manila Railroad Company (59 Phil 758 [1934]). because of the prevailing circumstances in the place. Bulacan earlier than its expected time of arrival thereat. mail and property between any points in the Philippines. Section 3. (91 Phil. Rule 9 of the Revised Rules of Court. Similarly. to operate a transport service which is essentially a business concern. R A.

It did not remove itself from the operation of Articles 1732 to 1766 of the Civil Code on common carriers. But the restrictive interpretation laid down therein is of no practical worth nor can it give rise to herein petitioner PNR's exoneration since the case of Malong vs. (at pp. [1985]). was not immune from suit under Act No. Malong continued to hold that: . In Malong. Statement of policy.asserting an affirmative relief or when it enters into a contract (Cruz. 1964 to 2014." (Nat. 1510. 4156. A sovereign is exempt from suit. following the ruling in the 1985 case of United States of America vs. controlled in the use and disposition of the means required for the proper administration of the Government (The Siren vs. supra at pages 36-37). 19 L. — The Philippine National Railways shall have the following general powers: (a) To do all such other things and to transact all such business directly or indirectly necessary. are immune from suits. Republic Act No. cited by Cruz. 129). 1987 Constitution with Comments and Cases. if the supreme authority could be subjected to suit at the instance of every citizen and. The PNR did not become immune from suit. The charter also provides: Sec. consequently. Eleventh Edition. Section 13(2) of the Corporation Law provides that every corporation has the power to sue and be sued in any court. . Immunity from suit is determined by the character of the objects for which the entity was organized. page 34). 3d 834). It is under the Office of the President of the Philippines. 4. The public service would be hindered.S. To the pivotal issue of whether the State acted in a sovereign capacity when it organized the PNR for the purpose of engaging in transportation. and public safety endangered. not reproduced in the Corporation Code. 1962. The Philippine National Railways must be administered with the view of serving the interests of the public by providing them the maximum of service and. not because of any formal conception or obsolete theory. as a common carrier. was categorical enough to specify that the Philippine National Railways "is not performing any governmental function" (supra. . ed. . U. 51 L. provides that the PNR is a government instrumentality under government ownership during its 50-year term. but on the logical and practical ground that there can be no legal right as against the authority that makes the law on which the right depends (Justice Holmes in Kawananakoa vs. incidental or conducive to the attainment of the purpose of the corporation. When the State participates in a covenant. it is deemed to have descended from its superior position to the level of an ordinary citizen and thus virtually opens itself to judicial process. at page 68). 353. 1991 edition. its charter. to exercise all powers of a railroad corporation under the Corporation Law. Justice Aquino. while aiming at its greatest utility by the public. the PNR's predecessor. and (b) Generally. Republic Act No. Philippine National Railways (138 SCRA 63.S. (This refers to Sections 81 to 102 of the Corporation Law on railroad corporations. 6366 and Presidential Decree No. 7 Wall. We realize that this Court qualified this form of consent only to those contracts concluded in a proprietary capacity and therefore immunity will attach for those contracts entered into in a governmental capacity. page 644). 3 Padilla. 152. The correct rule is that "not all government entities. page 33. 1-a. 205 U. Sinco. Philippine Political Law. decided three months after Ruiz was promulgated.. 741. being a factor for socioeconomic development and growth. — The Philippine National Railways. speaking for the Court en banc. Ruiz (136 SCRA 487 [1985]. The PNR Charter. as amended by Republic Act No. Polyblank. 6366 provides: Sec.Philippine Political Law.) Section 36 of the Corporation Code provides that every corporation has the power to sue and be sued in its corporate name. the Manila Railroad Company. 1991 edition. 65-66). in the instant case the State divested itself of its sovereign capacity when it organized the PNR which is no different from its predecessor. shall be a part of the infrastructure program of the government and as such shall remain in and under government ownership during its corporate existence. whether corporate or noncorporate. Of course. the economy of operation must be ensured so that service can be rendered at the minimum passenger and freight prices possible. General powers. declared: The Manila Railroad Company.

549). 9 Wheat. the rights and obligation of the contracting parties must be adjusted upon the same principles as if both contracting parties were private persons. the National Development Company is not immune from suit.. We come now to the question of whether respondent court properly agreed with the trial court in imputing negligence on the part of the train engineer and his employer. Bates. et al. (81 C.S. Inc. the PNR is subject to the obligations of persons engaged in that private enterprise. 92 Phil. 203. August 19. The Manila Hotel case also relied on the following rulings: By engaging in a particular business through the instrumentality of a corporation. Suits against State agencies with respect to matters in which they have assumed to act in a private or nongovernmental capacity are not suits against the State (81 C. 91 Phil. 705 and cases cited therein. and various suits against certain corporations created by the State for public purposes. 703. 1319). 593). Like any private common carrier. although the State may own the stock or property of such a corporation. 27 Fed.J. 1983.S. 66-68). 26). of New Jersey vs. Inc. 84 SCRA 223. 374. vs. National Development Company vs. Union de Maquinistas. U. L-41299. Harry Lyons. July 25. Stephens. 184). contractor and suitor (People vs. 26 SW 2nd 879 and State Highway Commission of Missouri vs. but to engage in matters partaking more of the nature of ordinary business rather than functions of a governmental or political character. 6 L ed. 66 SCRA 18l. Santos vs.S. It is an agency for the performance of purely corporate. vs. The latter is true. 117 Phil. cited in Manila Hotel Employees Association vs. for by engaging in business operations through a corporation the State divests itself so far of its sovereign character. etc. and contracts with individuals. 104 Phil. It is not performing any governmental function.. The foregoing rule was applied to State Dock Commissions carrying on business relating to pilots. 281. the government divests itself pro hac vice of its sovereign character. it was held that the PNR funds could be garnished at the instance of a labor union. 244. L-31948. Airlines. Santos.Airports Corp. proprietary or business functions (National Development Company vs. 1975. 206. are not regarded as suits against the State. Both stand upon equality before the law. it is amenable to all the rules of law which bind private individuals. Dodge. NDC Employees and Workers' Union. . February 21.Y. L-32387. 285. vs. 388).. 120 SCRA 707) and the Philippine National Bank (Republic vs. 121 Phil. Court of Appeals. Tobias. Philippine National Bank. (at pp. It should be noted that in Philippine National Railways vs. cited in National Airports case). 904. Suits against State agencies with relation to matters in which they have assumed to act in a private or nongovernmental capacity. 1978. and by implicating consents to suits against the corporation. When the State acts in its proprietary capacity. Other government agencies not enjoying immunity from suit are the Social Security System (Social Security System vs. 73 Phil. Manila Hotel Company. 1319). 71 N. Planters' Bank. and the sovereign is merged in the dealer. 296 SW 418. but when the sovereign engages in business and the conduct of business enterprises. It does not exercise sovereign functions. Thus. There is not one law for the sovereign and another for the subject. USA. Teodoro and Phil. terminals and transportation (Standard Oil Co.J. It would be unjust if the heirs of the victim of an alleged negligence of the PNR employees could not sue the PNR for damages.. whenever the contract in any form comes before the courts.S. so as to render the corporation subject to the rules of law governing private corporations. The point is that when the government enters into a commercial business it abandons its sovereign capacity and is to be treated like any other private corporation (Bank of the U. 2nd 370) and to State Highways Commissions created to build public roads and given appropriations in advance to discharge obligations incurred in their behalf (Arkansas State Highway Commission vs.

37 Phil. engendered the concrete and yes. Also. Court of Appeals. Jur. could have obviated the impending collision had he slackened his speed and applied the brakes (Picart vs. 206 [1991]). page 353). The unmindful demeanor of the train engineer in surging forward despite the obstruction before him is definitely anathema to the conduct of a prudent person placed under the same set of perceived danger. 758 [1934]). 5799. Having resolved the question of negligence between the train engineer and the bus driver after collating the mass of evidence. it would probably not have travelled 190 meters more from the place of the accident (page 10. . moreover. indicating that the train was travelling more than the normal speed of 30 kilometers per hour. it was established that the weather condition was characterized with intermittent rain which should have prompted the train engineer to exercise extra precaution. Fifth edition. If the train were really running at 30 kilometers per hour when it was approaching the intersection. by warnings. (65 Am. taken collectively. Teves. 193 SCRA 198. unlike appellate magistrates. or otherwise. or when in the exercise of reasonable diligence commensurate with the surroundings it should be apparent. p. SO ORDERED. too the train engineer was frank enough to say that he saw the jeep maneuvering into a parking area near the crossing which caused the obstruction in the flow of traffic such that the gravel and sand truck including the bus of herein private respondent were not able to move forward or to take the opposite lane due to other vehicles. Smith. these considerations were addressed to the trial judge who.. 59 Phil. to the company that a person on its track or to get on its track is unaware of his danger or cannot get out of the way. Brief for Petitioners). Likewise. applying brakes. the train reached Calumpit. to post a flagman or watchman to warn the public of the passing train amounts to negligence (Lilius vs. Remedial Law Compendium. despite the last opportunity within his hands vis-a-vis the weather condition including the presence of people near the intersection. WHEREFORE.G. it becomes the duty of the company to use such precautions. Indeed: When it is apparent. 649). Manila Railroad Company. Second Edition. correct conclusion that the train engineer was negligent who. 809 [1918]). 50 O. All of these factors. was in a better position to assign weight on factual questions. the conclusion reached thereafter thus commands great respect especially so in this case where respondent court gave its nod of approval to the findings of the court of origin (Co vs. What exacerbates against petitioners' contention is the authority in this jurisdiction to the effect that the failure of a railroad company to install a semaphore or at the very least. Then. Regalado. Amigo vs. Bulacan ahead of scheduled arrival thereat. as may be reasonably necessary to avoid injury to him.It was demonstrated beyond cavil in the course of the pre-trial hearings held for the purpose of stipulating on crucial facts that the bus was hit on the rear portion thereof after it crossed the railroad tracks. the petition is hereby DISMISSED and the decision of respondent court AFFIRMED.Withal.

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