G.R. No. 159402 - Air Transportation Office vs. Spouses Ramos

Spouses David and Elisea Ramos owned a 985-sq.-m. parcel of land, registered under TCT No. T-58894 in Baguio City, part of which was used by the Air Transportation Office (ATO) as runway and shoulder for Loakan Airport.
On August 11, 1995, the Ramoses agreed to sell the affected portion to the ATO for ₱778,150.00, but despite repeated demands, the ATO failed to pay.

April 29, 1998: The Ramoses filed a collection suit (Civil Case No. 4017-R) in RTC Branch 61, Baguio City, against the ATO and certain officials, invoking the deed of sale. The ATO pleaded that Proclamation No. 1358 had reserved the land for airport use and claimed sovereign-immunity defense.
November 10, 1998 & December 10, 1998: The RTC denied the ATO’s motions for preliminary hearing and for reconsideration on its immunity defense.
The ATO filed a certiorari petition in the Court of Appeals (CA), which was dismissed for lack of grave abuse of discretion.
February 21, 2001: The RTC rendered judgment ordering the ATO to pay (a) ₱778,150.00 plus 12% annual interest from August 11, 1995, (b) ₱150,000.00 moral damages, (c) ₱150,000.00 exemplary damages, (d) ₱50,000.00 attorney’s fees plus ₱15,000.00 for court appearances, and (e) costs.
May 14, 2003: The CA affirmed with modification—deleted costs award; reduced moral and exemplary damages to ₱30,000.00 each; attorney’s fees to ₱10,000.00; no costs.
The ATO elevated the case to the Supreme Court by petition for review on certiorari, raising only the issue of its suability without State consent.

Whether the Air Transportation Office, as an unincorporated government agency, can be sued without the State’s consent given its character and functions.