G.R. No. L-10948 - People vs. Mortero

On July 6, 1954, twenty employees of the Philippine Normal College filed an action in the Court of First Instance of Manila.
The employees, working in various capacities (cooks, waiters, dishwasher, and similar roles) in the dormitory known as Normal Hall, sought the recovery of salary differentials and overtime pay.

The Philippine Normal College and/or its precursor, the Philippine Normal School, were named as defendants.
The Solicitor General filed an answer on behalf of the defendants, denying liability for the claims.
Before the merits of the case could be heard, the lower court dismissed the case on the ground that neither defendant was a corporation or a juridical entity with the capacity to be sued.
A motion for reconsideration of the dismissal was made but subsequently denied.
The plaintiffs then took the appeal to the Supreme Court, alleging that the dismissal was erroneous.

Republic Act No. 416, which took effect in July 1949, converted the old Philippine Normal School into the present Philippine Normal College.
This Act endowed the College with the "general powers" as set out in section 13 of Act Numbered Fourteen Hundred and Fifty-Nine (Corporation Law).
The power conferred specifically included, among others, the authority "to sue and be sued in any court."
The governance of the College was placed in the hands of a board of trustees, responsible for administering, appropriating funds, and supervising the income and expenses of Normal Hall.

The Solicitor General argued that, although the College had its own juridical personality, its status as an Instrumentality of Government performing state functions required the consent of the state before it could be sued.
The plaintiffs contended that since the College was expressly endowed with the power to be sued by virtue of Republic Act No. 416 and the Corporation Law, dismissal on the required capacity ground was incorrect.

Whether the Philippine Normal College, despite being an Instrumentality of Government, possesses an independent juridical personality which confers on it the capacity to sue and be sued in court.
Whether the dismissal of the case for lack of corporate capacity was erroneous in light of the statutory grant under Republic Act No. 416 and the Corporation Law.
Whether the state’s purported need to consent to a suit against an instrumental state entity is negated by the express statutory provisions empowering the College.