Facts:

Inocencio Rosete, the petitioner, filed a claim against the Auditor General, the respondent, for damages amounting to P35,376. This claim arose from a fire that occurred on November 2, 1945, at the Emergency Control Administration (ECA) motor pool located at 22 Azcarraga, Manila. The fire was ignited by Jose Frayno y Panlilio, who recklessly lit his cigarette-lighter near a five-gallon drum while gasoline was being drained into it. The resulting blaze destroyed not only the ECA's warehouse but also the personal belongings of Rosete and his family, including professional and cultural books, jewelry, clothing, furniture, and silverware. The ECA was storing gasoline and other combustible materials without the necessary permits, as confirmed by the Mayor of Manila and other city officials. On October 3, 1946, the Insular Auditor denied Rosete's claim, asserting that even if negligence could be attributed to the ECA's officials, the government could not be held liable ...

Facts:

1. Background of the Case:
   Inocencio Rosete filed a claim against the Government for damages amounting to P35,376. The damages were caused by a fire that destroyed buildings belonging to Rosete. The fire originated from a warehouse owned by the Emergency Control Administration (ECA), a government agency, located at No. 2262 Azcarraga, Manila.

2. Cause of the Fire:
   The fire was allegedly caused by the negligence of Jose Frayno y Panlilio, who recklessly ignited his cigarette-lighter near a five-gallon drum containing gasoline. The gasoline was being drained at the time, and the spark from the lighter ignited the gasoline, leading to the fire.

3. Violation of City Ordinances:
   The ECA stored gasoline in the warehouse in violation of the City Ordinances of Manila. The storage of highly combustible and inflammable substances like gasoline required a permit, which the ECA did not possess.

4. Claimant's Argument:
   Rosete argued that the ECA and its officers were negligent in storing gasoline in the warehouse, and thus, the Government should be held liable for the damages under Article 1903 of the Civil Code.

5. Auditor General's Decision:
   The Insular Auditor denied Rosete's claim, stating that even if the ECA officials were negligent, the Government could not be held liable for the illegal or tortious acts of its servants.

6. Appeal to the Supreme Court:
   Rosete appealed the decision of the Auditor General to the Supreme Court, seeking to hold the Government liable for the damages caused by the fire.

Issue:

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Ruling:

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Ratio:

1. Article 1903 of the Civil Code:
   The Court reiterated that under Article 1903 of the Civil Code, the State is liable for damages caused by its special agents, but not for damages caused by officials performing their regular duties. A "special agent" is defined as someone who receives a definite and fixed order or commission, foreign to the exercise of the duties of their office.

2. ECA Not a Special Agent:
   The Court found that the ECA and its officers were not special agents of the Government. They were performing their regular duties as part of the active administration, and their actions were regulated by law and regulations. Therefore, the Government could not be held liable for their alleged negligence.

3. Precedent:
   The Court cited the case of Merritt vs. Government of the Philippine Islands (34 Phil., 311), which held that the State is not responsible for damages caused by its employees in the discharge of their official functions, as neither fault nor negligence can be presumed on the part of the State in organizing public services.

4. Dissenting Opinion:
   Justice Perfecto dissented, arguing that the ECA was a special agent of the Government because it was created for specific purposes not attainable through regular government functions. He contended that the Government should be held liable for the damages caused by the ECA's negligence.

5. Conclusion:
   The majority decision upheld the principle of State immunity from liability for the acts of its regular officials, unless they act as special agents. Since the ECA and its officers were not special agents, the Government was not liable for the damages caused by the fire.