Case Summary (G.R. No. 159402)
Petitioner and Respondents
Petitioner: Air Transportation Office (ATO).
Respondents: Spouses David and Elisea Ramos (David Ramos died October 14, 2001; substituted by their children pursuant to CA resolution of April 23, 2003).
Key Dates
• August 11, 1995 – Deed of sale agreement for P778,150.00.
• April 29, 1998 – Collection suit filed in RTC, Branch 61, Baguio City.
• February 21, 2001 – RTC decision awarding principal, interest, damages, fees, and costs.
• May 14, 2003 – CA affirms with modifications.
• February 23, 2011 – Supreme Court decision under review.
Applicable Law
• 1987 Constitution, Article XVI, Section 3 (sovereign immunity).
• Republic Act No. 776 (Civil Aeronautics Act of 1952).
• Republic Act No. 9497 (Civil Aviation Authority Act of 2008).
Antecedents
Respondents discovered unauthorized appropriation of their land by the ATO. After agreeing to sell the affected portion for P778,150.00, the ATO failed to pay despite repeated demands. The Ramos spouses filed Civil Case No. 4017-R for collection against ATO and officials.
RTC Proceedings and Decision
ATO invoked sovereign immunity based on Proclamation No. 1358 reserving the land for airport use. The RTC denied motions for a preliminary hearing and reconsideration, and a CA petition for certiorari was dismissed. On February 21, 2001, the RTC ordered ATO to pay:
- P778,150.00 plus 12% annual interest from August 11, 1995 until paid;
- P150,000.00 moral damages and P150,000.00 exemplary damages;
- P50,000.00 attorney’s fees plus P15,000.00 for court appearances;
- Costs of suit.
Court of Appeals Modification
On May 14, 2003, the CA affirmed the RTC judgment with modifications:
• Deleted award of costs.
• Reduced moral and exemplary damages to P30,000.00 each.
• Lowered attorney’s fees to P10,000.00.
Issue for Resolution
Whether ATO, as an unincorporated government agency, could be sued without the State’s consent under the doctrine of sovereign immunity.
Sovereign Immunity Doctrine
Article XVI, Section 3 of the 1987 Constitution provides that the State may not be sued without its consent. Sovereign immunity prevents disruption of government functions by litigation.
Distinction: Governmental vs. Proprietary Functions
An agency performing purely governmental functions is immune; one engaged in proprietary or commercial activities is not. Proprietary functions may be undertaken by private entities and are thus outside the State’s exclusive sovereign prerogative.
Precedents Supporting Non-Suability Doctrine
• National Airports Corporation v. Teodoro (1952): Airport management and maintenance are proprietary.
• Civil Aeronautics Administration v. Court of Appeals (1988): CAA, predecessor of ATO, was not immune.
• Malong v. Philippine National Railways (1985): PNR not immune when performing business functions.
Application to ATO
The ATO, like its predecessor CAA, managed, operated, and maintained airport facilities—a proprietary enterprise not reserved to sovereign functions. It cannot invoke sovereign immunity to evade a valid claim for comp
...continue readingCase Syllabus (G.R. No. 159402)
Facts
- Spouses David and Elisea Ramos owned a parcel of land registered as Transfer Certificate of Title No. T-58894 in Baguio City, measuring approximately 985 sq m.
- A portion of that land was used by the Air Transportation Office (ATO) as part of Loakan Airport’s runway and running shoulder.
- On August 11, 1995, after negotiations, the respondents executed a deed of sale conveying the affected portion to the ATO for ₱778,150.00.
- Despite repeated verbal and written demands, the ATO failed to pay the agreed amount.
Procedural History
- April 29, 1998: Respondents filed Civil Case No. 4017-R for collection against the ATO and certain ATO officials in the Regional Trial Court (RTC), Branch 61, Baguio City.
- ATO’s affirmative defense: invocation of Proclamation No. 1358 reserving the land for airport use and claim of sovereign immunity (state may not be sued without consent).
- November 10, 1998: RTC denied ATO’s motion for preliminary hearing on the affirmative defense; December 10, 1998: RTC denied reconsideration.
- ATO filed a special civil action for certiorari in the Court of Appeals (CA); petition was dismissed for lack of grave abuse of discretion.
- February 21, 2001: RTC rendered decision ordering ATO to pay:
• ₱778,150.00 plus 12% annual interest from August 11, 1995 until full payment
• ₱150,000.00 moral damages and ₱150,000.00 exemplary damages
• ₱50,000.00 attorney’s fees plus ₱15,000.00 for court appearances
• Costs of suit - ATO appealed to the CA.
- May 14, 2003: CA affirmed with modification:
• Deleted award of costs
• Reduced moral and exemplary damages to ₱30,000.00 each
• Reduced attorney’s fees award to ₱10,000.00 - G.R. No. 159402: ATO’s