MERRITT v GOVERNMENT 34 Phil 311 TRENT; March 31, 1916 NATURE Appeal from decision of the CFI FACTS

- E. Merritt, riding on a motorcycle, was hit by the General Hospital ambulance, which turned suddenly and unexpectedly to Taft Avenue without sounding any whistle or horn, in contravention of an ordinance and the Motor Vehicle Act. - Plaintiff was so severely injured. His leg showed a contraction of an inch and a half and a curvature that made his leg very weak and painful at the point of the fracture. Examination of his head revealed a notable readjustment of the functions of the brain and nerves. The patient apparently was slightly deaf, had a light weakness in his eyes and in his mental condition. This latter weakness was always noticed when the plaintiff had to do any difficult mental labor, especially when he attempted to use his money for mathematical calculations. - Witnesses testified that plaintiffs physical and mental condition before the accident was excellent. He was one of the best contractors of wooden buildings. He could not now earn even a half of the income that he had secured for his work because he had lost 50 per cent of his efficiency. He had to dissolve a partnership that he had with an engineer and give up a contract for the construction of a building. - Trial court held that the collision was due solely on the negligence of the chauffeur and awarded the plaintiff the sum of P14, 741.

- Act No. 2457 was enacted. It states that E. Merritt is hereby authorized to bring suit in the Court of First Instance of the city of Manila against the Government of the Philippine Islands in order to fix the responsibility for the collision between his motorcycle and the ambulance of the General Hospital, and to determine the amount of the damages, if any, to which Mr. E. Merritt is entitled on account of said collision, and the Attorney-General of the Philippine Islands is hereby authorized and directed to appear at the trial on the behalf of the Government of said Islands, to defendant said Government at the same. ISSUES WON the government is liable for the damages resulting from a tort committed by an agent or employee of the government HELD NO Ratio The State is only liable for the acts of its agents, officers and employees when they act as special agents within the meaning of paragraph 5 of article 1903. Reasoning - In the United States the rule is that the state is not liable for the torts committed by its officers or agents whom it employs, except when expressly made so by legislative enactment. The Government does not undertake to guarantee to any person the fidelity of the officers or agents whom it employs, since that would involve it in all its operations in endless embarrassments, difficulties and losses, which would be subversive of the public interest. - As to the scope of legislative enactments permitting individuals to sue the state where the

cause of action arises out of either fort or contract, the rule is stated in 36 Cyc., 915, thus: By consenting to be sued a state simply waives its immunity from suit. It does not thereby concede its liability to plaintiff, or create any cause of action in his favor, or extend its liability to any cause not previously recognized. It merely gives a remedy to enforce a preexisting liability and submits itself to the jurisdiction of the court, subject to its right to interpose any lawful defense. - Paragraph 5 of article 1903 of the Civil Code reads: The state is liable in this sense when it acts through a special agent, but not when the damage should have been caused by the official to whom properly it pertained to do the act performed, in which case the provisions of the preceding article shall be applicable. - The obligation to indemnify for damages which a third person causes to another by his fault or negligence is based, as is evidenced by the same Law 3, Title 15, Partida 7, on that the person obligated, by his own fault or negligence, takes part in the act or omission of the third party who caused the damage. It follows therefrom that the state, by virtue of such provisions of law, is not responsible for the damages suffered by private individuals in consequence of acts performed by its employees in the discharge of the functions pertaining to their office, because neither fault nor even negligence can be presumed on the part of the state in the organization of branches of public service and in the appointment of its agents; on the contrary, we must presuppose all foresight humanly possible on its part in order that each branch of service serves the general weal an that of private persons interested in its operation. Between

these latter and the state, therefore, no relations of a private nature governed by the civil law can arise except in a case where the state acts as a judicial person capable of acquiring rights and contracting obligations. - The Civil Code in chap 2, title 16, book 4, regulates the obligations which arise out of fault or negligence; and whereas in the first article thereof. No. 1902, where the general principle is laid down that where a person who by an act or omission causes damage to another through fault or negligence, shall be obliged to repair the damage so done, reference is made to acts or omissions of the persons who directly or indirectly cause the damage, the following articles refers to this persons and imposes an identical obligation upon those who maintain fixed relations of authority and superiority over the authors of the damage, because the law presumes that in consequence of such relations the evil caused by their own fault or negligence is imputable to them. This legal presumption gives way to proof, however, because, as held in the last paragraph of article 1903, responsibility for acts of third persons ceases when the persons mentioned in said article prove that they employed all the diligence of a good father of a family to avoid the damage, and among these persons, called upon to answer in a direct and not a subsidiary manner, are found, in addition to the mother or the father in a proper case, guardians and owners or directors of an establishment or enterprise, the state, but not always, except when it acts through the agency of a special agent, doubtless because and only in this case, the fault or negligence, which is the original basis of this kind of objections, must be presumed to lie with the state.

- Although in some cases the state might by virtue of the general principle set forth in article 1902 respond for all the damage that is occasioned to private parties by orders or resolutions which by fault or negligence are made by branches of the central administration acting in the name and representation of the state itself and as an external expression of its sovereignty in the exercise of its executive powers, yet said article is not applicable in the case of damages said to have been occasioned to the petitioners by an executive official, acting in the exercise of his powers, in proceedings to enforce the collections of certain property taxes owing by the owner of the property which they hold in sublease. - The responsibility of the state is limited by article 1903 to the case wherein it acts through a special agent (one who receives a definite and fixed order or commission, foreign to the exercise of the duties of his office if he is a special official) so that in representation of the state and being bound to act as an agent thereof, he executes the trust confided to him. This concept does not apply to any executive agent who is an employee of the acting administration and who on his own responsibility performs the functions which are inherent in and naturally pertain to his office and which are regulated by law and the regulations. - The responsibility of the state is limited to that which it contracts through a special agent, duly empowered by a definite order or commission to perform some act or charged with some definite purpose which gives rise to the claim, and not where the claim is based on acts or omissions imputable to a public official charged with some administrative or technical office who can be held to the proper responsibility in the manner laid down by the law of civil responsibility.

- The chauffeur of the ambulance of the General Hospital was not such an agent within the meaning of paragraph 5 of article 1903 On the computation of damages The two items which constitute a part of the P14,741 and which are drawn in question by the plaintiff are (a) P5,000, the award awarded for permanent injuries, and (b) the P2,666, the amount allowed for the loss of wages during the time the plaintiff was incapacitated from pursuing his occupation. We find nothing in the record which would justify us in increasing the amount of the first. As to the second, the record shows, and the trial court so found, that the plaintiff's services as a contractor were worth P1,000 per month. The court, however, limited the time to 2months and 21 days, which the plaintiff was actually confined in the hospital. In this we think there was error, because it was clearly established that the plaintiff was wholly incapacitated for a period of 6 months. The mere fact that he remained in the hospital only 2 months and 21 days while the remainder of the 6 months was spent in his home, would not prevent recovery for the whole time. We, therefore, find that the amount of damages sustained by the plaintiff, without any fault on his part, is P18,075. Dispositive Judgment appealed from reversed. Whether the Government intends to make itself legally liable for the amount of damages above set forth, which the plaintiff has sustained by reason of the negligent acts of one of its employees, by legislative enactment and by appropriating sufficient funds therefor, we are not called upon to determine. This matter rests solely with the Legislature and not with the courts. ROSETE v AUDITOR GENERAL 81 Phil 453

FERIA; August 31, 1948 NATURE Appeal from the decision of the Insular Auditor FACTS - Jose Panlilio ignited his lighter near a drum into which gasoline was being drained causing fire in the warehouse of Emergency Control Administration (ECA, a government agency). - The fire destroyed the building owned by the petitioner, thereby giving rise to this claim for damages against Panlilio for his negligence and the officers of ECA for storing gasoline in said warehouse contrary to the provisions of ordinances of the City of Manila (ordinance requires a license for storing flammable substances, which ECA didnt have). - Insular Auditor dismissed the claim hence this appeal. ISSUE WON the government is liable for the damages HELD NO - Art. 1903 of the Civil Code reads: Art. 1903. The obligation imposed in the preceding article is enforceable not only for personal acts and omission but also for those persons for whom another is responsible. xx The state is liable in this sense when it acts through a special agent, but not when the damage should have been

caused by the official to whom it properly pertained to do the act performed, in which case the provisions of the preceding article shall be applicable. - In the case of Merritt v. Government, the court held the following: The state is not responsible for the damage suffered by private individuals in consequence of acts performed by its employees in the discharge of the functions pertaining to their office n relations of a private nature governed by the civil law can arise except in a case where the state acts as a juridical person capable of acquiring rights and contracting obligations. xx That the responsibility of the state is limited by article 1903 to the case wherein it acts through a special agent (and a special agent, in the sense in which these words are employed, is one who receives a definite and fixed order by the commission, foreign to the exercise of duties of his office if he is a special official) so that in representation of the state and being bound to act as an agent thereof, he executes the trust confided to him. - There being no showing that whatever negligence may be imputed to the ECA or its officers, was done by a special agent, because the officers of the ECA did not act as special agents of the government within the above defined meaning of that wod in Article 1903 of

the Civil Code in storing gasoline in the warehouse of ECA, the government is not responsible for damages caused through such negligence. - Although there is an act (Act No. 327) authorizing the filing of claims against the government with the Insular Auditor, and appeal by private persons or entities from the latters decision to the Supreme Court, it does not make any and all claims against the government allowable, and the latter responsible for all claims. DISPOSITION affirmed. Decision appealed from is

MENDOZA V. DE LEON FONTANILLA V MALIAMAN and NATIONAL IRRIGATION ADMINSITRATION 194 SCRA 486 PARAS; February 27, 1991 NATURE Resolution FACTS - The National Irrigation Administration (NIA) maintains that it does not perform solely and primarily proprietary functions, but is an agency of the government tasked with governmental functions, and is therefore not liable for the tortuous act of its driver Garcia, who was not its special agent. o NIA believes this bases this on: PD 552 amended some provisions of RA 3601 (the law which created the NIA)

The case of Angat River Irrigation System v. Angat River Workers Union Angat Case: Although the majority opinion declares that the Angat System, like the NIA, exercised a governmental function because the nature of its powers and functions does not show that it was intended to bring to the Government any special corporate benefit or pecuniary profit, a strong dissenting opinion held that Angat River system is a government entity exercising proprietary functions. The Angat dissenting opinion: Alegre protested the announced termination of his employment. He argued that although his contract did stipulate that the same would terminate on July 17, 1976, since his services were necessary and desirable in the usual business of his employer, and his employment had lasted for five years, he had acquired the status of regular employee and could not be removed except for valid cause. The employment contract of 1971 was executed when the Labor Code of the Philippines had not yet been promulgated, which came into effect some 3 years after the perfection of the contract.

Reasoning the functions of government have been classified into governmental or constituent and proprietary or ministrant. The former involves the exercise of sovereignty and considered as compulsory; the latter connotes merely the exercise of proprietary functions and thus considered as optional. The National Irrigation Administration was not created for purposes of local government. While it may be true that the NIA was essentially a service agency of the government aimed at promoting public interest and public welfare, such fact does not make the NIA essentially and purely a "government-function" corporation. NIA was created for the purpose of "constructing, improving, rehabilitating, and administering all national irrigation systems in the Philippines, including all communal and pump irrigation projects." Certainly, the state and the community as a whole are largely benefited by the services the agency renders, but these functions are only incidental to the principal aim of the agency, which is the irrigation of lands. NIA is a government agency invested with a corporate personality separate and distinct from the government, thus is governed by the Corporation Law. Section 1 of Republic Act No. 3601 provides: Sec. 1. Name and Domicile A body corporate is hereby created which shall be known as the National Irrigation Administration. . . . which shall be organized immediately after the approval of this Act. It shall have its principal seat of business in the City of Manila and shall have representatives in all provinces, for the proper conduct of its business. (Emphasis for emphasis).

ISSUE WON the NIR is a government agency with a juridical personality separate and distinct from the government, thereby opening it up to the possibility that it may be held liable for the damages caused by its driver, who was not its special agent HELD YES

Besides, Section 2, subsection b of P.D. 552 provides that: (b) To charge and collect from the beneficiaries of the water from all irrigation systems constructed by or under its administration, such fees or administration charges as may be necessary to cover the cost of operation, maintenance and insurance, and to recover the cost of construction within a reasonable period of time to the extent consistent with government policy; to recover funds or portions thereof expended for the construction and/or rehabilitation of communal irrigation systems which funds shall accrue to a special fund for irrigation development under section 2 hereof; Unpaid irrigation fees or administration charges shall be preferred liens first, upon the land benefited, and then on the crops raised thereon, which liens shall have preference over all other liens except for taxes on the land, and such preferred liens shall not be removed until all fees or administration charges are paid or the property is levied upon and sold by the National Irrigation Administration for the satisfaction thereof. . . . The same section also provides that NIA may sue and be sued in court. It has its own assets and liabilities. It also has corporate powers to be exercised by a Board of Directors. Section 2, subsection (f): (f) . . . and to transact such business, as are directly or indirectly necessary, incidental or conducive to the attainment of the above powers and objectives, including the power to establish and maintain subsidiaries, and in general, to exercise all the powers of a corporation under the Corporation Law, insofar as they are not inconsistent with the provisions of this Act. DISPOSITION We conclude that the National Irrigation Administration is a government agency

with a juridical personality separate and distinct from the government. It is not a mere agency of the government but a corporate body performing proprietary functions. Therefore, it may be held liable for the damages caused by the negligent act of its driver who was not its special agent. ACCORDINGLY, the Motion for Reconsideration dated January 26, 1990 is DENIED WITH FINALITY. The decision of this Court in G.R. No. 55963 and G.R. No. 61045 dated December 1, 1989 is hereby AFFIRMED. DISSENTING: PADILLA: to say that NIA has opened itself to suit is one thing; to say that it is liable for damages arising from tort committed by its employees, is still another thing. The state or a government agency performing governmental functions may be held liable for tort committed by its employees only when it acts through a special agent. CITY OF MANILA V TEOTICA 22 SCRA 267 CONCEPCION; January 29, 1968 NATURE Appeal by certiorari from a decision of the Court of Appeals. FACTS - Genaro N. Teotico, an accountant, was at the corner of the Old Luneta and P. Burgos Avenue, Manila, waiting for a jeep. After waiting 5 mins, he hailed a jeep that came to a stop. As he stepped down from the curb to board the jeep, and took a few steps, he fell inside a manhole on P. Burgos Avenue. Due to the fall, his head hit the rim of the manhole breaking his eyeglasses and causing broken pieces thereof to pierce his left eyelid. As blood flowed therefrom, impairing

his vision, several persons came to his assistance and pulled him out of the manhole. One of them brought Teotico to the Philippine General Hospital, where his injuries were treated, after which he was taken home. In addition to the lacerated wound in his left upper eyelid, Teotico suffered contusions on the left thigh, the left upper arm, the right leg and the upper lip apart from an abrasion on the right infra-patella region. These injuries and the allergic eruption caused by anti-tetanus injections administered to him in the hospital, required further medical treatment by a private practitioner. - Teotico filed with CFI Manila, a complaint which was, subsequently, amended for damages against the City of Manila, its mayor, city engineer, city health officer, city treasurer and chief of police. - Defense pointed out that because of the lucrative scrap iron business then prevailing, stealing of iron catchbasin covers was rampant; that the Office of the City Engineer has filed complaints in court resulting from theft of said iron covers; that in order to prevent such thefts, the city government has changed the position and layout of catchbasins in the City by constructing them under the sidewalks with concrete cement covers and openings on the side of the gutter; and that these changes had been undertaken by the city from time to time whenever funds were available. - CFI Manila sustained the theory of the defendants and dismissed the amended complaint, without costs. - This decision was affirmed by the Court of Appeals, except insofar as the City of Manila is concerned, which was sentenced to pay damages in the aggregate sum of P6,750.00. Hence, this appeal by the City of Manila.

- The first issue raised by the Manila is whether the present case is governed by Section 4 of RA 409 (Charter of the City of Manila) reading: The city shall not be liable or held for damages or injuries to persons or property arising from the failure of the Mayor, the Municipal Board, or any other city officer, to enforce the provisions of this chapter, or any other law or ordinance, or from negligence of said Mayor, Municipal Board, or other officers while enforcing or attempting to enforce said provisions. or by Article 2189 of the Civil Code of the Philippines which provides: Provinces, cities and municipalities shall be liable for damages for the death of, or injuries suffered by, any person by reason of defective conditions of road, streets, bridges, public buildings, and other public works under their control or supervision. - Manila maintains that the former provision should prevail over the latter, because RA 409, is a special law, intended exclusively for the City of Manila, whereas the Civil Code is a general law, applicable to the entire Philippines. ISSUES WON City of Manila should be held liable for the damages suffered by Teotica. HELD YES. Ratio RA 409,sec.4 refers to liability arising from negligence, in general, regardless of the object thereof, whereas Article 2189, CC governs liability due to "defective streets," in particular. Since the present action is based upon the alleged defective condition of a road, said Article 2189 is decisive thereon.

Reasoning The assertion to the effect that said Avenue is a national highway was made, for the first time, in its motion for reconsideration of the decision of the Court of Appeals. At any rate, under Article 2189 of the Civil Code, it is not necessary for the liability therein established to attach that the defective roads or streets belong to the province, city or municipality from which responsibility is exacted. What said article requires is that the province, city or municipality have either "control or supervision" over said street or road. Even if P. Burgos Avenue were, therefore, a national highway, this circumstance would not necessarily detract from its "control or supervision" by the City of Manila, under Republic Act 409. Then, again, the determination of whether or not P. Burgos Avenue is under the control or supervision of the City of Manila and whether the latter is guilty of negligence, in connection with the maintenance of said road, which were decided by the Court of Appeals in the affirmative, is one of fact, and the findings of said Court thereon are not subject to our review. Dispositive WHEREFORE, the decision appealed from should be as it is hereby affirmed, with costs against the City of Manila. Voting Reyes, J.B.L., Dizon, Makalintal, Bengzon, J.P., Zaldivar, Sanchez, Castro, Angeles and Fernando, JJ., concur. ARANETA v JOYA 57 SCRA 59 CASTRO J.: May 24, 1974 FACTS: -An employee of the Ace ADVERTISING Company was sent to the States to pursue studies in television. When asked about the

expenses of the trip, respondent answered that these were not shouldered by the company and instead by other parties -while abroad, he continued to receive his salaries in the form of vouchers ordered and signed by respondent Joya. The petitioner signed three of these checks. The others were signed by either the respondent, or Vicente Araneta (company treasurer) who put up part of the bill connected with Taylor's trip and also handed him letters for delivery in the United States. The Ace Advertising disbursed P5,043.20, all told, on account of Taylor's travel and studies -the Ace Advertising filed a complaint with the court of first instance of Manila against the respondent for recovery of the total sum disbursed to Taylor, alleging that the trip was made without its knowledge, authority or ratification. The respondent, in his answer, denied the charge and claimed that the trip was nonetheless ratified by the company's board of directors, and that in any event under the by-laws he had the discretion, as general manager, to authorize the trip which was for the company's benefit -Joya also filed a 3rd party complaint against the two Aranetas proving that they were involved in sending Taylor abroad -trial court rendered judgment ordering the respondent to pay the Ace Advertising "the sum of P5,043.20 with interest at the legal rate from August 23, 1954 until full payment. 3rd party complaint dismissed -CA affirmed however dismissal of 3rd party complaint was reversed stating that Taylor's trip had been neither authorized nor ratified by the company -CA noted that based on the facts, both petitioners knew and through their acts showed

that they approved of the trip. were also privy to the unauthorized disbursement of the corporate moneys jointly with the appellant; what had happened was in truth and in fact a venture by them given their stamp of approval; and as it was an unauthorized act of expenditure of corporate funds, and it was these three without whose acts the same could not have happened, the juridical situation was a simple quasi-delict by them committed upon the corporation, for which solidary liability should have been imposed upon all in the first place ISSUE: WON petitioner is guilty of quasi-delict HELD: Yes - The petitioner's assertion that he signed the questioned payroll checks in good faith has not been substantiated, he in particular not having testified or offered testimony to prove such claim. Upon the contrary, in spite of his being a vicepresident and director of the Ace Advertising, the petitioner remained passive, throughout the period of Taylor's stay abroad, concerning the unauthorized disbursements of corporate funds for the latter. This plus the fact that he even approved thrice payroll checks for the payment of Taylor's salary, demonstrate quite distinctly that the petitioner neglected to perform his duties properly, to the damage of the firm of which he was an officer. -The fact that he was occupying a contractual position at the Ace Advertising is of no moment. The existence of a contract between the parties, as has been repeatedly held by this Court, constitutes no bar to the commission of a tort by

one against the other and the consequent recovery of damages