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Spouses Fontanilla Vs Maliaman Case Digest

The National Irrigation Administration (NIA), a government agency, was sued for damages caused when one of its driver's pickup trucks collided with and killed a bicyclist. The Supreme Court ruled that NIA could be held liable because, though a government agency, it has a separate corporate personality and performs proprietary rather than solely governmental functions by administering irrigation systems. As such, NIA can be held liable for torts committed by employees in the course of performing these proprietary duties, even if they are not special agents of the state.

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2K views2 pages

Spouses Fontanilla Vs Maliaman Case Digest

The National Irrigation Administration (NIA), a government agency, was sued for damages caused when one of its driver's pickup trucks collided with and killed a bicyclist. The Supreme Court ruled that NIA could be held liable because, though a government agency, it has a separate corporate personality and performs proprietary rather than solely governmental functions by administering irrigation systems. As such, NIA can be held liable for torts committed by employees in the course of performing these proprietary duties, even if they are not special agents of the state.

Uploaded by

kent kintanar
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© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
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epublic of the Philippines

SUPREME COURT
Manila

SECOND DIVISION

G.R. No. L-55963 December 1, 1989

SPOUSES JOSE FONTANILLA AND VIRGINIA FONTANILLA, petitioners,


vs.
HONORABLE INOCENCIO D. MALIAMAN and NATIONAL IRRIGATION
ADMINISTRATION, respondents.

G.R. No. L-61045 December 1, 1989

FACTS: A pick up owned by the National Irrigation Administration and driven officially by its
regular driver, Hugo Garcia, bumped a bicycle ridden by Francisco Fontanilla, which resulted in
the latter's death. The parents of Francisco filed a suit for damages against Garcia and the NIA,
as Garcia's employer. After trial, the court awarded actual, moral and exemplary damages to
Spouses Fontanilla. NIA appealed. The Solicitor General contends that the NIA 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 tortious act of its driver Hugo Garcia,
who was not its special agent.

ISSUE: 

May NIA, a government agency, be held liable for the damages caused by the negligent act of its
driver who was not its special agent?

HELD:

Yes. NIA 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. (Fontanilla vs. Maliaman,  G.R. Nos. L-55963 &
61045, February 27, 1991)

RATIO: 

■ Section 1 of RA No. 3601 tells us that NIA is a government agency invested with a corporate
personality separate and distinct from the government, thus is governed by the Corporation
Law. Section 2, subsection f of PD 552 provides that NIA also has its own assets and liabilities
and has corporate powers to be exercised by a Board of Directors. Section 2, subsection b of PD
552 provides that NIA may sue and be sued in court. 

■ Of equal importance is the case of National Waterworks and Sewerage Authority (NAWASA)
vs. NWSA Consolidated Unions, 11 SCRA 766, which propounds the thesis that "the NAWASA
is not an agency performing governmental functions; rather it performs proprietary
functions . . . ." The functions of providing water supply and sewerage service are regarded as
mere optional functions of government even though the service rendered caters to the community
as a whole and the goal is for the general interest of society.

Like the NAWASA, 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.

NOTES:

■ The liability of the State has two aspects. namely:


1. Its public or governmental aspects where it is liable for the tortious acts of special agents only.
2. Its private or business aspects (as when it engages in private enterprises) where it becomes
liable as an ordinary employer. Fontanilla vs. Maliaman,  G.R. Nos. L-55963 & 61045,
December 1, 1989)

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