G.R. No.

L-11154

March 21, 1916

E. MERRITT
vs
GOVERNMENT OF THE PHILIPPINE ISLANDS

SUMMARY OF FACTS:

A collision happened between the motorcycle driven by E. Merritt and the General
Hospital ambulance driven by an unknown chauffer.

An appeal by both parties was filed before the Supreme Court from a judgment of
the Court of first Instance of Manila in favour of the plaintiff for the sum of P14,741,
together with the costs of the cause.

Plaintiffs counsel contends that the trial court should not reduce the general
damages which the plaintiff suffered and the days of recuperation of the plaintiff at
home should be included in the computation of time of temporary disability.

Defendants counsel argues that the collision was not result of the chauffers
negligence and that the government is not liable even if be true that it was the fault
of the chauffer.

The Supreme Court was initially in full accord with the court below that the collision
was due solely to the negligence of the chauffer.
STATEMENT OF RELEVANT ISSUE
The main issue to be argued is whether the Government is legally liable for the
damages resulting therefrom.
COURTS RULING ON THE ISSUE

The Supreme Court anchored much of its decision in the provisions of paragraph 5
of article 1903 of the Civil Code in that there is some limitation on the responsibility
of the State in its contracts through a special agent who is duly vested by clear
order or task to perform some acts or charged with some definite purpose, which in
the event a complaint will be filed and would give rise to a claim for damages
against the State.
Obviously, this cannot be applied to the chauffer since he is not a special agent
imbued with a definite and fixed order or commission, extraneous to the exercise of
the duties of his office if he is a special agent and much less not a public official
contemplated in the code cited therein charged with some administrative or
technical function who can be held civilly responsible.
Additionally, the chauffer is an executive agent who is an employee of the
government hospital and who on his own responsibility performs the functions
which are inherent in and naturally pertain to his office and which are regulated by
prevailing laws and regulations at the time of the collision.
Although the Legislature passed an Act authorizing E. Merritt to bring suit against
the Government of the Philippine Islands, nowhere in the Act did it give power to the
judiciary to determine the specific amount of damage the plaintiff would receive.
In light from the foregoing reasons the judgment appealed from was reversed,
without costs in that instance since the courts cannot make rules or order just to
accommodate an aggrieved person who can possibly draw a right from a still nonexisting law, civil code or rule because it is not within its province to make laws to
that effect and doing so would result in a constitutional crisis.
PROFESSIONAL VIDEO, INC. vs. TESDA
G.R. No. 155504 June 26, 2009
SUMMARY OF FACTS:
PROVI was an entity engaged in the sale of high technology equipment, information
technology products and broadcast devices, including the supply of plastic card
printing and security facilities.
TESDA is a subsidiary branch of the Department of Labor and Employment (DOLE)
established under Republic Act (R.A.) No. 7796 (the TESDA Act of 1994) to develop
and establish a national system of skills standardization, testing, and certification in
the country. To fulfil this mandate, it sought to issue security-printed certification
and/or identification polyvinyl (PVC) cards to trainees who have passed the
certification process.
TESDAs Pre-Qualification Bids Award Committee (PBAC) conducted two (2) public
biddings on June 25, 1999 and July 22, 1999 for the printing and encoding of PVC
cards.

Due to the failed bidding, the PBAC recommended that TESDA enter into a
negotiated contract with PROVI. On December 29, 1999, TESDA and PROVI signed
and executed their Contract Agreement for the provision of goods and services in
the printing and encoding of PVC cards.
Under the Contract Agreement, PROVI will supply TESDA with the contracted goods
and services that would comply with the specifications defined in the Technical
Proposal and in turn, TESDA would pay PROVI the amount of Thirty-Nine Million Four
Hundred and Seventy-Five Thousand Pesos (P39,475,000) within fifteen (15) days
after TESDAs acceptance of the contracted goods and services.
In a later date, TESDA and PROVI executed an Addendum to the Contract
Agreement whose terms bound PROVI to deliver one hundred percent (100%) of
the enumerated supplies to TESDA consisting of five hundred thousand (500,000)
pieces of security foil; five (5) pieces of security die with TESDA seal; five hundred
thousand (500,000) pieces of pre-printed and customized identification cards; one
hundred thousand (100,000) pieces of scannable answer sheets; and five hundred
thousand (500,000) customized TESDA holographic laminate. In addition, PROVI
would install and maintain the following equipment: one (1) unit of Micropoise, two
(2) units of card printer, three (3) units of flatbed scanner, one (1) unit of OMR
scanner, one (1) unit of Server, and seven (7) units of personal computer.

STATEMENT OF RELEVANT ISSUE:

Whether TESDA, as an agency of the State, can be or cannot be sued without its
consent.
COURTS RULING ON THE ISSUE:
The Supreme Court affirmed the decision of the Court of Appeals that there was
gross misreading of the law and jurisprudence amounting to action in excess of the
Regional Trial Courts jurisdiction.
TESDA is an instrumentality of the government undertaking governmental functions.
TESDA, as an agency of the State, cannot be sued without its consent.
TESDAs funds are public in character, hence exempt from attachment or
garnishment.

PROVI has not shown that it is entitled to the writ of attachment. It failed to comply
with the two grounds enumerated in Section 1, Rule 57 of the Rules of Court to
which attachment may issue:

(b) In an action for money or property embezzled or fraudulently misapplied or

converted to his use by a public officer, or an officer of a corporation, or an
attorney, factor, broker, agent or clerk, in the course of his employment as such, or
by any other person in a fiduciary capacity, or for a willful violation of duty;
(d) In an action against a party who has been guilty of fraud in contracting the debt
or incurring the obligation upon which the action is brought, or in concealing or
disposing of the property for the taking, detention or conversion of which the action
is brought;
FRANCISCO MALONG and ROSALINA AQUINO MALONG vs. PHILIPPINE NATIONAL
RAILWAYS
G.R. No. L-49930 August 7, 1985
SUMMARY OF FACTS:
This case is about the immunity from suit of a government instrumentality, the
Philippine National Railways.
Its predecessor, as a common carrier, was not immune from suit under Act No.
1510, its charter.
The petitioners son was killed when he fell from a PNR train while it was between
Tarlac and Capas.
The respondent companys charter provides that the PNR is a government
instrumentality under government ownership during its 50-year term.
Its charter also provides that it generally will exercise all powers of a railroad
corporation under the Corporation Law
STATEMENT OF RELEVANT ISSUE:
Whether the State acted in a sovereign capacity or in a corporate capacity when it
organized the PNR for the purpose of engaging in the transportation business.
COURTS RULING ON THE ISSUE:
The Supreme Court held that in the subject case, the State divested itself of its
sovereign capacity when it organized the PNR which was no different from its
predecessor, the Manila Railroad Company and in so doing so is not shielded from
suit.
According to the Supreme Court, immunity from suit can be determined by the
character of the objects for which the entity was organized in line with its own
decision in Nat. Airports Corp. vs. Teodoro and Phil. Airlines, Inc., 91 Phil. 203, 206.

Furthermore, it was held that since PNR engaged in matters that partook more of
the nature of an ordinary business like its predecessor did rather than functioning as
a government instrumentality, PNR opened itself to possible suits because it did not
remove itself from the operation of articles 1732 to 1766 of the Civil Code on
common carriers.
The Supreme Court elucidated further that when the government ventures into a
commercial business it renounces its sovereign capacity and is to be regarded like
any other private corporation.
In an earlier case where the PNR was the petitioner, its fund was garnished by the
Union de Maquinistas, the legitimate labor union of the company because it would
be iniquitous if the heirs of the victim of an alleged negligence of the PNR
employees could not sue the PNR for damages.
Hence, the order of dismissal of the court below was reversed and set aside and
send the case back to the lower court for further proceedings.