Air Transportation Office vs Spouses David and Elisea Ramos

G.R. No. 159402 – 659 Phil. 104 – 644 SCRA 36 – Political Law – Constitutional Law – State Immunity From Suit – Suit against unincorporated entities – Just Compensation Suits

In 1995, the Air Transportation Office entered into a sales agreement with Spouses David and Elisea Ramos where it was agreed that the ATO shall buy the property of the Ramoses which was encroached by the Loakan Airport (runway). The ATO failed to pay the agreed purchase price (Php778k). In 1998, the spouses filed a collection of sum of money case against ATO. ATO (now CAAP or Civil Aviation Authority of the Philippines) invoked state immunity from suit. It argued that it is an unincorporated government agency without any separate juridical personality of its own which enjoys immunity from suit because it is invested with an inherent power of sovereignty.

ISSUE: Whether or not ATO (now CAAP) is immune from suit in this case.

HELD: No. ATO cited the general rule. An exception to the rule is that sovereign immunity cannot be successfully invoked to defeat a valid claim for compensation arising from the taking without just compensation and without the proper expropriation proceedings being first resorted to of the plaintiffs’ property. In this case, the property of the spouses is being taken without just compensation. Further, ATO’s defense of non-suability is rendered moot by the passage of RA 9497 which created the CAAP. The CAAP replaced the ATO. RA 9497 provides that CAAP may sue and be sued. It further provides that all powers, duties and rights vested by law and exercised by the ATO is hereby transferred to the CAAP.

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