G.R. No. 70547 – 217 SCRA 401 – Political Law – Constitutional Law – State Immunity From Suit – Suit Against GOCCs – Doctrine of Implied Powers
In 1974, a PNR train operated by Honorio Cirbado (aka Honorio Cabardo) bumped a Baliwag Bus (BB) driven by Romeo Hughes. Eighteen individuals died as a result. BB sued PNR for damages. PNR argued that it was Hughes who was negligent for failing to “stop, look, and listen.” During pre-trial, it was stipulated that PNR failed to install enough warning signs at the railroad crossing where the incident happened. It was also stipulated that PNR has the power to sue and be sued. The trial court, as well as the appellate court, ruled against PNR. It was established that PNR was negligent for failing to put warning signs at a busy railroad crossing; that Honorio was over speeding; that PNR failed to observe due diligence in selecting Honorio as its train operator as it appears that he only finished primary education but became an engineer through sheer experience. On appeal, PNR is now invoking that it is immune from suit.
ISSUE: Whether or not PNR is immune from suit.
HELD: No. Firstly, it already agreed during pre-trial that it may be sued. Secondly, even without the stipulation, PNR may still be sued. PNR was created by law (RA 4156). It is a corporation established to provide public transport services. Not all government entities, whether corporate or non-corporate, are immune from suits. Immunity from suit is determined by the character of the objects for which the entity was organized.
In PNR’s charter, it was stated there that PNR is empowered to transact all business necessary for its purpose. There was no mention as to its capacity to sue or be sued. However, using the doctrine of implied powers, the power to sue and be sued is implicit from the faculty to transact private business.
When the government enters into a commercial business it abandons its sovereign capacity and is to be treated like any other private corporation. When the State enters into a contract, it is deemed to have descended from its superior position to the level of an ordinary citizen and opens itself to judicial process.
