NATIONAL IRRIGATION ADMINISTRATION AND THE ADMINISTRATOR OF THE NATIONAL IRRIGATION ADMINISTRATION, PETITIONERS, VS. THE HONORABLE INTERMEDIATE APPELLATE COURT, ANDRES VENTURA, …

National Irrigation Administration versus Ventura

The Case

This is a petition for review on certiorari brought by the National Irrigation Administration and its Administrator against Andres Ventura and four other leasehold tenants of riceland in Santa Rosa, Nueva Ecija. The tenants sued to abate a nuisance and to recover damages, claiming that the irrigation canal the agency built left their landholdings flooded because its outlets had no gates to regulate the water. The case matters because it settles two questions every examinee must know: whether the National Irrigation Administration may be sued at all, and whether it is liable in tort for the negligence of its own officers.

Procedural History

The tenants filed their complaint for abatement of nuisance with damages before the Court of First Instance of Nueva Ecija, Fourth Judicial District, Branch Seven. After trial on the merits, that court rendered judgment on November 25, 1981, finding the complaint meritorious and ordering the agency to pay damages, attorney's fees, and the costs of suit. The agency elevated the matter to the Intermediate Appellate Court, which on February 27, 1986 affirmed the trial court's decision in its entirety. The agency then came to the Supreme Court by petition for review on certiorari, asking that the appellate decision be annulled and set aside.

Facts

The private respondents were leasehold tenants of about five hectares of riceland at Sitio Dagat-dagatan, Santo Rosario, Santa Rosa, Nueva Ecija. Sometime in 1967, the National Irrigation Administration constructed an irrigation canal on the property of Isabel and Virginia Tecson, and that canal passed through the tenants' landholdings because it traverses the Cinco-Cinco Creek, which abuts their land. The canal had two outlets that supplied water to the landholdings and at the same time drained their excess water.

The outlets were built without gates to regulate the flow of water. The landholdings were inundated, the planted palay crops were destroyed, and the tenants were prevented from planting. The trial court found that the agency scraped away the surface of the land to raise the canal's embankment, and that it delayed almost seven years in installing safety measures such as check gates, drainages, ditches, and paddy drains. The safety devices came only after the claim of Virginia Tecson was settled, sometime in 1976 or 1977.

On February 13, 1975, the tenants filed their complaint for abatement of nuisance with damages against the agency and its Administrator. The trial court found the agency's failure to provide the necessary safeguards to be the proximate cause of the damages, reduced the liability on account of the typhoons and plant pests that had also cut the harvests and the benefits that accrued from the canal, and awarded 35,000 pesos in damages and 5,000 pesos in attorney's fees, plus costs. The appellate court affirmed in full.

Issues

• Whether or not the National Irrigation Administration is immune from suit for a quasi-delict or tort.
• Whether or not the National Irrigation Administration is liable in tort, given that it did not act through a special agent under paragraph 6 of Article 2180 of the Civil Code.
• Whether or not the award of damages to the private respondents is supported by the evidence and the law.

Applicable Provisions

Paragraph 6 of Article 2180 of the Civil Code provides:

The State is responsible in like manner when it acts through a special agent; but not when the damage has been caused by the official to whom the task done properly pertains, in which case what is provided in article 2176 shall be applicable.

This is the provision the agency invoked to escape liability, and the Court used it to hold the agency answerable under the negligence rule of Article 2176.

Article 2176 of the Civil Code provides:

Whoever by act or omission causes damage to another, there being fault or negligence, is obliged to pay for the damage done. Such fault or negligence, if there is no pre-existing contractual relation between the parties, is called a quasi-delict and is governed by the provisions of this Chapter.

This is the basis of the tenants' action, which the Court describes as one for damages caused by the negligence of the agency.

Sub-paragraph (f) of Section 2 of Presidential Decree Number 552, amending Republic Act Number 3601, provides:

To establish/create such services and other means of social and economic assistance to the community which might be adversely and directly affected by the construction of National Irrigation Administration projects, and to do all such other things, 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.

This grant of corporate powers, read with the power to sue and be sued, is what removes the agency's shield of immunity.

Ruling

On the first issue, the Court held that the agency is not immune from suit by virtue of the express provision of Presidential Decree Number 552. The decree grants it the power to exercise all the powers of a corporation under the Corporation Law, and paragraph 4 of the same law allows it to sue and be sued in court for all kinds of actions, whether contractual or quasi-contractual, in the recovery of compensation and damages. The Court recalled its earlier ruling that the National Irrigation Administration is a government agency with a juridical personality separate and distinct from the government, not a mere agency of the government but a corporate body performing proprietary functions, with its own assets and liabilities and its own corporate powers exercised by a Board of Directors.

On the second issue, the Court rejected the argument that the agency could not be liable without acting through a special agent. It quoted paragraph 6 of Article 2180 and Article 2176, and concluded that the petitioners are liable for the damages caused by their negligent act. The trial court's findings, adopted by the Court, were that the agency constructed the canal without safety devices, that the failure to provide the necessary safeguards was the proximate cause of the damages to the farmers, and that the check gate of the Cinco-Cinco Creek invoked by the agency existed long before the canal was built, with no complaints until then.

On the third issue, the Court found the award in accordance with the evidence and the law. The tenants' landholdings were actually inundated, their testimonies on the amount of loss stood uncontradicted, and the amount awarded was just and reasonable under the circumstances.

Doctrine

The National Irrigation Administration is a government agency with a juridical personality separate and distinct from the government, a corporate body performing proprietary functions, and it may be sued for all kinds of actions, whether contractual or quasi-contractual, in the recovery of compensation and damages. It is not immune from suit, because Presidential Decree Number 552 expressly grants it the power to sue and be sued and to exercise all the powers of a corporation under the Corporation Law. Being suable, it is liable under Article 2176 for damage caused by its fault or negligence, and the special-agent requirement of paragraph 6 of Article 2180 does not shield it, since the negligence of its own officers in building and maintaining the canal is its own negligence. Where the agency's failure to install safety devices is the proximate cause of the inundation of farmlands, it must answer for the resulting damages.

Disposition

The petition for review on certiorari was denied for lack of merit, and the decision of the Intermediate Appellate Court affirming the award of damages, attorney's fees, and costs against the National Irrigation Administration and its Administrator was left standing.

Remember This

Memorize the line: the National Irrigation Administration is not immune from suit, because Presidential Decree Number 552 empowers it to sue and be sued and to exercise all the powers of a corporation under the Corporation Law. Examiners use this case to test state immunity and the liability of corporate government agencies for quasi-delict, so pair it with Article 2176 and paragraph 6 of Article 2180.