Fontanillas vs Maliamanm, GR 55963, Dec. 1, 1989 & Feb.
27, 1991 (MR)
Facts: On August 21, 1976, a pick-up truck owned and operated by the National
Irrigation Administration (NIA), driven by its regular employee Hugo Garcia, struck a
bicycle ridden by Francisco Fontanilla and Restituto Deligo along the Maharlika
Highway in Maasin, San Jose City. Francisco Fontanilla was injured and later died in the
hospital. The parents of Francisco Fontanilla, the petitioners, filed a case for damages
against NIA before the Court of First Instance of Nueva Ecija.
The trial court rendered judgment on March 20, 1980, ordering the National Irrigation
Administration to pay the heirs of Francisco Fontanilla P12,000.00 for his death and
P3,389.00 for hospitalization and burial expenses, plus costs. The trial court's decision
denied the petitioners' claim for moral and exemplary damages and attorney's fees.
Respondent NIA filed a motion for reconsideration which was denied and subsequently
appealed the decision to the Court of Appeals. Petitioners, instead of filing a brief in the
Court of Appeals, filed a petition with the Supreme Court seeking the affirmance of the
trial court decision but with modification regarding the denial of moral damages,
exemplary damages, and attorney's fees.
Issue: Whether the National Irrigation Administration, as an agency of the State, can be
held liable for damages based on the negligence of its regular employee acting within the
scope of his assigned tasks, and consequently, whether the award of moral damages,
exemplary damages, and attorney's fees is legally proper in this quasi-delict case which
resulted in the death of the petitioners' son.
Ruling: The Supreme Court ruled that the liability of the State has two aspects: public or
governmental, where it is liable only for the tortious acts of special agents, and private or
business, where it is liable as an ordinary employer. A special agent is one specially
commissioned to do a particular task foreign to their usual governmental functions; if the
agent is not a public official performing non-governmental functions, the State acts as an
ordinary employer and is liable for the agent's tort. However, the source clarifies that the
State is not liable when the damage is caused by an official to whom the task properly
pertains. Certain governmental functions provide immunity from tort liability, while
proprietary functions, like services provided by a private corporation that collect revenue,
may result in liability for the torts of agents acting within the scope of their employment.
The Court found that the National Irrigation Administration is a government corporation
with juridical personality created by express provision of Rep. Act No. 3601. Section 2 of
this Act spells out some of NIA's proprietary functions, such as collecting fees from users
to finance operations and reimburse construction costs. Since NIA is a corporate body
performing non-governmental, proprietary functions, it assumes the responsibility of an
ordinary employer and is liable for damages caused by the accident resulting from its
driver-employee's tortious act. This liability is predicated upon the existence of
negligence, specifically negligence in supervision, which the Court found was present
due to the driver traveling at a high speed within city limits and the supervisor's failure to
caution him. Thus, the Court held NIA liable for damages. The Supreme Court modified
the trial court's decision and directed NIA to pay the petitioners P12,000.00 for the death,
P3,389.00 for hospitalization and burial expenses, P30,000.00 as moral damages,
P8,000.00 as exemplary damages, and attorney's fees of 20% of the total award.
