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Rayo v. CFI of Bulacan GR No. L-55273-83 December 19, 1981: Raoul A. Villegas

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Rayo v.

CFI of
Bulacan

GR No. L-55273-83

December 19, 1981

Raoul A. Villegas

The justiciable questions in this case are as follows: a) Does the National Power
Corporation perform a government function when it operates and manages Angat Dam?;
and b) Does the power of the National Power Corporation to sue and be sued under its
organic charter include the power to be sued for civil damages?
The following are the facts of the case. In 1978, during the typhoon Gading, NPC Plant Superintendent
Benjamin Chavez opened all three floodgates of Angat Dam. Norzagaray, Bulacan was hit by a huge flood.
More than 100 people died. The estimated property damage reached into the millions of pesos.
The petitioners filed eleven complaints for damages with the Court of First Instance of Bulacan, against
the National Power Corporation and Benjamin Chavez.
The NPC filed a separate defense against each complaint. It claimed that it was exercising a pure
government function and could not be sued without the consent of the State. In the preliminary hearing,
the petitioners countered that the NPC was only exercising a proprietary function. Further, petitioners
pointed out that under the Section 3 (d) of R.A. 6395 (An Act Revising the Charter of the National Power
Corporation), the NPC can be sued in court.
The CFI dismissed all of the complaints against the NPC and left Benjamin Chavez as the sole defendant.
The petitioners filed a motion for reconsideration the court also denied this. The petitioners filed a
petition for review on certiorari with the Supreme Court based on R.A. 5440 (An Act Amending Sections 9
and 17 of the Judiciary Act of 1948).
The CFI based its order of dismissal on the assertion that the NPC performs a pure governmental
function. Suing the NPC for damages would require the consent of the State.
The Supreme Court requested the respondents to comment. The Solicitor General failed to meet any of
the deadlines named by the Court. Also, the Solicitor General requested for extensions on numerous
occasions. He did not meet any of his extended deadlines.
The Supreme Court granted the petition of Rayo and his co-petitioners. The Court substantiated its ruling
by pointing out that even in its charter under R.A. 6395, NPC has the power to sue and be sued, without
any qualification. Further, the Court also cited that under the same law, the NPC was organized as a
government owned and controlled corporation, with its own distinct personality, with capital paid into it
by the government.
Finally, the Court also held that since the NPC could sue and be sued without qualification, it could be
sued for civil damages.

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