G.R. No.

159402

February 23, 2011

AIR TRANSPORTATION OFFICE, Petitioner,

vs.
SPOUSES DAVID* ELISEA RAMOS, Respondents.

FACTS: Spouses Ramos own a parcel of land that was being used as part of the runway of Loakan
Airport operated by petitioner Air Transportation Office (ATO). Spouses Ramos agreed to sell the subject
land to petitioner but the latter failed to pay prompting the spouses to file a collection suit against ATO.
ISSUE: Whether ATO, an unincorporated government agency not performing a purely governmental
function can be sued without its consent
RULING: Yes. An unincorporated government agency without any separate juridical personality of its own
enjoys immunity from suit because it is invested with an inherent power of sovereignty. Accordingly, a
claim for damages against the agency cannot prosper; otherwise, the doctrine of sovereign immunity is
violated. However, the need to distinguish between an unincorporated government agency performing
governmental function and one performing proprietary functions has arisen. The immunity has been
upheld in favor of the former because its function is governmental or incidental to such function; it has not
been upheld in favor of the latter whose function was not in pursuit of a necessary function of government
but was essentially a business. The ATO is an agency of the government not performing a purely
governmental or sovereignty function, but was instead involved in the management and maintenance of
the Loakan airport, an activity that was not the exclusive prerogative of the State in its sovereign capacity.
Hence, the ATO had no claim to the State's immunity from suit. Moreover, the doctrine of 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
plaintiff's property.