Bermoy, et al. vs. Philippine Normal College

A government instrumentality endowed by its charter with the express corporate power to "sue and be sued" under Section 13 of the Corporation Law has the juridical capacity to be sued in court without need of further legislative consent, and its invocation of state immunity will not lie.

The Philippine Normal School was converted into the Philippine Normal College by Republic Act No. 416 in 1949. The College operated a dormitory known as Normal Hall, employing staff in various service capacities. Disputes arose regarding wage claims for these employees, leading to litigation that tested whether the College, as a government educational institution, possessed the juridical personality necessary to be subjected to court process.

• Filed in the CFI of Manila on July 6, 1954 by twenty employees
• Solicitor General filed an answer on behalf of defendants denying liability
• CFI dismissed the case on the ground that neither defendant was a corporation or juridical entity with capacity to be sued
• Motion for reconsideration denied by the CFI
• Elevated to the SC via appeal by plaintiffs

• Plaintiffs were twenty employees (cooks, waiters, a dishwasher, and other staff) working at Normal Hall, the dormitory of the Philippine Normal College
• On July 6, 1954, they instituted an action against the College (and/or Philippine Normal School) for recovery of salary differentials and overtime pay
• The Solicitor General represented the defendants and filed an answer denying liability
• Before trial on the merits, the CFI ordered the case dismissed on the sole ground that neither defendant possessed corporate or juridical personality and thus lacked capacity to be sued

• The Philippine Normal College possesses juridical personality and capacity to be sued by virtue of RA No. 416, which converted the School into a College and endowed it with corporate powers
• The CFI erred in dismissing the complaint; the College can be made a defendant in court because its charter expressly incorporates the power to sue and be sued from the Corporation Law
• The provisions of RA No. 416, particularly those regarding service of process upon the Board of Trustees, demonstrate legislative intent to make the College amenable to suit

• Admits that the Philippine Normal College possesses juridical personality of its own
• Contends that, as an instrumentality of government for the discharge of state functions, it may not be sued without the State's consent
• Impliedly argues that the mere grant of corporate form does not override the general principle of state immunity from suit; a specific waiver of sovereign immunity is required beyond the general corporate power to be sued

• Procedural Issues: N/A
• Substantive Issues:
  • Whether the Philippine Normal College is a juridical entity with capacity to be sued
  • Whether the College, as a government instrumentality, may be sued without the State's consent despite its charter granting corporate powers under the Corporation Law

• Procedural: N/A
• Substantive:
  • Yes. RA No. 416 expressly converted the Philippine Normal School into the Philippine Normal College and endowed it with the "general powers set out in section thirteen of Act Numbered Fourteen hundred and fifty-nine, as amended" (the Corporation Law).
  • Yes. Section 13 of the Corporation Law specifically enumerates the power "to sue and be sued in any court." This express statutory grant constitutes the State's consent to be sued. The SC rejected the Solicitor General's contention that additional consent was required, holding that the State "has already given that consent by investing the College with the express power to be sued in courts."
  • Section 6 of RA No. 416 further confirms this by providing that "all process against the Board of Trustees shall be served on the President or secretary thereof," which presumes and operationalizes the College's amenability to legal process.
  • The order of dismissal is revoked and the case remanded to the CFI for further proceedings.

• Juridical Personality of Government Instrumentalities — Government entities may be endowed with corporate or juridical personality separate from the State when created by statute with specific corporate powers. The SC applied this by finding that RA No. 416 created the College as a body corporate under the Corporation Law, not merely as an unincorporated agency, giving it independent capacity to be subjected to suits.
• State Immunity from Suit (Express Consent by Statute) — The general rule that the State may not be sued without its consent is inapplicable where the State has expressly waived such immunity through statutory language. The SC applied this by interpreting the incorporation of Section 13 of the Corporation Law (specifically the power "to sue and be sued") into the College's charter as an express, complete, and self-executing waiver of immunity.
• Incorporation by Reference — When a statute endows an entity with powers enumerated in another law, all such enumerated powers in the referenced law are deemed granted to the entity. The SC applied this to find that the specific power to sue and be sued was included in the general grant of corporate powers to the College, notwithstanding the absence of explicit repetition in RA No. 416.

• "With this express grant of power, we don't see how it could be doubted that the Philippine Normal College could be made a defendant in a suit in court."
• "The answer to that contention is that the state has already given that consent by investing the College with the express power to be sued in courts."
• "That the Act authorizes the College to be sued is also made clear in section 6, where it is provided that 'all process against the Board of Trustees shall be served on the President or secretary thereof,'" — Cited to demonstrate that procedural provisions for service of process confirm the substantive finding of amenability to suit.

• N/A (The SC decided the case primarily on statutory construction of RA No. 416 and the Corporation Law without citing prior controlling precedents in the text of the decision)

• Republic Act No. 416 — The charter of the Philippine Normal College:
  • Converted the Philippine Normal School into the Philippine Normal College
  • Granted it the "general powers set out in section thirteen of Act Numbered Fourteen hundred and fifty-nine, as amended" (Corporation Law)
  • Entrusted government to a Board of Trustees with power to administer Normal Hall funds
  • Section 6: Provided for service of process on the President or Secretary of the Board of Trustees, implying suability
  • Act No. 1459 (Corporation Law), Section 13 — Enumerated the general powers of corporations, specifically including the power "to sue and be sued in any court"

• N/A (Paras, C.J., Bengzon, Padilla, Montemayor, Reyes, A., Jugo, Bautista Angelo, Labrador, Concepcion, Reyes, J.B.L., and Endencia, JJ., concurred in the unanimous decision; no separate opinions were filed)