City of Manila vs. Intermediate Appellate Court

The operation and maintenance of a public cemetery is a proprietary function of a municipal corporation, and the city is liable for damages arising from the tortious acts of its employees in connection therewith, notwithstanding a charter provision exempting it from liability for governmental functions.

The City of Manila owns and operates the North Cemetery, created by resolution of the Municipal Board on August 27, 1903 and January 7, 1904. The administration of the cemetery falls under the City Health Officer, with the superintendent responsible for graves, exhumations, and related matters. The City prescribes guidelines for the use and disposition of burial lots through administrative orders. The Revised Charter of Manila (Republic Act No. 409) contains Section 4, Article I, exempting the city from liability for damages or injuries arising from the failure of the Mayor, the Municipal Board, or other city officers to enforce the charter or other laws, or from their negligence while enforcing or attempting to enforce said provisions. The case tests the boundary between that exemption and the city's liability for acts arising from its proprietary functions.

Vivencio Sto. Domingo, Sr. died on June 4, 1971 and was buried two days later in Lot No. 159, Block No. 194 of the North Cemetery, a burial ground owned and operated by the City Government of Manila. His widow, Irene Sto. Domingo, leased the burial lot from the city for a period of fifty years — from June 6, 1971 to June 6, 2021 — as evidenced by Official Receipt No. 61307 dated June 6, 1971, duly signed by the deputy treasurer of the City of Manila and sealed by the city government. The full rental of P50.00 was paid. No other document was executed to embody the lease, and the burial record for Block No. 194 did not reflect the term of duration of the lease in favor of the Sto. Domingo family.

On March 6, 1975, the City Mayor of Manila issued Administrative Order No. 5, Series of 1975, prescribing uniform procedures and guidelines for the processing of documents pertaining to the use and disposition of burial lots and plots within the North Cemetery. Believing in good faith that this administrative order limited burial lot leases to five years, the cemetery authorities certified on January 25, 1978 that Lot No. 159 was ready for exhumation. On the basis of that certification, the cemetery authorities, then headed by Joseph Helmuth, authorized the exhumation and removal of the remains of Vivencio Sto. Domingo, Sr. The bones and skull were placed in a bag or sack and kept in the cemetery's depository or bodega. The lot was subsequently rented out to another lessee.

On All Souls' Day in 1978, Irene Sto. Domingo and her family visited the grave only to find that the stone marker they had lovingly placed on the tomb was gone, replaced by a new marker belonging to another lessee. Upon inquiry with Sergio Mallari, the officer-in-charge of the North Cemetery, she was informed that her husband's remains had been exhumed and the lot given to another party. She was told she could look for the bones in the cemetery's warehouse, where exhumed remains from different burial lots were kept until retrieved by interested parties. To the bereaved widow, locating her husband's remains among thousands upon thousands of sacks of human bones was an impossible task, and she refused to run the risk of claiming the wrong set of bones. She was offered another lot but was never appeased. Too aggrieved to await the formal presentation of claims and demands to the city government, she filed an action for damages on February 22, 1979 against the City of Manila, Evangeline Suva of the City Health Office, Sergio Mallari, and Joseph Helmuth.

Both the trial court and the Court of Appeals found the receipt to constitute a valid contract of lease for fifty years and held that the exhumation was premature. The Court of Appeals further found that the lease contract was still in full force and effect when the lot was certified for exhumation on January 25, 1978, and that Administrative Order No. 5 applied only to new leases. The Court of Appeals also found that the appellants, despite their lowly station in life, had found great consolation in visiting the grave on special occasions, particularly on All Saints' Day, in keeping with Filipino Catholic tradition, and that the unauthorized exhumation and the impossible task of locating the remains among thousands of sacks constituted desecration that caused them profound wounded feelings.

• Good Faith and Lack of Knowledge: Petitioners argued that they should not be held liable for damages because they acted in good faith and lacked knowledge of or consent to the removal of the skeletal remains of Vivencio Sto. Domingo, Sr. from the subject burial lot.
• Governmental Function and Tort Immunity: Petitioners contended that the North Cemetery is exclusively devoted for public use, making its operation a governmental function, and that under Section 4, Article I of the Revised Charter of Manila (Republic Act No. 409), the city is exempt from liability for damages arising from the malfeasance or misfeasance of its officials and employees. They argued that the Revised Charter, being a special law, cannot be defeated by the Human Relations provisions of the Civil Code, a general law.

• Proprietary Function and Contract Liability: Private respondents maintained that the City of Manila entered into a contract of lease involving the exercise of proprietary functions with private respondent Irene Sto. Domingo, and that the city and its officers can therefore be sued for any violation of the contract of lease.

• Nature of Cemetery Operations: Whether the operations and functions of a public cemetery are a governmental or a proprietary function of the City of Manila.
• Tort Liability of the City: Whether the City of Manila is liable for damages for the tortious acts of its employees in connection with the operation of the North Cemetery, notwithstanding the exemption provision of the Revised Charter of Manila.
• Validity of the Lease: Whether the contract of lease for the burial lot for fifty years, as evidenced by the official receipt, is valid.
• Propriety of Damages Award: Whether the Court of Appeals erred in awarding damages against the petitioners notwithstanding their good faith and lack of knowledge or consent to the removal of the remains.

• Nature of Cemetery Operations: Proprietary. The operation and maintenance of a public cemetery is a proprietary function of the City of Manila, not a governmental one, as recognized in Torio vs. Fontanilla and supported by the city's acts of dominion over the North Cemetery.
• Tort Liability of the City: Yes. The City of Manila is liable for the tortious acts of its employees under the doctrine of respondent superior, since the cemetery operation is a proprietary function and the charter exemption applies only to governmental functions.
• Validity of the Lease: Yes. The official receipt duly signed by the deputy treasurer and sealed by the city government, clearly stating the fifty-year term, constitutes a valid contract of lease.
• Propriety of Damages Award: No error. The awards for breach of contract, moral damages, exemplary damages, and attorney's fees were proper, a breach of contractual provisions entitling the injured party to damages even without a prescribed penalty.

• Nature of Cemetery Operations: The Court drew the fundamental distinction between the dual character of municipal corporations: governmental (public, political) functions, which involve administering the powers of the state and promoting public welfare, and proprietary (private, corporate) functions, which are exercised for the special benefit and advantage of the community. Citing Torio vs. Fontanilla, the Court noted that maintenance of parks, golf courses, cemeteries, and airports are recognized as municipal activities of a proprietary character. The North Cemetery is patrimonial property of the City of Manila: it was created by Municipal Board resolution, is administered through the City Health Officer, and its operations — including the opening of graves, exhumation of remains, and prescription of procedures for burial lot disposition — are governed by city ordinances and administrative orders. These acts of dominion demonstrate that the cemetery is owned by the city in its proprietary or private character. In the absence of a special law classifying it as property for public use under Article 424 of the Civil Code, the cemetery falls within the class of patrimonial property.

• Tort Liability of the City: Because the operation of the cemetery is a proprietary function, the city can be held liable to third persons ex contractu or ex delicto, as established in Torio vs. Fontanilla. Under the doctrine of respondent superior, the employer must answer civilly for the negligence or want of skill of its agent or servant in the course of employment by which another, free from contributory fault, is injured. The city's employees failed to verify and check the duration of the lease contract, prematurely certifying the lot for exhumation. The contention that Administrative Order No. 5 limited the lease to five years was rejected because the order covers new leases only; when the lot was certified for exhumation on January 25, 1978, the fifty-year lease was still in full force and effect. The charter exemption in Section 4 of the Revised Charter of Manila applies to governmental functions and cannot shield the city from liability arising from its proprietary operations.

• Validity of the Lease: The official receipt, duly signed by the deputy treasurer of the City of Manila and sealed by the city government, clearly stated the fifty-year term from June 6, 1971 to June 6, 2021. Both the trial court and the Court of Appeals concluded that the receipt is in itself a contract of lease, and nothing in the record justified reversing that conclusion. Obligations arising from contracts have the force of law between the contracting parties, and a lease contract executed by lessor and lessee remains the law between them.

• Propriety of Damages Award: A breach of contractual provisions entitles the other party to damages even if no penalty for such breach is prescribed in the contract. The Court of Appeals' findings as to the harrowing experience of the respondents — their wounded feelings upon discovering on All Souls' Day that the resting place of their loved one no longer bore the marker they had placed, and the impossible task of locating his remains among thousands of sacks of bones — amply supported the awards for moral and exemplary damages. The breach of contract was clear, and the city's failure to notify the family of the intended transfer, which would have allowed them to demand faithful fulfillment of the contract or at least prepare for the transfer, compounded the injury.

• Governmental vs. Proprietary Functions of Municipal Corporations — A municipal corporation has a twofold character: public, governmental, or political on one hand, and corporate, private, and proprietary on the other. Governmental powers are those exercised in administering the powers of the state and promoting the public welfare, including legislative, judicial, public, and political functions. Proprietary powers are exercised for the special benefit and advantage of the community and include ministerial, private, and corporate functions. The maintenance of cemeteries, parks, golf courses, and airports is recognized as a proprietary function. The Court applied this doctrine to classify the North Cemetery as patrimonial property operated in the city's proprietary capacity, thereby removing the shield of governmental immunity.

• Municipal Tort Liability (Respondent Superior) — Municipal corporations are subject to suit upon contracts and in tort when acting in their proprietary capacity. The superior or employer must answer civilly for the negligence or want of skill of its agent or servant in the course or line of employment, by which another who is free from contributory fault is injured. The Court applied this doctrine to hold the City of Manila liable for its employees' failure to verify the duration of the lease, resulting in the premature and unauthorized exhumation and loss of the deceased's remains.

• Classification of Municipal Property — Under Articles 423 and 424 of the Civil Code, properties of municipal corporations are divided into property for public use (provincial roads, city streets, municipal streets, squares, fountains, public waters, promenades, and public works for public service) and patrimonial properties. All other property is patrimonial, without prejudice to special laws. The Court applied this classification to hold that, in the absence of a special law designating the North Cemetery as property for public use, it is patrimonial property owned by the city in its proprietary capacity.

• "Maintenance of parks, golf courses, cemeteries and airports among others, are also recognized as municipal or city activities of a proprietary character." — This passage, drawn from Torio vs. Fontanilla and adopted by the Court, provides the canonical classification of cemetery operations as proprietary, which is the decisive factor in determining the city's liability.

• "Municipal corporations are subject to be sued upon contracts and in tort.... The rule of law is a general one, that the superior or employer must answer civilly for the negligence or want of skill of its agent or servant in the course or line of his employment, by which another who is free from contributory fault, is injured." — This states the doctrine of respondent superior as applied to municipal corporations in their proprietary capacity, establishing the legal basis for the city's liability.

• "With the acts of dominion, there is, therefore no doubt that the North Cemetery is within the class of property which the City of Manila owns in its proprietary or private character." — This applies the proprietary function classification to the North Cemetery specifically, based on the city's administrative control over the cemetery through its officers and ordinances.

• Torio vs. Fontanilla, 85 SCRA 599 (1978) — Controlling precedent. Established that maintenance of cemeteries is a proprietary function and that municipal corporations can be held liable ex contractu or ex delicto when acting in their proprietary capacity. The doctrine of respondent superior was applied to municipal corporations under these conditions.
• Province of Zamboanga del Norte vs. City of Zamboanga, 22 SCRA 1334 (1968) — Cited for the classification of municipal properties into property for public use and patrimonial properties under Articles 423 and 424 of the Civil Code.
• Henson vs. Intermediate Appellate Court, 148 SCRA 11 (1987) — Cited for the principle that obligations arising from contracts have the force of law between the contracting parties, and that a lease contract remains the law between lessor and lessee.
• Boysaw vs. Interphil Promotions, Inc., 148 SCRA 635 (1987) — Cited for the principle that breach of a contractual provision entitles the other party to damages even if no penalty for such breach is prescribed in the contract.
• Municipality of Moncada vs. Cajuigan, 21 Phil. 184 (1912) — Early authority cited for municipal liability ex contractu.
• Mendoza vs. de Leon, 33 Phil. 508 (1916) — Early authority cited for municipal liability ex delicto.

• Article 423, Civil Code — Divides properties of municipal corporations into property for public use and patrimonial properties. Applied to classify the North Cemetery as patrimonial property in the absence of a special law designating it as property for public use.
• Article 424, Civil Code — Enumerates properties for public use (provincial roads, city streets, municipal streets, squares, fountains, public waters, promenades, and public works for public service paid for by provinces, cities, or municipalities) and provides that all other property is patrimonial. Applied to conclude that the North Cemetery, not being among the enumerated properties for public use, is patrimonial.
• Section 4, Article I, Republic Act No. 409 (Revised Charter of Manila) — Exempts the city from liability for damages or injuries arising from the failure of the Mayor, the Municipal Board, or other city officers to enforce the charter or other laws, or from their negligence while enforcing or attempting to enforce said provisions. The Court effectively rendered this provision inapplicable because the cemetery operation is a proprietary function, not a governmental one.
• Administrative Order No. 5, Series of 1975 — Issued by the City Mayor of Manila on March 6, 1975, prescribing guidelines for the use and disposition of burial lots within the North Cemetery. The Court held that it applies only to new leases, not to the existing fifty-year lease executed in 1971.

Padilla, Sarmiento, and Regalado, JJ., concurred. Melencio-Herrera (Chairperson), J., was on leave.