Malong v.

PNR
G.R. No. L-30671

Petitioners are the Malong spouses, Respondent is the Philippine National Railway. Petitioners are
appealing the dismissal (by the trial court) of their suit for damages.

Ponente is Justice Aquino.

Jaime Aquino, son of the petitioners, fell from the door of an overloaded PNR coach and died as a
result. Petitioners sued the PNR, but the case was dismissed in the trial court said court held that
the PNR, as a government instrumentality, was immune from suit. Petitioners appeal the dismissal.

THE STATE CANNOT BE SUED WITHOUT ITS CONSENT BUT IT RELINQUISHES THIS
SOVEREIGN IMMUNITY WHEN IT ENGAGES IN BUSINESS CONTRACTS.

Was the PNR immune from suit as a government instrumentality?

Did the State act in its sovereign capacity when it organized the PNR for transportation purposes?

No. Though the PNR is a government instrumentality, it exercises the power of a Railroad Corporation
under the Corporation Law where every corporation has the right to sue and be sued in the
corporations name.

No. Suits against the state agencies acting in private capacity are not suits against the State. Even if
it owns stock/property, it divests itself of sovereign capacity when it engages in business operations.

The PNR is subject to obligations of persons engaged in private enterprise because it does not
perform a government function.

Case remanded to trial court for further proceedings.

Justice Abad Santos, concurring:

While government-organized corporations are government instrumentalities by virtue of creation, that

alone cannot invest them with immunity from suit. Invoking immunity that way denies justice to the
people.