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Fontanilla v.

Maliaman (Resolution) municipalities, such property is not

employed for governmental purposes and in
 In its, motion for reconsideration, the NIA the ownership and operation thereof the
through the OSG maintains that on the municipality acts in its proprietary capacity,
strength of PD 552 and the case of Angat free from legislative interference."
River Irrigation System v. Angat River
 Like the NAWASA, the NIA was not created
Workers Union, “the NIA does not perform
for purposes of local government
solely and primarily proprietary functions
 It may be true that NIA was essentially a
but is an agency of government tasked with
service agency of the government aimed at
governmental functions and is therefore not
promoting public interest and public
liable for the tortous act of its driver Hugo
welfare, this fact alone does not make NIA
Garcia, who was not its special agent
essentially and purely a government
 The majority opinion in the cite case of Angat
System declared the Angat System (like NIA)
 We must not lose sight of the fact that the
exercised a governmental function because
NIA is a government agency invested with a
said agency does not show that it was
corporate personality separate and distinct
intended to bring the government any
from the government, thus is governed by
special corporate benefit or pecuniary profit
the Corporation Law
 There is a strong dissenting opinion by
 Sec. 2,b of PD 552 provides that NIA may sue
former CJ Conception which held the
and be sued in court
contrary view stating that the Angat System
 It has its own assets and liabilities and has
is a government entity exercising proprietary
corporate powers to be exercised by a Board
of Directors
 We agree with the former Chief Justice
 On the basis of the foregoing considerations,
Concepcion in saying that the same purpose
We conclude that the National Irrigation
such as public benefit and public welfare
Administration is a government agency with
may be found in the operation of certain
a juridical personality separate and distinct
enterprises (those engaged in the supply of
from the government. It is not a mere agency
electric power, or in supplying telegraphic,
of the government but a corporate body
telephonic, and radio communication, or in
performing proprietary functions. Therefore,
the production and distribution of prime
it may be held liable for the damages caused
necessities, etc.) yet it is certain that the
by the negligent act of its driver who was
functions performed by such enterprises are
now its special agent.
basically proprietary in nature.
 Of equal importance is the case of National SC Ruling:
Waterworks and Sewerage Authority
(NAWASA) vs. NWSA Consolidated Unions, ACCORDINGLY, the Motion for Reconsideration dated
11 SCRA 766, which propounds the thesis January 26, 1990 is DENIED WITH FINALITY. The
that "the NAWASA is not an agency decision of this Court in G.R. NO. 55963 and G.R. No.
performing governmental functions; rather 61045 dated December 1, 1989 is hereby AFFIRMED.
it performs proprietary functions xxx." The
functions of providing water supply and
sewerage service are regarded as mere
optional functions of government even
though the service rendered caters to the
community as a whole and the goal is for the
general interest of society…"although the
State may regulate the service and rates of
water plants owned and operated by