AIR TRANSPORTATION OFFICE, Petitioner,

vs.
SPOUSES DAVID and ELISEA RAMOS, Respondents.

G.R. No. 159402, February 23, 2011

FACTS:

Spouses David and Elisea Ramos owned a land in Baguio City. They have discovered that a portion
of this land was being used as part of the runway and running shoulder of the Loakan Airport being
operated by Air Transportation Office (ATO). Spouses Ramos and ATO agreed after negotiations to convey
the affected portion by deed of sale to the ATO, however ATO failed to pay despite repeated verbal and
written demands. The spouses filed an action for collection against the ATO and some of its officials in the
Regional Trial Court. ATO invoked that President Marcos had reserved certain parcels of land that included
the Ramos’ affected portion for use of the Loakan Airport. They asserted that the RTC had no jurisdiction
to entertain the action without the State’s consent because the deed of sale had been entered into in the
performance of governmental functions.

ISSUE:

Could ATO be sued without the State’s consent?

RULING:

Immunity from suits is determined by the character of the objects for which the entity was
organized. In this case, the juridical character of ATO is an agency of the Government not performing a
purely governmental or sovereign function, but 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.
Their actions were propriety in nature.

Therefore, ATO had no claim to the State’s immunity from suit. Also, 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