This is a petition for review on certiorari to annul and set aside the decision of the then Intermediate Appellate Court dated February 27, 1986^[1] affirming the decision of the then Court of First Instance of Nueva Ecija, Fourth Judicial District, Branch VII in Civil Case No. 6244 dated November 25, 1981^[2] in ordering petitioners to pay private respondents damages, attorney's fees and the costs.

It appears on record that private respondents Andres Ventura, Antonio Fajardo, Marcelo Fajardo, Alfonso Ventura and Florentino Ventura are leasehold tenants of a parcel of land consisting of about five (5) hectares of riceland situated at Sitio Dagat-dagatan, Sto. Rosario, Sta. Rosa, Nueva Ecija.

Sometime in 1967, petitioner National Irrigation Administration (NIA for brevity) constructed an irrigation canal on the property of Isabel and Virginia Tecson which passed through the private respondents' landholdings as said irrigation canal traverses the Cinco-Cinco Creek which abuts said landholding. The irrigation canal has two (2) outlets which provide private respondents' landholdings with water coming from said canal and at the same time serve to drain the excess water of said landholdings.

On February 13, 1975, private respondents filed a complaint for the abatement of nuisance with damages against petitioners NIA and/or the Administrator of the National Irrigation Administration alleging that the two (2) outlets constructed on both sides of the irrigation canal were not provided with gates to regulate the flow of water from the canal to their landholdings which resulted to the inundation of said landholdings causing the former to sustain damages consisting in the destruction of the planted palay crops and also prevented them from planting on their landholdings.

After trial on the merits, a decision was rendered by the court below on November 25, 1981, the pertinent portion of which reads as follows:

"In view of the foregoing, the Court finds the complaint meritorious. However, since there were typhoons and plant pests that reduced the harvests of the plaintiffs and that there were benefits that accrued to the plaintiffs by reason of said irrigation canal, the civil liability of the defendant should naturally be reduced.

"WHEREFORE, judgement is hereby entered: 1) Ordering the defendant to pay to the plaintiffs the sum of P35,000.00 representing damages; 2) Ordering defendant to pay P5,000.00 for attorney's fees and the cost of the suit."^[3]

Not satisfied with said decision, petitioners elevated the matter to the appellate court which rendered a decision on February 27, 1986 affirming in toto the decision of the trial court.

Hence, this petition. It is petitioners' position that the respondent appellate court erred in affirming the decision of the trial court because NIA is immune from suit for quasi-delict or tort and assuming NIA could be sued, it is not liable for tort since it did not act through a special agent as required under paragraph 6, Article 2180 of the Civil Code of the Philippines.

Petitioners are in error. As correctly ruled by the court below, the NIA "is not immune from suit, by virtue of the express provision of P.D. No. 552."^[4]

A reading of Section 2, sub-paragraph (f) of P.D. No. 552,^[5] amending Republic Act No. 3601 shows the granting to NIA the power "to exercise all the powers of a corporation under the Corporation Law, insofar as they are not inconsistent with the provisions of this Act." Paragraph 4 of said law also provide that petitioner NIA may sue and be sued in court for all kind of actions, whether contractual or quasi-contractual, in the recovery of compensation and damages as in the instant case considering that private respondents' action is based on damages caused by the negligence of petitioners. This Court had previously held that "the National Irrigation Administration is a government agency with a juridical personality separate and distinct from the government. It is not a mere agency of the government but a corporate body performing proprietary functions"^[6] as it has its own assets and liabilities as well as its own corporate powers to be exercised by a Board of Directors.

Paragraph 6, Article 2180 of the Civil Code of the Philippines states that:

"The State is responsible in like manner when it acts through a special agent; but not when the damage has been caused by the official to whom the task done properly pertains, in which case what is provided in article 2176 shall be applicable."

Article 2176 of said Code provides that:

"Whoever by act or omission causes damage to another, there being fault or negligence, is obliged to pay for the damage done. Such fault or negligence, if there is no pre-existing contractual relation between the parties, is called a quasi-delict and is governed by the provisions of this Chapter."

Thus, petitioners are liable for the damages caused by their negligent act. Said the trial court:

"On the issue of negligence, plaintiffs through the testimonies of Andres Ventura, Florentino Ventura and Prudencio Martin showed that the NIA constructed irrigation canals on the landholding[s] of the plaintiffs by scrapping away the surface of the landholding[s] to raise the embankment of the canal. As a result of the said construction, in 1967 the landholdings of the plaintiffs were inundated with water. Although it cannot be denied that the irrigation canal of the NIA is a boon to the plaintiffs, the delay of almost 7 years in installing the safety measures such as check gates, drainage[s], ditches and paddy drains has caused substantial damage to the annual harvest of the plaintiffs. In fact, Engineer Garlitos, witness for the defendant declared that these improvements were made only after the settlement of the claim of Mrs. Virginia Tecson, which was sometime in 1976 or 1977, while the irrigation canal was constructed in 1976 [1967]. The testimonies of the plaintiffs essentially corroborated by a disinterested witness in the person of Barangay Captain Prudencio Martin, proved that the landholdings of the complainants were inundated when the NIA irrigation canal was constructed without safety devises thereby reducing their annual harvest of 30 cavans per hectare (portions flooded). The failure [,] therefore, of the NIA to provide the necessary safeguards to prevent the inundation of plaintiffs' landholding[s] is the proximate cause of the damages to the poor farmers. On the other hand, the defendant maintains that the cause of inundation of plaintiffs' landholdings was the check gate of the Cinco-cinco creek known as Tombo check gate. However, evidence showed that this check gate existed long before the NIA irrigation canal was constructed and there were no complaints from the plaintiffs until the canal of the NIA was built. The uncontested testimony of barrio captain Prudencio Martin that the former name of the sitio where the plaintiffs' landholdings were located was "Hilerang Duhat" but was changed to Sitio Dagat-dagatan because of the inundation was not without justification."^[7]

With regard to petitioners' contention that the respondent appellate court erred in awarding damages to private respondents, We find said court's decision in accordance with the evidence and the law. As correctly held by the appellate court:

"It has been established that the plaintiffs' landholdings were actually inundated. The testimonies by all the plaintiffs with respect to the amount of the loss they suffered were not impugned by any contradictory evidence of the defendant. To Our mind, these testimonies are sufficient proof to make the grant of damages valid and proper. Besides, the amount awarded by the lower court is but just and reasonable considering the circumstances of the case."^[8]

WHEREFORE, this petition for review on certiorari is hereby DENIED for lack of merit.

SO ORDERED.

Narvasa, C.J., (Chairman), Padilla, Regalado, and Campos, Jr., JJ., concur.

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^[1] Rollo, pp. 68-75. Ponente: Justice Ramon B. Britanico with the concurrence of Justice Porfirio V. Sison, Justice Abdulwahid A. Bidin, Justice Marcelino R. Veloso and Justice Josue N. Bellosillo.

^[2] Original Record on Appeal, pp. 36-41. Penned by Judge Leticia P. Morales.

^[3] Id., at p. 41.

^[4] Decision, pp. 5, 40, Record on Appeal; Page 71, Rollo.

^[5] Paragraph 4, Section 2(e) and (b), Republic Act No. 3601 as amended by P.D. No. 552 provide that:

"All actions for the recovery of compensation and damages against the National Irrigation Administration under paragraphs (1), (2) and (3) hereof, shall be filed with a competent court within five (5) years from the date of entry of the land or destruction of the improvements or crops, after which period, the right of possession and/or ownership of the National Irrigation Administration shall be considered vested and absolute. All other actions for the recovery of compensation and damages to private property and improvements occasioned by the construction, operation and maintenance of irrigation facilities and other hydraulic structures under the administration of the National Irrigation Administration, which have accrued ten (10) or more years prior to the approval of this decree are deemed to have prescribed and are barred forever.

"(f) To establish/create such services and other means of social and economic assistance to the community which might be adversely and directly affected by the construction of National Irrigation Administration projects, and to do all such other things, and to transact such business, as are directly or indirectly necessary, incidental or conducive to the attainment of the above powers and objectives, including the power to establish and maintain subsidiaries, and in general, to exercise all the powers of a corporation under the Corporation Law, insofar as they are not inconsistent with the provisions of this Act." (Emphasis supplied)

^[6] Fontanilla vs. Maliaman, 194 SCRA 486 [1991].

^[7] Original Record on Appeal, pp. 40-41.

^[8] Rollo, p. 75.