Philippine National Railways and Honorio Cabardo, petitioners

vs.
Intermediate Appellate Court and Baliwag Transit, INC., respondents

G.R. No. 70547 January 22, 1993

DOCTRINE: Doctrine of Implied Powers (The power to sue and be sued is implicit from the faculty to transact
private business, as such, not all government entities are immune from suits. Immunity from which shall be
determined by the character of the objects for which the entity was organized.)

FACTS:

- Petition at bar is directed against the judgment rendered by respondent court

(Fourth Civil Cases Division) affirming the decision of Trial Court on negligence of
PNR.
- There was a collision between PNR (Passenger train No. 73, operated by locomotive
engineer Honorio Cabardo a.k.a Honorio Cirbado) and Bus No. 1066 of Baliwag
Transit, Inc. (driven by Romeo Hughes) on August 10, 1947, at the railroad crossing at
Barrio Balungao, Calumpit Bulacan, at 1:30 pm.
- The bus was passing through the town of Calumpit Bulacan temporarily as the
bridge at Hagonoy was under construction.
- PNR regularly passes along the intersection of Barrio Balungao, Calumpit, Bulacan, in
its trips to and from San Fernando, La Union, from Manila.
- On the said afternoon, while the rear portion of the bus was at the railroad track, the
train bumped into its right mid portion. During which, there was a slight rainfall in the
vicinity and that there were no bar, semaphores, and signal lights at the said
intersection which may warn public of the approaching train.
- As a result of the collision, not only did the bus incur damages, but 18 of its
passengers died, and at least 53 were physically injured.

ISSUES:

- W/N the petitioner or the respondent carriers, or both were negligent

- W/N respondent, being government-owned, may avail of immunity from suit

HELD: - Decision of respondent court was affirmed.

- There had been no admissible evidence shown to prove that the bus driver failed to
take necessary precaution in traversing the track. As such, no contributory
negligence may be ascribed on him. However, the failure of PNR to place a cross
bar, or signal light, flagman, or switchman or semaphores is evidence of negligence
on their part. With the weather condition noted during the incident, it was said that
the rain should have already prompted the train engineer (Honorio Cabrdo) to
exercise extra precaution.
- Apart from the fact that the lawyer of the petitioner agreed to stipulate inter alia
that the railroad company had the capacity to sue and be sued, by the doctrine of
implied powers utilized by the respondent court, the power to sue and be sued in
implicit from the faculty to transact private business. Given which, PNR is
characterized to be a private entity created not to discharge governmental
function but, among other things, to operate a transport service which is essentially
a business concern thereby barring which from invoking immunity from suit.