Public Corporation Case Digest

8/11/2019 Public Corporation Case Digest

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1. Alvarez v. Guigonia Jr.

On april 1993, HB no. 8817, entitled An act

converting Converting the Municipality of

Santiago into an independent Component City

to be known as the City of Santiago, was filed in

the house of Representative Antonio Abaya asprincipal author. The house bill was then duly

referred to the House COmiittee on Local

Government and the House Committee on

Appropriations. On January 1994, said bill was

transmitted to the Senate. Senate Bill 1243, a

counterpart of HB 8817, entitled as An Act

Converting the Municipality of Santiago into an

independent Component City to be known as

the City of Santiago was subsequently filed in

the Senate. After approval of subsequent

amendments made thereto, said bill was

approved by the Senate. The enrolled bill

following presidents approval was ratified by the

people. Petitioners then raised among others

that said conversion could not be validated as

the said city does not meet the requirement in

connection with the annual income requirement

following the exclusion of the IRA in the total.

Issue: WON IRA is included in the annual

income of a local government.

2. Pimentel Jr. v. Aguire

Facts: A petition for certiorari and prohibition

was filed on connection with the enactment of

AO. No. 372, otherwise known as Adoption of

Economy Measure in Government for FY 1998.

The said order required local government units

to reduce their expenditures by 25 percent to

their authorized regular appropriations for non-

personal services and which stipulated that a

portion of their Internal Revenue Allotments will

be withheld pending the assessment and

evaluation by the Department of Budget and

Management, on a quarterly basis using the

attached format. Petitioner contends that the

President in issuing said order was in effect

exercising the power of control over LGUs. He

further contends that the Constitution only grants

the President general supervision over LGUs

consistent with the principle of autonomy.

Petitioner further argues that the directive to

withhold the IRA is in contravention of the LGC

and the Constitution which mandates the

automatic release to each of these units its

share in the national revenue. Respondent,

speaking through the SG, claims that the said

order was issued to alleviate the economic

difficulties brought about by the peso

devaluation and constituted merely an exercise

of the Presidents power of supervision over

LGUs. He adds that said order does not violate

fiscal autonomy and that the withholding of a

portion of the IRA was only temporary in nature

pending the assessment and evaluation of DCC

of the emerging fiscal situation.

Issue: WON the president acted beyond the

mandate of the constitution when he enacted

AO 372 providing for the

3. Philippine Society for the Prevention of

Cruelty to Animals vs. Commission on

Audit

Facts: Petitioner composed of animal

aficionados and animal propagandists was

incorporated as a juridical entity on 1905 by the

Philippine Commision. The objects petitioner

was generally about enforcing laws relating to

animal cruelty and perform all things to alleviate

the suffering of animals and promote their

welfare. Its creation preceded the Corporation

Law and Security and Exchange Commission.

Subsequently CA 148 recalled its power to

retain some of its collected fines and to make

arrest. On December 2003, an audit team from

respondent visited the office of the petitioner to

conduct an audit survey pursuant to its mandate.

Petitioner demurred on the ground that it was aprivate entity and not under the jurisdiction of

COA. Respondents on the other hand asserts

that since petitioner is a body politic created by

virtue of a special legislation and endowed with

a governmental purpose the former can thus

audit the financial activities of the respondent.

Despite several correspondences between

petitioner and respondent, the latter was not


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able to conduct the audit survey due to the

refusal of the petitioner because the petitioner

maintained that it was a private corporation.

Issue: WON petitioner is a public corporation

thus under the jurisdiction of COAs auditing

mandate.

Held: No.

4. Atienza v. Villarosa

Petitioner Atienza and Respondent Villarosa

were Vice-Governor and Governor respectively

of the Occindental Mindoro. Initially petitioner

received a letter from respondent informing him

that purchase orders shall be approved by him

in his capacity as the local chief executive of the

province. A subsequent letter followed ordering

petitioner to submit a list of employees entered

by him and to have them terminated and granted

them to appoint replacements subject to

respondents approval. Petitioner in response

iterated that approval of Purchase Orders is

under his prerogative and that the appointment

of casual/job order employees is exercised

under his appointing authority. Respondent

asserts the validity of his orders.

Issue: WON said orders issued by Governor are

valid.

5. Liban v. Gordon

Facts: Petitioner filed a petition to declare

Richard Gordon as Having forfeited His Seat in

the Senate as he was accordingly appointed as

the Chairman of the PNRC Board of Governors

during his incumbency as a member of the

Senate. Petitioner asserts that respondent has

ceased to be a member of the Sentate as

provided in the Constitution Art. VI Sec. 13 No

Senator may hold any other office or

employment in the Government including

GOCC or their subsidiaries . Petitioners cited

a case which held that the PNRC is a GOCC.

Respondent replied that PNRC is not a GOCC

thus prohibition stated in the Constitution does

not apply to him.

Issue: WON PNRC is a GOCC thus subsequent

appointment of Gordon as its chairman during

his incumbency in the Senate constitutes a

violation in the constitutional prohibition againstincompatible offices.

Held: No. PNRC is not a GOCC. It is a private

organization performing Public Functions. As

stated in its charter PNRC is a non-profit, donor-

funded, voluntary, humanitarian organization,

whose mission is to bring timely, effective and

compassionate humanitarian assistance for the

most vulnerable without consideration of

nationality, race, religion, gender, social status,

or political affiliation.

6. Boy Scout of the Philippines v. NLRC

Facts: Petitioner, in a letter, addressed to the

five private respondents informing them that

they were to be transferred to another branch.

These orders were opposed by the private

respondents and appealed the matter. Despite

assurance of the BSP regarding added benefits,

private respondents were not persuaded to

abandon their opposition to the transfer order.Their persistent refusal later resulted to their

termination of employment with BSP which In

turn caused them to amend their complaint from

illegal transfer to one including charges of illegal

dismissal and unfair labor practice against

petitioner BSP. Initially the labor arbiter

dismissed the complaint but was later reversed

by the NLRC. In the complaint, private

respondents stated that BSP is by mandate of

law a Public Corporation. The court later

required the parties to file a comment on the

question whether or nor BSP is in fact a GOCC.

BSP asserts that it does not receive monetary

subsidy from the government. It further asserts

that it is a purely private organization directed

and controlled by its National Executive Board

the members of which are voluntary scouters

including seven Cabinet Secretaries.


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Issue: WON BSP is a GOCC.

Held: Yes. The public function of BSPs

functions and activities must be conceded, for

they pertain to the educational, civic, and social

development of the youth which constitutes a

very substantial and important part of the nation.Second, the fact that the appointment of

members of the Board are subject to the

ratification by the Chief Scout, the president

suggest that there is substantial governmental

participation or intervention in the choice of the

majority of members. Considering the character

of its purpose and its functions, the statutory

designation of the BSP as a public corporation

and the substantial participation of the

Government in the selection of members of the

National Executive Board of the BSP, as

presently constituted under its charter, is a

government-controlled corporation within the

meaning of the Constitution.

7. Veterans Federation of the Philippines

v. Reyes

Facts: Respondent as the Secretary of National

Defense, issued the assailed order directing

petitioner for the briefing and for documents on

personnel, ongoing projects and petitioners

financial condition. Respondent also informed

petitioner that it would be paying a visit for an

update on VFPs different affiliates and the

financial statement of the federation. Petitioner

initially denied the order on the ground that the

timeframe set by respondent had been set for

the activity. Later petitioner asserts that it is not

a public nor a governmental entity but a private

organization, and advances this claim to prove

that the order issued by respondent is an invalid

exercise of respondent secretarys control andsupervision. VFP asserts that it does not

possess the elements which would qualify them

as a public office, particularly the designation of

a portion of sovereign power of the government;

and that the funds are not public it being

sourced out from membership dues and not

from government funds; and that although its

personality emanates from a statutory charter,

VFP retains its essential character as private.

Issue: WON VFP is a GOCC.

Held: yes

8. Feliciano v. Gison

Facts: Leyte Metropolitan Water District (LMWD)

filed a petition to Department of Finance

requesting that a certain water supply equipment

and a vehicle given by the Japanese

Government for the rehabilitation of its typhoon-

damaged water supply system for tax

exemption. Initially the water supply equipment

was granted tax exemption but the vehicle was

not included. Upon filing for reconsideration by

LMWD, respondent as undersecretary of DOF,

denied the request to include the vehicle for tax

exemption. Accordingly, privileges of tax

exemption of GOCCs had already been

withdrawn. After elevating the case to the CTA,

the same denied their request for the same

reason iterated by DOF. LMWD then filed in CA

and requested among others to determine

whether LMWD is a GOCC or not.

Issue: WON LMWD is a GOCC.

Held: YES. LWDs are not private corporations

as they are not created under the Corporation

Code. Nor are they registered with the SEC.

Sec. 14 of the Corp. Code states that all

corporations organized under this code shall file

with the SEC articles of incorporation. LWDs

have no articles of incorporation, nor

incorporators, nor stockholders and members.

PD 198 created LWDs thus their powers to

exercise powers given to a private corporation

emanates from said decree, a special charterrather than a general law.

9. Chavez v. Public Estate Authority

Facts:President Marcos through a presidential decr


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ee created PEA, which wastasked with the development, improvement, and acquisition, lease, and sale of all kinds oflands. The then president also transferred toPEA the foreshore and offshore lands of ManilaBay under the Manila-Cavite CoastalRoad and Reclamation Project.

Thereafter, PEA was granted patent to the reclaimed areas of land and then, years later,PEA entered into a JVA with AMARI for thedevelopmentof the Freedom Islands. These two enteredinto a joint venture in the absence of any

public bidding.

Later, a privilege speech was given bySenator President Maceda denouncing theJVA as the grandmother of all scams. Aninvestigation was conducted and it was

concluded that the lands that PEA wasconveying toAMARI were lands of the public domain; the certif icates of title over theFreedom Islands were void; and the JVA itselfwas illegal. This prompted Ramos to form aninvestigatory committee on the legality of theJVA.

Petitioner now comes and contends that thegovernment stands to lose

billions by the conveyance or sale of the reclaimed areas to AMARI. He also asked for

the full disclosure of the renegotiationshappening between the parties.

HELD: No. To allow vast areas of reclaimed

lands of the public domain to be transferred to

PEA as private lands will sanction a gross

violation of the constitutional ban on private

corporations from acquiring any kind of alienable

land of the public domain.

The Supreme Court affirmed that the 157.84

hectares of reclaimed lands comprising the

Freedom Islands, now covered by certificates of

title in the name of PEA, are alienable lands of

the public domain. The 592.15 hectares of

submerged areas of Manila Bay remain

inalienable natural resources of the public

domain. Since the Amended JVA seeks to

transfer to AMARI, a private corporation,

ownership of 77.34 hectares of the Freedom

Islands, such transfer is void for being contrary

to Section 3, Article XII of the 1987 Constitution

which prohibits private corporations from

acquiring any kind of alienable land of the public

domain. Furthermore, since the Amended JVA

also seeks to transfer to AMARI ownership of

290.156 hectares of still submerged areas of

Manila Bay, such transfer is void for being

contrary to Section 2, Article XII of the 1987

Constitution which prohibits the alienation of

natural resources other than agricultural lands of

the public domain.

10. Limbona v. Mangelin

Facts: Petitioner, Sultan Alimbusar Limbona,

was elected Speaker of the Regional Legislative

Assembly or Batasang Pampook of Central

Mindanao (Assembly). On October 21, 1987

Congressman Datu Guimid Matalam, Chairman

of the Committee on Muslim Affairs of the House

of Representatives, invited petitioner in hiscapacity as Speaker of the Assembly of Region

XII in a consultation/dialogue with local

government officials. Petitioner accepted the

invitation and informed the Assembly members

through the Assembly Secretary that there shall

be no session in November as his presence was

needed in the house committee hearing of

Congress. However, on November 2, 1987, the

Assembly held a session in defiance of the

Limbona's advice, where he was unseated from

his position. Petitioner prays that the session's

proceedings be declared null and void and be itdeclared that he was still the Speaker of the

Assembly. Pending further proceedings of the

case, the SC received a resolution from the

Assembly expressly expelling petitioner's

membership therefrom. Respondents argue that

petitioner had "filed a case before the Supreme

Court against some members of the Assembly


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on a question which should have been resolved

within the confines of the Assembly," for which

the respondents now submit that the petition had

become "moot and academic" because its

resolution.

Issue: Whether or not the courts of law have

jurisdiction over the autonomous governments

or regions. What is the extent of self-government

given to the autonomous governments of Region

XII?

Held: Autonomy is either decentralization of

administration or decentralization of power.

There is decentralization of administration when

the central government delegates administrative

powers to political subdivisions in order to

broaden the base of government power and inthe process to make local governments "more

responsive and accountable". At the same time,

it relieves the central government of the burden

of managing local affairs and enables it to

concentrate on national concerns. The President

exercises "general supervision" over them, but

only to "ensure that local affairs are

administered according to law." He has no

control over their acts in the sense that he can

substitute their judgments with his own.

Decentralization of power, on the other hand,

involves an abdication of political power in the

favor of local governments units declared to be

autonomous. In that case, the autonomous

government is free to chart its own destiny and

shape its future with minimum intervention from

central authorities.

An autonomous government that enjoys

autonomy of the latter category [CONST. (1987),

Art. X, Sec. 15.] is subject alone to the decree of

the organic act creating it and accepted

principles on the effects and limits of"autonomy." On the other hand, an autonomous

government of the former class is, as we noted,

under the supervision of the national

government acting through the President (and

the Department of Local Government). If the

Sangguniang Pampook (of Region XII), then, is

autonomous in the latter sense, its acts are,

debatably beyond the domain of this Court in

perhaps the same way that the internal acts,

say, of the Congress of the Philippines are

beyond our jurisdiction. But if it is autonomous in

the former category only, it comes unarguably

under our jurisdiction. An examination of the

very Presidential Decree creating the

autonomous governments of Mindanao

persuades us that they were never meant to

exercise autonomy in the second sense

(decentralization of power). PD No. 1618, in the

first place, mandates that "[t]he President shall

have the power of general supervision and

control over Autonomous Regions." Hence, we

assume jurisdiction. And if we can make an

inquiry in the validity of the expulsion in

question, with more reason can we review the

petitioner's removal as Speaker.

This case involves the application of a most

important constitutional policy and principle, that

of local autonomy. We have to obey the clear

mandate on local autonomy.

Where a law is capable of two interpretations,

one in favor of centralized power in Malacaang

and the other beneficial to local autonomy, the

scales must be weighed in favor of autonomy.

Upon the facts presented, we hold that the

November 2 and 5, 1987 sessions were invalid.

It is true that under Section 31 of the Region XII

Sanggunian Rules, "[s]essions shall not be

suspended or adjourned except by direction of

the Sangguniang Pampook". But while this

opinion is in accord with the respondents' own,

we still invalidate the twin sessions in question,

since at the time the petitioner called the

"recess," it was not a settled matter whether or

not he could do so. In the second place, the

invitation tendered by the Committee on Muslim

Affairs of the House of Representatives provided

a plausible reason for the intermission sought.

Also, assuming that a valid recess could not be

called, it does not appear that the respondents


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called his attention to this mistake. What

appears is that instead, they opened the

sessions themselves behind his back in an

apparent act of mutiny. Under the

circumstances, we find equity on his side. For

this reason, we uphold the "recess" called on the

ground of good faith.

Documents

Public Corporation Case Digest