enforcement of the contract.

As Petitioners are not parties to the contract of lease which they

Kilosbayan, Inc. v. Morato seek to nullify, they do not have cause against respondents nor the right to bring this suit.
G.R. No. 118910 July 17, 1995

Mendoza, J Created by: Pia Alano DOCTRINE

Main Topic: Article II Declaration of Principles and State Policies
Legal Value of Article II (Declaration of Principles and State Policies)
Sub-topic: Legal Value of Article II ● The provisions under Art. II are not self-executing provisions; the disregard of such
provisions cannot give rise to a cause of action in the courts. They do not embody
PETITIONERS RESPONDENTS judicially enforceable constitutional rights but guidelines for legislation.
Kilosbayan, Incorporated, Jovito R. ● While constitutional policies were invoked, this case involves basically questions of
Salonga, Cirilo A. Rigos, Erme Camba, contract law. More specifically, the question is whether petitioners have a legal right
Emilio C. Capulong, Jr., Jose T. Apolo, Manuel L. Morato, in his capacity as which has been violated.
Ephraim Tendero, Fernando Santiago, Jose Chairman of the Philippine Charity
Abcede, Christine Tan, Rafael G. Fernando, Sweepstakes Office, and the Philippine
Raoul. V. Victorino, Jose Cunanan, Quintin Gaming Management Corporation
S. Doromal, Sen. Freddie Webb, Sen. FACTS
Wigberto Tañada, Rep. Joker P. Arroyo
● On May 5, 1995, the Supreme Court ruled that the Contract of Lease between the
Philippine Charity Sweepstakes Office (PCSO) and the Philippine Gaming Management
RECIT-READY SUMMARY Corp. (PGMC) was invalid on the ground that it had been made in violation of the charter
of the PCSO. The case was submitted as G.R. No. 113375 (Kilosbayan, Incorporated v.
In Kilosbayan, Inc. v. Guingona (G.R. No. 11375), the Supreme Court ruled that the Contract of Guingona).
Lease between the PCSO and the PGMC was invalid for violating a charter of the PCSO. The o According to the charter, the PCSO does not have the power to enter into
parties thus signed a new agreement called the Equipment Lease Agreement (ELA) in any contract which would involve it in any form of "collaboration, association
compliance with the charter and the SC decision. Petitioners filed another suit (G.R. No. or joint venture" for the holding of sweepstakes races, lotteries and other
118910) declaring the ELA invalid for being substantially the same as the Contract of Lease, similar activities.
which was nullified in the first case. Respondents raised the question of whether the ● The parties, PCSO and PGMC, thus entered into negotiations for a new agreement that
petitioners had the right to even bring this suit, provided that they had no personal or would be consistent with the PCSO charter and conformable to the Court's aforesaid
substantial interest to be injured by the enforcement of the contract. Petitioners invoked Decision.
constitutional policies in Art. II that the ELA allegedly violates, granting them legal standing as ● On January 25, 1995, the parties signed an Equipment Lease Agreement (ELA) whereby
“taxpayers and concerned citizens.” the PGMC leased on-line lottery equipment and accessories to the PCSO.
o The PCSO now bears all losses because the operation of the system is
The relevant issue is whether or not the petitioners have legal standing to bring this suit. completely in its hands. This feature of the new contract negates any doubt
that it is anything but a lease agreement.
The Court held that the petitioners do not have legal standing to question the ELA, as there is ● A copy of the ELA was submitted to the Court by the PGMC in accordance with its
no constitutional question involved in this case. The provisions of Art. II are not self-executing, manifestation in the prior case.
which means that these do not embody constitutional rights that may be violated if not ● On February 21, 1995 this suit was filed seeking to declare the ELA invalid on the
enforced. Rather, these provisions act as guidelines for legislation. Thus, the question for this ground that it is substantially the same as the Contract of Lease nullified in the first
case is whether Petitioners are “real parties in interest,” who suffer direct injury from the case.
 ● Respondents question the right of petitioners to bring this suit on the ground that, not HELD: NO
being parties to the contract of lease which they seek to nullify, they have no personal
and substantial interest likely to be injured by the enforcement of the contract. RATIO:
o Petitioners contend that the ruling in G.R. No. 113375, sustaining their
● Petitioners invoke the following Principles and State Policies set forth in Art. II
standing to challenge the validity of the first contract for the operation of
of the Constitution:
lottery, is now the "law of the case" and therefore the question of their
○ The maintenance of peace and order, the protection of life, liberty,
standing can no longer be reopened.
o Petitioners also invoke §§ 5, 12, 13, and 17 set forth in Art. II of the 1987 and property, and the promotion of the general welfare are essential
Constitution, suing as members of Congress and as “taxpayers and for the enjoyment by all the people of the blessings of democracy.
concerned citizens.” (§5)
Petitioners’ arguments and Respondents’ comments [note: the issue of w/n the ELA is valid is ○ The natural and primary right and duty of parents in the rearing of the
not related to the main topic (Legal Value of Art. II)] youth for civic efficiency and the development of moral character
PETITIONERS RESPONDENTS
shall receive the support of the Government. (§12)
1. The amended ELA is null and void since it is the 1. The ELA is a different lease contract with none of
same as the old lease contract admitted by the vestiges of a joint venture which were found in ○ The State recognizes the vital role of the youth in nation-building and
respondents PGMC and PCSO. the Contract of Lease nullified in the prior case. shall promote their physical, moral, spiritual, intellectual, and social
2. The amended ELA is null and void for being 2. The ELA did not have to be submitted to a public
inconsistent with and violative of PCSO’s bidding because it fell within the exception well-being. It shall inculcate in the youth patriotism and nationalism,
charter and the decision of this Honorable provided in E.O. No. 301, §1(e). and encourage their involvement in public and civic affairs. (§13)
Court of May 5, 1995. 3. The power to determine whether the ELA is
3. The amended ELA is null and void for being advantageous to the government is vested in the
○ The State shall give priority to education, science and technology,
violative of the law on public bidding of Board of Directors of the PCSO. arts, culture, and sports to foster patriotism and nationalism,
contracts for furnishing supplies, materials and 4. For lack of funds the PCSO cannot purchase its own accelerate social progress, and promote total human liberation and
equipment to the government (E.O. No. 301 and on-line lottery equipment and has had to enter into
E.O. No. 298) and the "rules and regulations for a lease contract. development. (§17)
the prevention of irregular, unnecessary, 5. What petitioners are actually seeking in this suit is ■ Note: 1% of the gross sales of the lotto operation of the PCSO
excessive or extravagant (IUEE) expenditures to further their moral crusade and political agenda,
promulgated under Commission on Audit using the Court as their forum. is granted to the Commission on Higher Education under
Circular No. 85-55-A, as it was awarded and Republic Act No. 7722.
executed without the public bidding, it has not
been approved by the PH President, and it is
■ 30% of the net receipts from the sale of tickets is also allotted
not most advantageous to the government. to charity. (R.A. No. L169, §6 (B))
4. The ELA is violative of Section 2(2), Article IX-D
● These are not, however, self executing provisions, the disregard of which can
of the 1987 Constitution in relation to COA
Circular No. 85- 55-A. give rise to a cause of action in the courts. They do not embody judicially
enforceable constitutional rights but guidelines for legislation.
● Thus, while constitutional policies are invoked, this case involves basically
questions of contract law.
ISSUES - HELD - RATIO ● Therefore, the issue in this case is not whether the petitioners have legal
standing, since standing is a concept in constitutional law and here no
constitutional question is actually involved. Rather, the question is whether
W/N the petitioners have standing to bring this suit or substantial interest to make petitioners are the "real parties in interest" within the meaning of Rule 3, §2 of
them real parties in interest. the Rules of Court which requires that "Every action must be prosecuted and
 defended in the name of the real party in interest."
● The difference between the rule on standing and real party in interest has
been noted by authorities thus: "[S]tanding, because of its constitutional and
public policy underpinnings, is very different from questions relating to
whether a particular plaintiff is the real party in interest or has capacity to sue.
Although [both] are directed towards ensuring that only certain parties can
maintain an action, standing restrictions require a partial consideration of the
merits, as well as broader policy concerns relating to the proper role of the
judiciary in certain areas.”
● Standing is a special concern in constitutional law because, in some cases,
suits are brought not by parties who have been personally injured, but by
concerned citizens, taxpayers or voters who actually sue in the public interest.
● Petitioners do not in fact show what particularized interest they have for
bringing this suit. Although the present action involves a contract made by a
government corporation, there is no allegation that public funds are being
misspent so as to make this action a public one and justify relaxation of the
requirement that an action must be prosecuted in the name of the real party
in interest.
● In actions for the annulment of contracts, such as this action, the real parties
are those who are parties to the agreement, are bound either principally or
subsidiarily, are prejudiced in their rights with respect to one of the
contracting parties and can show the detriment which would positively result
to them from the contract even though they did not intervene in it, or who
claim a right to take part in a public bidding but have been illegally excluded
from it.
● Petitioners do not have such present substantial interest in the ELA as would
entitle them to bring this suit.
W/N the Equipment Lease Agreement is valid as a lease contract.
HELD: YES
RATIO:
● The ELA is valid as a lease contract under the Civil Code and is not contrary
to the charter of the Philippine Charity Sweepstakes Office.
● Under §1(A) of its charter (R.A. 1169), the PCSO has authority to enter into a
contract for the holding of an on-line lottery, whether alone or in association,
collaboration or joint venture with another party, so long as it itself holds or
conducts such lottery.
○ What the PCSO is prohibited from doing is to invest in a business
engaged in sweepstakes races, lotteries, and similar activities, and it
is prohibited from doing so whether in "collaboration, association or
joint venture" with others or "by itself."
○ The reason for this is that these are competing activities and the
PCSO should not invest in the business of a competitor.
○ Remarks made by then Assemblyman, now Justice Davide, during
the deliberations on what later became B.P. Blg. 42, amending R.A.
No. 1169, were the basis for the ruling in G.R. 11375. It appears,
however, that the remarks were made in connection with a proposal
to give the PCSO the authority "to engage in any and all
investments." It was to provide an exception with regard to the type
of investments which the PCSO is authorized to make that the
Davide amendment was adopted.
■ It was not their intention to prohibit the PCSO from entering
into any collaboration, association or joint venture with
others even in instances when the sweepstakes races,
lotteries or similar activities are operated by it ("itself").
● The ELA in question does not have to be submitted to public bidding as a
condition for its validity.
● To find any fault with the new contract would be to cavil and expose the
opposition to the contract to be actually an opposition to lottery. However,
the morality of gambling is not a justiciable issue. Gambling is not illegal
per se. It is left to Congress to deal with the activity as it sees fit." In the case
of lottery, there is no dispute that, to enable the PCSO to raise funds for
charity, Congress authorized them to hold or conduct lotteries under certain
conditions.
○ Note: The Kilosbayan, Inc. is an organization "composed of
civic-spirited citizens, pastors, priests, nuns and lay leaders who are
committed to the cause of truth, justice, and national renewal." The
 provisions cited from Art. II involve a question of morality. Thus, REGALADO, J.:
they may be disapproving of the practice of gambling. ● He dissents from the majority opinion premised on the constitutional and procedural
doctrines posed and interpreted in tandem therein.
● He asserts that the J. Mendoza glossed over the validity of the lottery contract and
sought refuge in the rule of locus standi, thus suppressing concern over societal
RULING mores on gambling by invoking the doctrine of non-justiciability.
● In the first lotto case, the Court exempted petitioners from the traditional locus standi
WHEREFORE, the Petition for Prohibition, Review and/or Injunction seeking to declare the
proscription because the issues raised on the indiscriminate operation of a nationwide
Equipment Lease Agreement between the Philippine Charity Sweepstakes Office and the
on-line lottery system are of paramount public interest and of a category higher than
Philippine Gaming Management Corp. invalid is DISMISSED.
those involved in former cases wherein the application of that rule was sustained.
● In the first lotto case, the minority therein rested its position entirely on procedural
grounds, that is, by merely challenging the legal standing of petitioners but without any
DISSENTING OPINIONS comment on the merits of the contract in question.
○ Since the case at bar is in truth a reprise of the first, I had excepted that this
FELICIANO, J.: case would now be decided purely on the merits of the putative expanded
● On the matter of locus standi, he states that all the factors which pressed for lease agreement.
recognition of locus standi on the part of petitioners in the first Kilosbayan case still ○ To make the Court's judgment here turn again on technical procedural
exist and demand, with equal weight and insistence, such recognition in the present or grounds, by hiding within the shroud of the locus standi mystique, is not a
second Kilosbayan case. decisive and conclusive adjudication.
● He also submits that the interpretation given by Mr. Justice Davide, Jr., approved and
adopted by the majority of the Court in the first Kilosbayan case, faithfully reflected the
intent of the legislative body as a whole. Justice Mendoza has thereby misread the
provisions of R.A. No. 1169, as amended by B.P. Blg. 42, and overlooked their actual
syntax.
○ The operative words of Section 1 (B) are "to engage in x x x health and
welfare-related investments, programs, projects and activities x x x" which,
however, Mendoza, J. would read restrictively and simply as "to invest in." To
do so, is to disregard the actual language used by the statute.
○ What the law seeks to avoid, rather, is the PCSO sharing or franchising out its
exclusive authority to hold and conduct sweepstakes races, lotteries and
similar activities by collaborating or associating or entering into joint ventures
with other persons or entities not government-owned and legislatively
chartered like the PCSO is.
● The prohibition against PCSO sharing its authority with others is designed, among
other things, to prevent diversion to other uses of revenue streams that should go
solely to the charitable and welfare-related purposes specified in PCSO's charter.
● Public bidding is the standard and best way of ensuring that a contract by which the
government seeks to provide itself with supplies or materials or equipment is in fact
the most advantageous to the government.
 Kilosbayan, Inc. v. Morato (MR) ● Sections 5, 12, 13 and 17 of Article II are not self executing provisions. They do not
confer rights which can be enforced in the courts but only provide guidelines for
G.R. No. 118910 November 16, 1995
legislative intent.
Mendoza, J Created by: Shariel Catangui ● Section 16 on the other hand is a provision that confers a right because it speaks of
the right of the people. ( jurisprudence found in Oposa v. Factoran but was cited in the
Main Topic: Article II Declaration of Principles and State Policies case)
Sub-topic: Legal Value of Article II

PETITIONERS
Kilosbayan, Incorporated, Jovito R.
Salonga, Cirilo A. Rigos, Erme Camba,
Emilio C. Capulong, Jr., Jose T. Apolo,
Ephraim Tendero, Fernando Santiago, Jose
Abcede, Christine Tan, Rafael G. Fernando,
Raoul. V. Victorino, Jose Cunanan, Quintin
S. Doromal, Sen. Freddie Webb, Sen.
Wigberto Tañada, Rep. Joker P. Arroyo
RESPONDENTS
Manuel L. Morato, in his capacity as
Chairman of the Philippine Charity
Sweepstakes Office, and the Philippine
Gaming Management Corporation
FACTS
● On the issue of the locus standi, the petitioners are contending that the
members of the Court had ulterior motives when it overruled in GR No 118910
its original decision in G.R. No. 11375 where it sustained the locus standi of the
petitioners. The Court in reply said that the five members who dissented in
the first case an

RECIT-READY SUMMARY
Petitioners are seeking reconsideration for the July 17, 1995 decision of the Court. The
petitioners are contending that the decision in the first case (GR. No. 11375) has already
settled the issues on the standing of the petitioners to sue and on whether the PCSO can
enter into any form of association or collaboration with any party in operating an on-line
lottery, hence the questions should not have been reopened.
W/N the petitioners have legal standing to sue.
The court denied with finality the petition for reconsideration.
DOCTRINE
Legal Value of Article II (Declaration of Principles and State Policies)
ISSUES - HELD - RATIO
W/N the petitioners have standing to bring this suit or substantial interest to make
them real parties in interest.
HELD: NO
RATIO:
● Petitioners invoke the following Principles and State Policies set forth in Art. II
of the Constitution:
○ The maintenance of peace and order, the protection of life, liberty,
and property, and the promotion of the general welfare are essential
for the enjoyment by all the people of the blessings of democracy.
(§5)
○ The natural and primary right and duty of parents in the rearing of the
youth for civic efficiency and the development of moral character
shall receive the support of the Government. (§12)
 ○ The State recognizes the vital role of the youth in nation-building and
shall promote their physical, moral, spiritual, intellectual, and social
well-being. It shall inculcate in the youth patriotism and nationalism,
and encourage their involvement in public and civic affairs. (§13)
○ The State shall give priority to education, science and technology,
arts, culture, and sports to foster patriotism and nationalism,
accelerate social progress, and promote total human liberation and
development. (§17)msec@
■ Note: 1% of the gross sales of the lotto operation of the PCSO
is granted to the Commission on Higher Education under
Republic Act No. 7722.
■ 30% of the net receipts from the sale of tickets is also allotted
to charity. (R.A. No. L169, §6 (B))
● These are not, however, self executing provisions, the disregard of which can
give rise to a cause of action in the courts. They do not embody judicially
enforceable constitutional rights but guidelines for legislation.
● Thus, while constitutional policies are invoked, this case involves basically
questions of contract law.
● Therefore, the issue in this case is not whether the petitioners have legal
standing, since standing is a concept in constitutional law and here no
constitutional question is actually involved. Rather, the question is whether
petitioners are the "real parties in interest" within the meaning of Rule 3, §2 of
the Rules of Court which requires that "Every action must be prosecuted and
defended in the name of the real party in interest."
● The difference between the rule on standing and real party in interest has
been noted by authorities thus: "[S]tanding, because of its constitutional and
public policy underpinnings, is very different from questions relating to
whether a particular plaintiff is the real party in interest or has capacity to sue.
Although [both] are directed towards ensuring that only certain parties can
maintain an action, standing restrictions require a partial consideration of the
merits, as well as broader policy concerns relating to the proper role of the
judiciary in certain areas.”
● Standing is a special concern in constitutional law because, in some cases,
suits are brought not by parties who have been personally injured, but by
concerned citizens, taxpayers or voters who actually sue in the public interest.
● Petitioners do not in fact show what particularized interest they have for
bringing this suit. Although the present action involves a contract made by a
government corporation, there is no allegation that public funds are being
misspent so as to make this action a public one and justify relaxation of the
requirement that an action must be prosecuted in the name of the real party
in interest.
● In actions for the annulment of contracts, such as this action, the real parties
are those who are parties to the agreement, are bound either principally or
subsidiarily, are prejudiced in their rights with respect to one of the
contracting parties and can show the detriment which would positively result
to them from the contract even though they did not intervene in it, or who
claim a right to take part in a public bidding but have been illegally excluded
from it.
● Petitioners do not have such present substantial interest in the ELA as would
entitle them to bring this suit.
W/N the Equipment Lease Agreement is valid as a lease contract.
HELD: YES
RATIO:
● The ELA is valid as a lease contract under the Civil Code and is not contrary
to the charter of the Philippine Charity Sweepstakes Office.
● Under §1(A) of its charter (R.A. 1169), the PCSO has authority to enter into a
contract for the holding of an on-line lottery, whether alone or in association,
collaboration or joint venture with another party, so long as it itself holds or
conducts such lottery.
○ What the PCSO is prohibited from doing is to invest in a business
engaged in sweepstakes races, lotteries, and similar activities, and it
is prohibited from doing so whether in "collaboration, association or
joint venture" with others or "by itself."
○ The reason for this is that these are competing activities and the
PCSO should not invest in the business of a competitor.
○ Remarks made by then Assemblyman, now Justice Davide, during
 the deliberations on what later became B.P. Blg. 42, amending R.A.
No. 1169, were the basis for the ruling in G.R. 11375. It appears,
however, that the remarks were made in connection with a proposal
to give the PCSO the authority "to engage in any and all
investments." It was to provide an exception with regard to the type
of investments which the PCSO is authorized to make that the
Davide amendment was adopted.
■ It was not their intention to prohibit the PCSO from entering
into any collaboration, association or joint venture with
others even in instances when the sweepstakes races,
lotteries or similar activities are operated by it ("itself").
● The ELA in question does not have to be submitted to public bidding as a
condition for its validity.
● To find any fault with the new contract would be to cavil and expose the
opposition to the contract to be actually an opposition to lottery. However,
the morality of gambling is not a justiciable issue. Gambling is not illegal
per se. It is left to Congress to deal with the activity as it sees fit." In the case
of lottery, there is no dispute that, to enable the PCSO to raise funds for
charity, Congress authorized them to hold or conduct lotteries under certain
conditions.
○ Note: The Kilosbayan, Inc. is an organization "composed of
civic-spirited citizens, pastors, priests, nuns and lay leaders who are
committed to the cause of truth, justice, and national renewal." The
provisions cited from Art. II involve a question of morality. Thus,
they may be disapproving of the practice of gambling.
RULING
WHEREFORE, the Petition for Prohibition, Review and/or Injunction seeking to declare the
Equipment Lease Agreement between the Philippine Charity Sweepstakes Office and the
Philippine Gaming Management Corp. invalid is DISMISSED.
DISSENTING OPINIONS
FELICIANO, J.:
● On the matter of locus standi, he states that all the factors which pressed for
recognition of locus standi on the part of petitioners in the first Kilosbayan case still
exist and demand, with equal weight and insistence, such recognition in the present or
second Kilosbayan case.
● He also submits that the interpretation given by Mr. Justice Davide, Jr., approved and
adopted by the majority of the Court in the first Kilosbayan case, faithfully reflected the
intent of the legislative body as a whole. Justice Mendoza has thereby misread the
provisions of R.A. No. 1169, as amended by B.P. Blg. 42, and overlooked their actual
syntax.
○ The operative words of Section 1 (B) are "to engage in x x x health and
welfare-related investments, programs, projects and activities x x x" which,
however, Mendoza, J. would read restrictively and simply as "to invest in." To
do so, is to disregard the actual language used by the statute.
○ What the law seeks to avoid, rather, is the PCSO sharing or franchising out its
exclusive authority to hold and conduct sweepstakes races, lotteries and
similar activities by collaborating or associating or entering into joint ventures
with other persons or entities not government-owned and legislatively
chartered like the PCSO is.
● The prohibition against PCSO sharing its authority with others is designed, among
other things, to prevent diversion to other uses of revenue streams that should go
solely to the charitable and welfare-related purposes specified in PCSO's charter.
● Public bidding is the standard and best way of ensuring that a contract by which the
government seeks to provide itself with supplies or materials or equipment is in fact
the most advantageous to the government.
REGALADO, J.:
● He dissents from the majority opinion premised on the constitutional and procedural
doctrines posed and interpreted in tandem therein.
● He asserts that the J. Mendoza glossed over the validity of the lottery contract and
sought refuge in the rule of locus standi, thus suppressing concern over societal
mores on gambling by invoking the doctrine of non-justiciability.
● In the first lotto case, the Court exempted petitioners from the traditional locus standi
proscription because the issues raised on the indiscriminate operation of a nationwide
on-line lottery system are of paramount public interest and of a category higher than
those involved in former cases wherein the application of that rule was sustained.
● In the first lotto case, the minority therein rested its position entirely on procedural
grounds, that is, by merely challenging the legal standing of petitioners but without any
comment on the merits of the contract in question.
○ Since the case at bar is in truth a reprise of the first, I had excepted that this
case would now be decided purely on the merits of the putative expanded
lease agreement.
○ To make the Court's judgment here turn again on technical procedural
grounds, by hiding within the shroud of the locus standi mystique, is not a
decisive and conclusive adjudication.

TONDO MEDICAL CENTER EMPLOYEES ASSOCIATION vs.
THE COURT OF APPEALS
G.R. No. 167324 July 17, 2007
CHICO-NAZARIO, J Prepared by: Ezekiel Angeles
Main Topic: Legal Value of Article 2; not self-executory provisions
Sub-topic (if any):
PETITIONERS RESPONDENTS
Tondo Medical Center Employees Association, Research Institute
For Tropical Medicine Employees Association, National
Orthopedic Workers Union, Dr. Jose R. Reyes Memorial Hospital
The Court Of Appeals,
Employees Union, San Lazaro Hospital Employees Association,
Executive Secretary
Alliance Of Health Workers, Inc., Health Alliance For Democracy,
Alberto G. Romulo,
Council For Health Development, Network Opposed To
Secretary Of Health
Privatization, Community Medicine Development Foundation Inc.,
Manuel M. Dayrit,
Philippine Society Of Sanitary Engineers Inc., Kilusang Mayo Uno,
Secretary Of Budget
Gabriela, Kilusang Magbubukid Ng Pilipinas, Kalipunan Ng
And Management
Damayan Ng Mga Maralita, Elsa O. Guevarra, Arcadio B. Gonzales,
Emilia T. Boncodin
Jose G. Galang, Domingo P. Manay, Tito P. Esteves, Eduardo P.
Galope, Remedios M. Ysmael, Alfredo Bacuñata, Edgardo J.
Damicog, Remedios M. Maltu And Remegio S. Mercado
RECIT-READY SUMMARY
● Tondo Medical filed for a petition for certiorari, mandamus, and prohibition to SC;
which was later referred to CA for appropriate action
● Petiton assails the validity of the Health Sector Reform Agenda (HSRA) of the DOH
and Executive Order No. 102 by Pres. Estrada for the ff reasons:
○ HSRA is unconstitutional since:
○ The restructuring would negatively affect indigent patients in accessing
medical care
○ The devolution of basic services to government units negatively affect
income of employees
○ EO 102 exceeds president’s authority
● CA denied the petition due to procedural defects and constitutional provisions cited
were not self-executing.
● SC: Petitioners assail that the CA erred in ruling on the following:
○ HSRA not a justiciable controversy
○ Constitutional provisions not judicially enforceable (for being no
self-executory)
○ EO 102 not a justiciable controversy
○ Pres acting within authority by enforcing EO102
● SC affirms CA decision on the ff grounds:
○ The constitutional provisions cited by petitioners are non self-executing
provisions thus, they are not judicially enforceable and serves only as
guidelines for executive and legislative
○ The HSRA underwent due process and was approved by DBM
○ The reorganization of DOH is within the President’s mandate as provided
by the constitution; president has power to control and supervise all
departments under executive
○ EO 102 also a non justiciable controversy
○ Finally, the petitioners failed to substantiate claims of direct injury over
the implementation since no one was removed from service.
○ HSRA and E0 102 are constitutional
1987 Constitution
ART. III, SEC. 1. No person shall be deprived of life, liberty or property without due process of
law, nor shall any person be denied the equal protection of the law.
ART II, SEC. 5. The maintenance of peace and order, the protection of life, liberty, and property,
and the promotion of the general welfare are essential for the enjoyment of all the people of
the blessings of democracy.
ART II, SEC. 9. The State shall promote a just and dynamic social order that will ensure the
prosperity and independence of the nation and free the people from poverty through policies
that provide adequate social services, promote full employment, a rising standard of living and
an improved quality of life for all.
ART II, SEC. 10. The State shall promote social justice in all phases of national development.
ART II, SEC. 11. The State values the dignity of every human person and guarantees full respect
for human rights.
ART II, SEC. 13. The State recognizes the vital role of the youth in nation-building and shall
promote and protect their physical, moral, spiritual, intellectual and social well-being x x x.

ART II, SEC. 18. The State affirms labor as a primary social economic force. It shall protect the
rights of workers and promote their welfare.
ART XV, SEC. 1. The State recognizes the Filipino family as the foundation of the nation.
Accordingly, it shall strengthen its solidarity and actively promote its total development.
ART XV, SEC. 3. The State shall defend:
xxxx
(2) the right of children to assistance, including proper care and nutrition, and special protection
from all forms of neglect, abuse, cruelty, exploitation and other conditions prejudicial to their
development.
xxxx
ART XIII, SEC. 14. The State shall protect working women by providing safe and healthful
working conditions, taking into account their maternal functions, and such facilities and
opportunities that will enhance their welfare and enable them to realize their full potential in the
service of the nation.
ART II, SEC. 15. The State shall protect and promote the right to health of the people and instill
health consciousness among them.
ART XIII, SEC. 11. The State shall adopt an integrated and comprehensive approach to health
development which shall endeavor to make essential goods, health and other social services
available to all people at affordable cost. There shall be priority for the needs of the
underprivileged sick, elderly, disabled, women, and children. The State shall endeavor to
provide free medical care to paupers.
FACTS
● This case involves a Petition for Review on Certiorari, filed under Rule 45 of the Rules
of Court.
● The petitioner challenges the Decision of the Court of Appeals dated 26 November
2004, which denied a petition for nullification of the Health Sector Reform Agenda
(HSRA) Philippines 1999-2004 of the Department of Health (DOH) and Executive Order
No. 102 issued by then President Joseph Estrada on 24 May 1999.
● Initially, petitioners filed a Petition for Certiorari, Prohibition, and Mandamus under Rule
65 before the Supreme Court, but it was referred to the CA for appropriate action.
● The HSRA introduced by DOH in 1999 and aimed to reform the health sector in
various aspects.
● The HSRA focused on five key areas of reform, including providing fiscal autonomy to
government hospitals, securing funding for public health programs, developing local
health systems, strengthening health regulatory agencies, and expanding the National
Health Insurance Program.
● Petitioners challenged the first reform, particularly the fiscal autonomy of government
hospitals, which included collecting user fees and restructuring hospitals.
○ objected to certain administrative orders related to the reform's
implementation
○ alleging that they burdened indigent Filipinos who couldn't afford medical
services.
● Petitioners argued that the HSRA violated multiple constitutional provisions that
safeguard citizens' rights and welfare particularly:
○ fiscal autonomy,
○ income generation, and
○ revenue enhancement
● Executive Order No. 102, issued in 1999, redirected the functions and operations of the
DOH due to the devolution of basic services to local government units.
○ The order required the DOH to prepare a Rationalization and Streamlining
Plan (RSP) for the reorganization and staffing changes.
● Petitioners contended that EO 102 exceeded the President's authority and should
have been legislated by Congress.
○ criticized the implementation of the RSP, alleging errors in staffing changes
and reassignments of personnel.
● CA denied the petition due to:
○ procedural defects and
○ constitutional provisions cited by the petitioners were not self-executing and
thus required legislation.
● The court also found that EO 102 was within the President's authority and that the
DOH implemented it with proper approvals.
● The petitioners' Motion for Reconsideration of the Court of Appeals' decision was
subsequently denied.

ISSUES - HELD - RATIO
1. W/N the CA erred in ruling that the HSRA is not a justiciable controversy and
that the constitutional provisions are not judicially enforceable.
HELD: NO
RATIO:
● The Court affirmed the CA decision, holding that Sections 5, 9, 10, 11, 13, 15
and 18 are non self-executing provisions (re Tanada v. Angara).
● Hence, legislative action is required before the issue is deemed as judicially
enforceable.
● The Court also noted that equal protection clause is not violated since the
HSRA had no allegations of discrimination and lack of due process.
● As for S11, 14 ART XIII AND S1, 3 ART XV, are also declared as non
self-executory (re Basco v. PAGCOR and Tolentino v. Secretary of Finance) and
are mere directives to executive and legislative.
● The HSRA cannot be nullified due to considerations of due process and
limitations of judicial power.
2. W/N the CA erred in ruling that EO 102 is non justiciable and that the
president has authority to issue said EO
HELD: NO
RATIO:
● Petitioners contend that EO 102 exceeds presidential authority by
reorganizing the Department of Health
● However, the Court held that the President has control and supervisions over
all Executive departments including DOH and its reorganizatiion.
● This is still in line with the executive’s mandate under ART 7 S17 of Consti
● The Court emphasizes that the President has the power to reorganize his/her
office to achieve simplicity, economy, and efficiency as he/she deems fit; the
DOH is considered as part of the Office of the president.
○ This power is also recognized in General Appropriations Act
● Thus, no abuse of discretion can be deduced.
3. W/N the CA erred in upholding technicalities over transcendetal issues.
HELD: NO
RATIO:
● Petitioners allege that EO 102 was implemented before DBM’s approval and
that the President should have issued admin order to carry out the
Rationalization and Streamlining Plan (RSP)
● However, the Court held that the DBM already approved RSP and that the
DOH secretary is the alter-ego of the president; meaning that the DOH
Secretary’s acts are presumed to be acts of the president
● Regarding the diminution of compensation of employees and questionable
appointments, the Court finds petitioners' allegations too general and
unsubstantiated since none of the petitioners were removed from service
○ the reorganization of government units was also done in good faith.
● The Court explains that if any of the claims were substantiated or some errors
exist, they may only invalidate specific provisions or appointments, not the
entire Executive Order.
● Court emphasizes that constitutional questions must be supported by present
substantial interest and direct injury which the petitioners failed to
substantiate
● Court concludes that petitioners failed to show merit in their claims.
● Court affirms the validity of both HSRA and Executive Order No. 102.
RULING
IN VIEW OF THE FOREGOING, the instant Petition is DENIED. This Court
AFFIRMS the assailed Decision of the Court of Appeals, promulgated on 26
November 2004, declaring both the HSRA and Executive Order No. 102 as valid.
No costs. SO ORDERED.
 ● Sec. 62. Unauthorized Organizational Changes. Unless otherwise created by
OTHER NOTES/IMPORTANT CONCEPTS law or directed by the President of the Philippines, no organizational unit or
changes in key positions in any department or agency shall be authorized in
● Rationale behind Executive’s power to reorganize DOH [Aministrative code] their respective organizational structures and be funded form appropriations
● Sec. 23. The Agencies under the Office of the President.—The agencies by this Act.
under the Office of the President refer to those offices placed under the ● Again, in the year when Executive Order No. 102 was issued, "The General
chairmanship of the President, those under the supervision and control of the Appropriations Act of Fiscal Year 1999" (Republic Act No. 8745) conceded to
President, those under the administrative supervision of the Office of the the President the power to make any changes in any of the key positions and
President, those attached to it for policy and program coordination, and those organizational units in the executive department thus:
that are not placed by law or order creating them under any specific ● Sec. 77. Organized Changes. Unless otherwise provided by law or directed by
department. (Emphasis provided.) the President of the Philippines, no changes in key positions or organizational
● Section 2(4) of the Introductory Provisions of the Administrative Code defines units in any department or agency shall be authorized in their respective
the term "agency of the government" as follows: organizational structures and funded from appropriations provided by this Act.
● Agency of the Government refers to any of the various units of the ● Clearly, Executive Order No. 102 is well within the constitutional power of the
Government, including a department, bureau, office, instrumentality, or President to issue. The President did not usurp any legislative prerogative in
government-owned or controlled corporation, or a local government or a issuing Executive Order No. 102. It is an exercise of the President’s
distinct unit therein. constitutional power of control over the executive department, supported by
● Furthermore, the DOH is among the cabinet-level departments enumerated the provisions of the Administrative Code, recognized by other statutes, and
under Book IV of the Administrative Code, mainly tasked with the functional consistently affirmed by this Court.
distribution of the work of the President.32 Indubitably, the DOH is an agency
which is under the supervision and control of the President and, thus, part of
the Office of the President. Consequently, Section 31, Book III, Chapter 10 of
the Administrative Code, granting the President the continued authority to
reorganize the Office of the President, extends to the DOH.
● The power of the President to reorganize the executive department is
likewise recognized in general appropriations laws. As early as 1993, Sections
48 and 62 of Republic Act No. 7645, the "General Appropriations Act for
Fiscal Year 1993," already contained a provision stating that:
● Sec. 48. Scaling Down and Phase Out of Activities Within the Executive
Branch.—The heads of departments, bureaus and offices and agencies are
hereby directed to identify their respective activities which are no longer
essential in the delivery of public services and which may be scaled down,
phased out, or abolished, subject to civil service rules and regulations. x x x.
Actual scaling down, phasing out, or abolition of activities shall be effected
pursuant to Circulars or Orders issued for the purpose by the Office of the
President. (Emphasis provided.)

BCDA v. COA – 580 SCRA 295 [2009]
G.R. No. 178160 February 26, 2009
Carpio, J. Created By: Paul Antolino
Main Topic: Legal Value of Article 2
Sub-topic: Not source of rights
PETITIONERS RESPONDENTS
Bases Conversion and Development
Commission on Audit
Authority
RECIT-READY SUMMARY
When Congress passed Republic Act (RA) No. 7227, it established the Bases Conversion and
Development Authority (BCDA). The BCDA Board agreed on a new pay and benefits plan that
gave each contractual worker, regular permanent worker, and Board member a P10,000
bonus at the end of the year. In a letter, President Ramos said that the new plan for pay and
bonuses was fine with him. The full-time consultants at the BCDA also got the end-of-year
bonus. The Board increased BCDA officials and employees' year-end benefits from P10,000
to P30,000, ensuring they receive at least equivalent compensation to the BSP. In 2000 and
2001, they received a P30,000 benefit, and in 2002, the Board approved a P30,000 benefit.
But questions have been asked about whether or not board members and consultants of
BCDA are entitled to a bonus at the end of the year, whether or not denying the board
members and consultants a bonus at the end of the year is against Article II, Section 5 and 18
and Article III, Section 1 of the Constitution, and whether or not Board members and full-time
consultants are entitled to the year-end benefit because: (1) President Ramos approved the
benefit for the Board members, and (2) they've been getting it since 1997. Circular letter from
the DBM says that board members and advisers cannot get year end bonuses. Also, BCDA
does not have enough proof that RA 7227 goes against the law. The request is partially
granted. Commission on Audit is confirmed with the modification that the Bases Conversion
and Development Authority's Board members and full-time consultants do not have to pay in
return the year-end perks they have already received.
FACTS
● The Bases Conversion and Development Authority (BCDA) was created when
Congress passed Republic Act (RA) No. 7227. The Board decided on a new pay and
benefits plan that gave each temporary employee, regular permanent employee, and
Board member a P10,000 bonus at the end of the year. In a letter, President Ramos
gave his approval to the new pay and bonus plan. The year-end bonus was also given
to the BCDA's full-time consultants. Officials and employees at the BCDA got a
year-end bonus of P30,000, and on October 1, 2002, the Board passed Resolution No.
2002-10-193, which approved the release of a P30,000 year-end bonus for 2002.
● State Auditor IV Corazon V. Espao of the COA wrote in Audit Observation
Memorandum (AOM) No. 2003-004 that giving year-end benefits to Board members
was against Department of Budget and Management (DBM) Circular Letter No.
2002-2.
● In Notice of Disallowance (ND) No. 03-001-BCDA-(02), Director IV Rogelio D. Tablang,
COA, Legal and Adjudication Office-Corporate, denied the Board members and
full-time advisers a year-end bonus.
● In Decision, Director Tablang said that he "concurred" with AOM No. 2003-004 and
ND No. 03-001-BCDA-(02).
● In a letter, Rufo Colayco, President and CEO of the BCDA, asked for Decision No.
2004-013 to be looked at again. The idea was turned down by Director Tablang. The
BCDA sent the COA a notice of appeal. The COA said that the presumption of good
faith did not apply to the Board members and full-time consultants, so they could not
get the year-end bonus they were given.
ISSUES - HELD - RATIO
W/N board members and consultants of BCDA are entitled to Year End Bonus (YEB)
HELD: NO
RATIO:
According to DBM circulars, board members and consultants are not eligible for YEB:
● "Members of the Board of Directors of agencies are not paid by the
government," says DBM Circular Letter No. 2002-2. As officials who don't get
paid, they don't get PERA, ADCOM, YEB, or retirement benefits unless the law
says so.
● The Board's power to adopt compensation and benefit schemes is not
unlimited.
 ● In DBM Circular Letter No. 2002-2, it says, "YEB and retirement benefits are
extra benefits given to employees on top of their pay. As extra perks, these
will only be paid along with the standard pay." Consultants don't get
paychecks.
● The full-time consultants are not paid the basic pay because they are not part
of the BCDA team. The consulting contracts for the full-time consultants make
it clear that there is no employer-employee relationship between the BCDA
and the consultants, and that the BCDA will pay the consultants a contract
price.
members and full-time consultants in granting the year-end incentive. It failed
to demonstrate any obvious and unmistakable violation of the Constitution.
The idea that there is no distinction between regular officials and workers, or
between Board members and full-time consultants since both groups "have
mouths to feed and stomachs to fill" is nonsense.
W/N the BCDA Board can grant the year-end benefit to its members and the
full-time consultants because RA No. 7227 does not expressly prohibit it from
doing so

W/N granting of YEB to the board members and full-time consultants of BCDA is HELD: NO
consistent with Sections 5 and 18, Article II of the Constitution
RATIO:
HELD: NO
● Section 9 of RA No. 7227 reveals that the Board is prohibited from granting
RATIO: its members other benefits.
● Article II's title shows that it is a wide statement of ideas and policies. It
doesn't give anyone any rights that can be enforced.

W/N BCDA Board members and full-time consultants are entitled to the year-end
W/N the rejection of YEB for Board and Consultants is against Article III, Section 1 benefit because (1) President Ramos approved the granting of the benefit to the
of the Constitution Board members, and (2) they have been receiving it since 1997

HELD: NO HELD: NO

RATIO: RATIO:
● Every assumption should be made that RA No. 7227 is valid, and it is up to
● The State is not prevented from correcting a public official's wrong
the BCDA to show that there is a clear and obvious violation of the
interpretation of a law, and an illegal practice, no matter how long it has been
Constitution. When Congress passes a law, there is a strong assumption that
it is valid. For it to be invalidated, there must be a clear and unmistakable going on, cannot give rise to a vested right.
violation of the Constitution, not a clear and unmistakable one. BCDA doesn't
have enough proof that RA 7227, which limits BCDA's ability to give pay, is
illegal.
● The BCDA failed to demonstrate that RA No. 7227 unfairly targeted Board
RULING

WHEREFORE, the petition is PARTIALLY GRANTED. Commission on Audit Decision No.

2007-020 dated 12 April 2007 is AFFIRMED with the MODIFICATION that the Board members
and full-time consultants of the Bases Conversion and Development Authority are not required
to refund the year-end benefits they have already received.
 BACANI v. NACOCO DOCTRINE
G.R. No. L-9657 November 29, 1956
CONSTITUENT V. MINISTRANT
BAUTISTA ANGELO, J Created By: Maria Gabriela Aquino
The Government as an institution, has reference to what our Constitution has established
Main Topic: Functions of Government
composed of three great departments, the legislative, executive, and the judicial, through
Sub-topic: Constituent v. Ministrant & Incorporation which the powers and functions of government are exercised.

PLAINTIFFS DEFENDANTS These functions are twofold: constitute and ministrant. The former are those which constitute
LEOPOLDO T. BACANI and MATEO A. NATIONAL COCONUT CORPORATION and the very bonds of society and are compulsory in nature; the latter are those that are
MATOTO BOARD OF LIQUIDATORS, undertaken only by way of advancing the general interests of society, and are merely
optional.

RECIT-READY SUMMARY
● NACOCO requested the plaintiffs for transcript of stenographic notes. They were
billed for this, and the Auditor General was asking for a reimbursement out of the
plaintiff’s salary. Defendants argue that they are covered by Sec 2 of the Revised
Administrative Code, making them exempt from fees under Rule 130 of the ROC.
● For their exemption, the Court determined WON is a constituent or a ministrant. And
due to their nature, does that make them a part of the government, included in Sec
2 of the Revised Administrative Code?
● The Court ruled that NACOCO’s nature is a ministrant, as it is only to promote
merely the welfare, progress and prosperity of the people. NACOCO is a corporate
charter, not a municipal corporation formed and exercised as an attribute of
sovereign.
● Therefore, NACOCO is not exempt from payment of fees as laid down in Sec. 8 Rule
130 of the ROC.
The principles determining whether or not a government shall exercise certain of these
optional functions are: (1) that a government should do for the public welfare those things
which private capital would not naturally undertake and (2) that a government should do
these things which by its very nature it is better equipped to administer for the public welfare
than is any private individual or group of individuals.
INCORPORATION
The term "Government of the Republic of the Philippines" used in section 2 of the Revised
Administrative Code refers only to that government entity through which the functions of the
government are exercised as an attribute of sovereignty, and in this are included those arms
through which political authority is made effective whether they be provincial, municipal or
other form of local government. These are what we call municipal corporations.
They do not include government entities which are given a corporate personality separate
and distinct from the government and which are governed by the Corporation Law. Their
powers, duties and liabilities have to be determined in the light of that law and of their
corporate charters. They do not therefore come within the exemption clause prescribed in
section 16, Rule 130 of our Rules of Court.

FACTS

● National Coconut Corporation requested said stenographers for copies of the

transcript of the stenographic notes taken by them during the hearing. Plaintiffs
complied with the request by delivering to Counsel Alikpala (counsel of NACOCO),
and was asked by plaintiff for payment of fees (printing 1 peso each page).
 ● Auditor General disallowed the payment of these fees and sought the recovery of
the amounts paid. He required the plaintiffs to reimburse said amounts on the
ground that NACOCO, being a government entity, was exempt from the payment of
the fees in question.
● Auditor General issued an order directing the Cashier of the Department of Justice
to deduct from the salary of petitioners.
● ARGUMENTS
○ Defendants: Defendants set up as a defense that the National Coconut
Corporation is a government entity within the purview of section 2 of the
Revised Administrative Code of 1917 and, hence, it is exempt from paying
the stenographers' fees under Rule 130 of the Rules of Court.
ISSUES - HELD - RATIO
WON NACOCO may be considered as included in the term "Government of the
Republic of the Philippines" for the purposes of the exemption of the legal fees
latter are those that are undertaken only by way of advancing the general
interests of society, and are merely optional.
The principles determining whether or not a government shall exercise certain
of these optional functions are: (1) that a government should do for the public
welfare those things which private capital would not naturally undertake and
(2) that a government should do these things which by its very nature it is
better equipped to administer for the public welfare than is any private
individual or group of individuals.
There are functions which our government is required to exercise to promote
its objectives as expressed in our Constitution and which are exercised by it
as an attribute of sovereignty, and those which it may exercise to promote
merely the welfare, progress and prosperity of the people. NACOCO belongs
to the latter (MINISTRANT), and are government-owned or controlled
corporations which may be a private enterprise or one organized with powers
and formal characteristics of a private corporations under the Corporation
Law.

HELD: NO
WON its incorporation (certain functions) make them a part of the govt?
RATIO:
HELD: NO. They are only corporate charters.
● NACOCO is a ministrant, and not a municipal corporation. Therefore, the
payment of the fees in question became therefore contractual and as such
RATIO:
is valid even if it goes beyond the limit prescribed in section 8, Rule 130 of
● They do not acquire that status for the simple reason that they do not come
the Rules of Court.
under the classification of municipal or public corporation. The term
"Government of the Republic of the Philippines" used in section 2 of the
Revised Administrative Code refers only to that government entity through
Whether NACOCO is a constituent or a ministrant
which the functions of the government are exercised as an attribute of
sovereignty, and in this are included those arms through which political
HELD: NACOCO is a ministrant.
authority is made effective whether they be provincial, municipal or other
form of local government. These are what we call municipal corporations.
RATIO:
● These functions are twofold: constitute and ministrant. The former are those
They do not include government entities which are given a corporate
which constitute the very bonds of society and are compulsory in nature; the
 personality separate and distinct from the government and which are
governed by the Corporation Law. Their powers, duties and liabilities have
to be determined in the light of that law and of their corporate charters.
They do not therefore come within the exemption clause prescribed in
section 16, Rule 130 of our Rules of Court.

RULING

Wherefore, the decision appealed from is affirmed, without pronouncement as to

costs.
 promotions and refusal to bargain. However, the charges were denied by
ACCFA v. CUGCO ACCFA.
G.R. No. L-21484
November 29, 1969
G.R. No. L-23605 The issue is W/N the CIR has jurisdiction to entertain the petition of the
Unions for certification election on the ground that ACA is engaged in
Makalintal, J. Created By: Sophia Bawalan
governmental functions and W/N ACCFA (ACA) is performing governmental
Main Topic: Government Functions functions.
Sub-topic (if any):
It was held that the respondent Unions are not entitled to the certification
election and that ACA is a government office or agency engaged in
PETITIONERS RESPONDENTS
governmental, not proprietary functions.
Confederation of Unions in
Government Corporations and
The Agricultural Credit and Offices (CUGCO)
Cooperative Financing DOCTRINE
Administration (ACCFA) ACCFA Supervisors’ Association
/ (ASA) ● Section 11 of Republic Act No. 875:
The Agricultural Credit ○ "SEC. 11. Prohibition Against Strike in the Government. —
Administration (ACA) ACCFA Workers’ Association (AWA) The terms and conditions of employment in the
Government, including any political subdivision or
The Court of Industrial Relations instrumentality thereof, are governed by law and it is
declared to be the policy of this Act that employees
therein shall not strike for the purposes of securing
RECIT-READY SUMMARY
changes or modification in their terms and conditions
ACCFA was a government agency whose administrative machinery was of employment. Such employees may belong to any
required under RA 3844 to get reorganized, leading to a change of name labor organization which does not impose the obligation
from ACCFA to Agricultural Credit Administration (ACA). to strike or to join in strike: Provided, However, that this
section shall apply only to employees employed in
A collective bargaining agreement was entered into by and between the governmental functions of the Government including
Unions–comprising the ACCFA Supervisors' Association (ASA) and the but not limited to governmental corporations."
ACCFA Workers' Association (AWA)–and the ACCFA. The Unions started
protesting against the alleged violations and non-implementation of said
agreement, and later decided to declare a strike. Together with CUGCO, FACTS
they filed a complaint with the CIR against ACCFA for having allegedly
G.R. No. L-21484
committed acts of unfair labor practice–violation of the CBA to discourage
● Agricultural Credit and Cooperative Financing Administration
the members of the Unions in the exercise of their right to
self-organization, discrimination against said members regarding (ACCFA) - government agency created under RA 821
o RA 3844 (Agricultural Land Reform Code) required the
reorganization of the administrative machinery of
 ACCFA, and later changed its name from ACCFA to
Agricultural Credit Administration (ACA)
● ACCFA Supervisors' Association (ASA) and the ACCFA Workers'
Association (AWA) - referred to as the “Unions”; consist of the
supervisors and the rank-and-file employees in ACA, respectively
● Collective bargaining agreement (CBA)–to be effective for a period
of 1 year from July 1, 1961–between the Unions and ACCFA
o Unions began protesting against alleged violations and
non-implementation of said agreement
o Unions declared a strike on October 25, 1962 but was
ended on November 26, 1962 when the strikers
voluntarily returned to work
● Confederation of Unions in Government Corporations and Offices
(CUGCO) = mother union
o October 30, 1962 - The Unions, alongside CUGCO, filed
a complaint with the Court of Industrial Relations (CIR) for
having allegedly committed acts of unfair labor
practice–violation of the CBA to discourage the
members of the Unions in the exercise of their right to
self-organization, discrimination against said members
regarding promotions and refusal to bargain
o ACCFA denied the charges (lack of jurisdiction of the CIR
over the case, illegality of the bargaining contract,
expiration of said contract, lack of approval by the office
of the President)
● CIR ordered ACCFA to:
o "1. To cease and desist from committing further acts
tending to discourage the members of complainant
unions in the exercise of their right to self organization;
o 2. To comply with and implement the provision of the
collective bargaining contract executed on September 4,
1961, including the payment of P30.00 a month living
allowance;
o 3. To bargain in good faith and expeditiously with the
herein complainants."
G.R. No. L-23605
● During the pendency of the case above, the President signed into
law the Agricultural Land Reform Code (RA 3844)
● March 17, 1964 - ASA and AWA filed a petition for certification
election with the CIR praying that they be certified as the exclusive
bargaining agents for the supervisors and rank-and-file employees
in ACA
● ACA denied that the Unions represented the majority of the
supervisors and rank-and-file employees, and alleged that (1) the
petition was premature; (2) the ACA was not the proper party to be
notified and to answer the petition; and (3) the supervisors and
employees could not lawfully become members of nor be
represented by the Unions
o However, it was agreed that “the union petitioners in this
case represent the majority of the employees in their
respective bargaining units”
● In its order dated May 21, 1964, the trial Court certified the AWA and
the ASA as the sole and exclusive bargaining representatives of the
employees and supervisors of ACA (this was also affirmed by the
CIR en banc)
● ACA filed a petition for certiorari with urgent motion to stay the CIR
order of May 21, 1964 but was dismissed for lack of adequate
allegations. Although the dismissal was later reconsidered when
the ACA complied with the formal requirement, and was eventually
granted.
● ACA challenges the jurisdiction of CIR to entertain the Unions’
petition for certification election on the ground that ACA is engaged
in governmental functions
● ACA was established under Sec. 3 of the Agricultural Land Reform
Code to extend credit and similar assistance to agriculture
● Section 110: “The administrative machinery of the ACCFA shall be
reorganized to enable it to align its activities with the requirements
and objective of this Code and shall be known as the Agricultural
Credit Administration.”
● Visitorial power of the sovereign
o Only a government agency specially delegated by the
Congress has the power to audit the operations of
farmers' cooperatives
 ● Only the President may appoint the officials and employees of ACA
● ACA, being a government office or agency, is engaged in
governmental functions
ISSUES - HELD - RATIO
W/N the CIR has the jurisdiction to entertain the petition of the Unions
for certification election on the ground that ACA is engaged in
governmental functions
HELD: NO
RATIO:
● In view of the foregoing premises, we hold that the respondent
Unions are not entitled to the certification election sought in the
Court below. Such certification is admittedly for purposes of
bargaining in behalf of the employees with respect to terms and
conditions of employment X X X.
○ This is contrary to Section 11 of Republic Act No. 875,
which provides:
■ "The terms and conditions of employment in
the Government, including any political
subdivision or instrumentality thereof, are
governed by law and it is declared to be the
policy of this Act that employees therein shall
not strike for the purposes of securing
changes or modification in their terms and
conditions of employment. Such employees
may belong to any labor organization which
does not impose the obligation to strike or to
join in strike: Provided, However, that this
section shall apply only to employees
employed in governmental functions of the
Government including but not limited to
governmental corporations."
● Additionally, the trial Court in its order dated May 21, 1964
certified "the ACCFA Workers' Association and the ACCFA
Supervisors' Association as the sole and exclusive bargaining
representatives of the rank-and-file employees and supervisors,
respectively, of the Agricultural Credit Administration."
● The fact that ACA was established, among other governmental
agencies, to extend credit and similar assistance to agriculture,
in pursuance of the policy of implementing the land reform
program of the government, certainly a governmental function,
militates quite strongly against the recognition of collective
bargaining powers in the respondent Unions within the context of
Republic Act No. 875, and hence against the grant of their basic
petition for certification election as proper bargaining units.
W/N ACCFA (now ACA) is performing governmental functions
HELD: YES
RATIO:
● The ACA is a government office or agency engaged in
governmental, not proprietary functions.
● The implementation of the land reform program of the
government according to Republic Act No. 3844 is most certainly
a governmental, not a proprietary, function; and for that purpose
Executive Order No. 75 has placed the ACA under the Land
Reform.
● There can be no dispute as to the fact that the land reform
program contemplated in the said Code is beyond the
capabilities of any private enterprise to translate into reality. It is
a purely governmental function… X X X …the law itself declares
that the ACA is a government office, with the formulation of
policies, plans and programs vested no longer in a Board of
Governors, as in the case of the ACCFA, but in the National Land
Reform Council, itself a government instrumentality; and that its
personnel are subject to Civil Service laws and to rules of
 standardization with respect to positions and salaries, any vestige Laissez-faire - “no taxes, regulations, or tariffs; market should be
of doubt as to the governmental character of its functions completely free to be led by the natural laws of supply and demand”
disappears. (https://gocardless.com/guides/posts/laissez-faire-definition-principles-and-
examples/)

RULING

We hold, therefore, that insofar as the fringe benefits already paid

are concerned, there is no reason to set aside the decision of the
respondent Court, but that since the respondent Unions have no
right to the certification election sought by them nor,
consequently, to bargain collectively with the petitioner, no further
fringe benefits may be demanded on the basis of any collective
bargaining agreement.

The decisions and orders appealed from are set aside and/or
modified in accordance with the foregoing pronouncements. No
costs.

SEPARATE OPINIONS

Fernando, J., concurring.

● Laissez-faire principle is no longer acceptable and is repugnant to
the fundamental law
● Need of a social justice provision

OTHER NOTES / IMPORTANT CONCEPTS

Certification Election - “a process of determining through secret ballot the

sole and exclusive bargaining agent (SEBA) of all the employees in an
appropriate bargaining unit for the purpose of collective bargaining”
(https://blr.dole.gov.ph/2014/12/11/certification-election/)
 PVTA v. CIR
G.R. No. L-32052 July 25, 1975
FERNANDO, J. Created By: Bea Bibares
Main Topic: government; functions; unincorporated
Sub-topic: expanded role of govt, rejection of laissez-faire
PETITIONERS RESPONDENTS
Court of Industrial Relations
Philippine Virginia Tobacco Administration
and private respondent employees of PVTA
RECIT-READY SUMMARY
● Private respondents filed with CIR a petition to recover overtime pay for services
rendered in excess of 8hrs per day. CIR then rendered a decision directing PVTA to
pay the overtime compensation.
● PVTA raises the issue of CIR’s lack of jurisdiction and the Eight Hour Labor Law’s
inapplicability to them.
● The Court rules in favor of respondents. It affirms that the CIR has jurisdiction over the
labor dispute, as emphasized by the Constitutional Convention and even previous
cases. The laissez-faire principle must be rejected because governmental
interference over economic affairs is necessary in promoting the general welfare.
DOCTRINE
The expanded role of government + Rejection of the laissez-faire principle
o Laissez-faire principle = policy of minimum governmental interference in the
economic affairs of individuals and society
o This must be rejected because it goes against the philosophy of the
Constitution and the purpose of government to promote the general welfare
of the people and safeguard their wellbeing.
o The role of the government is not merely to perform (traditional) constituent
functions; promoting the welfare of the Filipino people, even in economic
policy, is necessary. Therefore there should be government interference in
situations such as this
FACTS
● PVTA employees filed a petition with CIR, praying for payment of overtime
compensation (in excess of the regular 8hrs per day) in accordance with Commonwealth
Act No. 444 (Eight Hour Labor Law)
o → PVTA denied allegations of failure to pay + raised issues of lack of cause of
action and lack of jurisdiction of respondent Court (CIR)
o → Court ordered sustaining priv respondents’ claims for overtime services,
directing PVTA to pay
o → motion for recon, Court en banc denied
o → PVTA filed petition for certiorari
● PVTA argues:
o The case is beyond the jurisdiction of CIR; PVTA exercises governmental
functions and is not covered by the Eight Hour Labor Law
ISSUES - HELD - RATIO
W/N CIR has jurisdiction over the matter
HELD: YES
RATIO:
It is valid that PVTA raises this issue. They are a corporation established with
governmental functions.
● RA 2265 (An Act Establishing the Virginia Tobacco Admin, defining its
objectives, powers and functions, other purposes) and RA 4155 (An Act to
promote and strengthen the Virginia Tobacco Industry) posits PVTA as a
governmental agency mainly in charge of the tobacco industry’s domestic and
foreign economy
● Bacani v. National Coconut Corporation + President Wilson on traditional
distinction between constituent and ministrant functions of govt:
○ Constituent = attributes of sovereignty (e.g. maintenance of peace,
prevention of crime, regulation of property and property rights,
national defense and foreign relations)
 ○ Ministrant = to promote the welfare, progress, and prosperity of the
people; optional; usually left to private enterprises
■ Laissez-faire principle = policy of minimum governmental
interference in the economic affairs of individuals and society
BUT, because of the growing complexities of modern society and the ideological
developments in our Constitution, these classifications of govt functions have grown
unrealistic. Promoting general welfare has become increasingly fundamental in
state action/government. The principle of laissez-faire must be rejected.
● J. Malcolm: “The modern period has shown a widespread belief in the amplest
possible demonstration of govt activity.”
● Edu v. Erica: “The Constitutional Convention… entrusted to our govt the
responsibility of coping with social and economic problems with the
commensurate power of control over economic affairs…. to live up to its
commitment to promote the general welfare through state action.”
● Manuel Roxas (as a leading member of the Consti Convention): The Consti’s
philosophy is not only political, it’s also social and economic. Declarations of
economic policy are necessary to safeguard the interest and welfare of
Filipino people. “Freedom to grow, develop national aspirations and interests,
not to be hampered by artificial boundaries”
● J. Laurel: for the humanization of laws and promotion of the interest of all; to
attain a “compassionate society”
HELD: YES
RATIO:
The law is clear and unambiguous.
● Sec 2 of Commonwealth Act No. 444: “it shall apply to all persons employed
in any industry or occupation, whether public or private”
RULING
WHEREFORE, the appealed Order of March 21, 1970 and the Resolution of respondent Court
en banc of May 8, 1970 denying a motion for reconsideration are hereby affirmed. The last
sentence of the Order of March 21, 1970 reads as follows: "To find how much each of them
[private respondents] is entitled under this judgment, the Chief of the Examining Division, or any
of his authorized representative, is hereby directed to make a reexamination of records, papers
and documents in the possession of respondent PVTA pertinent and proper under the premises
and to submit his report of his findings to the Court for further disposition thereof." Accordingly,
as provided by the New Labor Code, this case is referred to the National Labor Relations
Commission for further proceedings conformably to law. No costs.

SO, government involvement is necessary in this dispute as its issues lie with the
general welfare of the people. Additionally, PVTA’s functions as governmental in
nature does not remove the CIR’s rightful jurisdiction over this labor dispute.
● Previous cases like Philippine Association of Free Labor Unions v. Tan have
already affirmed CIR jurisdiction over labor cases. They have also clearly
specified cases within the exclusive jurisdiction of CIR, including Eight Hour
Labor Law cases.
● “Unless the law speaks clearly and unequivocally, the choice should fall on
the CIR.”

W/N the Eight Hour Labor Law applies to PVTA

 - An unincorporated government refers to an entity that is under the direct governance
Republic of the Philippines, petitioner, vs. The Presiding Judge, Branch XV, Court
of a central government (Office of the President of the Philippines) that lacks its own
of First Instance of Rizal and Jose Sison, respondents
separate legal personality or self-governing status (autonomy).
G.R. No. 100210 Date April 1, 1998 - A governmental agency under the Office of the President is exempted from the
payment of legal fees as well as posting an appeal bond.
Martinez, J. Created By: Saschia Melizette Bosi
Main Topic: Sec. 1 Philippines as a Democratic and Republican State
Sub-topic (if any) Functions of Govt: Unincorporated FACTS

● Sison filed a complaint against the Rice and Corn Administration (RCA) for a sum of
PETITIONERS RESPONDENTS
money with the CFI of RIzal, presided by the respondent judge.
Republic of the Philippines (Rice and Corn The Presiding Judge, Branch XV, Court of
● RCA responded by filing a motion to dismiss on the ground of non-suability of the
Administration) First Instance of Rizal and Jose Sison
RCA as a mere governmental agency of the Republic of the Philippines
● Sison then filed a motion to amend the complaint for showcasing that his actionable
RECIT-READY SUMMARY interest as assignee of the purchased price of unpaid deliveries of corn grains to RCA
● Judge was in favor of Sison ordering the RCA to pay the corn grains they bought form
Sison filed a complaint for a sum of money against the Rice and Corn Administration (RCA) for Sison amounting to 1.6 million with interest and to pay the attorney’s fees worth 250K
the purchased price of unpaid deliveries of corn grains to RCA. Respondent judge issued an ● RCA filed a motion to appeal where Sison filed a motion to dismiss that appeal for the
order to RCA for the payment of the corn grains they bought from Sison amounting to 1.6 RCA’s failure to post an appeal bond.
million with interest, and to pay the legal fees worth 250K. RCA then filed a motion to appeal, ● OSG filed an opposition to dismiss the appeal which was approved by Judge, however
however, Sison filed a motion to dismiss the appeal on the grounds that RCA failed to post an denying the exemption of RCA from the payment of legal fees and the posting of
appeal bond. The RCA, as represented by the OSG, filed a motion to dismiss the appeal appeal bond (within 5 days) stating that RCA is an instrumentality of the Republic of
stating that RCA is exempted from the payment of legal fees and the posting of appeal bond. the Philippines.
● Petitioner filed the petition for certiorari and mandamus with preliminary injunction to
The RCA is exempted from paying the legal fees and posting an appeal bond on the grounds set aside the Judge’s orders
that RCA is governmental agency without a separate, distinct, and independent legal
personality, under the Office of the President of the Philippines. This is based on the doctrine
of government’s exemption on posting an appeal bond (Government of the PH island v. ISSUES - HELD - RATIO
Judge of the CFI of Iloilo). The establishment of the RCA, pursuant to RA 3452, was tasked
to carry out the declared government policy laid in Sec. 1 of the said act. Its primary
governmental function is to perform the duty of subsidizing and stabilizing the price of palay
W/N [MAIN ISSUE] Whether or not the RCA should be exempted from paying the
and corn at a price that is within the reach of the consumers, hence, promoting for the
legal fees and posting an appeal bond on the grounds that RCA is a governmental
general welfare of the people.
agency of the Republic of the Philippines?

HELD: Yes.
DOCTRINE

Doctrine of Government’s Exemption RATIO: The RCA is a governmental agency of the Republic of the PH without a
separate, distinct, and independent legal personality. The Congress by RA 3452
created the RCA. and therefore was a government machinery that was tasked to carry
out the declared government policy laid in Sec. 1 of the said act. Moreover, RCA is hereby SET ASIDE and the latter is heretofore directed to allowed and give due
depends for its continuous operation on the appropriations set by the GAA yearly as course to the aforesaid appeal without the posting of an appeal bond.
stated in Sec. 14 of the same act (RA 3452). It is not a separate and distinct entity like
the corporation but by law, it is an office directly under the Office of the President of
the Philippines.

Sison contends that the RCA has been established to succeed the corporate assets,
liabilities, functions, and powers of the NARIC (National Rice & Corn Corporation)
which is a government-owned and controlled corporation that is separate and distinct
from the Government of the Republic of the Philippines. He further stated that RCA
engaged in the buying, selling of palay, rice, and corn. These are all erroneous.

The Court held that NARIC (a corporation) is different from RCA. RCA is an
instrumentality of the government who is performing governmental functions to
promote the general welfare “who wish to dispose of their produce at a price that will
afford them a fair and just return for their labor” (Sec. 1 RA 3452), the terms and
conditions of employment of its laborers and employees which is subject to the civil
service rules and regulations.

The mercantile activity of the RCA in the buying and selling of agri products is
incidental to its primary governmental function which is to perform the duty of
subsidizing and stabilizing the price of palay, rice and corn in order to make it within
the reach of the consumers–“at a price within the reach of the consumers” (Sec. 1 RA
3452 (primary function of the govt; welfare of the people).

Therefore, as governmental agency under the Office of the President, the RCA is
exempted from the payment of legal fees and posting of an appeal bond. This is
based on the well-settled doctrine of the Government’s exemption from the
requirement of posting an appeal bond (Government of the PH island v. Judge of the
CFI of Iloilo), thus, the Republic of the Philippines is exempted from requiring of filing
an appeal bond.

RULING

WHEREFORE, the order of the dismissal of the RCA’s appeal by the respondent Judge
 ● On April 15, 2002, the VFP’s incumbent president, Col. De Ocampo, received a letter
VFP v. Reyes from DND Secretary Reyes.
o The letter is about seeking clarification and information regarding the legal
G.R. No. 155027 February 28, 2006
relationship and management structure between the Veterans Federation of
Ponente Created By: Justine Cago the Philippines (RA 2640) and the Philippine Veterans Bank (RA 3518), as
Main Topic: Examples of government exercising its functions through corporations or defined by the relevant laws. The DND Secretary is requesting information to
instrumentalities rectify any actions that should have been taken and considers the potential
need for a conference with the organizations' staff to address these issues.
Sub-topic (if any): Government-owned or controlled corporations
● On June 10, 2002, the DND Secretary issued the DND Department Circular No. 04
entitled “Further Implementing the Provisions of Sections 1 and 2 of Republic Act No.
PETITIONERS RESPONDENTS 2640”.
Hon. ANGELO T. REYES in his capacity as o Section 2: Definition of Terms
Secretary of National Defense; and Hon.
THE VETERANS FEDERATION OF THE o Section 3: Relationship Between the DND and the VFP
EDGARDO E. BATENGA in his capacity as
PHILIPPINES represented by Esmeraldo R. o Section 4: Records of the FEDERATION
Undersecretary for Civil Relations and
Acorda o Section 5: Submission of Annual and Periodic Report
Administration of the Department of National
Defense o Section 6: Penal Sanctions
● On August 23, 2002, the DND Secretary and Undertary informed the VFP President
about a Department Order No. 129 which seeks to conduct a comprehensive
RECIT-READY SUMMARY management audit of the VFP. The respondents explain that it will help the DND better
understand the VFP’s functions, responsibilities, and situation on the ground.
The Secretary and the Undersecretary of the Department of National Defense (DND) seeks to
● On August 28, 2003, the DND informed the VFP president that the Management Audit
conduct a comprehensive management audit of the VFP through the issuance of Department
Group, headed by the Undersecretary, would be paying a visit to the VFP for an
Circular No. 04. The VFP complained and filed a Petition for Certiorari with Prohibition to
update on VFP’s different affiliates and financial statements of the Federation.
declare as void Department Circular No. 04 of the Department of National Defense (DND).
● The Secretary General of the VFP complained about the alleged broadness of the
The main issue of the case is W/N the VFP is a private corporation. The Court ruled that the
scope of the management audit and requested the suspension thereof until such time
VFP is a public corporation. As such, it can be placed under the control and supervision of
that specific areas of the audit shall have been agreed upon.
the Secretary of National Defense, who consequently has the power to conduct an extensive
● The request of the VFP Secretary General was denied, thus, the petition for Certiorari
management audit of VFP. Furthermore, the assailed DND Department Circular No. 04 does
with Prohibition to declare as void Department Circular No. 04 of the DND.
not supplant nor modify and is, on the contrary, perfectly in consonance with Rep. Act No.
2640.

ISSUES - HELD - RATIO

DOCTRINE
W/N the VFP is a private corporation.
The VFP is a public corporation because they have executive functions: 1) to implement the
provisions of Rep. Act No. 2640 and 2) to implement the Constitutional mandate for the State to
HELD: NO. The VFP is a public corporation.
provide immediate and adequate care, benefits and other forms of assistance to war veterans.

RATIO:
● Rep. Act No. 2640 is entitled "An Act to Create a Public Corporation to be Known as
FACTS
the Veterans Federation of the Philippines, Defining its Powers, and for Other
 Purposes."
● Any action or decision of the Federation (VFP) or of the Supreme Council shall be
subject to the approval of the Secretary of Defense (DND).
● The VFP is required to submit annual reports of its proceedings for the past year,
including a full, complete and itemized report of receipts and expenditures of whatever
kind, to the President of the Philippines or to the Secretary of National Defense.
● Under Executive Order No. 37 dated 2 December 1992, the VFP was listed as among
the government-owned and controlled corporations that will not be privatized.
● In Ang Bagong Bayani — OFW Labor Party v. COMELEC, this Court held in a minute
resolution that the "VFP [Veterans Federation Party] is an adjunct of the government,
as it is merely an incarnation of the Veterans Federation of the Philippines.
Petitioner’s Defense 1: The VFP does not possess the elements which would qualify it as a
public office, particularly the possession/delegation of a portion of sovereign power of
government to be exercised for the benefit of the public.
● The delegation to the individual of some of the sovereign functions of government is
"[t]he most important characteristic" in determining whether a position is a public office
or not.
● In the case at bar, the functions of petitioner corporation enshrined in Section 4 of Rep.
Act No. 2640 31 should most certainly fall within the category of sovereign functions.
The protection of the interests of war veterans is not only meant to promote social
justice, but is also intended to reward patriotism… It would be injustice of catastrophic
proportions to say that it is beyond sovereignty's power to reward the people who
defended her.
● The functions of the VFP are executive functions, designed to implement not just the
provisions of Rep. Act No. 2640, but also, and more importantly, the Constitutional
mandate for the State to provide immediate and adequate care, benefits and other
forms of assistance to war veterans and veterans of military campaigns, their surviving
spouses and orphans.
Petitioner’s Defense 2: The VFP funds are not public funds because no budgetary
appropriations or government funds have been released to the VFP directly or indirectly from
the DBM.
● The fact that no budgetary appropriations have been released to the VFP does not
prove that it is a private corporation.
● The DBM erroneously believed that the VFP is a private corporation, but the erroneous
application of the law by public officers does not bar a subsequent correct application
of the law.
● According to Rep. Act. No. 2640 (Sec. 2, 4, 6, 10, 12), funds in the hands of the VFP
from whatever source are public funds, and can be used only for public purposes.
○ The use of funds is limited to the purposes of the VFP which we have ruled to
be sovereign functions.
● They [donators] are presumed aware of the provisions of Rep. Act No. 2640 which not
only specifies the exclusive purposes for which VFP funds can be used, but also
provides for the regulation of such funds by the national government through the
Secretary of National Defense.
Petitioner’s Defense 3: The VFP is a civilian federation where membership is voluntary.
● The civilian nature of VFP is not relevant in this case because the Constitution does
not contain any prohibition, express or implied, against the grant of control and/or
supervision to the Secretary of National Defense over a civilian organization.
● The membership of the VFP is not the individual membership of the affiliate
organizations, but merely the aggregation of the heads of such affiliate organizations.
These heads forming the VFP then elect the Supreme Council and the other officers,
of this public corporation.
Petitioner’s Defense 4: The Administrative Code of 1987 does not provide that the VFP is an
attached agency, and nor does it provide that it is an entity under the control and supervision of
the DND in the context of the provisions of said code.
● The Administrative Code, by giving definitions of the various entities covered by it,
acknowledges that its enumeration is not exclusive.
Petitioner’s Defense 5: Petitioner offers as evidence the DBM opinion that the VFP is a
non-government organization in its certification that the VFP "has not been a direct recipient of
any funds released by the DBM."
● Respondents (DND): The supposed declaration of the DBM that petitioner is a
non-government organization is not persuasive, since DBM is not a quasi-judicial
agency.
● The Court: The DBM’s appraisal is persuasive because the DBM is an expert on
determining what the various government agencies and corporations are. The
persuasiveness of the DBM opinion has, however, been overcome by all the previous
explanations we have laid so far. The DND is clearly more of an expert with respect to
the determination of the entities under it, and its Administrative Rules and Regulations
are entitled to great respect and have in their favor the presumption of legality.
W/N the rules and guidelines laid down in the assailed Department Circular No. 04
expanded the scope of "control and supervision" beyond what has been laid down in Rep.
Act No. 2640.
HELD: NO.

RATIO:
● The 1935, 1973, 1987 Constitutions explicitly prohibit the regulation by special laws of
private corporations, with the exception of government-owned or controlled
corporations (GOCCs).
○ (Found in the first issue) The VFP is not a private corporation.
● Under the Administrative Code of 1987, supervision and control shall include the
authority to act directly whenever a specific function is entrusted by law or regulation
to a subordinate.
○ Considering that petitioner is a public corporation, the provisions of the
assailed Department Circular No. 04 did not supplant nor modify the
provisions of Republic Act No. 2640… [They] are merely consequences of
both the power of control and supervision granted by Rep. Act No. 2640.
Petitioner’s Defense: The assailed DND Department Circular No. 04 was never published, and
hence void.
● Its validity is not affected by such non-publication for the reason that its provisions fall
under two of the exceptions enumerated in Tañada.
○ Department Circular No. 04 is an internal regulation. As we have ruled, they
are meant to regulate a public corporation under the control of DND, and not
the public in general.
created to represent and defend the interests of Filipino veterans, should be resolved
as soon as possible in order for it to once and for all direct its resources to its rightful
beneficiaries all over the country.
RULING
WHEREFORE, the Petition is hereby DISMISSED for lack of merit. The validity of the Department
of National Defense Department Circular No. 04 is AFFIRMED.
OTHER NOTES/IMPORTANT CONCEPTS
1. Control - the power of an officer to alter or modify or nullify or set aside what a
subordinate has done in the performance of his duties and to substitute the judgment
of the former to that of the latter.
2. Supervision - overseeing, or the power or authority of an officer to see that
subordinate officers perform their duties. If the latter fail or neglect to fulfill them, the
former may take such action or step as prescribed by law to make them perform their
duties.

W/N the Supreme Court has Jurisdiction of the case considering that it did not pass through
the RTC and the CA.

HELD: YES

RATIO:
● The hierarchy of courts in our judicial system determines the appropriate forum for
these petitions… to prevent inordinate demands upon the Court's time and attention,
which are better devoted to matters within its exclusive jurisdiction, and to prevent
further overcrowding of the Court’s docket.
● The petition itself, in this case, does not specifically and sufficiently set forth the
special and important reasons why the Court should give due course to this petition
in the first instance, hereby failing to fulfill the conditions set forth… However, the
Court resolves to take judicial notice of the fact that the persons who stand to lose in
a possible protracted litigation in this case are war veterans, many of whom have
precious little time left to enjoy the benefits that can be conferred by petitioner
corporation. This bickering for the power over petitioner corporation, an entity

RAMISCAL v. SANDIGANBAYAN
G.R. No. 169727-28 August 18. 2006
Created By:
Callejo, Sr., J.
Juan Carlos Calapatia and Jego Antonio Yap
Main Topic: Government Owned or Controlled Corporations
PETITIONERS RESPONDENTS
BRIG. GEN. (Ret.) JOSE S. RAMISCAL, JR.
SANDIGANBAYAN (4th Division) and
PEOPLE OF THE PHILIPPINES
RECIT-READY SUMMARY
Based on a Joint Senate Inquiry, the AFP-RSBS, a government-owned corporation
responsible for the retirement pension and benefit funds of AFP personnel, was
involved in 148 different anomalous transactions wherein lots of land were
purchased for a significantly lower price than documented, with the excess amount
(in total, around 700 million pesos) released for each transaction most likely being
pocketed by officials of the RSBS Investment Committee, including petitioner, who
signed off on each transaction. Based on a preliminary investigation by the
Ombudsman, the Sandiganbayan found probable cause to issue a warrant of arrest
for the petitioner.
Petitioner assails the Sandiganbayan’s finding of probable cause against petitioner
for the issuance of warrants for petitioner's arrest without first conducting a hearing
and his prosecution for several counts of estafa, which he argues should be one
consolidated case.
The court held that the finding of probable cause for issuance of a warrant of arrest
is based on the Ombudsman’s preliminary investigation, and that the Revised Rules
on Criminal Procedure mandated that cases are not required to be set for hearing
to determine probable cause for the issuance of a warrant for the arrest of the
accused. They also held that petitioner took part in 148 anomalous transactions, and
each transaction is cause for a separate criminal action against petitioner due to
criminal intent being present in each transaction, and that each transaction caused
great damage to the government.
DOCTRINE
Court ruled that the AFP-RSBS is a government-owned and controlled
corporation, and that its funds are in the nature of public funds. Under Section
4(a)(1)(g) of R.A. No. 8249, the Sandiganbayan has exclusive jurisdiction over
offenses committed by presidents, directors, trustees or managers of
government-owned or controlled corporations. Under Section 4(b) of R.A. No.
8249, the Sandiganbayan has exclusive jurisdiction over offenses committed
by public officers and employees in relation to their office, whether simple or
complexed with other crimes.
FACTS
● A Joint Senate inquiry was conducted in 1998 to investigate the alleged coup rumors
and alleged anomalies in the Armed Forces of the Philippines-Philippine Retirement
Benefits System (AFP-RSBS). It found out that anomalies were made through the
purchase of lots by having two register of deeds with varying amounts
● This anomaly led to the recommendation of the Senate Blue Ribbon Committee to file a
case against past AFP-RSBS President Gen. Jose Ramiscal Jr., who had signed off on the
deeds covering the acquisition of lands
● After an investigation by the Ombudsman, it found out that it can hold Ramiscal, Jr., et.
al. for 148 counts in violation of Estafa through falsification of public documents, and one
count of violation against Section 3(e) of RA 3019. Of the 148 counts, however, only five
were pursued due to the lack of prosecutors who could handle the case
● The cases were filed with different divisions. As such, Petitioner motioned to Determine
Probable Cause and Consolidate All Cases in One Information with Prayer to Defer
Issuance of An Arrest Warrant Pending Resolution Thereof. This motion was denied, and
the subsequent Motion for Reconsideration
● The Petitioner then filed a Motion to Quash, but was denied by the Court as it
maintained that it had jurisdiction over the crimes charged
● Thus, the Petition for Certiorari in the Court. (The argument in relation to the topic on
hand) Petitioner contends that the AFP-RSBS is a government-owned and controlled
 corporation, and he does not fall within SG 27. As such, the Sandiganbayan has no
jurisdiction over the case
ISSUES - HELD - RATIO
MAIN ISSUE: Whether the Sandiganbayan committed grave abuse of discretion
amounting to excess of jurisdiction in finding probable cause against petitioner for the
issuance of warrants for petitioner's arrest without first conducting a hearing
HELD: NO.
RATIO: Petitioner was likewise unable to establish his claim that the
Sandiganbayan committed grave abuse of discretion in finding probable cause
for the issuance of a warrant for his arrest. His claim that the Sandiganbayan only
relied on the Ombudsman’s findings without taking into account his own evidence.
The SC agreed with the Sandiganbayan's ruling that the Revised Rules of
Criminal Procedure do not require cases to be set for hearing to determine
probable cause for the issuance of a warrant for the arrest of the accused
before any warrant may be issued. Section 6, Rule 112 mandates the judge to
personally evaluate the resolution of the Prosecutor (in this case, the
Ombudsman) and its supporting evidence, and if he/she finds probable cause, a
warrant of arrest or commitment order may be issued within 10 days from the
filing of the complaint or Information. In case of doubt on the existence of probable
cause, the judge may order the prosecutor to present additional evidence within five
(5) days from notice and the issue must be resolved by the court within thirty (30)
days from the filing of the complaint of information. These periods are part of
mandatory procedure.
ISSUE 2: Whether the Ombudsman committed grave abuse of discretion
amounting to excess or lack of jurisdiction in finding probable cause against
petitioner for estafa through falsification of public documents and for violation of
Section 3(e) of R.A. No. 3019
HELD: NO.
RATIO: Determination of probable cause during the preliminary investigation, or
reinvestigation for that matter, is a function that belongs to the Office of the
Ombudsman. As a rule, courts should not interfere with the Ombudsman's
investigatory power, exercised through the Ombudsman Prosecutors, and the
authority to determine the presence or absence of probable cause, except when the
finding is tainted with grave abuse of discretion amounting to lack or excess of
jurisdiction.
In this case, however, petitioner failed to establish that the Ombudsman
committed grave abuse of discretion amounting to excess or lack of jurisdiction
in finding probable cause to charge him with violation of Section 3(e) of R.A. No.
3019 and for estafa through falsification of a public document. The Ombudsman's
finding of probable cause against petitioner is buttressed by his encompassing and
comprehensive resolution, independent of the findings of the Senate Committees, as
well as the documents appended to the Informations. Petitioner's bare claim to the
contrary cannot prevail over such positive findings of the Ombudsman.
Based on the investigation of the Ombudsman, petitioner not only took part in the
accused acts, but perpetrated them in full awareness and bad faith. This was
determined as he not only signed off on every anomalous transaction, but refused to
report them.
ISSUE 3: Whether petitioner may be charged and prosecuted for five (5) counts of
estafa thru falsification of public documents
HELD: YES.
RATIO: The Sandiganbayan posited that that the criminal acts petitioner and his co-
accused are not continuous crimes. Respondents argue that a continuous crime may
exist only if there is only a single criminal intent and the commission of diverse acts is
merely a partial execution of said single criminal resolution. In the instant cases, the
requirement of singularity of criminal intent does not exist because there are as many
criminal intents as there are anomalous transactions (148), causing grave damage to
the government at each instance, with total damages amounting to over 700 million
pesos. With regards to the issue in contention, petitioner actually took part in 148
anomalous transactions, and petitioner was motivated by separate intents as he
signed each document, all of which are criminal in character; hence, it is but proper
that corresponding Informations be filed against him for each and every act of
falsification committed. However, it is not possible to pursue 148 cases due to a lack
of resources and manpower of the courts.

The determination of what charges to file and who are to be charged are matters
addressed to the discretion of the Ombudsman. In the instant case, the SC decided
to uphold the Sandiganbayan’s determination that each case may be tried separately.

ISSUE 4: Whether petitioner may be prosecuted for both estafa through falsification
of a public document and violation of Section 3(e) of R.A. No. 3019 without violating
his right against double jeopardy.

HELD: YES.

RATIO: The SC agreed with the contention of respondents that the

crimes committed by public officers and employees in relation to their offices
defined and penalized under the Anti-Graft Law do not exclude prosecution for
felonies defined and penalized under the Revised Penal Code and vice versa
pursuant to Section 3 of R.A. No. 3019. It is clear then that one may be charged with
violation of R.A. No. 3019 in addition to a felony under the Revised Penal Code for the
same delictual act, that is, either concurrently or subsequent to being charged with a
felony under the Code.

RULING

Petition is denied. Costs against the Petitioner.

Alzaga v. Sandiganbayan
G.R. No. 169328 13/08/2023
YNARES-SANTIAGO, J Created By: Christian Cando
Main Topic:government exercising its functions through government owned
corporations or instrumentalities
Sub-topic (if any):
PETITIONERS RESPONDENTS
Julian A Alzaga, Meinrado enrique A. Bello, Sandiganbayan 2nd Division and People of
and Manuel S. Satuito the Philippines
RECIT-READY SUMMARY
The case is a petition for certiorari regarding criminal cases within the Sandiganbayan and
the denied motion for reconsideration of petitioners Alzaga, Bello and Satuito. The
petitioners had positions within the AFP-RSBS or Armed Forces of the Philippines Retirement
and Separation Benefits System. The case was filed against them as there were alleged
irregularities in the purchase of 4 lots in Tanauan Batangas. Which they oversaw as Alzaga
was head of the legal department at the time of the purchase of 1 of the lots while Bello was
superintendent and when Bello took Alzaga’s previous position as head it was during his
term the other 3 lots where bought. Alzaga and Bello were both Vice presidents while Satuito
was the Chief of documentation and assistant vice president of the AFP-RSBS. The
petitioners filed a motion to quash and or dismiss the information filed against them as they
argued that the AFP-RSBS is a private entity. The Sandiganbayan would grant this motion to
dismiss but would reverse it as it found that the AFP-RSBS is a government owned
corporation. Furthermore the Petitioners argued that given their positions as vice president is
not indicated in the law RA 8249 that they are not subject to it. The court found that while it is
not mentioned their position is even higher than that of manager which is mentioned in the
law.
Whether or not the court committed grave abuse of discretion in finding that the AFP-RSBS is
a government owned and operated company.
Despite the petitioners claims that the company is a private entity the nature of the
companies work is imbued with public interest thus making it the same as government
entities and its funds being from congress and AFP members contributions and other
sources not taxable makes their funds in nature public funds.
Dismissing this petition for Certiorari
DOCTRINE
The AFP-RSBS is a government owned and controlled corporation under RA 9182 it is funded
through public funds and is a public interest.
The Petitioners being vice president and assistant vice president and head of the legal
department within this corporation make them under the jurisdiction of the Sandiganbayan
FACTS
● A petition for certiorari assails the April 5 2005 and august 10 2005 resolutions of the
Sandiganbayan in Criminal cases 25681- 25684. Which reversed the May 27, 2004
Resolution denying the petitioner's motion for reconsideration.
● 4 separate informations were filed for violations of Section 3(e) of Republic Act (R.A.) No.
3019 were filed against the petitioners.
● Alleged irregularities in the purchase of 4 lots in Tanauan, Batangas by the Armed
Forces of the Philippines Retirement and Separation Benefits System (AFP-RSBS).
● Petitioner Alzaga was previously the head of the legal department of the (AFP-RSBS) at
the time of one of the purchases while Bello was a superintendent that would succeed
Alzaga and under his term the other 3 lots were purchased; both of them were vice
presidents of the AFP-RSBS.
● While Satuito was the Chief of the Documentation and Assistant Vice President of the
AFP-RSBS
● Petitioners filed their motions to quash and/or dismiss the information alleging that the
sandiganbayan has no jurisdiction over them as the AFP-RSBS is a private entity
created to benefit its members
o That their positions do not fall under the purview of the Sandiganbayan
pursuant to Section 4 of Presidential Decree (P.D.) No. 1606 (1978), 6 as
amended by R.A. No. 8249 (1997)
● The sandiganbayan granted the motion to dismiss due to lack of jurisdiction but would
reverse its resolution later on.
● The AFP-RSBS was created through P.D 361. To ensure continued support to AFP
military retirement system as provided for in RA 340
 ● The AFP-RSBS is administered by the Chief of staff of the AFP
● The AFP-RSBS is funded through congress, AFP members donations and contributions,
Public funds not subject to taxation
● AFP-RSBS is imbued with public interest; it is also in the nature of public funds.
● The Sandiganbayan correctly ruled that the AFP-RSBS is a government owned and
controlled corporation and that the Sandiganbayan has jurisdiction over the persons
charged with the crime.
● The position held and not the salary grade which puts them under the authority of the
Sandiganbayan
● The work and nature of the AFP-RSBS is imbued with public interest nad is
therefore akin to public funds
● Their ranks as vice president is even higher than that of manager that is written in law
ISSUES - HELD - RATIO
The Sandiganbayan was then also granted under R.A. No. 8249 jurisdiction over
“Presidents, directors or trustees, or managers of government-owned or controlled
corporations, state universities or educational institutions or foundations”
Although their ranks are not explicitly stated in RA 8249 their ranks are even higher
than that of manager which was mentioned in the law when charges against them
were allegedly done.
RULING
WHEREFORE, the instant Petition for Certiorari is DISMISSED. The assailed Resolution of the
Sandiganbayan dated April 25, 2005 that the AFPRSBS is a government-owned and controlled
corporation and that it has CD Technologies Asia, Inc. © 2021 cdasiaonline.com jurisdiction over
the persons of the petitioners and the Resolution dated August 10, 2005 denying petitioners'
motion for reconsideration, are AFFIRMED. SO ORDERED

W/N the Court committed a grave abuse of discretion in deciding over a matter that
is not in accordance with law or jurisprudence in deciding that the AFP-RSBS is a
government owned and operated company

HELD: No

RATIO:
The AFP-RSBS was created by PD 361 and was administered by the Chief of staff of
the AFP it was funded through congressional appropriation and members of the AFP
through contributions and other earnings that will not be subject to tax. The Nature
and character of the duties of the AFP-RSBS is imbued with public interest the same
as government entities and its funds are the same in nature to public funds.

W/N [
Extra Issues] as Vice presidents the petitioners are subject to the Sandiganbayan

HELD: YES

RATIO:

CAROLINA R. JAVIER vs. SANDIGANBAYAN
G.R. No. 147026-27 September 11, 2009
DEL CASTILLO, J Created By: Yanni Castigador
Main Topic: Government-Owned or Controlled Corporations (Private Sector
representative to National Book Development Board; Governmental)
Sub-topic (if any):
PETITIONERS RESPONDENTS
THE FIRST DIVISION OF THE
CAROLINA R. JAVIER SANDIGANBAYAN and the PEOPLE OF THE
PHILIPPINES
RECIT-READY SUMMARY
The RA No. 8047 (Book Publishing Industry Development Act) was enacted in order
to promote the development of the book publishing industry with aid from the
private sector. Petitioner Javier was appointed by the President to the Governing
Board as private sector representative however she failed to attend a bookfair in
Spain despite being issued the money for traveling expenses.
Whether or not Javier is considered a public officer.
Despite the claims of Javier that Sandiganbayan has no jurisdiction to hear her case
due to her not being a public officer, she was deemed to have been one given her
appointment. Although Javier was a private representative, her being a member of
the Governing Board bestowed upon her the sovereign powers conferred on a
public officer in the NBDB. Given that Javier was appointed, by the Office of the
President, to a Governmement Controlled entity, she was in active performance and
status of a public officer thus her petition got dismissed.
Government-Owned or Controlled Corporations, namely the National Book
Development Board
RA. No. 8047 (Book Publishing Industry Development Act)
- Focused on promoting the continued development of the book publishing industry
- One of the initiatives was the creation of the National Book Development
Board (NBDB) under the supervision of the Office of the President
- 11 members: 5 from government and 6 from nominees from the
public (i.e organizations, private sector, publishers)
- Those who perform public functions in pursuance of objectives such as this act deem
the individuals as public officers in the government
FACTS
● RA. No. 8047 (Book Publishing Industry Development Act) was enacted to promote the
continuing development of the bookpublishing industry through the active
participation of the private sector. In line with this, the Act provided for the creation
ofthe National Book Development Board (Governing Board) which shall be under the
administration and supervision of theOffice of the President. It shall be composed of
members from the government and private sector.
● Petitioner Javier was appointed by the President to the Governing Board as private
sector representative for a one-year term.At the time, she was also the President of
the Book Suppliers Association of the Philippines. As a Board member, part of
herfunctions is to attend book fairs to establish linkages with international book
publishing bodies. On September 1997, she wasissued a travel authority to attend the
Madrid International Book Fair in Spain. She was paid for her traveling expenses
● However, Javier was unable to attend the book fair, so the resident auditor asked her
to return/refund the cash advance given toher. Javier failed to return the money. This
led the Executive Director of the Board to file a complaint against Javier
formalversation of public funds and properties. The Sandiganbayan found Javier guilty
of committing the charges against her.
● Javier contends that the Sandiganbayan has no jurisdiction to hear her case because
she is not a public officer and that she belongs to the Board only as a private sector
representative. She also claims that she does not perform public functions and is
without administrative or political power.
ISSUES - HELD - RATIO
W/N the petitioner Javier is a public officer.
RULING
HELD: YES
WHEREFORE, the Petition is DISMISSED. The questioned Resolutions and Order of
RATIO: the Sandiganbayan are AFFIRMED. Costs against petitioner.
- The powers and functions of the NBDB can be identified as partaking in a
public function.
- Public Office - authority/duty conferred or created by law for a certain period
invested with some portion of the sovereign functions of the government to
be exercised for the public benefit
- Although the petitioner is a private representative, the law provided her with
some form of sovereign function of the government in order to achieve a
certain objective
- Given that she was also appointed as member of the Governing
Board, she has the duty to see that the purposes of the laws enacted
are achieved (RA No. 8047)
- Anti-Graft Law - Public Officer are those elected or appointed officials,
employees
- Section 7, RA 8047 - members of the Governing Board shall receive
per diem as authorized
- Thus petitioner is a public officer
- RPC (Chapter II, Section 2, Title VII, Book II)
- Public Officer - any person by direct provision of law, elected or
appointed by competent authority shall partake in performance of
public functions in the Gov of the Philippines or perform public duties
an employee, agent, subordinate, etc.,

W/N the protection accorded to individuals under the international

Covenant on Civil and Political Right and the Universal Declaration
of Human Rights remained in effect during the interregnum.

HELD:

RATIO:
GENERAL RULES FOR DIGESTS:
As such, the City of Paranaque sent Final Notices of Real Estate Tax Delinquency for the
Delete this part when you save actual digests.
years 1992 to 2001. The City also issued notices of levy and warrants of levy on the Airport
1. UPLOAD CASES - Please upload the original of the cases assigned to you for the week Lands and Buildings.
in the Block Drive.
2. GDOC, NOT WORD DOC - Upload as a gdoc and not as word doc so people can The Mayor of the City of Parañaque threatened to sell at public auction the Airport Lands and
comment if there are any edits. Buildings should MIAA fail to pay the real estate tax delinquency.
3. KEEP IT SIMPLE - As much as possible, please use simple language and try not to
copy-paste from the case UNLESS there is a technical definition or there is no MIAA asked the OGCC to clarify Opinion No. 061, and with Opinion No. 147, the OGCC states
better/simpler way to say it. that any exemption is required to show proof of such fact and that the MIAA Charter suffices
4. SUBMIT ON TIME! as proof.
5. READ FULL TEXT - Make sure you read the case you’re assigned to digest.
6. TIP - Read the case first in full before starting on the digest. This may take up less time
MIAA filed petitions and motions with the CA. All of which were denied. MIAA proceeded to
since you’ve already filtered out the relevant facts/issues/held.
file their case with the SC. At the same time, the City of Paranaque had posted notices of
public auction for the Airport Lands and Buildings.
Manila International Airport Authority v. Court of Appeals
G.R. No. 155650 July 20, 2006 The SC issued a TRO on the public auction, but it was only received after the conclusion of
the auction.
CARPIO, J. Marcellin Cruz & Antonio Olalia
Main Topic: Functions of Government MIAA insists the Airport Lands and Buildings are property of the Republic of the Philippines.
MIAA also cite Sec. 21 of the MIAA Charter and Sec. 234 of the Local Government Code for
Sub-topic (if any): Instrumentalities; Government instrumentality vested with
their exemption from real estate tax.
corporate powers; not GOCC
The City of Paranaque cite Sec. 193 which removed the exemption of GOCCs. The ruling in
PETITIONERS RESPONDENTS Mactan International Airport v. Marcos was cited.
COURT OF APPEALS, CITY OF
PARAÑAQUE, CITY MAYOR OF
ISSUE
Manila International Airport Authority PARAÑAQUE, SANGGUNIANG
W/N Petitioner MIAA is indeed a Government-Owned and Controlled Corporation and thus
(MIAA) PANGLUNGSOD NG PARAÑAQUE, CITY
ASSESSOR OF PARAÑAQUE, AND CITY subject to the taxes imposed by the Local Government
TREASURER OF PARAÑAQUE
RATIO
Respondents of this case argue that MIAA is a GOCC, but SC rules that it is not a GOCC.
RECIT-READY SUMMARY Rather, it is a Government Instrumentality that is exempt from real estate tax on the Airport
Lands and Buildings owned by Republic. An exemption lies, however, in the circumstance that
FACTS the land is used to the benefit of a taxable person. This means that people who lease the
MIAA operates the Ninoy Aquino International Airport in Paranaque City under E.O. No. 903 airport lands and buildings owned by the republic can be levied.
or the Revised Charter of the Manila International Airport.
Additionally, since it is owned by the republic, MIAA cannot be threatened to be sold on the
The Office of the Government Corporate Counsel issued Opinion No. 061 stating that the auction because properties of public dominion are outside the commerce of man.
Local Government Code of 1991 withdraws the exemption of the MIAA from real estate tax
granted by the Charter.

DOCTRINE — INSTRUMENTALITY
The MIAA is not a Government Owned or Controlled Corporation. MIAA is a government
instrumentality under Section 2(10) of Introductory Provisions of the Administrative Code.
Section 2(10) “Instrumentality refers to any agency of the National Government, not integrated
within the department framework, vested with special functions or jurisdiction by law, endowed
with some if not all corporate powers, administering special funds, and enjoying operational
autonomy, usually through a charter.”
Section 133(o) of the Local Government Code, Common Limitations on the Taxing Powers of
Local Government Units, states, “unless otherwise provided herein, the exercise of the taxing
powers of provinces, cities, municipalities, and barangays shall not extend to the levy of the
following:
Taxes, fees or charges of any kind on the National Government, its agencies and
instrumentalities and local government units.”
FACTS
● Under Executive Order No. 903, otherwise known as the Revised Charter of the Manila
International Airport Authority ("MIAA Charter"), the MIAA shall operate the NAIA
Complex in Paranaque City.
● The Charter transferred to MIAA 600 hectares of land previously under the Bureau of Air
Transportation.
o The Charter provides further that no portion of the transferred land shall be
disposed of through sale or any other mode unless specifically approved by
the President of the Philippines.
● On March 21, 1997, the Office of the Government Corporate Counsel (OGCC) issued
Opinion No. 061, which states that the Local Government Code of 1991 withdrew the
exemption from real estate tax granted to MIAA under Section 21 of the MIAA Charter.
● Subsequently, the MIAA negotiated with the City of Paranaque to pay the real estate
tax.
o The MIAA had then paid a portion of the tax already due.
● On June 28, 2001, MIAA received Final Notices of Real Estate Tax Delinquency from
the City of Parañaque for the taxable years 1992 to 2001.
● On July 17, 2001, the City of Paranaque issued notices of levy and warrants of levy on
the Airport Lands and Buildings.
o The Mayor of the City of Parañaque threatened to sell at public auction the
Airport Lands and Buildings should MIAA fail to pay the real estate tax
delinquency.
● MIAA sought clarification on Opinion No. 061.
● On August 9, 2001, OGCC Opinion No. 147 clarifying OGCC Opinion No. 061 was
issued. The OGCC pointed out that Section 206 of the Local Government Code
requires persons exempt from real estate tax to show proof of exemption.
o The OGCC stated that Section 21 of the MIAA Charter will suffice as proof
that the MIAA are exempt from real estate tax.
● MIAA filed with the Court of Appeals an original petition for prohibition and injunction,
with prayer for preliminary injunction or temporary restraining order.
o The petition sought to restrain the City of Parañaque from imposing real
estate tax on, levying against, and auctioning for public sale the Airport Lands
and Buildings.
● The CA denied the motion because it was filed beyond the 60-day reglementary
period. The subsequent motion for reconsideration and supplemental motion for
reconsideration were also denied.
● MIAA filed the present petition for review with the Supreme Court.
● The City of Paranaque, in 2003, posted notices of auction sale for the Airport Lands
and Buildings.
● A day before the public auction, MIAA filed an Urgent Ex-Parte and Reiteratory Motion
for the Issuance of a Temporary Restraining Order.
o Motion sought to restrain the City of Paranaque from auctioning the Airport
Lands and Buildings.
● The SC issued a temporary restraining order (TRO) effective immediately.
o However, the TRO was only received three hours after the conclusion of the
public auction.
● The SC issued a Resolution confirming nunc pro tunc the TRO.
● On March 29, 2005, the SC heard oral arguments of the parties.
● MIAA admits that the MIAA Charter placed the title to the Airport Lands and Buildings
in the name of MIAA. However, it cannot claim ownership over these properties since
the real owner of the Airport Lands and Buildings is the Republic of the Philippines.
● The Charter mandates that the Airport Lands and Buildings be devoted to public use
and service.
o Since this continues to be the case, the Airport Lands and Buildings are still
owned by the State, and are therefore inalienable and are not subject to real
estate tax by local governments.
 ● MIAA also points out that Section 21 of the MIAA Charter specifically exempts MIAA
from paying real estate tax.
o MIAA insists that it is also exempt from real estate tax under Section 234 of
the Local Government Code because the Republic owns the Airport Lands
and Buildings.
● Respondents cite Section 193 of the Local Government Code, which expressly
withdrew the tax exemption privileges of government-owned and controlled
corporations (GOCC).
● Respondents also cite a basic rule of statutory construction, which is that the express
mention of one person, thing, or act excludes all others.
o An international airport is not among the exceptions mentioned in Section
193 of the Local Government Code, so MIAA cannot claim that the Airport
Lands and Buildings are exempt from real estate tax.
● Respondents also cite the ruling of this Court in Mactan International Airport v.
Marcos.
● Respondents also argue that petitioners are estopped from claiming the tax exemption
because they already paid a part of the tax assessments
ISSUES - HELD - RATIO
W/N Petitioner MIAA is indeed a Government-Owned and Controlled Corporation
and thus subject to the taxes imposed by the Local Government
HELD: NO.
RATIO:
SC rules that MIAA’s Airport Lands and Buildings are exempt from real estate tax
imposed by local governments.
● Respondents want to force that MIAA is a GOCC because GOCC is not
exempt from real estate tax. BUT, MIAA is not a GOCC.
○ Section 2(13) of the Introductory Provisions of the Administrative Code
of 1987 GOCC states GOCCs are organized as stock or non-stock
corporations. According to MIAA Charter (Section 10), MIAA IS NOT a
stock corporation because it does not have capital divided into
shares of stock
○ Non-stock corporations are not allowed to distribute their income to
its members. However, Section 11 of MIAA Charter requires MIAA to
remit 20% of its annual gross operating income to the National
Treasury thus it cannot be a non-stock.
● What is MIAA? A Government Instrumentality!
○ Section 2(10) of the Introductory Provisions of the Administrative
Code defines Governmental Instrumentality.
■ When the law vests in a government instrumentality
corporate powers, the instrumentality does not become a
corporation; it just has the powers of a corporation under
Corporation Law
■ When this law makes a Government Instrumentality
operationally autonomous, it is still part of the National
Government but outside of the department framework.
● Given that MIAA is a government Instrumentality, it CANNOT be taxed.
○ Section 133(o) of the Local Government Code provides that
instrumentalities of the government cannot be taxed
○ According to Maceda v. Macaraig, an exemption taxing
instrumentalities can occur if it is deemed that it would be practical for
the government and its agencies; for example reducing the amount of
money that a government agency has to handle in the course of its
operations
○ Additionally, the only exception is when the legislature clearly
intended to tax government instrumentalities for the delivery of
essential public services for sound and compelling policy
considerations.
● Additionally, The Airport Lands and Buildings are owned by the Republic
○ This makes them public dominion; because they are public dominion,
they are “outside the commerce of man” which means they cannot be
subject to an auction (which the respondents threatened if MIAA
didn’t pay taxes)
■ Only the president can withdraw MIAA as made for public
use
○ Real Property Owned by Republic is exempted from real estate tax
 according to Section 234(a) of the Local Government Code
■ Section 234(a) of the Local Government Code states that real
property owned by the Republic loses its tax exemption only
if the "beneficial use thereof has been granted, for
consideration or otherwise, to a taxable person."
● MIAA, as a government instrumentality, is not a
taxable person under Section 133(o) of the Local
Government Code.
RULING
WHEREFORE, we GRANT the petition. We SET ASIDE the assailed Resolutions of the Court of
Appeals of 5 October 2001 and 27 September 2002 in CA-G.R. SP No. 66878. We DECLARE
the Airport Lands and Buildings of the Manila International Airport Authority EXEMPT from
the real estate tax imposed by the City of Parañaque. We declare VOID all the real estate tax
assessments, including the final notices of real estate tax delinquencies, issued by the City of
Parañaque on the Airport Lands and Buildings of the Manila International Airport Authority,
except for the portions that the Manila International Airport Authority has leased to private
parties. We also declare VOID the assailed auction sale, and all its effects, of the Airport Lands
and Buildings of the Manila International Airport Authority.
OTHER NOTES/IMPORTANT CONCEPTS
● According to Article XII of the 1987 Constitution (Sec. 16), Congress has no
power to create government-owned or controlled corporations with special
charters unless they are made to comply with the two conditions of common
good and economic viability.
○ the test of economic viability applies only to government-owned or
controlled corporations that perform economic or commercial
activities and need to compete in the marketplace.
○ Being essentially economic vehicles of the State for the common
good — meaning for economic development purposes — these
government-owned or controlled corporations with special charters
are usually organized as stock corporations just like ordinary private
corporations.
○ The intent of the Constitution is to prevent the creation of
government-owned or controlled corporations that cannot survive on
their own in the marketplace and thus merely drain the public coffers
● ON THE OTHER HAND, government instrumentalities vested with
corporate powers and performing governmental or public functions need
not meet the test of economic viability.
○ These instrumentalities perform essential public services for the
common good, services that every modern State must provide its
citizens.
○ Congress has plenary authority to create government
instrumentalities vested with corporate powers provided these
instrumentalities perform essential government functions or public
services.
○ MIAA performs an essential public service that every modern State
must provide its citizens.
■ MIAA derives its revenues principally from the mandatory
fees and charges MIAA imposes on passengers and airlines.
The terminal fees that MIAA charges every passenger are
regulatory or administrative fees and not income from
commercial transactions
○

BOY SCOUTS OF THE PHILIPPINES
G.R. No. 177131 June 7, 3011
Created By:Jan Karen Esguerra; Veronica
Leonardo-de Castro, J.
Terese Paras
Main Topic: Instrumentalities
Sub-topic (if any): Public Corporations
PETITIONERS RESPONDENTS
Boy Scouts of the Philippines (BSP) Commission on Audit (COA)
RECIT-READY SUMMARY
The COA contended that the Boys Scouts of the Philippines (BSP) is within their jurisdiction.
Hence, subject to an annual financial audit in accordance with generally accepted auditing
standards. But the BSP argued that they are not a government owned or controlled
corporation and should not fall within the jurisdiction of the COA.
The court held that the BSP and its funds are subject to the COA’s audit jurisdiction.
Under Article IX(D) section 2 of the Constitution, COA has jurisdiction to audit the
accounts of the government, or any of its subdivisions, agencies, or
instrumentalities, including government-owned and controlled corporations with
original charters.
The ruling established that the BSP is a public corporation with juridical personality,
formed by law to promote a state policy. Furthermore, its public characteristic is
attributed to its being an attached agency of the Department of Education, Culture,
and Sports (DECS) and is therefore a government instrumentality.
DOCTRINE
o A public corporation is an entity created by law for a public purpose.
o Instrumentality refers to any agency of the national government not
integrated within the department framework, vested with special
functions or jurisdiction by law, endowed with some if not all
corporate powers, administering special funds, and enjoying
operational autonomy usually through a charter. This term includes
regulatory agencies, chartered institutions, and government-owned
or controlled corporations.
FACTS
● The Commission on Audit (COA) issued Resolution No. 99-011 on August 19, 1999 (“the
COA Resolution”) with the subject "Defining the Commission's policy with respect to
the audit of the Boy Scouts of the Philippines."
o The resolution states that the BSP was created as a public corporation under
Commonwealth Act No. 111, as amended by Presidential Decree No. 460 and
Republic Act No. 7278
o In the case, Boy Scouts of the Philippines v. National Labor Relations
Commission, the SC ruled that the BSP, as constituted under its charter:
▪ It was a "government-controlled corporation within the meaning of
Article IX (B) (2) (1) of the Constitution";
▪ and that "the BSP is appropriately regarded as a government
instrumentality under the 1987 Administrative Code."
o The COA Resolution also cited its constitutional mandate under Section 2 (1),
Article IX (D).
● In consideration of the premises stated above, the BSP is under the jurisdiction of the
COA and COA will conduct an annual financial audit on the said corporation.
o For purposes of audit supervision, the BSP shall belong to the Educational,
Social, Scientific, Civic and Research Sector.
● The BSP sought reconsideration dated November 26, 1999 signed by the BSP
National President Jejomar C. Binay.
PETITIONERS RESPONDENTS
● The case, Boy Scouts of the ● The BSP is a public corporation created
Philippines v. National Labor under Commonwealth Act No. 111 dated
Relations Commission, is October 31, 1936,
inapplicable. ○ The functions of BSP relate to the
○ The issue herein is the fostering of public virtues of
jurisdiction of NLRC regarding citizenship and patriotism and the
 the illegal dismissal and unfair
labor practice.
○ It simply stated that the BSP is
akin to a public corporation.
○ Republic Act No. 7278
introduced crucial
amendments to its charter;
hence, the findings of the
Court in Boy Scouts of the
Philippines v. National Labor
Relations Commission are no
longer valid.
● Amendments in Republic Act.
No. 7278
○ The government has ceased to
play a controlling influence in
it.
○ The assets and funds of BSP
are not derived from any
government grant. For its
operations, BSP is not
dependent in any way on any
government appropriation, and
it hasn't even been included in
any appropriations for the
government.
■ The Court had found that
the BSP’s assets were
acquired from the Boy
Scouts of America and not
from the Philippine
government.
● The BSP contends that it is not a
government-owned or controlled
corporation; neither is it an
instrumentality, agency, or subdivision
of the government.
○ The Court designation of the
BSP as a government agency
general improvement of the
moral spirit and fiber of the youth.
○ Any attempt to classify the BSP
as a private corporation would
be incomprehensible since no
less than the law which created it
had designated it as a public
corporation and its statutory
mandate embraces performance
of sovereign functions.
○ The only reason why the BSP
employees fell within the scope
of the Civil Service Commission
even before the 1987
Constitution was the fact that it
was a GOCC.
○ As an attached agency of the
Department of Education, Culture
and Sports (DECS), the BSP is an
agency of the government and a
chartered institution under
Section 1 (12) of the Revised
Administrative Code of 1987.
● The Republic Act No. 7278 did not
change the character of the BSP as a
government-owned or controlled
corporation and government
instrumentality.
○ In the deliberation of the House
Bills that eventually resulted to
Republic Act No. 7278, Congress
worked closely with the BSP to
rejuvenate the organization, to
bring it back to its former glory
reached under its original charter,
Commonwealth Act No. 111, and
to correct the perceived ills
introduced by the amendments
to its Charter under Presidential
Decree No. 460.
or instrumentality is mere ■ The BSP suffered from low
obiter dictum. morale and decrease in
number because the
Secretaries of the different
departments in government
who were too busy to attend
the meetings of the BSP's
National Executive Board
("the Board") sent
representatives who, as it
turned out, changed from
meeting to meeting. Thus,
the Scouting Councils
established in the provinces
and cities were not in touch
with what was happening on
the national level, but they
were left to implement what
was decided by the Board.
○ Therefore the amended BSP was
done to strongly promote the
BSP's objectives, which were not
supported under Presidential
Decree No. 460. The
amendments were not done with
the view of changing the
character of the BSP into a
privatized corporation.
● Being a government agency, the
funds and property owned or held
in trust by the BSP are subject to
the audit authority of respondent
Commission on Audit pursuant to
Section 2 (1), Article IX-D of the
1987 Constitution.

ISSUES - HELD - RATIO
W/N the BSP falls under the COA’s audit jurisdiction.
HELD: Yes, BSP is a public corporation and its funds are subject to the COA’s audit
jurisdiction.
RATIO:
The court’s ruling on the classification of BSP as a public corporation
The BSP is a public corporation because it is a corporation (a) with juridical
personality, formed by a law (b) to promote a state policy. Furthermore, its public
characteristic is attributed to its being (c ) an attached agency of the Department of
Education, Culture, and Sports (DECS) (d) and is therefore a government
instrumentality.
Public corporations are treated by law as agencies or instrumentalities of the
government which are not subject to the test of ownership or economic viability but to
different criteria relating to their public purpose and their administrative relationship
to the government or any of its departments or offices.
a. The BSP is a corporation [Commonwealth Act No. 111 Section 1, see
notes.] classified as a juridical person under the Civil Code, and such
classification entails that it be governed by the laws creating and
recognizing them. (as opposed to private corporations/entities that
are merely regulated by laws of general application on the subject)
i. Article 44, Civil Code. The following are juridical persons:
(2) Other corporations, institutions, and entities for public
interest or purpose created by law; their personality begins
as soon as they have been constituted according to law.
Article 45, Civil Code. Juridical persons mentioned in Nos. 1
and 2 of the preceding article are governed by the laws
creating or recognizing them.
b. The BSP charter (Commonwealth Act. No, 111) entitled “An Act to
Create a Public Corporation to be Known as the Boy Scouts of the
Philippines and to Define its Powers and Purposes” created the BSP
as a “public corporation” in the implementation of a State policy
declared in Article II Section 13 of the Constitution. The fact that
BSP was created through the enactment of Commonwealth Act. No.
111 to promote a public interest reinforces that BSP is indeed a
juridical person subject to the laws that created/recognized it.
i. Section 13. The State recognizes the vital role of the youth in
nation-building and shall promote and protect their physical,
moral, spiritual, intellectual, and social well-being. It shall
inculcate in the youth patriotism and nationalism and
encourage their involvement in public and civic affairs.
c. BSP’s public characteristic can be attributed to its classification as an
attached agency of the Department of Education, Culture, and Sports
(DECS) under the Administrative Code. The attachment refers to the
lateral relationship between the department or its equivalent and the
attached agency or corporation for purposes of policy and program
coordination. As an attached agency, the BSP enjoys operational
autonomy, as long as policy and program coordination is achieved by
having at least one representative of government in the governing
board, which in the case of the BSP is the DECS Secretary.
d. In addition, BSP is considered to be a “government instrumentality”
since it is an attached agency and a “chartered institution.” (see notes
for definition of instrumentality and chartered institution)
The relationship of the BSP, an attached agency, to the government, through the
DECS, is defined in the Revised Administrative Code of 1987. The BSP meets the
minimum statutory requirement of an attached government agency as the DECS
Secretary sits at the BSP Board ex officio, thus facilitating the policy and program
coordination between the BSP and the DECS.

Moreover, though the BSP does not receive annual allotment from the government, it
OTHER NOTES/IMPORTANT CONCEPTS
may accept donations or contributions by the government or any of its subdivisions,
branches, offices, agencies, or instrumentalities. [ Sec. 8, amended charter of BSP]
Receiving which would be an impossibility if they were registered as a private
corporation since the government bodies would be estopped from making such
donations.
Regarding COA’s jurisdiction:
Article IX(D) section 2 of the Constitution provides that:
The Commission on Audit shall have the power, authority, and duty to examine, audit,
and settle all accounts pertaining to the revenue and receipts of, and expenditures or
uses of funds and property, owned or held in trust by, or pertaining to, the
Government, or any of its subdivisions, agencies, or instrumentalities, including
government-owned and controlled corporations with original charters, and on a
post-audit basis: (a) constitutional bodies, commissions and offices that have been
granted fiscal autonomy under this Constitution; (b) autonomous state colleges and
universities; (c) other government-owned or controlled corporations with original
charters and their subsidiaries; and (d) such non-governmental entities receiving
subsidy or equity, directly or indirectly, from or through the Government, which are
required by law of the granting institution to submit to such audit as a condition of
subsidy or equity.
● Instrumentality refers to any agency of the national government not
integrated within the department framework, vested with special functions or
jurisdiction by law, endowed with some if not all corporate powers,
administering special funds, and enjoying operational autonomy usually
through a charter. This term includes regulatory agencies, chartered
institutions, and government-owned or controlled corporations.
● Chartered institution refers to any agency organized or operating under a
special charter, and vested by law with the functions relating to specific
constitutional policies or objectives. This term includes state universities,
colleges, and the monetary authority of the State.
● A private corporation owned by the government can only exist constitutionally
if it is economically viable to justify its existence under a special law.
● Commonwealth Act. No. 111 Section 1. J. E. H. Stevenot, A. N. Luz, C. P.
Romulo, Vicente Lim, Manuel Camus, Jorge B. Vargas, and G. A. Daza; all of
Manila, Philippines, their associates and successors, are hereby created a
body corporate and politic in deed and in law, by the name, style and title of
"Boy Scouts of the Philippines" (hereinafter called the corporation). The
principal office of the corporation shall be in Metropolitan Manila, Philippines.

Since the BSP, under its amended charter, continues to be a public corporation or a
government instrumentality, we come to the inevitable conclusion that it is subject to
the exercise by the COA of its audit jurisdiction in the manner consistent with the
provisions of the BSP Charter.

RULING

WHEREFORE, premises considered, the instant petition for prohibition is DISMISSED.

 ● Joint Communiqué: PROC & Philippines adherence to One China policy (PROC as the
Funa v MECO and COA sole legal government of China).
● The Philippines still had people-to-people basis unofficial relations with Taiwan (ROC).
G.R. No. 193462 February 4, 2014
● The unofficial relationship was maintained between Taipei Economic and Cultural Office
Perez, J. Created By: Ghel de la Cruz and Manila Economic and Cultural Office (MECO).
● MECO is a non-stock, non-profit corporation which is tasked to:
Main Topic: Functions of Government
o Establish and develop the commercial and industrial interests of Filipino
Sub-topic (if any): Instrumentalities nationals here and abroad.
o Receive and accept grants and subsidies for corporate purposes.
PETITIONERS RESPONDENTS o Acquire by purchase, lease or any gratuitous title real and personal
Manila Economic and Cultural Office and the properties necessary for the use and need of the corporation.
Dennis A.B. Funa o Do and perform any and all acts deemed reasonably necessary to carry out
Commision on Audit
the purposes.
● MECO was entrusted by the Philippine gov’t to foster friendly and unofficial relations
RECIT-READY SUMMARY with Taiwan for trade, economic cooperation, investment, cultural, scientific and
educational exchanges.
● Manila Economic and Cultural Office (MECO) is a non-stock, non-profit corporation ● MECO was also authorized to perform certain consular and other functions.
tasked to maintain unofficial relations with Taiwan and which is also authorized to ● Dennis A.B. Funa (Funa) sent a letter to the Commission on Audit (COA) to request for
collect “consular fees” and “verification fees” to be remitted to the Philippine a copy of the latest financial and audit report of MECO.
government. Dennis Funa filed a petition for mandamus for the Commission on Audit ● COA Assistant Commissioner Jaime P. Naranjo (Naranjo) issued a memorandum to
(COA) to release the latest financial and audit report of MECO as this was subject to Funa saying that MECO is not among the agencies audited by any of the 3 clusters of
the audit jurisdiction of COA. MECO and COA contested that MECO is not a GOCC, the Corporate Government Sector.
therefore, it is not subject to audit. However, the Court held that since MECO handles ● According to Funa, COA is neglecting its constitutional duty (Sec. 2 (1) Article IX-D) to
“government funds” through the various fees it was authorized to collect, these fees audit accounts of GOCC or government instrumentalities.
are subject to the audit jurisdiction of the COA even if MECO is not a GOCC or ● Funa filed a petition for mandamus.
government instrumentality.
PETITIONERS RESPONDENTS

DOCTRINE ● MECO is a GOCC (EO No. 292 s. ● MECO Position:

1987) ○ Mandamus is
o MECO is not a GOCC and is considered a sui generis entity but its act of handling ○ non-stock corporation prematurely filed, only
government funds is still subject to the audit jurisdiction of COA. vested with ripen when there is
governmental refusal by a tribunal.
functions relating to ○ Not controlled by the
FACTS public needs government and funds
○ controlled by are private funds.
● The Chinese Civil War resulted in 2 governments: People’s Republic of China (PROC) government thru board ○ The President only
and Republic of China (ROC). of directors appointed recommends appointees
● The Philippines terminated relations with ROC and established diplomatic relations only by President to its board of directors
with PROC.
 ○ under the operational
and policy supervision
of DTI.
● COA Position:
via “desire letters” but it as visa services, passport services for Filipinos, authentication of documents,
is not binding. and translation services, are subject to the audit jurisdiction of the COA as
○ The government only has these are considered to be “government funds” as COA has constitutional
policy supervision to power to audit accounts of non-governmental entities receiving subsidy or
ensure MECO activities
equity from or through the government (Section 29 (1) of the Audit Code).
are in tune with the
commitments under the
One China policy.
W/N Funa has locus standi?
○ Petitioner has no locus
standi. HELD: YES
○ Violation of the doctrine
of hierarchy of courts. RATIO:
○ MECO is not a GOCC or Issue is of transcendental importance as it involves the constitutional duty of COA.
government
instrumentality.
○ MECO can be audited
W/N there was a violation of the doctrine of hierarchy of Courts?
because of the
“verification fees” for
HELD: NO
overseas employment it
collects on behalf of
DOLE from Taiwanese RATIO:
employers. As it involves a constitutionality issue which is of transcendental importance, there is
no violation of the doctrine.

ISSUES - HELD - RATIO RULING

WHEREFORE, premises considered, the petition is PARTIALLY GRANTED. The Manila Economic
and Cultural Office is hereby declared a non-governmental entity. However, the accounts of the
W/N COA is mandated to audit the accounts of MECO?
Manila Economic and Cultural Office pertaining to: the verification fees contemplated by Section
W/N Accounts of MECO are subject to the audit jurisdiction of the COA?
7 of Executive Order No. 1022 issued 1 May 1985, that the former collects on behalf of the
Department of Labor and Employment, and the fees it was authorized to collect under Section 2
HELD: YES
(6) of Executive Order No. 15 issued 16 May 2001, are subject to the audit jurisdiction of the
COA.
RATIO:
1. MECO is a non-governmental entity, it is a sui generis private entity.
However, the “verification fees” it collects on behalf of DOLE for verification of
overseas employment contracts, recruitment agreement or special powers of
attorney and the “consular fees” from its delegated consular functions such
 was not abolished or reorganized 4.) RA no. 8485 designates the petitioner as a member of
Philippine Society V COA the committee of animal welfare which falls under the Department of Agriculture.
G.R. No. 169752 September 25, 2007
Court ruled that the entity is a private juridical entity and is not subject to COA’s audit. The
Austria-Martinez, J. Created By: Nurdidagen G. Dilangalen court reasoned that it is a private entity because 1.) employees are enrolled in SSS 2.) it is not
subject to any government supervision 3.) Reportorial requirements are mandated to both
Main Topic: Quasi-public entities
private and public entities. Accordingly the court classified the petitioner as a quasi-public
Sub-topic (if any): entity which are private corporations that render public service, supply public wants or
pursue other eleemosynary objectives.
PETITIONERS RESPONDENTS
COMMISSION ON AUDIT, DIR. Thus the court granted the petition and enjoined COA from auditing the petitioner.
RODULFO J. ARIESGA (in his official capacity
as Director of
the Commission on Audit), MS. MERLE M. DOCTRINE
VALENTIN and
Philippine Society For the Prevention of
MS. SUSAN GUARDIAN (in their official ● Quasi Public Entities: private corporations that render public service, supply public wants,
Cruelty to Animals
capacities as Team
or pursue other eleemosynary (charitable) objectives. While main purpose of its organization
Leader and Team Member, respectively, of
is for the gain or benefit of its members, they are required by law to discharge functions for
the audit Team
the benefit of the public.
of the Commission on Audit),
● Charter test: a test to determine whether an entity is created by its own charter for the
exercise of a public function or by incorporation under the general corporation law.

RECIT-READY SUMMARY
Philippine Society for the Prevention of Cruelty to Animals (petitioner) was incorporated as a
juridical in 1905 under Act no 1285. Through its own charter, the purpose was the
enforcement of laws pertaining to animal welfare. In 2003, petitioner was given an order from
the Commission on Audit, respondent, citing that petitioner is under audit. Petitioner argued
that since it is a private entity, it should not be subject to any government audits. Respondent
counters that through the petitioner is a government entity and should be subject to COA’s
audit. Petitioner argued that it is not a public entity because 1.) it was created by special
charter as no laws yet existed under which it can be incorporated 2.) Its charter does not
indicate it is a public corporation 3.) It has been granted tax exemptions 4.) Employees are
registered in SSS and not GSIS 5.) It does not receive any form of government assistance 6.)
It has no power to make arrests as it originally did 7.) None of its board members are
government appointees 8.) its actions or decisions are not subject to government approval.
Respondent claimed that it is subject to government audit because 1.) Petitioner was created
due to special charter 2.) it exercises sovereign powers by enforcing laws 3.) it submits
reports to the office of the President 3.) Despite the creation of corporation laws, petitioner
FACTS
● Philippine Society For the Prevention of Cruelty to Animals, petitioner, petitioned for a writ of
certiorari and prohibition to prevent the Commission of Audit, respondent, from subjecting
the former to an audit.
● Petitioner was incorporated in 1905 as a juridical entity under Act no 1285 by the Philippine
Commission.
● At the time Act no 1285 is the original corporation law act as Act No. 1459 did not exist yet.
● In 2003 they COA visited the office of petitioner for the purpose of general audit but
demurred the order on the ground that it was a private entity.
● COA general counsel responded in 2004 stating that the petitioner was subject to its
authority.
● Petitioner filed for a reevaluation with the Respondent and the latter affirming its findings that
the former is subject to COA’s audit.
● Petitioner refuses to be audited hence it filed for a petition for a writ of certiorari and
prohibition resulting in the current case.
● Petitioner arguments (please see below)
● Respondent arguments (please see below)

PETITIONER Arguments
● It was created by special legislation
and no laws yet existed under which
it can be incorporated. It exercises no
governmental function because these
have been revoked by CA no. 148 EO
no 63.
● No where in its charter is indicated
that it is a public corporation unlike
Boy Scouts of the Philippines.
● If it were a government body, there
would be no need for the state to
grant a tax exemption under RA No.
1178.
● Employees are registered under SSS
through its own initiative and not
GSIS.
● It does not receive any form of
assistance from the government.
● C.A. No 148 deprived the petitioner
the power to make arrests.
● No government appointee or
representatives sits on board of
trustees
● Reading its charts, the petitioner
shows that it is actions or decisions
are not subject to government
approval from any agency.
ISSUES - HELD - RATIO
RESPONDENTS Arguments
● Petitioner was created from a special
charter thus making it a government
corporation subject to COA’s auditing
power.
● Petitioner exercises sovereign power
through its power to enforce laws on
animal protection and welfare. Thus it is
deemed to be a government
instrumentality under Administrative
Code 1987.
● Section 23 Title 2 Book 3 of the above
mentioned code shows that the Office
of the President exercises supervision
control over the petitioner.
● Petitioner’s function to render a report
to the Civil Governor (and now to the
President) highlights its instrumentality.
● Despite the creation of Corporation law,
the petitioner was not abolished or
re-organized under corporate laws.
● RA no. 8485 aka Animal Welfare Act of
1998 designates petitioner as a member
of the committee of Animal Welfare
which falls under the Department of
Agriculture.
W/N Petitioner can be considered a private entity
HELD: Yes
RATIO: In determining the public or private nature of an entity, the charter test must be used. The
charter test determines whether an entity was created for the exercise of public function or by
incorporation under the general corporation law. In the case at bar, the charter test cannot be held
against the petitioner as petitioner was established in 1902 and charter test was established in 1935
with no retroactive effect. Given that in 1905, there were no there was no general law on the
formation and organization of private corporations nor were there restrictions for the government to
create corporations through legislation, it stands to reason that petitioner is a private juridical entity.
Further the court clarified that the amendments in CA no 148 made the petitioner a private
corporation as it revoked petitioner’s powers to arrest violators of animal welfare laws.
Further the court agreed with the petitioner that it is a private juridical entity because 1.) it is not
subject to government supervision through any state agency and 2.)The employees are enrolled in
the SSS system not GSIS through the initiative of the employer. Therefore the court concluded that
Just because a juridical entity is imbued with public interest does not automatically make a public
juridical entity (doesn’t make it part of the government). Further submission of report to the Office of
the President does not immediately make the petitioner a government entity as Reportorial
requirement is required of all corporations not just public ones. This is to see if the creature of the
state is acting in accordance to the right conferred upon it.
The court clarified that the nature of the petitioner is that of a Quasi public corporation which are
private corporations that render public service, supply public wants, or pursue other eleemosynary
objectives. While the purpose of its organization is for the gain or benefit of its members, they are
required by law to discharge functions for the benefit of the public. In effect, quasi-public corporations
are a SPECIES OF A PRIVATE CORPORATION. The qualifying factor is the type of service rendered
to the public: IF IT PERFORMS A PUBLIC SERVICE then it becomes a quasi public corporation.
RULING
Wherefore the potion is GRANTED. Petitioner is DECLARED a private domestic corporation subject to
the jurisdictions of the Securities Exchange Commission. The responders are ENJOINED from
investigating, examining and auditing the petitioner’s fiscal and financial affairs.
OTHER NOTES/IMPORTANT CONCEPTS
● Enjoined = prohibited
● Juridical entity = An individual or legal entity recognized under law as having legal rights
and obligations.
● Private Juridical entity = a juridical entity that acts is not government affiliated.

SERENA v. SANDIGANBAYAN
G.R. No. 162059 January 22, 2008
Reyes, R.T., J. Created By: Kiana Dizon
Main Topic: Government Exercising its Functions Through Instrumentalities
Sub-topic (if any): State University
PETITIONERS RESPONDENTS
Hannah Eunice D. Serena
Sandiganbayan and People of the
Philippines
RECIT-READY SUMMARY
A student regent at the University of the Philippines (UP) is charged with estafa for
allegedly defrauding the government by requesting and receiving a sum of Fifteen
Million Pesos from the Office of the President. The charge asserts that she
committed the offense in relation to her official functions as a student regent and
took advantage of her position, thereby making the case fall under the jurisdiction
of the Sandiganbayan.
W/N the Sandiganbayan has jurisdiction over the petitioner’s case. YES.
The court held that the Sandiganbayan does have jurisdiction over the charge of
estafa against the defendant. The court emphasized that the Sandiganbayan's
jurisdiction is not solely determined by the salary grade of the public official, but
also includes other factors specified in relevant statutes. The court explained that
the Sandiganbayan has jurisdiction over other offenses or felonies committed by
public officials in relation to their office.
DOCTRINE
The jurisdiction of the Sandiganbayan is not solely based on the salary grade of a
public official. Other factors, including the nature of the offense and its relationship to
the official's duties, determine its jurisdiction. The administration of certain institutions,
like state universities, can be considered a sovereign function, and individuals
holding positions within these institutions can be considered public officers subject
to the jurisdiction of the Sandiganbayan.
FACTS
● The defendant in this case is a student regent at the University of the
Philippines (UP). She is charged with committing estafa by allegedly
defrauding the government. The charge stems from her actions in requesting
and receiving a sum of Fifteen Million Pesos from the Office of the President.
● Defendant's Position:
o Student regent at UP
o Holds a position within the university's administration, albeit as a
student representative
o Charged with committing estafa while occupying this position
● Alleged Fraudulent Act:
o Accused of requesting and receiving a sum of Fifteen Million Pesos
from the Office of the President
o Prosecution asserts that she made false pretenses and
misrepresentations in order to obtain the funds
● Relation to Official Position:
o Charge against the defendant is based on the assertion that she
committed the alleged estafa in relation to her official functions as a
student regent.
o Prosecution argues that she took advantage of her position to carry
out the fraudulent act.
● Jurisdiction Dispute:
o Defendant argues that the charge should not fall under the
jurisdiction of the Sandiganbayan since she does not hold a
high-ranking government position and that her acts were not ratified
by the university's governing body.
▪ Dispute is based on the interpretation of Presidential Decree
No. 1606, a law that defines the jurisdiction of the
Sandiganbayan over certain offenses committed by public
officials and employees.
o Prosecution contends that the defendant's status as a public official,
even with a lower position, falls under the Sandiganbayan's
jurisdiction for certain offenses committed in relation to her office.
o Defendant argues that the funds she received were from President
Joseph Ejercito Estrada's private funds and not from the government
 coffers. She maintains that the source of funds is crucial to of sovereign functions, fulfilling the criteria for being considered a public officer under
determining whether the charge falls under the Sandiganbayan's Philippine law.
jurisdiction.

ISSUES - HELD - RATIO W/N the offense charged was committed in relation to the petitioner’s office.

W/N the Sandiganbayan has jurisdiction over the petitioner’s case.
HELD: YES
RATIO:
The Sandiganbayan has jurisdiction over the petitioner's case. The court's jurisdiction
is established by Presidential Decree No. 1606, which defines its jurisdiction over
offenses committed by public officials and employees. While the petitioner is not
holding a high-ranking government position, she falls under the category of "other
executive officials" specified in Section 4(A)(1)(g) of the decree. This provision
explicitly grants the Sandiganbayan jurisdiction over "Presidents, directors or trustees,
or managers of government-owned or controlled corporations, state universities or
educational institutions or foundations." The petitioner, as a student regent at a state
university, falls within this definition and thus comes under the jurisdiction of the
Sandiganbayan for offenses committed in relation to her office.
HELD: YES
RATIO:
The offense charged was committed in relation to the petitioner's office. The
information filed against the petitioner alleges that she committed estafa while in
the performance of her official functions as a student regent. It is claimed that she
used her position to request and receive funds from the Office of the President and
that she took advantage of her official capacity to carry out the alleged fraudulent act.
Therefore, the offense charged is directly connected to her role as a student regent,
establishing the requisite relation to her office for the Sandiganbayan's jurisdiction to
apply.
RULING

WHEREFORE, the petition is DENIED for lack of merit.

W/N the petitioner can be considered a public officer

HELD: YES

RATIO:
The petitioner, as a student regent at a state university, can be considered a public
officer. In the Philippines, a public officer is defined as an individual invested with
some portion of the sovereign functions of the government, to be exercised for the
benefit of the public. The petitioner's role as a student regent involves participating in
the administration and governance of the university, which is a legitimate
governmental function outlined in the Constitution. Even though the petitioner is not
receiving a salary and is a regular tuition fee-paying student, compensation is not
an essential element of being a public officer. Her position involves the delegation

CO CHAM v. VALDEZ TAN KEH
75 PHIL. 11 / G.R. No. L-5 September 17, 1945
Feria, J Written by: Joy Fallega & Marian Pua
Main Topic: De Facto Government
Provision: Sec. 1 Philippines as a Democratic and Republican State
PETITIONERS RESPONDENTS
EUSEBIO VALDEZ TAN KEH & Arsenio P.
CO CHAM
DIZON (Judge of 1st Instance)
RECIT-READY SUMMARY
The petitioners filed a petition for mandamus for the respondent judge of the lower court
to be ordered to continue the proceedings that were initiated under the regime of the
Republic of the Philippines established during the Japanese military occupation. The
respondent judge contends that the governments established during the Japanese
occupation were not de facto governments. Moreover, the respondent asserted that
MacArthur’s proclamation issued on October 23, 1994, had the effect of nullifying all
judicial proceedings and judgments of the court under the Philippine Executive
Commission and the Republic of the Philippines established during the Japanese
occupation and that, in the absence of a law, lower courts have no jurisdiction to continue
proceedings in the courts of the defunct Republic of the Philippines.
The issue in this case is whether the judicial acts and proceedings of courts during the
Japanese occupation were good and valid and remained so even after the liberation or
reoccupation of the Philippines.
The Court held that in accordance with the principle of postliminy (postliminium) of
international law, judicial acts and proceedings that are not of political complexion by the
courts of justice of the Philippine Executive Commission and the Republic of the
Philippines, which is regarded as a de facto government, continue to be good and valid
even after the liberation or reoccupation of the Philippines.
DOCTRINE
By virtue of the principle of postliminium, judicial acts and proceedings of the courts under
a de facto government that are not of a political complexion remain good and valid after
the liberation.
FACTS
● This case is a petition for mandamus praying for the continuation of proceedings in
the Court of First Instance Manila, which were initiated under the regime of the
so-called Republic of the Philippines during the Japanese military occupation.
● On Jan. 2, 1942, Imperial Japanese Forces occupied the city of Manila and
proclaimed a Military administration under martial law in districts occupied by them.
They established the Philippine Executive Commission appointing Jorge Vargas as
the chairman.
o The Military admin permitted all laws in force in the Commonwealth and
executive and judicial institutions to continue to be effective in the same manner
as before the occupation.
o Public officials were also permitted to remain in their posts and continue to carry
out their duties.
o EO No. 1 and 4 stated that the SC, CA, Courts of 1st Instance, and justices of the
peace and municipal courts under the Commonwealth continue to have the
same jurisdiction.
o EO No. 3, sec. 1 stated that activities of the admin organs and judicial courts
shall be based on existing statutes, orders, ordinances and customs.
● On Oct. 14, 1943, the Republic of the Philippines was inaugurated with no
substantial change in the laws enforced, and the organization & jurisdiction of the
different courts functioning during the Philippine Executive Commission.
● On Oct. 23, 1943, Gen. Douglas MacArthur landed in Leyte and proclaimed that:
1. The Commonwealth, subject to the supreme authority of the US, is the sole
and only government having legal and valid jurisdiction over the people in
areas free from Japanese occupation and control.
2. Laws existing on the statute books and regulations of the Commonwealth are
in full force and effect and legally binding upon people in areas not
occupied/controlled by the Japanese.
3. All laws, regulations, and processes of any OTHER government are NULL AND
VOID and without legal effect in areas free from Japanese occupation and
control.
● After the partial liberation of Manila, the Commonwealth’s full powers and
responsibilities under the Constitution were restored.
● For the case at bar, 1st Instance judge refused to take cognizance and continue the
proceedings on the grounds that:
 o Gen. MacArthur’s proclamation had invalidated and nullified all judicial
proceedings of courts under governments other than the Commonwealth..
o Lower courts have no jurisdiction to continue proceedings under the Republic in
the absence of an enabling law granting such jurisdiction.
o The governments (Philippine Executive Commission & Republic of the
Philippines) established were not de facto governments.
ISSUES - HELD - RATIO
W/N judicial acts and proceedings of courts during the Japanese occupation
were good and valid and remained so even after the liberation/reoccupation of
the PH.
HELD: YES. The judicial acts and proceedings were good and valid and remained
so after liberation, as the gov’t established were de facto gov’t (Denominated a
gov’t of paramount force and Independent Government). [see note]
RATIO:
All acts and proceedings of the 3 branches of DE FACTO governments are
GOOD and VALID (legal truism in political & international law).
Denominated a Gov’t of Paramount Force (Philippine Executive Commission)
● Based on the Hague Convention, municipal laws are considered as
continuing in force during occupation. However, the occupant possesses all
the powers of a de facto gov’t and may suspend old laws & promulgate new
ones or maintain existing laws.
o However, laws of political nature (right to assembly, bear arms, freedom
of press, travel within the territory) are suspended.
o In practice, local tribunals continue administering justice upon
acceptance of occupant or supervision of the commander in chief.
● The PH Executive Commission was a civil gov’t established by Japanese
military forces making it a de facto gov’t of paramount force.
o Whether the gov’t is civil or military does not matter so long as the
character and source of authority are the same (Jap occupants).
o Being run by Filipinos rather than Jap does not diminish it from being a
gov’t of this kind since similar situations happened in different countries
(Napoleon in Prussia, Duke of Wellington in France, Germans in France).
Independent Government (Republic of the Philippines)
● Japan had no legal power to grant Fil independence/sovereignty. There was
no treaty of peace or other means recognized in law of nations. [see note]
● Republic of the Philippines was an independent gov’t established by
Filipinos in insurrection or rebellion against the parent state (US), with the
support of the Japanese, making it a de facto gov’t of the third kind.
o It was organized by confederate states during the war of secession and
recognized by the US SC in several cases.
Since both governments were indeed de facto, all acts and proceedings are
GOOD AND VALID even after its liberation/reoccupation, by virtue of the
principle of postliminium in international law.
W/N the proclamation made by Gen. MacArthur (3rd par.) invalidated all
judgments, judicial acts and proceedings of the courts during the Japanese
occupation.
HELD: NO. The phrase “processes of any other government” does not include
judicial acts and proceedings.
RATIO:
● It is presumed that it is not Gen MacArthur’s intention to violate the
principles of international law (Hague Convention) and US SC.
● Statutory Construction rule determines that judicial acts & proceedings are
not included.
o “statute ought never to be construed to violate the law of nations if any
other possible construction remains”
● Inclusion of acts and proceedings would greatly inconvenience the public.
(almost all courts have been destroyed by fire as result from the war)
● EO 37 orders abolishment of CA and passes all appealed cases to SC for
final decision (including appeals made during Jap occupation)
W/N the present Commonwealth courts may continue the proceedings
pending at the time the PH was liberated/reoccupied.
HELD: YES.
RATIO:
● Proceedings pending before the Jap. occupation proceeded during the
occupation; therefore, the same courts reestablished and conceived as
having IN CONTINUED EXISTENCE after reoccupation (principle of
postliminium)
● Legal maxim: “Law once established continues until changed by some
competent legislative power. It is not changed merely by the change of
sovereignty.”
● “There can be no break of interregnum in law...Once created, it persists until
a change takes place, and when changed it continues in such changed
condition until the next change, and so forever. Conquest or colonization is
impotent to bring law to an end; in spite of change of constitution, the law
continues unchanged until the new sovereign by legislative act creates a
change.”
RULING
[It] is adjudged and decreed that a writ of mandamus issue, directed to the
respondent judge of the Court of First Instance of Manila, ordering him to take
cognizance of and continue to final judgment the proceedings in civil case No.
3012 of said court.
OTHER NOTES/IMPORTANT CONCEPTS
3 Kinds of Facto Governments
● Government de facto in a proper legal sense
○ Gov’t gets possession/control of the rightful legal gov’t and maintains
itself against the will of the latter.
○ It gains possession by usurpation, by force, or the voice of the majority.
● Denominated a government of paramount force
○ Gov’t established and maintained by military forces who invade and
occupy a territory of the enemy in the course of war.
○ Authority and rules are deprived from laws of war (right to conquer)
○ Distinguishing characteristics
■ Existence is maintained by active military power in territories and
against the rightful authority of the lawful gov’t
■ The citizen’s acts of obedience, rendered in submission of such
force, are not held as wrongdoings even though the submission is
not warranted by the lawful gov’t
○ Powers and Duties (Art. 43, Sec. 3 of the Hague Conventions of 1907)
■ Establish and insure public order and safety
■ Respect the laws in force in the country
○ Art. 45 of Hague Conventions
■ “Belligerent occupation does not serve to transfer sovereignty over
territory controlled”
● Independent government
○ Gov’t established by inhabitants of a country who rise in insurrection
against the parent state.
Principle of Postliminium in International Law
● Regaining one’s own territory does not wipe out the effects of act done by
an invader
● Judicial, administrative, and other acts done under the sanction of municipal
law, during the occupation, remain good.
CONCURRING OPINION (De Joya)
● The principal issue requires the application of principles of International
Law, in connection with the municipal law in force before and during the
Japanese occupation.
● International Law is a body of rules accepted by nations as regulating
their mutual relations, the proof of the existence of a given rule is to be
found in the consent of nations to abide by the rules, which is evidenced
by the usages and customs of the nation. And as an integral part of our
laws, it must be ascertained and administered by Courts, whenever
questions of right depending upon it are presented for the Court’s
determination.
● The government established in the Philippines during the Japanese
occupation is considered a de facto government, and the judicial
proceedings conducted before the courts are to be considered legal,
valid, and enforceable, even after the American forces liberated our
 nation, as long as the said judicial proceedings had been conducted
under the laws of the Commonwealth of the Philippines.
● Further, according to the rules and principles of International Law, judicial
proceedings conducted before the courts of justice established during
the Japanese military occupation should be considered legal, valid, and
binding if they merely apply the municipal law of the territory and if such
proceedings have no political or military significance.
DISSENTING OPINION (Perfecto)
● Validity of the judicial acts and proceedings during the Japanese occupation
even after liberation
○ The majority proposition destroys the validity of what it maintains as a
legal truism in political and international law by stating from the
beginning the absolute proposition that all acts and proceedings of the
legislative, executive, and judicial departments of a de facto government
are good and valid. Moreover, no absolute authority has been cited to
support the majority proposition, as they have already lost faith in the
validity of the absolute and sweeping proposition when they established
that the judicial acts and proceedings of a political complexion are
unexplained exceptions.
○ Meaning that they are not the same courts under consti &
Commonwealth
● Different process of appointment of judges and justices
○ Commonwealth - Commission on Appointments & president
○ Chief justice - appointed by Jap Commander in Chief, all other judges -
appointed by chairman of exec commission
● Jurisdiction of judges cannot be transferred upon re establishment of
Commonwealth
○ Only cases before the occupation can be appealed to the SC for final
decision
Whether the Commonwealth gov’t is bound to the acts of either/both
Jap-sponsored gov’t.
● No, on grounds of legal principles and national dignity and international
decency.
Even considerations of policy or practical convenience militate against
petitioner’s contention.
● Validity of established gov’ts courts do not depend on the administered and
enforced law (which are the same as the Commonwealth’s) but on the
jurisdiction they have (aka judges weren’t judges but just lawyers applying
the law).

DISSENTING OPINIONS (Hilado)

Proceedings are null and void under Gen. MacArthur’s proclamation.

● Under the Japanese, people had to obey their orders and decrees &
conceded to the military strength. There was no need to continue doing so
in the form of accepting the proceedings as having jurisdiction.
The gov’ts established, the courts and judges were not de facto.
● Laws of war were created before WW1 & should be abolished as expressed
with several nation’s creation of renunciation of war within their constitutions
(Art 2, Sec 3) → established gov’t = not de facto
Courts were entirely different from Commonwealth courts before and after
Japanese occupation.
● EO 36 - “reestablish courts” in provinces after Japanese leave
 Letter of Associate Justice Puno
A.M No. 90-11-267-CA 29 June 1992
Padilla, J. Created By: Lian Espinosa
Main Topic: De Jure Government
Sub-topic (if any): N/A
PETITIONERS RESPONDENTS
Associate Justices Jose C. Campos, Jr.
Associate Justice Reynato S. Puno
and Luis A. Javellana
RECIT-READY SUMMARY
Associate Justice Reynato Puno, a former member of the Court of Appeals
(CA), requested correction of his seniority ranking due to changes in his
appointments. He became an associate justice of the CA in 1980 but took his
oath in 1982 after serving in the solicitor general's office. The CA was
reorganized into the Intermediate Appellate Court in 1983. Puno was
appointed to this new court in 1984 but saw a shift in his seniority ranking due
to subsequent appointments by President Aquino following the EDSA
Revolution.
Puno claimed that the change in his ranking was due to an inadvertent
oversight, arguing that it contradicted the provisions of Executive Order No.
33, Section 2. The Court en banc approved Puno's request but faced
opposition from Justices Campos and Javelliano, who argued that the new
court's creation invalidated Puno's claim to previous precedence.
The central issue was whether the present Court of Appeals was a new entity,
rendering precedence from previous appointments irrelevant. The court ruled
that the current Court of Appeals was distinct from the earlier CA and
Intermediate Appellate Court, created as part of the revolutionary
government's reorganization following the EDSA revolution. The court
emphasized that the new court's appointments had no connection to earlier
ones and that precedence referred to prospective rather than retroactive
situations.
Even if Executive Order No. 33 didn't abolish precedence, President Aquino,
as the head of the revolutionary government, could disregard it when making
appointments to the reorganized Court of Appeals.
DOCTRINE
De jure (government of law) — The legal, legitimate government of a state and is so
recognized by other states. It is an organized government of a state which has the
general support of the people.
In this case, the government under Cory Aquino and the Freedom Constitution was a
de jure government because it was established by authority of the legitimate
sovereign, the people. It was a revolutionary government established in defiance of the
1973 Constitution. But the resulting government was indisputably a revolutionary
government bound by no constitution or legal limitations except treaty obligations that
the revolutionary government, as the de jure government in the Philippines, assumed
under international law.
FACTS
● Associate Justice Reynato Puno, a member of the court of appeals (CA), wrote a
letter to the supreme court, seeking the correction of his seniority ranking in the
CA. He was appointed as associate justice of the CA on 20 June 1980 but took
his oath for it on 29 November 1982 after serving as assistant solicitor general
in the office of the solicitor general (since 1974).
● [17 JAN 1983] The Court of Appeals was reorganized and became the
Intermediate Appellate Court pursuant to Batas Pambansa Blg. 129. (An Act
Reorganizing the Judiciary).
o [7 NOV 1984] Puno accepted his appointment as Appellate Justice in
the First Special Cases Division of the Intermediate Appellate Court
and ceased to be a member of the judiciary.
● Due to the EDSA Revolution, there occurred a reorganization of the entire PH
government, including the judiciary – this also led to the creation of a
screening committee.
o The screening committee recommended the return of Puno as
Associate Justice of the new CA and assigned him with the rank of
number 11 in the roster of appellate court justices.
 o When the appointments were signed by President Aquino, Puno’s
seniority ranking changed from 11 to 26.
o Puno alleges that the change in his seniority ranking was caused by
inadvertence (oversight or lack of attention) because if not, it would
be contrary to the provisions of E.O. 33 Sec. 2.
▪ FOR REFERENCE: SECTION 2. Section 3, Chapter 1 of
Batas Pambansa Blg. 129, is hereby amended to read as
follows:
▪ “SEC. 2. Organization. — There is hereby created a Court
of Appeals which shall consist of a Presiding Justice and
fifty Associate Justices who shall be appointed by the
President of the Philippines. The Presiding Justice shall be
so designated in his appointment and the Associate
Justice shall have precedence according to the dates of
their respective appointments, or when the appointments
of two or more shall bear the same date, according to the
order in which their appointments were issued by the
President. Any Member who is reappointed to the Court
after rendering service in any other position in the
government shall retain the precedence to which he was
entitled under his original appointment, and his service in
the Court shall, for all intents and purposes be considered
as continuous and uninterrupted.”
o The court en banc granted Puno’s request.
o A motion for consideration was later filed by Associate Justices
Campos and Javelliano who were affected by the change of ranking.
They contend that the petitioner cannot claim such reappointment
because the court he had previously been appointed ceased to exist
at the date of his last appointment.
ISSUES - HELD - RATIO
W/N the present Court of Appeals is a new court such that it would negate
any claim to precedence or seniority admittedly enjoyed by petitioner in the
Court of Appeals and Intermediate Appellate Court existing prior to
Executive No. 33.
HELD: YES.
RATIO: The court held that the present CA is a NEW ENTITY, different and
distinct from the CA or the intermediate Appellate Court existing prior to E.O.
33 since it was created in the wake of the massive reorganization launched by
the revolutionary government of Aquino in the aftermath of the EDSA
revolution.
The CA and Intermediate Appellate Court existing prior to E.O. 33 phased out
as part of the legal system abolished by the revolution and that the CA
established under E.O. 33 was an ENTIRELY NEW COURT with appointments
thereto (having no relation to earlier appointments to the abolished courts),
and that the reference to the precedence in rank contained in the last
sentence of Sec., BP Blg. No. 129 as amended by E.O. 33 refers to prospective
situations as distinguished from retroactive ones.
Even if E.O. 33 didn’t abolish precedence or seniority ranking from the
previous appointment, president Aquino (as head of the revolutionary
government) can disregard or set aside such precedence or seniority when
she made her appointments to the reorganized CA.
RULING
The Court GRANTS the Motion for Reconsideration and the seniority rankings of
members of the Court of Appeals, including that of the petitioner, at the time the
appointments were made by the President in 1986, are recognized and upheld.
DISSENTING OPINIONS
GUTIERREZ, JR., J.
● Asserts that President Aquino's government ceased to be
revolutionary after the promulgation of Proclamation No. 3 on March
25, 1986, transitioning into a constitutional government governed by
the Freedom Constitution and its associated executive orders.
● The Freedom Constitution mandates that existing officials and
employees continue in office until their successors are appointed or
within a specified time frame.
 ● Executive Order No. 33, issued by President Aquino on July 28, 1986,
reaffirmed the provision regarding seniority retention in the Court of
Appeals. This order was enacted to reorganize the Intermediate
Appellate Court into the Court of Appeals.
● The retention of seniority provision was not intended to be
prospective only, and the President was bound by it.
● President Aquino's commitment to the rule of law and adherence to
legal provisions.
● There is a discrepancy in the seniority ranking of Justice Puno after
his reappointment and clarifies that the President's role was to follow
the recommendations of the Screening Committee and the Supreme
Court.
● Overall, he contends that the provision regarding the retention of
seniority for reappointed Court of Appeals members was not violated
during the 1986 reorganization, and the Court's decision to correct
Justice Puno's seniority ranking should be upheld.

CRUZ, J.
● Agrees with Justice Gutierrez's dissent and offers these additional
points. Section 3 of BP 129 established the original rule for
precedence among members of the Intermediate Appellate Court.
This rule was incorporated into Section 2 of EO 33 without any
substantive changes, aside from the court's name. The initial provision
was not repealed; rather, it was effectively "re-enacted," as noted by
Justice Feliciano.
● Does not believe this re-enacted rule was meant to have only
prospective application. In my view, it should apply both to former
members of the Intermediate Appellate Court and to Court of Appeals
members.
○ “It's a recognized principle of legal interpretation to
harmonize seemingly conflicting provisions whenever
possible. While the majority opinion suggests revoking
Section 3 of BP 129, I advocate reconciling this section with
Section 2 of EO 33, given that the latter provision effectively
re-enacts the former. Notably, Section 8 of EO 33 clarifies that
the term "Intermediate Appellate Court" should now be
understood as "Court of Appeals."

Republic vs. Sandiganbayan
G.R. No. 104768 July 21, 2003
CARPIO, J Prudencio IV De Guzman
Main Topic: De Jure Government; Bill of Rights; International Treaties; Rights during
Interregnum
Sub-topic (if any):
PETITIONERS RESPONDENTS
SANDIGANBAYAN,
REPUBLIC OF THE PHILIPPINES Major General Josephus Q. Ramas and
Elizabeth Dimaano
RECIT-READY SUMMARY
President Corazon Aquino's EO No. 1 established the PCGG to recover ill-gotten wealth from
Marcos, his immediate family, relatives, subordinates and close associates. The PCGG formed
an AFP Board to probe unexplained wealth in the military, including Major General Josephus
Q. Ramas. The July 1987 AFP Board Resolution outlined aspects of Ramas's alleged wealth,
such as properties in Quezon City and Cebu, his connection with Elizabeth Dimaano, and a
1986 raid that seized items, including cash and jewelry. The warrant for the search and
seizure was captioned “Illegal Possession of Firearms and Ammunition.” PCGG initiated a
forfeiture petition against Ramas and Dimaano. Despite efforts, delays ensued due to
evidence and preparation challenges. Respondents cited Republic v. Migrino, arguing PCGG
lacked jurisdiction. On November 18, 1991, Sandiganbayan dismissed the Amended
Complaint, returning seized items to Dimaano. Sandiganbayan denied the Motion for
Reconsideration of petitioners, hence, this petition. The relevant issue of the case was
whether or not the Bill of Rights was in effect during the Interregnum after the actual
take-over of power by the revolutionary government. Petitioner argues that confiscated items
from Dimaano should be admissible as evidence, asserting that private respondents lacked
constitutional rights during their seizure. The court ruled that the Bill of Rights under the 1973
Constitution was not operative during the interregnum. However, the protection accorded to
individuals under the Covenant and Declaration remained in effect. As the de jure
government, the revolutionary government could not escape its duty to comply with
international treaty obligations in good faith. Therefore, the seizure of items was void.
DOCTRINE
o De Jure Government - President Corazon Aquino’s government was de jure since it
was established by the authority of the legitimate sovereign. As a de jure
government, it assumed responsibility for the State’s good faith compliance with the
Covenant and the Declaration, which almost had the same rights found in the Bill of
Rights of the 1973 Constitution. In this case, the court ruled that the private
respondents enjoyed the rights under the international law. Hence, the items seized
outside the coverage of the warrant were declared as void and inadmissible in court.
FACTS
● President Corazon Aquino issued EO No. 1 creating the PCGG (Presidential
Commission on Good Government) which was primarily assigned to recover all
ill-gotten wealth of Marcos, his immediate family, relatives, subordinates and close
associates.
● The PCGG, through Chairman Salonga, established an Anti-Graft Board within the AFP
(AFP Board), which was tasked to investigate unexplained wealth and corrupt
practices by AFP personnel. One such case involved Major General Josephus Q.
Ramas, the Commanding General of the Philippine Army.
● The AFP Board's findings in the July 1987 Resolution highlighted various aspects of
Ramas's alleged unexplained wealth:
o Ramas owned a house and lot situated at 15-Yakan St., La Vista, Quezon City
(P700,000) and a house and lot in Cebu City.
o Ramas frequented Elizabeth Dimaano's residence in Batangas City, wherein
the latter was identified as his mistress.
o On March 3, 1986, a raid was conducted at Dimaano's residence, resulting in
the confiscation of various items, including military equipment,
communication devices, cash amounting to Php 2,870,000 (or USD 50,000),
jewelry, and land titles. The search warrant was captioned “Illegal Possession
of Firearms and Ammunition.”
● PCGG initiated a forfeiture petition against Ramas for violation of RA 3019 (Anti-Graft
and Corrupt Practices Act) and RA 1379 (the Act for the Forfeiture of Unlawfully
Acquired Property) with Dimaano as co-defendant.
● Sandiganbayan declared the properties confiscated from Dimaano’s house as illegally
seized and therefore inadmissible as evidence. The raiding team seized items outside
the coverage of the warrant presented.
● Despite the PCGG's attempts to proceed with the case, delays occurred due to trial
preparation issues and a lack of prima facie evidence.
 ● By March 1990, the PCGG struggled to present further evidence, and the trial was
rescheduled. Eventually, respondents filed motions to dismiss, citing the Republic v.
Migrino case as precedent. The court held in Migrino that PCGG does not have
jurisdiction to prosecute because of mere position and not showing that they are
subordinates of former President Marcos.
● On November 18, 1991, the Sandiganbayan ruled to dismiss the Amended Complaint,
ordering the return of confiscated items to Elizabeth Dimaano. In response, the PCGG
filed a Motion for Reconsideration, leading to further opposition from Ramas and
Dimaano.
● The Sandiganbayan ultimately denied the Motion for Reconsideration on March 25,
1992. Hence, this petition for review on certiorari to set aside such resolutions.
ISSUES - HELD - RATIO
W/N the Bill of Rights was in effect during the Interregnum after the actual take-over of
power by the revolutionary government.
HELD: NO.
RATIO:
Petitioner contends that the government may confiscate monies and items taken from Dimaano
and use the same as evidence against her since at the time of their seizure, private
respondents did not enjoy any constitutional right.
The court ruled that the Bill of Rights under the 1973 Constitution was not operative during the
interregnum. However, the protection accorded to individuals under the Covenant and
Declaration remained in effect. Once established as the de jure government, it took on the duty
of ensuring the state's adherence to the Covenant, respecting individual rights as outlined in
Article 2(1) of the Covenant requires each signatory State “to respect and to ensure to all
individuals within its territory and subject to its jurisdiction the rights recognized in the present
Covenant.” Under Article 17(1) of the Covenant, the revolutionary government had the duty to
insure that “[n]o one shall be subjected to arbitrary or unlawful interference with his privacy,
family, home or correspondence.”
The Declaration, to which the Philippines is also a signatory, provides in its Article 17(2) that
“[n]o one shall be arbitrarily deprived of his property.” Despite the non-binding nature of the
Declaration, it's interpreted as part of international law, obligating the government to uphold
individual rights. As the de jure government, the revolutionary government couldn't escape its
duty to comply with international treaty obligations in good faith. Therefore, the seizure of items
was void.
W/N PCGG had jurisdiction to Investigate the Respondent.
HELD: NO.
RATIO:
The PCGG lacks jurisdiction over private respondents, as the court determined that Ramas
was not a subordinate of Former President Marcos. The court emphasized that mere military
rank doesn't inherently establish being a subordinate. Moreover, the PCGG couldn't present
sufficient evidence linking the ill-gotten wealth to Ramas's ties with the former president or his
spouse.
W/N the Sandiganbayan erred in dismissing the case before completion of the presentation
of petitioner’s evidence
HELD: NO.
RATIO:
Based on the Sandiganbayan's findings and case records, it's evident that the petitioner bears
responsibility for the incomplete evidence presentation. The case spanned four years before
its dismissal. The Sandiganbayan offered ample time for completion, even overlooking
petitioner's delays. Nonetheless, the petitioner ended the long sequence of delays by
submitting a Re-Amended Complaint, which would only prolong even more the disposition of
the case. Furthermore, the Court's decisions in Migrino and Cruz prompted the
Sandiganbayan to dismiss the case due to the PCGG's lack of jurisdiction to investigate and
prosecute private respondents. This alone formed a strong legal basis for the forfeiture case's
dismissal against private respondents.
RULING
Petition for certiorari is DISMISSED. The Resolutions of the Sandiganbayan remanding the
records of this case to the ombudsman and referring this case to the Commissioner of the BIR
for a determination of any tax liability of Dimaano, are AFFIRMED.
 PEOPLE v. GOZO
G.R. No. 53 SCRA 476 Date: October 26, 1973
Ponente: Fernando Created By: Joachim Fernando
Main Topic: Sovereignty
Sub-topic (if any): Auto-limitation
PETITIONERS RESPONDENTS
The People of the Philippines Loreta Gozo
RECIT-READY SUMMARY
Loreta Gozo has started to construct her house within a naval base leased by the
United States in Olongapo. As she was advised, she does not need to secure such
permits, as these bases are not within the jurisdiction of the state. Hence, no efforts
were made by Gozo to secure a permit. During the Construction of her house, an
inspector from the City Engineer’s office has apprehended the ongoing work. After
their investigation, Gozo was found guilty of violating a municipal ordinance in
Olongapo that requires the acquisition of permits for the construction and
modification of establishments. The trial court found Gozo guilty of violating the said
ordinance. Gozo assailed the decision, arguing that the naval base wherein her
house was being constructed is not within the jurisdiction of the state, based on the
Military bases Agreement of 1947 and the doctrine of auto-limitation. The Court
clarifies that a state may diminish its jurisdiction upon consent, but it shall not
disappear, as the said bases shall always form part of our national territory. Hence,
the Court finds Gozo guilty.
Auto-Limitation
o The State has the exclusive capacity of legal-self determination, wherein it can
expressly or impliedly grant consent to another state to exercise jurisdiction over a
certain area, while diminishing the State’s jurisdiction. This is rooted from the
illimitable competence of the State in exercising preferential jurisdiction. The State
however will never have its jurisdiction removed, as the said area shall always form
part of its national territory.
FACTS
● The appellant, Loreta Gozo, constructed her house within a naval base in Ologapo,
Zamabales leased by the United States.
● Upon the alleged advice of her neighbors and an assistant in the City Mayor’s office,
she has not secured a permit for the construction of her house.
● This is grounded on the basis that the Country does not exercise sovereignty over
those naval bases.
● However, during the construction of her house, an inspector from the City Engineer’s
Office has apprehended the ongoing construction. Asking for the necessary permits in
place.
● After their investigation, they found Loreta Gozo guilty in violation of a municipal
ordinance that requires the procurement of permits for construction and modification
of establishments.
● The trial court has convicted Gozo for the said violation.
● Gozo assails the validity of the said decision on the following grounds:
○ Due process question, citing the application of this doctrine in People v.
Fajardo.
○ Sovereignty and jurisdiction of the state over the property, which is situated
within a naval base leased by the United States.
● The Court clarifies that the due process question in People v. Fajardo was oppressive
in nature. That Fajardo has demonstrated in good faith his willfulness to comply with
the said ordinance, however it was repeatedly denied by the municipality. Such is not
the case for the appellant, as no efforts were made in seeking to acquire a permit.
● With regard to the state’s exercise of sovereignty, the Court cites the leading cases of
People v. Acierto and Reagan v CIR, wherein it was established that the state merely
consents to the United States exercise of jurisdiction in certain cases, as a matter of
comity, courtesy, or expediency. The United States merely exercises preferential
jurisdiction, but it does not amount to the Philippines surrendering its jurisdiction. It
shall and always have jurisdiction, as the said base is within the territory of the
country. With regard to auto-limitation, the doctrine presents that a state, through the
express or implied consent may delimit its own sovereignty. As the state has expressly
granted this through the Military Bases Agreement of 1947, the United States shall
exercise jurisdiction over the leased naval bases. The existence of this agreement
merely diminishes the jurisdiction of the Philippines over the said bases, but it does
not disappear. The State shall always have the power to exercise jurisdiction over
those areas, as it shall always be part of our national territory.
● Hence, the Court affirms the assailed decision, finding Loreta Gozo guilty of violation
of Municipal Ordinance No. 14.
 decision within which to obtain the required permit. Only upon her failure to do so
ISSUES - HELD - RATIO will that portion of the appealed decision requiring demolition be enforced. Costs
against the accused.

W/N: Does the Philippines have jurisdiction over the naval base leased by the USA?

HELD: YES

RATIO:
The Philippines shall continue to exercise its jurisdiction, despite the Military Bases
Agreement of 1947. Through the concept of auto-limitation, the State merely reduces
its jurisdiction, and grants the United States preferential jurisdiction over the area, due
to their competence within their own naval bases. However, the State never
surrenders its jurisdiction, it shall always be present, it may only be reduced at most.

W/N The question of due process in People v. Fajardo applies to the appellant?

HELD: NO

RATIO:
In the case of Fajardo, he has always seeked for the approval of his permit, however
it was repeatedly denied by the municipality. Hence the said construction in the case
of Fajardo without a permit was granted, as the actions of the municipality were
oppressive in nature against Fajardo, evidently showing his efforts of good faith. Such
is not the case for Gozo, as no efforts were made to seek the said permit.

RULING

WHEREFORE, the appealed decision of November 11, 1969 is affirmed insofar

as it found the accused, Loreta Gozo, guilty beyond reasonable doubt of a
violation of Municipal Ordinance No. 14, series of 1964 and sentencing her to
pay a fine of P200.00 with subsidiary imprisonment in case of insolvency, and
modified insofar as she is required to demolish the house that is the subject
matter of the case, she being given a period of thirty days from the finality of this