Republic of the Philippines SUPREME COURT Manila THIRD DIVISION G.R. Nos.

147706-07 February 16, 2005

PEOP E OF T!E P!" "PP"NES, petitioner, vs. T!E !ONOR#$ E S#N%"G#N$#&#N 'F()*+ %(,(s(o-. a-/ EFREN . # #S, respondents. D CORON#, J.0 Does the Sandi"anba#an have $urisdiction over presidents, directors or trustees, or %ana"ers of "overn%ent&o'ned or controlled corporations or"ani(ed and incorporated under the !orporation !ode for purposes of the provisions of R) *+,-, other'ise .no'n as the )nti&/raft and !orrupt Practices )ct0 The petitioner, represented b# the Office of the Special Prosecutor 1OSP2, ta.es the affir%ative position in this petition for certiorari under Rule 34 of the Rules of !ourt. Respondent fren 5. )las contends other'ise, to"ether 'ith the respondent court. Pursuant to a resolution dated Septe%ber *+, ,--- of the Office of the O%buds%an, t'o separate infor%ations,for violation of Section *1e2 of R) *+,-, other'ise .no'n as the )nti&/raft and !orrupt Practices )ct, 'ere filed 'ith the Sandi"anba#an on Nove%ber ,6, ,--- a"ainst fren 5. )las. The char"es e%anated fro% the alle"ed ano%alous advertisin" contracts entered into b# )las, in his capacit# as President and !hief Operatin" Officer of the Philippine Postal Savin"s 7an. 1PPS72, 'ith 7a"on" 7uha# Publishin" !o%pan# 'hich purportedl# caused da%a"e and pre$udice to the "overn%ent. On October *+, 8++8, )las filed a %otion to 9uash the infor%ations for lac. of $urisdiction, 'hich %otion 'as vehe%entl# opposed b# the prosecution. )fter considerin" the ar"u%ents of both parties, the respondent court ruled that PPS7 'as a private corporation and that its officers, particularl# herein respondent )las, did not fall under Sandi"anba#an $urisdiction. )ccordin" to the Sandi"anba#an: )fter a careful consideration of the ar"u%ents of the accused&%ovant as 'ell as of that of the prosecution, 'e are of the considered opinion that the instant %otion of the accused is 'ell ta.en. Indeed, it is the basic thrust of Republic )ct as 'ell as 1sic2 Presidential Decree No. ,3+3 as a%ended b# President Decree No. ,;<3 and Republic )ct No. 6-64 and Republic )ct No. <8;- that the Sandi"anba#an has $urisdiction onl# over public officers unless private persons are char"ed 'ith the% in the co%%ission of the offenses. The records disclosed that 'hile Philippine Postal Savin"s 7an. is a subsidiar# of the Philippine Postal !orporation 'hich is a "overn%ent o'ned corporation, the sa%e is not created b# a special la'. It 'as or"ani(ed and incorporated under the !orporation !ode 'hich is 7atas Pa%bansa 7l". 3<. It 'as re"istered 'ith the Securities and =chan"e !o%%ission under S ! No. )S+-;&++44-* on >une 88, ,--; 'ith a lifeti%e of fift# 14+2 #ears. ?nder its )rticles of Incorporation the purpose for 'hich said entit# is for%ed 'as pri%aril# for business, === 5i.e'ise, a scrutin# of the seven 162 secondar# purposes of the corporation points to the conclusion that it e=ists for business. Obviousl#, it is not involved in the perfor%ance of a particular function in the e=ercise of "overn%ent po'er. Thus, its officers and e%plo#ees are not covered b# the /SIS and are under the SSS la', and actions for reinstate%ent and bac.'a"es
l^vvphi1.net

!ISION

are not 'ithin the $urisdiction of the !ivil Service !o%%ission but b# the National 5abor Relations !o%%ission 1N5R!2. The Supre%e !ourt, in the case of Trade ?nions of the Philippines and )llied Services vs. National Housin" !orp., ,6* S!R) **, held that the !ivil Service no' covers onl# "overn%ent o'ned or controlled corporations 'ith ori"inal or le"islative charters, those created b# an act of !on"ress or b# special la', and not those incorporated under and pursuant to a "eneral le"islation. The Hi"hest !ourt cate"oricall# ruled that the !ivil Service does not include "overn%ent&o'ned or controlled corporation 'hich are or"ani(ed as subsidiaries of "overn%ent& o'ned or controlled corporation under the "eneral corporation la'. In Philippine National Oil !o%pan# @ ner"# Develop%ent !orporation vs. 5eo"ardo, ,64 S!R) 83, the Supre%e !ourt e%phasi(ed that: The test in deter%inin" 'hether a "overn%ent&o'ned or controlled corporation is sub$ect to the !ivil Service 5a' is the %anner of its creation such that "overn%ent corporation created b# special charter are sub$ect to its provision 'hile those incorporated under the "eneral corporation la' are not 'ithin its covera"e. 5i.e'ise in Davao !it# Aater District vs. !ivil Service !o%%ission, 8+, S!R) 3+, it 'as held that Bb# "overn%ent&o'ned or controlled corporation 'ith ori"inal charter 'e %ean "overn%ent& o'ned or controlled corporation created b# a special la' and not under the !orporation !ode of the PhilippinesB 'hile in 5lenes vs. Dicdican, et al., 83+ S!R) 8+6, a public officer has been ruled, as a person 'hose duties involve the e=ercise of discretion in the perfor%ance of the function of "overn%ent. !learl#, on the basis of the fore"oin" pronounce%ents of the Supre%e !ourt, the accused herein cannot be considered a public officer. Thus, this !ourt %a# not e=ercise $urisdiction over his act. 8 Dissatisfied, the People, throu"h the Office of the Special Prosecutor 1OSP2, filed this petition* ar"uin", in essence, that the PPS7 'as a "overn%ent&o'ned or controlled corporation as the ter% 'as defined under Section 81,*2 of the )d%inistrative !ode of ,-<6. ; 5i.e'ise, in further definin" the $urisdiction of the Sandi"anba#an, R) <8;- did not %a.e a distinction as to the %anner of creation of the "overn%ent&o'ned or controlled corporations for their officers to fall under its $urisdiction. Hence, bein" President and !hief Operatin" Officer of the PPS7 at the ti%e of co%%ission of the cri%es char"ed, respondent )las ca%e under the $urisdiction of the Sandi"anba#an.
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Cuotin" at len"th fro% the assailed resolution dated Debruar# ,4, 8++,, respondent )las, on the other hand, practicall# reiterated the pronounce%ents %ade b# the respondent court in support of his conclusion that the PPS7 'as not created b# special la', hence, its officers did not fall 'ithin the $urisdiction of the Sandi"anba#an. 4 Ae find %erit in the petition. Section 81,*2 of O 8-83 defines "overn%ent&o'ned or controlled corporations as follo's: Sec. 8. /eneral Ter%s Defined @ ?nless the specific 'ords of the te=t or the conte=t as a 'hole or a particular statute, shall re9uire a different %eanin": === === === 1,*2 "overn%ent o'ned or controlled corporations refer to an# a"enc# or"ani(ed as a stoc. or non&stoc. corporation vested 'ith functions relatin" to public needs 'hether "overn%ental or proprietar# in nature, and o'ned b# the "overn%ent directl# or indirectl# or throu"h its

instru%entalities either 'holl#, or 'here applicable as in the case of stoc. corporations to the e=tent of at least 4,E of its capital stoc.: provided, that "overn%ent o'ned or controlled corporations %a#be further cate"ori(ed b# the depart%ent of the bud"et, the civil service co%%ission and the co%%ission on audit for the purpose of the e=ercise and dischar"e of their respective po'ers, functions and responsibilities 'ith respect to such corporations. Dro% the fore"oin", PPS7 fits the bill as a "overn%ent&o'ned or controlled corporation, and or"ani(ed and incorporated under the !orporation !ode as a subsidiar# of the Philippine Postal !orporation 1PHI5POST2. More than --E of the authori(ed capital stoc. of PPS7 belon"s to the "overn%ent 'hile the rest is no%inall# held b# its incorporators 'ho areF'ere the%selves officers of PHI5POST. The creation of PPS7 'as e=pressl# sanctioned b# Section *8 of R) 6*4;, other'ise .no'n as the Postal Service )ct of ,--8, for purposes of, a%on" others, Bto encoura"e and pro%ote the virtue of thrift and the habit of savin"s a%on" the "eneral public, especiall# the #outh and the %ar"inali(ed sector in the countr#side ===B and to facilitate postal service b# Breceivin" collections and %a.in" pa#%ents, includin" postal %one# orders.B 6 It is not disputed that the Sandi"anba#an has $urisdiction over presidents, directors or trustees, or %ana"ers of "overn%ent&o'ned or controlled corporations 'ith ori"inal charters 'henever char"es of "raft and corruption are involved. Ho'ever, a 9uestion arises 'hether the Sandi"anba#an has $urisdiction over the sa%e officers in "overn%ent&o'ned or controlled corporations or"ani(ed and incorporated under the !orporation !ode in vie' of the deli%itation provided for in )rticle IG&7 Section 81,2 of the ,-<6 !onstitution 'hich states that: S !. 8. 1,2 The !ivil Service e%braces all branches, subdivisions, instru%entalities, and a"encies of the "overn%ent, includin" "overn%ent&o'ned or controlled corporations 'ith ori"inal charters. It should be pointed out ho'ever, that the $urisdiction of the Sandi"anba#an is separate and distinct fro% the !ivil Service !o%%ission. The sa%e is "overned b# )rticle GI, Section ; of the ,-<6 !onstitution 'hich provides that Bthe present anti&"raft court .no'n as the Sandi"anba#an shall continue to function and exercise its jurisdiction as now or hereafter may be provided by law." This provision, in effect, retained the $urisdiction of the anti&"raft court as defined under )rticle GIII, Section 4 of the ,-6* !onstitution 'hich %andated its creation, thus: Sec. 4. The 7atasan" Pa%bansa shall create a special court, to be .no'n as Sandi"anba#an, 'hich shall have $urisdiction over cri%inal and civil cases involvin" "raft and corrupt practices and such other offense co%%itted b# public officers and e%plo#ees, including those in government-owned or controlled corporations , in relation to their office as %a# be deter%ined b# la'. 1Italics ours2 On March *+, ,--4, !on"ress, pursuant to its authorit# vested under the ,-<6 !onstitution, enacted R) 6-64<%aintainin" the $urisdiction of the Sandi"anba#an over presidents, directors or trustees, or %ana"ers of "overn%ent&o'ned or controlled corporations 'ithout an# distinction 'hatsoever. Thereafter, on Debruar# 4, ,--6, !on"ress enacted R) <8;- - 'hich preserved the sub$ect provision: Section ;, Jurisdiction. The Sandi"anba#an shall e=ercise e=clusive ori"inal $urisdiction in all cases involvin": a. Violations of Republic )ct No. *+,-, as a%ended, other'ise .no'n as the )nti&/raft and !orrupt Practices )ct, Republic )ct No. ,*6-, and !hapter II, Section, Title VII, 7oo. II of the Revised Penal !ode, 'here one or %ore of the accused are officials occup#in" the follo'in" positions in the "overn%ent, 'hether in a per%anent, actin" or interi% capacit#, at the ti%e of the co%%ission of the offense,

1,2 Officials of the e=ecutive branch occup#in" the positions of re"ional director, and hi"her, other'ise classified as "rade B86B and hi"her, of the !o%pensation and Position !lassification )ct of ,-<- 1Republic )ct No. 364<2 specificall# includin": === === === 1"2 residents! directors or trustees! or managers of government-owned or controlled corporations, state universities or educational institutions or foundations. 1Italics ours2 The le"islature, in %andatin" the inclusion of Bpresidents, directors or trustees, or %ana"ers of "overn%ent&o'ned or controlled corporationsB 'ithin the $urisdiction of the Sandi"anba#an, has consistentl# refrained fro% %a.in" an# distinction 'ith respect to the %anner of their creation. The deliberate o%ission, in our vie', clearl# reveals the intention of the le"islature to include the presidents, directors or trustees, or %ana"ers of both t#pes of corporations 'ithin the $urisdiction of the Sandi"anba#an 'henever the# are involved in "raft and corruption. Had it been other'ise, it could have si%pl# %ade the necessar# distinction. 7ut it did not. It is a basic principle of statutor# construction that 'hen the la' does not distin"uish, 'e should not distin"uish."bi lex non distinguit nec nos distinguere debemos . !orollaril#, )rticle GI Section ,8 of the ,-<6 !onstitution, on the $urisdiction of the O%buds%an 1the "overn%entHs prosecutor# ar% a"ainst persons char"ed 'ith "raft and corruption2, includes officers and e%plo#ees of "overn%ent&o'ned or controlled corporations, li.e'ise 'ithout an# distinction.
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In #uimpo v. $anodbayan,,+ this !ourt, alread# %indful of the pertinent provisions of the ,-<6 !onstitution, ruled that the concerned officers of "overn%ent&o'ned or controlled corporations, 'hether created b# special la' or for%ed under the !orporation !ode, co%e under the $urisdiction of the Sandi"anba#an for purposes of the provisions of the )nti&/raft and !orrupt Practices )ct. Other'ise, as 'e e%phasi(ed therein, a %a$or polic# of /overn%ent, 'hich is to eradicate, or at the ver# least %ini%i(e, the "raft and corruption that has per%eated the fabric of the public service li.e a %ali"nant social cancer, 'ould be seriousl# under%ined. In fact, Section , of the )nti&/raft and !orrupt Practices )ct e%bodies this polic# of the "overn%ent, that is, to repress certain acts not onl# of public officers but also of private persons constitutin" "raft or corrupt practices or 'hich %a# lead thereto. The fore"oin" pronounce%ent has not outlived its usefulness. On the contrar#, it has beco%e even %ore relevant toda# due to the ra%pant cases of "raft and corruption that erode the peopleHs faith in "overn%ent. Dor indeed, a "overn%ent&o'ned or controlled corporation can conceivabl# create as %an# subsidiar# corporations under the !orporation !ode as it %i"ht 'ish, use public funds, disclai% public accountabilit# and escape the liabilities and responsibilities provided b# la'. 7# includin" the concerned officers of "overn%ent&o'ned or controlled corporations or"ani(ed and incorporated under the !orporation !ode 'ithin the $urisdiction of the Sandi"anba#an, the le"islature evidentl# see.s to avoid $ust that. 1!EREFORE, in vie' of the fore"oin", the petition is hereb# /R)NT D and the assailed resolution dated Debruar# ,4, 8++, of the respondent court is hereb# R V RS D and S T )SID . SO ORD R D. Pan"aniban, 1!hair%an2, Sandoval&/utierre(, !arpio&Morales, and /arcia, >>., concur.

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Doc.eted as !ri%inal !ases Nos. 8464+&8464,. Resolution dated Debruar# ,4, 8++,, )nne= B)B, %ollo, pp. ,<&88. %ollo, pp. 8&,6. O No. 8-8. !o%%ent, %ollo, pp. *<&;-. )d%inistrative !ode of ,-<6. )rticles of Incorporation of PPS7, )nne= B!B, %ollo, pp. 86&*4.

ntitled: )!T TO STR N/TH N TH D?N!TION)5 )ND STR?!T?R)5 OR/)NII)TION OD TH S)NDI/)N7)J)N, )M NDIN/ DOR TH)T P?RPOS PD ,3+3, )S )M ND D.
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ntitled: )N )!T D?RTH R D DININ/ TH >?RISDI!TION OD TH &'()*+'(,'-'(. )M NDIN/ DOR TH P?RPOS PR SID NTI)5 D !R NO. ,3+3, )S )M ND D, PROVIDIN/ D?NDS TH R DOR, )ND DOR OTH R P?RPOS S.
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8*+ Phil. 8*8 1,-<32.