Liban vs.
Gordon
G.R. No. 175352, January 18, 2011
Petitioners Liban, et al., who were officers of
the Board of Directors of the Quezon City Red Cross
Chapter, filed with the Supreme Court what they styled
as “Petition to Declare Richard J. Gordon as Having
Forfeited His Seat in the Senate” against respondent
Gordon, who was elected Chairman of the Philippine
National Red Cross (PNRC) Board of Governors during
his incumbency as Senator.
Petitioners alleged that by accepting the
chairmanship of the PNRC Board of Governors,
respondent Gordon ceased to be a member of the Senate
pursuant to Sec. 13, Article VI of the Constitution,
which provides that “[n]o Senator . . . may hold any
other office or employment in the Government, or any
subdivision, agency, or instrumentality thereof,
including government-owned or controlled
corporations or their subsidiaries, during his term
without forfeiting his seat.” Petitioners cited the case
of Camporedondo vs. NLRC, G.R. No. 129049,
decided August 6, 1999, which held that the PNRC is a
GOCC, in supporting their argument that respondent
Gordon automatically forfeited his seat in the Senate
when he accepted and held the position of Chairman of
the PNRC Board of Governors.
Formerly, in its Decision dated July 15, 2009,
the Court, voting 7-5,[1] held that the office of the
PNRC Chairman is NOT a government office or an
office in a GOCC for purposes of the prohibition in Sec.
13, Article VI of the 1987 Constitution. The PNRC
Chairman is elected by the PNRC Board of Governors;
he is not appointed by the President or by any
subordinate government official. Moreover, the PNRC
is NOT a GOCC because it is a privately-owned,
privately-funded, and privately-run charitable
organization and because it is controlled by a Board of
Governors four-fifths of which are private sector
individuals. Therefore, respondent Gordon did not
forfeit his legislative seat when he was elected as PNRC
Chairman during his incumbency as Senator.
The Court however held further that the PNRC
Charter, R.A. 95, as amended by PD 1264 and 1643, is
void insofar as it creates the PNRC as a private
corporation since Section 7, Article XIV of the 1935
Constitution states that “[t]he Congress shall not,
except by general law, provide for the formation,
organization, or regulation of private corporations,
unless such corporations are owned or controlled by
the Government or any subdivision or instrumentality
thereof.” The Court thus directed the PNRC to
incorporate under the Corporation Code and register
with the Securities and Exchange Commission if it
wants to be a private corporation. The fallo of the
Decision read:
WHEREFORE, we declare that the office of the
Chairman of the Philippine National Red Cross is not a
government office or an office in a government-owned or
controlled corporation for purposes of the prohibition in
Section 13, Article VI of the 1987 Constitution. We also
declare that Sections 1, 2, 3, 4(a), 5, 6, 7, 8, 9, 10, 11, 12,
and 13 of the Charter of the Philippine National Red
Cross, or Republic Act No. 95, as amended by
Presidential Decree Nos. 1264 and 1643, are VOID
because they create the PNRC as a private corporation or
grant it corporate powers.
Respondent Gordon filed a Motion for
Clarification and/or for Reconsideration of the Decision.
The PNRC likewise moved to intervene and filed its
own Motion for Partial Reconsideration. They basically
questioned the second part of the Decision with regard to
the pronouncement on the nature of the PNRC and
the constitutionality of some provisions of the PNRC
Charter.
ISSUE:
Was it correct for the Court to have passed upon and
decided on the issue of the constitutionality of the PNRC
charter? Corollarily: What is the nature of the PNRC?
Ruling:
the office of the Chairman of the Philippine National Red
Cross is not a government office or an office in a
government-owned or controlled corporation for purposes
of the prohibition in Section 13, Article VI of the 1987
Constitution.
Principles:
the office of the PNRC Chairman is not a government
office or an office in a government-owned or controlled
corporation for purposes of the prohibition in Section 13,
Article VI of the 1987 Constitution. However, since the
PNRC Charter is void insofar as it... creates the PNRC as
a private corporation, the PNRC should incorporate under
the Corporation Code and register with the Securities and
Exchange Commission if it wants to be a private
corporation.
a position held in an ex officio capacity does not violate
the constitutional proscription on the holding of multiple
offices.
The prohibition against holding dual or multiple offices or
employment under Section 13, Article VII of the
Constitution must not, however, be construed as applying
to posts occupied by the Executive officials specified
therein without additional compensation... in an ex officio
capacity as provided by law and as required by the
primary functions of said officials' office. The reason is
that these posts do not comprise "any other office" within
the contemplation of the constitutional prohibition but are
properly an... imposition of additional duties and
functions on said officials.
The term ex officio means "from office; by virtue of
office." It refers to an "authority derived from official
character merely, not expressly conferred upon the
individual character, but rather annexed to the official
position." Ex officio likewise... denotes an "act done in
an official character, or as a consequence of office, and
without any other appointment or authority other than
that conferred by the office." An ex officio member of a
board is one who is a member by virtue of his title to a
certain office, and... without further warrant or
appointment.
The ex officio position being actually and in legal
contemplation part of the principal office, it follows that
the official concerned has no right to receive additional
compensation for his services in the said position. The
reason is that these services are already... paid for and
covered by the compensation attached to his principal
office.
Boyscouts of the Philippines v COA
G.R. No. 177131, June 7, 2011
Facts:
COA issued a Resolution No. 99-011 on
August 19, 1999, with the subject
“Defining the Commission’s Policy with
respect to the audit of the Boy Scout of
the Philippines.” The BSP which was
created as a public corporation, and that
in BSP vs. NLRC, the Supreme Court
ruled that the BSP, as constituted under
its charter, was a Government Owned
and Controlled Corporation within the
meaning of Art. IX (B) (2) (1) of the
Constitution, and that the BSP is
regarded as a government
instrumentality under the
Administrative Code. For the purposes
of audit supervision, the BSP shall be
classified among the government
corporations to be audited by employing
the team audit approach. The BSP
sought reconsideration of the COA
Resolution in a letter signed by then BSP
National President Jejomar C. Binay,
saying that it is not subject to the COA’s
jurisdiction.
Issues:
Whether or not the Boy Scout of the
Philippines is a government owned and
controlled corporation?
Whether or not it is under the jurisdiction
of the COA?
The Ruling of the court:
After looking at the legislative history of its
amended charter and carefully studying the
applicable laws and the arguments of both
parties, The SC finds that the BSP is a public
corporation and its funds are subject to the
COA’s audit jurisdiction.
The BSP is a public corporation or a
government agency or instrumentality with
juridical personality, which does not fall
within the constitutional prohibition in
Article XII, Section 16, notwithstanding the
amendments to its charter. Not all
corporations, which are not government
owned or controlled, are ipso facto to be
considered private corporations as there
exists another distinct class of corporations
or chartered institutions which are otherwise
known as "public corporations." These
corporations are treated by law as agencies or
instrumentalities of the government which
are not subject to the tests of ownership or
control and economic viability but to
different criteria relating to their public
purposes/interests or constitutional policies
and objectives and their administrative
relationship to the government or any of its
Departments or Offices.
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.
Philippine Society for the Prevention of Cruelty to
Animals v. COA
G.R. No. 169752, September 25, 2007
FACTS:
The petitioner was incorporated as a juridical entity over
one hundred years ago by virtue of Act No. 1285, enacted
on January 19, 1905, by the Philippine Commission. The
petitioner, at the time it was created, was composed of
animal aficionados and animal propagandists. The
objects of the petitioner, as stated in Section 2 of its
charter, shall be to enforce laws relating to cruelty
inflicted upon animals or the protection of animals in the
Philippine Islands, and generally, to do and perform all
things which may tend in any way to alleviate the
suffering of animals and promote their welfare.
At the time of the enactment of Act No. 1285, the original
Corporation Law, Act No. 1459, was not yet in existence.
Act No. 1285 antedated both the Corporation Law and
the constitution of the SEC.
For the purpose of enhancing its powers in promoting
animal welfare and enforcing laws for the protection of
animals, the petitioner was initially imbued under its
charter with the power to apprehend violators of animal
welfare laws. In addition, the petitioner was to share
1/2 of the fines imposed and collected through its
efforts for violations of the laws related thereto.
Subsequently, however, the power to make arrests as
well as the privilege to retain a portion of the fines
collected for violation of animal-related laws were
recalled by virtue of C.A. No. 148. Whereas, the cruel
treatment of animals is now an offense against the State,
penalized under our statutes, which the Government is
duty bound to enforce;
When the COA was to perform an audit on them they
refuse to do so, by the reason that they are a private
entity and not under the said commission. It argued that
COA covers only government entities. On the other
hand the COA decided that it is a government entity.
ISSUE: WON the said petitioner is a private entity.
RULING:
YES. First, the Court agrees with the petitioner that the
“charter test” cannot be applied. Essentially, the
“charter test” provides that the test to determine
whether a corporation is government owned or
controlled, or private in nature is simple. Is it created by
its own charter for the exercise of a public function, or
by incorporation under the general corporation law?
Those with special charters are government
corporations subject to its provisions, and its employees
are under the jurisdiction of the CSC, and are
compulsory members of the GSIS.
And since the “charter test” had been introduced by the
1935 Constitution and not earlier, it follows that the test
cannot apply to the petitioner, which was incorporated
by virtue of Act No. 1285, enacted on January 19, 1905.
Settled is the rule that laws in general have no
retroactive effect, unless the contrary is provided. All
statutes are to be construed as having only a prospective
operation, unless the purpose and intention of the
legislature to give them a retrospective effect is
expressly declared or is necessarily implied from the
language used. In case of doubt, the doubt must be
resolved against the retrospective effect.
Second, a reading of petitioner’s charter shows that
it is not subject to control or supervision by any agency
of the State, unlike GOCCs. No government
representative sits on the board of trustees of the
petitioner. Like all private corporations, the successors
of its members are determined voluntarily and solely by
the petitioner in accordance with its by-laws, and may
exercise those powers generally accorded to private
corporations, such as the powers to hold property, to sue
and be sued, to use a common seal, and so forth. It may
adopt by-laws for its internal operations: the petitioner
shall be managed or operated by its officers “in
accordance with its by-laws in force.”
Third. The employees of the petitioner are registered
and covered by the SSS at the latter’s initiative, and not
through the GSIS, which should be the case if the
employees are considered government employees. This is
another indication of petitioner’s nature as a private
entity.
Fourth. The respondents contend that the petitioner
is a “body politic” because its primary purpose is to
secure the protection and welfare of animals which, in
turn, redounds to the public good. This argument, is not
tenable. The fact that a certain juridical entity is
impressed with public interest does not, by that
circumstance alone, make the entity a public corporation,
inasmuch as a corporation may be private although its
charter contains provisions of a public character,
incorporated solely for the public good. This class of
corporations may be considered quasi-public
corporations, which are private corporations that render
public service, supply public wants, or pursue other
eleemosynary objectives. While purposely organized for
the gain or benefit of its members, they are required by
law to discharge functions for the public benefit.
Examples of these corporations are utility, railroad,
warehouse, telegraph, telephone, water supply
corporations and transportation companies. It must be
stressed that a quasi-public corporation is a species of
private corporations, but the qualifying factor is the type
of service the former renders to the public: if it performs a
public service, then it becomes a quasi-public corporation.
Authorities are of the view that the purpose alone of the
corporation cannot be taken as a safe guide, for the fact is
that almost all corporations are nowadays created to
promote the interest, good, or convenience of the public.
A bank, for example, is a private corporation; yet, it is
created for a public benefit. Private schools and
universities are likewise private corporations; and yet,
they are rendering public service. Private hospitals and
wards are charged with heavy social responsibilities.
More so with all common carriers. On the other hand,
there may exist a public corporation even if it is endowed
with gifts or donations from private individuals.
The true criterion, therefore, to determine whether a
corporation is public or private is found in the totality of
the relation of the corporation to the State. If the
corporation is created by the State as the latter’s own
agency or instrumentality to help it in carrying out its
governmental functions, then that corporation is
considered public; otherwise, it is private. Applying the
above test, provinces, chartered cities, and barangays can
best exemplify public corporations. They are created by
the State as its own device and agency for the
accomplishment of parts of its own public works.
Fifth. The respondents argue that since the charter
of the petitioner requires the latter to render periodic
reports to the Civil Governor, whose functions have been
inherited by the President, the petitioner is, therefore, a
government instrumentality.
 This contention is inconclusive. By virtue of the
fiction that all corporations owe their very existence and
powers to the State, the reportorial requirement is
applicable to all corporations of whatever nature,
whether they are public, quasi-public, or private
corporations—as creatures of the State, there is a
reserved right in the legislature to investigate the
activities of a corporation to determine whether it acted
within its powers. In other words, the reportorial
requirement is the principal means by which the State
may see to it that its creature acted according to the
powers and functions conferred upon it.
The Province of North Cotabato v. the Gov. of the RP
Peace Panel
G.R. No. 183591, October 14, 2008
The MOA-AD is a result of various agreements entered
into by and between the government and the MILF
starting in 1996; then in 1997, they signed the
Agreement on General Cessation of Hostilities; and the
following year, they signed the General Framework of
Agreement of Intent on August 27, 1998. However, in
1999 and in the early of 2000, the MILF attacked a
number of municipalities in Central Mindanao. In
March 2000, they took the hall of Kauswagan, Lanao
del Norte; hence, then Pres. Estrada declared an all-out
war-which tolled the peace negotiation. It was when
then Pres. Arroyo assumed office, when the negotiation
regarding peace in Mindanao continued. MILF was
hesitant; however, this negotiation proceeded when the
government of Malaysia interceded. Formal peace talks
resumed and MILF suspended all its military actions.
The Tripoli Agreement in 2001 lead to the ceasefire
between the parties. After the death of MILF Chairman
Hashim and Iqbal took over his position, the crafting of
MOA-AD in its final form was born.
 MOA-AD Overview
This is an agreement to be signed by the GRP and the
MILF. Used as reference in the birth of this MOA-AD
are the Tripoli Agreement, organic act of ARMM, IPRA
Law, international laws such as ILO Convention 169,
the UN Charter etc., and the principle of Islam i.e
compact right entrenchment (law of compact, treaty and
order). The body is divided into concepts and principles,
territory, resources, and governance.
Embodied in concepts and principles, is the definition
of Bangsamoro as all indigenous peoples of Mindanao
and its adjacent islands. These people have the right to
self- governance of their Bangsamoro homeland to
which they have exclusive ownership by virtue of their
prior rights of occupation in the land. The MOA-AD
goes on to describe the Bangsamoro people as "the
‘First Nation' with defined territory and with a system
of government having entered into treaties of amity and
commerce with foreign nations." It then mentions for the
first time the "Bangsamoro Juridical Entity" (BJE) to
which it grants the authority and jurisdiction over the
Ancestral Domain and Ancestral Lands of the
Bangsamoro.
As defined in the territory of the MOA-AD, the BJE shall
embrace the Mindanao-Sulu-Palawan geographic region,
involving the present ARMM, parts of which are those
which voted in the inclusion to ARMM in a plebiscite.
The territory is divided into two categories, “A” which
will be subject to plebiscite not later than 12 mos. after
the signing and “B” which will be subject to plebiscite 25
years from the signing of another separate agreement.
Embodied in the MOA-AD that the BJE shall have
jurisdiction over the internal waters-15kms from the
coastline of the BJE territory; they shall also have
"territorial waters," which shall stretch beyond the BJE
internal waters up to the baselines of the Republic of the
Philippines (RP) south east and south west of mainland
Mindanao; and that within these territorial waters, the
BJE and the government shall exercise joint jurisdiction,
authority and management over all natural resources.
There will also be sharing of minerals in the territorial
waters; but no provision on the internal waters.
Included in the resources is the stipulation that the BJE is
free to enter into any economic cooperation and trade
relations with foreign countries and shall have the option
to establish trade missions in those countries, as well as
environmental cooperation agreements, but not to include
aggression in the GRP. The external defense of the BJE is
to remain the duty and obligation of the government. The
BJE shall have participation in international meetings and
events" like those of the ASEAN and the specialized
agencies of the UN. They are to be entitled to participate
in Philippine official missions and delegations for the
negotiation of border agreements or protocols for
environmental protection and equitable sharing of
incomes and revenues involving the bodies of water
adjacent to or between the islands forming part of the
ancestral domain. The BJE shall also have the right to
explore its resources and that the sharing between the
Central Government and the BJE of total production
pertaining to natural resources is to be 75:25 in favor of
the BJE. And they shall have the right to cancel or modify
concessions and TLAs.
And lastly in the governance, the MOA-AD claims that
the relationship between the GRP and MILF is associative
i.e. characterized by shared authority and responsibility.
This structure of governance shall be further discussed in
the Comprehensive Compact, a stipulation which was
highly contested before the court. The BJE shall also be
given the right to build, develop and maintain its own
institutions, the details of which shall be discussed in the
comprehensive compact as well.
Issue:
When the Executive Department pronounced to abandon
the MOA, is the issue of its constitutionality merely
moot and academic and therefore no longer justiciable
by the Court?
Held:
Yes. Since the MOA has not been signed, its provisions
will not at all come into effect. The MOA will forever
remain a draft that has never been finalized. It is now
nothing more than a piece of paper, with no legal force
or binding effect. It cannot be the source of, nor be
capable of violating, any right. The instant Petitions,
therefore, and all other oppositions to the MOA, have
no more leg to stand on. They no longer present an
actual case or a justiciable controversy for resolution by
this Court.
An actual case or controversy exists when there is a
conflict of legal rights or an assertion of opposite legal
claims, which can be resolved on the basis of existing
law and jurisprudence. A justiciable controversy is
distinguished from a hypothetical or abstract difference
or dispute, in that the former involves a definite and
concrete dispute touching on the legal relations of
parties having adverse legal interests. A justiciable
controversy admits of specific relief through a decree
that is conclusive in character, whereas an opinion only
advises what the law would be upon a hypothetical state
of facts.
The Court should not feel constrained to rule on the
Petitions at bar just because of the great public interest
these cases have generated. We are, after all, a court of
law, and not of public opinion. The power of judicial
review of this Court is for settling real and existent
dispute, it is not for allaying fears or addressing public
clamor. In acting on supposed abuses by other branches
of government, the Court must be careful that it is not
committing abuse itself by ignoring the fundamental
principles of constitutional law.
Gov. Villafuerte and Camsur v. Robredo
G.R. No. 195390 December 10, 2014
FACTS:
In 1995, the Commission on Audit (COA) conducted an
examination and audit on the manner the local
government units (LGUs) utilized their Internal
Revenue Allotment (IRA) for the calendar years 1993-
1994. The examination yielded an official report,
showing that a substantial portion of the 20%
development fund of some LGUs was not actually
utilized for development projects but was diverted to
expenses properly chargeable against the Maintenance
and Other Operating Expenses (MOOE), in stark
violation of Section 287 of R.A. No. 7160, otherwise
known as the Local Government Code of 1991 (LGC).
Thus, on December 14, 1995, the DILG issued MC No.
95-216,5 enumerating the policies and guidelines on the
utilization of the development fund component of the
IRA. It likewise carried a reminder to LGUs of the strict
mandate to ensure that public funds, like the 20%
development fund, “shall be spent judiciously and only
for the very purpose or purposes for which such funds are
intended.”6
On September 20, 2005, then DILG Secretary Angelo T.
Reyes and Department of Budget and Management
Secretary Romulo L. Neri issued Joint MC No. 1, series
of 2005,7 pertaining to the guidelines on the appropriation
and utilization of the 20% of the IRA for development
projects, which aims to enhance accountability of the
LGUs in undertaking development projects. The said
memorandum circular underscored that the 20% of the
IRA intended for development projects should be utilized
for social development, economic development and
environmental management.8
On August 31, 2010, the respondent, in his capacity as
DILG Secretary, issued the assailed MC No. 2010-
83,9 entitled “Full Disclosure of Local Budget and
Finances, and Bids and Public Offerings,” which aims to
promote good governance through enhanced transparency
and accountability of LGUs.
On February 21, 2011, Villafuerte, then Governor of
Camarines Sur, joined by the Provincial Government of
Camarines Sur, filed the instant petition for certiorari,
seeking to nullify the assailed issuances of the respondent
for being unconstitutional and having been issued with
grave abuse of discretion.
On June 2, 2011, the respondent filed his Comment on the
petition.16 Then, on June 22, 2011, the petitioners filed
their Reply (With Urgent Prayer for the Issuance of a Writ
of Preliminary Injunction and/or Temporary Restraining
Order).17 In the Resolution18 dated October 11, 2011, the
Court gave due course to the petition and directed the
parties to file their respective memorandum. In
compliance therewith, the respondent and the petitioners
filed their Memorandum on January 19, 201219 and on
February 8, 201220 respectively.
ISSUE: Whether or not the assailed memorandum
circulars violate the principles of local and fiscal
autonomy enshrined in the Constitution and the LGC.
HELD:
The assailed memorandum circulars
do not transgress the local and fiscal
autonomy granted to LGUs.
The petitioners argue that the assailed issuances of the
respondent interfere with the local and fiscal autonomy of
LGUs embodied in the Constitution and the LGC. In
particular, they claim that MC No. 2010-138 transgressed
these constitutionally-protected liberties when it restricted
the meaning of “development” and enumerated activities
which the local government must finance from the 20%
development fund component of the IRA and provided
sanctions for local authorities who shall use the said
component of the fund for the excluded purposes stated
therein.33 They argue that the respondent cannot
substitute his own discretion with that of the local
legislative council in enacting its annual budget and
specifying the development projects that the 20%
component of its IRA should fund.34

The argument fails to persuade.

The Constitution has expressly adopted the policy of

ensuring the autonomy of LGUs. 35 To highlight its
significance, the entire Article X of the Constitution was
devoted to laying down the bedrock upon which this
policy is anchored.

It is also pursuant to the mandate of the Constitution of

enhancing local autonomy that the LGC was enacted.
Section 2 thereof was a reiteration of the state policy.