Salvador Laurel v. Ombudsman Aniano Desierto 1.
WoN the jurisdiction of the Ombudsman is limited to cases
April 12, 2002 | Kapunan
Group 2 - Marmeto
FACTS
● 1991: Pres. Corazon Aquino issued EO 223 creating a committee to
prepare for the National Centennial Celebration in 1998
● Subsequently, Pres. Ramos issued EO 128 renaming the committee
National Centennial Commission (NCC) and appointing VP Salvador
Laurel as chair
o The NCC is an ad hoc body that will terminate upon completion of
activities relating to the Centennial celebration of Philippine
Independence and Malolos Congress
● VP Laurel and others incorporated a corporation named Philippine
Centennial Expo 98 Corp (Expocorp). VP Laurel became CEO.
● 1998: Sen. Nikki Coseteng, in a privilege speech, bared allegations on
the construction and operation of the Centennial Exposition Project in
Clark.
● The Senate Blue Ribbon Committee recommended the prosecution by
the Ombudsman of VP Laurel for violating rules on public bidding by
awarding centennial projects and issuing Notice to Proceed to Asia
Construction and Development Corp to construct the Freedom Ring (a
project of ExpoCorp) even without a valid contract.
● A committee formed by Pres. Estrada and headed by Sen. Saguisag
also recommended investigations by the Ombudsman on VP Laurel’s
violations of RA 6713 (Code of Conduct of Public Officials), RA 3019
(Anti-Graft and Corrupt Practices Act) and Art. 217 of the RPC
● When the Ombudsman denied VP Laurel’s motions to dismiss, he filed
the current petition for certiorari with the SC. He argued that he is not
a public officer (and thus outside the jurisdiction of the Ombudsman)
because:
o Expocorp was a private corporation and not a GOCC
o The NCC was not a public office
o As Chair of the NCC and CEO of ExpoCorp, VP Laurel was not a
public officer.
ISSUES
cognizable by the Sandiganbayan (i.e. public officers of Grade 27
or higher) → NO
● Petitioner argued that pursuant to Uy v. Sandiganbayan, the
Ombudsman has no jurisdiction over him because the Sandiganbayan
has no jurisdiction over him
● Upon clarification by the Ombudsman, the Court set aside its
pronouncement in Uy. The court explained that: “The power to
investigate and to prosecute granted by law to the Ombudsman is
plenary and unqualified. It pertains to any act or omission of any
public officer or employee when such act or omission appears to be
illegal, unjust, improper or inefficient. The law does not make a
distinction between cases cognizable by the Sandiganbayan and those
cognizable by regular courts.”
o The law that created the Ombudsman (RA 6770) merely gave it
the primary jurisdiction over cases heard by the Sandiganbayan
but did not limit its power over only said cases.
o It is the Office of the Special Prosecutor (OSP) that is limited only
to cases to be filed with the Sandiganbayan. The OSP is only a
component of the Office of the Ombudsman.
2. WoN petitioner, as NCC Chair was a public officer → YES
● The definition of public officer as used in jurisprudence can be found
in Mechem (A Treatise on the law of Public Offices and Officers):
o Public Office = right, authority and duty, created and conferred by
law, by which, for a given period, either fixed by law or enduring
at the pleasure of the creating power, an individual is invested
with some portion of the sovereign functions of the government,
to be exercised by him for the benefit of the public
o Characteristics of public office = delegation of sovereign functions
(most important characteristic), its creation by law and not by
contract, an oath, salary, continuance of the position, scope of
duties, and the designation of the position as an office
● Laurel argued that the ff are not present in the position of NCC Chair:
(1) the delegation of sovereign functions; (2) salary, since he
 purportedly did not receive any compensation; and (3) continuance, of Expocorp must be viewed in the light of his powers and functions as
the tenure of the NCC being temporary. NCC Chair.
● The Court held that the NCC performs executive functions because: ● The definition of public officers in RA 3019 (where it defined a public
o The Constitution (Art. XIV) granted the power of the state to officer as one receiving compensation) does not apply for purposes of
conserve, promote, and popularize the nations historical and determining the Ombudsman’s jurisdiction, as defined by the
cultural heritage. The NCC was tasked to implement programs and Constitution and the Ombudsman Act of 1989.
projects on the utilization of culture, arts, literature and media as
vehicles for history, economic endeavors, and reinvigorating the
RULING
spirit of national unity and sense of accomplishment in every
Filipino in the context of the Centennial Celebrations. Petition dismissed
o The President created the NCC by an EO. When the President
promulgates EOs, he/she is providing for rules of a general or
permanent character in implementation or execution of
The Veterans Federation of the Philippines vs Hon. Angelo T. Reyes
constitutional or statutory powers
Feb 28, 2006
o The NCC has a role in the country’s econ development, esp.
Chico – Nazario J.
Central Luzon. The Expo was placed in Clark Field to help the
region recover from the eruption of Mt. Pinatubo by generating
Provision
employment in the area
RPC 203. Who are public officers. — For the purpose of applying the
● Petitioner argued that the centennial celebration was like a fiesta,
provisions of this and the preceding titles of this book, any person who, by
which involved a proprietary rather than a government function. The
direct provision of the law, popular election or appointment by competent
court held that the centennial celebration could not be likened to a
authority, shall take part in the performance of public functions in the
town fiesta because of its impact on the entire nation. Hence, the NCC
Government of the Philippine Islands, of shall perform in said Government
performed sovereign functions, and hence was a public office, making
or in any of its branches public duties as an employee, agent or
Laurel a public officer.
subordinate official, of any rank or class, shall be deemed to be a public
● Even though Laurel did not receive compensation as NCC Chair, he
officer.
was still a public officer because of the honorary nature of the
position. It was merely for the public good and was not for profit.
Summary
● Even though the NCC was just an ad hoc body, the element of
This case revolves around the constitutionality of DND Department Circular
continuance was not an indispensable characteristic of a public office.
No. 4 which implemented the power of supervision of DND over the
● In the US, the office of the Commissioner of the United States
management and operation of VFP, mainly on the ground that it is a
Centennial Commission was held to be an office of trust
private corporation and cannot therefore be regulated by special laws. The
● Even assuming that Expocorp is a private corporation, Laurel’s position
Court held that it is a public corporation for the following reasons: (1) RA
as Chief Executive Officer (CEO) of Expocorp arose from his
2640 is entitled “An Act to Create a Public Corporation to be Known as the
Chairmanship of the NCC. Consequently, his acts or omissions as CEO
Veterans Federation of the Philippines, Defining its Powers, and for Other
Purposes”, (2) its actions or decisions are subject to the approval of the
DND Secretary, (3) it is required to submit annual reports of its
proceedings for the past year, (4) EO 37 listed VFP as among the GOCCs
that will not be privatized, and (5) Veterans Federation Party is an adjunct
of the government as it is merely an incarnation of the Veterans
Federation of the Philippines, as held in Ang Bagong Bayani OFW Labor
Party v COMELEC.
Detailed Facts
 Veterans Federation of the Philippines (VFP) is a corporate body
organized under RA 2640, dated June 18, 1960, as amended, and
duly registered with SEC.
 Hon. Angelo Reyes was the Secretary of National Defense (DND
Secretary) who issued the Department Circular No. 4 on June 10,
2002.
 Hon. Edgardo Batenga was the DND Undersecretary for Civil
Relations and Administration who was tasked by DND Sec. Reyes
to conduct and extensive management audit of the records of
VFP.
 On April 15, 2002, the VFP’s incumbent president received a
letter from Reyes to clarify and rectify the organizational and
management relationship between VFP and the Philippine
Veterans Bank (PVB). RA 2640 states that VFP is under the control
and supervision of the DND Secretary and that it shall submit an
annual report to the President or the DND Secretary. RA 3518,
which created the PVB, stated that PVB shsall be directed and its
property managed, controlled and preserved by a Board of
Directors, 3 ex-officio members of which are the Philippine
Veterans Administrator, the VFP President, and the DND
Secretary.
 On June 10, 2002, Sec. Reyes issued the DND Department Circular
No. 4 entitled, Further Implementing the Provisions of Sections 1
and 2 of RA 2640. (This basically enumerated the rules that VFP
should follow in its operation since it is being supervised by the
DND.)
 On August 23, 2002, USec Batenga sent a letter to VFP President
informing him that Department Order No. 129 directed the
conduct of a Manaagement Audit of VFP. Then on August 28,
2002, another letter was sent informing VFP President that the
Management Audit Group headed by USec Batenga will visit VFP
for an update on its different affiliates and financial statement.
 The SecGen of VFP sent an undated letter to DND Sec. Reyes
complaining about the alleged broadness of the scope of the
management audit and requesting suspension thereof. This
request was denied by the USec. on the ground that a specific
timeframe had been set fr the activity.
 Therefore, VFP filed this petition for certiorari with prohibition to
SC. It prayed to issue a TRO and a writ of preliminary prohibitory
and mandatory injunction to enjoin respondents from
implementing DND Department Circular No. 4 and declare it null
an dvoid for being ultra vires.
Ordinarily, cases questioning the constitutionality of administrative
issuances are filed with the lower courts first because of the hierarchy in
the judicial system, except for special and important reasons (which this
case does not have). But SC gave due course to the petition because 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.
Issue
(S) Is the VFP a private corporation? – NO.
Holding
Petitioner claims that it is not a public nor a governmental entity but a
private organization, and advances this claim to prove that the issuance of
DND Department Circular No. 04 (which allegedly expanded the scope of
control and supervision beyond what has been laid down in RA 2640) is an
invalid exercise of DNC Secretary’s control and supervision
 Our constitutions explicitly prohibit the regulation by special laws
of private corporations, with the exception of GOCCs.
Hence, it would be impermissible for the law to grant control of
 the VFP to a public official if it were neither a public corporation,
an unincorporated governmental entity, nor a GOCC.
However, VFP is in fact a public corporation. Proofs: (1) RA 2640 is entitled
“An Act to Create a Public Corporation to be Known as the Veterans
Federation of the Philippines, Defining its Powers, and for Other
Purposes”, (2) its actions or decisions are subject to the approval of the
DND Secretary, (3) it is required to submit annual reports of its
proceedings for the past year, (4) EO 37 listed VFP as among the GOCCs
that will not be privatized, and (5) Veterans Federation Party is an adjunct
of the government as it is merely an incarnation of the Veterans
Federation of the Philippines, as held in Ang Bagong Bayani OFW Labor
Party v COMELEC.
To answer VFP’s reasons for insisting that it is a private corporation: (I
don’t think this is really important for Crim, but putting it here anyway
since this is the bulk of the case)
1. Petitioner claims that 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 most important characteristic which distinguishes an office
from an employment or contract is that the creation and
conferring of an office involves a delegation to the individual of
some of the sovereign functions of government, to be exercised
by him for the benefit of the public; that some portion of the
sovereignty of the country, either legislative, executive or judicial,
attaches, for the time being, to be exercised for the public benefit.
Unless the powers conferred are of this nature, the individual is
not a public officer. In the case of VFP, its functions as enshrined
in RA 2640, Section 4 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. 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
2. Petitioner claims that VFP funds are not public funds.
 Funds in the hands of the VFP from whatever source (e.g.
membership dues of affiliate organizations remitted to VFP) are
public funds, and can be used only for public purposes; its use is
limited to the purposes of the VFP which we have ruled to be
sovereign functions. Likewise, the law governing VFP funds (Rep.
Act No. 2640) recognizes the public character of the funds.
Section 2 even provides that the VFP can only invest its funds for
the exclusive benefit of the Veterans of the Philippines.
 Note: 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.
3. Petitioner argues that it is a civilian federation where membership is
voluntary.
 Irrelevant in this case. 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.
4. Petitioner claims that 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. It also could not have repealed or enormously modified
RA 2640 by implication as such is not favored in statutory
construction.

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.
 DBM’s appraisal indeed has persuasive authority, it being an
expert on determining what the various government agencies and
corporations are. However, its persuasiveness has been overcome
by all the previous explanations laid so far. Furthermore, DND
Department Circular No. 4 is more authoritative since 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
VFP also assail the Department Circular No. 4 on the ground that it
expanded the scope of control and supervision beyond what has been
laid down in RA 2640. It alleges that equating the meaning of “control”
and “supervision” in the Administrative Code of 1987 to that of RA 2640 is
taking out the context of the original legislative intent from the peculiar
surrounding circumstances and conditions that brought about the creation
of VFP.
 The Court has defined the power of control = 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. And the power of
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
 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; direct
the performance of duty; restrain the commission of acts; review,
approve, reverse or modify acts and decisions of subordinate
officials or units; determine priorities in the execution of plans
and programs; and prescribe standards, guidelines, plans and
programs”
 The definition of the power of control and supervision under
Section 2 of the assailed Department Circular are synonymous
with the foregoing definitions. Consequently, and 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, thus not violating the settled
rule that all such (administrative) issuances must not override, but
must remain consistent and in harmony with the law they seek to
apply or implement. Administrative rules and regulations are
intended to carry out, neither to supplant nor to modify, the law.
 The power to alter or modify or nullify or set aside what a
subordinate has done in the performance of his duties, or to see
to it that subordinate officers perform their duties in accordance
with law, necessarily requires the ability of the superior officer
to monitor, as closely as it desires, the acts of the subordinate.
Petitioner also questioned the validity of DND Department Circular No. 4
on the ground that it was never published. Respondents said it was, but
regardless, Tañada v Tuvera has laid down 3 exceptions to the requirement
of publication of laws: (1) those interpretative regulations, (2) those
merely internal in nature, as those regulating only the personnel of the
administrative agency and not the public, and (3) those LOI issued by
administrative superiors concerning the ruled or guidelines to be followed
by their subordinates in the performance of their duties. Department
Circular No. 4 is an internal regulation and interpretative in nature. It is
meant to regulate a public corporation under the control of DND and not
the public in general.
Ruling
Petition is DISMISSED for lack of merit. DND Department Circular No. 4 is
VALID.
 DND Department Circular No. 4 does not supplant nor modify and
is, on the contrary, perfectly in consonance with RA 2640.
VFP is a public corporation, and as such, can be placed under the control
and supervision of the Secretary of National Defense, who can conduct an
extensive management audit of VFP.