Case no. 8
Veteran any person who rendered military
Veterans Federation of the Philippines (VFP) v. Reyes
Petition for Certiorari
Prayer to declare as VOID Department Circular no. 04 of the
DEPARTMENT OF NATIONAL DEFENSE (DND), dated
June 10, 2002
VFP (petitioner)
- A corporate body organized under RA 2640 (June 18,
1960)
Angelo T. Reyes (respondent)
- Secretary of National Defense, who issues the
ASSAILED CN. 04
Edgardo Batenga
- Undersecretary, who was tasked by the respondent to
conduct an EXTENSIVE MANAGEMENT AUDIT
of the records of VFP.
Emmanuel De Ocampo
- Petitioners incumbent president
a. REYES wrote to DE OCAMPO informing the
corporation that they (DND) came across some legal
bases which tended to show that there is an
organizational and management RELATIONSHIP
between VFP and PH Veterans Bank.
a. (letter) VFP is under the control and
supervision of the Secretary of ND. [Sec 1,
RA 2640]
b. (letter) VFP shall make and transmit to the
President of PH or to the SEC of ND a
REPORT of its proceedings, including a
FULL & COMPLETE report of receipts and
expenditures of whatever kind. [Sec 12, RA
2640]
b. DND Secretary (petitioner) issues the ASSAILED
Department CIRCULAR no. 4 entitled Further
Implementing the Provisions of Sections 1 & 12 of
RA 2640
a. CIRCULAR NO. 4: Rules shall apply to the
management and operations of VFP.
b. CIRCULAR NO. 4: Definition of terms,
relationship between DND and VFP, the
preservation of the records of all business
transactions, VFP should submit ANNUAL
& PERIODIC reports, and there are attached
penal provisions of the law upon
noncompliance.
c. Supervision and control - authority to act
directly whenever a specific function is
entrusted by law or regulation to a
subordinate (approve, reverse or modify acts
and decisions
d. Power of control power to alter, modify
or nullify or set aside what a subordinate
officer had done in the performance of his
duties
e. Supervision power to see to it that their
subordinate officers perform their duties
f.
service in the land, see or air forces of the
PH during wars or military campaigns OR
who rendered military service in the AFP
AND has been honorably discharged or
separated after AT LEAST 6 years total
cumulative active service or sooner
separated due to death or disability arising
from a wound or injury received or disease
incurred in line of duty while in the active
service.
c. Secretary general of VFP sent a latter to respondent
DND Secretary COMPLAINING about the alleged
BROADNESS of the scope of the MANAGEMENT
AUDIT and requesting the SUSPENSION thereof
until such time that specific areas of the audit shall
have been agreed upon.
d. Undersecretary DENIED the letter (reason: there is a
timeframe)
e. Petitioner filed this petition for Certiorari with
Prohibition
a. TRO: implementing DND DEP CN. 4 and
the ongoing management audit of
petitioners books of account.
b. DC No. 4 be declared null and void for
being ultra vires
c. Convert TRO into a permanent one
VFPs CLAIM THAT IT IS A PRIVATE NON-
GOVERNMENT CORPORATION.
- VFP claims that DND Circular no. 4 is an INVALID
exercise of respondent Secretarys control and
supervision.
- BECAUSE: It is not a public nor a governmental
entity but a PRIVATE ORGANIZATION.
Central ISSUE: WON VFP is a private corporation.
Supreme Court: We are constrained to rule that VFP is in
fact a PUBLIC CORPORATION.
BECAUSE:
a. RA 2640 An act to create a PUBLIC
CORPORATION
b. Any act or decisions of the FEDERATION shall be
subject to the approval of Sec. of Defense
c. VFP required to SUBMIT annual reports
d. VFP was listed as among the GOCC that will NOT
be privatized
e. VFP is an adjunct of the government (Ang bagong
bayani-OFW labor party v. COMELEC)
VFP Supreme Court
- Constitution - There is no challenge in the
EXPLICITYLY prohibit creation of VFP in the petition as
the regulation by special to permit this Court from
laws of private considering tis nullity.
corporations (except
GOCC)
1. VFP does not possess 1. Public office an individual is
the elements which would invested with some portion of the
qualify it as a public office SOVEREIGN FUCNTIONS of
1
 the govt, to be exercised by him
for the benefit of the public.
SOVEREIGN FUNCTION the
protection of the interest of war
veterans is not only meant to
promote social justice, but is also
intended to REWARD patriotism.
o Add nothing to the law and does not affect
substantial rights
- An office is not rendered inutile by the fact that it is
placed under the control of a higher office
- Circular is perfectly in consonance with RA 2640.
- Petition DISMISSED.
- Validity AFFIRMED.

Functions of VFP are executive

functions. (Provide immediate
and adequate care, benefits and
other forms of assistance to war
veterans and their surviving
spouses and orphans.)
2. VFP funds are not 2. No budgetary appropriations
public funds does not prove that it is a private
a. No budgetary corporation.
appropriations
from DBM DBMs mistake will not prevent
b. VFP funds future budgetary appropriations to
come from the VFP.
membership
dies Erroneous application of the law
c. Lease rentals by public officers does not bar a
raised are subsequent coorect application of
private in the law.
character
VFP funds are used for public
purposes.
3. Juridical personality of 3. Membership of the VFP is not
the VFP emanates from a individual membership of the
statutory character. It is a affiliate organizations, but
private, civilian federation MERELY the aggregation of the
of VETERANS heads of such affiliate
voluntarily formed by organizations.
veterans themselves
4. ADMIN Code of 1987 4. ADMIN Code is not exclusive
does not provide VFP as
an attached agency
5. DBM declared that VFP 5. DBM opinion suffers from lack
is a non-government of explanation and justification in
organization and issues a the certification of non-receipt
certificate where said opinion was given.
DBM did not furnish explanation
for its opinion.

- Petitioner is a public corporation

- Assailed circular did not supplant nor modify the
provision of RA 2640
- Secretary of National Defense REQUIRE
submission of reports, documents and other papers
regarding any or all of the federations business
functions
- Even assuming that the assailed circular was not
published VALIDITY is not affected
o Falls under two of the exceptions
o Circular is an INTERNAL REGULATION