BCDA v.

COA

FACTS: On 13 March 1992, Congress approved Republic Act (RA) No. 7227 [3] creating the Bases
Conversion and Development Authority (BCDA). Section 9 of RA No. 7227 states that the BCDA
Board of Directors (Board) shall exercise the powers and functions of the BCDA. Under Section 10,
the functions of the Board include the determination of the organizational structure and the adoption
of a compensation and benefit scheme at least equivalent to that of the Bangko Sentral ng Pilipinas
(BSP). Accordingly, the Board determined the organizational structure of the BCDA and adopted a
compensation and benefit scheme for its officials and employees.

In 1999, the BSP gave a P30,000 year-end benefit to its officials and employees. In 2000, the BSP
increased the year-end benefit from P30,000 to P35,000. Pursuant to Section 10 of RA No. 7227
which states that the compensation and benefit scheme of the BCDA shall be at least equivalent to
that of the BSP, the Board increased the year-end benefit of BCDA officials and employees
from P10,000 to P30,000. Thus in 2000 and 2001, BCDA officials and employees received a P30,000
year-end benefit, and, on 1 October 2002, the Board passed Resolution No. 2002-10-193[6] approving
the release of a P30,000 year-end benefit for 2002.

Aside from the contractual employees, regular permanent employees, and Board members, the full-
time consultants of the BCDA also received the year-end benefit.

On 20 February 2003, State Auditor IV Corazon V. Espao of the COA issued Audit Observation
Memorandum (AOM) No. 2003-004[7] stating that the grant of year-end benefit to Board members was
contrary to Department of Budget and Management (DBM) Circular Letter No. 2002-2 dated 2
January 2002. In Notice of Disallowance (ND) No. 03-001-BCDA-(02)[8] dated 8 January 2004,
Director IV Rogelio D. Tablang (Director Tablang), COA, Legal and Adjudication Office-Corporate,
disallowed the grant of year-end benefit to the Board members and full-time consultants.

COA affirmed the disallowance of the year-end benefit granted to the Board members and full-time
consultants and held that the presumption of good faith did not apply to them.
Clearly, as stated above, the members and ex-officio members of the Board of Directors are not
entitled to YEB, they being not salaried officials of the government. The same goes with full
time consultants wherein no employer-employee relationships exist between them and the BCDA.

ISSUE: W//N the Board members and full-time consultants of the BCDA are entitled to the year-end
benefit – NO

RULING: Board members and full-time consultants of the BCDA are not entitled to the year-end
benefit.

BCDA claims that the Board members and full-time consultants should be granted the year-end
benefit because the granting of year-end benefit is consistent with Sections 5 and 18, Article II of the
Constitution. Sections 5 and 18 state:

Section 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 by
all people of the blessings of democracy.

Section 18. The State affirms labor as a primary social economic force. It shall protect
the rights of workers and promote their welfare.
Article II of the Constitution is entitled Declaration of Principles and State Policies. By its very title,
Article II is a statement of general ideological principles and policies. It is not a source of enforceable
rights.

In Tondo Medical Center Employees Association v. Court of Appeals, the Court held that Sections 5
and 18, Article II of the Constitution are not self-executing provisions. In that case, the Court
held that Some of the constitutional provisions invoked in the present case were taken from Article II
of the Constitution specifically, Sections 5 x x x and 18 the provisions of which the Court categorically
ruled to be non self-executing.

OCAMPO V. ENRIQUEZ

FACTS: During the campaign period for the 2016 Presidential Election, then candidate Rodrigo R.
Duterte (Duterte) publicly announced that he would allow the burial of former President Ferdinand E.
Marcos (Marcos) at the Libingan Ng Mga Bayani (LNMB). He won the May 9, 2016 election, garnering
16,601,997 votes. At noon of June 30, 2016, he formally assumed his office at the Rizal Hall in the
Malaca�an Palace.

On August 7, 2016, public respondent Secretary of National Defense Delfin N. Lorenzana issued a
Memorandum to the public respondent Chief of Staff of the Armed Forces of the Philippines (AFP),
General Ricardo R. Visaya, regarding the interment of Marcos at the LNMB.

Petitioners argue that the burial of Marcos at the LNMB should not be allowed because it has the
effect of not just rewriting history as to the Filipino people's act of revolting against an authoritarian
ruler but also condoning the abuses committed during the Martial Law, thereby violating the letter and
spirit of the 1987 Constitution, which is a "post-dictatorship charter" and a "human rights constitution."
For them, the ratification of the Constitution serves as a clear condemnation of Marcos' alleged
"heroism." To support their case, petitioners invoke Sections 2,47 11,48 13,49 23,50 26,51 2752 and
2853 of Article II, Sec. 17 of Art. VII,54 Sec. 3(2) of Art. XIV,55 Sec. 1 of Art. XI,56 and Sec. 26 of Art.
XVIII57 of the Constitution.

ISSUE: Whether the Issuance and implementation of the assailed memorandum and directive violate
the Constitution, domestic and international laws – NO (PUCHA!)

RULING: The Court agrees with the OSG that President Duterte's decision to have the remains of
Marcos interred at the LNMB involves a political question that is not a justiciable controversy. In the
exercise of his powers under the Constitution and the Executive Order (E.O.) No. 292 (otherwise
known as the Administrative Code of 1987) to allow the interment of Marcos at the LNMB, which is a
land of the public domain devoted for national military cemetery and military shrine purposes,
President Duterte decided a question of policy based on his wisdom that it shall promote national
healing and forgiveness. There being no taint of grave abuse in the exercise of such discretion, as
discussed below, President Duterte's decision on that political question is outside the ambit of judicial
review.

Ta�ada v. Angara58 already ruled that the provisions in Article II of the Constitution are not self-
executing. Thus:ChanRoblesVirtualawlibrary
By its very title, Article II of the Constitution is a "declaration of principles and state policies." The
counterpart of this article in the 1935 Constitution is called the "basic political creed of the nation" by
Dean Vicente Sinco. These principles in Article II are not intended to be self� executing principles
ready for enforcement through the courts. They are used by the judiciary as aids or as guides in the
exercise of its power of judicial review, and by the legislature in its enactment of laws. As held in the
leading case of Kilosbayan, Incorporated vs. Morato, the principles and state policies enumerated in
Article II x x x are not "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."

In the same light, we held in Basco vs. Pagcor that broad constitutional principles need legislative
enactments to implement them xxx “The reasons for denying a cause of action to an alleged
infringement of broad constitutional principles are sourced from basic considerations of due process
and the lack of judicial authority to wade "into the uncharted ocean of social and economic policy
making."

ACCFA v. CUGCO | G.R. No. L-21484

FACTS: The Agricultural Credit and Cooperative Financing Administration (ACCFA) was a
government agency created under Republic Act No. 821, as amended. Its administrative machinery
was reorganized and its name changed to Agricultural Credit Administration (ACA) under the Land
Reform Code (Republic Act No. 3844). On the other hand, the ACCFA Supervisors' Association
(ASA) and the ACCFA Workers' Association (AWA), hereinafter referred to as the Unions, are labor
organizations composed of the supervisors and the rank-and-file employees, respectively, in the
ACCFA (now ACA).

On September 4, 1961 a collective bargaining agreement, which was to be effective for a period of
one (1) year from July 1, 1961, was entered into by and between the Unions and the ACCFA. A few
months thereafter, the Unions started protesting against alleged violations and non-implementation of
said agreement. Finally, on October 25, 1962 the Unions declared a strike, which was ended when
the strikers voluntarily returned to work on November 26, 1962. On October 30, 1962 the Unions,
together with its mother union, the Confederation of Unions in Government Corporations and Offices
(CUGCO), filed a complaint with the Court of Industrial Relations against the ACCFA (Case No. 3450-
ULP) for having allegedly committed acts of unfair labor practice, namely: violation of the collective
bargaining agreement in order to discourage the members of the Unions in the exercise of their right
to self-organization, discrimination against said members in the matter of promotions, and refusal to
bargain.

Finding the remaining grounds for ACA's opposition to the petition to be without merit, 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." Said order was
affirmed by the CIR en banc in its resolution dated August 24, 1964.

On October 2, 1964 the ACA filed in this Court a petition for certiorari with urgent motion to stay the
CIR order of May 21, 1964. In a resolution dated October 6, 1964, this Court dismissed the petition for
"lack of adequate allegations," but the dismissal was later reconsidered when the ACA complied with
the formal requirement stated in said resolution. As prayed for, this Court ordered the CIR to stay the
execution of its order of May 21, 1964.

In this appeal, the ACA in effect challenges the jurisdiction of the CIR to entertain the petition of the
Unions for certification election on the ground that it (ACA) is engaged in governmental functions. The
Unions join the issue on this single point, contending that the ACA forms proprietary functions.

ISSUE: W/N ACCFA is a government agency? CIR has jurisdiction? – YES ; NONE
RULING: Under Section 3 of the Agricultural Land Reform Code the ACA was established, among
other governmental agencies,1 to extend credit and similar assistance to agriculture.

The implementation of the policy thus enunciated, insofar as the role of the ACA therein is concerned,
is spelled out in Sections 110 to 118, inclusive, of the Land Reform Code. Section 110 provides that
"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." Under Section 112 the sum of P150,000,000 was appropriated out of national funds
to finance the additional credit functions of the ACA as a result of the land reform program laid down
in the Code. Section 103 grants the ACA the privilege of rediscounting with the Central Bank, the
Development Bank of the Philippines and the Philippine National Bank. Section 105 directs the
loaning activities of the ACA "to stimulate the development of farmers' cooperatives," including those
"relating to the production and marketing of agricultural products and those formed to manage and/or
own, on a cooperative basis, services and facilities, such as irrigation and transport systems,
established to support production and/or marketing of agricultural products." Section 106 deals with
the extension by ACA of credit to small farmers in order to stimulate agricultural production. Sections
107 to 112 lay down certain guidelines to be followed in connection with the granting of loans, such as
security, interest and supervision of credit. Sections 113 to 118, inclusive, invest the ACA with certain
rights and powers not accorded to non-governmental entities.

On March 19, 1964 Executive Order No. 75 was promulgated. It is entitled: "Rendering in Full Force
and Effect the Plan of Reorganization Proposed by the Special Committee on Reorganization of
Agencies for Land Reform for the Administrative Machinery of the Agricultural Land Reform Code,"

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 Project Administration together with the
other member agencies, the personnel complement of all of which are placed in one single pool and
made available for assignment from one agency to another, subject only to Civil Service laws, rules
and regulations, position classification and wage structures.

The appointing authority in respect of the officials and employees of the ACA is the President of the
Philippines.

The considerations set forth above militate 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. The ACA is
a government office or agency engaged in governmental, not proprietary functions. These functions
may not be strictly what President Wilson described as "constituent" (as distinguished from
"ministrant"),4 such as those relating to the maintenance of peace and the prevention of crime, those
regulating property and property rights, those relating to the administration of justice and the
determination of political duties of citizens, and those relating to national defense and foreign
relations. Under this traditional classification, such constituent functions are exercised by the State as
attributes of sovereignty, and not merely to promote the welfare, progress and prosperity of the
people — these letter functions being ministrant he exercise of which is optional on the part of the
government.

The growing complexities of modern society, however, have rendered this traditional
classification of the functions of government quite unrealistic, not to say obsolete. The areas
which used to be left to private enterprise and initiative and which the government was called
upon to enter optionally, and only "because it was better equipped to administer for the public
welfare than is any private individual or group of individuals," 5 continue to lose their well-
defined boundaries and to be absorbed within activities that the government must undertake
in its sovereign capacity if it is to meet the increasing social challenges of the times. Here as
almost everywhere else the tendency is undoubtedly towards a greater socialization of
economic forces. Here of course this development was envisioned, indeed adopted as a
national policy, by the Constitution itself in its declaration of principle concerning the
promotion of social justice.

It was in furtherance of such policy that the Land Reform Code was enacted and the various
agencies, the ACA among them, established to carry out its purposes. 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, no less than, say, the
establishment and maintenance of public schools and public hospitals. And when, aside from the
governmental objectives of the ACA, geared as they are to the implementation of the land reform
program of the State, 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 of doubt as to the governmental character of its functions disappears.

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, including
the right to strike as a coercive economic weapon, as in fact the said unions did strike in 1962 against
the ACCFA (G.R. No. L-21824).6 This is contrary to Section 11 of Republic Act No. 875, which
provides:

SEC. 11. Prohibition Against Strike in the Government — 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.

JAVIER v. SANDIGAN

On June 7, 1995, Republic Act (R.A.) No. 8047,[5] or otherwise known as the Book Publishing Industry
Development Act, was enacted into law. Foremost in its policy is the State's goal in promoting the
continuing development of the book publishing industry, through the active participation of the private
sector, to ensure an adequate supply of affordable, quality-produced books for the domestic and
export market.

To achieve this purpose, the law provided for the creation of the National Book Development Board
(NBDB or the Governing Board, for brevity), which shall be under the administration and supervision
of the Office of the President.

On February 26, 1996, petitioner was appointed to the Governing Board as a private sector
representative for a term of one (1) year.[6] During that time, she was also the President of the Book
Suppliers Association of the Philippines (BSAP). She was on a hold-over capacity in the following
year. On September 14, 1998, she was again appointed to the same position and for the same period
of one (1) year.[7] Part of her functions as a member of the Governing Board is to attend book fairs to
establish linkages with international book publishing bodies. On September 29, 1997, she was issued
by the Office of the President a travel authority to attend the Madrid International Book Fair
in Spain on October 8-12, 1997.[8] Based on her itinerary of travel,[9] she was paid P139,199.00[10] as
her travelling expenses.
Unfortunately, petitioner was not able to attend the scheduled international book fair.

On February 16, 1998, Resident Auditor Rosario T. Martin advised petitioner to immediately
return/refund her cash advance considering that her trip was canceled. [11] Petitioner, however, failed
to do so. On July 6, 1998, she was issued a Summary of Disallowances [12] from which the balance for
settlement amounted to P220,349.00. Despite said notice, no action was forthcoming from the
petitioner.

On September 23, 1999, Dr. Nellie R. Apolonio, then the Executive Director of the NBDB, filed with
the Ombudsman a complaint against petitioner for malversation of public funds and properties. She
averred that despite the cancellation of the foreign trip, petitioner failed to liquidate or return to the
NBDB her cash advance within sixty (60) days from date of arrival, or in this case from the date of
cancellation of the trip, in accordance with government accounting and auditing rules and
regulations. Dr. Apolonio further charged petitioner with violation of Republic Act (R.A.) No.
6713[13] for failure to file her Statement of Assets and Liabilities.

On October 10, 2000, petitioner filed a Motion to Quash Information,[23] averring that the
Sandiganbayan has no jurisdiction to hear Criminal Case No. 25867 as the information did not allege
that she is a public official who is classified as Grade 27 or higher. Neither did the information charge
her as a co-principal, accomplice or accessory to a public officer committing an offense under the
Sandiganbayan's jurisdiction. She also averred that she is not a public officer or employee and that
she belongs to the Governing Board only as a private sector representative under R.A. No. 8047,
hence, she may not be charged under R.A. No. 3019 before the Sandiganbayan or under any statute
which covers public officials. Moreover, she claimed that she does not perform public functions and is
without any administrative or political power to speak of that she is serving the private book publishing
industry by advancing their interest as participant in the government's book development policy.

Petitioner hinges the present petition on the ground that the Sandiganbayan has committed grave
abuse of discretion amounting to lack of jurisdiction for not quashing the two informations charging
her with violation of the Anti-Graft Law and the Revised Penal Code on malversation of public
funds. She advanced the following arguments in support of her petition, to wit: first, she is not a public
officer, and second, she was being charged under two (2) informations, which is in violation of her
right against double jeopardy.

To substantiate her claim, petitioner maintained that she is not a public officer and only a private
sector representative, stressing that her only function among the eleven (11) basic purposes and
objectives provided for in Section 4, R.A. No. 8047, is to obtain priority status for the book
publishing industry. At the time of her appointment to the NDBD Board, she was the President of
the BSAP, a book publishers association. As such, she could not be held liable for the crimes imputed
against her, and in turn, she is outside the jurisdiction of the Sandiganbayan.

ISSUE: W/N Petitioner is a public officer – YES

HELD: The NBDB is the government agency mandated to develop and support the Philippine book
publishing industry. It is a statutory government agency created by R.A. No. 8047, which was enacted
into law to ensure the full development of the book publishing industry as well as for the creation of
organization structures to implement the said policy. To achieve this end, the Governing Board of the
NBDB was created to supervise the implementation.

A perusal of the above powers and functions leads us to conclude that they partake of the nature of
public functions. A public office is the 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. The individual so invested is
a public officer.

Notwithstanding that petitioner came from the private sector to sit as a member of the NBDB, the law
invested her with some portion of the sovereign functions of the government, so that the purpose of
the government is achieved. In this case, the government aimed to enhance the book publishing
industry as it has a significant role in the national development. Hence, the fact that she was
appointed from the public sector and not from the other branches or agencies of the government does
not take her position outside the meaning of a public office. She was appointed to the Governing
Board in order to see to it that the purposes for which the law was enacted are achieved. The
Governing Board acts collectively and carries out its mandate as one body. The purpose of the law for
appointing members from the private sector is to ensure that they are also properly represented in the
implementation of government objectives to cultivate the book publishing industry.

In fine, We hold that petitioner is a public officer. The next question for the Court to resolve is whether,
as a public officer, petitioner is within the jurisdiction of the Sandiganbayan.

MIAA v. CA

FACTS: Petitioner Manila International Airport Authority (MIAA) operates the Ninoy Aquino
International Airport (NAIA) Complex in Parañaque City under Executive Order No. 903, otherwise
known as the Revised Charter of the Manila International Airport Authority ("MIAA Charter"). On 21
March 1997, the Office of the Government Corporate Counsel (OGCC) issued Opinion No. 061. The
OGCC opined that the Local Government Code of 1991 withdrew the exemption from real estate tax
granted to MIAA under Section 21 of the MIAA Charter. Thus, MIAA negotiated with respondent City
of Parañaque to pay the real estate tax imposed by the City. MIAA then paid some of the real estate
tax already due.

On 17 July 2001, the City of Parañaque, through its City Treasurer, issued notices of levy and
warrants of levy on the Airport Lands and Buildings. 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 thus sought a clarification of OGCC Opinion No. 061.

On 9 August 2001, the OGCC issued Opinion No. 147 clarifying OGCC Opinion No. 061. The OGCC
pointed out that Section 206 of the Local Government Code requires persons exempt from real estate
tax to show proof of exemption. The OGCC opined that Section 21 of the MIAA Charter is the proof
that MIAA is exempt from real estate tax.

Meanwhile, in January 2003, the City of Parañaque posted notices of auction sale at the Barangay
Halls of Barangays Vitalez, Sto. Niño, and Tambo, Parañaque City; in the public market of Barangay
La Huerta; and in the main lobby of the Parañaque City Hall. The City of Parañaque published the
notices in the 3 and 10 January 2003 issues of the Philippine Daily Inquirer, a newspaper of general
circulation in the Philippines. The notices announced the public auction sale of the Airport Lands and
Buildings to the highest bidder on 7 February 2003, 10:00 a.m., at the Legislative Session Hall
Building of Parañaque City.

A day before the public auction, or on 6 February 2003, at 5:10 p.m., MIAA filed before this Court an
Urgent Ex-Parte and Reiteratory Motion for the Issuance of a Temporary Restraining Order. The
motion sought to restrain respondents — the City of Parañaque, City Mayor of
Parañaque, Sangguniang Panglungsod ng Parañaque, City Treasurer of Parañaque, and the City
Assessor of Parañaque ("respondents") — from auctioning the Airport Lands and Buildings.

MIAA also points out that Section 21 of the MIAA Charter specifically exempts MIAA from the
payment of real estate tax. MIAA insists that it is also exempt from real estate tax under Section 234
of the Local Government Code because the Airport Lands and Buildings are owned by the
Republic. To justify the exemption, MIAA invokes the principle that the government cannot tax
itself. MIAA points out that the reason for tax exemption of public property is that its taxation would not
inure to any public advantage, since in such a case the tax debtor is also the tax creditor.

Respondents invoke Section 193 of the Local Government Code, which expressly withdrew the tax
exemption privileges of government-owned and-controlled corporations upon the effectivity of the
Local Government Code. Respondents also argue that a basic rule of statutory construction is that the
express mention of one person, thing, or act excludes all others. An international airport is not among
the exceptions mentioned in Section 193 of the Local Government Code. Thus, respondents assert
that MIAA cannot claim that the Airport Lands and Buildings are exempt from real estate tax.

ISSUE: W/N the Airport Lands and Buildings of MIAA are exempt from real estate tax under existing
laws. – EXEMPT!

RULING: MIAAs Airport Lands and Buildings are exempt from real estate tax imposed by local
governments.

MIAA is Not a Government-Owned or Controlled Corporation – There is no dispute that a

government-owned or controlled corporation is not exempt from real estate tax. However, MIAA
is not a government-owned or controlled corporation. Section 2(13) of the Introductory Provisions of
the Administrative Code of 1987 defines a government-owned or controlled corporation as follows:

SEC. 2. General Terms Defined. x x x x

(13) Government-owned or controlled corporation refers to any

agency organized as a stock or non-stock corporation, vested with functions
relating to public needs whether governmental or proprietary in nature, and owned by
the Government directly or through its instrumentalities either wholly, or, where
applicable as in the case of stock corporations, to the extent of at least fifty-one (51)
percent of its capital stock: x x x.

A government-owned or controlled corporation must be organized as a stock or non-stock

corporation. MIAA is not organized as a stock or non-stock corporation. MIAA is not a stock
corporation because it has no capital stock divided into shares. MIAA has no stockholders or
voting shares.

Clearly, under its Charter, MIAA does not have capital stock that is divided into shares.
 Section 3 of the Corporation Code[10] defines a stock corporation as one whose capital
stock is divided into shares and x x x authorized to distribute to the holders of such shares
dividends x x x. MIAA has capital but it is not divided into shares of stock. MIAA has no
stockholders or voting shares. Hence, MIAA is not a stock corporation.

MIAA is also not a non-stock corporation because it has no members. Section 87 of the Corporation
Code defines a non-stock corporation as one where no part of its income is distributable as dividends
to its members, trustees or officers. A non-stock corporation must have members. Even if we assume
that the Government is considered as the sole member of MIAA, this will not make MIAA a non-stock
corporation. Non-stock corporations cannot distribute any part of their income to their
members. Section 11 of the MIAA Charter mandates MIAA to remit 20% of its annual gross operating
income to the National Treasury.[11] This prevents MIAA from qualifying as a non-stock corporation.

MIAA is a government instrumentality vested with corporate powers to perform efficiently its
governmental functions. MIAA is like any other government instrumentality, the only difference is that
MIAA is vested with corporate powers. Section 2(10) of the Introductory Provisions of the
Administrative Code defines a government instrumentality as follows:

SEC. 2. General Terms Defined. x x x x

(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. x x x

When the law vests in a government instrumentality corporate powers, the instrumentality does not
become a corporation. Unless the government instrumentality is organized as a stock or non-stock
corporation, it remains a government instrumentality exercising not only governmental but also
corporate powers. Thus, MIAA exercises the governmental powers of eminent domain., police
authority and the levying of fees and charges. At the same time, MIAA exercises all the powers of a
corporation under the Corporation Law, insofar as these powers are not inconsistent with the
provisions of this Executive Order.

Likewise, when the law makes a government instrumentality operationally autonomous, the
instrumentality remains part of the National Government machinery although not integrated with the
department framework. The MIAA Charter expressly states that transforming MIAA into a separate
and autonomous body will make its operation more financially viable.

Many government instrumentalities are vested with corporate powers but they do not become stock or
non-stock corporations, which is a necessary condition before an agency or instrumentality is deemed
a government-owned or controlled corporation. Examples are the Mactan International Airport
Authority, the Philippine Ports Authority, the University of
the Philippines and Bangko Sentral ng Pilipinas. All these government instrumentalities exercise
corporate powers but they are not organized as stock or non-stock corporations as required by
Section 2(13) of the Introductory Provisions of the Administrative Code. These government
instrumentalities are sometimes loosely called government corporate entities. However, they are not
government-owned or controlled corporations in the strict sense as understood under the
Administrative Code, which is the governing law defining the legal relationship and status of
government entities.
 A government instrumentality like MIAA falls under Section 133(o) of the Local Government
Code, which states:

SEC. 133. Common Limitations on the Taxing Powers of Local Government

Units. 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:

xxxx

(o) Taxes, fees or charges of any kind on the National Government, its agencies
and instrumentalities and local government units.

The MIAA Charter expressly provides that the Airport Lands and Buildings shall not be disposed
through sale or through any other mode unless specifically approved by the President of
the Philippines. This only means that the Republic retained the beneficial ownership of
the Airport Lands and Buildings because under Article 428 of the Civil Code, only the owner has the
right to x x x dispose of a thing. Since MIAA cannot dispose of the Airport Lands and Buildings, MIAA
does not own the Airport Lands and Buildings.

Section 234(a) of the Local Government Code exempts from real estate tax any [r]eal property owned
by the Republic of the Philippines. Section 234(a)provides:

SEC. 234. Exemptions from Real Property Tax. The following are
exempted from payment of the real property tax:

(a) Real property owned by the Republic of the Philippines or any of its
political subdivisions except when the beneficial use thereof has been granted,
for consideration or otherwise, to a taxable person;

FUNA v. MECO (G.R. No. 193462)

FACTS: The Philippines formally ended its official diplomatic relations with the government in Taiwan
on 9 June 1975, when the country and the PROC expressed mutual recognition thru the Joint
Communiqué of the Government of the Republic of the Philippines and the Government of the
People’s Republic of China (Joint Communiqué).8

Under the Joint Communiqué, the Philippines categorically stated its adherence to the One China
policy of the PROC. The pertinent portion of the Joint Communiqué reads: 9

The Philippine Government recognizes the Government of the People’s Republic of China as the sole
legal government of China, fully understands and respects the position of the Chinese Government
that there is but one China and that Taiwan is an integral part of Chinese territory, and decides to
remove all its official representations from Taiwan within one month from the date of signature of this
communiqué.

The Philippines’ commitment to the One China policy of the PROC, however, did not preclude the
country from keeping unofficial relations with Taiwan on a "people-to-people" basis.10 Maintaining ties
with Taiwan that is permissible by the terms of the Joint Communiqué, however, necessarily required
the Philippines, and Taiwan, to course any such relations thru offices outside of the official or
governmental organs.

Hence, despite ending their diplomatic ties, the people of Taiwan and of the Philippines maintained an
unofficial relationship facilitated by the offices of the Taipei Economic and Cultural Office, for the
former, and the MECO, for the latter.

The MECO12 was organized on 16 December 1997 as a non-stock, non-profit corporation under
Batas Pambansa Blg. 68 or the Corporation Code. From the moment it was incorporated, the MECO
became the corporate entity "entrusted" by the Philippine government with the responsibility of
fostering "friendly" and "unofficial" relations with the people of Taiwan, particularly in the areas of
trade, economic cooperation, investment, cultural, scientific and educational exchanges. 15To enable it
to carry out such responsibility, the MECO was "authorized" by the government to perform certain
"consular and other functions" that relates to the promotion, protection and facilitation of Philippine
interests in Taiwan.16

At present, it is the MECO that oversees the rights and interests of Overseas Filipino Workers (OFWs)
in Taiwan; promotes the Philippines as a tourist and investment destination for the Taiwanese; and
facilitates the travel of Filipinos and Taiwanese from Taiwan to the Philippines, and vice versa.

On 23 August 2010, petitioner sent a letter18 to the COA requesting for a "copy of the latest financial
and audit report" of the MECO invoking, for that purpose, his "constitutional right to information on
matters of public concern." The petitioner made the request on the belief that the MECO, being
under the "operational supervision" of the Department of Trade and Industry (DTI), is a government
owned and controlled corporation (GOCC) and thus subject to the audit jurisdiction of the COA.

Taking the 25 August 2010 memorandum as an admission that the COA had never audited and
examined the accounts of the MECO, the petitioner filed the instant petition for mandamus on 8
September 2010. Petitioner filed the suit in his capacities as "taxpayer, concerned citizen, a member
of the Philippine Bar and law book author."22 He impleaded both the COA and the MECO.

Petitioner posits that by failing to audit the accounts of the MECO, the COA is neglecting its duty
under Section 2(1), Article IX-D of the Constitution to audit the accounts of an otherwise bona fide
GOCC or government instrumentality. It is the adamant claim of the petitioner that the MECO is a
GOCC without an original charter or, at least, a government instrumentality, the funds of which
partake the nature of public funds.

ISSUE: W/N MECO is a GOCC subject to the jurisdiction of COA – NO. We grant the petition in part.
We declare that the MECO is a non-governmental entity. However, under existing laws, the accounts
of the MECO pertaining to the "verification fees" it collects on behalf of the DOLE as well as the fees it
was authorized to collect under Section 2(6) of EO No. 15, s. 2001, are subject to the audit jurisdiction
of the COA. Such fees pertain to the government and should be audited by the COA.

RULING: Under Section 2(1) of Article IX-D of the Constitution,77 the COA was vested with the
"power, authority and duty" to "examine, audit and settle" the "accounts" of the following entities:

1. The government, or any of its subdivisions, agencies and instrumentalities;

2. GOCCs with original charters;

3. GOCCs without original charters;

 4. Constitutional bodies, commissions and offices that have been granted fiscal autonomy
under the Constitution; and

5. Non-governmental entities receiving subsidy or equity, directly or indirectly, from or through

the government, which are required by law or the granting institution to submit to the COA for
audit as a condition of subsidy or equity.

In addition to the foregoing, the Administrative Code also empowers the COA to examine and audit
"the books, records and accounts" of public utilities "in connection with the fixing of rates of every
nature, or in relation to the proceedings of the proper regulatory agencies, for purposes of determining
franchise tax."

We take exception to petitioner’s characterization of the MECO as a GOCC or government

instrumentality. The MECO is not a GOCC or government instrumentality.

Government instrumentalities are agencies of the national government that, by reason of some
"special function or jurisdiction" they perform or exercise, are allotted "operational autonomy" and are
"not integrated within the department framework."88 Subsumed under the rubric "government
instrumentality" are the following entities:89

1. regulatory agencies,

2. chartered institutions,

3. government corporate entities or government instrumentalities with corporate powers

(GCE/GICP),90 and

4. GOCCs

The Administrative Code defines a GOCC:91

(13) Government-owned or controlled corporation refers to any agency organized as a stock or non-
stock corporation, vested with functions relating to public needs whether governmental or proprietary
in nature, and owned by the Government directly or through its instrumentalities either wholly, or,
where applicable as in the case of stock corporations, to the extent of at least fifty-one (51) per cent of
its capital stock

GOCCs, therefore, are "stock or non-stock" corporations "vested with functions relating to public
needs" that are "owned by the Government directly or through its instrumentalities." By definition,
three attributes thus make an entity a GOCC: first, its organization as stock or non-stock
corporation; second, the public character of its function; and third, government ownership over
the same.

Possession of all three attributes is necessary to deem an entity a GOCC.

In this case, there is not much dispute that the MECO possesses the first and second attributes. It is
the third attribute, which the MECO lacks.

The MECO Is Organized as a Non-Stock Corporation. The MECO Performs Functions with a Public
Aspect. Evidently, the functions vested in the MECO are impressed with a public aspect.
The MECO Is Not Owned or Controlled by the Government Organization as a non-stock corporation
and the mere performance of functions with a public aspect, however, are not by themselves sufficient
to consider the MECO as a GOCC. In order to qualify as a GOCC, a corporation must also, if not
more importantly, be owned by the government.

The fact of the incorporation of the MECO under the Corporation Code is key. The MECO was correct
in postulating that, as a corporation organized under the Corporation Code, it is governed by the
appropriate provisions of the said code, its articles of incorporation and its by-laws. In this case, it is
the by-laws109 of the MECO that stipulates that its directors are elected by its members; its officers
are elected by its directors; and its members, other than the original incorporators, are admitted by
way of a unanimous board resolution.

The categorical exclusion of the MECO from a GOCC makes it easier to exclude the same from any
other class of government instrumentality. The other government instrumentalities i.e., the regulatory
agencies, chartered institutions and GCE/GICP are all, by explicit or implicit definition, creatures of
the law.110 The MECO cannot be any other instrumentality because it was, as mentioned earlier,
merely incorporated under the Corporation Code.

It is evident, from the peculiar circumstances surrounding its incorporation, that the MECO was not
intended to operate as any other ordinary corporation. And it is not. Despite its private origins, and
perhaps deliberately so, the MECO was "entrusted"111 by the government with the "delicate and
precarious"112 responsibility of pursuing "unofficial"113 relations with the people of a foreign land whose
government the Philippines is bound not to recognize. The intricacy involved in such undertaking is
the possibility that, at any given time in fulfilling the purposes for which it was incorporated, the MECO
may find itself engaged in dealings or activities that can directly contradict the Philippines’
commitment to the One China policy of the PROC. Such a scenario can only truly be avoided if the
executive department exercises some form of oversight, no matter how limited, over the operations of
this otherwise private entity.

Indeed, from hindsight, it is clear that the MECO is uniquely situated as compared with other private
corporations. From its over-reaching corporate objectives, its special duty and authority to exercise
certain consular functions, up to the oversight by the executive department over its operations—all the
while maintaining its legal status as a non-governmental entity—the MECO is, for all intents and
purposes, sui generis.

The MECO is not a GOCC or government instrumentality. It is a sui generis private entity
especially entrusted by the government with the facilitation of unofficial relations with the people
in Taiwan without jeopardizing the country’s faithful commitment to the One China policy of the
PROC. However, despite its non-governmental character, the MECO handles government funds
in the form of the "verification fees" it collects on behalf of the DOLE and the "consular fees" it
collects under Section 2(6) of EO No. 15, s. 2001. Hence, under existing laws, the accounts of
the MECO pertaining to its collection of such "verification fees" and "consular fees" should be
audited by the COA.

PHILIPPINE SOCIETY FOR THE PREVENTION OF CRUELTY TO ANIMALS v. COA

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
Securities and Exchange Commission. Important to note is that the nature of the petitioner as a
corporate entity is distinguished from the sociedad anonimas under the Spanish Code of
Commerce.

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 one-half (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 Commonwealth
Act (C.A.) No. 148.

Immediately thereafter, then President Manuel L. Quezon issued Executive Order (E.O.) No. 63
dated November 12, 1936, portions of which provide:

Whereas, during the first regular session of the National Assembly, Commonwealth Act
Numbered One Hundred Forty Eight was enacted depriving the agents of the Society for the
Prevention of Cruelty to Animals of their power to arrest persons who have violated the laws
prohibiting cruelty to animals thereby correcting a serious defect in one of the laws existing in our
statute books.

On December 1, 2003, an audit team from respondent Commission on Audit (COA) visited the
office of the petitioner to conduct an audit survey pursuant to COA Office Order No. 2003-051
dated November 18, 2003 addressed to the petitioner. The petitioner demurred on the ground
that it was a private entity not under the jurisdiction of COA, citing Section 2(1) of Article IX of the
Constitution which specifies the general jurisdiction of the COA.

Petitioner argues: first, even though it was created by special legislation in 1905 as there was no
general law then existing under which it may be organized or incorporated, it exercises no
governmental functions because these have been revoked by C.A. No. 148 and E.O. No. 63;
second, nowhere in its charter is it indicated that it is a public corporation, unlike, for instance,
C.A. No. 111 which created the Boy Scouts of the Philippines, defined its powers and purposes,
and specifically stated that it was An Act to Create a Public Corporation in which, even as
amended by Presidential Decree No. 460, the law still adverted to the Boy Scouts of the
Philippines as a public corporation, all of which are not obtaining in the charter of the petitioner;
third, if it were a government body, there would have been no need for the State to grant it tax
exemptions under Republic Act No. 1178, and the fact that it was so exempted strengthens its
position that it is a private institution; fourth, the employees of the petitioner are registered and
covered by the Social Security System at the latters initiative and not through the Government
Service Insurance System, which should have been the case had the employees been
considered government employees; fifth, the petitioner does not receive any form of financial
assistance from the government, since C.A. No. 148, amending Section 5 of Act No. 1285, states
that the full amount of the fines, collected for violation of the laws against cruelty to animals and
for the protection of animals, shall accrue to the general fund of the Municipality where the
offense was committed; sixth, C.A. No. 148 effectively deprived the petitioner of its powers to
make arrests and serve processes as these functions were placed in the hands of the police
force; seventh, no government appointee or representative sits on the board of trustees of the
petitioner; eighth, a reading of the provisions of its charter (Act No. 1285) fails to show that any
act or decision of the petitioner is subject to the approval of or control by any government
agency, except to the extent that it is governed by the law on private corporations in general; and
finally, ninth, the Committee on Animal Welfare, under the Animal Welfare Act of 1998, includes
members from both the private and the public sectors.

ISSUE: W/N the petitioner qualifies as a government agency that may be subject to audit by
respondent COA. – No!

HELD: Essentially, the charter test as it stands today provides:

[T]he 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 Civil
Service Commission, and are compulsory members of the Government Service Insurance
System. Xxx

And since the underpinnings of 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.[16] 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.[17]

There are a few exceptions. Statutes can be given retroactive effect in the following cases: (1)
when the law itself so expressly provides; (2) in case of remedial statutes; (3) in case of
curative statutes; (4) in case of laws interpreting others; and (5) in case of laws creating
new rights. None of the exceptions is present in the instant case.

The general principle of prospectivity of the law likewise applies to Act No. 1459, otherwise
known as the Corporation Law, which had been enacted by virtue of the plenary powers of the
Philippine Commission on March 1, 1906, a little over a year after January 19, 1905, the time the
petitioner emerged as a juridical entity.

In a legal regime where the charter test doctrine cannot be applied, the mere fact that a
corporation has been created by virtue of a special law does not necessarily qualify it as a public
corporation.

The textual foundation of the charter test, which placed a limitation on the power of the
legislature, first appeared in the 1935 Constitution. However, the petitioner was incorporated in
1905 by virtue of Act No. 1258, a law antedating the Corporation Law (Act No. 1459) by a year,
and the 1935 Constitution, by thirty years. There being neither a general law on the formation
and organization of private corporations nor a restriction on the legislature to create private
corporations by direct legislation, the Philippine Commission at that moment in history was well
within its powers in 1905 to constitute the petitioner as a private juridical entity.

The amendments introduced by C.A. No. 148 made it clear that the petitioner was a private
corporation and not an agency of the government. This was evident in Executive Order No. 63,
issued by then President of the Philippines Manuel L. Quezon, declaring that the revocation of
the powers of the petitioner to appoint agents with powers of arrest corrected a serious defect in
one of the laws existing in the statute books.

A reading of petitioners charter shows that it is not subject to control or supervision by any
agency of the State, unlike government-owned and -controlled corporations. 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.

The employees of the petitioner are registered and covered by the Social Security System at the
latters initiative, and not through the Government Service Insurance System, which should be the
case if the employees are considered government employees. This is another indication of
petitioners nature as a private entity.

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.

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 latters 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.

SERENA v. SANDIGAN

FACTS: Petitioner Hannah Eunice D. Serena was a senior student of the University of the
Philippines-Cebu. A student of a state university is known as a government scholar. She was
appointed by then President Joseph Estrada on December 21, 1999 as a student regent of UP,
to serve a one-year term starting January 1, 2000 and ending on December 31, 2000.

In the early part of 2000, petitioner discussed with President Estrada the renovation of Vinzons
Hall Annex in UP Diliman.2 On September 4, 2000, petitioner, with her siblings and relatives,
registered with the Securities and Exchange Commission the Office of the Student Regent
Foundation, Inc. (OSRFI).3

One of the projects of the OSRFI was the renovation of the Vinzons Hall Annex.4 President
Estrada gave Fifteen Million Pesos (P15,000,000.00) to the OSRFI as financial assistance for the
proposed renovation. The source of the funds, according to the information, was the Office of the
President.

The renovation of Vinzons Hall Annex failed to materialize.5 The succeeding student regent,
Kristine Clare Bugayong, and Christine Jill De Guzman, Secretary General of the KASAMA sa
U.P., a system-wide alliance of student councils within the state university, consequently filed a
complaint for Malversation of Public Funds and Property with the Office of the Ombudsman.

n July 3, 2003, the Ombudsman, after due investigation, found probable cause to indict petitioner
and her brother Jade Ian D. Serana for estafa, docketed as Criminal Case No. 27819 of the
Sandiganbayan. Petitioner moved to quash the information. She claimed that the Sandiganbayan
does not have any jurisdiction over the offense charged or over her person, in her capacity as UP
student regent.

Petitioner claimed that Republic Act (R.A.) No. 3019, as amended by R.A. No. 8249, enumerates
the crimes or offenses over which the Sandiganbayan has jurisdiction.8 It has no jurisdiction over
the crime of estafa.9 It only has jurisdiction over crimes covered by Title VII, Chapter II, Section 2
(Crimes Committed by Public Officers), Book II of the Revised Penal Code (RPC). Estafa falling
under Title X, Chapter VI (Crimes Against Property), Book II of the RPC is not within the
Sandiganbayan’s jurisdiction.

Petitioner likewise posited that the Sandiganbayan had no jurisdiction over her person. As a
student regent, she was not a public officer since she merely represented her peers, in contrast
to the other regents who held their positions in an ex officio capacity. She addsed that she was a
simple student and did not receive any salary as a student regent.

According to the Ombudsman, petitioner, despite her protestations, iwas a public officer. As a
member of the BOR, she hads the general powers of administration and exerciseds the
corporate powers of UP. Based on Mechem’s definition of a public office, petitioner’s stance that
she was not compensated, hence, not a public officer, is erroneous. Compensation is not an
essential part of public office. Parenthetically, compensation has been interpreted to include
allowances. By this definition, petitioner was compensated.

ISSUE: W/N Petitioner is a public officer who may be prosecuted for estafa before the
Sandiganbayan – YES, Petitioner UP student regent is a public officer.

RULING: Petitioner claims that she is not a public officer with Salary Grade 27; she is, in fact, a
regular tuition fee-paying student. This is likewise bereft of merit. It is not only the salary grade
that determines the jurisdiction of the Sandiganbayan. The Sandiganbayan also has jurisdiction
over other officers enumerated in P.D. No. 1606. In Geduspan v. People,43 We held that while
the first part of Section 4(A) covers only officials with Salary Grade 27 and higher, its second part
specifically includes other executive officials whose positions may not be of Salary Grade 27 and
higher but who are by express provision of law placed under the jurisdiction of the said court.
Petitioner falls under the jurisdiction of the Sandiganbayan as she is placed there by express
provision of law.44

Section 4(A)(1)(g) of P.D. No. 1606 explictly vested the Sandiganbayan with jurisdiction over
Presidents, directors or trustees, or managers of government-owned or controlled corporations,
state universities or educational institutions or foundations. Petitioner falls under this category. As
the Sandiganbayan pointed out, the BOR performs functions similar to those of a board of
trustees of a non-stock corporation.45 By express mandate of law, petitioner is, indeed, a public
officer as contemplated by P.D. No. 1606.

Moreover, it is well established that compensation is not an essential element of public

office.46 At most, it is merely incidental to the public office.47

Delegation of sovereign functions is essential in the public office. An investment in an individual

of some portion of the sovereign functions of the government, to be exercised by him for the
benefit of the public makes one a public officer.48

The administration of the UP is a sovereign function in line with Article XIV of the Constitution.
UP performs a legitimate governmental function by providing advanced instruction in literature,
philosophy, the sciences, and arts, and giving professional and technical training. Moreover, UP
is maintained by the Government and it declares no dividends and is not a corporation created
for profit.

CO KIM CHAM v VALDEZ TAN KEH

FACTS: This petition for mandamus in which petitioner prays that the respondent judge of the
lower court be ordered to continue the proceedings in civil case No. 3012 of said court, which
were initiated under the regime of the so-called Republic of the Philippines established during the
Japanese military occupation of these Islands.

The respondent judge refused to take cognizance of and continue the proceedings in said case
on the ground that the proclamation issued on October 23, 1944, by General Douglas MacArthur
had the effect of invalidating and nullifying all judicial proceedings and judgements of the court of
the Philippines under the Philippine Executive Commission and the Republic of the Philippines
established during the Japanese military occupation, and that, furthermore, the lower courts have
no jurisdiction to take cognizance of and continue judicial proceedings pending in the courts of
the defunct Republic of the Philippines in the absence of an enabling law granting such authority.
And the same respondent, in his answer and memorandum filed in this Court, contends that the
government established in the Philippines during the Japanese occupation were no de facto
governments.

On February 3, 1945, the City of Manila was partially liberated and on February 27, 1945,
General MacArthur, on behalf of the Government of the United States, solemnly declared "the full
powers and responsibilities under the Constitution restored to the Commonwealth whose seat is
here established as provided by law."
In the light of these facts and events of contemporary history, the principal questions to be
resolved in the present case may be reduced to the following:(1) Whether the judicial acts and
proceedings of the court existing in the Philippines under the Philippine Executive Commission
and the Republic of the Philippines were good and valid and remained so even after the
liberation or reoccupation of the Philippines by the United States and Filipino forces; (2)Whether
the proclamation issued on October 23, 1944, by General Douglas MacArthur, Commander in
Chief of the United States Army, in which he declared "that all laws, regulations and processes of
any of the government in the Philippines than that of the said Commonwealth are null and void
and without legal effect in areas of the Philippines free of enemy occupation and control," has
invalidated all judgements and judicial acts and proceedings of the said courts; and (3) If the said
judicial acts and proceedings have not been invalidated by said proclamation, whether the
present courts of the Commonwealth, which were the same court existing prior to, and continued
during, the Japanese military occupation of the Philippines, may continue those proceedings
pending in said courts at the time the Philippines were reoccupied and liberated by the United
States and Filipino forces, and the Commonwealth of the Philippines were reestablished in the
Islands.

ISSUE: W/N the proceedings during the Japanese period still apply or continue after the
occupation – YES

HELD: The governments by the Philippine Executive Commission and the Republic of the
Philippines during the Japanese military occupation being de facto governments, it necessarily
follows that the judicial acts and proceedings of the courts of justice of those governments, which
are not of a political complexion, were good and valid, and, by virtue of the well-known principle
of postliminy (postliminium) in international law, remained good and valid after the liberation or
reoccupation of the Philippines by the American and Filipino forces under the leadership of
General Douglas MacArthur. According to that well-known principle in international law, the fact
that a territory which has been occupied by an enemy comes again into the power of its
legitimate government of sovereignty, "does not, except in a very few cases, wipe out the effects
of acts done by an invader, which for one reason or another it is within his competence to do.
Thus judicial acts done under his control, when they are not of a political complexion,
administrative acts so done, to the extent that they take effect during the continuance of his
control, and the various acts done during the same time by private persons under the sanction of
municipal law, remain good. Were it otherwise, the whole social life of a community would be
paralyzed by an invasion; and as between the state and the individuals the evil would be scarcely
less, — it would be hard for example that payment of taxes made under duress should be
ignored, and it would be contrary to the general interest that the sentences passed upon
criminals should be annulled by the disappearance of the intrusive government ."