J.A.B. Bulao & Associates

CASE 2011-0125: AIRLINE PILOTS ASSOCIATION OF THE PHILIPPINES VS. PHILIPPINE AIRLINES (G.R. NO. 168382, 06 JUNE 2011, DEL CASTILLO, J.) SUBJECT: ILLEGAL STRIKE; NEW MATTERS RAISED CANNOT BE ENTERTAINED WHEN JUDGMENT IS ALREADY FINAL. (BRIEF TITLE: ALPAP VS. PAL).

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DOCTRINE: IT HAS BEEN HELD THAT A PROCEEDING MAY NOT BE REOPENED UPON GROUNDS ALREADY AVAILABLE TO THE PARTIES DURING THE PENDENCY OF SUCH PROCEEDINGS; OTHERWISE, IT MAY GIVE WAY TO VICIOUS AND VEXATIOUS PROCEEDINGS.^[1][44]

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PARTIAL DIGEST:

FACTS AND ISSUE

DOLE SECRETARY DECLARED THE ALPAP OFFICERS AND MEMBERS TO HAVE LOST THEIR EMPLOYMENT STATUS BASED ON EITHER OF TWO GROUNDS, VIZ: THEIR PARTICIPATION IN THE ILLEGAL STRIKE ON JUNE 5, 1998 OR THEIR DEFIANCE OF THE RETURN-TO-WORK ORDER OF THE DOLE SECRETARY.  ALPAP ARGUES THAT SUCH DECISION OF DOLE IS INEQUITABLE BECAUSE SOME OF THEIR MEMBERS WERE ON LEAVE OR WERE ABROAD AT THE TIME OF THE STRIKE. SOME WERE EVEN MERELY BARRED FROM RETURNING TO THEIR WORK WHICH EXCUSED THEM FOR NOT COMPLYING IMMEDIATELY WITH THE RETURN-TO-WORK ORDER. IS THEIR ARGUMENT VALID?

RULING:

THESE ALLEGATIONS WERE RAISED LATE, THAT IS, AFTER THE JUDGMENT (THAT THE RETURNING PILOTS’ TERMINATION WAS LEGAL) BECAME FINAL. THESE DEFENSES WERE NOT RAISED WHEN THE CASE WAS STILL PENDING BEFORE THE DOLE SECRETARY, THE CA OR EVEN BEFORE THIS COURT. IT HAS BEEN HELD THAT A PROCEEDING MAY NOT BE REOPENED UPON GROUNDS ALREADY AVAILABLE TO THE PARTIES DURING THE PENDENCY OF SUCH PROCEEDINGS; OTHERWISE, IT MAY GIVE WAY TO VICIOUS AND VEXATIOUS PROCEEDINGS.^[2][44]  ALPAP WAS GIVEN ALL THE OPPORTUNITIES TO PRESENT ITS EVIDENCE AND ARGUMENTS. IT CANNOT NOW COMPLAIN THAT IT WAS DENIED DUE PROCESS.

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Republic of thePhilippines

Supreme Court

Manila

FIRST DIVISION

x – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – x

D E C I S I O N

DEL CASTILLO, J.:

A judgment that has attained finality is immutable and could thus no longer be modified.

By this Petition for Review on Certiorari,^[3][1] petitioner Airline Pilots Association of the Philippines (ALPAP) assails the Decision^[4][2] dated December 22, 2004 and Resolution^[5][3] dated May 30, 2005 of the Court of Appeals (CA) in CA-G.R. SP No. 79686, which found no grave abuse of discretion on the part of Department of Labor and Employment (DOLE) Secretary Patricia A. Sto. Tomas (Sto. Tomas) and Acting Secretary Manuel G. Imson (Imson) in issuing their respective letters dated July 30, 2003^[6][4] and July 4, 2003,^[7][5] in connection with ALPAP’s motions^[8][6] filed in NCMB NCR NS 12-514-97.

Factual Antecedents

            The present controversy stemmed from a labor dispute between respondent Philippine Airlines, Inc. (PAL) and ALPAP, the legitimate labor organization and exclusive bargaining agent of all commercial pilots of PAL.  Claiming that PAL committed unfair labor practice, ALPAP filed on December 9, 1997, a notice of strike^[9][7] against respondent PAL with the DOLE, docketed as NCMB NCR NS 12-514-97.  Upon PAL’s petition and considering that its continued operation is impressed with public interest, the DOLE Secretary assumed jurisdiction over the labor dispute per Order^[10][8] dated December 23, 1997, the dispositive portion of which reads:

WHEREFORE, this Office hereby assumes jurisdiction over the labor dispute at the Philippine Airlines, Inc. pursuant to Article 263 (g) of the Labor Code, as amended.

                Accordingly, all strikes and lockouts at the Philippine Airlines, Inc., whether actual or impending, are hereby strictly prohibited. The parties are also enjoined from committing any act that may exacerbate the situation.

                The parties are further directed to submit their respective position papers within ten (10) days from receipt of this Order.

                SO ORDERED.^[11][9]

            In a subsequent Order dated May 25, 1998,^[12][10] the DOLE Secretary reiterated the prohibition contained in the December 23, 1997 Order.  Despite such reminder to the parties, however, ALPAP went on strike on June 5, 1998.  This constrained the DOLE, through then Secretary Cresenciano B. Trajano, to issue a return-to-work order^[13][11] on June 7, 1998. However, it was only on June 26, 1998 when ALPAP officers and members reported back to work as shown in a logbook^[14][12] signed by each of them. As a consequence, PAL refused to accept the returning pilots for their failure to comply immediately with the return-to-work order.

            On June 29, 1998, ALPAP filed with the Labor Arbiter a complaint for illegal lockout^[15][13] against PAL, docketed as NLRC NCR Case No. 00-06-05253-98. ALPAP contended that its counsel received a copy of the return-to-work order only on June 25, 1998, which justified their non-compliance therewith until June 26, 1998.  It thus prayed that PAL be ordered to accept unconditionally all officers and members of ALPAP without any loss of pay and seniority and to pay whatever salaries and benefits due them pursuant to existing contracts of employment.

            On PAL’s motion, the Labor Arbiter consolidated the illegal lockout case with NCMB NCR NS 12-514-97 (strike case) pending before the DOLE Secretary since the controversy presented in the lockout case is an offshoot of the labor dispute over which the DOLE Secretary has assumed jurisdiction and because the factual allegations in both cases are interrelated.^[16][14] In a Resolution dated January 18, 1999,^[17][15] the NLRC sustained the consolidation of the illegal lockout case with the strike case, opining that the DOLE Secretary has the authority to resolve all incidents attendant to his return-to-work order.

            Through then DOLE Secretary Bienvenido E. Laguesma, a Resolution^[18][16]  dated June 1, 1999 was rendered in NCMB NCR NS 12-514-97, declaring the strike conducted by ALPAP on June 5, 1998 illegal and pronouncing the loss of employment status of its officers and members who participated in the strike in defiance of the June 7, 1998 return-to-work order. The decretal portion of the Resolution reads:

                WHEREFORE, PREMISES CONSIDERED, this Office hereby:

a.               x  x   x;

b.              DECLARES the strike conducted by ALPAP on June 5, 1998 and thereafter as illegal for being procedurally infirm and in open defiance of the return-to-work order of June 7, 1998 and, consequently, the strikers are deemed to have lost their employment status; and

c.               DISMISSES the complaint for illegal lockout for lack of merit.

SO ORDERED.^[19][17]

            In a Resolution^[20][18] dated July 23, 1999, ALPAP’s motion for reconsideration was denied.  Thus, ALPAP filed a Petition for Certiorari^[21][19] with the CA assailing both the June 1, 1999 and July 23, 1999 DOLE Resolutions. The case was docketed as CA-G.R. SP No. 54880.

            Meanwhile, several ALPAP members filed separate individual complaints for illegal dismissal and non-payment of monetary benefits against PAL with the Labor Arbiters of the NLRC, questioning their termination as a result of the strike staged by other ALPAP members on June 5, 1998.^[22][20]  While these cases were pending, the CA, in CA-G.R. SP No. 54880, affirmed and upheld the June 1, 1999 and July 23, 1999 DOLE Resolutions in its Decision^[23][21] dated August 22, 2001.  ALPAP then sought a review of the CA Decision, thereby elevating the matter to this Court docketed as G.R. No. 152306.  On April 10, 2002, this Court dismissed ALPAP’s petition for failure to show that the CA committed grave abuse of discretion or a reversible error.^[24][22]  This Court’s Resolution attained finality on August 29, 2002.^[25][23]

Proceedings before the DOLE Secretary

            On  January  13,  2003,  ALPAP  filed  before  the   Office   of   the   DOLE  Secretary a Motion^[26][24] in NCMB NCR NS 12-514-97, requesting the said office to conduct an appropriate legal proceeding to determine who among its officers and members should be reinstated or deemed to have lost their employment with PAL for their actual participation in the strike conducted in June 1998.  ALPAP contended that there is a need to conduct a proceeding in order to determine who actually participated in the illegal strike since not only the striking workers were dismissed by PAL but all of ALPAP’s officers and members, even though some were on official leave or abroad at the time of the strike.  It also alleged that there were some who joined the strike and returned to work but were asked to sign new contracts of employment, which abrogated their earned seniority. Also, there were those who initially defied the return-to-work order but immediately complied with the same after proper receipt thereof by ALPAP’s counsel. However, PAL still refused to allow them to enter its premises. According to ALPAP, such measure, as to meet the requirements of due process, is essential because it must be first established that a union officer or member has participated in the strike or has committed illegal acts before they could be dismissed from employment. In other words, a fair determination of who must suffer the consequences of the illegal strike is indispensable since a significant number of ALPAP members did not at all participate in the strike. The motion also made reference to the favorable recommendation rendered by the Freedom of Association Committee of the International Labour Organization (ILO) in ILO Case No. 2195 which requested the Philippine Government “to initiate discussions in order to consider the possible reinstatement in their previous employment of all ALPAP’s workers who were dismissed following the strike staged in June 1998.”^[27][25] A Supplemental Motion^[28][26] was afterwards filed by ALPAP on January 28, 2003, this time asking the DOLE Secretary to resolve all issues relating to the entitlement to employment benefits by the officers and members of ALPAP, whether terminated or not.

            In its Comment^[29][27] to ALPAP’s motions, PAL argued that the motions cannot legally prosper since the DOLE Secretary has no authority to reopen or review a final judgment of the Supreme Court relative to  NCMB NCR NS 12-514-97; that the requested proceeding is no longer necessary as the CA or this Court did not order the remand of the case to the DOLE Secretary for such determination; that the NLRC rather than the DOLE Secretary has jurisdiction over the motions as said motions partake of a complaint for illegal dismissal with monetary claims; and that all money claims are deemed suspended in view of the fact that PAL is under receivership.

            On January 24, 2003, the DOLE called the parties to a hearing to discuss and clarify the issues raised in ALPAP’s motions.^[30][28] In a letter dated July 4, 2003^[31][29] addressed to ALPAP President, Capt. Ismael C. Lapus, Jr., then Acting DOLE Secretary, Imson, resolved ALPAP’s motions in the following manner:

            x x x x

                After a careful consideration of the factual antecedents, applicable legal principles and the arguments of the parties, this Office concludes that NCMB-NCR-NS-12-514-97 has indeed been resolved with finality by the highest tribunal of the land, the Supreme Court. Being final and executory, this Office is bereft of authority to reopen an issue that has been passed upon by the Supreme Court.

                It is important to note that in pages 18 to 19 of ALPAP’s Memorandum, it admitted that individual complaints for illegal dismissal have been filed by the affected pilots before the NLRC. It is therefore an implied recognition on the part of the pilots that the remedy to their present dilemma could be found in the NLRC.

                x x x x

                Thus, to avoid multiplicity of suits, splitting causes of action and forum-shopping which are all obnoxious to an orderly administration of justice, it is but proper to respect the final and executory order of the Supreme Court in this case as well as the jurisdiction of the NLRC over the illegal dismissal cases. Since ALPAP and the pilots have opted to seek relief from the NLRC, this Office should respect the authority of that Commission to resolve the dispute in the normal course of law. This Office will no longer entertain any further initiatives to split the jurisdiction or to shop for a forum that shall only foment multiplicity of labor disputes. Parties should not jump from one forum to another. This Office will make sure of that.

                By reason of the final ruling of the Honorable Supreme Court, the erring pilots have lost their employment status and second, because these pilots have filed cases to contest such loss before another forum, the Motion and Supplemental Motion of ALPAP as well as the arguments raised therein are merely NOTED by this Office.

            ALPAP filed its motion for reconsideration^[32][30] arguing that the issues raised in its motions have remained unresolved hence, it is the duty of DOLE to resolve the same it having assumed jurisdiction over the labor dispute. ALPAP also denied having engaged in forum shopping as the individual complainants who filed the cases before the NLRC are separate and distinct from ALPAP and that the causes of action therein are different. According to ALPAP, there was clear abdication of duty when then Acting Secretary Imson refused to properly act on the motions. In a letter dated July 30, 2003,^[33][31] Secretary Sto. Tomas likewise merely noted ALPAP’s motion for reconsideration, reiterating the DOLE’s stand to abide by the final and executory judgment of the Supreme Court.

Proceedings before the Court of Appeals

            ALPAP filed a petition for certiorari^[34][32] with the CA, insisting that the assailed letters dated July 4, 2003 and July 30, 2003, which merely noted its motions, were issued in grave abuse of discretion.

            In their Comment,^[35][33] Sto. Tomas and Imson argued that the matter of who among ALPAP’s members and officers participated in the strike was already raised and resolved by the CA and this Court.  By filing the motions, ALPAP, in effect, initiated a termination case which is properly cognizable by the Labor Arbiter. And since several ALPAP members have already filed complaints for illegal dismissal and claims for salaries and benefits with the Labor Arbiter, ALPAP is thus engaging in forum-shopping when it filed the subject motions.

            PAL, on the other hand, also claimed in its Comment^[36][34] that ALPAP violated the principles governing forum shopping, res judicata and multiplicity of suits.  It opined that when ALPAP questioned the loss of employment status of “all its officers and members and asked for their reinstatement” in its appeal to reverse the Decision of the DOLE Secretary in the consolidated strike and illegal lockout cases, the matter of who should be meted out the penalty of dismissal was already resolved with finality by this Court and could not anymore be modified.

            The CA, in its Decision dated December 22, 2004,^[37][35] dismissed the petition.  It found no grave abuse of discretion on the part of Sto. Tomas and Imson in refusing to conduct the necessary proceedings to determine issues relating to ALPAP members’ employment status and entitlement to employment benefits. The CA held that both these issues were among the issues taken up and resolved in the June 1, 1999 DOLE Resolution which was affirmed by the CA in CA-G.R. SP No. 54880 and subsequently determined with finality by this Court in G.R. No. 152306.  Therefore, said issues could no longer be reviewed.  The CA added that Sto. Tomas and Imson merely acted in deference to the NLRC’s jurisdiction over the illegal dismissal cases filed by individual ALPAP members.

           ALPAP moved for reconsideration which was denied for lack of merit in CA Resolution^[38][36]  dated May 30, 2005.

            Hence, this petition.

Issues

I.

                WHETHER X X X THE HONORABLE COURT OF APPEALS COMMITTED REVERSIBLE ERROR WHEN IT DECLARED THAT THE PUBLIC RESPONDENT DID NOT COMMIT GRAVE ABUSE OF DISCRETION AMOUNTING TO LACK AND/OR EXCESS OF JURISDICTION WHEN IT REFUSED TO ACT ON ALPAP’S MOTIONS AND MERELY NOTED THE SAME.

II.

                WHETHER X X X THE HONORABLE COURT OF APPEALS COMMITTED GRAVE MISTAKE IN DECLARING THAT THE 01 JUNE 1999 RESOLUTION OF THE DEPARTMENT OF LABOR AND EMPLOYMENT HAS ALREADY TAKEN UP AND RESOLVED THE ISSUE OF WHO AMONG THE ALPAP MEMBERS ARE DEEMED TO HAVE LOST THEIR EMPLOYMENT STATUS.^[39][37]

            ALPAP contends that it was erroneous for Sto. Tomas and Imson to merely take note of the motions when the issues raised therein sprang from the DOLE Secretary’s exercise of authority to assume jurisdiction over a labor dispute which have nevertheless remained unresolved.  ALPAP prays that the assailed letters dated July 4, 2003 and July 30, 2003 be declared null and void. It likewise seeks for a conduct of a proceeding to determine who actually participated in the illegal strike of June 1998 and consequently who, from its vast membership, should be deemed to have lost employment status.

Our Ruling

            We deny the petition.

There was no grave abuse of discretion on the part of Sto. Tomas and Imson in merely noting ALPAP’s twin motions in due deference to a final and immutable judgment rendered by the Supreme Court.

            From the June 1, 1999 DOLE Resolution, which declared the strike of June 5, 1998 as illegal and pronounced all ALPAP officers and members who participated therein to have lost their employment status, an appeal was taken by ALPAP.  This was dismissed by the CA in CA-G.R. SP No. 54880, which ruling was affirmed by this Court and which became final and executory on August 29, 2002.

In the instant case, ALPAP seeks for a conduct of a proceeding to determine who among its members and officers actually participated in the illegal strike because, it insists, the June 1, 1999 DOLE Resolution did not make such determination.  However, as correctly ruled by Sto. Tomas and Imson and affirmed by the CA, such proceeding would entail a reopening of a final judgment which could not be permitted by this Court.  Settled in law is that once a decision has acquired finality, it becomes immutable and unalterable, thus can no longer be modified in any respect.^[40][38]  Subject to certain recognized exceptions,^[41][39] the principle of immutability leaves the judgment undisturbed as “nothing further can be done except to execute it.”^[42][40]

True, the dispositive portion of the DOLE Resolution does not specifically enumerate the names of those who actually participated in the strike but only mentions that those strikers who failed to heed the return-to-work order are deemed to have lost their employment. This omission, however, cannot prevent an effective execution of the decision.  As was held in Reinsurance Company of the Orient, Inc. v. Court of Appeals,^[43][41] any ambiguity may be clarified by reference primarily to the body of the decision or supplementary to the pleadings previously filed in the case.   In any case,  especially when there is an ambiguity,  “a judgment shall be read in connection with the entire record and construed accordingly.”^[44][42]

There is no necessity to conduct a proceeding to determine the participants in the illegal strike or those who refused to heed the return to work order because the ambiguity can be cured by reference to the body of the decision and the pleadings filed.

            A review of the records reveals that in NCMB NCR NS 12-514-97, the DOLE Secretary declared the ALPAP officers and members to have lost their employment status based on either of two grounds, viz: their participation in the illegal strike on June 5, 1998 or their defiance of the return-to-work order of the DOLE Secretary.  The records of the case unveil the names of each of these returning pilots.  The logbook^[45][43] with the heading “Return To Work Compliance/ Returnees” bears their individual signature signifying their conformity that they were among those workers who returned to work only on June 26, 1998 or after the deadline imposed by DOLE.  From this crucial and vital piece of evidence, it is apparent that each of these pilots is bound by the judgment. Besides, the complaint for illegal lockout was filed on behalf of all these returnees. Thus, a finding that there was no illegal lockout would be enforceable against them.  In fine, only those returning pilots, irrespective of whether they comprise the entire membership of ALPAP, are bound by the June 1, 1999 DOLE Resolution.

            ALPAP harps on the inequity of PAL’s termination of its officers and members considering that some of them were on leave or were abroad at the time of the strike. Some were even merely barred from returning to their work which excused them for not complying immediately with the return-to-work order. Again, a scrutiny of the records of the case discloses that these allegations were raised at a very late stage, that is, after the judgment has finally decreed that the returning pilots’ termination was legal. Interestingly, these defenses were not raised and discussed when the case was still pending before the DOLE Secretary, the CA or even before this Court.  We agree with the position taken by Sto. Tomas and Imson that from the time the return-to-work order was issued until this Court rendered its April 10, 2002 resolution dismissing ALPAP’s petition, no ALPAP member has claimed that he was unable to comply with the return-to-work directive because he was either on leave, abroad or unable to report for some reason.  These defenses were raised in ALPAP’s twin motions only after the Resolution in G.R. No. 152306 reached finality in its last ditch effort to obtain a favorable ruling.  It has been held that a proceeding may not be reopened upon grounds already available to the parties during the pendency of such proceedings; otherwise, it may give way to vicious and vexatious proceedings.^[46][44]  ALPAP was given all the opportunities to present its evidence and arguments. It cannot now complain that it was denied due process

            Relevant to mention at this point is that when NCMB NCRNS12-514-97 (strike/illegal lockout case) was still pending, several complaints for illegal dismissal were filed before the Labor Arbiters of the NLRC by individual members of ALPAP, questioning their termination following the strike staged in June 1998. PAL likewise manifests that there is a pending case involving a complaint^[47][45] for the recovery of accrued and earned benefits belonging to ALPAP members.  Nonetheless, the pendency of the foregoing cases should not and could not affect the character of our disposition over the instant case.  Rather, these cases should be resolved in a manner consistent and in accord with our present disposition for effective enforcement and execution of a final judgment.

            WHEREFORE, the petition is DENIED for lack of merit.  The Decision of the Court of Appeals dated December 22, 2004 and Resolution dated May 30, 2005 in CA-G.R. SP No. 79686 are AFFIRMED.

            SO ORDERED. 

MARIANO C. DEL CASTILLO

Associate Justice

WE CONCUR:

RENATO C. CORONA

Chief Justice

Chairperson

JOSE PORTUGAL PEREZ

Associate Justice

C E R T I F I C A T I O N

            Pursuant to Section 13, Article VIII of the Constitution, it is hereby certified that the conclusions in the above Decision had been reached in consultation before the case was assigned to the writer of the opinion of the Court’s Division.

RENATO C. CORONA

Chief Justice

CASE 2011-0124: PEOPLE OF THE PHILIPPINESVS. LUIS J. MORALES (G.R. NO. 166355,30 MAY 2011, BRION, J.) SUBJECTS: JURISDICTION OF SANDIGANBAYAN; EXPOCORP IS PRIVATE CORPORATION; ITS PRESIDENT IS BEYOND JURISDICTION OF SANDIGANBAYAN. (BRIEF TITLE: PEOPLE VS. MORALES).

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SUBJECT: EXPOCORP NOT A PRIVATE CORPORATION

Expocorp is a private corporation as found by the Sandiganbayan. It was not created by a special law but was incorporated  under the Corporation Code and was registered with the Securities and Exchange Commission.  It is also not a government-owned or controlled corporation. Although BCDA, which owned 999,991 sharesof its shares, was one of Expocorp’s original incorporators, the Board of Directors of Expocorp allowed Global to buy 1,229,998 of its unused and unsubscribed shares two months after its incorporation.  With the BCDA as a minority stockholder, Expocorp cannot be characterized as a government-owned or controlled corporation. In  Dante V. Liban, et al. v. Richard J. Gordon, we pointedly said:

 A government-owned or controlled corporation must be owned by the government, and in the case of a stock corporation, at least a majority of its capital stock must be owned by the government.

SUBJECT: JURISDICTION OF SANDIGANBAYAN

R.A. No. 8249,which amended Presidential Decree No. 1606,delineated the jurisdiction of the Sandiganbayan as follows:

Section 4. Section 4 of the same decree is hereby further amended to read as follows:

Sec. 4. Jurisdiction. — The Sandiganbayan shall exercise exclusive original jurisdiction in all cases involving:

a.         Violations of Republic Act No. 3019, as amended, otherwise known as the Anti-graft and Corrupt Practices Act, Republic Act No. 1379, and Chapter II, Section 2, Title VII, Book II of the Revised Penal Code, where one or more of the accused are officials occupying the following positions in the government whether in a permanent, acting or interim capacity, at the time of the commission of the offense:

(1)        Officials of the executive branch occupying the positions of regional director and higher, otherwise classified as Grade ’27’ and higher, of the Compensation and Position Classification Act of 1989 (Republic Act No. 6758), specifically including:

(a)        Provincial governors, vice-governors, members of the Sangguniang panlalawigan and provincial treasurers, assessors, engineers and other provincial department heads;

(b)        City mayors, vice-mayors, members of the sangguniang Panlungsod, city treasurers, assessors, engineers and other city department heads;

(c )       Officials of the diplomatic service occupying the position of consul and higher;

(d)       Philippine army and air force colonels, naval captains, and all officers of higher rank;

(e)        Officers of the Philippine National Police while occupying the position of provincial director and those holding the rank of senior superintendent or higher;

(f)        City and provincial prosecutors and their assistants, and officials and prosecutors in the Office of the Ombudsman and special prosecutor;

(g)        Presidents, directors or trustees, or managers of government-owned or -controlled corporations, state universities or educational institutions or foundations;

(2)        Members of Congress and officials thereof classified as Grade ’27’ and up under the Compensation and Position Classification Act of 1989;

(3)        Members of the judiciary without prejudice to the provisions of the Constitution;

(4)        Chairmen and members of Constitutional Commissions, without prejudice to the provisions of the Constitution; and

(5)        All other national and local officials classified as Grade ’27’ and higher under the Compensation and Position Classification Act of 1989.

b.         Other offenses or felonies whether simple or complexed with other crimes committed by the public officials and employees mentioned in subsection a of this section in relation to their office.

c.         Civil and criminal cases filed pursuant to and in connection with Executive Order Nos. 1, 2, 14 and 14-A, issued in 1986. (Underlining supplied.)

SUBJECT: EXPOCORP’S PRESIDENT BEYOND SANDIGANBAYAN’S JURISDICTION

Since Expocorp is a private corporation, not a government-owned or controlled corporation, Morales, as Expocorp’s president who now stands charged for violating Section 3(e) of R.A. No. 3019 in this capacity, is beyond the Sandiganbayan’s jurisdiction.   

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Republic of the Philippines

Supreme Court

Manila

THIRD DIVISION

We review the petition for review on certiorari, filed by the People of the Philippines (the People), to assail the Resolution of the First Division of the Sandiganbayan in Criminal Case No. 27431, entitled “People of the Philippines versus Luis J. Morales.”

Background Facts

On June 13, 1991, then President  Corazon Aquino issued Administrative Order No. 223 to commemorate the 100^th anniversary of the declaration of Philippine Independence and thereby created the Committee for the National Centennial Celebrations in 1998 (Committee).

In 1993, then President Fidel V. Ramos issued Executive Order No. 128 (EO 128),  entitled “Reconstituting the Committee for the Preparation of the National Centennial Celebrations in 1998.”  EO 128 renamed the Committee as the “National Centennial Commission” (NCC).  The mandate of the NCC was to “take charge of the nationwide preparations for the National Celebration of the Philippine Centennial of the Declaration of Philippine Independence and the Inauguration of the Malolos Congress.”  The late Vice-President Salvador Laurel was appointed as NCC Chairman.

On March 10, 1996, the NCC and the Bases Conversion Development Authority (BCDA) organized the Philippine Centennial Expo ’98 Corporation or Expocorp whose primary purpose was to operate, administer, manage and develop the Philippine Centennial International Exposition 1998 (Expo ‘98).  

The Philippine Centennial project was marred by numerous allegations of anomalies, among them, the lack of public biddings.  In 1998, Senator Ana Dominique Coseteng delivered a privilege speech in the Senate denouncing these anomalies.  Because of this speech, the Senate Blue Ribbon Committee conducted an investigation on the Philippine Centennial project. In 1999, then President Joseph Estrada created the Ad Hoc and Independent Citizen’s Committee (AHICC), also for the purpose of investigating these alleged anomalies. Both the Senate Blue Ribbon Committee and the AHICC recommended to the Office of the Ombudsman that a more exhaustive investigation of the Philippine Centennial project be conducted.

The investigation that followed resulted in the filing in 2001 of an Informationby the Ombudsman’s Fact-Finding and Investigation Bureau against respondent Luis J. Morales (Morales), the acting president of Expocorp at the time relevant to the case. This Information served as basis for Criminal Case No. 27431 that we now consider. 

The Information against Morales for violation of Section 3(e) of Republic Act (R.A.) No. 3019reads:

That on or about September 6, 1997 or sometime prior or subsequent thereto in Pasig City, Philippines, and within the jurisdiction of this Honorable Court, the above-named accused, a public officer, being then the Pres. of Expo Corporation, Pasig City, a government corporation, and as such was issued one (1) Mercede[s] Benz, Model 1997-C230, bearing Serial No. WDB202023-1F-602122, and Engine No. 111974-12-027093 for his official use, and while in the performance of his official functions, acting thru evident bad faith and manifest partiality, did then and there willfully, unlawfully, and criminally give unwarranted benefits to one Rodolfo M. Lejano by selling to him said Mercede[s] Benz through Newton Motors, Inc. represented by its President Exequiel V. Mariano in the amount of Two Million Two Hundred Fifty Thousand Pesos (P2,250,000.00), without the requisite public bidding nor approval of the Board of Directors of Expo Corporation and thereafter failed to deposit the proceeds of the sale of the aforementioned vehicle to the account of Expo Corporation, to the damage and prejudice of the Corporation and the public interest as well.

In the proceedings before the Sandiganbayan, Morales moved for the dismissal of the case for lack of jurisdiction over his person and over the offense charged.  He alleged that Expocorp is a private corporation and that he is not a public employee or official. He also alleged that the Sandiganbayan has no jurisdiction over his person or the offense charged as he is a private individual who has not been charged jointly with other public officials or employees.  He added that Expocorp is not a government-owned or controlled corporation because it was not created by a special law, it did not have an original charter, and a majority of Expocorp’s capital stock is owned by private individuals. He claimed that he did not receive any compensation from the government as defined in Section 2(a) of R.A. No. 3019, and the compensation he received as Expocorp’s acting president was paid from Expocorp’s funds.  

In its comment to Expocorp’s motion, the Office of the Special Prosecutor, representing the People, insisted that Expocorp is a government-owned corporation since its articles of incorporation showed that of its ten listed subscribers, BCDA held stocks valued at P99,999,100.00, while the stocks held by the rest of the subscribers had a total value of P900.00. The People further argued, based on the Court’s ruling in Salvador H. Laurel v. Aniano A. Desierto, that NCC Chairman Laurel was a public officer; thus, Morales was likewise a public officer since his appointment flowed from the former’s exercise of his authority as chairman of both NCC and Expocorp.

In his reply, Morales averred that upon Expocorp’s incorporation, BCDA owned essentially all of Expocorp’s stocks. Two months after its incorporation, however, the Board of Directors of Expocorp issued a resolution declaring all its unissued and unsubscribed shares open for subscription.  Global Clark Assets Corporation (Global) subscribed to essentially all of these unissued and unsubscribed shares; thus, Global became the majority owner with 55.16% of Expocorp’s stocks, while BCDA was left as minority stockholder with 44.84% of Expocorp’s stocks. Morales also asserted that the ruling in Laurel applied exclusively to Chairman Laurel.  Morales concluded that since Expocorp is a private corporation and an entity distinct from NCC, he, as its president, is not a public officer.

The Sandiganbayan Resolution

The Sandiganbayan, after considering the arguments of the parties, ruled that the position of a president of a government-owned or controlled corporation clearly falls within its jurisdiction.  However, before Morales could be held accountable as Expocorp’s president, it must first be established that Expocorp is a government-owned or controlled corporation.

The Sandiganbayan explained in Laurel, that the Court only held thatLaurel is a public officer without ruling on whether Expocorp is a private or a government-owned corporation. The Court also held that NCC performed executive functions, hence, it was a public office; consequently, its chairman, Laurel, was a public officer.  Morales, in the case at bar, is being charged as president of Expocorp only and not as an NCC official.   

In ruling that Expocorp is a private corporation, the Sandiganbayan stated that it was not created by a special law nor did it have an original charter.  It was organized under the Corporation Code and was registered with the Securities and Exchange Commission. According to the Sandiganbayan, Expocorp could not derive its public character from the fact that it was organized by the NCC. The Sandiganbayan ruled that applying the provisions of the Revised Administrative Code of 1987, Expocorp is a private corporation because Global owns 55.16% of its stocks; hence, its officers and employees are private individuals who are outside the jurisdiction of the Sandiganbayan. On this basis, the Sandiganbayan dismissed the information against Morales.  

The Sandiganbayan denied the motion the People subsequently filed; hence, the present petition.

The Issues

The People submits the following grounds:

(1)        Expocorp was organized and created for the sole purpose of performing the executive functions of the National Centennial Commission and the sovereign functions of the government, and should  be considered as a public office.

(2)        Petitioner, as president of Expocorp, should rightfully be considered as a “public officer”, falling under the jurisdiction of the Sandigangayan.

The Court’s Ruling

We deny the petition for lack of merit. 

The nature of Expocorp

The People submits that Expocorp was an extension of the NCC as provided in Expocorp’s Articles of Incorporation, specifically Section 2which states Expocorp’s primary purpose. It provides that Expocorp’s primary purpose was to establish and operate Expo ’98 –   an NCC project.  The People stated in its petition, thus –

The position occupied by respondent as President of Expocorp stemmed from his appointment as such by NCC Chair and Expocorp Chief Executive Officer Salvador H. Laurel.  On the basis of such appointment, respondent served as the government’s representative and Laurel’s alter ego in running the affairs of Expocorp.  As held in the Laurel vs. Desierto case, “even assuming that Expocorp is a private corporation, petitioner’s position as Chief Executive officer (CEO) of Expocorp arose from his Chairmanship of the NCC.  Consequently, his acts or omissions as CEO of Expocorp must be viewed in the light of his powers and functions as NCC Chair.”

Having established that Expocorp, by extension, performed part of the sovereign functions delegated to the NCC, it follows that respondent, as President of Expocorp, performed tasks that likewise fall within the contemplation of the government’s sovereign functions.  

We do not agree with the People. 

Expocorp is a private corporation as found by the Sandiganbayan. It was not created by a special law but was incorporated  under the Corporation Code and was registered with the Securities and Exchange Commission.  It is also not a government-owned or controlled corporation. Although BCDA, which owned 999,991 sharesof its shares, was one of Expocorp’s original incorporators, the Board of Directors of Expocorp allowed Global to buy 1,229,998 of its unused and unsubscribed shares two months after its incorporation.  With the BCDA as a minority stockholder, Expocorp cannot be characterized as a government-owned or controlled corporation. In  Dante V. Liban, et al. v. Richard J. Gordon, we pointedly said:

A government-owned or controlled corporation must be owned by the government, and in the case of a stock corporation, at least a majority of its capital stock must be owned by the government.

The Sandiganbayan’s Jurisdiction

Section 5, Article XIII of the 1973 Constitution defines the jurisdiction of the Sandiganbayan:

Sec. 5.  The [Batasang Pambansa] shall create a special court, to be known as Sandiganbayan, which shall have jurisdiction over criminal and civil cases involving graft and corrupt practices and such other offenses committed by public officers and employees, including those in government-owned or controlled corporations, in relation to their office as may be determined by law.

R.A. No. 8249,which amended Presidential Decree No. 1606,delineated the jurisdiction of the Sandiganbayan as follows:

Section 4. Section 4 of the same decree is hereby further amended to read as follows:

Sec. 4. Jurisdiction. — The Sandiganbayan shall exercise exclusive original jurisdiction in all cases involving:

a.         Violations of Republic Act No. 3019, as amended, otherwise known as the Anti-graft and Corrupt Practices Act, Republic Act No. 1379, and Chapter II, Section 2, Title VII, Book II of the Revised Penal Code, where one or more of the accused are officials occupying the following positions in the government whether in a permanent, acting or interim capacity, at the time of the commission of the offense:

(1)        Officials of the executive branch occupying the positions of regional director and higher, otherwise classified as Grade ’27’ and higher, of the Compensation and Position Classification Act of 1989 (Republic Act No. 6758), specifically including:

(a)        Provincial governors, vice-governors, members of the Sangguniang panlalawigan and provincial treasurers, assessors, engineers and other provincial department heads;

(b)        City mayors, vice-mayors, members of the sangguniang Panlungsod, city treasurers, assessors, engineers and other city department heads;

(c )       Officials of the diplomatic service occupying the position of consul and higher;

(d)       Philippine army and air force colonels, naval captains, and all officers of higher rank;

(e)        Officers of the Philippine National Police while occupying the position of provincial director and those holding the rank of senior superintendent or higher;

(f)        City and provincial prosecutors and their assistants, and officials and prosecutors in the Office of the Ombudsman and special prosecutor;

(g)        Presidents, directors or trustees, or managers of government-owned or -controlled corporations, state universities or educational institutions or foundations;

(2)        Members of Congress and officials thereof classified as Grade ’27’ and up under the Compensation and Position Classification Act of 1989;

(3)        Members of the judiciary without prejudice to the provisions of the Constitution;

(4)        Chairmen and members of Constitutional Commissions, without prejudice to the provisions of the Constitution; and

(5)        All other national and local officials classified as Grade ’27’ and higher under the Compensation and Position Classification Act of 1989.

b.         Other offenses or felonies whether simple or complexed with other crimes committed by the public officials and employees mentioned in subsection a of this section in relation to their office.

c.         Civil and criminal cases filed pursuant to and in connection with Executive Order Nos. 1, 2, 14 and 14-A, issued in 1986. (Underlining supplied.)

Since Expocorp is a private corporation, not a government-owned or controlled corporation, Morales, as Expocorp’s president who now stands charged for violating Section 3(e) of R.A. No. 3019 in this capacity, is beyond the Sandiganbayan’s jurisdiction.   

WHEREFORE, premises considered, the petition for review on certiorari is DISMISSED for lack of merit. The Sandiganbayan’s June 15, 2004 Resolution in Criminal Case No. 27431, entitled “People of the Philippines versus Luis J. Morales,” is AFFIRMED.  No costs.

SO ORDERED.

ARTURO D. BRION

Associate Justice

WE CONCUR:

CONCHITA CARPIO MORALES

Associate Justice

MA. LOURDES P.A. SERENO

Associate Justice

ATTESTATION

          I attest that the conclusions in the above Decision had been reached in consultation before the case was assigned to the writer of the opinion of the Court’s Division.

                                            CONCHITA CARPIO MORALES

                                                            Associate Justice

                                                               Chairperson

CERTIFICATION

Pursuant to Section 13, Article VIII of the Constitution, and the Division Chairperson’s Attestation, it is hereby certified that the conclusions in the above Decision had been reached in consultation before the case was assigned to the writer of the opinion of the Court’s Division.

                                                          RENATO C. CORONA

                                                                   Chief Justice                                                     

Penned by Associate Justice Diosdado M. Peralta (now a member of this Court), and concurred in by Associate Justice Teresita J. Leonardo-de Castro (now a member of this Court) and Associate Justice Roland B. Jurado; rollo, pp.24-33.

Sections 1 and 2 of EO 128.

A government agency created under Republic Act No. 7227.

The Expo ‘98 in the Clark Special Economic Zone was an NCC project mandated under EO 128.

Rollo, pp. 169-170.

The Anti-Graft and Corrupt Practices Act, Section 3  – Corrupt practices of public officers. — In addition to acts or omissions of public officers already penalized by existing law, the following shall constitute corrupt practices of any public officer and are hereby declared to be unlawful:

xxx xxx xxx

 (e)          Causing any undue injury to any party, including the Government, or giving any private party any unwarranted benefits, advantage or preference in the discharge of his official administrative or judicial functions through manifest partiality, evident bad faith or gross inexcusable negligence. This provision shall apply to officers and employees of offices or government corporations charged with the grant of licenses or permits or other concessions.

Rollo, p. 169.

Id. at 24-25.

G.R. No. 145368, April 12, 2002, 381 SCRA 48.

Supra note 9.

Ibid.

Rollo, pp. 34-47.

Id. at 8.

PRIMARY PURPOSE

To set up and establish the Philippine Centennial International Exposition 1998 (EXPO ’98), a project of the National Centennial Commission envisioned and mandated under Executive Order No. 128, series of 1993, in the Clark Special Economic Zone (CSEZ) within the Provinces of Pampanga and Tarlac, Philippines as created, defined and delineated under Proclamation No. 163, series 1993, of the President of the Philippines and in furtherance of said purpose;

                1. To operate, administer, manage, implement, and develop EXPO ’98 conformably to and in accordance with the Detailed Feasibility study and Master Plan for said Exposition prepared by Douglas/Gallagher, Inc. and approved by the President of thePhilippines;

                2. To exercise oversight functions and overall jurisdiction over the operations of EXPO ’98 as well as manage and oversee all plans, programs, and activities related to the implementation and operation of said Exposition;

                3. To regulate the establishment, operation, and maintenance of utilities, services, and infrastructure works in all the site components of EXPO ’98 and its support facilities;

                4. To oversee the preparations for the implementation of the participation of countries, groups, organizations, and entities at EXPO ’98;

                5. To establish linkages with participating countries and coordinate their programs and activities relevant to the theme of EXPO ’98;

                6. To provide and prescribe the guidelines for the design and fabrication of the pavilions of participating countries that played a significant role in Philippine historical development and of other participating groups, organizations, and entities which would be reflective of the following objectives of EXPO ’98 —

                a) showcase the national vision of thePhilippines, highlighted by a rich history and culture, and its traditional heritage and diverse cultural influences;

                b) express eloquently the Filipinism sentiment of the Philippine Centennial;

                c) strengthen cultural and historical linkages between thePhilippinesand participating countries;

                d) create an image of thePhilippinesas a country with rich trade and tourism potentials; and

                e) project the Filipino character and strengthen the sense of national pride and patriotism among the Filipino people.

                7. To conceive and devise varied promotional strategies towards creating awareness and appreciation of EXPO ’98 as the centerpiece of the national celebrations in 1998 of the centennial of the declaration of Philippine Independence and beyond that as a permanent site for the Filipino people to honor their rich heritage;

                8. To encourage and invite the active and meaningful participation of the private sector in managing and overseeing EXPO ’98; and

                9. To forge strategic partnerships and joint ventures with local and international investors and developers in the development, maintenance, operation, and management of EXPO ’98 on a turn-key basis.

SECONDARY PURPOSES

                (1) To purchase, acquire, own, lease, sell and convey real properties such as lands, buildings, factories and warehouses and machineries, equipment and other personal properties as may be necessary or incidental to the conduct of the corporate business, and to pay in cash, shares of its capital stock, debentures and other evidences of indebtedness, or other securities, as may be deemed expedient, for any business or property acquired by the corporation;

                (2) To borrow or raise money necessary to meet the financial requirements of its business by the issuance of bonds, promissory notes and other evidences of indebtedness, and to secure the repayment thereof by mortgage, pledge, deed of trust or lien upon the properties of the corporation or to issue pursuant to law shares of its capital stock, debentures and other evidences of indebtedness in payment for properties acquired by the corporation or for money borrowed in the prosecution of its lawful business;

                (3) To invest and deal with the money and properties of the corporation in such manner as may from time to time be considered wise or expedient for the advancement of its interests and to sell, dispose of or transfer the business, properties and goodwill of the corporation or any part thereof for such consideration and under such terms as it shall see fit to accept;

                (4) To aid in any manner any corporation, association, or trust estate, domestic or foreign, or any firm or individual, any shares of stock in which or any bonds, debentures, notes, securities, evidences of indebtedness, contracts, or obligations of which are held by or for this corporation, directly or indirectly or through other corporations or otherwise;

                (5) To enter into any lawful arrangement for sharing profits, union of interest, unitization or farmout agreement, reciprocal concession, or cooperation, with any corporation, association, partnership, syndicate, entity, person or governmental, municipal or public authority, domestic or foreign, in the carrying on of any business or transaction deemed necessary, convenient or incidental to carrying out any of the purposes of this corporation;

                (6) To acquire or obtain from any government or authority, national, provincial, municipal or otherwise, or any corporation, company or partnership or person, such charter, contracts, franchise, privileges, exemption, licenses and concessions as may be conducive to any of the objects of the corporation;

                (7) To establish and operate one or more branch offices of agencies and to carry on any or all of its operations and business without any restrictions as to place or amount including the right to hold, purchase or otherwise acquire, lease, mortgage, pledge and convey or otherwise deal in and with real and personal property anywhere within the Philippines;

                (8) To conduct and transact any and all lawful business, and to do or cause to be done any one or more of the acts and things herein set forth as its purposes, within or without the Philippines, and in any and all foreign countries, and to do everything necessary, desirable or incidental to the accomplishment of the purposes or the exercise of any one or more of the powers herein enumerated, or which shall at any time appear conducive to or expedient for the protection or benefit of this corporation (Annex “C,” id. at 172-174).

Id. at 15.

Id. at 171.

Id. at 176.

G.R. No. 175352, July 15, 2009, 593 SCRA 68, 88.

Section 4, Article XI of the 1987 Constitution provides: The present anti-graft court known as the Sandiganbayan shall continue to function and exercise its jurisdiction as now or hereafter may be provided by law.

Enacted on February 5, 1997 and entitled “An Act Further Defining the Jurisdiction of the Sandiganbayan, Amending for the Purpose Presidential Decree No. 1606, as amended, Providing Funds Therefor, and for Other Purposes.”

Revising Presidential Decree No. 1486 Creating aSpecial Courtto be known as “Sandiganbayan” and for Other Purposes.