Bataan Shipyard Engineering Co., Inc. vs. PCGG (G.R. No.

75885 May 27, 1987)

Re: Business Organization Corporation Law A Corporation Cannot Invoke the Right
Against Self-Incrimination

Nature: Special Civil Action for Certiorari

Facts:
Challenged in this special civil action of certiorari and prohibition by a private
corporation known as the Bataan Shipyard and Engineering Co., Inc. are: (1) Executive
Orders Numbered 1 and 2, promulgated by President Corazon C. Aquino on February
28, 1986 and March 12, 1986, respectively, and (2) the sequestration, takeover, and
other orders issued, and acts done, in accordance with said executive orders by the
Presidential Commission on Good Government and/or its Commissioners and agents,
affecting said corporation. The sequestration order issued on April 14, 1986 was
addressed to three of the agents of the Commission, ordering them to sequester several
companies among which is Bataan Shipyard and Engineering Co., Inc. On the strength
of the above sequestration order, several letters were sent to BASECO among which is
that from Mr. Jose M. Balde, acting for the PCGG, addressed a letter dated April 18,
1986 to the President and other officers of petitioner firm, reiterating an earlier request
for the production of certain documents. The letter closed with the warning that if the
documents were not submitted within five days, the officers would be cited for "contempt
in pursuance with Presidential Executive Order Nos. 1 and 2." BASECO contends that
its right against self-incrimination and unreasonable searches and seizures had been
transgressed by the Order of April 18, 1986 which required it "to produce corporate
records from 1973 to 1986 under pain of contempt of the Commission if it fails to do so."
BASECO prays that the Court 1) declare unconstitutional and void Executive Orders
Numbered 1 and 2; 2) annul the sequestration order dated April- 14, 1986, and all other
orders subsequently issued and acts done on the basis thereof, inclusive of the
takeover order of July 14, 1986 and the termination of the services of the BASECO
executives.
Issue:
Whether or not BASECOs right against self-incrimination and unreasonable searches
and seizures was violated.
Held:
No. The order to produce documents was issued upon the authority of Section 3 (e) of
Executive Order No. 1, treating of the PCGG's power to "issue subpoenas requiring * *
the production of such books, papers, contracts, records, statements of accounts and
other documents as may be material to the investigation conducted by the Commission.
It is elementary that the right against self-incrimination has no application to juridical
persons. While an individual may lawfully refuse to answer incriminating questions
unless protected by an immunity statute, it does not follow that a corporation, vested
with special privileges and franchises, may refuse to show its hand when charged with
an abuse of such privileges. Corporations are not entitled to all of the constitutional
protections, which private individuals have. They are not at all within the privilege
against self-incrimination; although this court more than once has said that the privilege
runs very closely with the 4th Amendment's Search and Seizure provisions. It is also
settled that an officer of the company cannot refuse to produce its records in its
possession upon the plea that they will either incriminate him or may incriminate it."
The corporation is a creature of the state. It is presumed to be incorporated for the
benefit of the public. It received certain special privileges and franchises, and holds
them subject to the laws of the state and the limitations of its charter. Its powers are
limited by law. It can make no contract not authorized by its charter. Its rights to act as a
corporation are only preserved to it so long as it obeys the laws of its creation. There is
a reserve right in the legislature to investigate its contracts and find out whether it has
exceeded its powers. It would be a strange anomaly to hold that a state, having
chartered a corporation to make use of certain franchises, could not, in the exercise of
sovereignty, inquire how these franchises had been employed, and whether they had
been abused, and demand the production of the corporate books and papers for that
purpose. The defense amounts to this, that an officer of the corporation which is
charged with a criminal violation of the statute may plead the criminality of such
corporation as a refusal to produce its books. To state this proposition is to answer it.
While an individual may lawfully refuse to answer incriminating questions unless
protected by an immunity statute, it does not follow that a corporation, vested with
special privileges and franchises may refuse to show its hand when charged with an
abuse of such privileges. (Wilson v. United States, 55 Law Ed., 771, 780 [emphasis, the
Solicitor General's]) The constitutional safeguard against unreasonable searches and
seizures finds no application to the case at bar either. There has been no search
undertaken by any agent or representative of the PCGG, and of course no seizure on
the occasion thereof.