BOY SCOUTS OF THE PHILIPPINES v.

COMMISSION ON AUDIT
G.R. No.177131; June 7, 2011

FACTS:
This case arose when the COA issued Resolution No. 99-011on August 19, 1999 ("the COA
Resolution"), with the subject "Defining the Commissions policy with respect to the audit of the
Boy Scouts of the Philippines."

In its whereas clauses, the COA Resolution stated that the BSP was created as a public
corporation under Commonwealth Act No. 111, as amended by Presidential Decree No. 460 and
Republic Act No. 7278; that in Boy Scouts of the Philippines v. National Labor Relations
Commission, the Supreme Court ruled that the BSP, as constituted under its charter, was a
"government-controlled corporation within the meaning of Article IX(B)(2)(1) of the Constitution";
and that "the BSP is appropriately regarded as a government instrumentality under the 1987
Administrative Code."

The COA Resolution also cited its constitutional mandate under Section 2(1), Article IX (D).Finally,
the COA Resolution reads:

NOW THEREFORE, in consideration of the foregoing premises, the COMMISSION PROPER

HAS RESOLVED, AS IT DOES HEREBY RESOLVE,to conduct an annual financial audit of
the Boy Scouts of the Philippines in accordance with generally accepted auditing
standards, and express an opinion on whether the financial statements which include the
Balance Sheet, the Income Statement and the Statement of Cash Flows present fairly its
financial position and results of operations.

xxxx

BE IT RESOLVED FURTHERMORE, that for purposes of audit supervision,the Boy Scouts of the
Philippines shall be classified among the government corporations belonging to the Educational,
Social, Scientific, Civic and Research Sectorunder the Corporate Audit Office I, to be audited,
similar to the subsidiary corporations, by employing the team audit approach

ISSUE: Does COA have jurisdiction over BSP?

HELD:

After looking at the legislative history of its amended charter and carefully studying the applicable
laws and the arguments of both parties, [the Supreme Court found] that the BSP is a public
corporation and its funds are subject to the COA's audit jurisdiction.

The BSP Charter (Commonwealth Act No. 111, approved on October 31, 1936), entitled "An Act
to Create a Public Corporation to be Known as the Boy Scouts of the Philippines, and to Define
its Powers and Purposes" created the BSP as a "public corporation"

There are three classes of juridical persons under Article 44 of the Civil Code and the BSP, as
presently constituted under Republic Act No. 7278, falls under the second classification. Article
44 reads:
Art. 44. The following are juridical persons:

(1) The State and its political subdivisions;

(2)Other corporations,institutions and entities for public interest or purpose created by
law; their personality begins as soon as they have been constituted according to law;
(3) Corporations, partnerships and associations forprivate interest or purposeto which
the law grants a juridical personality, separate and distinct from that of each shareholder,
partner or member.

The BSP, which is a corporation created for a public interest or purpose, is subject to the law
creating it under Article 45 of the Civil Code, which provides:

Art. 45.Juridical persons mentioned in Nos. 1 and 2 of the preceding article are governed
by the laws creating or recognizing them.

Private corporations are regulated by laws of general application on the subject.

Partnerships and associations for private interest or purpose are governed by the provisions of
this Code concerning partnerships.

The purpose of the BSP as stated in its amended charter shows that it was created in order to
implement a State policy declared in Article II, Section 13 of the Constitution, which reads:

Section 13. The State recognizes the vital role of the youth in nation-building and shall promote
and protect their physical, moral, spiritual, intellectual, and social well-being. It shall inculcate in
the youth patriotism and nationalism, and encourage their involvement in public and civic affairs.

Evidently, the BSP, which was created by a special law to serve a public purpose in pursuit of a
constitutional mandate, comes within the class of "public corporations" defined by paragraph 2,
Article 44 of the Civil Code and governed by the law which creates it, pursuant to Article 45 of the
same Code. DENIED

Carandang vs. Disierto G.R. no. 148076, January 12, 2011

Facts:

The RPN-9 was sequestered by the Government.

On July 28, 1998, Carandang assumed office as general manager and chief operating officer of RPN.8

On April 19, 1999, Carandang and other RPN officials were charged with grave misconduct before the
Ombudsman. The charge alleged that Carandang, in his capacity as the general manager of RPN,
had entered into a contract with AF Broadcasting Incorporated despite his being an incorporator,
director, and stockholder of that corporation; that he had thus held financial and material interest in a
contract that had required the approval of his office; and that the transaction was prohibited under
Section 7 (a) and Section 9 of Republic Act No. 6713 (Code of Conduct and Ethical Standards for
Public Officials and Employees), thereby rendering him administratively liable for grave misconduct.

Carandang sought the dismissal of the administrative charge on the ground that the Ombudsman had
no jurisdiction over him because RPN was not a government-owned or -controlled corporation.9
In its decision dated January 26, 2000,11 the Ombudsman found Carandang guilty of grave misconduct
and ordered his dismissal from the service.

Carandang moved for reconsideration on two grounds: (a) that the Ombudsman had no jurisdiction
over him because RPN was not a government-owned or -controlled corporation; and (b) that he had
no financial and material interest in the contract that required the approval of his office.12

Issue:

Whether or not the Office of the Ombudsman has jurisdiction over the herein petitioner.

Held:

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 state to be exercised by him for the benefit of the
public." Also it includes elective and appointive officials and employees, permanent or temporary,
whether in the classified or unclassified or exemption service receiving compensation, even nominal,
from the government as defined in Sec. 2 (b) of Republic Act No. 3019 as amended. Unless the powers
conferred are of this nature, the individual is not a public officer.

The Court was constrained to conclude that, indeed, the herein petitioner (Antonio M. Carandang) is
a public officer.

Precisely, since he (Antonio M. Carandang) was appointed by then President Joseph Ejercito Estrada
as general manager and chief operating officer of RPN-9 (page 127 of the Rollo). As a presidential
appointee, the petitioner derives his authority from the Philippine Government. It is luce clarius that
the function of the herein petitioner (as a presidential appointee), relates to public duty, i.e., to
represent the interest of the Philippine Government in RPN-9 and not purely personal matter, thus,
the matter transcends the petitioner’s personal pique or pride.

On March 2, 1986, when RPN-9 was sequestered by the Government on ground that the same was
considered as an illegally obtained property, RPN-9 has shed-off its private status. In other words,
there can be no gainsaying that as of the date of its sequestration by the Government, RPN-9, while
retaining its own corporate existence, became a government-owned or controlled corporation within
the Constitutional precept.

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 government 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; Provided, That government-owned or controlled corporations may be further categorized
by the department of Budget, the Civil Service, and the Commission on Audit for purposes of the
exercise and discharge of their respective powers, functions and responsibilities with respect to such
corporations."

The Court is of the view and so holds that RPN-9 perfectly falls under the foregoing definition. For one,
"the government’s interest to RPN-9 amounts to 72.4% of RPN’s capital stock with an uncontested
portion of 32.4% and a contested or litigated portion of 40%."
Dante Liban, et al. v. Richard Gordon, G.R. No. 175352, January 18, 2011

R E S O L U T I O N : LEONARDO-DE CASTRO, J.:

I. THE FACTS

Petitioners Liban, et al., who were officers of the Board of Directors of the Quezon City Red Cross
Chapter, filed with the Supreme Court what they styled as “Petition to Declare Richard J. Gordon
as Having Forfeited His Seat in the Senate” against respondent Gordon, who was elected
Chairman of the Philippine National Red Cross (PNRC) Board of Governors during his
incumbency as Senator.

Petitioners alleged that by accepting the chairmanship of the PNRC Board of Governors,
respondent Gordon ceased to be a member of the Senate pursuant to Sec. 13, Article VI of the
Constitution, which provides that “[n]o Senator . . . may hold any other office or employment in
the Government, or any subdivision, agency, or instrumentality thereof, including government-
owned or controlled corporations or their subsidiaries, during his term without forfeiting his seat.”
Petitioners cited the case of Camporedondo vs. NLRC, G.R. No. 129049, decided August 6, 1999,
which held that the PNRC is a GOCC, in supporting their argument that respondent Gordon
automatically forfeited his seat in the Senate when he accepted and held the position of Chairman
of the PNRC Board of Governors.

Formerly, in its Decision dated July 15, 2009, the Court, voting 7-5,[1] held that the office of the
PNRC Chairman is NOT a government office or an office in a GOCC for purposes of the
prohibition in Sec. 13, Article VI of the 1987 Constitution. The PNRC Chairman is elected by the
PNRC Board of Governors; he is not appointed by the President or by any subordinate
government official. Moreover, the PNRC is NOT a GOCC because it is a privately-owned,
privately-funded, and privately-run charitable organization and because it is controlled by a Board
of Governors four-fifths of which are private sector individuals. Therefore, respondent Gordon did
not forfeit his legislative seat when he was elected as PNRC Chairman during his incumbency as
Senator.

The Court however held further that the PNRC Charter, R.A. 95, as amended by PD 1264 and
1643, is void insofar as it creates the PNRC as a private corporation since Section 7, Article XIV
of the 1935 Constitution states that “[t]he Congress shall not, except by general law, provide for
the formation, organization, or regulation of private corporations, unless such corporations are
owned or controlled by the Government or any subdivision or instrumentality thereof.” The Court
thus directed the PNRC to incorporate under the Corporation Code and register with the
Securities and Exchange Commission if it wants to be a private corporation. The fallo of the
Decision read:

WHEREFORE, we declare that the office of the Chairman of the Philippine National Red Cross
is not a government office or an office in a government-owned or controlled corporation for
purposes of the prohibition in Section 13, Article VI of the 1987 Constitution. We also declare that
Sections 1, 2, 3, 4(a), 5, 6, 7, 8, 9, 10, 11, 12, and 13 of the Charter of the Philippine National Red
Cross, or Republic Act No. 95, as amended by Presidential Decree Nos. 1264 and 1643, are
VOID because they create the PNRC as a private corporation or grant it corporate powers.

Respondent Gordon filed a Motion for Clarification and/or for Reconsideration of the Decision.
The PNRC likewise moved to intervene and filed its own Motion for Partial Reconsideration. They
basically questioned the second part of the Decision with regard to the pronouncement on the
nature of the PNRC and the constitutionality of some provisions of the PNRC Charter.

II. THE ISSUE:

Was it correct for the Court to have passed upon and decided on the issue of the constitutionality
of the PNRC charter? Corollarily: What is the nature of the PNRC?

III. THE RULING :

[The Court GRANTED reconsideration and MODIFIED the dispositive portion of the Decision by
deleting the second sentence thereof.]

NO, it was not correct for the Court to have decided on the constitutional issue because it
was not the very lis mota of the case. The PNRC is sui generis in nature; it is neither strictly
a GOCC nor a private corporation.

The issue of constitutionality of R.A. No. 95 was not raised by the parties, and was not among the
issues defined in the body of the Decision; thus, it was not the very lis mota of the case. We have
reiterated the rule as to when the Court will consider the issue of constitutionality in Alvarez v.
PICOP Resources, Inc., thus:

This Court will not touch the issue of unconstitutionality unless it is the very lis mota. It is a well-
established rule that a court should not pass upon a constitutional question and decide a law to
be unconstitutional or invalid, unless such question is raised by the parties and that when it is
raised, if the record also presents some other ground upon which the court may [rest] its judgment,
that course will be adopted and the constitutional question will be left for consideration until such
question will be unavoidable.

[T]his Court should not have declared void certain sections of . . . the PNRC Charter. Instead,
the Court should have exercised judicial restraint on this matter, especially since there was some
other ground upon which the Court could have based its judgment. Furthermore, the PNRC, the
entity most adversely affected by this declaration of unconstitutionality, which was not even
originally a party to this case, was being compelled, as a consequence of the Decision, to
suddenly reorganize and incorporate under the Corporation Code, after more than sixty (60) years
of existence in this country.

Since its enactment, the PNRC Charter was amended several times, particularly on June 11,
1953, August 16, 1971, December 15, 1977, and October 1, 1979, by virtue of R.A. No. 855, R.A.
No. 6373, P.D. No. 1264, and P.D. No. 1643, respectively. The passage of several laws relating
to the PNRC’s corporate existence notwithstanding the effectivity of the constitutional proscription
on the creation of private corporations by law is a recognition that the PNRC is not strictly in the
nature of a private corporation contemplated by the aforesaid constitutional ban.

A closer look at the nature of the PNRC would show that there is none like it[,] not just in terms of
structure, but also in terms of history, public service and official status accorded to it by the State
and the international community. There is merit in PNRC’s contention that its structure is sui
generis. It is in recognition of this sui generis character of the PNRC that R.A. No. 95 has remained
valid and effective from the time of its enactment in March 22, 1947 under the 1935 Constitution
and during the effectivity of the 1973 Constitution and the 1987 Constitution. The PNRC Charter
and its amendatory laws have not been questioned or challenged on constitutional grounds, not
even in this case before the Court now.

[T]his Court [must] recognize the country’s adherence to the Geneva Convention and respect the
unique status of the PNRC in consonance with its treaty obligations. The Geneva Convention
has the force and effect of law. Under the Constitution, the Philippines adopts the generally
accepted principles of international law as part of the law of the land. This constitutional provision
must be reconciled and harmonized with Article XII, Section 16 of the Constitution, instead of
using the latter to negate the former. By requiring the PNRC to organize under the Corporation
Code just like any other private corporation, the Decision of July 15, 2009 lost sight of the PNRC’s
special status under international humanitarian law and as an auxiliary of the State, designated
to assist it in discharging its obligations under the Geneva Conventions.

The PNRC, as a National Society of the International Red Cross and Red Crescent Movement,
can neither “be classified as an instrumentality of the State, so as not to lose its character of
neutrality” as well as its independence, nor strictly as a private corporation since it is regulated by
international humanitarian law and is treated as an auxiliary of the State.

Although [the PNRC] is neither a subdivision, agency, or instrumentality of the government, nor a
GOCC or a subsidiary thereof . . . so much so that respondent, under the Decision, was correctly
allowed to hold his position as Chairman thereof concurrently while he served as a Senator, such
a conclusion does not ipso facto imply that the PNRC is a “private corporation” within the
contemplation of the provision of the Constitution, that must be organized under the Corporation
Code. [T]he sui generis character of PNRC requires us to approach controversies involving the
PNRC on a case-to-case basis.

In sum, the PNRC enjoys a special status as an important ally and auxiliary of the government in
the humanitarian field in accordance with its commitments under international law. This Court
cannot all of a sudden refuse to recognize its existence, especially since the issue of the
constitutionality of the PNRC Charter was never raised by the parties. It bears emphasizing that
the PNRC has responded to almost all national disasters since 1947, and is widely known to
provide a substantial portion of the country’s blood requirements. Its humanitarian work is
unparalleled. The Court should not shake its existence to the core in an untimely and drastic
manner that would not only have negative consequences to those who depend on it in times of
disaster and armed hostilities but also have adverse effects on the image of the Philippines in the
international community. The sections of the PNRC Charter that were declared void must
therefore stay.

[Thus, R.A. No. 95 remains valid and constitutional in its entirety. The Court MODIFIED the
dispositive portion of the Decision by deleting the second sentence, to now read as follows:

WHEREFORE, we declare that the office of the Chairman of the Philippine National Red Cross
is not a government office or an office in a government-owned or controlled corporation for
purposes of the prohibition in Section 13, Article VI of the 1987 Constitution.]

[1] Concurring with Justice Antonio Carpio, who wrote the Decision, were then-Chief Justice
Puno and Associate Justices Quisumbing, Carpio Morales, Chico–Nazario, Velasco, and
Leonardo-de Castro. Joining Associate Justice Nachura in his Dissenting Opinion were Associate
Justices Ynares-Santiago, Brion, Peralta, and Bersamin. Then-Justice [now Chief Justice] Corona
took no part.

Manila International Airport Authority vs. Court of Appeals, Paranque City G.R. No. 155650
July 20, 2006

OCTOBER 6, 2017

FACTS:

MIAA received Final Notices of Real Estate Tax Delinquency from the City of Parañaque for the
taxable years 1992 to 2001. MIAA’s real estate tax delinquency was estimated at P624 million.

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 filed with the Court of Appeals an original petition for prohibition and injunction, with prayer
for preliminary injunction or temporary restraining order. The petition sought to restrain the City of
Parañaque from imposing real estate tax on, levying against, and auctioning for public sale the
Airport Lands and Buildings.

Paranaque’s Contention: Section 193 of the Local Government Code 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.
MIAA’s contention: Airport Lands and Buildings are owned by the Republic. The government
cannot tax itself. 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.

ISSUE: Whether Airport Lands and Buildings of MIAA are exempt from real estate tax under
existing laws?

RULING: Yes. Ergo, the real estate tax assessments issued by the City of Parañaque, and all
proceedings taken pursuant to such assessments, are void.

1. MIAA is Not a Government-Owned or Controlled Corporation

MIAA is not a government-owned or controlled corporation but an instrumentality of the National

Government and thus exempt from local taxation.

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

MIAA is also not a non-stock corporation because it has no members. A non-stock corporation
must have members.

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.

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.”

2. Airport Lands and Buildings of MIAA are Owned by the Republic

a. Airport Lands and Buildings are of Public Dominion

The Airport Lands and Buildings of MIAA are property of public dominion and therefore owned by
the State or the Republic of the Philippines.

No one can dispute that properties of public dominion mentioned in Article 420 of the Civil Code,
like “roads, canals, rivers, torrents, ports and bridges constructed by the State,” are owned by the
State. The term “ports” includes seaports and airports. The MIAA Airport Lands and Buildings
constitute a “port” constructed by the State. Under Article 420 of the Civil Code, the MIAA Airport
Lands and Buildings are properties of public dominion and thus owned by the State or the
Republic of the Philippines.
The Airport Lands and Buildings are devoted to public use because they are used by the public
for international and domestic travel and transportation. The fact that the MIAA collects terminal
fees and other charges from the public does not remove the character of the Airport Lands and
Buildings as properties for public use.

The charging of fees to the public does not determine the character of the property whether it is
of public dominion or not. Article 420 of the Civil Code defines property of public dominion as one
“intended for public use.” The terminal fees MIAA charges to passengers, as well as the landing
fees MIAA charges to airlines, constitute the bulk of the income that maintains the operations of
MIAA. The collection of such fees does not change the character of MIAA as an airport for public
use. Such fees are often termed user’s tax. This means taxing those among the public who
actually use a public facility instead of taxing all the public including those who never use the
particular public facility.

b. Airport Lands and Buildings are Outside the Commerce of Man

The Court has also ruled that property of public dominion, being outside the commerce of man,
cannot be the subject of an auction sale.

Properties of public dominion, being for public use, are not subject to levy, encumbrance or
disposition through public or private sale. Any encumbrance, levy on execution or auction sale of
any property of public dominion is void for being contrary to public policy. Essential public services
will stop if properties of public dominion are subject to encumbrances, foreclosures and auction
sale. This will happen if the City of Parañaque can foreclose and compel the auction sale of the
600-hectare runway of the MIAA for non-payment of real estate tax.

c. MIAA is a Mere Trustee of the Republic

MIAA is merely holding title to the Airport Lands and Buildings in trust for the Republic. Section
48, Chapter 12, Book I of the Administrative Code allows instrumentalities like MIAA to hold title
to real properties owned by the Republic. n MIAA’s case, its status as a mere trustee of the Airport
Lands and Buildings is clearer because even its executive head cannot sign the deed of
conveyance on behalf of the Republic. Only the President of the Republic can sign such deed of
conveyance.

d. Transfer to MIAA was Meant to Implement a Reorganization

The transfer of the Airport Lands and Buildings from the Bureau of Air Transportation to MIAA
was not meant to transfer beneficial ownership of these assets from the Republic to MIAA. The
purpose was merely to reorganize a division in the Bureau of Air Transportation into a separate
and autonomous body. The Republic remains the beneficial owner of the Airport Lands and
Buildings. MIAA itself is owned solely by the Republic. No party claims any ownership rights over
MIAA’s assets adverse to the Republic.

e. Real Property Owned by the Republic is Not Taxable

Sec 234 of the LGC provides that 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 following are exempted from payment of the real
property tax.

However, portions of the Airport Lands and Buildings that MIAA leases to private entities are not
exempt from real estate tax. For example, the land area occupied by hangars that MIAA leases
to private corporations is subject to real estate tax.

Feliciano vs Commission on Audit GR No. 147402 January 14, 2004

Facts:

A special audit team from COA Regional office no. VIII audited the accounts of LMWD.
Subsequently, LMWD received a letter from COA dated July 19, 1999 requesting payment of
auditing fees. As general manager of LMWD, petitioner sent a reply dated October 12, 1999
informing COA’s regional director that the water district could not pay the auditing fees. Petitioner
cited as basis for his action section 6 and 20 of Presidential Decree no. 198 as well as section 18
of RA 6758.

The regional director referred petitioner to reply o the COA Chairman on October 18, 1999. On
October 19, 1999, petitioner wrote COA through the Regional Director asking for refund of all
auditing fees LMWD previously paid to COA. On March 16, 2000, petitioner received COA
Chairman Celso D. Gangans resolution dated January 3, 2o00 denying his requests. Petitioner
filed a motion for reconsideration on March 31, 2000, which COA denied on January 30, 2001.

Issue: Whether or not petitioner LMWD is a private corporation exempt from the auditing
jurisdiction of COA.

Held: No. Private corporations may exist only under a general law. If the corporation is private, it
must necessarily exist under a general law. Stated differently, only corporations created under a
general law can qualify as private corporations under existing laws, that general law is the
corporation code, except that the cooperative code governs the incorporation of cooperatives.

Obviously, LWDs are not private corporations because they are not created under the corporation
code. LWDs are registered with the Securities and Exchange Commission (SEC). Section 14 of
the corporation code states that all corporations under this code shall file with the SEC articles of
incorporation. LWDs have no articles of incorporation, no incorporators and no stockholders or
members. There are no stockholders or members to elect the board of directors of LWDs as in
the case of all corporations registered with the SEC. The local mayor or the provincial governor
appoints the directors of LWDs for a fixed term of office. This court has ruled that LWDs are not
created under the corporation code.
The determining factor of COA’s audit jurisdiction is government ownership or control of the
corporation. The criterion of ownership and control is more important than the issue of original
charter.

Certainly, the government owns and controls LWDs. The government organizes LWDs in
accordance with a specific law, PD 198. There is no private party involved as co-owner in the
creation of and LWD. Just prior to the creation of LWDs, the national or local government owns
and controls all their assets. The government controls LWDs because under PD 198 the municipal
or city mayor, or the provincial governor, appoints all the board of directors of an LWD for a fixed
term of six (6) years. The board of directors of LWDs are not co-owners of the LWDs. LWD have
no private stockholders or members. The board of directors and other personnel of LWDs are
government employees subject to civil service laws, anti-graft laws.

Section 18 of RA 6758 prohibits COA Personnel from receiving any kind of compensation from
any government except compensation paid directly by COA out of its appropriations and
contributions. Thus, RA 6758 itself recognizes an exception to the statutory ban by COA
personnel receiving compensation from GOCCs.

SOVERIEGNTY.1. EXPRESSED CONSENT- INCORP. OF GOCC

G.R. No. 154411 June 19, 2003
NATIONAL HOUSING AUTHORITY, Petitioner,
vs.
HEIRS OF ISIDRO GUIVELONDO, court of appeals, HON. ISAIAS DICDICAN, Presiding
Judge, Regional Trial Court, Branch 11, Cebu City, and PASCUAL Y. ABORDO, Sheriff,
Regional Trial Court, Branch 11, Cebu City, Respondents.

Facts:
On February 23, 1999 the NHA called the alleged claimants of the the land they
intend to develop as a socialized housing project, namely the Heirs of Isidro Guivelondo.
November 12, 1999, the Heirs of Isidro Guivelondo (respondents) filed a Manifestation
stating that they were waiving their objections to petitioner’s power to expropriate their
properties. The plaintiff has a lawful right to expropriate the properties of the defendants
who are heirs of Isidro Guivelondo and the court appointed three Commissioners to
ascertain the just compensations. Commisioners submitted their reports amounting to
P11,200.00 per square meter. Both parties filed a motion for reconsideration about the
compensation but was denied by court.

A motion for execution was filed by the respondents and was then granted by the
court.
July 16, 2001, The petitioner filed with the trial court a Motion to Dismiss Civil Case
No. CEB-23386, complaint for eminent domain, alleging that the implementation of its
socialized housing project was rendered impossible by the unconscionable value of the
land sought to be expropriated, which the intended beneficiaries can’t afford. The Motion
was on the ground that the Partial Judgment had already become final and executory and
there was no just and equitable reason to warrant the dismissal of the case.

Issues:
1) whether or not the state can be compelled and coerced by the courts to exercise or
continue with the exercise of its inherent power of eminent domain;
2) whether or not judgment has become final and executory and if estoppel or laches
applies to government;
3) whether or not writs of execution and garnishment may be issued against the state in
an expropriation wherein the exercise of the power of eminent domain will not serve public
use or purpose

Ruling:
WHEREFORE, in view of the foregoing, the instant petition for review is DENIED.
The decision of the Court of Appeals in CA-G.R. SP No. 68670, affirming the trial court’s
Order denying petitioner’s Motion to Dismiss the expropriation proceedings in Civil Case
No. CEB-23386, is AFFIRMED. Petitioner’s prayer for injunctive relief against the levy
and garnishment of its funds and personal properties is DENIED. The Temporary
Restraining Order dated January 22, 2003 is LIFTED.

Held:

1) Yes. The right of the plaintiff to dismiss an action with the consent of the court is
universally recognized with certain well-defined exceptions. If the plaintiff
discovers that the action which he commenced was brought for the purpose of
enforcing a right or a benefit, the advisability or necessity of which he later
discovers no longer exists, or that the result of the action would be different from
what he had intended, then he should be permitted to withdraw his action, subject
to the approval of the court.
2) Yes. Expropriation proceedings consists of two stages: first, condemnation of the
property after it is determined that its acquisition will be for a public purpose or
public use and, second, the determination of just compensation to be paid for the
taking of private property to be made by the court with the assistance of not more
than three commissioners. Both of the stages are final yet still appealable. An order
of condemnation or dismissal is final, resolving the question of whether or not the
plaintiff has properly and legally exercised its power of eminent domain. Once the
first order becomes final and no appeal thereto is taken, the authority to expropriate
and its public use can no longer be questioned. In the case at bar, petitioner did
not appeal the Order of the trial court dated December 10, 1999, which declared
that it has a lawful right to expropriate the properties of respondent Heirs of Isidro
Guivelondo. Hence, the Order became final and may no longer be subject to
review or reversal in any court. A final and executory decision or order can no
longer be disturbed or reopened no matter how erroneous it may be. Although
judicial determinations are not infallible, judicial error should be corrected through
appeals, not through repeated suits on the same claim.
3) Yes. Court is satisfied that "socialized housing" falls with the confines of "public
use". The public purpose of the socialized housing project is not in any way
diminished by the amount of just compensation that the court has fixed. It was also
stated that the funds of such government-owned and controlled corporations and
non-corporate agency, although considered public in character, are not exempt
from garnishment. This is so because when the Government enters into
commercial business, it abandons its sovereign capacity and is to be treated like
any other corporation.