Feliciano v. Gison
REITERATIONFacts
The Antecedents: Leyte Metropolitan Water District (LMWD) sought tax exemption for water supply equipment and a Toyota Hi-Lux pick-up truck received as a grant from the Japanese government for typhoon rehabilitation. The Department of Finance (DOF) granted exemption for the equipment but denied it for the vehicle, citing the withdrawal of tax exemption privileges for government-owned and controlled corporations (GOCCs) by Executive Order No. 93. Procedural History: LMWD's motion for reconsideration of the denial was denied by the DOF. LMWD appealed to the Court of Tax Appeals (CTA), which dismissed the case for lack of jurisdiction, ruling that LMWD is a GOCC with an original charter. The Court of Appeals (CA) affirmed the CTA's decision. This petition for review on certiorari before the Supreme Court follows. The Petition: LMWD, joined by the "No Tax, No Impairment of Contracts Coalition, Inc.," petitions for review on certiorari under Rule 45. They primarily argue that water districts are not GOCCs with original charters but are private corporations formed under Presidential Decree No. 198, which they contend is a general law, not a special charter. The Coalition further argues that classifying water districts as GOCCs violates the non-impairment of contracts clause and could lead to a nationwide crisis.
Issue(s)
Whether local water districts are Government-Owned or Controlled Corporations (GOCCs) with special charters. Whether Presidential Decree No. 198 constitutes a special charter for local water districts. Whether the doctrine of conclusiveness of judgment applies to bar the present petition.
Ruling
The Supreme Court denied the petition and the petition for intervention for lack of merit and affirmed the decision of the Court of Appeals, which upheld the ruling of the Court of Tax Appeals. The Court ruled that local water districts are GOCCs with special charters and that the issue had already been settled in previous cases, particularly Feliciano v. Commission on Audit.
Ratio Decidendi
On whether local water districts are GOCCs with special charters: The Court reiterated its settled jurisprudence that local water districts (LWDs) are GOCCs with special charters. This is because they are created pursuant to P.D. No. 198, which serves as their special charter, and not under the Corporation Code, the general law for private corporations. Unlike private corporations registered with the Securities and Exchange Commission (SEC), LWDs do not have articles of incorporation, incorporators, or stockholders. Their directors are appointed by local government officials, distinguishing them from private corporations where directors are elected by stockholders. The Court emphasized that P.D. No. 198 grants LWDs their legal existence and powers, making it their charter. On whether P.D. No. 198 is a special charter: The Court unequivocally held that P.D. No. 198 constitutes the special charter of local water districts. It explained that the Constitution allows the creation of private corporations only by general law and GOCCs by special charters. Since LWDs are not created under the Corporation Code (the general law for private corporations) and are not registered with the SEC, they cannot be private corporations. Therefore, they must be GOCCs created by a special charter, which P.D. No. 198 provides. The decree grants LWDs their powers and rights, and without it, they would not possess corporate powers. On the applicability of the doctrine of conclusiveness of judgment: The Court found that the doctrine of conclusiveness of judgment, a branch of res judicata, barred the present petition. The prior case of Feliciano v. Commission on Audit (COA) had already squarely resolved the same issue of whether LMWD is a GOCC with a special charter. The judgment in Feliciano v. COA was final, rendered by a court of competent jurisdiction, and was on the merits. There was a substantial identity of parties (LMWD represented by Engr. Feliciano) and the issue presented, even though the respondents were different government offices (COA and DOF), as they represented the same government. Therefore, the issues decided in the prior case were conclusive between the parties in the present case.
Main Doctrine
Local Water Districts (LWDs) are Government-Owned or Controlled Corporations (GOCCs) with special charters, created pursuant to Presidential Decree No. 198, and are not private corporations created under a general law like the Corporation Code. The doctrine of conclusiveness of judgment bars the re-litigation of issues already decided in a prior case between substantially the same parties.