People v. Morales
REITERATIONFacts
The Antecedents: Administrative Order No. 223 created the Committee for the National Centennial Celebrations in 1998 (Committee). Executive Order No. 128 reconstituted the Committee and renamed it the "National Centennial Commission" (NCC). The NCC appointed the late Vice-President Salvador Laurel as its Chairman. The NCC and the Bases Conversion Development Authority (BCDA) organized the Philippine Centennial Expo ’98 Corporation or Expocorp to operate, administer, manage, and develop the Philippine Centennial International Exposition 1998 (Expo ‘98). Allegations of anomalies, including lack of public biddings, surrounded the project. Investigations were conducted by the Senate Blue Ribbon Committee and the Ad Hoc and Independent Citizen’s Committee (AHICC). These investigations recommended further investigation by the Office of the Ombudsman. The Ombudsman’s Fact-Finding and Investigation Bureau filed an Information against respondent Luis J. Morales (Morales), the acting president of Expocorp, for violation of Section 3(e) of Republic Act (R.A.) No. 3019. Procedural History: The Information alleged that Morales, as acting president of Expocorp, acted with evident bad faith and manifest partiality by selling a Mercedes Benz vehicle for his official use to Rodolfo M. Lejano through Newton Motors, Inc. for P2,250,000.00 without public bidding or board approval, and failed to deposit the proceeds to Expocorp’s account. Morales moved for dismissal, arguing Expocorp is a private corporation and he is not a public employee, thus the Sandiganbayan lacks jurisdiction. He contended Expocorp was not created by special law, had no original charter, and majority of its stock was owned by private individuals. The People argued Expocorp is a government-owned corporation because BCDA held a significant portion of its stocks, and citing Laurel v. Desierto, Morales was a public officer. Morales countered that BCDA's ownership became minority after Global Clark Assets Corporation (Global) subscribed to unsubscribed shares, making Expocorp a private corporation. The Sandiganbayan dismissed the information, ruling Expocorp is a private corporation and Morales, as its president, is not a public officer within its jurisdiction. The People’s motion for reconsideration was denied, leading to the present petition. The Petition: The People filed a petition for review on certiorari, arguing Expocorp should be considered a public office as it performed executive functions of the NCC and sovereign functions of the government, and that Morales, as its president, should be considered a public officer subject to Sandiganbayan jurisdiction.
Issue(s)
Whether Expocorp is a government-owned or controlled corporation. Whether respondent Luis J. Morales, as president of Expocorp, is a public officer subject to the jurisdiction of the Sandiganbayan for violation of Section 3(e) of R.A. No. 3019.
Ruling
The petition is denied for lack of merit. The Resolution of the Sandiganbayan dated June 15, 2004, dismissing the information against respondent Luis J. Morales, is affirmed.
Ratio Decidendi
On whether Expocorp is a government-owned or controlled corporation: The Court affirmed the Sandiganbayan's finding that Expocorp is a private corporation because it was incorporated under the Corporation Code and registered with the Securities and Exchange Commission, not created by a special law. While BCDA was an original incorporator, Global Clark Assets Corporation (Global) later subscribed to a majority of the unsubscribed shares, leaving BCDA as a minority stockholder. According to the ruling in Dante V. Liban, et al. v. Richard J. Gordon, a government-owned or controlled corporation must have at least a majority of its capital stock owned by the government. Since Global, a private entity, owned the majority of Expocorp's stocks, Expocorp cannot be characterized as a government-owned or controlled corporation. On whether respondent Luis J. Morales, as president of Expocorp, is a public officer subject to the jurisdiction of the Sandiganbayan for violation of Section 3(e) of R.A. No. 3019: Consequently, Morales, as the president of Expocorp, is not a public officer in relation to his position in Expocorp. The Sandiganbayan's jurisdiction is limited to cases involving public officers and employees, including those in government-owned or controlled corporations, in relation to their office. As Expocorp is a private corporation, Morales, in his capacity as its president, falls outside the Sandiganbayan's jurisdiction for the alleged violation of Section 3(e) of R.A. No. 3019. The Court clarified that the ruling in Laurel v. Desierto applied to Salvador Laurel's position as NCC Chairman, which was a public office, and did not automatically confer public officer status on the president of Expocorp solely based on Expocorp's organizational ties to the NCC.
Main Doctrine
A corporation organized under the Corporation Code and registered with the Securities and Exchange Commission, where majority of its capital stock is owned by private individuals, is a private corporation, and its officers are not public officers subject to the jurisdiction of the Sandiganbayan for violations of R.A. No. 3019, unless they hold other positions classified as public office.