Corpo 2nd Day

7/24/2019 Corpo 2nd Day

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G.R. No. L-22619 December 2, 1924

NATIONAL COAL COMPANY, pla!"##-appellee,$%.T&' COLL'CTOR O( INT'RNAL R')'N*', +e#e!+a!"-appella!".

This action was brought in the Court of First Instance of the City of Manila on the 17th day of July, 1923, for the

urose of reco!ering the su" of #12,$%%&'(, alleged to ha!e been aid under rotest by the laintiff co"any to

the defendant, as secific ta) on 2%,$(9&3 tons of coal& *aid co"any is a cororation created by +ct o& 27$- ofthe #hiliine .egislature for the urose of de!eloing the coal industry in the #hiliine Islands and is actually

engaged in coal "ining on reser!ed lands belonging to the /o!ern"ent& It clai"ed e)e"tion fro" ta)es under the

ro!ision of sections 1% and 1- of +ct o& 2719, and rayed for a 0udg"ent ordering the defendant to refund to thelaintiff said su" of #12,$%%&'(, with legal interest fro" the date of the resentation of the co"laint, and costs

against the defendant&

The defendant answered denying generally and secifically all the "aterial allegations of the co"laint, e)cet the

legal e)istence and ersonality of the laintiff& +s a secial defense, the defendant alleged a that the su" of#12,$%%&'( was aid by the laintiff without rotests, and b that said su" was due and owing fro" the laintiff

to the /o!ern"ent of the #hiliine Islands under the ro!isions of section 1%9' of the +d"inistrati!e Code and

rayed that the co"laint be dis"issed, with costs against the laintiff&

on the issue thus resented, the case was brought on for trial& +fter a consideration of the e!idence adduced byboth arties, the 4onorable #edro Concetion, 0udge, held that the words 5lands ownedby any erson, etc&,5 in

section 1- of +ct o& 2719 should be understood to "ean 5lands held in leaseor usufruct,5 in har"ony with the

other ro!ision of said +ct6 that the coal lands ossessed by the laintiff, belonging to the /o!ern"ent, fell withinthe ro!isions of section 1- of +ct o& 27196 and that a ta) of #$&$% er ton of 1,$1' ilos on each ton of coal

e)tracted therefro", as ro!ided in said section, was the only ta) which should be collected fro" the laintiff6 and

sentenced the defendant to refund to the laintiff the su" of #11,$(1&11 which is the difference between the

a"ount collected under section 1%9' of the +d"inistrati!e Code and the a"ount which should ha!e been collectedunder the ro!isions of said section 1- of +ct o& 2719& Fro" that sentence the defendant aealed, and now

"aes the following assign"ents of error8

I& The court below erred in holding that section 1- of +ct o& 2719 does not refer to coal lands owned by ersonsand cororations&

II& The court below erred in holding that the laintiff was not sub0ect to the ta) rescribed in section 1%9' of the

+d"inistrati!e Code&

The uestion confronting us in this aeal is whether the laintiff is sub0ect to the ta)es under section 1- of +ct

o& 2719, or to the secific ta)es under section 1%9' of the +d"inistrati!e Code&

The laintiff cororation was created on the 1$th day of March, 1917, by +ct o& 27$-, for the urose of

de!eloing the coal industry in the #hiliine Island, in har"ony with the general lan of the /o!ern"ent to

encourage the de!elo"ent of the natural resources of the country, and to ro!ided facilities therefor& :y said +ct,the co"any was granted the general owers of a cororation 5and such other owers as "ay be necessary to

enable it to rosecute the business of de!eloing coal deosits in the #hiliine Island and of "ining, e)tracting,

transorting and selling the coal contained in said deosits&5 *ec& 2, +ct o& 27$-& :y the sa"e law +ct o&

27$- the /o!ern"ent of the #hiliine Islands is "ade the "a0ority stocholder, e!idently in order to insureroer go!ern"ent suer!ision and control, and thus to lace the /o!ern"ent in a osition to render all ossible

encourage"ent, assistance and hel in the rosecution and furtherance of the co"any;s business&

a"boanga, ?eart"ent of Mindanao and *ulu, and the Island of #olillo, #ro!ince ofTayabas&5 +l"ost i""ediately after the issuance of said rocla"ation the ational Coal Co"any too ossession


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of the coal lands within the said reser!ation, with an area of about %$$ hectares, without any further for"ality,

contract or lease& a"boanga,?eart"ent of Mindanao and *ulu, and the Island of #olillo, #ro!ince of Tayabas&5 It will be noted that said

rocla"ation only ro!ided that all coal=bearing ublic lands within said ro!ince and island should be withdrawn

fro" settle"ent, entry, sale, or other disosition& There is nothing in said rocla"ation which authoriEes the

laintiff or any other erson to enter uon said re!ersations and to "ine coal, and no ro!ision of law has beencalled to our attention, by !irtue of which the laintiff was entitled to enter uon any of the lands so reser!ed by

said rocla"ation without first obtaining er"ission therefor&

The laintiff is a ri!ate cororation& The "ere fact that the /o!ern"ent haens to the "a0ority stocholder doesnot "ae it a ublic cororation& +ct o& 27$-, as a"ended by +ct o& 2(22, "aes it sub0ect to all of the

ro!isions of the Cororation .aw, in so far as they are not inconsistent with said +ct o& 27$-& o ro!isions of

+ct o& 27$- are found to be inconsistent with the ro!isions of the Cororation .aw& +s a ri!ate cororation, it

has no greater rights, owers or ri!ileges than any other cororation which "ight be organiEed for the sa"eurose under the Cororation .aw, and certainly it was not the intention of the .egislature to gi!e it a reference

or right or ri!ilege o!er other legiti"ate ri!ate cororations in the "ining of coal& Ahile it is true that said

rocla"ation o& 39 withdrew 5fro" settle"ent, entry, sale, or other disosition of coal=bearing ublic landswithin the #ro!ince of >a"boanga & & & and the Island of #olillo,5 it "ade no ro!ision for the occuation and

oeration by the laintiff, to the e)clusion of other ersons or cororations who "ight, under roer er"ission,enter uon the oerate coal "ines&


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2 It "ined on ublic lands between the "onth of July, 192$, and the "onths of March, 1922, 2%,$(9&3 tons of

coal&

3 on de"and of the Collector of Internal e!enue it aid a ta) of #$&-$ a ton, as ta)es under the ro!isions ofarticle 19%' of the +d"inistrati!e Code on the 1-th day of ?ece"ber, 1922&

% It is ad"itted that it is neither the owner nor the lessee of the lands uon which said coal was "ined&

- The rocla"ation of Francis :urton 4arrison, /o!ernor=/eneral, of the 1(th day of


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do"estic sale or consu"tion, and uon things i"orted fro" the nited *tates or foreign countries& It ha!ing

been de"onstrated that the laintiff has roduced coal in the #hiliine Islands and is not a lessee or owner of theland fro" which the coal was roduced, we are clearly of the oinion, and so hold, that it is sub0ect to ay the

internal re!enue ta) under the ro!isions of section 1%9' of the +d"inistrati!e Code, and is not sub0ect to the

ay"ent of the internal re!enue ta) under section 1- of +ct o& 2719, nor to any other ro!isions of said +ct&

Therefore, the 0udg"ent aealed fro" is hereby re!oed, and the defendant is hereby relie!ed fro" allresonsibility under the co"laint& +nd, without any finding as to costs, it is so ordered&

P&ILIPPIN' OCI'TY (ORT&' PR')'NTION O(CR*'LTY TO ANIMAL,

G.R. No. 1692


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Pe""o!er%, Member%/

P*NO, C.J. 0*I*MING, YNAR'-ANTIAGO, ANDO)AL-G*TI'RR', CARPIO, A*TRIA-MARTIN', CORONA, - $er%3% - CARPIO-MORAL', AC*NA, TINGA, C&ICO-NAARIO, GARCIA,

)'LACO, R.,NAC&*RA, a!+

R'Y', JJ.

COMMIION ON A*DIT,DIR. ROD*L(O . ARI'GA5! % o##cal capac"7 a% Drec"oro# "e Comm%%o! o! A3+"8, M.M'RL' M. )AL'NTIN a!+ M.*AN G*ARDIAN 5! "er o##calcapac"e% a% Team Lea+er a!+ TeamMember, re%pec"$el7, o# "e a3+"Team o# "e Comm%%o! o! A3+"8,

Prom3la"e+/ Re%po!+e!"%. ep"ember 2, 2::) = = = = = = = = = = = = = = = = = = = = = = = = = = = = = = = = = = = = = = = = = = = = = = = = = = = = = = = = = = = )

? D C I * I <

+*TI+=M+TID>,J&8

:efore the Court is a secial ci!il action for Certiorari and#rohibition under ule '- of the ules of

Court, in relation to *ection 2 of ule '%, filed by the etitioner assailing


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and D)change Co""ission& I"ortant to note is that the nature of the etitioner as a cororate entity is

distinguished fro" thesociedad anonimasunder the *anish Code of Co""erce&

For the urose of enhancing its owers in ro"oting ani"al welfare and enforcing laws for the

rotection of ani"als, the etitioner was initially i"bued under its charter with the ower to arehend

!iolators of ani"al welfare laws& In addition, the etitioner was to share one=half 1@2 of the fines

i"osed and collected through its efforts for !iolations of the laws related thereto& +s originally worded,

*ections % and - of +ct o& 12(- ro!ide8

*DC& %& The said society is authorized to appointnot to e)ceed fi!e agents in the

City of Manila, and not to e)ceed two in each of the ro!inces of the #hiliine Islands whoshall have all the power and authority of a police officer to make arrests for violation of the

lawsenacted for the re!ention of cruelty to ani"als and the rotection of ani"als, and to

ser!e any rocess in connection with the e)ecution of such laws6 and in addition thereto, allthe olice force of the #hiliine Islands, where!er organiEed, shall, as occasion reuires,

assist said society, its "e"bers or agents, in the enforce"ent of all such laws&

*DC& -& One-half of all the fines imposed and collected through the efforts of said

society, its "e"bers or its agents, for !iolations of the laws enacted for the re!ention of

cruelty to ani"als and for their rotection, shall belong to said society and shall be used to

promote its objects&

e"hasis sulied

*ubseuently, howe!er, the ower to "ae arrests as well as the ri!ilege to retain a ortion of the

fines collected for !iolation of ani"al=related laws were recalled by !irtue of Co""onwealth +ct C&+&

o& 1%(,G%Hwhich reads, in its entirety, thus8

:e it enacted by the ational +sse"bly of the #hiliines8

*ection 1& *ection four of +ct u"bered Twel!e hundred and eighty=fi!e asa"ended by +ct u"bered Thirty fi!e hundred and forty=eight, is hereby further a"ended

so as to read as follows8

*ec& %& The said society is authoriEed to aoint not to e)ceed tenagents in the City of Manila, and not to e)ceed one in each "uniciality of

the #hiliines who shall have the authority to denounce to regular peace

officersany !iolation of the laws enacted for the re!ention of cruelty toani"als and the rotection of ani"als and to cooerate with said eace

officers in the rosecution of transgressors of such laws&

*ec& 2& he full amount of the fines collectedfor !iolation of the laws against cruelty

to ani"als and for the rotection of ani"als,shall accrue to the general fund of the

!unicipalitywhere the offense was co""itted&

*ec& 3& This +ct shall tae effect uon its aro!al&

+ro!ed, o!e"ber (, 193'& D"hasis sulied
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I""ediately thereafter, then #resident Manuel .& ueEon issued D)ecuti!e


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which it "ay be organiEed and incororated, nor a *ecurities and D)change Co""ission which

would ha!e assed uon its organiEation and incororation&

b& That D)ecuti!e


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The essential uestion before this Court is whether the etitioner ualifies as a go!ern"ent agency

that "ay be sub0ect to audit by resondent C


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cororation law6 and finally,si%th, eublic +ct o& (%(-, otherwise nown as the O+ni"al Aelfare +ct of

199(,P designates the etitioner as a "e"ber of its Co""ittee on +ni"al Aelfare which is attached to the

?eart"ent of +griculture&

In !iew of the hrase OOne-half of all the fines imposed and collected through the efforts of said

society,P the Court, in a esolution dated January 3$, 2$$7, reuired the


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0urisdiction of the Ci!il *er!ice Co""ission, and are co"ulsory "e"bers of the

/o!ern"ent *er!ice Insurance *yste"& ))) D"hasis suliedG13H

The etitioner is correct in stating that the charter test is redicated, at best, on the legal regi"e

established by the 193- Constitution, *ection 7, +rticle KIII, which states8

*ec& 7& The ational +sse"bly shall not, e)cet by general law, ro!ide for thefor"ation, organiEation, or regulation of ri!ate cororations, unless such cororations are

owned or controlled by the /o!ern"ent or any subdi!ision or instru"entality thereof&G1%H

The foregoing roscrition has been carried o!er to the 1973 and the 19(7 Constitutions& *ection

1' of +rticle KII of the resent Constitution ro!ides8

*ec& 1'& The Congress shall not, e)cet by general law, ro!ide for the for"ation,

organiEation, or regulation of ri!ate cororations& /o!ern"ent=owned or controlledcororations "ay be created or established by secial charters in the interest of the co""on

good and sub0ect to the test of econo"ic !iability&

*ection 1' is essentially a re=enact"ent of *ection 7 of +rticle KLI of the 193- Constitution and

*ection % of +rticle KIL of the 1973 Constitution&

?uring the for"ulation of the 193- Constitution, the Co""ittee on Franchises reco""ended the

foregoing roscrition to re!ent the ressure of secial interests uon the law"aing body in the creation

of cororations or in the regulation of the sa"e&

To er"it the law"aing body by secial law to ro!ide

for the organiEation, for"ation, or regulation of ri!ate cororations would be in effect to offer to it the

te"tation in "any cases to fa!or certain grous, to the re0udice of others or to the re0udice of the

interests of the country&G1-H

+nd since the underinnings of the charter test had been introduced by the 193- Constitution and

not earlier, it follows that the test cannot aly to the etitioner, which was incororated by !irtue of +ct

o& 12(-, enacted on January 19, 19$-& *ettled is the rule that laws in general ha!e no retroacti!e effect,

unless the contrary is ro!ided&G1'H +ll statutes are to be construed as ha!ing only a rosecti!e oeration,

unless the urose and intention of the legislature to gi!e the" a retrosecti!e effect is e)ressly declared

or is necessarily i"lied fro" the language used& In case of doubt, the doubt "ust be resol!ed against the

retrosecti!e effect&G17H

There are a few e)cetions& *tatutes can be gi!en retroacti!e effect in the following cases8 1 when

the law itself so e)ressly ro!ides6 2 in case of re"edial statutes6 3 in case of curati!e statutes6 % in

case of laws interreting others6 and - in case of laws creating new rights&G1(H one of the e)cetions is

resent in the instant case&

The general rincile of rosecti!ity of the law liewise alies to +ct o& 1%-9, otherwise nown

as the Cororation .aw, which had been enacted by !irtue of the lenary owers of the #hiliine

Co""ission on March 1, 19$', a little o!er a year afterJanuary 19, 19$-, the ti"e the etitioner e"erged
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as a 0uridical entity& D!en the Cororation .aw resects the rights and owers of 0uridical entities

organiEed beforehand, !iE8

*DC& 7-& +ny cororation orsociedad anonimafor"ed, organiEed, and e)istingunder the laws of the #hiliine Islands and lawfully transacting business in the

#hiliine Islands on the date of the assage of this +ct, shall be sub0ect to the ro!isions

hereof so far as such ro!isions "ay be alicable and shallbe entitled at its option either to continue business as such corporation or to reform and

organize under and by virtue of the provisions of this $ct, transferring all cororate interests

to the new cororation which, if a stoc cororation, is authoriEed to issue its shares of stoc

at ar to the stocholders or "e"bers of the old cororation according to theirinterests& D"hasis sulied&

+s ointed out by the


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it is a uasi=ublic cororation, a ind of ri!ate do"estic cororation, which the Court will further

elaborate on under thefourthoint&

"econd, a reading of etitioners charter shows that it is not sub0ect to control or suer!ision by any

agency of the *tate, unlie go!ern"ent=owned and =controlled cororations& o go!ern"ent reresentati!e

sits on the board of trustees of the etitioner& .ie all ri!ate cororations, the successors of its "e"bers

are deter"ined !oluntarily and solely by the etitioner in accordance with its by=laws, and "ay e)ercise

those owers generally accorded to ri!ate cororations, such as the owers to hold roerty, to sue and be

sued, to use a co""on seal, and so forth& It "ay adot by=laws for its internal oerations8 the etitioner

shall be "anaged or oerated by its officers Oin accordance with its by=laws in force&P The ertinent

ro!isions of the charter ro!ide8

*ection 1& +nna .& Ide, ate *& Aright, John .& Cha"berlain, Aillia" F& Tucer,Mary *& Fergusson, +"asa *& Crossfield, *encer Cosby, *ealy :& ossiter, ichard #&

*trong, Jose obles .ahesa, Josefina & de .uEuriaga, and such other ersons as "ay be

associated with the" in confor"ity with this act, and their successors, are hereby constitutedand created a body olitic and cororate at law, under the na"e and style of OThe

#hiliines *ociety for the #re!ention of Cruelty to +ni"als&P

+s incororated by this +ct, said society shall ha!e the ower to add to its

organiEation such and as "any "e"bers as it desires, to ro!ide for and choose such

officers as it "ay dee" ad!isable, and in such "anner as it "aywish, and to re"o!e "e"bers as it shall ro!ide&

It shall ha!e the right to sue and be sued, to use a co""on seal, to

recei!e legacies and donations, to conduct social enterrises for the urose ofobtaining funds, to le!y dues uon its "e"bers and ro!ide for their collection to hold

real and ersonal estate such as "ay be necessary for the acco"lish"ent of the uroses

of the society, and to adot such by=laws for its go!ern"ent as "ay not be inconsistent withlaw or this charter&

) ) ) )

*ec& 3& The said society shall be oerated under the direction of its officers, in

accordance with its by=laws in force, and this charter&

) ) ) )

*ec& '& The rincial office of the society shall be et in the city of Manila, and thesociety shall ha!e full ower to locate and establish branch offices of the society where!er it

"ay dee" ad!isable in the #hiliine Islands, such branch offices to be under the

suer!ision and control of the rincial office&

hird& The e"loyees of the etitioner are registered and co!ered by the *ocial *ecurity *yste" at

the latters initiati!e, and not through the /o!ern"ent *er!ice Insurance *yste", which should be the case

if the e"loyees are considered go!ern"ent e"loyees& This is another indication of etitioners nature as

a ri!ate entity& *ection 1 of eublic +ct o& 11'1, as a"ended by eublic +ct o& (2(2, otherwise

nown as the *ocial *ecurity +ct of 1997, defines the e"loyer8


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D"loyer Q +ny erson, natural or 0uridical, do"estic or foreign, who carries on in

the #hiliines any trade, business, industry, undertaing or acti!ity of any ind and uses theser!ices of another erson who is under his orders as regards the e"loy"ent, e%cept the

(overnment and any of its political subdivisions' branches or instrumentalities' including

corporations owned or controlled by the (overnment8 #ro!ided, That a self=e"loyederson shall be both e"loyee and e"loyer at the sa"e ti"e& D"hasis sulied

ourth& The resondents contend that the etitioner is a Obody oliticP because its ri"ary urose is

to secure the rotection and welfare of ani"als which, in turn, redounds to the ublic good&

This argu"ent, is, at best, secious& The fact that a certain 0uridical entity is i"ressed with ublic

interest does not, by that circu"stance alone, "ae the entity a ublic cororation, inas"uch as a

cororation "ay be ri!ate although its charter contains ro!isions of a ublic character, incororated

solely for the ublic good& This class of cororations "ay be considered uasi=ublic cororations, which

are ri!ate cororations that render ublic ser!ice, suly ublic wants, G21H

or ursue other elee"osynary

ob0ecti!es& Ahile urosely organiEed for the gain or benefit of its "e"bers, they are reuired by law to

discharge functions for the ublic benefit& D)a"les of these cororations are utility,G22H

railroad,

warehouse, telegrah, telehone, water suly cororations and transortation co"anies& G23H

It "ust be

stressed that a uasi=ublic cororation is a secies of ri!ate cororations, but the ualifying factor is the

tye of ser!ice the for"er renders to the ublic8 if it erfor"s a ublic ser!ice, then it beco"es a uasi=

ublic cororation&G2%H

+uthorities are of the !iew that the urose alone of the cororation cannot be taen as a safe guide,

for the fact is that al"ost all cororations are nowadays created to ro"ote the interest, good, or

con!enience of the ublic& + ban, for e)a"le, is a ri!ate cororation6 yet, it is created for a ublic

benefit& #ri!ate schools and uni!ersities are liewise ri!ate cororations6 and yet, they are rendering

ublic ser!ice& #ri!ate hositals and wards are charged with hea!y social resonsibilities& More so with all

co""on carriers&


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ifth& The resondents argue that since the charter of the etitioner reuires the latter to render

eriodic reorts to the Ci!il /o!ernor, whose functions ha!e been inherited by the #resident, the etitioner

is, therefore, a go!ern"ent instru"entality&

This contention is inconclusi!e& :y !irtue of the fiction that all cororations owe their !ery e)istence

and owers to the *tate, the reortorial reuire"ent is alicable to all cororations of whate!er nature,

whether they are ublic, uasi=ublic, or ri!ate cororationsas creatures of the *tate, there is a reser!ed

right in the legislature to in!estigate the acti!ities of a cororation to deter"ine whether it acted within its

owers& In other words, the reortorial reuire"ent is the rincial "eans by which the *tate "ay see to it

that its creature acted according to the owers and functions conferred uon it& These rinciles were

e)tensi!ely discussed inataan "hipyard 2ngineering Co.' /nc. v. #residential Commission on (ood

(overnment&G2'H 4ere, the Court, in holding that the sub0ect cororation could not in!oe the right against

self=incri"ination whene!er the *tate de"anded the roduction of its cororate boos and aers,

e)tensi!ely discussed the urose of reortorial reuire"ents, viz8

) ) ) The cororation is a creature of the state& It is resu"ed to be incororated for the

benefit of the ublic& It recei!ed certain secial ri!ileges and franchises, and holds the"

sub0ect to the laws of the state and the li"itations of its charter& Its owers are li"ited bylaw& It can "ae no contract not authoriEed by its charter& Its rights to act as a cororation

are only reser!ed to it so long as it obeys the laws of its creation& There is a reser!eGdH right

in the legislature to in!estigate its contracts and find out whether it has e)ceeded itsowers&

/t would be a strange anomaly to hold that a state' having chartered a corporation

to make use of certain franchises' could not' in the e%ercise of sovereignty' in,uire howthese franchises had been employed' and whether they had been abused' and demand theproduction of the corporate books and papers for that purpose& The defense a"ounts to this,

that an officer of the cororation which is charged with a cri"inal !iolation of the statute

"ay lead the cri"inality of such cororation as a refusal to roduce its boos& To state this

roosition is to answer it& &hile an individual may lawfully refuse to answer incriminating,uestions 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& Ailson !& nited *tates, -- .aw Dd&, 771, 7($&G27H

A4DDF


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16

G.R. No. 92;-;< ep"ember 1;, 1991

DA)AO CITY =AT'R DITRICT, CAGAYAN D' ORO CITY =AT'R DITRICT, M'TROC'* =AT'R DITRICT, AMOANGA CITY =AT'R DITRICT, L'YT' M'TRO =AT'RDITRICT, *T*AN CITY =AT'R DITRICT, CAMARIN' NORT' =AT'R DITRICT,LAG*NA =AT'R DITRICT, D*MAG*'T' CITY =AT'R DITRICT, LA *NION =AT'RDITRICT, AYAY =AT'R DITRICT, M'TRO LINGAY'N =AT'R DITRICT, *RDAN'TA=AT'R DITRICT, COTAATO CITY =AT'R DITRICT, MARA=I =AT'R DITRICT,TAG*M =AT'R DITRICT, DIGO =AT'R DITRICT, ILIG =AT'R DITRICT, a!+M'CA*AYAN =AT'R DITRICT, pe""o!er%,$%.CI)IL 'R)IC' COMMIION, a!+ COMMIION ON A*DIT, re%po!+e!"%.

Ahether or not the .ocal Aater ?istricts for"ed and created ursuant to the ro!isions of #residential

?ecree o& 19(, as a"ended, are go!ern"ent=owned or controlled cororations with original charterfalling under the Ci!il *er!ice .aw and@or co!ered by the !isitorial ower of the Co""ission on +udit is

the issue which the etitioners entreat this Court, en banc, to shed light on&

#etitioners are a"ong the "ore than fi!e hundred -$$ water districts e)isting throughout the country

for"ed ursuant to the ro!isions of #residential ?ecree o& 19(, as a"ended by #residential ?ecrees os&7'( and 1%79, otherwise nown as the 5#ro!incial Aater tilities +ct of 1973&5

#residential ?ecree o& 19( was issued by the then #resident Ferdinand D& Marcos by !irtue of his

legislati!e ower under #rocla"ation o& 1$(1& It authoriEed the different local legislati!e bodies to for"

and create their resecti!e water districts through a resolution they will ass sub0ect to the guidelines, rulesand regulations therein laid down& The decree further created and for"ed the 5.ocal Aater tilities

+d"inistration5 .A+, a national agency attached to the ational Dcono"ic and ?e!elo"ent

+uthority D?+, and granted with regulatory ower necessary to oti"iEe ublic ser!ice fro" water

utilities oerations&

The resondents, on the other hand, are the Ci!il *er!ice Co""ission C*C and the Co""ission on +udit

C


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))) ))) )))

Considering that #? 19( is a general legislation e"owering and@or authoriEing go!ern"ent

agencies and entities to create water districts, said #? 19( cannot be considered as thecharter itself creating the Aater ?istrict& #ublic resondent .C did not co""it any gra!e

abuse of discretion in holding that the oerati!e act, that created the Metro Iloilo Aater

?istrict was the resolution of the *angguniang #anglunsod of Iloilo City& 4ence, thee"loyees of Aater ?istricts are not co!ered by Ci!il *er!ice .aws as the latter do sic not

ha!e original charters&

In adherence to the 0ust cited ruling, the C*C susended the i"le"entation of esolution o& 9$=-7- by

issuing esolution o& 9$=77$ which reads8

))) ))) )))


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18

+s early asaguio &ater 3istrict v. rajano' et al.' /&& o& '-%2(, February 2$, 19(%, 127 *C+ 73$,

Ae already ruled that a water district is a cororation created ursuant to a secial law #&?& o& 19(, asa"ended, and as such its officers and e"loyees are co!ered by the Ci!il *er!ice .aw&

In another case 4agonoy Aater ?istrict !& .C, /&& o& (1%9$, +ugust 31, 19((, 1'- *C+ 272, Ae

ruled once again that local water districts are uasi=ublic cororations whose e"loyees belong to the

Ci!il *er!ice& The Court;s ronouce"ent in this case, as e)tensi!ely uoted inthe anjaycase,supra'artly reads8

5The only uestion here is whether or not local water districts are go!ern"ent owned or

controlled cororations whose e"loyees are sub0ect to the ro!isions of the Ci!il *er!ice

.aw& The .abor +rbiter asserted 0urisdiction o!er the alleged illegal dis"issal of ri!ateresondent Lillanue!a by relying on *ection 2- of #residential decree o& 19(, nown as

the #ro!incial Aater tilities +ct of 19735 which went onto effect in 2- May 1973, and

which ro!ides as follows8

2%emption from Civil "ervice& The district and its e"loyees, being

engaged in a rorietary function, are hereby e)e"t fro" the ro!isions ofthe Ci!il *er!ice .aw& Collecti!e :argaining shall be a!ailable only to

ersonnel below suer!isory le!els8#rovided' however, That the total of allsalaries, wages e"olu"ents, benefits or other co"ensation aid to all

e"loyees in any "onth shall not e)ceed fifty ercent -$R of a!erage net

"onthy re!enue& *aid net re!enue reresenting inco"e fro" water sales andsewerage ser!ice charges, less ro=rata share of debt ser!ice and e)enses for

fuel or energy for u"ing during the receding fiscal year&

The .abor +rbiter failed to tae into accout the ro!isions of #residential ?ecree o& 1%79,

which went into effect on 11 June 197(, #&?& o& 1%79, wied away *ection 2- of #? 19(

uoted abo!e, and *ection 2' of #? 19( was renu"bered as *ection 2- in the following"anner8

*ection 2' of the sa"e decree #? 19( is hereby a"ended to read as *ection 2- as follows8

*ection 2-&$uthorization& The district "ay e)ercise all the owers which are e)ressly

granted by this Title or which are necessarily i"lied fro" or incidental to the owers anduroses herein stated& For the urose of carrying out the ob0ecti!es of this +ct, a district is

hereby granted the ower of e"inent do"ain, the e)ercise thereof shall, howe!er, be sub0ect

to re!iew by the +d"inistration&

Thus, *ection 2- of #? 19( e)e"ting the e"loyees of water districts fro" the alicationof the Ci!il *er!ice .aw was re"o!ed fro" the statute boos8

))) ))) )))

Ae grant the etition for the following reasons8

1& *ection 2- of #? o& 19( was reealed by *ection 3 of #? o& 1%796 *ection 2' of #?o& 19( was a"ended ro read as *ec& 2- by *ec& % of #? o& 1%79& The a"endatory decree

too effect on June 11, 197(&

))) ))) )))

3& The :A? is a cororation created ursuant to a secial law #? o& 19(, as a"ended&

+s such its officers and e"loyees are art of the Ci!il *er!ice *ec& 1, +rt& KII=:, G1973HConstitution6 #? o& ('(&


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19

+scertained fro" a consideration of the whole statute, #? 19( is a secial law alicable only to the

different water districts created ursuant thereto& In all its essential ter"s, it is ob!ious that it ertains to asecial urose which is intended to "eet a articular set of conditions and cir"cu"stances& The fact that

said decree generally alies to all water districts throughout the country does not change the fact that #?

19( is a secial law& +ccordingly, this Court;s resolution in Metro Iloilo case declaring #? 19( as a generallegislation is hereby abandoned&

:y 5go!ern"ent=owned or controlled cororation with original charter,5 Ae "ean go!ern"ent owned or

controlled cororation created by a secial law and not under the Cororation Code of the #hiliines&

Thus, in the case of

7umanta v. 674C

/&& o& (2(19, February (, 19(9, 17$ *C+ 79, (2, Ae held8

The Court, in6ational "ervice Corporation *6$"2CO+ v. 6ational 7abor 4elationsCommission, /&& o '9(7$, ro"ulgated on 29 o!e"ber 19((, uoting e)tensi!ely fro"

the deliberations of 19(' Constitutional Co""ission in resect of the intent and "eaning of

the new hrase 5with original character,5 in effect held thatgovernment-owned andcontrolled corporations with original charter refer to corporations chartered by special law

as distinguished from corporations organized under our general incorporation statute 8

the Corporations Code& In +*DC


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institutions and one "e"ber a reresentati!e of wo"en;s organiEation& o ublic official

shall ser!e as directorrovided' however, that if the district has a!ailed of the financialassistance of the +d"inistration, the +d"inistration "ay aoint any of its ersonnel to sit

in the board of directors with all the rights and ri!ileges aertaining to a regular "e"ber

for such eriod as the indebtedness re"ains unaid in which case the board shall beco"osed of si) "e"bers6 as a"ended by #?s os& 7'( and 1%79&

the "anner of their aoint"ent and no"inations6

*ec& 9&$ppointment& :oard "e"bers shall be aointed by the aointing authority& *aid

aoint"ents shall be "ade fro" a list of no"inees, if any, sub"itted ursuant to *ection

1$& If no no"inations are sub"itted, the aointing authority shall aoint any ualifiederson of the category to the !acant osition6

*ec&1$&6ominations&


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21

and the co"ensation and ersonal liability of the "e"bers of the :oard of ?irectors8

*ec& 13& Compensation& Dach director shall recei!e a er die", to be deter"ined by the

board, for each "eeting of the board actually attended by hi", but no director shag recei!eer die"s in any gi!en "onth in e)cess of the eui!alent of the total er die"s of four

"eetings in any gi!en "onth& o director shall recei!e other co"ensation for ser!ices to

the district&

+ny er die" in e)cess of #-$&$$ shall be sub0ect to aro!al of the +d"inistration asa"ended by #? 7'(&

*ec& 1%ersonal 7iability& o director "ay be held to be ersonally liable for any action

of the district&

oteworthy, the abo!e uoted ro!isions of #? 19(, as a"ended, are si"ilar to those which are actuallycontained in other cororate charters& The conclusion is inescaable that the said decree is in truth and in

fact the charter of the different water districts for it clearly defines the latter;s ri"ary urose and its basic

organiEational set=u& In other words, #? 19(, as a"ended, is the !ery law which gi!es a water district0uridical ersonality& Ahile it is true that a resolution of a local sanggunian is still necessary for the final

creation of a district, this Court is of the oinion that said resolution cannot be considered as its charter, the

sa"e being intended only to i"le"ent the ro!isions of said decree& In assing a resolution for"ing a

water district, the local sanggunian is entrusted with no authority or discretion to grant a charter for thecreation of a ri!ate cororation& It is "erely gi!en the authority for the for"ation of a water district, on a

local otion basis, to be e)ercised under and in ursuance of #? 19(&

More than the aforeuoted ro!isions, what is of i"ortant interest in the case at bar is *ection 3, ar& bof the sa"e decree which reads8

*ec& 3b& $ppointing authority& The erson e"owered to aoint the "e"bers of the:oard of ?irectors of a local water district, deending uon the geograhic co!erage and

oulation "ae=u of the articular district& In the e!ent that "ore than se!enty=fi!eercent of the total acti!e water ser!ice connections of a local water districts are within the

boundary of any city or "uniciality, the aointing authority shall be the "ayor of that city

or "uniciality, as the case "ay be6 otherwise, the aointing authority shall be the

go!ernor of the ro!ince within which the district is located8#rovided, That if the e)istingwaterwors syste" in the city or "uniciality established as a water district under this

?ecree is oerated and "anaged by the ro!ince, initial aoint"ent shall be e)tended by

the go!ernor of the ro!ince& *ubseuent aoint"ents shall be as secified herein&

If ortions of "ore than one ro!ince are included within the boundary of the district, andthe aointing authority is to be the go!ernors then the ower to aoint shall rotate

between the go!ernors in!ol!ed with the initial aoint"ents "ade by the go!ernor in

whose ro!ince the greatest nu"ber of ser!ice connections e)ists as a"ended by #? 7'(&

The abo!e=uoted section definitely sets to naught etitioners; contention that they are ri!ate cororations&

It is clear therefro" that the ower to aoint the "e"bers who will co"rise the :oard of ?irectors

belongs to the local e)ecuti!es of the local subdi!ision units where such districts are located& In contrast,

the "e"bers of the :oard of ?irectors or trustees of a ri!ate cororation are elected fro" a"ong the"e"bers and stocholders thereof& It would not be a"iss to e"hasiEe at this oint that a ri!ate

cororation is created for the ri!ate urose, benefit, ai" and end of its "e"bers or stocholders&

ecessarily, said "e"bers or stocholders should be gi!en a free hand to choose those who will co"osethe go!erning body of their cororation& :ut this is not the case here and this clearly indicates that

etitioners are definitely not ri!ate cororations&

The foregoing disuisition notwithstanding, Ae are, howe!er, not unaware of the serious reercussion this

"ay bring to the thousands of water districts; e"loyees throughout the country who stand to be affectedbecause they do not ha!e the necessary ci!il ser!ice eligibilities& +s these e"loyees are eually rotected


22/57

22

by the constitutional guarantee to security of tenure, Ae find it necessary to rule for the rotection of such

right which cannot be i"aired by a subseuent ruling of this Court& Thus, those e"loyees who ha!ealready acuired their er"anent e"loy"ent status at the ti"e of the ro"ulgation of this decision cannot

be re"o!ed by the "ere reason that they lac the necessary ci!il ser!ice eligibilities&

+CC


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23

G.R. No. L-66 Ma7 21, 19

T&' R'GIT'R O( D''D O( RIAL, pe""o!er-appellee,$%.*NG I* I T'MPL', re%po!+e!"-appella!"..

The egister of ?eeds for the ro!ince of iEal refused to accet for record a deed of donation e)ecuted in

due for" on January 22, 19-3, by Jesus ?y, a Filiino citiEen, con!eying a arcel of residential land, in

Caloocan, iEal, nown as lot o& 2, bloc %(=?, #*?=%212, /&.&&


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24

The fact that the aellant religious organiEation has no caital stoc does not suffice to escae the

Constitutional inhibition, since it is ad"itted that its "e"bers are of foreign nationality& The urose of thesi)ty er centu" reuire"ent is ob!iously to ensure that cororations or associations allowed to acuire

agricultural land or to e)loit natural resources shall be controlled by Filiinos6 and the sirit of the

Constitution de"ands that in the absence of caital stoc, the controlling "e"bershi should be co"osedof Filiino citiEens&

To er"it religious associations controlled by non=Filiinos to acuire agricultural lands would be to dri!e

the oening wedge to re!i!e alien religious land holdings in this country& Ae can not ignore the historical

fact that co"laints against land holdings of that ind were a"ong the factors that sared the re!olution of1(9'&

+s to the co"laint that the disualification under article KIII is !iolati!e of the freedo" of religion

guaranteed by +rticle III of the Constitution, we are by no "eans con!inced nor has it been shown that

land tenure is indisensable to the free e)ercise and en0oy"ent of religious rofession or worshi6 or thatone "ay not worshi the ?eity according to the dictates of his own conscience unless uon land held in fee

si"le&

The resolution aealed fro" is affir"ed, with costs against aellant&


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25

G.R. No. L-6: 3!e 12, 19;

T&' P'OPL' O( T&' P&ILIPPIN', pla!"##-appellee,$%.=ILLIAM &. 0*A&A, +e#e!+a!"-appella!".

Aillia" 4& uasha, a "e"ber of the #hiliine bar, was charged in the Court of First Instance of Manila

with the cri"e of falsification of a ublic and co""ercial docu"ent in that, ha!ing been entrusted with the

rearation and registration of the article of incororation of the #acific +irways Cororation, a do"esticcororation organiEed for the urose of engaging in business as a co""on carrier, he caused it to aear

in said article of incororation that one +rsenio :aylon, a Filiino citiEen, had subscribed to and was the

owner of '$&$$- er cent of the subscribed caital stoc of the cororation when in reality, as the accusedwell new, such was not the case, the truth being that the owner of the ortion of the caital stoc

subscribed to by :aylon and the "oney aid thereon were +"erican citiEen whose na"e did not aear in

the article of incororation, and that the urose for "aing this false state"ent was to circu"!ent theconstitutional "andate that no cororation shall be authoriEe to oerate as a ublic utility in the #hiliines

unless '$ er cent of its caital stoc is owned by Filiinos&

Found guilty after trial and sentenced to a ter" of i"rison"ent and a fine, the accused has aealed to this

Court&

The essential facts are not in disute&


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26

they wanted to ha!e their resecti!e shares holdings resol!ed at a latter date& They stated that they could

get together that they feel that they had no ti"e to settle their resecti!e share holdings& Ae discussed the"atter and finally it was decided that the best way to handle the things was not to ut the shares in the

na"e of anyone of the interested arties and to ha!e so"eone act as trustee for their resecti!e shares

holdings& *o we looed around for a trustee& +nd he said 5There are a lot of eole who" I trust&5 4e said,5Is there so"eone around who" we could get right awayB5 I said, 5There is +rsenio& 4e was "y boy

during the liberation and he cared for "e when i was sic and i said i consider hi" "y friend&5 I said& They

all new +rsenio& 4e is a !ery ind "an and that was what was done& That is how it ca"e about&

?efendant is accused under article 172 aragrah 1, in connection with article 171, aragrah %, of thee!ised #enal Code, which read8

+T& 171&alsification by public officer' employee' or notary or ecclesiastic minister& The

enalty ofprision mayorand a fine not to e)ceed -,$$$ esos shall be i"osed uon any ublic

officer, e"loyee, or notary who, taing ad!antage of his official osition, shall falsify a docu"entby co""itting any of the following acts8

) ) ) ) ) ) ) ) )

%& Maing untruthful state"ents in a narration of facts&

+T& 172&alsification by private individuals and use of falsified documents& The enalty

ofprision correccionalin its "ediu" and "a)i"u" eriod and a fine of not "ore than -,$$$ esosshall be i"osed uon8

) ) ) ) ) ) ) ) )

1& +ny ri!ate indi!idual who shall co""it any of the falsifications enu"erated in the ne)t

receding article in any ublic or official docu"ent or letter of e)change or any other ind ofco""ercial docu"ent&

Co""enting on the abo!e ro!ision, Justice +lbert, in his well=nown wor on the e!ised #enal Code

new edition, & %$7=%$(, obser!es, on the authority of ;.". vs. 4eyes'1 #hil&, 3%1, that the er!ersion

of truth in the narration of facts "ust be "ade with the wrongful intent of in0uring a third erson6 and onthe authority of ;.". vs. 7opez1- #hil&, -1-, the sa"e author further "aintains that e!en if such wrongful

intent is ro!en, still the untruthful state"ent will not constitute the cri"e of falsification if there is no legal

obligation on the art of the narrator to disclose the truth& Arongful intent to in0ure a third erson and

obligation on the art of the narrator to disclose the truth are thus essential to a con!iction for a cri"e offalsification under the abo!e article of the e!ised #enal Code&

ow, as we see it, the falsification i"uted in the accused in the resent case consists in not disclosing in

the articles of incororation that :aylon was a "ere trustee or du""y as the rosecution chooses to call

hi" of his +"erican co=incororators, thus gi!ing the i"ression that :aylon was the owner of the sharessubscribed to by hi" which, as abo!e stated, a"ount to '$&$$- er cent of the sub=scribed caital stoc&

This, in the oinion of the trial court, is a "alicious er!ersion of the truth "ade with the wrongful intent

circu"!enting section (, +rticle KIL of the Constitution, which ro!ides that 5 no franchise, certificate, orany other for" of authoriEation for the oeration of a ublic utility shall be granted e)cet to citiEens of the

#hiliines or to cororation or other entities organiEed under the law of the #hiliines, si)typer

centumof the caital of which is owned by citiEens of the #hiliines & & & &5 #lausible though it "ay aearat first glance, this oinion loses !alidity once it is noted that it is redicated on the erroneous assu"tion

that the constitutional ro!ision 0ust uoted was "eant to rohibit the "ere formationof a ublic utilitycororation without '$ er cent of its caital being owned by the Filiinos, a "istaen belief which hasinduced the lower court to that the accused was under obligation to disclose the whole truth about the

nationality of the subscribed caital stoc of the cororation by re!ealing that :aylon was a "ere trustee or

du""y of his +"erican co=incororators, and that in not "aing such disclosure defendant;s intention was

to circu"!ent the Constitution to the detri"ent of the ublic interests& Contrary to the lower court;sassu"tion, the Constitution does not rohibit the mere formationof a ublic utility cororation without


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27

the reuired for"ation of Filiino caital& Ahat it does rohibit is the granting of a franchise or other for"

of authoriEation for the oeration of a ublic utility to a corporation already in e%istencebut without thereuisite roortion of Filiino caital& This is ob!ious fro" the conte)t, for the constitutional ro!ision in

uestion ualifies the ter"s 5 franchise5, 5certificate5, or 5any other for" of authoriEation5 with the hrase

5for the oeration of a ublic utility,5 thereby "aing it clear that the franchise "eant is not the 5ri"aryfranchise5 that in!est a body of "en with cororate e)istence but the 5secondary franchise5 or the ri!ilege

to oerate as a ublic utility after the cororation has already co"e into being&

If the Constitution does not rohibit the "ere for"ation of a ublic utility cororation with the alien

caital, then how can the accused be charged with ha!ing wrongfully intended to circu"!ent thatfunda"ental law by not re!ealing in the articles of incororation that :aylon was a "ere trustee of his

+"erican co=incororation and that for that reason the subscribed caital stoc of the cororation was

wholly +"ericanB For the "ere for"ation of the cororation such re!elation was not essential, and the

Cororation .aw does not reuire it& ?efendant was, therefore, under no obligation to "ae it& In theabsence of such obligation and of the allege wrongful intent, defendant cannot be legally con!icted of the

cri"e with which he is charged&

It is urged, howe!er, that the for"ation of the cororation with '$ er cent of its subscribed caital stocaearing in the na"e of :aylon was an indisensable rearatory ste to the sub!ersion of the

constitutional rohibition and the laws i"le"enting the olicy e)ressed therein& This !iew is not correct&

For a cororation to be entitled to oerate a ublic utility it is not necessary that it be organiEed with '$ er

cent of its caital owned by Filiinos fro" the start& + cororation for"ed with caital that is entirely alien"ay subseuently change the nationality of its caital through transfer of shares to Filiino citiEens&

con!ersely, a cororation originally for"ed with Filiino caital "ay subseuently change the national

status of said caital through transfer of shares to foreigners& Ahat need is there then for a cororation thatintends to oerate a ublic utility to ha!e, at the ti"e of its for"ation, '$ er cent of its caital owned by

Filiinos aloneB That condition "ay anyti"e be attained thru the necessary transfer of stocs& The "o"ent

for deter"ining whether a cororation is entitled to oerate as a ublic utility is when it alies for a

franchise, certificate, or any other for" of authoriEation for that urose& +nd that can be done after thecororation has already co"e into being and not while it is still being for"ed& +nd at that "o"ent, the

cororation "ust show that it has co"lied not only with the reuire"ent of the Constitution as to the

nationality of its caital, but also with the reuire"ents of the Ci!il +!iation .aw if it is a co""on carrierby air, the e!ised +d"inistrati!e Code if it is a co""on carrier by water, and the #ublic *er!ice .aw if it

is a co""on carrier by land or other ind of ublic ser!ice&

Dually untenable is the suggestion that defendant should at least be held guilty of an 5i"ossible cri"e5under article -9 of the e!ised #enal Code& It not being ossible to suose that defendant had intended to

co""it a cri"e for the si"le reason that the alleged constitutional rohibition which he is charged for

ha!ing tried to circu"!ent does not e)ist, con!iction under that article is out of the uestion&

The foregoing consideration can not but lead to the conclusion that the defendant can not be held guilty ofthe cri"e charged& The "a0ority of the court, howe!er, are also of the oinion that, e!en suosing that the

act i"uted to the defendant constituted falsification at the ti"e it was eretrated, still with the aro!al

of the #arty +"end"ent to the Constitution in March, 19%7, which laced +"ericans on the sa"e footing

as Filiino citiEens with resect to the right to oerate ublic utilities in the #hiliines, thus doing awaywith the rohibition in section (, +rticle KIL of the Constitution in so far as +"erican citiEens are

concerned, the said act has ceased to be an offense within the "eaning of the law, so that defendant can no

longer be held cri"inally liable therefor&

In !iew of the foregoing, the 0udg"ent aealed fro" is re!ersed and the defendant Aillia" 4& uasha

acuitted, with costs de oficio.


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G.R. No. L-2294 Ma7 2, 191

(ILIPINA COMPA>IA D' 'G*RO, pe""o!er,$%.C&RIT'RN, &*'N'('LD a!+ CO., INC., re%po!+e!"&


29/57

29

Aorld Aar II re!i!ed the roble" again& It was nown that /er"an and other ene"y interests were

cloaed by do"estic cororation structure& It was not only by legal ownershi of shares that a"aterial influence could be e)ercised on the "anage"ent of the cororation but also by long ter"

loans and other factual situations& For that reason, legislation on ene"y roerty enacted in !arious

countries during Aorld Aar II adoted by statutory ro!isions to the control test and deter"ined, to!arious degrees, the incidents of control& Court decisions were rendered on the basis of such newly

enacted statutory ro!isions in deter"ining ene"y character of do"estic cororation&

The nited *tates did not, in the a"end"ents of the Trading with the Dne"y +ct during the last

war, include as did other legislations the alications of the control test and again, as in Aorld AarI, courts refused to aly this concet whereby the ene"y character of an +"erican or neutral=

registered cororation is deter"ined by the ene"y nationality of the controlling stocholders&

Measures of blocing foreign funds, the so called freeEing regulations, and other ad"inistrati!e

ractice in the treat"ent of foreign=owned roerty in the nited *tates allowed to large degree thedeter"ination of ene"y interest in do"estic cororations and thus the alication of the control

test& Court decisions sanctioned such ad"inistrati!e ractice enacted under the First Aar #owers

+ct of 19%1, and "ore recently, on ?ece"ber (, 19%7, the *ure"e Court of the nited *tatesdefinitely aro!ed of the control theory& In Clar vs.ebersee FinanE ororation, +& /&, dealing

with a *wiss cororation allegedly controlled by /er"an interest, the Court8 5The roerty of all

foreign interest was laced within the reach of the !esting ower of the +lien #roerty Custodian

not to aroriate friendly or neutral assets but to reach ene"y interest which "asueraded underthose innocent fronts& & & & The ower of seiEure and !esting was e)tended to all roerty of any

foreign country or national so that no innocent aearing de!ice could beco"e a Tro0an horse&5

It beco"es unnecessary, therefore, to dwell at length on the authorities cited in suort of the aealed

decision& 4owe!er, we "ay add that, in


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and the contractual rights of the arties,so far as not vested& lost& Lance, the .aw on Insurance,

*ec& %%, & 112&

The resondent ha!ing beco"e an ene"y cororation on ?ece"ber 1$, 19%1, the insurance olicy issuedin its fa!or on


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G.R. No. L-


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*DC& -& *a!e in cases of hereditary succession, no private agricultural landshall be transferred or

assigned e)cet to indi!iduals, cororations, or associations ,ualified to ac,uire or hold lands ofthe public domain in the #hilippines&

*ection 1 of the sa"e +rticle also ro!ides the following8

*DCTI


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not "e"bers or faithful of the church but so"eone else, by uoting a ortion a ortion of the ought of

fidelity subscribed by a bisho uon his ele!ation to the eiscoacy wherein he ro"ises to render to the#ontificial Father or his successors an account of hispastoraloffice and of all things aertaining to

thestateof this church&

esondents liewise ad!anced the oinion that in construing the constitutional ro!ision calling for '$ er

cent of Filiino citiEenshi, the criterion of the roerties or assets thereof&

In sol!ing the roble" thus sub"itted to our consideration, Ae can say the following8 + cororation sole isa secial for" of cororation usually associated with the clergy& Concei!ed and introduced into the

co""on law by sheer necessity, this legal creation which was referred to as 5that unhay frea of Dnglish

law5 was designed to facilitate the e)ercise of the functions of ownershi carried on by the clerics for andon behalf of the church which was regarded as the roerty owner *ee I Cou!ier;s .aw ?ictionary, & '(2=

'(3&

+ cororation sole consists of one erson only, and his successors who will always be one at a ti"e, in

so"e articular station, who are incororated by law in order to gi!e the" so"e legal caacities and

ad!antages, articularly that of eretuity, which in their natural ersons they could not ha!e had& In thissense, the ing is a sole cororation6 so is a bisho, or dens, distinct fro" their se!eral chaters eid !s&

:arry, 93 Fla& (%9, 112 *o& (%'&

The ro!isions of our Cororation law on religious cororations are illu"inating and sustain the stand ofetitioner& *ection 1-% thereof ro!ides8

*DC& 1-%& For the ad"inistration of the te"oralities of any religious deno"ination, society or

church and the "anage"ent of the estates and the roerties thereof, it shall be lawful for thebisho, chief riest, or residing either of any such religious deno"ination, society or church to

beco"e a cororation sole, unless inconsistent wit the rules, regulations or disciline of his

religious deno"ination, society or church or forbidden by co"etent authority thereof&

*ee also the ertinent ro!isions of the succeeding sections of the sa"e Cororation .aw coied hereunder8

*DC& 1--& In order to beco"e a cororation sole the bisho, chief riest, or residing elder of anyreligious deno"ination, society or church "ust file with the *ecurities and D)change Co""issioner

articles of incororation setting forth the following facts8

))) ))) )))&

3 That as such bisho, chief riest, or residing elder he is charged with the administrationof the

te"oralities and the "anage"ent of the estates and roerties of his religious deno"ination,society, or church within its territorial 0urisdiction, describing it6

))) ))) )))&

+s a"ended by Co""onwealth +ct o& 2(7&

*DC& 1-7& Fro" and after the filing with the *ecurities and D)change Co""issioner of the saidarticles of incororation, which !erified by affida!it or affir"ation as aforesaid and acco"anied by

the coy of the co""ission, certificate of election, or letters of aoint"ent of the bisho, chief

riest, or residing elder, duly certified as rescribed in the section i""ediately receding such the

bisho, chief riest, or residing elder, as the case "ay be, shall beco"e a cororation sole and alltemporalities' estates' and properties the religious denomination' society' or church therefore

administered or managed by him as such bishop' chief priest' or presiding elder' shall be held in

trust by him as a corporation sole' for the use' purpose' behalf' and sole benefit of his religiousdenomination' society' or church, including hositals, schools, colleges, orhan, asylu"s,

arsonages, and ce"eteries thereof& For the filing of such articles of incororation, the *ecurities


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and D)change Co""issioner shall collect twenty=fi!e esos& +s a"ended by Co""onwealth +ct&

o& 2(76 and&

*DC& 1'3& The right to ad"inister all te"oralities and all roerty held or owned by a religiousorder or society, or by the diocese, synod, or district organiEation of any religious deno"ination or

church shall, on its incororation, ass to the cororation and shall be held in trust for the use,

urose behalf, and benefit of the religious society, or order so incororated or of the church ofwhich the diocese, or district organiEation is an organiEed and constituent art&

The Cannon .aw contains si"ilar ro!isions regarding the duties of the cororation sole or ordinary as

ad"inistrator of the church roerties, as follows8

+l


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sole or heads of dioceses as they are ad"ittedly "ere administratorsof said roerties, ownershi of these

te"oralities logically fall and de!elo uon the church, diocese or congregation acuiring the sa"e&+lthough this uestion of ownershi of ecclesiastical roerties has off and on been "entioned in se!eral

decisions of the Court yet in no instance was the sub0ect of citiEenshi of this religious society been assed

uon&

Ae are not unaware of the oinion e)ressed by the late Justice #erfecto in his dissent in the case of+gustines !s& Court of First Instance of :ulacan, ($ #hil& -'-, to the effect that 5the o"an Catholic

+rchbisho of Manila is only a branch of a uni!ersal church by the #oe, with er"anent residence in

o"e, Italy5& There is no uestion that the o"an Catholic Church e)isting in the #hiliines is a tributaryand art of the international religious organiEation, for the word 5o"an5 clearly e)resses its unity with

and recogniEes the authority of the #oe in o"e& 4owe!er, lest Ae beco"e hasty in drawing conclusions,

Ae ha!e to analyEe and tae note of the nature of the go!ern"ent established in the Latican City, of which

it was said8

/


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itself when the ro!isions on natural to be e"bodied in the #hiliine Constitution were fra"ed, but all that

has been said on this regard referred "ore articularly to landholdings of religious cororations nown as5Friar Dstates5 which ha!e already bee acuired by our go!ern"ent, and not to roerties held by

cororations sole which, Ae reeat, are roerties held in trust for the benefit of the faithful residing within

its territorial 0urisdiction& Though that sa"e feeling robably reciitated and influenced to a large e)tentthe doctrine laid down in the celebrated ri!enco decision, Ae ha!e to tae this "atter in the light of legal

ro!isions and 0urisrudence actually obtaining, irresecti!e of senti"ents&

The uestion now left for our deter"ination is whether the ni!ersal o"an Catholic +ostolic Church in

the #hiliines, or better still, the cororation sole na"ed the o"an Catholic +ostolic +d"inistrator of?a!ao, Inc&, is ualified to acuire ri!ate agricultural lands in the #hiliines ursuant to the ro!isions of

+rticle KIII of the Constitution&

Ae see fro" sections 1 and - of said +rticle uoted before, that only ersons or cororations ualified to

acuire hold lands of the ublic do"ain in the #hiliines "ay acuire or be assigned and hold ri!ateagricultural lands& Conseuently, the decisi!e factor in the resent contro!ersy hinges on the roosition or

whether or not the etitioner in this case can acuire agricultural lands of the ublic do"ain&

Fro" the data secured fro" the *ecurities and D)change Co""ission, Ae find that the o"an Catholic

:isho of >a"boanga was incororated as a cororation sole in "eptember' 1=1>' principally toadminister its temporalities and manage its properties& #robably due to the ra!ages of the last war, its

articles of incororation were reconstructedin the *ecurities and D)change Co""ission on +ril (, 19%(&

+t first, this cororation sole ad"inistered all the te"oralities of the church e)isting or located in theisland of Mindanao& .ater on, howe!er, new dioceses were for"ed and new cororations sole were created

to corresond with the territorial 0urisdiction of the new dioceses, one of the" being etitioner herein, the

o"an Catholic +ostolic +d"inistrator of ?a!ao, Inc&, which was registered with the *ecurities and

D)change Co""ission on *ete"ber 12, 19-$, and succeeded in the ad"inistrati!e for all the5te"oralities5 of the o"an Catholic Church e)isting in ?a!ao&

+ccording to our Cororation .aw, #ublic +ct o& 1-%9, aro!ed +ril 1, 19$', a cororation sole&

is organiEed and composed of a single individual, the head of any religious society or church, for

the +?MII*T+TI


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It can, therefore, be noticed that the ower of a cororation sole to purchasereal roerty, lie the ower

e)ercised in the case at bar, it is not restricted although the ower to sell or mortgageso"eti"es is,deending uon the rules, regulations, and disciline of the church concerned reresented by said

cororation sole& If cororations sole can urchase and sell real estate for its church, charitable, bene!olent,

or educational uroses, can they register said real roertiesB +s ro!ided by law, lands held in trust forsecific uroses "e be sub0ect of registration section '9, +ct %9', and the caacity of a cororation sole,

lie etitioner herein, to register lands belonging to it is acnowledged, and title thereto "ay be issued in

its na"e :isho of ue!a *ego!ia !s& Insular /o!ern"ent, 2' #hil& 3$$=1913& Indeed it is absurd that

while the cororations sole that "ight be in need of acuiring lands for the erection of te"les where thefaithful can ray, or schools and ce"eteries which they are e)ressly authoriEed by law to acuire in

connection with the roagation of the o"an Catholic +ostolic faith or in furtherance of their freedo"

of religion they could not register said roerties in their na"e& +s rofessor Ja!ier J& eo"uceno !erywell says 5Man in his search for the i""ortal and i"onderable, has, e!en before the dawn of recorded

history, erected te"les to the nnown /od, and there is no doubt that he will continue to do so for all

ti"e to co"e, as long as he continues ;i"loring the aid of ?i!ine #ro!idence;5 eo"uceno;sCororation *ole, LI +teneo .aw Journal, o& 1, & %1, *ete"ber, 19-'& nder the circu"stances of this

case, Ae "ight safely state that e!en before the establish"ent of the #hiliine Co""onwealth and of the

eublic of the #hiliines e!ery cororation sole then organiEed and registered had by e)ress ro!isionof law the necessarypower and ,ualificationto urchase in its na"e ri!ate lands located in the territory inwhich it e)ercised its functions or "inistry and for which it was created, indeendently of the nationality of

its incu"bent uniue and single "e"ber and head, the bisho of the dioceses& It can be also "aintained

without fear of being gainsaid that the o"an Catholic +ostolic Church in the #hiliines has nonationality and that the fra"ers of the Constitution, as will be hereunder e)lained, did not ha!e in "ind

the religious cororations sole when they ro!ided that '$ er centu" of the caital thereof be owned by

Filiino citiEens&

There could be no contro!ersy as to the fact that a duly registered cororation sole is an artificial beingha!ing the right of succession and the ower, attributes, and roerties e)ressly authoriEed by law or

incident to its e)istence section 1, Cororation .aw& In outlining the general owers of a cororationublic +ct& o& 1%-9 ro!ides a"ong others8

*DC& 13&2very corporationhas the ower8

- To urchase, hold, con!ey, sell, lease, lot, "ortgage, encu"ber, and otherwise deal with such

real and ersonal roerty as the urose for which the cororation was for"ed "ay er"it, and the

transaction of the lawful business of the cororation "ay reasonably and necessarily reuire, unlessotherwise rescribed in this +ct8 & & &

In i"le"entation of the sa"e and secially "ade alicable to a for" of cororation recogniEed by the

sa"e law, *ection 1-9 aforeuoted e)ressly allowed the cororation sole to urchase and hold real as wellas ersonal roerties necessary for the ro"otion of the ob0ects for which said cororation sole is created&esondent .and egistration Co""issioner, howe!er, "aintained that since the #hiliine Constitution is

a later enact"ent than ublic +ct o& 1%-9, the ro!isions of *ection 1-9 in a"lification of *ection 13

thereof, as regard real roerties, should be considered reealed by the for"er&

There is a reason to belie!e that when the secific ro!ision of the Constitution in!oed by resondentCo""issioner was under consideration, the fra"ers of the sa"e did not ha!e in "ind or o!erlooed this

articular for" of cororation& It is undeniable that the naturaliEation and conser!ation of our national

resources was one of the do"inating ob0ecti!es of the Con!ention and in drafting the resent +rticle KII ofthe Constitution, the delegates were goaded by the desire 1 to insure their conser!ation for Filiino

osterity6 2 to ser!e as an instru"ent of national defense, heling re!ent the e)tension into the countryof foreign control through eaceful econo"ic enetration6 and 3 to re!ent "aing the #hiliines a

source of international conflicts with the conseuent danger to its internal security and indeendence *eeThe Fra"ing of the #hiliine Constitution by #rofessor Jose M& +ruego, a ?elegate to the Constitutional

Con!ention, Lol& II& #& -92='$%& In the sa"e boo ?elegate +ruego, e)laining the reason behind the first

consideration, wrote8


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+t the ti"e of the fra"ing of #hiliine Constitution, Filiino caital had been to be rather shy&

Filiinos hesitated s a general rule to in!est a considerable su" of their caital for the de!elo"ent,e)loitation and utiliEation of the natural resources of the country& They had not as yet been so used

to cororate as the eoles of the west& This general aathy, the delegates new, would "ean the

retardation of the de!elo"ent of the natural resources, unless foreign caital would be encouragedto co"e and hel in that de!elo"ent& hey knew that the naturalization of the natural resourceswould certainly not encourage theILD*TMDT


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deter"ination thereof is not absolutely necessary for the solution of the roble" in!ol!ed in this case& In

his desire to face the issues suarely, the writer will endea!or, at least as a disgression, to e)lain andde!elo his theory, not as a lucubration of the Court, but of his own, for he dee"s it better and con!enient

to go o!er the cycle of reasons that are lined to one another and that ste by ste lead s to conclude as

Ae do in the disositi!e art of this decision&

It will be noticed that *ection 1 of +rticle KIII of the Constitution ro!ides, a"ong other things, that 5allagricultural lands of the ublic do"ain and their disosition shall be li"ited to citiEens of the #hiliines or

to corporations at least ?@ per centum of the capital of which is owned by such citizens , *'CT TOANY 'BITING RIG&T AT T&' TIM' O( T&' INA*G*RATION O( T&' GO)'RNM'NT'TALI&'D *ND'R T&I CONTIT*TION.

+s recounted by Mr& Justice .aurel in the afore"entioned case of /old Cree Mining Cororation !s&

odrigueE et al&, '' #hil& 2-9, 5this recognition in the clause already uoted, is not "ere graciousness but

springs from the just character of the government established. he farmers of the Constitution were notobscured by the rhetoric of democracy or swayed to hostility by an intense spirit of nationalism. hey well

knew that conservation of our natural resources did not mean destruction or annihilation of+CID?

#


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when that erson is not the owner but "erely an ad"inistrator of the te"oralities of the cororation soleB

The writer lea!es the answer to whoe!er "ay read and consider this ortion of the decision&

+nyway, as stated before, this uestion is not a decisi!e factor in disosing the case, for e!en if Ae were todisregard such sa!ing clause of the Constitution, which reads8subject to any e%isting right' grant' etc.' at

the same time of the inauguration of the (overnment established under this Constitution , yet Ae would

ha!e, under the e!idence on record, sufficient grounds to uhold etitioner;s contention on this "atter&

In this case of the egister of ?eeds of iEal !s& ng *ui *i Te"le, 2/&& o& .='77', ro"ulgated May21, 19--, wherein this uestion was considered fro" a different angle, this Court through Mr& Justice J&:&.&

eyes, said8

The fact that the aellant religious organiEation has no caital stoc does not suffice to escae theConstitutional inhibition, since it is ad"itted that its "e"bers are of foreign nationality& The

urose of the si)ty er centu" reuire"ent is ob!iously to ensure that cororation or associations

allowed to acuire agricultural land or to e)loit natural resources shall be controlled by Filiinos6

and the sirit of the Constitution de"ands that in the absence of capital stock' the controlling

membership should be composed of ilipino citizens&

In that case resondent=aellant ng *iu *i Te"le was not a cororation sole but a cororation

aggregate, i&e&, an unregistered organiEation oerating through 3 trustees, all of Chinese nationality, and that

is why this Court laid down the doctrine 0ust uoted& Aith regard to etitioner, which liewise is a non=stoc cororation, the case is different, because it is a registered cororation sole, e!idently of no

nationality and registered "ainly to ad"inister the te"oralities and "anage the roerties belonging to

the faithful of said church residing in ?a!ao& 3" e$e! # ?e ?ere "o o o$er "e recor+ "o !3re !"o

"e compo%! member%p "o +e"erm!e ?e"er "e c"e!%p re3reme!" % %a"%#e+ or !o", ?e

?o3l+ #!+ 3!+e!able proo# "a" "e member% o# "e Roma! Ca"olc Apo%"olc #a" ?"! "e

"err"or7 o# Da$ao are pre+om!a!"l7 (lp!o c"e!%.

+s indicated before, etitioner has resented

e!idence to establish that the clergy and lay "e"bers of this religion fully co!ers the ercentage of FiliinocitiEens reuired by the Constitution& These facts are not contro!erted by resondents and our conclusion in

this oint is sensibly ob!ious&

3issenting Opinion83iscussed& +fter ha!ing de!eloed our theory in the case and arri!ed at thefindings and conclusions already e)ressed in this decision& Ae now dee" it roer to analyEe and del!e

into the basic foundation on which the dissenting oinion stands u& :eing aware of the transcendental and

far=reaching effects that


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lie the one at bar& The e"hasis and wonderings on the state"ent that once the caacity of a cororation

sole to acuire ri!ate agricultural lands is ad"itted there will be no li"it to the areas that it "ay hold andthat this will a!e the way for the 5re!i!al or re!italiEation of religious landholdings that ro!ed so

troubleso"e in our ast5, cannot e!en furnish the 5enu"bra5 of a threat to the future of the Filiino

eole& In the first lace, the right of Filiino citiEens, including those of foreign e)traction, and #hiliinecororations, to acuire ri!ate lands is not sub0ect to any restriction or li"it as to uantity or area, and Ae

certainly do not see any wrong in that& The right of Filiino citiEens and cororations to acuire ublic

agricultural lands is already li"ited by law& In the second lace, cororations sole cannot be considered as

aliens because they ha!e no nationality at all& Cororations sole are, under the law, "ere ad"inistrators ofthe te"oralities of the o"an Catholic Church in the #hiliines& In the third lace, e!ery cororation, be

it aggregate or sole, is only entitled to urchase, con!ey, sell, lease, let, "ortgage, encu"ber and otherwise

deal with real roerties when it is ursuant to or in consonance with the uroses for which thecororation was for"ed, and when the transactions of the lawful business of the cororation reasonably and

necessarily reuire such dealing section 13=- of the Cororation .aw, #ublic +ct o& 1%-9 and

considering these ro!isions in con0unction with *ection 1-9 of the sa"e law which ro!ides that acororation sole "ay only 5urchase and hold real estate and ersonal roerties for its church, charitable,

bene!olent or educational uroses5, the abo!e "entioned fear of re!italiEation of religious landholdings in

the #hiliines is absolutely diselled& The fact that the law thus e%presslyauthoriEes the cororations soleto receive be,uests or gifts of real propertieswhich were the "ain source that the friars had to acuiretheir big haciendas during the *anish regi"e, is a clear indication that the reuisite that beuests or gifts

of real estate be for charitable, bene!olent, or educational uroses, was, in the oinion of the legislators,

considered sufficient and adeuate rotection against the re!italiEation of religious landholdings&

Finally, and as re!iously stated, Ae ha!e reason to belie!e that when the ?elegates to the ConstitutionalCon!ention drafted and aro!ed +rticle KIII of the Constitution they do not ha!e in "ind the cororation

sole& Ae co"e to this finding because the Constitutional +sse"bly, co"osed as it was by a great nu"ber

of e"inent lawyers and 0urists, was lie any other legislati!e body e"owered to enact either theConstitution of the country or any ublic statute, resu"ed to now the conditions e)isting as to articular

sub0ect "atter when it enacted a statute :oard of Co""erce of


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2& That a cororation sole is a non=stoc cororation6

3& That the


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residing in the 0urisdiction of the cororation sole has no say either in the "anner of acuiring or of selling

real roerty& It "ay be also ad"itted that the faithful of the diocese cannot go!ern or o!errule the acts ofthe


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constitutional limitations were the promotion of policies that do not lend themselves to definite and

specific formulation& The courts ha!e had to define those olicies and ha!e often drawn on naturallaw and natural rights theories in doing so& The interretation of constitutions tends to resond to

changing concetions of olitical and social !alues& The e)tent to which these e)traneous aids affect

the 0udicial construction of constitutions cannot be for"ulated in recise rules, but their influencecannot be ignored in describing the essentials of the rocess ottschaeffer on Constitutional .aw,

1939 ed&, & 1(=19&

There are ti"es that when e!en the literal e)ression of legislation "ay be inconsistent with the

general ob0ecti!es of olicy behind it, and on the basis of euity or sirit of the statute the courtsrationaliEe a restricted "eaning of the latter& + restricted interretation is usually alied where the

effect of literal interretation will "ae for in0ustice and absurdity or, in the words of one court, the

language "ust be so unreasonable ;as to shoc general co""on sense;& Lol& 3, *utherland on

*tatutory Construction, 3rd ed&, 1-$&&

+ constitution is not intended to be a li"itation on the de!elo"ent of a country nor an obstruction

to its rogress and foreign relations Moscow Fire Ins& Co& of Moscow, ussia !s& :an of ew

Nor and Trust Co&, 29% & N& *&'%(6 -' &D& 2d& 7%-, 293 &N& 7%9&

+lthough the "eaning or rinciles of a constitution re"ain fi)ed and unchanged fro" the ti"e ofits adotion, a constitution "ust be construed as if intended to stand for a great length of ti"e, and

it is rogressi!e and not static& +ccordingly, it should not recei!e too narrow or literal an

interretation but rather the "eaning gi!en it should be alied in such "anner as to "eet new orchanged conditions as they arise &*& !s& .assic, 313 &*& 299, (- .& Dd&, 13'(&

Dffect should be gi!en to the urose indicated by a fair interretation of the language used and that

construction which effectuates, rather than that which destroys a lain intent or urose of a

constitutional ro!ision, is not only fa!ored but will be adoted *tate e) rel& andolh Country !s&

Aalden, 2$' *&A& 2d 979&

It is uite generally held that in arri!ing at the intent and urose the construction should be broad

or liberal or euitable, as the better "ethod of ascertaining that intent, rather than technical /reat

*outhern .ife Ins& Co& !s& City of +ustin, 2%3 *&A& 77(&

+ll these authorities uhold our con!iction that the fra"ers of the Constitution had not in "ind thecororations sole, nor intended to aly the" the ro!isions of section 1 and - of said +rticle KIII when

they assed and aro!ed the sa"e& +nd if it were so as Ae thin it is, herein etitioner, the o"an

Catholic +ostolic +d"inistrator of ?a!ao, Inc&, could not be deri!ed of the right to acuire by urchaseor donation real roerties for charitable, bene!olent and educational uroses, nor of the right to register

the sa"e in its na"e with the egister of ?eeds of ?a!ao, an indisensable reuisite rescribed by the.and egistration +ct for lands co!ered by the Torrens syste"&

Ae lea!e as the last the"e for discussion the "uch debated uestion abo!e referred to as 5the !ested rightsa!ing clause5 contained in section 1, +rticle KIII of the Constitution& The dissenting Justice hurls uon the

ersonal oinion e)ressed on the "atter by the writer of the decision the "ost ointed darts of his se!ere

criticis"& Ae thin, howe!er, that this strong dissent should ha!e been sared, because as clearly indicatedbefore, so"e "e"bers of this Court either did not agree with the theory of the writer or were not ready to

tae a definite stand on that articular oint, so that there being no "a0ority oinion thereon there was no

need of any dissension therefro"& :ut as the criticis" has been "ade the writer dee"s it necessary to say afew words of e)lanation&

The writer fully agrees with the dissenting Justice that ordinarily 5a caacity to acuire roerty in futuro,

is not in itself a !ested or e)isting roerty right that the Constitution rotects fro" i"air"ent& For a

roerty right to be !ested or acuired there "ust be a transition fro" thepotentialor contingent tothe actual, and the rorietary interest "ust ha!e attached to a thing6 it "ust ha!e beco"e ;fi)ed and

established;5 :alboa !s& Farrales, -1 #hil& %9(& :ut the case at bar has to be considered as an e)cetion to

the rule because a"ong the rights granted by section 1-9 of the Cororation .aw was the right to recei!e


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beuests or gifts of real roerties for charitable, bene!olent and educational uroses& +nd this right to

recei!e such beuests or gifts which i"lies donations in futuro, is not a "ere otentiality that could bei"aired without any secific ro!ision in the Constitution to that effect, esecially when the i"air"ent

would disturbingly affect the roagation of the religious faith of the i""ense "a0ority of the Filiino

eole and the curtail"ent of the acti!ities of their Church& That is why the writer ga!e us a basis of hiscontention what #rofessor +ruego said in his boo 5The Fra"ing of the #hiliine Constitution5 and the

enlightening oinion of Mr& Justice Jose #& .aurel, another ?elegate to the Constitutional Con!ention, in

his concurring oinion in the case of /oldcree Mining Co& !s& Dulogio odrigueE et al&, '' #hil& 2-9&

+nyway the "a0ority of the Court did not dee" necessary to ass uon said 5!ested right sa!ing clause5 forthe final deter"ination of this case&

J?/MDT

Aherefore, the resolution of the resondent .and egistration Co""ission of *ete"ber 21, 19-%, holding

that in !iew of the ro!isions of sections 1 and - of +rticle KIII of the #hiliine Constitution the !endeeetitioner is not ualified to acuire lands in the #hiliines in the absence of roof that at least '$ er

centu" of the caital, roerties or assets of the o"an Catholic +ostolic +d"inistrator of ?a!ao, Inc& is

actually owned or controlled by Filiino citiEens, and denying the registration of the deed of sale in theabsence of roof of co"liance with such reuisite, is hereby re!ersed& Conseuently, the resondent

egister of ?eeds of the City of ?a!ao is ordered to register the deed of sale e)ecuted by Mateo .& odis

in fa!or of the o"an Catholic +ostolic +d"inistrator of ?a!ao, Inc&, which is the sub0ect of the resent

litigation& o ronounce"ent is "ade as to costs& It is so ordered&


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G.R. No. L-2


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/& Manalo, with office at the corner of Central and ?on Mariano Marcos +!enues, ueEon City, Fro" that

decision, the eublic of the #hiliines aealed to this Court under eublic +ct o& -%%$& The aealshould be sustained&

+s correctly contended by the *olicitor /eneral, the Iglesia i Cristo, as a cororation sole or a 0uridical

erson, is disualified to acuire or hold alienable lands of the ublic do"ain, lie the two lots in uestion,

because of the constitutional rohibition already "entioned and because the said church is not entitled toa!ail itself of the benefits of section %(b which alies only to Filiino citiEens or natural ersons& +

cororation sole an 5unhay frea of Dnglish law5 has no nationality o"an Catholic +ostolic +d"&

of ?a!ao, Inc& !s& .and egistration Co""ission, 1$2 #hil& -9'& *ee egister of ?eeds !s& ng *iu *iTe"le, 97 #hil& -( and sec& %9 of the #ublic .and .aw&

The contention in the co""ents of the Iglesia i Cristo its lawyer did not file any brief that the two lots

are ri!ate lands, following the rule laid down in *usi !s& aEon and ?irector

Corpo 2nd Day

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