PHILIPPINE SOCIETY v.

COA
G.R. No. 169752 || Sept. 25, 2007 || AUSTRIA-MARTINEZ, J.

The petitioner was incorporated as a juridical entity over hundred years ago by Act No. 1285 through the National
Commission. The members are composed primarily of animal aficionados and animal propagandists. Its charter is
to enforce laws relating to cruelty inflicted upon animals or the protection of animals in the Philippine Islands and
generally to alleviate the suffering of animals and promote their welfare. The petitioner was imbued with the
power of policing in order to enforce the protection of animals. It was also given the share of 1⁄2 of the fines and
imposed and collected through its efforts for violations of the laws. Although the said police power and shares in
collecting were rescinded by CA No. 148 by mandating them to work with the local police (later was completely
given to the police) and give the share of money collected to the municipal office.

On December 1, 2003, COA officer attempted to conduct an audit survey. However, the petitioner claimed that it
was a private entity not under the jurisdiction of COA. The petitioner claims that even though it was created by
special legislation in 1905, as there was no general law then existing under which it may be organized or
incorporated, it exercises no governmental functions because these have been revoked. Also, nowhere in the
Charter of PhilSoc that it is indicated that it is a government institution, unlike the BSP. The employees are
covered by SSS, by the initiative of the company, and not the GSIS. It has no government representative also that
sits on its board. Lastly, the charter does not mandate that the decisions made should be consulted by ay
government agency.

Issue: Whether the petitioner qualifies as a government agency that may be subject to audit by respondent COA?
– No

Charter test – The test to determine whether a corporation is a government owned or controlled, or private in
nature is simple. Is it created by its own charter for the exercise of a public function, or by incorporation under
the general corporation law? Those with special charters are government corporations subject to its provisions,
and its employees are under the jurisdiction of the Civil Service Commission and compulsory members of GSIS
(Government Service Insurance System).

The Constitution of 1935 and 1987 both provide the charter test which states in Section 7 that the government
may only provide for the formation, organization, or regulation of private corporations, unless corporations are
owned or controlled by government or any of its subdivisions or instrumentality. The court agrees to petitioner
that the Charter test cannot be applied. Since the petitioner was created on January 19, 1905, the charter test
cannot be applied to the petitioner. Laws also do not have retroactive effect. Thus, based on its charter, it shows
that it is not subject to control or supervision by any agency of the State. No government representative sits on the
board of trustees of the petitioners. It has powers to voluntarily determine its by-laws, sue and be sued, own
private property, etc. Also, the employees of the petitioner are registered under SSS.
The fact that a corporation is created for the public good does not render its privacy. It might be considered a
quasi-public corporation that render public services and supply public wants. Examples: corporations that engage
in railroad, warehouse, telephone, water supply, etc. A quasi-public corporation is a private corporation. Also, just
because the corporation renders public service, it cannot be automatically recognized as a government
instrumentality. Banks, private schools render public service since this is the trend nowadays in businesses.

A true criterion is the corporation’s relation to the State. If the corporation is created by the state as an agency or
instrumentality to help in its governmental function then it is public, if not then private. Ex. Barangays,
municipalities, etc.
 CO KIM CHAM v. EUSEBIO VALDEZ TAN KEH and ARSENIO P. DIZON
No. L-5 || Sept. 17, 1945 || FERIA, J.

Petitioner files for mandamus for the lower court to continue proceedings for Civil Case No.3012 (A Property
Rights dispute). The court refused to take cognizance of the petitioner's appeal since the courts are following Gen.
Douglas McArthur's proclamation that invalidates and nullifies laws, regulations, and process of any government
in the Philippines of that of the said Commonwealth and without legal effect in areas of the Philippines free of
enemy occupation. The courts refuse to take cognizance of the case under the defunct state of the Republic of the
Philippines since there is an absence of law granting such authority. The respondent believes that the former
government is not de facto.

Issues: (1) Whether the judicial acts and proceedings of the court existing under the Philippine Executive
Commission and the Republic of the Philippines were good and valid and remained so even after the liberation or
reoccupation of the Islands by US and Filipino forces.

(2) Whether the proclamation of Gen. Douglas McArthur that all laws, regulations, and processes of any other
government in the Phil than that of the Commonwealth are null and void and without legal effect in the areas of
the Phil free of enemy occupation and control has invalidated all judgment and judicial acts and proceedings.

(3) Whether the said judicial acts and proceedings were not invalidated, the present court of Commonwealth may
continue proceeding the pending at the time of reoccupation. (reiterated by dissenting Hilado)

(1) YES. Usually, the courts and laws of the usurped state remains intact, and that the courts esp. local maintain
their public office as long as the said laws and public officer did not act against the usurper. Therefore, the
character of the courts did not change. Also, the internationally recognized rule of postliminity ensures that the
proceedings of the court are indeed good and valid in quality and in legality under de facto governments.
Postliminity believes that the return of occupied territory to its rightful owner does not means give the former
owner the right to wipe out effects done by the former invader as long as there is no political complexion in the
decisions and administrative acts.

It would mean that if without the rule, the whole social life of the community will be paralyzed. It would also be
problematic if everything becomes null and void since some evidence were already burned because of war and
that litigants will not try to go to court anyway believing it will be null after the war so inconvenience. Statutory
construction also says that any inconvenience, or endanger a statute will do to public interest will be avoided and
the court will presume that the statute does not intend to do so either. It would also be assumed that the acts of the
invader are done for public order & safety.

(2) NO. Therefore the declaration of McArthur does not invalidate the judicial acts and proceedings. It could be
added that the proclamation is an acknowledgment of the Gen. Incapacity to do so and that the proclamation is
simply an attempt to invalidate all judicial proceedings therefore acting in accordance to international law. Hague
Convention article 43 states that the usurper not to suspend the assertion of civil life of the usurped, which in this
case is being thwarted by the nullity of judicial cases. In Ochoa v. Hernandez, the US acknowledges the
international rules. The fact that there was a proclamation of Gen. shows that it is an abrogation and not fact ab
initio.

(3) YES. Usually, the courts and laws of the usurped state remains intact, and that the courts esp. local maintain
their public office and that the cases in existence continued to be tried. Even though the cases were alien to the
usurped courts, it could be said that through adoption policy of Japan, continue their duty. Law is established and
continued until by some competent legislative power replaces it. Present courts have jurisdiction to continue final
judgment. As seen that the Audencia (Spanish period Supreme Court) still take cognizance of cases despite
changing to American occupation and same with CFI. Even though there was no declaration of continuation the
Executive Proclamation No. 37 also shows there is recognition of the cases as the cases pending to the to-be-
abolished Court of Appeals were being given to the Supreme Court, acknowledging its continuity. Therefore,
mandamus is granted ordering to take cognizance of the case and final judgment shall be continued.