veterans federation of the philippines vs. hon agnelo t reyes in his capacity as snd

7/23/2019 Veterans Federation of the Philippines vs. Hon Agnelo t Reyes in His Capacity as Snd

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EN BANC

THE VETERANS

FEDERATION OF

THE PHILIPPINESrepresented

by Esmeraldo R.Aorda!

Petitioner,

" versus "

Hon. AN#ELO T. RE$ES %n &%s

apa%ty as Seretary o' Nat%onal

De'ense( and Hon. ED#ARDO E.

BATEN#A %n &%s apa%ty as)nderseretary 'or C%*%l

Relat%ons and Adm%n%strat%on o'

t&e Department o' Nat%onal

De'ense!

Respondents.

#. R. No. +,,-/

Present:

PANGANIBAN, C.J .,

PUNO,

QUISUMBING,

YNARES-SANTIAGO,SANDOVA-GUTIERRE!,

"ARPIO,

AUSTRIA-MARTINE!,

"ORONA,

"ARPIO MORAES,

"AE#O, SR.,

A!"UNA,

TINGA,

"$I"O-NA!ARIO, %ndGAR"IA, JJ .

Pro&'()%ted:

*e+r'%r , //0

1 - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - 1

D E " I S I O N

"$I"O-NA!ARIO, J.:



T2is is % Petition 3or Certiorari 4it2 Pro2i+ition 'nder R'(e 05 o3 t2e 6778

R'(es o3 "i9i( Proed're, 4it2 % pr%er to de(%re %s 9oid Dep%rt&ent "ir'(%r No.

/; o3 t2e Dep%rt&ent o3 N%tion%( De3ense <DND=, d%ted 6/ #'ne //.

Petitioner in t2is %se is t2e Veter%ns *eder%tion o3 t2e P2i(ippines <V*P=, %

orpor%te +od or)%ni>ed 'nder Rep'+(i At No. 0;/, d%ted 6 #'ne 670/, %s

%&ended, %nd d'( re)istered 4it2 t2e Se'rities %nd E12%n)e "o&&ission.

Respondent An)e(o T. Rees 4%s t2e Seret%r o3 N%tion%( De3ense <DND

Seret%r= 42o iss'ed t2e %ss%i(ed Dep%rt&ent "ir'(%r No. /;, d%ted 6/ #'ne

//. Respondent Ed)%rdo E. B%ten)% 4%s t2e DND Underseret%r 3or "i9i(

Re(%tions %nd Ad&inistr%tion 42o 4%s t%s?ed + t2e respondent DND Seret%r to

ond't %n e1tensi9e &%n%)e&ent %'dit o3 t2e reords o3 petitioner.

T2e 3%t'%( %nd proed'r%( %nteedents o3 t2is %se %re %s 3o((o4s:

Petitioner V*P 4%s re%ted 'nder Rep. At No. 0;/, @6 % st%t'te %ppro9ed

on 6 #'ne 670/.

On 65 Apri( //, petitioners in'&+ent president reei9ed % (etter d%ted 6CApri( // 42i2 re%ds:

"o(. E&&%n'e( V. De O%&po <Ret.=

PresidentVeter%ns *eder%tion o3 t2e P2i(ippines

M%?%ti, Metro M%ni(%

De%r "o(. De O%&po:

P(e%se +e in3or&ed t2%t d'rin) t2e prep%r%tion o3 & +rie3in) +e3ore t2e"%+inet %nd t2e President (%st M%r2 7, //, 4e %&e %ross so&e (e)%( +%ses

42i2 tended to s2o4 t2%t t2ere is %n or)%ni>%tion%( %nd &%n%)e&ent re(%tions2ip

+et4een Veter%ns *eder%tion o3 t2e P2i(ippines %nd t2e P2i(ippine Veter%ns B%n? 42i2 3or &%n e%rs 2%9e +een in%d9ertent( o9er(oo?ed.

I re3er to Rep'+(i At 0;/ re%tin) t2e +od orpor%te ?no4n %s t2e

V*P %nd Rep'+(i At C56 re%tin) t2e P2i(. Vets @si B%n?.

http://sc.judiciary.gov.ph/jurisprudence/2006/feb2006/G.%20R.%20No.%20155027.htm#_ftn1




6. RA 0;/ d%ted 6 #'ne 0/ Setion 6 ... 2ere+ re%ted %

+od orpor%te, 'nder t2e ontro( %nd s'per9ision o3 t2eSeret%r o3 N%tion%( De3ense.

. RA 0;/ Setion 6 ... On or +e3ore t2e (%st d% o3 t2e&ont2 3o((o4in) t2e end o3 e%2 3is%( e%r, t2e *eder%tion

s2%(( &%?e %nd tr%ns&it to t2e President o3 t2e P2i(ippines

or to t2e Seret%r o3 N%tion%( De3ense, % report o3 its proeedin)s 3or t2e p%st e%r, in('din) % 3'((, o&p(ete %nd

ite&i>ed report o3 reeipts %nd e1pendit'res o3 42%te9er

?ind.

C. Rep'+(i At C56 d%ted 6 #'ne 670C <An At "re%tin)

t2e P2i(ippine Veter%ns B%n?, %nd 3or Ot2er P'rposes=

pro9ides in Setion 0 t2%t ... t2e %33%irs %nd +'siness o3 t2e

P2i(ippine Veter%ns B%n? s2%(( +e direted %nd its propert&%n%)ed, ontro((ed %nd preser9ed, 'n(ess ot2er4ise

pro9ided in t2is At, + % Bo%rd o3 Diretors onsistin) o3 e(e9en <66= &e&+ers to +e o&posed o3 t2ree ex

officio &e&+ers to 4it: t2e P2i(ippine Veter%ns

Ad&inistr%tor, t2e President o3 t2e Veter%ns *eder%tion o3 t2e P2i(ippines %nd t2e Seret%r o3 N%tion%( De3ense 1 1 1.

It is t2ere3ore in t2e onte1t o3 (%ri3i%tion %nd reti3i%tion o3 42%t

s2o'(d 2%9e +een done + t2e DND <Dep%rt&ent o3 N%tion%( De3ense= 3or %nd%+o't t2e V*P %nd PVB t2%t I %& reF'estin) %ppropri%te in3or&%tion %nd report

%+o't t2ese t4o orpor%te +odies.

T2ere3ore it &% +eo&e neess%r t2%t % on3erene 4it2 o'r st%33s in

t2ese t4o +odies +e set.

T2%n? o' %nd %ntiip%tin) o'r %tion on t2is reF'est.

Ver tr'( o'rs,

<SGD= ANGEO T. REYES

@DND Seret%r

On 6/ #'ne //, respondent DND Seret%r iss'ed t2e %ss%i(ed DND

Dep%rt&ent "ir'(%r No. /; entit(ed, *'rt2er I&p(e&entin) t2e Pro9isions o3

Setions 6@ %nd @C o3 Rep'+(i At No. 0;/, t2e 3'(( te1t o3 42i2 %ppe%rs %s

3o((o4s:







Department o' Nat%onal De'ense

Department C%r0lar No. -1

S0b2et3 *'rt2er I&p(e&entin) t2e Pro9isions o3 Setions 6 o3 Rep'+(i At No. 0;/

A0t&or%ty3 Rep'+(i At No. 0;/

E1e'ti9e Order No. 7 d%ted #'( 5, 678

Set%on +

T2ese r'(es s2%(( )o9ern %nd %pp( to t2e &%n%)e&ent %nd oper%tions o3 t2e Veter%ns *eder%tion o3 t2e P2i(ippines <V*P= 4it2in t2e onte1t pro9ided +

EO 7 s-678.

Set%on 4 DEFINITION OF TER5S H 3or t2e p'rpose o3 t2ese r'(es, t2e

ter&s, p2r%ses or 4ords 'sed 2erein s2%((, 'n(ess t2e onte1t indi%tes ot2er4ise,

&e%n or +e 'nderstood %s 3o((o4s:

S0per*%s%on and Control H it s2%(( in('de %'t2orit to %t diret(

42ene9er % spei3i 3'ntion is entr'sted + (%4 or re)'(%tion to % s'+ordin%te

diret t2e per3or&%ne o3 % d't restr%in t2e o&&ission o3 %ts %ppro9e, re9erseor &odi3 %ts %nd deisions o3 s'+ordin%te o33ii%(s or 'nits deter&ine priorities

in t2e e1e'tion o3 p(%ns %nd pro)r%&s %nd presri+e st%nd%rds, )'ide(ines, p(%ns

%nd pro)r%&s.

Po6er o' Control H po4er to %(ter, &odi3, n'((i3 or set %side 42%t %

s'+ordin%te o33ier 2%d done in t2e per3or&%ne o3 2is d'ties %nd to s'+stit'te t2e J'd)&ent o3 t2e 3or&er to t2%t o3 t2e (%tter.

S0per*%s%on H &e%ns o9erseein) or t2e po4er o3 %n o33ier to see to it t2%tt2eir s'+ordin%te o33iers per3or& t2eir d'ties it does not %((o4 t2e s'perior to

%nn'( t2e %ts o3 t2e s'+ordin%te.

Adm%n%strat%*e Proess H e&+r%es &%tter onernin) t2e proed're int2e disposition o3 +ot2 ro'tine %nd ontested &%tters, %nd t2e &%tter in 42i2

deter&in%tions %re &%de, en3ored or re9ie4ed.

#o*ernment A7eny H %s de3ined 'nder PD 6;;5, % )o9ern&ent %)en

or %)en o3 )o9ern&ent or %)en re3ers to %n dep%rt&ent, +'re%' or o33ie

o3 t2e n%tion%( )o9ern&ent, or %n o3 its +r%n2es or instr'&ent%(ities, o3 %n po(iti%( s'+di9ision, %s 4e(( %s %n )o9ern&ent o4ned or ontro((ed orpor%tion,

in('din) its s'+sidi%ries, or ot2er se(3-)o9ernin) +o%rd or o&&ission o3 t2e

)o9ern&ent.



#o*ernment O6ned and Controlled Corporat%on 8#OCC9 H re3er to

%n %)en or)%ni>ed %s % sto? or non-sto? orpor%tion, 9ested 4it2 3'ntions

re(%tin) to p'+(i needs 42et2er )o9ern&ent%( or propriet%r in n%t're, %nd o4ned + t2e )o9ern&ent diret( or t2ro')2 its instr'&ent%(ities 42o(( or, 42ere

%pp(i%+(e %s in t2e %se o3 sto? orpor%tions, to t2e e1tent o3 %t (e%st 5/K o3 its

%pit%( sto?.

F0nd H s'& o3 &one or ot2er reso'res set %side 3or t2e p'rpose o3

%rrin) o't spei3i %ti9ities or %tt%inin) ert%in o+Jeti9es in %ord%ne 4it2spei%( re)'(%tions, restritions or (i&it%tions %nd onstit'tes %n independent,

3is%( %nd %o'ntin) entit.

#o*ernment F0nd H in('des p'+(i &onies o3 e9er sort %nd ot2er reso'res pert%inin) to %n %)en o3 t2e )o9ern&ent.

Veteran H %n person 42o rendered &i(it%r ser9ie in t2e (%nd, se% or %ir

3ores o3 t2e P2i(ippines d'rin) t2e re9o('tion %)%inst Sp%in, t2e P2i(ippineA&eri%n L%r, Lor(d L%r II, in('din) *i(ipino iti>ens 42o ser9ed in A((ied

*ores in t2e P2i(ippine territor %nd 3orei)n n%tion%(s 42o ser9ed in P2i(ippine3ores t2e ore%n %&p%i)n, t2e Vietn%& %&p%i)n, t2e Anti-dissidene

%&p%i)n, or ot2er 4%rs or &i(it%r %&p%i)ns or 42o rendered &i(it%r ser9ie

in t2e Ar&ed *ores o3 t2e P2i(ippines %nd 2%s +een 2onor%+( dis2%r)ed or sep%r%ted %3ter %t (e%st si1 <0= e%rs tot%( '&'(%ti9e %ti9e ser9ie or sooner

sep%r%ted d'e to t2e de%t2 or dis%+i(it %risin) 3ro& % 4o'nd or inJ'r reei9ed or

si?ness or dise%se in'rred in (ine o3 d't 42i(e in t2e %ti9e ser9ie.

Set%on : 4 Relat%ons&%p Bet6een t&e DND and t&e VFP

C.6 Se 6 o3 RA C6;/ pro9ides ... t2e 3o((o4in) persons <2e%ds o3 9%rio's9eter%ns %ssoi%tions %nd or)%ni>%tions in t2e P2i(ippines= %nd t2eir %ssoi%tes

%nd s'essors %re 2ere+ re%ted % +od orpor%te, 'nder t2e ontro( %nd

s'per9ision o3 t2e Seret%r o3 N%tion%( De3ense, 'nder t2e n%&e, st(e %nd tit(eo3 Veter%ns *eder%tion o3 t2e P2i(ippines ...

T2e Seret%r o3 N%tion%( De3ense s2%(( +e 2%r)ed 4it2 t2e d't o3

s'per9isin) t2e 9eter%ns %nd %((ied pro)r%& 'nder t2e J'risdition o3 t2eDep%rt&ent. It s2%(( %(so 2%9e t2e responsi+i(it o3 o9erseein) %nd ens'rin) t2e

J'diio's %nd e33eti9e i&p(e&ent%tion o3 9eter%ns %ssist%ne, +ene3its, %nd

'ti(i>%tion o3 V*P %ssets.

C. To e33eti9e( s'per9ise %nd ontro( t2e orpor%te %33%irs o3 t2e

*eder%tion %nd to s%3e)'%rd t2e interests %nd 4e(3%re o3 t2e 9eter%ns 42o %re %(so4%rds o3 t2e St%te entr'sted 'nder t2e protetion o3 t2e DND, t2e Seret%r &%

person%(( or t2ro')2 % desi)n%ted represent%ti9e, reF'ire t2e s'+&ission o3

reports, do'&ents %nd ot2er p%pers re)%rdin) %n or %(( o3 t2e *eder%tions



+'siness tr%ns%tions p%rti'(%r( t2ose re(%tin) to t2e V*P 3'ntions 'nder

Setion o3 RA 0;/.

T2e Seret%r or 2is represent%ti9e &% %ttend on3erenes o3 t2e s'pre&e

o'ni( o3 t2e V*P %nd s'2 ot2er %ti9ities 2e &% dee& re(e9%nt.

C.C T2e Seret%r s2%(( 3ro& ti&e to ti&e iss'e )'ide(ines, direti9es %nd

ot2er orders )o9ernin) 9it%( )o9ern&ent %ti9ities in('din), +'t not (i&ited to,

t2e ond't o3 e(etions t2e %F'isition, &%n%)e&ent %nd dispositions o3 properties, t2e %o'ntin) o3 3'nds, 3in%ni%( interests, sto?s %nd +onds,

orpor%te in9est&ents, et. %nd s'2 ot2er tr%ns%tions 42i2 &% %33et t2e

interests o3 t2e 9eter%ns.

C.; *in%ni%( tr%ns%tions o3 t2e *eder%tion s2%(( 3o((o4 t2e pro9isions o3

t2e )o9ern&ent %'ditin) ode <PD 6;;5= i.e. )o9ern&ent 3'nds s2%(( +e spent or

'sed 3or p'+(i p'rposes tr'st 3'nds s2%(( +e %9%i(%+(e %nd &% +e spent on( 3or

t2e spei3i p'rpose 3or 42i2 t2e tr'st 4%s re%ted or t2e 3'nds reei9ed 3is%(responsi+i(it s2%((, to t2e )re%test e1tent, +e s2%red + %(( t2ose e1erisin)

%'t2orit o9er t2e 3in%ni%( %33%irs, tr%ns%tions, %nd oper%tions o3 t2e 3eder%tiondis+'rse&ents or dispositions o3 )o9ern&ent 3'nds or propert s2%(( in9%ri%+(

+e%r t2e %ppro9%( o3 t2e proper o33ii%(s.

Set%on 1 4 Reords o' t&e FEDERATION

As % orpor%te +od %nd in %ord%ne 4it2 %ppropri%te (%4s, it s2%(( ?eep

%nd %re3'(( preser9e reords o3 %(( +'siness tr%ns%tions, &in'tes o3 &eetin)s o3 sto?2o(ders&e&+ers o3 t2e +o%rd o3 diretors re3(etin) %(( det%i(s %+o't s'2

%ti9it.

A(( s'2 reords %nd &in'tes s2%(( +e open to diretors, tr'stees,

sto?2o(ders, %nd ot2er &e&+ers 3or inspetion %nd opies o3 42i2 &% +e

reF'ested.

As % +od orpor%te, it s2%(( s'+&it t2e 3o((o4in): %nn'%( report

proeedin)s o3 o'ni( &eetin)s report o3 oper%tions to)et2er 4it2 3in%ni%(

st%te&ent o3 its %ssets %nd (i%+i(ities %nd 3'nd +%(%ne per e%r st%te&ent o3 re9en'es %nd e1penses per e%r st%te&ent o3 %s2 3(o4s per e%r %s erti3ied +

t2e %o'nt%nt %nd ot2er do'&entsreports %s &% +e neess%r or reF'ired +

t2e SND.

Set%on , 4 S0bm%ss%on o' Ann0al and Per%od% Report

As &%nd%ted 'nder %ppropri%te (%4s, t2e 3o((o4in) reports s2%(( +e

s'+&itted to t2e SND, to 4it:



%. Ann'%( Report to +e s'+&itted not (%ter t2%n e9er #%n'%r C6 o3 t2e 3o((o4in) e%r.

S%id report s2%(( onsist o3 t2e 3o((o4in):

6. *in%ni%( Report o3 t2e *eder%tion, si)ned + t2e Tre%s'rer Gener%( %nd A'ditor

Gener%(

. Roster o3 Me&+ers o3 t2e S'pre&e "o'ni(C. Roster o3 Me&+ers o3 t2e E1e'ti9e Bo%rd %nd N%tion%( O33iers %nd

;. "'rrent (istin) o3 o33iers %nd &%n%)e&ent o3 V*P.

+. Report on t2e proeedin)s o3 e%2 S'pre&e "o'ni( Meetin) to +e s'+&itted not

(%ter t2%n one &ont2 %3ter t2e &eetin)

. Report o3 t2e V*P President %s &% +e reF'ired + SND or %s &% +e 3o'ndneess%r + t2e President o3 t2e *eder%tion

d. Reso('tions p%ssed + t2e E1e'ti9e Bo%rd %nd t2e S'pre&e "o'ni( 3or

on3ir&%tion to +e s'+&itted not (%ter t2%n one &ont2 %3ter t2e %ppro9%( o3 t2ereso('tion

e. A3ter Oper%tionAti9it Reports to +e s'+&itted not (%ter t2%n one &ont2 %3ter s'2

oper%tion or %ti9it

Set%on ; 4 Penal Sant%ons

As %n %tt%2ed %)en to % re)'(%r dep%rt&ent o3 t2e )o9ern&ent, t2e V*P

%nd %(( its instr'&ent%(ities, o33ii%(s %nd personne( s2%(( +e s'+Jet to t2e pen%( pro9isions o3 s'2 (%4s, r'(es %nd re)'(%tions %pp(i%+(e to t2e %tt%2ed %)enies

o3 t2e )o9ern&ent.

In % (etter d%ted 0 A')'st // %ddressed to t2e President o3 petitioner,

respondent DND Seret%r reiter%ted 2is instr'tions in 2is e%r(ier (etter o3 6C Apri(

//.

T2ere%3ter, petitioners President reei9ed % (etter d%ted C A')'st

// 3ro& respondent Underseret%r, in3or&in) 2i& t2%t Dep%rt&ent Order No.

67 d%tedC A')'st // direted t2e ond't o3 % M%n%)e&ent A'dit o3 t2e

Veter%ns *eder%tion o3 t2e P2i(ippines.@; T2e (etter 4ent on to st%te t2%t

respondent DND Seret%r +e(ie9es t2%t t2e &%nd%te )i9en + s%id (%4 %n +e

&e%nin)3'(( e1erised i3 t2is dep%rt&ent %n +etter %pprei%te t2e 3'ntions,





responsi+i(ities %nd sit'%tion on t2e )ro'nd %nd t2is %n +e done + 'ndert%?in) %

t2oro')2 st'd o3 t2e or)%ni>%tion.@5

Respondent Underseret%r %(so reF'ested +ot2 3or % +rie3in) %nd 3or do'&ents on personne(, on)oin) proJets %nd petitioners 3in%ni%( ondition. T2e

(etter ended + st%tin) t2%t, %3ter t2e +rie3in), t2e s'pport st%33 o3 t2e A'dit

"o&&ittee 4o'(d +e)in t2eir 4or? to &eet t2e one-&ont2 t%r)et 4it2in 42i2 to

s'+&it % report.

A (etter d%ted A')'st //C in3or&ed petitioners President t2%t t2e

M%n%)e&ent A'dit Gro'p 2e%ded + t2e Underseret%r 4o'(d +e p%in)

petitioner % 9isit on C/ A')'st // 3or %n 'pd%te on V*Ps di33erent %33i(i%tes %nd

t2e 3in%ni%( st%te&ent o3 t2e *eder%tion.

S'+seF'ent(, t2e Seret%r Gener%( o3 t2e V*P sent %n 'nd%ted (etter to

respondent DND Seret%r, 4it2 notie to respondent Underseret%r 3or "i9i(

Re(%tions %nd Ad&inistr%tion, o&p(%inin) %+o't t2e %((e)ed +ro%dness o3 t2e

sope o3 t2e &%n%)e&ent %'dit %nd reF'estin) t2e s'spension t2ereo3 'nti( s'2

ti&e t2%t spei3i %re%s o3 t2e %'dit s2%(( 2%9e +een %)reed 'pon.

T2e reF'est 4%s, 2o4e9er, denied + t2e Underseret%r in % (etter d%ted ;

Septe&+er // on t2e )ro'nd t2%t % spei3i ti&e3r%&e 2%d +een set 3or t2e

%ti9it.

Petitioner t2's 3i(ed t2is Petition 3or Certiorari 4it2 Pro2i+ition 'nder R'(e

05 o3 t2e 6778 R'(es o3 "i9i( Proed're, pr%in) 3or t2e 3o((o4in) re(ie3s:

6. *or t2is "o'rt to iss'e % te&por%r restr%inin) order %nd % 4rit o3

pre(i&in%r pro2i+itor %nd &%nd%tor inJ'ntion to enJoin respondent

Seret%r %nd %(( t2ose %tin) 'nder 2is disretion %nd %'t2orit 3ro&: <%=

i&p(e&entin) DND Dep%rt&ent "ir'(%r No. /; %nd <+= ontin'in) 4it2t2e on)oin) &%n%)e&ent %'dit o3 petitioners +oo?s o3 %o'nt

. A3ter 2e%rin) t2e iss'es on notie H





%. De(%re DND Dep%rt&ent "ir'(%r No. /; %s n'(( %nd

9oid 3or +ein) ultra vires +. "on9ert t2e 4rit o3 pro2i+ition, pre(i&in%r pro2i+itor

%nd &%nd%tor inJ'ntion into % per&%nent one.@0

#IVIN# D)E CO)RSE TO THE PETITION

Petitioner %sserts t2%t, %(t2o')2 %ses 42i2 F'estion t2e onstit'tion%(it or

9%(idit o3 %d&inistr%ti9e iss'%nes %re ordin%ri( 3i(ed 4it2 t2e (o4er o'rts, t2e

'r)en %nd s'+st%nti9e i&port%ne o3 t2e F'estion on 2%nd %nd t2e p'+(i interest

%ttend%nt to t2e s'+Jet &%tter o3 t2e petition J'sti3 its +ein) 3i(ed 4it2 t2is "o'rt

diret( %s %n ori)in%( %tion.@8

It is sett(ed t2%t t2e Re)ion%( Tri%( "o'rt %nd t2e "o'rt o3 Appe%(s %(so

e1erise ori)in%( J'risdition o9er petitions 3or certiorari %nd pro2i+ition. As 4e

2%9e 2e(d in n'&ero's o%sions, 2o4e9er, s'2 on'rrene o3 ori)in%(

J'risdition does not &e%n t2%t t2e p%rt see?in) e1tr%ordin%r 4rits 2%s t2e

%+so('te 3reedo& to 3i(e 2is petition in t2e o'rt o3 2is 2oie.@ T2's,

in Commissioner of Internal Revenue v. Leal ,@7 4e 2e(d t2%t:

S'2 on'rrene o3 ori)in%( J'risdition %&on) t2e Re)ion%( Tri%( "o'rt,t2e "o'rt o3 Appe%(s %nd t2is "o'rt, 2o4e9er, does not &e%n t2%t t2e p%rt

see?in) %n o3 t2e e1tr%ordin%r 4rits 2%s t2e %+so('te 3reedo& to 3i(e 2is petition

in t2e o'rt o3 2is 2oie. T2e 2ier%r2 o3 o'rts in o'r J'dii%( sste&deter&ines t2e %ppropri%te 3or'& 3or t2ese petitions. T2's, petitions 3or t2e

iss'%ne o3 t2e s%id 4rits %)%inst t2e 3irst (e9e( <in3erior= o'rts &'st +e 3i(ed 4it2

t2e Re)ion%( Tri%( "o'rt %nd t2ose %)%inst t2e (%tter, 4it2 t2e "o'rt o3 Appe%(s. A

diret in9o%tion o3 t2is "o'rts ori)in%( J'risdition to iss'e t2ese 4rits s2o'(d +e%((o4ed on( 42ere t2ere %re spei%( %nd i&port%nt re%sons t2ere3or, spei3i%((

%nd s'33iient( set 3ort2 in t2e petition. T2is is t2e est%+(is2ed po(i to pre9ent

inordin%te de&%nds 'pon t2e "o'rts ti&e %nd %ttention, 42i2 %re +etter de9otedto &%tters 4it2in its e1('si9e J'risdition, %nd to pre9ent 3'rt2er o9er-ro4din)

o3 t2e "o'rts do?et. T2's, it 4%s proper 3or petitioner to instit'te t2e spei%(

i9i( %tion 3or certiorari 4it2 t2e "o'rt o3 Appe%(s %ss%i(in) t2e RT" order denin) 2is &otion to dis&iss +%sed on (%? o3 J'risdition.











T2e petition itse(3, in t2is %se, does not spei3i%(( %nd s'33iient( set 3ort2

t2e spei%( %nd i&port%nt re%sons 42 t2e "o'rt s2o'(d )i9e d'e o'rse to t2is

petition in t2e 3irst inst%ne, 2ere+ 3%i(in) to 3'(3i(( t2e onditions set 3ort2

in Commissioner of Internal Revenue v. Leal .

@6/

L2i(e 4e reiter%te t2e po(iies set3ort2 in Leal %nd %((ied %ses %nd ontin'e to %+2or t2e propensit o3 % n'&+er o3

(iti)%nts to disre)%rd t2e prinip(e o3 2ier%r2 o3 o'rts in o'r J'dii%( sste&, 4e,

2o4e9er, reso(9e to t%?e J'dii%( notie o3 t2e 3%t t2%t t2e persons 42o st%nd to

(ose in % possi+(e protr%ted (iti)%tion in t2is %se %re 4%r 9eter%ns, &%n o3 42o&

2%9e preio's (itt(e ti&e (e3t to enJo t2e +ene3its t2%t %n +e on3erred +

petitioner orpor%tion. T2is +i?erin) 3or t2e po4er o9er petitioner orpor%tion, %n

entit re%ted to represent %nd de3end t2e interests o3 *i(ipino 9eter%ns, s2o'(d +e

reso(9ed %s soon %s possi+(e in order 3or it to one %nd 3or %(( diret its reso'res to

its ri)2t3'( +ene3ii%ries %(( o9er t2e o'ntr. A(( t2ese s%id, 4e 2ere+ reso(9e to

)i9e d'e o'rse to t2is petition.

ISS)ES

Petitioner &%in( %((e)es t2%t t2e r'(es %nd )'ide(ines (%id do4n in t2e

%ss%i(ed Dep%rt&ent "ir'(%r No. /; e1p%nded t2e sope o3 ontro( %nd

s'per9ision +eond 42%t 2%s +een (%id do4n in Rep. At No. 0;/.@66 Petitioner

3'rt2er s'+&its t2e 3o((o4in) iss'es to t2is "o'rt:

6. L%s t2e 2%((en)ed dep%rt&ent ir'(%r p%ssed in t2e 9%(id e1erise o3

t2e respondent Seret%rs ontro( %nd s'per9ision

. "o'(d t2e 2%((en)ed dep%rt&ent ir'(%r 9%(id( (% st%nd%rds(%ssi3in) t2e V*P, %n essenti%(( i9i(i%n or)%ni>%tion, 4it2in t2e %&+it o3

st%t'tes on( %pp(in) to )o9ern&ent entities

C. Does t2e dep%rt&ent ir'(%r, 42i2 )r%nts respondent diret

&%n%)e&ent ontro( on t2e V*P, 'nd'( enro%2 on t2e prero)%ti9es

o3 V*Ps )o9ernin) +od

At t2e 2e%rt o3 %(( t2ese iss'es %nd %(( o3 petitioners pr%ers %nd %ssertions

in t2is %se is petitioners (%i& t2%t it is % pri9%te non-)o9ern&ent orpor%tion.







CENTRAL ISS)E3

IS THE VFP A PRIVATE CORPORATION<

Petitioner (%i&s t2%t it is not % p'+(i nor % )o9ern&ent%( entit +'t %

pri9%te or)%ni>%tion, %nd %d9%nes t2is (%i& to pro9e t2%t t2e iss'%ne o3 DND

Dep%rt&ent "ir'(%r No. /; is %n in9%(id e1erise o3 respondent Seret%rs ontro(

%nd s'per9ision.@6

T2is "o'rt 2%s de3ined t2e po4er o3 ontro( %s t2e po4er o3 %n o33ier to

%(ter or &odi3 or n'((i3 or set %side 42%t % s'+ordin%te 2%s done in t2e

per3or&%ne o3 2is d'ties %nd to s'+stit'te t2e J'd)&ent o3 t2e 3or&er to t2%t o3 t2e

(%tter.@6C T2e po4er o3 s'per9ision, on t2e ot2er 2%nd, &e%ns o9erseein), or t2e

po4er or %'t2orit o3 %n o33ier to see t2%t s'+ordin%te o33iers per3or& t2eir

d'ties. I3 t2e (%tter 3%i( or ne)(et to 3'(3i(( t2e&, t2e 3or&er &% t%?e s'2 %tion

or step %s presri+ed + (%4 to &%?e t2e& per3or& t2eir d'ties.@6; T2ese

de3initions %re snon&o's 4it2 t2e de3initions in t2e %ss%i(ed Dep%rt&ent

"ir'(%r No. /;, 42i(e t2e ot2er pro9isions o3 t2e %ss%i(ed dep%rt&ent ir'(%r %re

&ere onseF'enes o3 ontro( %nd s'per9ision %s de3ined.

T2's, in order 3or petitioners pre&ise to +e %+(e to s'pport its on('sion,

petitioners s2o'(d +e dee&ed to i&p( eit2er o3 t2e 3o((o4in): <6= t2%t it is

'nonstit'tion%(i&per&issi+(e 3or t2e (%4 <Rep. At No. 0;/= to )r%nt ontro(

%ndor s'per9ision to t2e Seret%r o3 N%tion%( De3ense o9er % pri9%te

or)%ni>%tion, or <= t2%t t2e ontro( %ndor s'per9ision t2%t %n +e )r%nted to t2e

Seret%r o3 N%tion%( De3ense o9er % pri9%te or)%ni>%tion is (i&ited, %nd is not %s

stron) %s t2e %re de3ined %+o9e.

T2e 3o((o4in) pro9ision o3 t2e 67C5 "onstit'tion, t2e or)%ni %t ontro((in)

%t t2e ti&e o3 t2e re%tion o3 t2e V*P in 670/, is re(e9%nt:









Setion 8. T2e "on)ress s2%(( not, e1ept + )ener%( (%4, pro9ide 3or t2e

3or&%tion, or)%ni>%tion, or re)'(%tion o3 pri9%te orpor%tions, 'n(ess s'2

orpor%tions %re o4ned %nd ontro((ed + t2e Go9ern&ent or %n s'+di9ision or instr'&ent%(it t2ereo3.@65

On t2e ot2er 2%nd, its o'nterp%rts in t2e 678C %nd 678 onstit'tions %re t2e

3o((o4in):

Setion ;. T2e N%tion%( Asse&+( s2%(( not, e1ept + )ener%( (%4,

pro9ide 3or t2e 3or&%tion, or)%ni>%tion, or re)'(%tion o3 pri9%te orpor%tions,

'n(ess s'2 orpor%tions %re o4ned or ontro((ed + t2e )o9ern&ent or %ns'+di9ision or instr'&ent%(it t2ereo3.@60

Se. 60. T2e "on)ress s2%(( not, e1ept + )ener%( (%4, pro9ide 3or t2e

3or&%tion, or)%ni>%tion, or re)'(%tion o3 pri9%te orpor%tions. Go9ern&ent-o4ned

%nd ontro((ed orpor%tions &% +e re%ted or est%+(is2ed + spei%( 2%rters in

t2e interest o3 t2e o&&on )ood %nd s'+Jet to t2e test o3 eono&i 9i%+i(it.@68

*ro& t2e 3ore)oin), it is rst%( (e%r t2%t o'r onstit'tions e1p(iit(

pro2i+it t2e regulation + spei%( (%4s o3 pri9%te orpor%tions, 4it2 t2e e1eption

o3 )o9ern&ent-o4ned or ontro((ed orpor%tions <GO""s=. $ene, it 4o'(d +e

i&per&issi+(e 3or t2e (%4 to )r%nt ontro( o3 t2e V*P to % p'+(i o33ii%( i3 it 4ere

neit2er % p'+(i orpor%tion, %n 'ninorpor%ted )o9ern&ent%( entit, nor % GO"".@6 S%id onstit'tion%( pro9isions %n e9en +e re%d to pro2i+it t2e re%tion itse(3 o3

t2e V*P i3 it 4ere neit2er o3 t2e t2ree &entioned %+o9e, +'t 4e %nnot )o into t2%t

in t2is %se sine t2ere is no 2%((en)e to t2e re%tion o3 t2e V*P in t2e petition %s

to per&it t2is "o'rt 3ro& onsiderin) its n'((it.

Petitioner 9i)oro's( %r)'es t2%t t2e V*P is % pri9%te non-)o9ern&ent

or)%ni>%tion, pressin) on t2e 3o((o4in) ontentions:

6. T2e V*P does not possess t2e e(e&ents 42i2 4o'(d F'%(i3 it %s %

p'+(i o33ie, p%rti'(%r( t2e possessionde(e)%tion o3 % portion o3 so9erei)n po4er o3 )o9ern&ent to +e e1erised 3or t2e +ene3it o3 t2e p'+(i

. V*P 3'nds %re not p'+(i 3'nds +e%'se H












%= No +'d)et%r %ppropri%tions or )o9ern&ent 3'nds 2%9e

+een re(e%sed to t2e V*P diret( or indiret( 3ro& t2e

Dep%rt&ent o3 B'd)et %nd M%n%)e&ent <DBM=

+= V*P 3'nds o&e 3ro& &e&+ers2ip d'es

= T2e (e%se rent%(s r%ised 3ro& t2e 'se o3 )o9ern&ent (%nds

reser9ed 3or t2e V*P %re pri9%te in 2%r%ter %nd do not

+e(on) to t2e )o9ern&ent. S%id rent%(s %re 3r'itso3 V*Ps (%+or %nd e33orts in &%n%)in) %nd %d&inisterin)

t2e (%nds 3or V*P p'rposes %nd o+Jeti9es. A (ose %n%(o)

4o'(d +e %n *i(ipino iti>en sett(in) on )o9ern&ent (%nd

%nd 42o ti((s t2e (%nd 3or 2is (i9e(i2ood %nd s'sten%ne.T2e 3r'its o3 2is (%+or +e(on) to 2i& %nd not to t2e o4ner

o3 t2e (%nd. S'2 3r'its %re not p'+(i 3'nds.

C. A(t2o')2 t2e J'ridi%( person%(it o3 t2e V*P e&%n%tes 3ro& % st%t'tor2%rter, t2e V*P ret%ins its essenti%( 2%r%ter %s % pri9%te, i9i(i%n 3eder%tion o3

9eter%ns 9o('nt%ri( 3or&ed + t2e 9eter%ns t2e&se(9es to %tt%in % 'nit o3 e33ort, p'rpose %nd o+Jeti9es, e.g . H

%. T2e &e&+ers o3 t2e V*P %re indi9id'%( &e&+ers %ndretirees 3ro& t2e p'+(i %nd &i(it%r ser9ie

+. Me&+ers2ip in t2e V*P is 9o('nt%r, not o&p'(sor

. T2e V*P is )o9erned, not + t2e "i9i( Ser9ie %4, t2e

Arti(es o3 L%r nor t2e GSIS %4, +'t + t2e %+or "ode

%nd t2e SSS %4

d. T2e V*P 2%s its o4n "onstit'tion %nd B-%4s %nd is

)o9erned + % S'pre&e "o'ni( 42o %re e(eted 3ro& %nd + t2e &e&+ers t2e&se(9es

;. T2e Ad&inistr%ti9e "ode o3 678 does not pro9ide t2%t t2e V*P is %n

%tt%2ed %)en, nor does it pro9ide t2%t it is %n entit 'nder t2e ontro( %nds'per9ision o3 t2e DND in t2e onte1t o3 t2e pro9isions o3 s%id ode.

5. T2e DBM de(%red t2%t t2e V*P is % non-)o9ern&ent or)%ni>%tion %ndiss'ed % erti3i%te t2%t t2e V*P 2%s not +een % diret reipient o3 %n 3'nds

re(e%sed + t2e DBM.

T2ese %r)'&ents o3 petitioner not4it2st%ndin), 4e %re onstr%ined to r'(e

t2%t petitioner is in 3%t % p'+(i orpor%tion. Be3ore respondin) to petitioners



%((e)%tions one + one, 2ere %re t2e &ore e9ident re%sons 42 t2e V*P is % p'+(i

orpor%tion:

<6= Rep. At No. 0;/ is entit(ed An At to Create a P0bl%

Corporat%on to +e no4n %s t2e Veter%ns *eder%tion o3 t2e P2i(ippines,De3inin) its Po4ers, %nd 3or Ot2er P'rposes.

<= An %tion or deision o3 t2e *eder%tion or o3 t2e S'pre&e "o'ni( s2%((

+e s'+Jet to t2e %ppro9%( o3 t2e Seret%r o3 De3ense.@67

<C= T2e V*P is reF'ired to s'+&it %nn'%( reports o3 its proeedin)s 3or t2e

p%st e%r, in('din) % 3'((, o&p(ete %nd ite&i>ed report o3 reeipts %nd

e1pendit'res o3 42%te9er ?ind, to t2e President o3 t2e P2i(ippines or to t2eSeret%r o3 N%tion%( De3ense.@/

<;= Under E1e'ti9e Order No. C8 d%ted Dee&+er 677, t2e V*P 4%s(isted %s %&on) t2e )o9ern&ent-o4ned %nd ontro((ed orpor%tions t2%t

4i(( not +e pri9%ti>ed.

<5= In Ang Bagong Bayani – OFW Labor arty v. CO!"L"C ,@6 t2is"o'rt 2e(d in % &in'te reso('tion t2%t t2e V*P @Veter%ns *eder%tion

P%rt is %n %dJ'nt o3 t2e )o9ern&ent, %s it is &ere( %n in%rn%tion o3 t2e

Veter%ns *eder%tion o3 t2e P2i(ippines.

And no4 to %ns4er petitioners re%sons 3or insistin) t2%t it is % pri9%te

orpor%tion:

6. Petitioner (%i&s t2%t t2e V*P does not possess t2e e(e&ents 42i2 4o'(d

F'%(i3 it %s % p'+(i o33ie, p%rti'(%r( t2e possessionde(e)%tion o3 % portion o3

so9erei)n po4er o3 )o9ern&ent to +e e1erised 3or t2e +ene3it o3 t2e p'+(i

In Laurel v. #esierto,@ 4e %dopted t2e de3inition o3 Me2e& o3 % p'+(i

o33ie, t2%t it is t2e ri)2t, %'t2orit %nd d't, re%ted %nd on3erred + (%4, +42i2, 3or % )i9en period, eit2er 3i1ed + (%4 or end'rin) %t t2e p(e%s're o3 t2e

re%tin) po4er, %n indi9id'%( is in9ested 4it2 so&e portion o3 t2e so9erei)n

3'ntions o3 t2e )o9ern&ent, to +e e1erised + 2i& 3or t2e +ene3it o3 t2e p'+(i.












In t2e s%&e %se, 4e 4ent on to %dopt Me2e&s 9ie4 t2%t t2e de(e)%tion to

t2e indi9id'%( o3 so&e o3 t2e so9erei)n 3'ntions o3 )o9ern&ent is @t2e &ost

i&port%nt 2%r%teristi in deter&inin) 42et2er % position is % p'+(i o33ie or

not.@C S'2 portion o3 t2e so9erei)nt o3 t2e o'ntr, eit2er (e)is(%ti9e, e1e'ti9e

or J'dii%(, &'st %tt%2 to t2e o33ie 3or t2e ti&e +ein), to +e e1erised 3or t2e p'+(i +ene3it. Un(ess t2e po4ers on3erred %re o3 t2is n%t're, t2e indi9id'%( is not

% p'+(i o33ier. T2e &ost i&port%nt 2%r%teristi 42i2 distin)'is2es %n o33ie

3ro& %n e&p(o&ent or ontr%t is t2%t t2e re%tion %nd on3errin) o3 %n o33ie

in9o(9es % de(e)%tion to t2e indi9id'%( o3 so&e o3 t2e so9erei)n 3'ntions o3

)o9ern&ent, to +e e1erised + 2i& 3or t2e +ene3it o3 t2e p'+(i H t2%t so&e

portion o3 t2e so9erei)nt o3 t2e o'ntr, eit2er (e)is(%ti9e, e1e'ti9e or J'dii%(,

%tt%2es, 3or t2e ti&e +ein), to +e e1erised 3or t2e p'+(i +ene3it. Un(ess t2e

po4ers on3erred %re o3 t2is n%t're, t2e indi9id'%( is not % p'+(i o33ier.@; T2e

iss'e, t2ere3ore, is 42et2er t2e V*As o33iers 2%9e +een de(e)%ted so&e portion o3 t2e so9erei)nt o3 t2e o'ntr, to +e e1erised 3or t2e p'+(i +ene3it.

In se9er%( %ses, 4e 2%9e de%(t 4it2 t2e iss'e o3 42et2er ert%in spei3i

%ti9ities %n +e (%ssi3ied %s so9erei)n 3'ntions. T2ese %ses, 42i2 de%( 4it2

%ti9ities not i&&edi%te( %pp%rent to +e so9erei)n 3'ntions, 'p2e(d t2e p'+(i

so9erei)n n%t're o3 oper%tions needed eit2er to pro&ote soi%( J'stie @5 or to

sti&'(%te p%trioti senti&ents %nd (o9e o3 o'ntr.@0

As re)%rds t2e pro&otion o3 soi%( J'stie %s % so9erei)n 3'ntion, 4e 2e(din Agricultural Cre$it an$ Coo%erative Financing A$ministration &ACCFA' v.

Confe$eration of (nions in )overnment Cor%orations an$ Offices &C()CO',@8 t2%t t2e o&pe((in) 'r)en 4it2 42i2 t2e "onstit'tion spe%?s o3 soi%( J'stie

does not (e%9e %n do'+t t2%t (%nd re3or& is not %n option%( +'t % o&p'(sor

3'ntion o3 so9erei)nt. T2e s%&e re%son 4%s 'sed in o'r de(%r%tion t2%t

soi%(i>ed 2o'sin) is (i?e4ise % so9erei)n 3'ntion.@ $i)2( si)ni3i%nt 2ere is

t2e o+ser9%tion o3 3or&er "2ie3 #'stie Q'er'+e M%?%(int%(:

T2e )ro4in) o&p(e1ities o3 &odern soiet, 2o4e9er, 2%9e rendered t2istr%dition%( (%ssi3i%tion o3 t2e 3'ntions o3 )o9ern&ent @into onstit'ent %nd

&inistr%nt 3'ntions F'ite 'nre%(isti, not to s% o+so(ete. The areas which used

to be left to private enterprise and initiative %nd 42i2 t2e )o9ern&ent 4%s%((ed 'pon to enter option%((, %nd on( +e%'se it 4%s +etter eF'ipped to

%d&inister 3or t2e p'+(i 4e(3%re t2%n is %n pri9%te indi9id'%( or )ro'p o3

indi9id'%(s, continue to lose their well-defined boundaries and to be absorbed















within activities that the government must undertake in its sovereign capacity i3

it is to &eet t2e inre%sin) soi%( 2%((en)es o3 t2e ti&es. $ere@, %s %(&ost

e9er42ere e(se@, t2e tenden is 'ndo'+ted( to4%rds % )re%ter soi%(i>%tion o3 eono&i 3ores. $ere, o3 o'rse, t2is de9e(op&ent 4%s en9isioned, indeed

%dopted %s % n%tion%( po(i, + t2e "onstit'tion itse(3 in its de(%r%tion o3

prinip(e onernin) t2e pro&otion o3 soi%( J'stie.@7

<E&p2%sis s'pp(ied.=

It 4%s, on t2e ot2er 2%nd, t2e 3%t t2%t t2e N%tion%( "entenni%( "e(e+r%tions

4%s %('(%ted to %ro'se %nd sti&'(%te p%trioti senti&ents %nd (o9e o3 o'ntr t2%t

it 4%s onsidered %s % so9erei)n 3'ntion in Laurel v. #esierto.@C/ In Laurel , t2e

"o'rt t2en too? its 'e 3ro& % si&i(%r %se in t2e United St%tes in9o(9in) % *o'rt2

o3 #'( 3ire4or?s disp(%. T2e 2o(din) o3 t2e "entenni%( "e(e+r%tions 4%s 2e(d to

+e %n e1e'ti9e 3'ntion, %s it 4%s intended to en3ore Arti(e IV o3 t2e

"onstit'tion 42i2 pro9ides 3or t2e onser9%tion, pro&otion %nd pop'(%ri>%tion o3

t2e n%tions 2istori%( %nd '(t'r%( 2erit%)e %nd reso'res, %nd %rtisti re(%tions.

In t2e %se %t +%r, t2e 3'ntions o3 petitioner orpor%tion ens2rined in

Setion ; o3 Rep. At No. 0;/ @C6 s2o'(d &ost ert%in( 3%(( 4it2in t2e %te)or o3

so9erei)n 3'ntions. T2e protetion o3 t2e interests o3 4%r 9eter%ns is not on(

&e%nt to pro&ote soi%( J'stie, +'t is %(so intended to re4%rd p%triotis&. A(( o3

t2e 3'ntions in Setion ; onern t2e 4e((-+ein) o3 4%r 9eter%ns, o'r o'ntr&en

42o ris?ed t2eir (i9es %nd (ost t2eir (i&+s in 3i)2tin) 3or %nd de3endin) o'r

n%tion. It 4o'(d +e inJ'stie o3 %t%strop2i proportions to s% t2%t it is +eond

so9erei)nts po4er to re4%rd t2e peop(e 42o de3ended 2er.

i?e t2e 2o(din) o3 t2e N%tion%( "entenni%( "e(e+r%tions, t2e 3'ntions o3

t2e V*P %re e1e'ti9e 3'ntions, desi)ned to i&p(e&ent not J'st t2e pro9isions o3

Rep. At No. 0;/, +'t %(so, %nd &ore i&port%nt(, t2e "onstit'tion%( &%nd%te 3or

t2e St%te to pro9ide i&&edi%te %nd %deF'%te %re, +ene3its %nd ot2er 3or&s o3

%ssist%ne to 4%r 9eter%ns %nd 9eter%ns o3 &i(it%r %&p%i)ns, t2eir s'r9i9in)

spo'ses %nd orp2%ns.@C

. Petitioner (%i&s t2%t V*P 3'nds %re not p'+(i 3'nds.











Petitioner (%i&s t2%t its 3'nds %re not p'+(i 3'nds +e%'se no +'d)et%r

%ppropri%tions or )o9ern&ent 3'nds 2%9e +een re(e%sed to t2e V*P diret( or

indiret( 3ro& t2e DBM, %nd +e%'se V*P 3'nds o&e 3ro& &e&+ers2ip d'es

%nd (e%se rent%(s e%rned 3ro& %d&inisterin) )o9ern&ent (%nds reser9ed 3or t2eV*P.

T2e 3%t t2%t no +'d)et%r %ppropri%tions 2%9e +een re(e%sed to t2e V*P

does not pro9e t2%t it is % pri9%te orpor%tion. T2e DBM indeed did not see it 3it to

propose +'d)et%r %ppropri%tions to t2e V*P, 2%9in) itse(3 +e(ie9ed t2%t t2e V*P is

% pri9%te orpor%tion.@CC I3 t2e DBM, 2o4e9er, is &ist%?en %s to its on('sion

re)%rdin) t2e n%t're o3 V*Ps inorpor%tion, its pre9io's %ssertions 4i(( not

pre9ent 3't're +'d)et%r %ppropri%tions to t2e V*P. T2e erroneo's %pp(i%tion o3

t2e (%4 + p'+(i o33iers does not +%r % s'+seF'ent orret %pp(i%tion o3 t2e (%4.@C;

Ne9ert2e(ess, 3'nds in t2e 2%nds o3 t2e V*P 3ro& 42%te9er so're %re p'+(i

3'nds, %nd %n +e 'sed on( 3or p'+(i p'rposes. T2is is &%nd%ted + t2e

3o((o4in) pro9isions o3 Rep. At No. 0;/:

<6= Setion pro9ides t2%t t2e V*P %n on( in9est its 3'nds 3or

t2e exclusive benefit o3 t2e Veter%ns o3 t2e P2i(ippines

<= Setion (i?e4ise pro9ides t2%t <%=n %tion or deision o3 t2e

*eder%tion or o3 t2e S'pre&e "o'ni( s2%(( +e s'+Jet to t2e %ppro9%( o3 t2e Seret%r o3 N%tion%( De3ense. $ene, %(( %ti9ities o3 t2e V*P to

42i2 t2e S'pre&e "o'ni( %n %pp( its 3'nds %re s'+Jet to t2e %ppro9%(

o3 t2e Seret%r o3 N%tion%( De3ense

<C= Setion ; pro9ides t2%t t2e *eder%tion s2%(( e1ist solely for t*e %ur%oses

of a benevolent c*aracter+ an$ not for t*e %ecuniary benefit of its

members,

<;= Setion 0 pro9ides t2%t %(( 3'nds o3 t2e V*P in e1ess o3 oper%tin)

e1penses %re reser9ed 3or dis+'rse&ent, %s t2e S'pre&e "o'ni( &%%'t2ori>e, for t*e %ur%oses state$ in -ection to of t*is Act,







<5= Setion 6/ pro9ides t2%t <%=n don%tion or ontri+'tion 42i2 3ro& ti&e

to ti&e &% +e &%de to t2e *eder%tion + t2e Go9ern&ent o3 t2e

P2i(ippines or %n o3 its s'+di9isions, +r%n2es, o33ies, %)enies or instr'&ent%(ities s2%(( +e e1pended + t2e S'pre&e "o'ni( on( 3or t2e

p'rposes &entioned in t2is At. %nd 3in%((,

<0= Setion 6 reF'ires t2e s'+&ission o3 %nn'%( reports o3 V*P proeedin)s

3or t2e p%st e%r, in('din) % 3'((, o&p(ete %nd ite&i>ed report o3 reeipts

%nd e1pendit'res o3 42%te9er ?ind, to t2e President o3 t2e P2i(ippines or tot2e Seret%r o3 N%tion%( De3ense.

It is i&port%nt to note 2ere t2%t t2e &e&+ers2ip d'es o((eted 3ro& t2e

indi9id'%( &e&+ers o3 V*Ps %33i(i%te or)%ni>%tions do not +eo&e p'+(i 3'nds

42i(e t2e %re sti(( 3'nds o3 t2e %33i(i%te or)%ni>%tions. A (ose re%din) o3 Setion

6@C5 o3 Rep. At No. 0;/ re9e%(s t2%t 42%t 2%s +een re%ted %s % +od orpor%te is

not t2e indi9id'%( &e&+ers2ip o3 t2e %33i(i%te or)%ni>%tions, +'t &ere( t2e

%))re)%tion o3 t2e 2e%ds o3 t2e %33i(i%te or)%ni>%tions. T2's, on( t2e &one

re&itted + t2e %33i(i%te or)%ni>%tions to t2e V*P p%rt%?e in t2e p'+(i n%t're o3 t2e

V*P 3'nds.

In Re%ublic v. COCOF"#,@C0 4e 2e(d t2%t t2e "oon't e9 *'nds %re

p'+(i 3'nds +e%'se, inter alia, <6= t2e 4ere &e%nt to +e 3or t2e +ene3it o3 t2eoon't ind'str, one o3 t2e &%Jor ind'stries s'pportin) t2e n%tion%( eono&, %nd

its 3%r&ers %nd <= t2e 9er (%4s )o9ernin) oon't (e9ies reo)ni>e t2eir p'+(i

2%r%ter. T2e s%&e is tr'e 4it2 re)%rd to t2e V*P 3'nds. No (ess p'+(i is t2e 'se

3or t2e V*P 3'nds, %s s'2 'se is (i&ited to t2e p'rposes o3 t2e V*P 42i2 4e 2%9e

r'(ed to +e so9erei)n 3'ntions. i?e4ise, t2e (%4 )o9ernin) V*P 3'nds <Rep. At

No. 0;/= reo)ni>es t2e p'+(i 2%r%ter o3 t2e 3'nds %s s2o4n in t2e en'&er%ted

pro9isions %+o9e.

Le %(so o+ser9ed in t2e s%&e COCOF"# %se t2%t <e=9en i3 t2e &one is

%((o%ted 3or % spei%( p'rpose %nd r%ised + spei%( &e%ns, it is sti(( p'+(i in

2%r%ter.@C8 In t2e %se %t +%r, so&e o3 t2e 3'nds 4ere r%ised + e9en &ore

spei%( &e%ns, %s t2e ontri+'tions 3ro& %33i(i%te or)%ni>%tions o3 t2e V*P %n









2%rd( +e re)%rded %s en3ored ontri+'tions %s to +e onsidered t%1es. T2e %re

&ore in t2e n%t're o3 don%tions 42i2 2%9e %(4%s +een reo)ni>ed %s % so're o3

p'+(i 3'ndin). A33i(i%te or)%ni>%tions o3 t2e V*P %nnot o&p(%in o3 t2eir

ontri+'tions +eo&in) p'+(i 3'nds 'pon t2e reeipt + t2e V*P, sine t2e %re pres'&ed %4%re o3 t2e pro9isions o3 Rep. At No. 0;/ 42i2 not on( spei3ies

t2e e1('si9e p'rposes 3or 42i2 V*P 3'nds %n +e 'sed, +'t %(so pro9ides 3or t2e

re)'(%tion o3 s'2 3'nds + t2e n%tion%( )o9ern&ent t2ro')2 t2e Seret%r o3

N%tion%( De3ense. T2ere is not2in) 4ron), 42et2er (e)%(( or &or%((, 3ro& r%isin)

re9en'es t2ro')2 non-tr%dition%( &et2ods. As re&%r?ed +

#'stie *(orentino *e(ii%no in 2is on'rrin) opinion in /ilosbayan+ Incor%orate$

v. )uingona+ Jr .@C 42ere 2e e1p(%ined t2%t t2e 3'nds r%ised + t2e On-(ine otter

Sste& 4ere %(so p'+(i in n%t're, t2's:

1 1 1 @T2e &ore s'ess3'( t2e )o9ern&ent is in r%isin) re9en'es + non-

tr%dition%( &et2ods s'2 %s PAG"OR oper%tions %nd pri9%ti>%tion &e%s'res, t2e(esser 4i(( +e t2e press're 'pon t2e tr%dition%( so'res o3 p'+(i re9en'es, i.e.+ t2e

po?et +oo?s o3 indi9id'%( t%1p%ers %nd i&porters.

Petitioner %ddition%(( 2%rps on t2e in%pp(i%+i(it o3 t2e %se o3 Laurel

v. #esierto

@C7

42i2 4%s ited + respondents. Petitioner (%i&s t2%t %&on) t2ere%sons N%tion%( "entenni%( "o&&ission "2%ir S%(9%dor %'re( 4%s onsidered %

p'+(i o33ier 4%s t2e 3%t t2%t 2is o&pens%tion 4%s deri9ed 3ro& p'+(i 3'nds.

$%9in) r'(ed t2%t V*P 3'nds 3ro& 42%te9er so're %re p'+(i 3'nds, 4e %n s%3e(

on('de t2%t t2e S'pre&e "o'ni(s o&pens%tion, t%?en %s t2e %re 3ro& V*P

3'nds 'nder t2e ter& oper%tin) e1penses in Setion 0 o3 Rep. At No. 0;/, %re

deri9ed 3ro& p'+(i 3'nds. T2e p%rti'(%r no&en(%t're o3 t2e o&pens%tion t%?en

3ro& V*P 3'nds is not e9en o3 re(e9%ne 2ere. As 4e s%id in Laurel onernin)

o&pens%tion %s %n e(e&ent o3 p'+(i o33ie:

Under p%rti'(%r ir'&st%nes, o&pens%tion 2%s +een 2e(d to in('de

%((o4%ne 3or person%( e1penses, o&&issions, e1penses, 3ees, %n 2onor%ri'&,

&i(e%)e or tr%9e(in) e1penses, p%&ents 3or ser9ies, restit'tion or % +%(%nin) o3

%o'nts, s%(%r, %nd 4%)es.@;/










C. Petitioner %r)'es t2%t it is % i9i(i%n 3eder%tion 42ere &e&+ers2ip is

9o('nt%r.

Petitioner (%i&s t2%t t2e Seret%r o3 N%tion%( De3ense 2istori%(( did not

ind'()e in t2e diret or &iro&%n%)e&ent o3 t2e V*P preise( +e%'se it is

essenti%(( % i9i(i%n or)%ni>%tion 42ere &e&+ers2ip is 9o('nt%r.@;6 T2is re(i%ne

o3 petitioner on 42%t 2%s 2istori%(( +een done is erroneo's, sine (%4s %re not

repe%(ed + dis'se, 'sto&, or pr%tie to t2e ontr%r.@; *'rt2er&ore, %s e%r(ier

st%ted, t2e erroneo's %pp(i%tion o3 t2e (%4 + p'+(i o33iers does not +%r %

s'+seF'ent orret %pp(i%tion o3 t2e (%4.@;C

Neit2er is t2e i9i(i%n n%t're o3 V*P re(e9%nt in t2is %se. T2e "onstit'tion

does not ont%in %n pro2i+ition, e1press or i&p(ied, %)%inst t2e )r%nt o3 ontro(

%ndor s'per9ision to t2e Seret%r o3 N%tion%( De3ense o9er % i9i(i%n

or)%ni>%tion. T2e O33ie o3 t2e Seret%r o3 N%tion%( De3ense is itse(3 % i9i(i%n

o33ie, its o'p%nt +ein) %n %(ter e)o o3 t2e i9i(i%n "o&&%nder-in-"2ie3. T2is

set-'p is t2e &%ni3est%tion o3 t2e onstit'tion%( prinip(e t2%t i9i(i%n %'t2orit is,

%t %(( ti&es, s'pre&e o9er t2e &i(it%r.@;; T2ere +ein) no s'2 onstit'tion%(

pro2i+ition, t2e re%tion o3 % i9i(i%n p'+(i or)%ni>%tion + Rep. At No. 0;/ is

not rendered in9%(id + its +ein) p(%ed 'nder t2e ontro( %nd s'per9ision o3 t2e

Seret%r o3 N%tion%( De3ense.

Petitioners st%nd t2%t t2e V*P is % pri9%te orpor%tion +e%'se &e&+ers2ip

t2ereto is 9o('nt%r is (i?e4ise erroneo's. As st%ted %+o9e, t2e &e&+ers2ip o3 t2e

V*P is not t2e indi9id'%( &e&+ers2ip o3 t2e %33i(i%te or)%ni>%tions, +'t &ere( t2e

%))re)%tion o3 t2e 2e%ds o3 s'2 %33i(i%te or)%ni>%tions. T2ese 2e%ds 3or&in) t2eV*P t2en e(et t2e S'pre&e "o'ni( %nd t2e ot2er o33iers, @;5 o3 t2is p'+(i

orpor%tion.















;. Petitioner (%i&s t2%t t2e Ad&inistr%ti9e "ode o3 678 does not pro9ide

t2%t t2e V*P is %n %tt%2ed %)en, %nd nor does it pro9ide t2%t it is %n entit 'nder

t2e ontro( %nd s'per9ision o3 t2e DND in t2e onte1t o3 t2e pro9isions o3 s%id

ode.

T2e Ad&inistr%ti9e "ode, + )i9in) de3initions o3 t2e 9%rio's entities

o9ered + it, %?no4(ed)es t2%t its en'&er%tion is not e1('si9e. T2e

Ad&inistr%ti9e "ode o'(d not +e s%id to 2%9e repe%(ed nor enor&o's( &odi3ied

Rep. At No. 0;/ + i&p(i%tion, %s s'2 repe%( or enor&o's &odi3i%tion +

i&p(i%tion is not 3%9ored in st%t'tor onstr'tion.@;0

5. Petitioner o33ers %s e9idene t2e DBM opinion t2%t t2e V*P is % non-

)o9ern&ent or)%ni>%tion in its erti3i%tion t2%t t2e V*P 2%s not +een % diret

reipient o3 %n 3'nds re(e%sed + t2e DBM.

Respondents (%i& t2%t t2e s'pposed de(%r%tion o3 t2e DBM t2%t petitioner

is % non-)o9ern&ent or)%ni>%tion is not pers'%si9e, sine DBM is not % F'%si-

J'dii%( %)en. T2e %9er t2%t 42%t 4e 2%9e s%id o3 t2e B're%' o3 o%(

Go9ern&ent *in%ne <BG*= in *ili%%ine Long #istance 0ele%*one Com%any&L#0' v. City of #avao@;8 %n +e %pp(ied to DBM:

In %n %se, it is ontended, t2e r'(in) o3 t2e B're%' o3 o%( Go9ern&ent

*in%ne <BG*= t2%t petitioners e1e&ption 3ro& (o%( t%1es 2%s +een restored is% onte&por%neo's onstr'tion o3 Setion C @o3 R.A. No. 875 %nd, %s s'2, is

entit(ed to )re%t 4ei)2t.

T2e r'(in) o3 t2e BG* 2%s +een onsidered in t2is %se. B't 'n(i?e t2e

"o'rt o3 T%1 Appe%(s, 42i2 is % spei%( o'rt re%ted 3or t2e p'rpose o3

re9ie4in) t%1 %ses, t2e BG* 4%s re%ted &ere( to pro9ide ons'(t%ti9eser9ies %nd te2ni%( %ssist%ne to (o%( )o9ern&ents %nd t2e )ener%( p'+(i on

(o%( t%1%tion %nd ot2er re(%ted &%tters. T2's, t2e r'(e t2%t t2e "o'rt 4i(( not set

%side on('sions rendered + t2e "TA, 42i2 is, + t2e 9er n%t're o3 its3'ntion, dedi%ted e1('si9e( to t2e st'd %nd onsider%tion o3 t%1 pro+(e&s %nd

2%s neess%ri( de9e(oped %n e1pertise on t2e s'+Jet, 'n(ess t2ere 2%s +een %n

%+'se or i&pro9ident e1erise o3 %'t2orit %nnot %pp( in t2e %se o3 t2e BG*.







On t2is sore, t2o')2, 4e dis%)ree 4it2 respondents %nd 2o(d t2%t

t2e DBMs %ppr%is%( is onsidered pers'%si9e. Respondents &isre%d t2e L#0 %se

in %ssertin) t2%t on( F'%si-J'dii%( %)enies deter&in%tion %n +e onsidered

pers'%si9e. L2%t t2e L#0 %se points o't is t2%t, 3or %n %d&inistr%ti9e %)ens

opinion to +e pers'%si9e, t2e %d&inistr%ti9e %)en in9o(9ed <42et2er it 2%s F'%si-

J'dii%( po4ers or not= &'st +e %n e1pert in t2e 3ie(d t2e %re )i9in) t2eir opinion

on.

T2e DBM is indeed %n e1pert on deter&inin) 42%t t2e 9%rio's )o9ern&ent

%)enies %nd orpor%tions %re. T2is deter&in%tion is neess%r 3or t2e DBM to

3'(3i(( its &%nd%te:

Se. . M%nd%te. - T2e Dep%rt&ent s2%(( +e responsi+(e 3or t2e

3or&'(%tion %nd i&p(e&ent%tion o3 t2e N%tion%( B'd)et 4it2 t2e )o%( o3 %tt%inin)

o'r n%tion%( soio-eono&i p(%ns %nd o+Jeti9es.

T2e Dep%rt&ent s2%(( +e responsi+(e 3or t2e e33iient %nd so'nd 'ti(i>%tion

o3 )o9ern&ent 3'nds %nd re9en'es to e33eti9e( %2ie9e o'r o'ntrs

de9e(op&ent o+Jeti9es.@;

T2e pers'%si9eness o3 t2e DBM opinion 2%s, 2o4e9er, +een o9ero&e + %((

t2e pre9io's e1p(%n%tions 4e 2%9e (%id so 3%r. It 2%s %(so +een e(ipsed + %not2er

si&i(%r( pers'%si9e opinion, t2%t o3 t2e Dep%rt&ent o3 N%tion%( De3ense e&+odied

in Dep%rt&ent "ir'(%r No. /;. T2e DND is (e%r( &ore o3 %n e1pert 4it2 respet

to t2e deter&in%tion o3 t2e entities 'nder it, %nd its Ad&inistr%ti9e R'(es %nd

Re)'(%tions %re entit(ed to )re%t respet %nd 2%9e in t2eir 3%9or t2e pres'&ption o3

(e)%(it.@;7

T2e DBM opinion 3'rt2er&ore s'33ers 3ro& its (%? o3 e1p(%n%tion %nd

J'sti3i%tion in t2e erti3i%tion o3 non-reeipt 42ere s%id opinion 4%s )i9en. T2e

DBM 2%s not 3'rnis2ed, in s%id erti3i%tion or e(se42ere, %n e1p(%n%tion 3or its

opinion t2%t V*P is % non-)o9ern&ent or)%ni>%tion.








THE FATE OF DEPART5ENT CIRC)LAR NO. -1

O'r r'(in) t2%t petitioner is % p'+(i orpor%tion is deter&in%ti9e o3 42et2er

or not 4e s2o'(d )r%nt petitioners pr%er to de(%re Dep%rt&ent "ir'(%r No. /;

9oid.

Petitioner %ss%i(s Dep%rt&ent "ir'(%r No. /; on t2e )ro'nd t2%t it e1p%nded

t2e sope o3 ontro( %nd s'per9ision +eond 42%t 2%s +een (%id do4n in Rep. At

No. 0;/. Petitioner %((e)es t2%t <t=2e eF'%tion o3 t2e &e%nin) o3 ontro( %nd

s'per9ision o3 t2e Ad&inistr%ti9e "ode o3 678 %s t2e s%&e ontro( %nd

s'per9ision 'nder Rep. At No. 0;/, t%?es o't t2e onte1t o3 t2e ori)in%(

(e)is(%ti9e intent 3ro& t2e pe'(i%r s'rro'ndin) ir'&st%nes %nd onditions t2%t +ro')2t %+o't t2e re%tion o3 t2e V*P.@5/ Petitioner (%i&s t2%t t2e V*P 4%s

intended %s % se(3-)o9ernin) %'tono&o's +od 4it2 % S'pre&e "o'ni( %s

)o9ernin) %'t2orit, %nd t2%t t2e %ss%i(ed ir'(%r pre-e&pts V*Ps ori)in%( se(3-

)o9ern%ne %nd %'tono& <in= representin) 9eter%ns or)%ni>%tions, %nd s'+stit'tes

)o9ern&ent disretion %nd deisions to t2%t o3 t2e 9eter%ns o4n

deter&in%tion.@56 Petitioner s%s t2%t t2e ir'(%rs pro9isions pr%ti%(( render

t2e S'pre&e "o'ni( in'ti(e, despite its +ein) t2e st%t'tor )o9ernin) +od o3 t2e

V*P.@5

As pre9io's( &entioned, t2is "o'rt 2%s de3ined t2e po4er o3 ontro( %s t2e

po4er o3 %n o33ier to %(ter or &odi3 or n'((i3 or set %side 42%t % s'+ordin%te 2%s

done in t2e per3or&%ne o3 2is d'ties %nd to s'+stit'te t2e J'd)&ent o3 t2e 3or&er

to t2%t o3 t2e (%tter.@5C T2e po4er o3 s'per9ision, on t2e ot2er 2%nd, &e%ns

o9erseein), or t2e po4er or %'t2orit o3 %n o33ier to see t2%t s'+ordin%te o33iers

per3or& t2eir d'ties.@5;

Under t2e Ad&inistr%ti9e "ode o3 678:@55

S'per9ision %nd ontro( s2%(( in('de t2e %'t2orit to %t diret(

42ene9er % spei3i 3'ntion is entr'sted + (%4 or re)'(%tion to % s'+ordin%te

diret t2e per3or&%ne o3 d't restr%in t2e o&&ission o3 %ts re9ie4, %ppro9e,re9erse or &odi3 %ts %nd deisions o3 s'+ordin%te o33ii%(s or 'nits deter&ine

priorities in t2e e1e'tion o3 p(%ns %nd pro)r%&s %nd presri+e st%nd%rds,

)'ide(ines, p(%ns %nd pro)r%&s. 1 1 1















T2e de3inition o3 t2e po4er o3 ontro( %nd s'per9ision 'nder Setion o3 t2e

%ss%i(ed Dep%rt&ent "ir'(%r %re snon&o's 4it2 t2e 3ore)oin) de3initions.

"onseF'ent(, %nd onsiderin) t2%t petitioner is % p'+(i orpor%tion, t2e

pro9isions o3 t2e %ss%i(ed Dep%rt&ent "ir'(%r No. /; did not s'pp(%nt nor &odi3

t2e pro9isions o3 Rep'+(i At No. 0;/, t2's not 9io(%tin) t2e sett(ed r'(e t2%t %((

s'2 <%d&inistr%ti9e= iss'%nes &'st not o9erride, +'t &'st re&%in onsistent %nd

in 2%r&on 4it2 t2e (%4 t2e see? to %pp( or i&p(e&ent. Ad&inistr%ti9e r'(es

%nd re)'(%tions %re intended to %rr o't, neit2er to s'pp(%nt nor to &odi3, t2e

(%4.@50

Setion C. o3 t2e %ss%i(ed dep%rt&ent ir'(%r, 42i2 %'t2ori>es t2e

Seret%r o3 N%tion%( De3ense to 1 1 1 person%(( or t2ro')2 % desi)n%ted

represent%ti9e, reF'ire t2e s'+&ission o3 reports, do'&ents %nd ot2er p%pers

re)%rdin) %n or %(( o3 t2e *eder%tions +'siness 3'ntions, 1 1 1.

%s 4e(( %s Setion C.C 42i2 %((o4s t2e Seret%r o3 DND to

1 1 1 @*ro& ti&e to ti&e iss'e )'ide(ines, direti9es %nd ot2er orders

)o9ernin) 9it%( )o9ern&ent %ti9ities in('din), +'t not (i&ited to, t2eond't o3 e(etions, t2e %F'isition, &%n%)e&ent %nd dispositions o3

properties, t2e %o'ntin) o3 3'nds, 3in%ni%( interests, sto?s %nd +onds,

orpor%te in9est&ents, et. %nd s'2 ot2er tr%ns%tions 42i2 &% %33et t2einterests o3 t2e 9eter%ns.

%re &ere( onseF'enes o3 +ot2 t2e po4er o3 ontro( %nd s'per9ision )r%nted +

Rep. At No. 0;/. T2e po4er to %(ter or &odi3 or n'((i3 or set %side 42%t %s'+ordin%te 2%s done in t2e per3or&%ne o3 2is d'ties, or to see to it t2%t

s'+ordin%te o33iers per3or& t2eir d'ties in %ord%ne 4it2 (%4, neess%ri(

reF'ires t2e %+i(it o3 t2e s'perior o33ier to &onitor, %s (ose( %s it desires, t2e

%ts o3 t2e s'+ordin%te.





T2e s%&e is tr'e 4it2 respet to Setions ; %nd 5 o3 t2e %ss%i(ed Dep%rt&ent

"ir'(%r No. /;, 42i2 reF'ires t2e preser9%tion o3 t2e reords o3 t2e *eder%tion

%nd t2e s'+&ission to t2e Seret%r o3 N%tion%( De3ense o3 %nn'%( %nd periodi

reports.

Petitioner (i?e4ise (%i&s t2%t t2e %ss%i(ed DND Dep%rt&ent "ir'(%r No.

/; 4%s ne9er p'+(is2ed, %nd 2ene 9oid.@58 Respondents den s'2 non-

p'+(i%tion.@5

Le 2%9e p't 3ort2 +ot2 t2e r'(e %nd t2e e1eption on t2e p'+(i%tion o3

%d&inistr%ti9e r'(es %nd re)'(%tions in t2e %se o3 0a1a$a v. 0uvera:@57

1 1 1 Ad&inistr%ti9e r'(es %nd re)'(%tions &'st %(so +e p'+(is2ed i3 t2eir

p'rpose is to en3ore or i&p(e&ent e1istin) (%4 p'rs'%nt %(so to % 9%(id

de(e)%tion.

Interpret%ti9e re)'(%tions %nd t2ose &ere( intern%( in n%t're, t2%t is,re)'(%tin) on( t2e personne( o3 t2e %d&inistr%ti9e %)en %nd not t2e p'+(i,

need not +e p'+(is2ed. Neit2er is p'+(i%tion reF'ired o3 t2e so-%((ed (etters o3

instr'tions iss'ed + %d&inistr%ti9e s'periors onernin) t2e r'(es on )'ide(inesto +e 3o((o4ed + t2eir s'+ordin%tes in t2e per3or&%ne o3 t2eir d'ties.

E9en %ss'&in) t2%t t2e %ss%i(ed ir'(%r 4%s not p'+(is2ed, its 9%(idit is not

%33eted + s'2 non-p'+(i%tion 3or t2e re%son t2%t its pro9isions 3%(( 'nder t4o o3

t2e e1eptions en'&er%ted in 0a1a$a.

Dep%rt&ent "ir'(%r No. /; is %n intern%( re)'(%tion. As 4e 2%9e r'(ed, t2e

%re &e%nt to re)'(%te % p'+(i orpor%tion 'nder t2e ontro( o3 DND, %nd not t2e

p'+(i in )ener%(. As (i?e4ise dis'ssed %+o9e, 42%t 2%s +een re%ted %s % +od

orpor%te + Rep. At No. 0;/ is not t2e indi9id'%( &e&+ers2ip o3 t2e %33i(i%te

or)%ni>%tions o3 t2e V*P, +'t &ere( t2e %))re)%tion o3 t2e 2e%ds o3 t2e %33i(i%te

or)%ni>%tions. "onseF'ent(, t2e indi9id'%( &e&+ers o3 t2e %33i(i%te or)%ni>%tions,

42o %re not p'+(i o33iers, %re +eond t2e re)'(%tion o3 t2e ir'(%r.









Setions , C %nd 0 o3 t2e %ss%i(ed ir'(%r %re %ddition%(( &ere(

interpret%ti9e in n%t're. T2e %dd not2in) to t2e (%4. T2e do not %33et t2e

s'+st%nti%( ri)2ts o3 %n person, 42et2er p%rt to t2e %se %t +%r or not. In Setions

%nd C, ontro( %nd s'per9ision %re de3ined, &entionin) %tions t2%t can +e per3or&ed %s onseF'enes o3 s'2 ontro( %nd s'per9ision, +'t 4it2o't spei3in)

t2e p%rti'(%r %tions t2%t s*all +e rendered to ontro( %nd s'per9ise t2e V*P.

Setion 0, in t2e s%&e 9ein, &ere( st%te 42%t t2e dr%3ters o3 t2e ir'(%r perei9ed

to +e onseF'enes o3 +ein) %n %tt%2ed %)en to % re)'(%r dep%rt&ent o3 t2e

)o9ern&ent, en'&er%tin) s%ntions %nd re&edies pro9ided + (%4 t2%t may +e

%9%i(ed o3 42ene9er desired.

Petitioner t2en o+Jets to t2e i&p(e&ent%tion o3 Se. C.; o3 t2e %ss%i(ed

Dep%rt&ent "ir'(%r, 42i2 pro9ides t2%t H

C.; *in%ni%( tr%ns%tions o3 t2e *eder%tion s2%(( 3o((o4 t2e pro9isions o3

t2e )o9ern&ent %'ditin) ode <PD 6;;5= i.e. )o9ern&ent 3'nds s2%(( +e spent or

'sed 3or p'+(i p'rposes tr'st 3'nds s2%(( +e %9%i(%+(e %nd &% +e spent on( 3or

t2e spei3i p'rpose 3or 42i2 t2e tr'st 4%s re%ted or t2e 3'nds reei9ed 3is%(responsi+i(it s2%((, to t2e )re%test e1tent, +e s2%red + %(( t2ose e1erisin)

%'t2orit o9er t2e 3in%ni%( %33%irs, tr%ns%tions, %nd oper%tions o3 t2e 3eder%tion

dis+'rse&ents or dispositions o3 )o9ern&ent 3'nds or propert s2%(( in9%ri%+(

+e%r t2e %ppro9%( o3 t2e proper o33ii%(s.

Sine 4e 2%9e %(so pre9io's( deter&ined t2%t V*P 3'nds %re p'+(i 3'nds,

t2ere is (i?e4ise no re%son to de(%re t2is pro9ision in9%(id. Setion C.; is orret

in reF'irin) t2e V*P 3'nds to +e 'sed 3or p'+(i p'rposes, +'t on( inso3%r t2e ter&

p'+(i p'rposes is onstr'ed to &e%n p'+(i p'rposes en'&er%ted in Rep. At

No. 0;/.

$%9in) in t2eir possession p'+(i 3'nds, t2e o33iers o3 t2e V*P, espei%((

its 3is%( o33iers, &'st indeed s2%re in t2e 3is%( responsi+i(it to t2e )re%test

e1tent.



As to petitioners %((e)%tion t2%t V*P 4%s intended %s % se(3-)o9ernin)

%'tono&o's +od 4it2 % S'pre&e "o'ni( %s )o9ernin) %'t2orit, 4e 3ind t2%t t2e

pro9isions o3 Rep. At No. 0;/ onernin) t2e ontro( %nd s'per9ision o3 t2e

Seret%r o3 N%tion%( De3ense (e%r( 4it22o(ds 3ro& t2e V*P o&p(ete %'tono&.

To s%, 2o4e9er, t2%t s'2 pro9isions render t2e V*P in'ti(e is %n e1%))er%tion. Ano33ie is not rendered in'ti(e + t2e 3%t t2%t it is p(%ed 'nder t2e ontro( o3 %

2i)2er o33ie. T2ese s'+ordin%te o33ies, s'2 %s t2e e1e'ti9e o33ies 'nder t2e

ontro( o3 t2e President, e1erise disretion %t t2e 3irst inst%ne. L2i(e t2eir %ts

%n +e %(tered or e9en set %side + t2e s'perior, t2ese %ts %re e33eti9e %nd %re

dee&ed t2e %ts o3 t2e s'perior 'nti( t2e %re &odi3ied. S're(, 4e %nnot s% t2%t

t2e o33ies o3 %(( t2e Dep%rt&ent Seret%ries %re 4ort2(ess positions.

In s'&, t2e %ss%i(ed DND Dep%rt&ent "ir'(%r No. /; does not s'pp(%nt nor

&odi3 %nd is, on t2e ontr%r, per3et( in onson%ne 4it2 Rep. At No. 0;/.

Petitioner V*P is % p'+(i orpor%tion. As s'2, it %n +e p(%ed 'nder t2e ontro(

%nd s'per9ision o3 t2e Seret%r o3 N%tion%( De3ense, 42o onseF'ent( 2%s t2e

po4er to ond't %n e1tensi9e &%n%)e&ent %'dit o3 petitioner orpor%tion.

=HEREFORE, t2e Petition is 2ere+ DIS5ISSED 3or (%? o3 &erit. T2e

9%(idit o3 t2e Dep%rt&ent o3 N%tion%( De3ense Dep%rt&ent "ir'(%r No. /;

isAFFIR5ED.

SO ORDERED.

5INITA V. CHICO"NA>ARIO

Assoi%te #'stie

LE "ON"UR:



ARTE5IO V. PAN#ANIBAN

"2ie3 #'stie

RE$NATO S. P)NO

Assoi%te #'stie

LEONARDO A. ?)IS)5BIN#

Assoi%te #'stie

CONS)ELO $NARES"SANTIA#O

Assoi%te #'stie

AN#ELINA SANDOVAL"#)TIERRE>

Assoi%te #'stie

ANTONIO T. CARPIO

Assoi%te #'stie

5A. ALICIA A)STRIA"5ARTINE>

Assoi%te #'stie

RENATO C. CORONA

Assoi%te #'stie

CONCHITA CARPIO 5ORALES

Assoi%te #'stie

RO5EO @. CALLE@O! SR.

Assoi%te #'stie

ADOLFO S. A>C)NA

Assoi%te #'stie

DANTE O. TIN#A

Assoi%te #'stie

CANCIO C. #ARCIA

Assoi%te #'stie



" E R T I * I " A T I O N

P'rs'%nt to Arti(e VIII, Setion 6C o3 t2e "onstit'tion, it is 2ere+ erti3ied

t2%t t2e on('sions in t2e %+o9e Deision 4ere re%2ed in ons'(t%tion +e3ore t2e

%se 4%s %ssi)ned to t2e 4riter o3 t2e opinion o3 t2e "o'rt.

ARTE5IO V. PAN#ANIBAN

"2ie3 #'stie

@6 REPUBI" A"T No. 0;/: AN A"T TO "REATE A PUBI" "ORPORATION TO BE NOLN AST$E VETERANS *EDERATION O* T$E P$IIPPINES, DE*INING ITS POLERS, AND *OR

OT$ER PURPOSES. @ Se. 6. T2e 3o((o4in) persons, to 4it: E&i(io A)'in%(do, o3 Assoi%ion de (os Veter%nos de

(% Re9o('ion M%r)%rito Torr%(+% o3 t2e A*P Retired Veter%ns Assoi%tion <A*REVA= oren>o B.

"%+rer% o3 t2e "on3eder%tion o3 t2e *i(ipino Veter%ns <"ONVETS= Teodoro V. %(%4 o3 t2e De3enders

o3 B%t%%n %nd "orre)idor *%'sto S. A(+erto o3 t2e E"GA Veter%ns Assoi%tion EnriF'e ". Ri&%ndo o3 t2e *AIT Veter%ns e)ion *r%niso . Gon>%(es o3 t2e *i(ipino Dis%+(ed Veter%ns Assoi%tion B%si(i% M.

B%J% o3 t2e Go(d St%r Mot2ers %nd United L%r Lido4s %nd Orp2%ns Assoi%tion o3 t2e P2i(ippines

Si&eon ". Med%((% o3 t2e $'nters ROT" Assoi%tion Antonio *. G%ri% o3 t2e M%)s%s% Veter%ns

e)ion Dionisio V. OJed% G'%o3 t2e PE*TO Veter%ns Assoi%tion Pri&iti9o o9in% o3 t2e P2i(ippine N%tion%( G'%rd Veter%ns e)ion #ose V.Andr%d% o3 t2e P2i(ippine N%9%( Veter%ns e)ion

#%i&e Piopon)o o3 t2e P2i(ippine Veter%ns e)ion So3i% . Pr'deni%do o3 t2e P2i(ippine Assoi%tion o3

L%r Lido4s, P%rents, %nd Orp2%ns E')enio B. Reto o3 t2e United Dis%+(ed Veter%ns Assoi%tion o3 t2e

P2i(ippines %nd G%'denio Antonino o3 t2e USA*IP N %nd t2eir %ssoi%tes %nd s'essors %re 2ere+re%ted % +od orpor%te, 'nder t2e ontro( %nd s'per9ision o3 t2e Seret%r o3 N%tion%( De3ense, 'nder t2e

n%&e, st(e %nd tit(e o3 Veter%ns *eder%tion o3 t2e P2i(ippines, 2erein%3ter re3erred to %s t2e *eder%tion.

T2e prinip%( o33ie o3 t2e *eder%tion s2%(( +e in t2e "it o3 M%ni(%, P2i(ippines.

@C Se. . T2e s%id *eder%tion s2%(( 2%9e perpet'%( s'ession, 4it2 po4er to s'e %nd +e s'ed to 2o(d s'2

re%( %nd person%( propert %s s2%(( +e neess%r 3or its p'rposes, %nd to reei9e re%( %nd person%( propert

+ )i3t, de9ise or +eF'est to in9est its 3'nds 3or t2e e1('si9e +ene3it o3 t2e 9eter%ns o3 t2e P2i(ippines to

e1tend, 4it2in its %p%+i(ities, %(( neess%r %ssist%ne, %nd oper%te s'2 enterprises %s &% 3'rt2er t2e&%teri%( or &or%( 4e((-+ein) o3 9eter%ns to %dopt % se%(, %nd to %(ter or destro t2e s%&e %t p(e%s're to

http://sc.judiciary.gov.ph/jurisprudence/2006/feb2006/G.%20R.%20No.%20155027.htm#_ftnref1








2%9e o33ies %nd ond't its +'siness %nd %33%irs in t2e "it o3 M%ni(% %ndor pro9ines, ities,

&'niip%(ities %nd +%rrios o3 t2e P2i(ippines %nd to %&end s%id (%4s, re)'(%tions %nd r'(es to est%+(is2 %nd

oper%te +r%n2es o3 its o33ie %n42ere in t2e P2i(ippines to p'+(is2 % &%)%>ine %ndor ot2er p'+(i%tions

%nd )ener%((, to do %(( s'2 %ts %nd t2in)s %s &% +e neess%r to %rr into e33et t2e pro9isions o3 t2isAt %nd to pro&ote t2e p'rposes o3 s%id *eder%tion.

An %tion or deision o3 t2e *eder%tion or o3 t2e S'pre&e "o'ni( s2%(( +e s'+Jet to t2e

%ppro9%( o3 t2e Seret%r o3 N%tion%( De3ense.

@; Rollo, p. 5C.@5 Id.@0 Id., p. C6.@8 Id., p. 8;.@ Commissioner of Internal Revenue v. Leal+ ;;/ P2i(. ;88, ;; <//= eo%le v. Court of A%%eals, C06

P2i(. ;7, ;78 <6777= earson v. Interme$iate A%%ellate Court+ C50 P2i(. C;6, C55 <677= eo%le

v. Cuaresma, G.R. No. 0888, 6 Apri( 677, 68 S"RA ;65, ;;.@7 Id., pp. ;;-;5.@6/ Id.@66 Rollo, p. ;.@6 Id., p. 5.@6C !on$ano v. -ilvosa, 78 P2i(. 6;C, 6; <6755=.@6; Id.@65 "ONSTITUTION <67C5=, Art. III, Se. 8.@60 "ONSTITUTION <678C=, Art. IV, Se. ;.@68 "ONSTITUTION, Art. II, Se. 60.@6 "ontro( +ein) t2e po4er o3 %n o33ier to %(ter or &odi3 or n'((i3 or set %side 42%t % s'+ordin%te 2%s

done in t2e per3or&%ne o3 2is d'ties %nd to s'+stit'te t2e J'd)&ent o3 t2e 3or&er to t2%t o3 t2e (%tter

s2o'(d not +e on3'sed 4it2 t2e ontro( in t2e ter& )o9ern&ent-o4ned or ontro((ed orpor%tion<GO""=. Cf. E.O. No. 7 <Ad&inistr%ti9e "ode= Introd'tor Pro9isions, Setion <6C= 42ere ontro( is

onsidered to +e t2e o4ners2ip o3 %t (e%st 3i3t-one <56= per ent o3 its %pit%( sto?.@67 REPUBI" A"T No. 0;/, Setion , p%r. .@/ REPUBI" A"T No. 0;/, Setion .@6 G.R. No. 6;857, 6/ Apri( //.@

;C/ P2i(. 05, 08 <//=.@C Id.@; I$ .@5 Agricultural Cre$it an$ Coo%erative Financing A$ministration &ACCFA' v. Confe$eration of (nions in

)overnment Cor%orations an$ Offices &C()CO'+ 6;6 P2i(. CC;, C;7 <6707= eo%le2s 3omesite an$

3ousing Cor%oration v. Court of In$ustrial Relations, G.R. No. -C67/, 7 M% 678, 65/ S"RA 70,

C6/.@0 Laurel v. #esierto, s'pr% note , p. 08.@8 S'pr% note 5.@ eo%le2s 3omesite an$ 3ousing Cor%oration v. Court of In$ustrial Relations, s'pr% note 5.@7 Agricultural Cre$it an$ Coo%erative Financing A$ministration &ACCFA' v. Confe$eration of (nions in

)overnment Cor%orations an$ Offices &C()CO', s'pr% note 5, p. C;7.@C/ Laurel v. #esierto, s'pr% note .@C6

Se. ;. T2e p'rposes o3 t2e *eder%tion s2%(( +e to 'p2o(d %nd de3end t2e de&or%ti 4% o3 (i3e %sen9isioned in t2e "onstit'tion o3 t2e Rep'+(i o3 t2e P2i(ippines to represent %nd to de3end t2e interests o3 %(( *i(ipino 9eter%ns to oordin%te t2e e33orts o3 %(( di33erent 9eter%ns o3 t2e P2i(ippines in +e2%(3 o3 t2e

interests o3 respeti9e &e&+ers to pro&ote &'t'%( 2e(p %&on) 3or&er o&r%des-in-%r&s to perpet'%te

t2eir o&&on e1perienes in 4%r to 'ndert%?e %ts o3 2%rit %nd re(ie3 4or? to preser9e pe%e %nd order

to 3oster (o9e o3 o'ntr %nd t2in)s *i(ipino %nd in'(%te indi9id'%( i9i onsio'sness. In )ener%(, t2e*eder%tion s2%(( e1ist so(e( 3or p'rposes o3 % +ene9o(ent 2%r%ter, %nd not 3or pe'ni%r pro3it o3 its

&e&+ers.@C "ONSTITUTION, Art. VI, Se. 8.






























































@CC Dep%rt&ent o3 B'd)et %nd M%n%)e&ents erti3i%tion o3 non-reeipt in 3%9or o3 Petitioner "orpor%tion,

Anne1 O o3 t2e Petition.@C; !anila Joc4ey Club v. Court of A%%eals, C0/ P2i(. C08, CC <677=.@C5 Se. 6. T2e 3o((o4in) persons, to 4it: E&i(io A)'in%(do, o3 Assoi%ion de (os Veter%nos de

(% Re9o('ion M%r)%rito Torr%(+% o3 t2e A*P Retired Veter%ns Assoi%tion <A*REVA= oren>o B.

"%+rer% o3 t2e "on3eder%tion o3 t2e *i(ipino Veter%ns <"ONVETS= Teodoro V. %(%4 o3 t2e De3enders

o3 B%t%%n %nd "orre)idor *%'sto S. A(+erto o3 t2e E"GA Veter%ns Assoi%tion EnriF'e ". Ri&%ndo o3

t2e *AIT Veter%ns e)ion *r%niso . Gon>%(es o3 t2e *i(ipino Dis%+(ed Veter%ns Assoi%tion B%si(i% M.B%J% o3 t2e Go(d St%r Mot2ers %nd United L%r Lido4s %nd Orp2%ns Assoi%tion o3 t2e P2i(ippines

Si&eon ". Med%((% o3 t2e $'nters ROT" Assoi%tion Antonio *. G%ri% o3 t2e M%)s%s% Veter%ns

e)ion Dionisio V. OJed% G'%o3 t2e PE*TO Veter%ns Assoi%tion Pri&iti9o o9in% o3 t2e P2i(ippine

N%tion%( G'%rd Veter%ns e)ion #ose V.Andr%d% o3 t2e P2i(ippine N%9%( Veter%ns e)ion#%i&e Piopon)o o3 t2e P2i(ippine Veter%ns e)ion So3i% . Pr'deni%do o3 t2e P2i(ippine Assoi%tion o3

L%r Lido4s, P%rents, %nd Orp2%ns E')enio B. Reto o3 t2e United Dis%+(ed Veter%ns Assoi%tion o3 t2e

P2i(ippines %nd G%'denio Antonino o3 t2e USA*IP N %nd t2eir %ssoi%tes %nd s'essors %re 2ere+

re%ted % +od orpor%te, 'nder t2e ontro( %nd s'per9ision o3 t2e Seret%r o3 N%tion%( De3ense, 'nder t2en%&e, st(e %nd tit(e o3 Veter%ns *eder%tion o3 t2e P2i(ippines, 2erein%3ter re3erred to %s t2e *eder%tion.

T2e prinip%( o33ie o3 t2e *eder%tion s2%(( +e in t2e "it o3 M%ni(%, P2i(ippines.@C0 ;C P2i(. 8C5, 80-80C <//6=.@C8 Id.@C G.R. No. 66CC85, 5 M% 677;, C S"RA 66/, 650.@C7 S'pr% note .@;/ Id., itin) 65 ".#.S. "o&pens%tion, p. 05;.@;6 Rollo, p. 80.@; Cf . "IVI "ODE, Arti(e 8, p%r. 6: %4s %re repe%(ed on( + s'+seF'ent ones, %nd t2eir 9io(%tion or

nono+ser9%ne s2%(( not +e e1'sed + dis'se, 'sto&, or pr%tie to t2e ontr%r.@;C !anila Joc4ey Club v. Court of A%%eals, s'pr% note C;.@;; "ONSTITUTION, Art. , Se. C.@;5 REPUBI" A"T No. 0;/, Se. 8.@;0 -ee (nite$ -tates v. alacio, CC P2i(. /, 60 <6760= Lic*auco v. A%ostol , ;; P2i(. 6C, 6;7 <67=.@;8 ;;8 P2i(. 586, 58-5 <//C=.@; E1e'ti9e Order No. 7, ADMINISTRATIVE "ODE o3 678, Tit(e VII, "2%pter 6, Se. .@;7 )on5ales v. Lan$ Ban4 of t*e *ils., G.R. No. 80857, M%r2 677/, 6C S"RA 5/, 50.@5/ Rollo, p. 6.@56 Id., pp. 6-.@5 Id., p. 7.@5C !on$ano v. -ilvosa+ s'pr% note 6C.@5; Id.@55 E.O. No. 7, Boo? ;, "2%pter 8, Setion C <6=.@50 Commissioner of Internal Revenue v. Court of A%%eals+ C6/ P2i(. C7, C78 <6775=.@58 Rollo, p. ;;.@5 Respondents "o&&ent, 6 No9e&+er //C.@57 G.R. No. -0C765, 7 Dee&+er 670, 6;0 S"RA ;;0, ;5;.























































veterans federation of the philippines vs. hon agnelo t reyes in his capacity as snd

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