People vs. Sandiganbayan

The Sandiganbayan has jurisdiction over presidents, directors, trustees, or managers of government-owned or controlled corporations organized and incorporated under the Corporation Code — not only those with original charters — for purposes of violations of RA 3019, because the governing statutes deliberately make no distinction as to the manner of creation of the GOCC, and under the principle ubi lex non distinguit nec nos distinguere debemos, courts must not distinguish where the law does not.

Respondent Efren L. Alas served as President and Chief Operating Officer of the Philippine Postal Savings Bank (PPSB), a subsidiary of the Philippine Postal Corporation (PHILPOST). PPSB was organized and incorporated under the Corporation Code (Batas Pambansa Blg. 68) and registered with the Securities and Exchange Commission on June 22, 1994, with more than 99% of its authorized capital stock owned by the government. Its creation was expressly sanctioned by Section 32 of RA 7354, the Postal Service Act of 1992, for purposes including the promotion of thrift and savings among the public and the facilitation of postal service through collections and payments. The jurisdiction of the Sandiganbayan over officers of GOCCs is governed by PD 1606, as amended by RA 7975 and RA 8249, while the scope of the Civil Service under Article IX-B, Section 2(1) of the 1987 Constitution is limited to GOCCs with original charters — a constitutional delimitation that the Sandiganbayan erroneously applied to the jurisdictional question.

Pursuant to a resolution dated September 30, 1999 of the Office of the Ombudsman, two separate informations for violation of Section 3(e) of RA 3019 were filed with the Sandiganbayan on November 17, 1999 against Efren L. Alas. The charges stemmed from alleged anomalous advertising contracts entered into by Alas in his capacity as President and Chief Operating Officer of the Philippine Postal Savings Bank (PPSB) with Bagong Buhay Publishing Company, which purportedly caused damage and prejudice to the government. PPSB was organized and incorporated under the Corporation Code as a subsidiary of the Philippine Postal Corporation (PHILPOST), registered with the Securities and Exchange Commission on June 22, 1994, with more than 99% of its authorized capital stock belonging to the government. Its creation was expressly sanctioned by Section 32 of RA 7354, the Postal Service Act of 1992.

On October 30, 2002, Alas filed a motion to quash the informations for lack of jurisdiction, which the prosecution opposed. The Sandiganbayan, in a resolution dated February 15, 2001, granted the motion. It reasoned that PPSB was not created by a special law but was organized under the Corporation Code, that its primary and secondary purposes were business-oriented, that its employees were covered by SSS rather than GSIS, and that labor disputes involving its personnel fell under the NLRC rather than the Civil Service Commission. Relying on several Supreme Court decisions interpreting the scope of the Civil Service, the Sandiganbayan concluded that Alas was not a public officer and therefore outside its jurisdiction.

Dissatisfied, the People of the Philippines, through the Office of the Special Prosecutor, filed the present petition for certiorari under Rule 65, contending that PPSB was a government-owned or controlled corporation as defined under Section 2(13) of the Administrative Code of 1987 and that RA 8249 made no distinction as to the manner of creation of GOCCs for purposes of Sandiganbayan jurisdiction. Respondent Alas reiterated the Sandiganbayan's reasoning, maintaining that PPSB was not created by special law and thus its officers did not fall within the anti-graft court's jurisdiction.

• Definition of GOCC under the Administrative Code: Petitioner argued that PPSB was a government-owned or controlled corporation as defined under Section 2(13) of EO 292 (Administrative Code of 1987), which covers any agency organized as a stock or non-stock corporation vested with functions relating to public needs and owned by the government directly or indirectly, wholly or to the extent of at least 51% of its capital stock.
• No statutory distinction as to manner of creation: Petitioner maintained that RA 8249, in defining the jurisdiction of the Sandiganbayan, did not make any distinction as to the manner of creation of GOCCs for their officers to fall under its jurisdiction, and that being President and COO of PPSB at the time of the commission of the crimes charged, respondent Alas came under the Sandiganbayan's jurisdiction.

• PPSB not created by special law: Respondent Alas contended that PPSB was not created by special law but was organized and incorporated under the Corporation Code, and therefore its officers did not fall within the jurisdiction of the Sandiganbayan.
• Civil Service delimitation applies: Respondent practically reiterated the Sandiganbayan's pronouncements, relying on the constitutional provision limiting the Civil Service to GOCCs with original charters and on Supreme Court decisions holding that the Civil Service does not cover GOCCs incorporated under the general corporation law, to support the conclusion that PPSB's officers were not public officers.

• Sandiganbayan Jurisdiction over GOCCs Incorporated under the Corporation Code: Whether the Sandiganbayan has jurisdiction over presidents, directors, trustees, or managers of government-owned or controlled corporations organized and incorporated under the Corporation Code for purposes of violations of RA 3019.

• Sandiganbayan Jurisdiction over GOCCs Incorporated under the Corporation Code: Yes. The Sandiganbayan has jurisdiction over officers of GOCCs organized under the Corporation Code, RA 8249 having deliberately made no distinction as to the manner of creation of the GOCC, and the principle ubi lex non distinguit nec nos distinguere debemos precluding courts from distinguishing where the law does not.

• Sandiganbayan Jurisdiction over GOCCs Incorporated under the Corporation Code: The jurisdiction of the Sandiganbayan is governed not by Article IX-B, Section 2(1) of the 1987 Constitution — which limits the Civil Service to GOCCs with original charters — but by Article XI, Section 4 of the 1987 Constitution, which provides that the Sandiganbayan shall continue to function and exercise its jurisdiction as may be provided by law. This provision retained the jurisdiction defined under Article XIII, Section 5 of the 1973 Constitution, which expressly included officers and employees of government-owned or controlled corporations. Congress, pursuant to this constitutional authority, enacted RA 7975 and later RA 8249, both of which maintained the Sandiganbayan's jurisdiction over "presidents, directors or trustees, or managers of government-owned or controlled corporations" without any distinction as to the manner of their creation. The deliberate legislative omission to distinguish between GOCCs created by special law and those incorporated under the Corporation Code reveals a clear intent to include both types within the Sandiganbayan's jurisdiction. Under the established principle of statutory construction — ubi lex non distinguit nec nos distinguere debemos — courts must not distinguish where the law does not. This interpretation is reinforced by Article XI, Section 12 of the 1987 Constitution, which likewise includes officers and employees of GOCCs within the jurisdiction of the Ombudsman without distinction. The Court had already ruled in Quimpo vs. Tanodbayan that officers of GOCCs, whether created by special law or formed under the Corporation Code, come under the jurisdiction of the Sandiganbayan for purposes of the Anti-Graft and Corrupt Practices Act, emphasizing that excluding them would seriously undermine the government's policy to eradicate graft and corruption. The Court noted that a GOCC could conceivably create numerous subsidiaries under the Corporation Code, use public funds, and disclaim public accountability if its officers were excluded from the Sandiganbayan's jurisdiction — a result the legislature evidently sought to avoid.

• Ubi lex non distinguit nec nos distinguere debemos — When the law does not distinguish, courts should not distinguish. The Court applied this principle to RA 8249's jurisdictional provision, which includes "presidents, directors or trustees, or managers of government-owned or controlled corporations" without distinguishing between GOCCs created by special law and those incorporated under the Corporation Code. The deliberate legislative omission to distinguish evinces intent to include both types within the Sandiganbayan's jurisdiction.
• Separation of Sandiganbayan jurisdiction from Civil Service coverage — The jurisdiction of the Sandiganbayan is separate and distinct from the coverage of the Civil Service Commission. The constitutional delimitation of the Civil Service to GOCCs with original charters (Article IX-B, Section 2(1)) does not restrict the jurisdiction of the Sandiganbayan, which is governed by Article XI, Section 4 of the 1987 Constitution and the statutes enacted pursuant thereto.
• Definition of government-owned or controlled corporations under the Administrative Code — Under Section 2(13) of EO 292, GOCCs refer to any agency organized as a stock or non-stock corporation vested with functions relating to public needs whether governmental or proprietary in nature, and owned by the government directly or indirectly either wholly or, where applicable, to the extent of at least 51% of its capital stock. PPSB qualified as a GOCC under this definition, with more than 99% of its authorized capital stock belonging to the government.

• "The legislature, in mandating the inclusion of 'presidents, directors or trustees, or managers of government-owned or controlled corporations' within the jurisdiction of the Sandiganbayan, has consistently refrained from making any distinction with respect to the manner of their creation." — This passage identifies the ratio decidendi: the deliberate legislative omission to distinguish between GOCCs created by special law and those incorporated under the Corporation Code evinces intent to include both within the Sandiganbayan's jurisdiction.
• "It is a basic principle of statutory construction that when the law does not distinguish, we should not distinguish. Ubi lex non distinguit nec nos distinguere debemos." — This states the controlling doctrinal principle applied to resolve the jurisdictional question.
• "A government-owned or controlled corporation can conceivably create as many subsidiary corporations under the Corporation Code as it might wish, use public funds, disclaim public accountability and escape the liabilities and responsibilities provided by law." — This passage articulates the policy rationale for including GOCCs incorporated under the Corporation Code within the Sandiganbayan's jurisdiction, highlighting the risk of evasion of public accountability.

• Trade Unions of the Philippines and Allied Services vs. National Housing Corp., 173 SCRA 33 — Cited by the Sandiganbayan for the proposition that the Civil Service covers only GOCCs with original or legislative charters, not those incorporated under the general corporation law. The Supreme Court distinguished this line of cases as applicable to Civil Service coverage, not to Sandiganbayan jurisdiction.
• Philippine National Oil Company – Energy Development Corporation vs. Leogardo, 175 SCRA 26 — Cited by the Sandiganbayan for the test that the manner of creation determines Civil Service coverage. The Supreme Court treated this as inapplicable to the jurisdictional question before it.
• Davao City Water District vs. Civil Service Commission, 201 SCRA 601 — Cited by the Sandiganbayan for the definition of GOCCs with original charters. Distinguished as pertaining to Civil Service law, not Sandiganbayan jurisdiction.
• Llenes vs. Dicdican, 260 SCRA 207 — Cited by the Sandiganbayan for the definition of a public officer. The Supreme Court's ruling effectively expanded the concept of public officer for Sandiganbayan jurisdiction purposes beyond the Civil Service framework.
• Quimpo vs. Tanodbayan, 230 Phil. 232 (1986) — Controlling precedent. The Court had already ruled, mindful of the 1987 Constitution, that officers of GOCCs — whether created by special law or formed under the Corporation Code — come under the jurisdiction of the Sandiganbayan for purposes of RA 3019. The Court reaffirmed this ruling and emphasized its continuing relevance.

• Section 2(13), Executive Order No. 292 (Administrative Code of 1987) — Defines government-owned or controlled corporations as any agency organized as a stock or non-stock corporation vested with functions relating to public needs, owned by the government directly or indirectly either wholly or to the extent of at least 51% of its capital stock. Applied to classify PPSB as a GOCC, given that more than 99% of its authorized capital stock belonged to the government.
• Article IX-B, Section 2(1), 1987 Constitution — Provides that the Civil Service embraces government-owned or controlled corporations with original charters. The Court clarified that this provision delimits Civil Service coverage but does not restrict Sandiganbayan jurisdiction, which is governed by a separate constitutional provision.
• Article XI, Section 4, 1987 Constitution — Provides that the Sandiganbayan shall continue to function and exercise its jurisdiction as now or hereafter may be provided by law. This is the constitutional basis for the Sandiganbayan's jurisdiction, distinct from the Civil Service provision.
• Article XIII, Section 5, 1973 Constitution — Mandated the creation of the Sandiganbayan with jurisdiction over criminal and civil cases involving graft and corrupt practices committed by public officers and employees, including those in government-owned or controlled corporations. The 1987 Constitution retained this jurisdictional framework.
• Section 4, Republic Act No. 8249 — Defines the jurisdiction of the Sandiganbayan, including exclusive original jurisdiction over violations of RA 3019 where one or more of the accused are officials occupying specified positions, including "presidents, directors or trustees, or managers of government-owned or controlled corporations." The Court held that this provision makes no distinction as to the manner of creation of the GOCC.
• Section 3(e), Republic Act No. 3019 (Anti-Graft and Corrupt Practices Act) — The substantive offense charged against respondent Alas, involving corrupt practices of public officers causing undue injury to any party or giving unwarranted benefits through manifest partiality, evident bad faith, or gross inexcusable negligence.
• Section 32, Republic Act No. 7354 (Postal Service Act of 1992) — Expressly sanctioned the creation of PPSB for purposes including the promotion of thrift and savings among the public and the facilitation of postal service through collections and payments.
• Article XI, Section 12, 1987 Constitution — Includes officers and employees of government-owned or controlled corporations within the jurisdiction of the Ombudsman, likewise without distinction as to manner of creation. Cited as corroboration for the legislative intent to include all GOCC officers within anti-graft mechanisms.

Panganiban (Chairman), Sandoval-Gutierrez, Carpio-Morales, and Garcia, JJ., concurred.