Case no. 8 Veterans Federation of the Philippines (VFP) v.

Reyes Petition for Certiorari Prayer to declare as VOID Department Circular no. 04 of the DEPARTMENT OF NATIONAL DEFENSE (DND), dated June 10, 2002 VFP (petitioner) - A corporate body organized under RA 2640 (June 18, 1960) Angelo T. Reyes (respondent) - Secretary of National Defense, who issues the ASSAILED CN. 04 Edgardo Batenga - Undersecretary, who was tasked by the respondent to conduct an EXTENSIVE MANAGEMENT AUDIT of the records of VFP. Emmanuel De Ocampo - Petitioners incumbent president a. REYES wrote to DE OCAMPO informing the corporation that they (DND) came across some legal bases which tended to show that there is an organizational and management RELATIONSHIP between VFP and PH Veterans Bank. a. (letter) VFP is under the control and supervision of the Secretary of ND. [Sec 1, RA 2640] b. (letter) VFP shall make and transmit to the President of PH or to the SEC of ND a REPORT of its proceedings, including a FULL & COMPLETE report of receipts and expenditures of whatever kind. [Sec 12, RA 2640] DND Secretary (petitioner) issues the ASSAILED Department CIRCULAR no. 4 entitled Further Implementing the Provisions of Sections 1 & 12 of RA 2640 a. CIRCULAR NO. 4: Rules shall apply to the management and operations of VFP. b. CIRCULAR NO. 4: Definition of terms, relationship between DND and VFP, the preservation of the records of all business transactions, VFP should submit ANNUAL & PERIODIC reports, and there are attached penal provisions of the law upon noncompliance. c. Supervision and control - authority to act directly whenever a specific function is entrusted by law or regulation to a subordinate (approve, reverse or modify acts and decisions d. Power of control power to alter, modify or nullify or set aside what a subordinate officer had done in the performance of his duties e. Supervision power to see to it that their subordinate officers perform their duties

c.

d. e.

Veteran any person who rendered military service in the land, see or air forces of the PH during wars or military campaigns OR who rendered military service in the AFP AND has been honorably discharged or separated after AT LEAST 6 years total cumulative active service or sooner separated due to death or disability arising from a wound or injury received or disease incurred in line of duty while in the active service. Secretary general of VFP sent a latter to respondent DND Secretary COMPLAINING about the alleged BROADNESS of the scope of the MANAGEMENT AUDIT and requesting the SUSPENSION thereof until such time that specific areas of the audit shall have been agreed upon. Undersecretary DENIED the letter (reason: there is a timeframe) Petitioner filed this petition for Certiorari with Prohibition a. TRO: implementing DND DEP CN. 4 and the ongoing management audit of petitioners books of account. b. DC No. 4 be declared null and void for being ultra vires c. Convert TRO into a permanent one

f.

VFPs CLAIM THAT IT IS A PRIVATE NONGOVERNMENT CORPORATION. - VFP claims that DND Circular no. 4 is an INVALID exercise of respondent Secretarys control and supervision. - BECAUSE: It is not a public nor a governmental entity but a PRIVATE ORGANIZATION. Central ISSUE: WON VFP is a private corporation. Supreme Court: We are constrained to rule that VFP is in fact a PUBLIC CORPORATION. BECAUSE: a. RA 2640 An act to create a PUBLIC CORPORATION b. Any act or decisions of the FEDERATION shall be subject to the approval of Sec. of Defense c. VFP required to SUBMIT annual reports d. VFP was listed as among the GOCC that will NOT be privatized e. VFP is an adjunct of the government (Ang bagong bayani-OFW labor party v. COMELEC) VFP Constitution EXPLICITYLY prohibit the regulation by special laws of private corporations (except GOCC) 1. VFP does not possess the elements which would qualify it as a public office Supreme Court - There is no challenge in the creation of VFP in the petition as to permit this Court from considering tis nullity.

b.

1. Public office an individual is invested with some portion of the SOVEREIGN FUCNTIONS of
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the govt, to be exercised by him for the benefit of the public. SOVEREIGN FUNCTION the protection of the interest of war veterans is not only meant to promote social justice, but is also intended to REWARD patriotism. Functions of VFP are executive functions. (Provide immediate and adequate care, benefits and other forms of assistance to war veterans and their surviving spouses and orphans.) 2. No budgetary appropriations does not prove that it is a private corporation. DBMs mistake will not prevent future budgetary appropriations to the VFP. Erroneous application of the law by public officers does not bar a subsequent coorect application of the law. VFP funds are used for public purposes. 3. Membership of the VFP is not individual membership of the affiliate organizations, but MERELY the aggregation of the heads of such affiliate organizations. 4. ADMIN Code is not exclusive -

Add nothing to the law and does not affect substantial rights An office is not rendered inutile by the fact that it is placed under the control of a higher office Circular is perfectly in consonance with RA 2640. Petition DISMISSED. Validity AFFIRMED.

2. VFP funds are not public funds a. No budgetary appropriations from DBM b. VFP funds come from membership dies c. Lease rentals raised are private in character

3. Juridical personality of the VFP emanates from a statutory character. It is a private, civilian federation of VETERANS voluntarily formed by veterans themselves 4. ADMIN Code of 1987 does not provide VFP as an attached agency 5. DBM declared that VFP is a non-government organization and issues a certificate

5. DBM opinion suffers from lack of explanation and justification in the certification of non-receipt where said opinion was given. DBM did not furnish explanation for its opinion.

Petitioner is a public corporation Assailed circular did not supplant nor modify the provision of RA 2640 Secretary of National Defense REQUIRE submission of reports, documents and other papers regarding any or all of the federations business functions Even assuming that the assailed circular was not published VALIDITY is not affected o Falls under two of the exceptions o Circular is an INTERNAL REGULATION
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