You are on page 1of 14

Defensor Santiago

In October 1988, Miriam Defensor Santiago, who was the then Commissioner of the Commission of
Immigration and Deportation (CID), approved the application for legalization of the stay of about 32
aliens. Her act was said to be illegal and was tainted with bad faith and it ran counter against
Republic Act No. 3019 (Anti-Graft and Corrupt Practices Act). The legalization of such is also a
violation of Executive Order No. 324 which prohibits the legalization of disqualified aliens. The aliens
legalized by Santiago were allegedly known by her to be disqualified. Two other criminal cases were
filed against Santiago. Pursuant to this information, Francis Garchitorena, a presiding Justice of the
Sandiganbayan, issued a warrant of arrest against Santiago. Santiago petitioned for provisional
liberty since she was just recovering from a car accident which was approved. In 1995, a motion
was filed with the Sandiganbayan for the suspension of Santiago, who was already a senator by
then. The Sandiganbayan ordered the Senate President (Maceda) to suspend Santiago from office
for 90 days.
ISSUE: Whether or not Sandiganbayan can order suspension of a member of the Senate without
violating the Constitution.
HELD: Yes. it is true that the Constitution provides that each house may determine the rules of
its proceedings, punish its Members for disorderly behavior, and, with the concurrence of two-thirds
of all its Members, suspend or expel a Member. A penalty of suspension, when imposed, shall not
exceed sixty days.
n here, the order of suspension prescribed by RA. 3019 is distinct from the power of Congress to
discipline its own ranks under the Constitution. The suspension contemplated in the above
constitutional provision is a punitive measure that is imposed upon determination by the Senate or
the Lower House, as the case may be, upon an erring member. This is quite distinct from the
suspension spoken of in Section 13 of RA 3019, which is not a penalty but a preliminary, preventive
measure, prescinding from the fact that the latter is not being imposed on petitioner for misbehavior
as a Member of the Senate.
Republic Act No. 3019 does not exclude from its coverage the members of Congress and that,
therefore, the Sandiganbayan did not err in thus decreeing the assailed preventive suspension
order.
But Santiago committed the said act when she was still the CID commissioner, can she still be
suspended as a senator?
Section 13 of Republic Act No. 3019 does not state that the public officer concerned must be
suspended only in the office where he is alleged to have committed the acts with which he has been
charged. Thus, it has been held that the use of the word office would indicate that it applies to any
office which the officer charged may be holding, and not only the particular office under which he
stands accused.
Santiago has not yet been convicted of the alleged crime, can she still be suspended?
The law does not require that the guilt of the accused must be established in a pre-suspension
proceeding before trial on the merits proceeds. Neither does it contemplate a proceeding to
determine (1) the strength of the evidence of culpability against him, (2) the gravity of the offense
charged, or (3) whether or not his continuance in office could influence the witnesses or pose a
threat to the safety and integrity of the records another evidence before the court could have a valid
basis in decreeing preventive suspension pending the trial of the case. All it secures to the accused
is adequate opportunity to challenge the validity or regularity of the proceedings against him, such
as, that he has not been afforded the right to due preliminary investigation, that the acts imputed to
him do not constitute a specific crime warranting his mandatory suspension from office under
Section 13 of Republic Act No. 3019, or that the information is subject to quashal on any of the
grounds set out in Section 3, Rule 117, of the Revised Rules on Criminal procedure.

Subject: Constitutional Law 1

Topic: Ombudsman

Title: Baluyot vs Honzalga G.R. No. 136374 February 9, 2000

Facts:

During a spot audit conducted on March 21, 1977 by a team of auditors from the Philippine National Red
Cross (PNRC) headquarters, a cash shortage of P154,350.13 was discovered in the funds of its Bohol
chapter. The chapter administrator, Francisca S. Baluyot, was held accountable for the shortage.
Thereafter, on January 8, 1998, private respondent Paul E. Holganza, in his capacity as a member of the
board of directors of the Bohol chapter, filed an affidavit-complaint1 before the Office of the Ombudsman
charging petitioner of malversation under Article 217 of the Revised Penal Code. However, upon
recommendation Anna Marie P. Militante, Graft Investigation Officer I, an administrative docket for
dishonesty was also opened against Baluyot.
On February 6, 1998, public respondent issued an Order requiring Baluyot to file her counter-affidavit to
the charges of malversation and dishonesty within ten days from notice, with a warning that her failure to
comply would be construed as a waiver on her part to refute the charges, and that the case would be
resolved based on the evidence on record. Baluyot filed her counter-affidavit, raising principally the
defense that public respondent had no jurisdiction over the controversy. She argued that the Ombudsman
had authority only over government-owned or controlled corporations, which the PNRC was not, or so
she claimed.
Issue:

Whether or not the Ombudsman has jurisdiction over a private voluntary organization.

Court Ruling:

We dismiss the petition. Resolving the issue set out in the opening paragraph of this opinion, we rule that
the Philippine National Red Cross (PNRC) is a government owned and controlled corporation, with an
original charter under Republic Act No. 95, as amended. The test to determine whether a corporation is
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 are compulsory members of the Government Service Insurance
System. The PNRC was not "impliedly converted to a private corporation" simply because its charter was
amended to vest in it the authority to secure loans, be exempted from payment of all duties, taxes, fees
and other charges of all kinds on all importations and purchases for its exclusive use, on donations for its
disaster relief work and other services and in its benefits and fund raising drives, and be allotted one
lottery draw a year by the Philippine Charity Sweepstakes Office for the support of its disaster relief
operation in addition to its existing lottery draws for blood program.
Clearly then, public respondent has jurisdiction over the matter, pursuant to Section 13, of Republic Act
No. 6770, otherwise known as "The Ombudsman Act of 1989", to wit:
Sec. 13. Mandate. The Ombudsman and his Deputies, as protectors of the people, shall act promptly on
complaints filed in any form or manner against officers or employees of the Government, or of any
subdivision, agency or instrumentality thereof, including government-owned or controlled corporations,
and enforce their administrative, civil and criminal liability in ever case where the evidence warrants in
order to promote efficient service by the Government to the people.11
WHEREFORE, the petition for certiorari is hereby DISMISSED. Costs against petitioner. SO
ORDERED.

Garcia vs. OMBUDSMAN


G.R. No. 127710

FACTS:
Garcia was Department Manager III for administration of the National Development Company (NDC), a
government corporation.
NDC initiated a program of early retirement of its personnel. Those who availed themselves of early
retirement or separation were given tax-exempt retirement and separation benefits.
Petitioner availed herself of the program, and applied for early retirement under RA 1616. NDC approved
the application, and in due course paid petitioner her retirement benefits. However, private respondents,
who were controller, disbursing officer, and assistant general manager of NDC deducted withholding tax
on the amount of provident fund benefits given to petitioner corresponding to her share over and above
her personal contribution.
Petitioner protested private respondents' action and requested them to refund the taxes withheld and
remitted to the Bureau of Internal Revenue, claiming that such amount was tax exempt.
Due to private respondents' refusal to grant her request, petitioner filed with the Office of the Ombudsman
a complaint against them, for causing her undue injury.
After requiring respondents' comment, the Ombudsman dismissed petitioner's complaint.

ISSUE: Whether or not respondent Ombudsman acted with grave abuse of discretion in dismissing
petitioner's complaint.

RULING: No. The Ombudsman acted correctly in dismissing petitioner's complaint because private
respondents had not acted in bad faith or with gross negligence in deducting withholding tax from
petitioner's provident fund benefits share over and above her personal contribution, as they were guided
by the opinion of the Commissioner of Internal Revenue at the time. The latter's change of opinion, while
favoring petitioner, will not make private respondents' act prior thereto amount to bad faith as they relied
on the prevailing legal opinion on the issue. Hence, they could not be held criminally liable therefor.

Lapid vs CA
GR 142261
June 29, 2000

Facts:
Gov. Lapid & 5 other government officials were charged with alleged grave misconduct prejudicial to the
best interest of the service for allegedly having conspired among themselves in demanding & collecting
from various quarrying operators in Pampanga a control fee, control slip, or monitoring fee of P120 per
truckload of sand, gravel or other quarry material, without a duly enacted provincial ordinance authorizing
the collection thereof and without issuing receipts for such collection.

The Ombudsman rendered a decision finding petitioner guilty for misconduct, which meted out the
penalty of 1yr suspension without pay pursuant to Sec.25(2) of the Ombudsman Act.

The DILG implemented the said Ombudsman decision.


Proceeding from the premise that the Ombudsman decision had not yet become final, petitioner argued
that writs of prohibition & mandamus may be issued against the DILG for prematurely implementing the
assailed decision.

Issue: Whether or not the decision of the Office of the Ombudsman is immediately executory pending
appeal.

Held: Yes. Findings of fact of the Office of the Ombudsman when supported by substantial evidence are
conclusive. Any order, directive or decision imposing the penalty of public censure or reprimand,
suspension of not more than one month's salary shall be final and unappealable.

Note: In all administrative disciplinary cases, orders, directives or decisions of the Office of the
Ombudsman may be appealed to the Supreme Court by filing a petition for certiorari within ten (10) days
from receipt of the written notice of the order, directive or decision or denial of the motion for
reconsideration in accordance with Rule 45 of the Rules of Court.

Tirol vs. Commission on Audit


G.R. No. 133954

FACTS: During petitioner's capacity as the DECS Regional Director, he and some officials of the
Lalawigan National High School in Eastern Samar entered into a contract with Fairchild Marketing and
Construction in the total amount of P80,000.

Upon filing of complaint by the Teachers and Employees Union, COA investigated the transaction and
found that there was malversation of public funds. Instead of a competitive public bidding, the purchase
of certain supplies and equipment was done through a negotiated contract, which resulted in an overprice
of P35,100.

Petitioner's main allegation is that the Requisition and Issue Voucher (RIV) and check were previously
reviewed by his subordinates before he approved and signed them. Said act, therefore, only constitutes a
ministerial act on his part.

But the Office of the Ombudsman-Visayas rejected petitioner's defense because had he carefully
scrutinized the documents he would have discovered that the purchases were made without competitive
public bidding. Moreover, the magnitude of the amount involved would prevent a reasonable mind from
accepting the claim that petitioner was merely careless or negligent in the performance of his functions.
Petitioner filed a Motion for Reconsideration of the Ombudsman's ruling ( rejected petitioner's defense)
but the Motion was dismissed, prompting petitioner to file the instant petition, seeking reversal of the
Ombudsman's assailed Resolution and Order.

ISSUE: Whether or not the Court can interfere with the discretion of the Ombudsman in prosecuting and
dismissing a complaint filed before it.

RULING: No. The Court ordinarily does not interfere with the discretion of the Ombudsman to determine
whether there exists reasonable ground to believe that a crime has been committed and that the accused is
probably guilty thereof and, thereafter, to file the corresponding information with the appropriate courts.
This rule is based not only upon respect for the investigatory and prosecutory powers granted by the
Constitution to the Office of the Ombudsman but upon practicality as well. Otherwise, the functions of
the courts will be grievously hampered by immeasurable petitions assailing the dismissal of investigatory
proceedings conducted by the Office of the Ombudsman with regard to complaints filed before it, in as
much the same way that the courts would be extremely swamped if they would be compelled to review
the exercise of discretion on the part of the fiscals or prosecuting attorneys each time they decide to file an
information in court or dismiss a complaint by a private complainant.

Mamburao Inc. v Office of the Ombudsman (Mamburao v Desierto is nonexistent)


344 SCRA 805
Petitioner: Mamburao Inc. and Peter H. Messer
Respondent: Office of the Ombudsman, Rodolfo D. Abella, Lydia P. Fernandez and Nanny P. Garcia
Facts:
Petitioners applied for a P6 Million loan with the Balagtas branch of Landbank of the Philippines
in order to finance the construction of a restaurant in Bocaue, Bulacan. Upon knowing that the loan would
be reduced to 3M because of the re-appraisal ordered by new Gen. Manager Abella, petitioners withdrew
their application.
Petitioners sought to re-apply for a loan at the Baliuag branch of the LBP. Fernandez, being the
head of the Northern and Central Luzon Banking Group, ordered the rollback of their application to the
Provincial Lending Center headed by Nanny Garcia.
Petitioners claim that when Messer went to Garcias office, she commented that she will
recommend the denial of their loan accusing Mamburao of establishing a front for prostitution where the
main merchandise are GROs. The application was subsequently denied.
Petitioners subsequently filed a charges against respondents for slander, libel, falsification and use
of falsified documents, and perjury. However, the ombudsman dismissed their complaints.
Issue:
WON the Ombudsman committed grave abuse of discretion in dismissing petitioners complaints.
Held:
No, the Ombudsman has the power to dismiss a case outright without conducting a preliminary
investigation. It is beyond the ambit of this court to review the exercise of Discretion of the Ombudsman
of his constitutionally mandated investigatory and prosecutory powers.

Carandang v Desierto
639 SCRA 293
Petitioner: Antonio M. Carandang
Respondent: Hon. Aniano A. Desierto, Office of the Ombudsman

Facts:
Petitioner Carandang, the general manager and chief operating officer of Radio Philippines
Network (RPN), was charged with grave misconduct along with other officials before the Ombudsman.
Petitioner questions the jurisdiction over him of the Ombudsman and the Sandiganbayan on the ground
that RPN is not a government owned or control corporation, hence, he is not a public official or employee.
Previously, a certain Roberto S. Benedicto who allegedly holds about 72.4% of the shares of RPN
ceded to the government his shares of stock. However, Benedicto moved to reconsider, saying that the
stocks he agreed to cede was only 32.4%. The said motion is yet to be resolved.
Issue:
WON the Ombudsman and the Sandiganbayan can validly charge petitioner Carandang as a public
official
Held:
No, as there is still no finality with regard to the share of Benedicto that was ceded to the
government, RPN cannot be said to be a GOCC. Consequently, it does not come within the jurisdiction of
the Ombudsman nor the Sandiganbayan. The Ombudsman may only act on complaints against officers or
employees of the Government, or any of its subdivision, agency, or instrumentality, including GOCCs.
GOCCs refer to any agency organized as a stock or non-stock corporation vested with functions relating
to public needs and owned by the government to the extent of at least 51% of its capital stock.

Lacson v ES
649 SCRA 142
Petitioner: Theron V. Lacson, Jaime R. Millan, Bernaro T. Viray
Respondent: Hon. Executive Secretary, Presidential Anti-Graft Commission
Facts:
Petitioners were non-presidential appointee and career service officials of Philippine Estates
Authority. On October 3, 2002, Sulficio O. Tagud filed a complaint accusing petitioners for overpricing
the contract for the construction of the Central Boulevard Project aka Pres. Diosdado Macapagal
Boulevard. The Ombudsman inestigated both the criminal and administrative aspects of the case.
Petitoners were subsequently charged with violation of RA 7080 (Act Defining and Penalizing Plunder),
and Dishonesty, Misconduct and Acts Inimical to the Interest of the Public Service in violation of the
Uniform Rules on Administrative Cases.
The PAGC also proceeded against petitioners administratively. Petitioners contend that because they are
not presidential appointees, it is only the Ombudsman who has jurisdiction over them.
Issue:
WON it is only the Ombudsman who should conduct the investigation against petitioners.
Held:
No, the Ombudsman has concurrent jurisdiction with similarly authorized agencies. Thus, their
power to investigate offense involving public officials is not exclusive therefore the ombudsman may
share its authority to conduct an investigation concerning administrative charges against petitioners with
other agencies.

People vs Morales
649 SCRA 182

Facts:
The National Centennial Celebrations Commission (NCC), whose mandate was to take charge of the
nationwide preparations for the National Celebration of the Philippine Centennial of the Declaration of
the Philippines Independence and the Inauguration of the Malolos Congress, and the Bases Conversion
Development Authority (BCDA) organized the Philippine Centennial Expo 98 Corporation (Expocorp)
whose primary purpose was to operate, administer, manage and develop the Philippine Centennial
International Exposition in 1998.
The project was marred by numerous allegations of anomalies, among them, the lack of public biddings.
Due to a privilege speech delivered by Senator Ana Dominique Coseteng in the Senate denouncing these
anomalies, the Senate Blue Ribbon Committee (SBRC) conducted an investigation on said project.
President Estrada created the Citizens Committee (AHICC), for the purpose of investigating these alleged
anomalies. Both the SBRC and AHICC recommended to the Office of the Ombudsman that a more
exhaustive investigation of the Philippine Centennial project be conducted. The investigation that
followed resulted in the filing of an Information by the Ombudsmans Fact-Finding and Investigation
Bureau against respondent Luis J. Morales (Morales), the acting president of Expocorp at the time.
In the proceedings before the Sandiganbayan, Morales moved for the dismissal of the case for lack of
jurisdiction over his person and over the offense charged. He alleged that Expocorp is a private
corporation and that he is not a public employee or official. He added that Expocorp is not a government-
owned or controlled corporation because it was not created by a special law, it did not have an original
charter, and a majority of Expocorps capital stock is owned by private individuals.

Issue: W/N Expocorp is a government-owned or controlled corporation falling under the jurisdiction of
the Ombudsman.

Ruling: No. The court affirmed that Expocorp is not a government-owned or controlled corporation, it is a
private corporation. The Office of the Ombudsman exercises jurisdiction over public officials/employees
of Government-Owned and Controlled Corporations with original charters. This being so, it can only
investigate and prosecute acts or omissions of the officials/employees of government corporations.

Quarto v. Marcelo
658 SCRA 580

Facts:
The Department of Public Works and Highways - Internal Audit Service (DPWH-IAS) is a committee
mandated to investigate alleged anomalous transactions involving the repairs and/or purchase of spare
parts of DPWH service vehicles in 2001. The DPWH-IAS discovered that several emergency repairs
and/or purchase of spare parts of hundreds of DPWH service vehicles, which were approved and paid by
the government, did not actually take place, resulting in government losses of approximately 143
million.
Thus, Atty. Irene D. Ofilada of the DPWH-IAS filed before the Office of the Ombudsman a Complaint-
Affidavit charging several high-ranking DPWH officials and employees including the petitioner, Erdito
Quarto (Chief of the Central Equipment and Spare Parts Division, of the DPWH in Manila and head of the
Special Inspectorate Team (SIT)), and the respondents (members of the SIT), who purportedly benefited
from the anomalous transactions with Plundering, etc.
The respondents were charged with dishonesty and grave misconduct, for having signed Pre-Repair
Inspection and Post Repair Inspection Reports in support of the four job orders (given by the Petitioner)
and made it appear that the vehicle was inspected prior and after the alleged repair (although they knew
that the vehicle was never turned over for inspection). They admitted the existence of irregularities and
offered their cooperation and to testify and to provide evidence against the DPWH officials and
employees involved in the anomaly in exchange for their immunity from prosecution, which was granted
by the Ombudsman.
The petitioner filed a certiorari petition with the SC, questioning the Ombudsmans grant of immunity to
the respondents. Petitioner argues that the Ombudsman should have included the respondents in the
informations since it was their inspection reports that actually paved the way for the commission of the
alleged irregularities. He asserts that the respondents criminal complicity clearly appears since no repair
could have started and no payment for repairs, ghost or not, could have been made without the
respondents inspection reports. By excluding the respondents in the informations, the Ombudsman is
engaged in "selective prosecution" which is a clear case of grave abuse of discretion.
Issue: Whether or not the Ombudsman Committed grave abuse of discretion in granting immunity to the
respondents.
Ruling: No. RA No. 6770 (the Ombudsman Act of 1989) expressly grants the Ombudsman the power to
grant immunity from prosecution to witnesses. Given this power, Section 17, Rule 119 of the Rules of
Court, which presupposes that the witness is originally included in the information, is inapplicable to the
present case since the decision on whom to prosecute is an executive, not a judicial, prerogative and
within the context of the Courts policy of non-interference with the Ombudsmans exercise of his
investigatory and prosecutory powers.
RA No. 6770 fully recognizes this prosecutory prerogative by empowering the Ombudsman to grant
immunity, subject to "such terms and conditions" as he may determine. The only textual limitation
imposed by law on this authority is the need to take "into account the pertinent provisions of the Rules of
Court," i.e., Section 17, Rule 119 of the Rules of Court.

Ombudsman vs CSC
G.R. no. 162215, July 20, 2007

Facts:
By letter dated March 7, 1994 addressed to then Ombudsman Conrado M. Vasquez, the CSC approved
the Qualification Standards for several positions in the Office of the Ombudsman including that for Graft
Investigation Officer III. The Qualification Standards for said position are: EDUCATION: Bachelor of
Laws with 5 years of experience in the practice of law, counseling, investigation/ prosecution of cases,
hearings of administrative/ criminal cases, legal research or other related work. TRAINING: 24 hours of
relevant training. ELIGIBILITY: RA 1080 (Bar)
However, in the case of Khem N. Inok vs. Civil Service Commission, the SC held that the Judiciary, the
Constitutional Commissions, the Office of the Ombudsman and the Commission on Human Rights are not
covered by the CES governed by the Career Executive Service Board. Thus, Ombudsman Simeon V.
Marcelo wrote a letter to the CSC, requesting the approval of the amendment the qualification standards
for Director II positions in Ombudsman, classifying them as a CES position, hence, governed by the rules
of the CES pertaining to eligibility, appointment to CES ranks, etc.
CSC issued Opinion No. 44, s. 2004 disapproving the request on the ground that Director II position,
being third level eligibility, is covered by the CES, and that, as the central personnel agency of the
government, it is mandated by the Constitution to administer all levels in the civil service, including that
of the third level.
The Office of the Ombudsman filed a petition for certiorari seeking to set aside and nullify CSC Opinion
No. 44, s. 2004, asserting that its specific, exclusive and discretionary constitutional and statutory power
as an independent constitutional body to administer and supervise its own officials and personnel,
including the authority to administer competitive examinations and prescribe reasonable qualification
standards for its own officials, cannot be curtailed by the general power of the CSC to administer the civil
service system.
Issue: Whether or not the Director II positions in the Central Administrative Service and the Finance and
Management Service of the Office of the Ombudsman are covered by the Career Executive Service.
Ruling: No. Section 7(3), Title I, Book V of the Administrative Code of 1987 enumerates exclusively and
restrictively the specific positions under the Career Executive Service, all the holders of which are
appointed by the President and are required to have CES eligibility; the Constitutional Commissions, the
SC, the CHR, and the Ombudsman are empowered to appoint officials and employees to positions
belonging to first level up to third level of their respective agencies, and that they are not presidential
appointees...
Persons occupying positions in the CES are presidential appointees. A person occupying the position of
Graft Investigation Officer III is not, however, appointed by the President but by the Ombudsman as
provided in Article IX of the Constitution: Sec. 6: The Officials and employees of the ombudsman, other
than the deputies, shall be appointed by the Ombudsman according to the Civil Service Law.

Main Point:
Under the Constitution, the Ombudsman is the appointing authority for all officials and employees of the
Office of the Ombudsman, except the Deputy Ombudsmen. Thus, a person occupying the position of
Director II in the Central Administrative Service or Finance and Management Service of the Office of the
Ombudsman is appointed by the Ombudsman, not by the President. As such, he is neither embraced in the
CES nor does he need to possess CES eligibility.

To further ensure its independence, the Ombudsman has been vested with the power of administrative
control and supervision of the Office. This includes the authority to organize such directorates for
administration and allied services as may be necessary for the effective discharge of the functions of the
Office, as well as to prescribe and approve its position structure and staffing pattern. Necessarily, it also
includes the authority to determine and establish the qualifications, duties, functions and responsibilities
of the various directorates and allied services of the Office. This must be so if the constitutional intent to
establish an independent Office of the Ombudsman is to remain meaningful and significant.

Quimpo v Tanodbayan 146 SCRA 137 (1986)


FACTS:

Petitioner FELICITO R. QUIMPO filed with respondent Tanodbayan (Ombudsman) a complaint against private
respondents (Greg Dimaano and Danny Remo) for violation of Republic Act No. 3091 (Anti-Graft and Corrupt
Practices Act).

Petitioner alleged that Admiral Adjusters and Surveyors, Inc. (AASI), of which he was the president, was engaged
by Petrophil Corporation to render survey services for one (1) year from March 1, 1982 to February 28, 1983; that
upon the expiration of the contract, it was renewed for another period of one (1) year, from March 1, 1983 to
February 2, 1984; that sometime in October, 1983, private respondents Greg Dimaano and Danny Remo, as
manager and analyst, respectively, of the Bulk Distribution Department and MPED of Petrophil Corporation,
caused the withholding of the fees due AASI and required AASI to submit an explanation of the losses caused by
leaking valves as reflected in AASI's survey reports; that despite AASI's explanation, private respondents still
refused to release the payments and even threatened to forfeit AASI's performance bond and claim damages and
losses from AASI; that despite AASI's submission of several explanations, private respondents refused to release
the fees amounting to P147,300.00.

Private respondents moved to dismiss the Complaint alleging lack of jurisdiction of the Tanodbayan over the
employees of PETROPHIL Corporation, which Motion was opposed by the petitioner.

ISSUE:

Whether or not the PETROPHIL Corporation (a subsidiary of the Philippine National Oil Company (PNOC)) is a
government-owned or controlled corporation, whose employees fall under Tanodbayan jurisdiction.

RULLING:

YES. Employees of PETROPHIL Corporation fall under Tanodbayan jurisdiction.

It has to be conceded that PETROPHIL was not created by special law. As the incumbent Solicitor General has
pointed out, it was originally created as a private corporation under the Corporation Law with the name
Standard Vacuum Oil Company (STANVAC). STANVAC was taken over by Esso Philippines, which was, in turn,
bought by Esso Eastern Standard. Eventually, Esso Eastern Standard was purchased by the Philippine National Oil
Corporation (PNOC), and its corporate name was changed to Petrophil Corporation.

While it may be that PETROPHIL was not originally "created" as a government-owned or controlled corporation,
after it was acquired by PNOC, which is a government-owned or controlled corporation, PETROPHIL became a
subsidiary of PNOC and thus shed-off its private status. It is now funded and owned by the government as, in
fact, it was acquired to perform functions related to government programs and policies on oil, a vital commodity
in the economic life of the nation. It was acquired not temporarily but as a permanent adjunct to perform
essential government or government-related functions, as the marketing arm of PNOC to assist the latter in
selling and distributing oil and petroleum products to assure and maintain an adequate and stable domestic
supply.

It should make no substantial difference that it was not originally "created" as a government-owned or controlled
corporation. What is decisive is that it has since been acquired by the Government to perform functions related
to government programs and policies on oil.

The meaning thus given to "government-owned or controlled corporations" for purposes of the civil service
provision should likewise apply for purposes of the Tanodbayan and Sandiganbayan provisions, otherwise,
incongruity would result, and a government-owned corporation could create as many subsidiary corporations
under the Corporation Code as it wishes, which would then be free from strict accountability and could escape
the liabilities and responsibilities provided for by law. This device was liberally made use of during the past
regime to the detriment of budgetary restraints and of fiscal accountability by "private" corporations thus
created.

Zaldivar v Sandiganbayan 160 SCRA 843 (1988)

ENRIQUE A. ZALDIVAR v THE HONORABLE SANDIGANBAYAN AND HONORABLE RAUL M. GONZALEZ, CLAIMING TO BE
AND ACTING AS TANODBAYAN-OMBUDSMAN UNDER THE 1987 CONSTITUTION

FACTS:

Enrique Zaldivar was the governor of Antique. He was charged before the Sandiganbayan for violations of the
Anti-Graft and Corrupt Practices Act. Raul M. Gonzales was the then Tanodbayan who was investigating the case.
Zaldivar then filed with the Supreme Court a petition for Certiorari, Prohibition and Mandamus assailing the
authority of the Tanodbayan to investigate graft cases under the 1987 Constitution. The Supreme Court, acting
on the petition issued a Cease and Desist Order against Gonzalez directing him to temporarily restrain from
investigating and filing information against Zaldivar.

Gonzales however proceeded with the investigation and he filed criminal information against Zaldivar. Gonzalez
even had a newspaper interview where he proudly claims that he scored one on the Supreme Court; that the
Supreme Courts issuance of the TRO is a manifestation theta the rich and influential persons get favorable
actions from the Supreme Court, [while] it is difficult for an ordinary litigant to get his petition to be given due
course.

Zaldivar then filed a Motion for Contempt against Gonzalez. The Supreme Court then ordered Gonzalez to
explain his side. Gonzalez stated that the statements in the newspapers were true; that he was only exercising
his freedom of speech; that he is entitled to criticize the rulings of the Court, to point out where he feels the
Court may have lapsed into error. He also said, even attaching notes, that not less than six justices of the
Supreme Court have approached him to ask him to go slow on Zaldivar and to not embarrass the Supreme
Court.

ISSUE:

Whether or not Tanodbayan has the authority to conduct preliminary investigations and to direct the filing of
criminal cases with the Sandiganbayabn.

RULING:

NO. The incumbent tanodbayan (caged Special Prosecutor under 1987 Constitution and who is supposed to retain
powers and duties not given to the Ombudsman) is WITHOUT authority to conduct preliminary investigations and
to direct the filing of criminal cases with the Sandiganbayan, except upon orders of the Ombudman.

Under the present Constitution, the Special Prosecutor (Raul Gonzalez) is a mere subordinate of the Tanodbayan
Ombudsman) and can investigate and prosecute cases only upon the latter's authority or orders. The Special
Prosecutor cannot initiate the prosecution of cases but can only conduct the same if instructed to do so by the
Ombudsman. Even his original power to issue subpoena, which he still claims under Section 10(d) of PD 1630, is
now deemed transferred to the Ombudsman, who may, however, retain it in the Spedal Prosecutor in connection
with the cases he is ordered to investigate.

It is not correct either to suppose that the Special Prosecutor remains the Ombudsman as long as he has not been
replaced, for the fact is that he has never been the Ombudsman. The Office of the Ombudsman is a new creation
under Article XI of the Constitution different from the Office of the Tanodbayan created under PD 1607 although
concededly some of the powers of the two offices are Identical or similar. The Special Prosecutor cannot plead
that he has a right to hold over the position of Ombudsman as he has never held it in the first place.