LEYSON v. OFFICE OF THE OMBUDSMAN G.R No. 134990, April 27, 2000 Facts:
International Towage and Transport Corporation (ITTC), a domestic corporation eNgaged in the lighterage or shipping business, entered into a 1-year contract with: Legaspi il Company, Inc! (L"#$%&I IL)
#rane'port anuacturing Corporation (#*$N"+&*T) and
nited Coconut Chemicals (NIT" CCNT),
or the transport o coconut oil in bul. through T T*$N%$%I$!
C&/ owns the ma0ority shareholdings o these CI companies!
nder the contract, either party could terminate the agreement pro2ided a three-month ad2ance notice was gi2en to the other party!
3owe2er, prior to the e'piration o the contract, the CI companies with their new &resident, scar Torralba, terminated the contract 4IT3T the re5uisite ad2ance notice!
The CI companies engaged the ser2ices o another 2essel, T arilag, operated by %outhwest aritime Corporation!
Leyson, "'ecuti2e 6& o ITTC, iled with ice o the mbudsman a grie2ance case against scar Torralba alleging the ollowing: o breach o contract - unilateral cancellation o 2alid and e'isting contract7 o bad aith - alsiiaction o documents and reports to stop the operation o T Transasia7 o manipulation - inluenced their insurance to dis5ualiy T Transasia7 o unreasonable denial o re5uirement imposed7 o double standards and inconsistent in a2or o T arilag7 o engaged and entered into a contract with %outhwest aritime Corp! which is not the owner o T arilag7 and o o2erpricing in the reight rate causing losses o millions o pesos to Cocochem!
$lso, Leyson Leyson charged charged $ntiporda $ntiporda (Chairman o o C&/ and and CI il ills) and To Torralba with 2iolation o o The $nti-#rat and Corrupt &ractices $ct beore the mbudsman alleging the aoresaid irregularities and corrupt practices!
OMBUDSMAN:
I%I%%" the complaint based on the inding that the case was a simple breach o contract with damaged which should ha2e been iled in the regular court! It said that the oice has N 0urisdiaction to determine the legality or 2alidity o the termination o the contract entered into by CI and ITTC! The entities in2ol2ed are pri2ate corporations o2er which the mbudsman has no 0urisdiction!
Petitioner's contentions:
coconut le2y unds are public unds and that corporations ormed and organi8ed rom those unds or whose controlling stoc.s are rom those unds should be regarded as go2ernment and9or controlled corporations! %ince the unding or controlling interest o the companies being headed by pri2ate respondents was gi2en or owned by the CI, it ollows that they are go2ernment and9or controlled corporations! &etitioner also asserts that respondents $ntiporda and Torralba are public oicers sub0ect to the 0urisdiction o o the mbudsman! mbudsman! 3e also asserts that the respondents conclusion that his complaint reers to a breach o contract is whimsical, capricious and irresponsible amounting to total disregard o its main point as to whether respondents 2iolated the $nti-grat and Corrupt &ractices $ct when they entered into a contract with %outhwest aritime Corporation which was grossly disad2antageous to the go2ernment in general and to CI in particular!
es!on"ents' contentions:
CI companies were duly organi8ed and are e'isting by 2irtue o the Corporation Code! Their stoc.holders are pri2ate indi2iduals and entities! They are not public oicers as deined under The $nti-grat and Corrupt &ractices $ct but are pri2ate e'ecuti2es appointed by the /oard o irectors o the CI companies! Iss#e:
4hether or not the mbudsman committed gra2e abuse o discretion! --N
He$": PETITION DISMISSED.
Definition of "government owned or controlled corportion" contained in par! (1;), %ec! <, Introductory &ro2isions o the $dministrati2e Code o 1=>?, i! e!, any agency organi8ed as a stoc. or non-stoc. corporation 2ested with unctions relating to public needs whether go2ernmental or proprietary in nature, and owned by the #o2ernment directly or through its instrumentalities either wholly, or, where applicable as in the case o stoc. corporations, to the e'tent o at least ity-one (@1) percent o its capital stoc.!
The deinition mentions t%ree &( re)#isites, namely: 1! any agency organi8ed as a stoc. or non-stoc. corporation7
In the present case, all three (;) corporations comprising the CII companies were organi8ed as stoc. corporations: The C&/-CII owns AA!1B o the shares o L"#$%&I IL, =1!
@ o the shares o NIT" CCNT! b2iously, the below @1 shares o stoc. in L"#$%&I IL remo2es this irm rom the deinition o a go2ernment owned or controlled corporation! ur concern has thus been limited to #*$N"+&*T and NIT" CCNT as we go bac. to the second re5uisite! nortunately, it is in this regard that petitioner ailed to substantiate his contentions! There is no showing that #*$N"+&*T and9 or NIT" CCNT was 2ested with unctions relating to public needs whether go2ernmental or proprietary in nature unli.e &"T*&3IL in Duimpo! The Court thus concludes that the CII companies are, as ound by public respondent, pri2ate corporations not within the scope o its 0urisdiction!
4ith the oregoing conclusion, we ind it unnecessary to resol2e the other issues raised by petitioner!
ODOLFO CUENCA v. HON. ATAS* et a$. G.R. No. 14!214, cto#er $, 2007 Facts:
Cuenca was the incorporator, &resident and C" o the then Construction e2elopment Corporation o the &hilippines (CC&), now &NCC!
CC& was granted a ranchise under & 111; to construct, operate and maintain toll acilities o the North and %outh Lu8on "'pressway!
In the course o its operation, CC& incurred substantial credit obligations rom both pri2ate and go2ernment sources! Its unpaid obligations balloned and it became impossible or it to settle its maturing and o2erdue accounts with vario#s +FIs &+overn,ent Financia$ Instit#tions( namely: &N/, /&, NC (National e2elopment Company), #%I%, L$N/$NE, &"L#C (&hilippine "'port and oreign Loan #uarantee Corporation and Trade and In2estment e2elopment Corporation o the &hilippines!
&res! arcos issued Letter o- Instr#ction /01 directing creditor #Is to con2ert into CC&s shares o the stoc. all o the direct obligations o CC& and those o its wholly-owned subsidiaries, including but not limited to loans, credits, accrued interests, ees and ad2ances in any currency and direct obligations o CC& and obligations maturing which were guaranteed by the #I%!
$ special stoc.holders meeting, presided by Cuenca, was held whereby stoc.holders representing more than <9; o the outstanding capital stoc. o CC& appro2ed the increase o its authori8ed capital stoc. rom 1!Fbillion to
Thus, CC& con2erted some o its obligations to #Is into e5uity!
Conse5uently, CC& issued common shares to /&, NC, L/&, &"L#C and preerred shares to &N/ in consideration or the e'tinguishment o some o CC&s outstanding loan obligation to said #Is, all o which were duly recorded in its corporate boo.s!
%"C appro2ed the increase o CC&s authori8ed capital stoc., and CC& Certiicate o %toc.s were issued to #Is!
Thus, with the implementation o LI 1<=@, #Is became the ma0ority stoc.holders o CC& to the e'tent o ?B o the authori8ed capital stoc.s!
CC& was renamed to &NCC to relect the &hilippine #o2ernment stoc.holding and became a go2ernment-ac5uired asset corporation!
Conse5uently, the 2arious #Is were gi2en seats in the /oard o irectors o &NCC and participated in the management o the company!
eanwhile, pursuant to $dministrati2e rder nos! 1A and FA, /&, &N/, &"#LC and NC transerred their interests in &NCC to the *epublic o the &hils which in turn con2eyed them to the $sset &ri2ati8ation Trust ($&T), now the &ri2ati8ation and anagement ice or the disposition to the pri2ate sector pursuant to the go2ernments pri2ati8ation program!
ore than a decade ater LI 1<=@ was implemented, Cuenca iled a complaint beore the %"C to determine whether the #Is were registered stoc.holders o &NCC and the number o shares held by each o them and to compel &NCC to call and hold regular stoc.holders meeting and election o directors e2ery year!
Cuenca a2erred that while &NCC issued the certiicates o stoc.s to the #Is pursuant to LI 1<=@, the #Is, howe2er, reused to cancel and ne2er did cancel the loan in their boo.s as payment or the
shares issued in their names by &NCC as they considered it to be diminution o the 2alue o their in2estments! 3e claimed that some o the #Is reused to accept deli2ery o the stoc. certiicates rom &NCC while others were not e2en aware o the issuance o the certiicates o stoc. in their names!
Conse5uently, #Is continued to charge and recei2e payments or their loan and interest charges rom &NCC though these loans were supposed to ha2e been con2erted into common stoc. pursuant to LI 1<=@!
Cuenca iled beore the %"C an rgent $pplication or Temporary *estraining rder and 4rit o &reliminary In0unction see.ing to en0oin &NCC rom allowing the #Is to 2ote their shares o stoc. in &NCC or rom e'ercising any right arising rom the shares!
%"C granted petition o urgent T*!
Cuenca iled a third amended complaint beore the *TC a.ati City or enorcement and strict compliance with LI 1<=@7 o cancellation o all penalties, interest and surcharges7 o en0oinment o the #Is rom recei2ing any real or personal properties rom &NCC7 and o cancellation o the trasner o a land co2ered by TCT to $&T!
%"C granted preliminary in0unction!
&NCC iled a petition or certiorari beore %"C en banc to re2iew and set aside the %"C orders! --I%I%%"
&NCC iled a otion to esignate 3earing &anel on the ground that the instant case would be better heard and resol2ed by a hearing panel o three than by a sole hearing oicer, considering the interests the &hilippine #o2ernment holds in &NCC through the #Is! --#*$NT"!
%"C designated the ollowing as hearing oicers: $tas, abrero, Lobigas!
Hearin2 Pane$ Decision: dismissed Cuencas complaint or lac. o merit and re2o.ing the writ o preliminary in0unction issued! it ound that the e2idence presented by &NCC and #Is constituted substantial proo o the implementation o LI 1<=@! it reasoned that not only did &NCC issue the shares o stoc. but such act was corrobated by Ca2al %ecurities *egistry, Inc! (&NCC stoc. transer agent) prior to the iling o the instant case, #Is ha2e been nominating their representati2es to &NCCs /oard o irectors which is an attribute o ownership o shares o stoc. in &NCC! it also too. cogni8ance the eed o Conirmation and %upplement to eed o Conirmation e'ecuted by the #Is, which erased all doubts on the implementation o the LI 1<=@ by the con2ersion o the #Is loan recei2ables rom &NCC into latters e5uity! it ound the pieces o e2idence presented by Cuenca to be inconse5uential and insuicient to o2erthrow the weight o the e2idence presented by respondents that a con2ersion o &NCCs debt into e5uity was implemented!
SEC EN BANC: airmed decision o 3earing &anel
CA: dismissed petition o Cuenca
Iss#e3s: 4hether or not Cuenca was denied due process! He$": &"TITIN I%I%%"! N D%N&A' ( D)% *R+%
The re5uirements spelled in $ng Tibay ha2e been complied with!
(&ND&NG ( (A+- ( AD&N&-RA-&/% D&% A++RD%D (&NA'&- %N )**R-%D )-AN-&A' %/&D%N+%.
The rule is that the indings o act o administrati2e bodies, i based on substantial e2idence, are controlling on the re2iewing authority!
It has been held that it is not or the appellate court to substitute its own 0udgment or that o the administrati2e agency on the suiciency o the e2idence and the credibility o the witnesses! The 3earing &anel had the optimum opportunity to re2iew the pieces o e2idence presented beore it and to obser2e the demeanor o the witnesses!
$dministrati2e decisions on matters within their 0urisdiction are entitled to respect and can only be set aside on proo o gra2e abuse o discretion, raud, or error o law, which ha2e not been shown by petitioner in this case! It is well-settled that actual indings o administrati2e agencies are generally held to be binding and inal so long as they are supported by substantial e2idence in the record o the case! It is not the unction o this Court to analy8e or weigh all o2er again the e2idence and credibility o witnesses presented beore the lower court, tribunal, or oice, as we are not a trier o acts! ur 0urisdiction is limited to re2iewing and re2ising errors o law imputed to the lower court, the latters indings o act being conclusi2e and not re2iewable by this Court! The C$ ound neither re2ersible error nor gra2e abuse o discretion on the part o the %"C en banc in airming the decision o the %"C %IC 3earing &anel, which was supported by substantial e2idence! Thus, we ind no reason to rule otherwise!
