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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 theASSAILED CN. 04

Edgardo Batenga

- Undersecretary, who was tasked by the respondent toconduct an EXTENSIVE MANAGEMENT AUDIT

of the records of VFP.

Emmanuel De Ocampo

- Petitioners incumbent presidenta. REYES wrote to DE OCAMPO informing the

corporation that they (DND) came across some legalbases 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 andsupervision of the Secretary of ND. [Sec 1,

RA 2640]

b. (letter) VFP shall make and transmit to thePresident 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]

b.

DND Secretary (petitioner) issues the ASSAILEDDepartment CIRCULAR no. 4 entitled Further

Implementing the Provisions of Sections 1 & 12 of

RA 2640

a. CIRCULAR NO. 4: Rules shall apply to themanagement 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 actdirectly 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, modifyor nullify or set aside what a subordinate

officer had done in the performance of his

duties

e. Supervision power to see to it that theirsubordinate officers perform their duties

f. Veteran any person who rendered militaryservice 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 tota

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.

c. Secretary general of VFP sent a latter to respondentDND 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 shal

have been agreed upon.

d. Undersecretary DENIED the letter (reason: there is atimeframe)

e. Petitioner filed this petition for Certiorari withProhibition

a. TRO: implementing DND DEP CN. 4 andthe ongoing management audit o

petitioners books of account.b. DC No. 4 be declared null and void for

being ultra vires

c. Convert TRO into a permanent oneVFPs CLAIM THAT IT IS A PRIVATE NON-

GOVERNMENT CORPORATION.

- VFP claims that DND Circular no. 4 is an INVALIDexercise of respondent Secretarys control and

supervision.

- BECAUSE: It is not a public nor a governmentaentity 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 PUBLICCORPORATION

b. Any act or decisions of the FEDERATION shall besubject to the approval of Sec. of Defense

c. VFP required to SUBMIT annual reportsd. VFP was listed as among the GOCC that will NOT

be privatized

e. VFP is an adjunct of the government (Ang bagongbayani-OFW labor party v. COMELEC)

VFP Supreme Court

- Constitution

EXPLICITYLY prohibit

the regulation by special

laws of private

corporations (except

GOCC)

- There is no challenge in th

creation of VFP in the petition a

to permit this Court fro

considering tis nullity.

1. VFP does not possess

the elements which would

qualify it as a public office

1. Public office an individual

invested with some portion of th

SOVEREIGN FUCNTIONS o

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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. VFP funds are not

public funds

a. No budgetaryappropriations

from DBM

b. VFP fundscome from

membership

dies

c. Lease rentalsraised are

private in

character

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. Juridical personality of

the VFP emanates from a

statutory character. It is a

private, civilian federation

of VETERANS

voluntarily formed by

veterans themselves

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 of 1987

does not provide VFP as

an attached agency

4. ADMIN Code is not exclusive

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 REQUIREsubmission of reports, documents and other papers

regarding any or all of the federations business

functions

- Even assuming that the assailed circular was notpublished VALIDITY is not affected

o Falls under two of the exceptionso Circular is an INTERNAL REGULATION

o Add nothing to the law and does not affecsubstantial rights

- An office is not rendered inutile by the fact that it isplaced under the control of a higher office

- Circular is perfectly in consonance with RA 2640.- Petition DISMISSED.- Validity AFFIRMED.