G.R. No. 75885 May 27, 1987 BATAAN SHIPYARD & ENGINEERING CO., INC. (BASECO), petitioner, vs.

PRESIDENTIA COMMISSION ON GOOD GO!ERNMENT, CHAIRMAN "O!ITO SA ONGA, COMMISSIONER MARY CONCEPCION BA#TISTA, COMMISSIONER RAMON DIA$, COMMISSIONER RA# R. DA$A, COMMISSIONER %#INTIN S. DOROMA , CAPT. "ORGE B. SIAC#NCO, &' a(., respondents. )ACTS* This case involves special civil action of certiorari and prohibition by a private corporation known as the Bataan Shipyard and Engineering Co., Inc. are: ( ! E"ec#tive $rders %#&bered and ', pro&#lgated by (resident Cora)on C. *+#ino on ,ebr#ary '-, .-/ and 0arch ', .-/, respectively, and ('! the se+#estration, takeover, and other orders iss#ed, and acts done, in accordance with said e"ec#tive orders by the (residential Co&&ission on 1ood 1overn&ent and2or its Co&&issioners and agents, affecting said corporation. B*SEC$ is a 3ship repair and shipb#ilding co&pany 4incorporated as a do&estic private corporation4 (on *#g. 56, .7'! by a consorti#& of ,ilipino ship owners and shipping e"ec#tives. Its &ain office is at Engineer Island, (ort *rea, 0anila, where its Engineer Island Shipyard is ho#sed, and its &ain shipyard is located at 0ariveles Bataan.3 Its *rticles of Incorporation disclose that its a#thori)ed capital stock is (/6,666,666.66 divided into /6,666 shares, of which ',666 shares with a val#e of ( ',666,666.66 have been s#bscribed, and on said s#bscription, the aggregate s#& of (5,658,666.66 has been paid by the incorporators. The sa&e articles identify the incorporators, n#&bering fifteen ( 8!. By .-/, however, of these fifteen ( 8! incorporators, si" (/! had ceased to be stockholders. *s of .-/, there were twenty ('6! stockholders listed in B*SEC$9s Stock and Transfer Book.! :hen E$ ; ' was pro&#lgated by (res. Cora)on *+#ino and respectively the se+#estration, takeover and other orders in relation to the E$ done by the (C11 to the alleged 0arcos controlled corporation which is B*SEC$. The proble& arose when the se+#estration order was initiated. The se+#estration order was directed to 5 co&&issioners of the (C11 directing the& to se+#ester the following: . Bataan Shipyard and Engineering Co., Inc. (Engineering Island Shipyard and 0ariveles Shipyard!, '. Baseco <#arry, 5. (hilippine =ai>*lai Corporation, ?. ,idelity 0anage&ent Co., Inc., 8. @o&son @ealty, Inc., /. Trident 0anage&ent Co., 7. %ew Trident 0anage&ent, -. Bay Transport, .. *nd all affiliate co&panies of *lfredo 3BeAo3 @o&#alde). *nd were ordered to do the following: . To i&ple&ent this se+#estration order with a &ini&#& disr#ption of these co&panies9 b#siness activities. '. To ens#re the contin#ity of these co&panies as going concerns, the care and &aintenance of these assets #ntil s#ch ti&e that the $ffice of the (resident thro#gh the Co&&ission on 1ood 1overn&ent sho#ld decide otherwise. 5. To report to the Co&&ission on 1ood 1overn&ent periodically. ,#rther, yo# are a#thori)ed to re+#est for 0ilitary2Sec#rity S#pport fro& the 0ilitary2(olice a#thorities, and s#ch other acts essential to the achieve&ent of this se+#estration order.

Thereafter, the corporation was ordered by the (C11 to prod#ce certain doc#&ents s#ch as: . Stock Transfer Book '. Begal doc#&ents, s#ch as: '. . *rticles of Incorporation, 0in#tes of the *nn#al Stockholders 0eeting fro& .75 to .-/, @eg#lar and Special 0eetings of the Board of Cirectors fro& 0in#tes of the E"ec#tive Co&&ittee 0eetings fro& .75 to contracts with s#ppliers2contractors2others. '.'. By>Baws, '.5. '.?. 0in#tes of the .75 to .-/, '.8. .-/, './. E"isting

5. Dearly list of stockholders with their corresponding share2stockholdings fro& .75 to .-/ d#ly certified by the Corporate Secretary. ?. *#dited ,inancial State&ents s#ch as Balance Sheet, (rofit ; Boss and others fro& .75 to Cece&ber 5 , .-8. 8. 0onthly ,inancial State&ents for the c#rrent year #p to 0arch 5 , .-/. /. Consolidated Cash (osition @eports fro& =an#ary to *pril 8, .-/. 7. Inventory listings of assets #p dated #p to 0arch 5 , .-/. -. Epdated sched#le of *cco#nts @eceivable and *cco#nts (ayable. .. Co&plete list of depository banks for all f#nds with the a#thori)ed signatories for withdrawals thereof. 6. Sched#le of co&pany invest&ents and place&ents. (etitioner now prays to the Co#rt to: ! Ceclare #nconstit#tional and void E"ec#tive $rders %#&bered and 'F

'! *nn#l the se+#estration order dated *pril> ?, .-/, and all other orders s#bse+#ently iss#ed and acts done on the basis thereof, incl#sive of the takeover order of =#ly ?, .-/ and the ter&ination of the services of the B*SEC$ e"ec#tives. +) T,& -.o/01'2o3 o4 1&.'a23 /o105&3' 234.236&/ ',& .26,' a6a237' 7&(48 231.2523a'2o3 (&'o 'o-21 3a'23) ?! *nd that (C11 #nd#ly interfered with its &anage&ent and affairs and right of do&inion. ISS#E* :hether or not right against self>incri&ination is applicable to a corporation. HE D* %o. The right against self>incri&ination has no application to A#ridical persons and the constit#tional safeg#ard against #nreasonable searches and

sei)#res finds no application to the case at bar either. G:hile an individ#al &ay lawf#lly ref#se to answer incri&inating +#estions #nless protected by an i&&#nity stat#te, it does not follow that a corporation, vested with special privileges and franchises, &ay ref#se to show its hand when charged with an ab#se of s#ch privileges. There is a reserve right in the legislat#re to investigate the contracts of a corporation and find o#t whether it has e"ceeded its powers. It wo#ld be a strange ano&aly to hold that a state, having chartered a corporation like B*SEC$ to &ake #se of certain franchises, co#ld not, in the e"ercise of sovereignty, in+#ire how these franchises had been e&ployed, and whether they had been ab#sed, and de&and the prod#ction of the corporate books and papers for that p#rpose. %either is the right against #nreasonable searches and sei)#res applicable here. There were no searches &ade and no sei)#re p#rs#ant to any search was ever &ade. B*SEC$ was &erely ordered to prod#ce the corporate records. The co#rt held that right against self>incri&ination has no application to corporations e"cl#sively +#oted in B*SEC$ fro& :ilson vs. Enited States th#s: GThe corporation is a creat#re of the state. It is pres#&ed to be incorporated for the benefit of the p#blic. It received certain special privileges and franchises, and holds the& s#bAect to the laws of the state and the li&itations of its charter. Its powers are li&ited by law. It can &ake no contract not a#thori)ed by its charter. Its rights to act as a corporation are only preserved to it so long as it obeys the laws of its creation. There is a reserve right in the legislat#re to investigate its contracts and find o#t whether it has e"ceeded its powers. It wo#ld be a strange ano&aly to hold that a state, having chartered a corporation to &ake #se of certain franchises, co#ld not, in the e"ercise of sovereignty, in+#ire how these franchises had been e&ployed, and whether they had been ab#sed, and de&and the prod#ction of the corporate books and papers for that p#rpose. The defense a&o#nts to this, that an officer of the corporation which is charged with a cri&inal violation of the stat#te &ay plead the cri&inality of s#ch corporation as a ref#sal to prod#ce its books. To state this proposition is to answer it. :hile an individ#al &ay lawf#lly ref#se to answer incri&inating +#estions #nless protected by an i&&#nity stat#te, it does not follow that a corporation, vested with special privileges and franchises &ay ref#se to show its hand when charged with an ab#se of s#ch privileges.H (:ilson v. Enited States!