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SUPREME COURT REPORTS ANNOTATED VOLUME 381 8/7/18, 8'53 PM

48 SUPREME COURT REPORTS ANNOTATED


Laurel vs. Desierto
*
G.R. No. 145368. April 12, 2002.

SALVADOR H. LAUREL, petitioner, vs. HON. ANIANO A.


DESIERTO, in his capacity as Ombudsman, respondent.

Constitutional Law; Ombudsman; Public Officers; The


Ombudsman has the power to investigate any malfeasance,
misfeasance and non-feasance by a public officer or employee of the
government, or of any subdivision, agency or instrumentality thereof,
including government-owned or controlled corporations; Public
Officer Defined.·In sum, the Ombudsman has the power to
investigate any malfeasance, misfeasance and non-feasance by a
public officer or employee of the government, or of any subdivision,
agency or instrumentality thereof, including government-owned or
controlled corporations. Neither the Constitution nor the
Ombudsman Act of 1989, however, defines who public officers are. A
definition of public officers cited in jurisprudence is that provided
by Mechem, a recognized authority on the subject: A public office is
the right, authority and duty, created and conferred by law, by
which, for a given period, either fixed by law or enduring at the
pleasure of the creating power, an individual is invested with some
portion of the sovereign functions of the government, to be exercised
by him for the benefit of the public. The individual so invested is a
public officer.
Same; Same; Same; The characteristics of a public office include
the delegation of sovereign functions, its creation by law and not by
contract, an oath, salary, continuance of the position, scope of duties,
and the designation of the position as an office.·The characteristics
of a public office, according to Mechem, include the delegation of
sovereign functions, its creation by law and not by contract, an
oath, salary, continuance of the position, scope of duties, and the

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designation of the position as an office.


Same; Same; Same; Court holds that the National Centennial
Commission (NCC) performs executive functions.·We hold that the
NCC performs executive functions. The executive power „is
generally defined as the power to enforce and administer the laws.
It is the power of carrying the laws into practical operation and
enforcing their due observance.‰ The executive function, therefore,
concerns the implementation of the policies as set forth by law.

______________

* FIRST DIVISION.

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Laurel vs. Desierto

Same; Same; Same; The NCC was precisely created to ensure a


more coordinated and synchronized celebrations of the Philippine
Centennial and wider participation from the government and non-
government or private organizations and to rationalize the relevance
of historical links with other countries and to carry them into effect.
·E.O. No. 128, reconstituting the Committee for the National
Centennial Celebrations in 1998, cited the „need to strengthen the
said Committee to ensure a more coordinated and synchronized
celebrations of the Philippine Centennial and wider participation
from the government and non-government or private
organizations.‰ It also referred to the „need to rationalize the
relevance of historical links with other countries.‰ The NCC was
precisely created to execute the foregoing policies and objectives, to
carry them into effect.
Same; Same; Same; The promotion of industrialization and full
employment is a fundamental state policy.·There can hardly be any
dispute that the promotion of industrialization and full employment
is a fundamental state policy.
Same; Same; Same; The NCC performs sovereign functions; It is
a public office and petitioner is a public officer.·Clearly, the NCC
performs sovereign functions. It is, therefore, a public office, and

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petitioner, as its Chair, is a public officer.


Same; Same; Same; Fact that petitioner did not receive any
compensation during his tenure is of little consequence.·That
petitioner allegedly did not receive any compensation during his
tenure is of little consequence. A salary is a usual but not a
necessary criterion for determining the nature of the position. It is
not conclusive. The salary is a mere incident and forms no part of
the office. Where a salary or fees is annexed, the office is provided
for it is a naked or honorary office, and is supposed to be accepted
merely for the public good. Hence, the office of petitioner as NCC
Chair may be characterized as an honorary office, as opposed to a
lucrative office or an office of profit, i.e., one to which salary,
compensation or fees are attached. But it is a public office,
nonetheless.

PETITION for review of a decision of the Ombudsman.

The facts are stated in the opinion of the Court.


Laurel Law Offices for petitioner.
The Solicitor General for respondent.

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Laurel vs. Desierto

KAPUNAN, J.:

On June 13, 1991, President Corazon C. Aquino issued


Administrative Order No. 223 „constituting a Committee
for the preparation of the National Centennial Celebration
in 1998.‰ The Committee was mandated „to take charge of
the nationwide preparations for the National Celebration of
the Philippine Centennial of the Declaration of Philippine
Independence
1
and the Inauguration of the Malolos
Congress.‰
Subsequently, President Fidel V. Ramos issued
Executive Order No. 128, „reconstituting the Committee for
the preparation of the National Centennial Celebrations in
1998.‰ It renamed the Committee as the „National
Centennial Commission.‰ Appointed to chair the
reconstituted Commission was Vice-President Salvador

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______________

1 A.O. 223, Section 1. The same section provided for the CommitteeÊs
composition as follows:

x x x. The Committee shall be composed of six (6) representatives from the


Presidential Commission for Culture and the Arts (PCCA), and five (5)
representatives from the Philippine Centennial Foundation, Inc. (PCFI). They
shall be appointed by the President upon their nomination by their respective
groups.
The Committee members shall elect among themselves the Chairman and
Vice-Chairman, and such other officers as they may deem necessary.
The Committee was also granted the following duties and powers:

1. To undertake the overall study, formulation and implementation of


programs and projects on the utilization of culture, arts, and media as
vehicles for value education in the context of the Centennial
Celebration;
2. To act as principal coordinator for all the activities related to awareness
and celebration of the centennial;
3. To constitute sub-committees and working groups which shall
undertake the implementation of the program and projects; and
4. To call upon the assistance of any government agency or
instrumentality and corporation, and to invite private individuals and
organizations to assist it in the performance of its tasks. (Id., at Section
2.)

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Laurel vs. Desierto

H. Laurel. Presidents Diosdado M. Macapagal and 2


Corazon
C. Aquino were named Honorary Chairpersons.
Characterized as an „ad-hoc body,‰ the existence of the
Commission „shall terminate upon the completion 3
of all
activities related to the Centennial Celebrations.‰ Like its
predecessor Committee, the Commission was tasked to
„take charge of the nationwide preparations for the
National Celebration of the Philippine Centennial of the
Declaration of Philippine Independence and the
Inauguration of the Malolos Congress.‰

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Per Section 6 of the Executive Order, the Commission


was also charged with the responsibility to „prepare, for
approval of the President, a Comprehensive Plan for the
Centennial Celebrations within six (6) months from the
effectivity of the Executive Order.
E.O. No. 128 also contained provisions for staff support
and funding:

SEC. 3. The Commission shall be provided with technical and


administrative staff support by a Secretariat to be composed of,
among others, detailed personnel from the Presidential
Management Staff, the National Commission for Culture and the
Arts, and the National Historical Institute. Said Secretariat shall
be headed by a full time Executive Director who shall be designated
by the President.
SEC. 4. The Commission shall be funded with an initial budget
to be drawn from the Department of Tourism and the presidentÊs
Contingent Fund, in an amount to be recommended by the
Commission, and approved by the President. Appropriations for
succeeding years shall be incorporated in the budget of the Office of
the President.

______________

2 Other members of the Commission were the Secretaries of


Education, Culture and Sports, National Defense, Interior and Local
Government, Tourism, Trade and Industry, Public Works and Highways,
Transportation and Communications, and Budget and Management, the
Press Secretary, two (2) representatives each from the Senate and the
House of Representatives, two (2) representatives from the Judiciary, the
Executive Director of the National Historical Institute, three (3)
representatives from the National Commission for Culture and Arts,
three (3) representatives from the Philippine Centennial Foundation,
Inc., and other members from the government and the private sectors,
„as may be designated later.‰ (E.O. No. 128, Section 1.)
3 Id., at Section 5.

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Subsequently, a corporation named the Philippine4


Centennial Expo Â98 Corporation (Expocorp) was created.
Petitioner was

______________

4 The purposes of the corporation were set forth in Article 2 of the


Articles of Incorporation, thus:

PRIMARY PURPOSE

To set up and establish the Philippine Centennial International Exposition


1998 (EXPO Â98), a project of the National Centennial Commission envisioned
and mandated under Executive Order No. 128, series of 1993, in the Clark
Special Economic Zone (CSEZ) within the Provinces of Pampanga and Tarlac,
Philippines as created, defined and delineated under Proclamation No. 163,
series 1993, of the President of the Philippines and furtherance of said purpose;

1. To operate, administer, manage, implement, and develop EXPO Ê98


conformably to and in accordance with the Detailed Feasibility study
and Master Plan for said Exposition prepared by
DOUGLAS/GALLAGHER, INC. and approved by the President of the
Philippines;
2. To exercise oversight functions and overall jurisdiction over the
operations of EXPO Ê98 as well as manage and oversee all plans,
programs, and activities related to the implementation and operation of
said Exposition;
3. To regulate the establishment, operation, and maintenance of utilities,
services, and infrastructure works in all the site components of EXPO
Ê98 and its support facilities;
4. To oversee the preparations for the implementation of the participation
of countries, groups, organizations, and entities at EXPO Ê98;
5. To establish linkages with participating countries and coordinate their
programs and activities relevant to the theme of EXPO Ê98;
6. To provide and prescribe the guidelines for the design and fabrication of
the pavilions of participating countries that played a significant role in
Philippine historical development and of other participating groups,
organizations, and entities which would be reflective of the following
objectives of EXPO Ê98·

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Laurel vs. Desierto

among the nine (9) Expocorp incorporators, who were also


its first nine (9) directors. Petitioner was elected Expocorp
Chief Executive Officer.

______________

a) showcase the national vision of the Philippines, highlighted by a rich


history and culture, and its traditional heritage and diverse cultural
influences;
b) express eloquently the Filipinism sentiment of the Philippine
Centennial;
c) strengthen cultural and historical linkages between Philippines and
participating countries;
d) create an image of the Philippines as a country with rich trade and
tourism potentials; and
e) project the Filipino character and strengthen the sense of national pride
and patriotism among the Filipino people.

7. To conceive and devise varied promotional strategies towards creating


awareness and appreciation of EXPO Ê98 as the centerpiece of the
national celebrations in 1998 of the centennial of the declaration of
Philippine Independence and beyond that as a permanent site for the
Filipino people to honor their rich heritage;
8. To encourage and invite the active and meaningful participation of the
private sector in managing and overseeing EXPO Ê98; and
9. To forge strategic partnerships and joint ventures with local and
international investors and developers in the development,
maintenance, operation, and management of EXPO Ê98 on a turn-key
basis.

SECONDARY PURPOSES

(1) To purchase, acquire, own, lease, sell and convey real properties such as
lands, buildings, factories and warehouses and machineries, equipment
and other personal properties as may be necessary or incidental to the
conduct of the corporate business, and to pay in cash, shares of its
capital stock, debentures and other evidences of indebtedness, or other
securities, as may be deemed expedient, for any business or property
acquired by the corporation.
(2) To borrow or raise money necessary to meet the financial requirements

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of its business by the issuance of bonds, promissory

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On August 5, 1998, Senator Ana Dominique Coseteng


delivered a privilege speech in the Senate denouncing
alleged anomalies in

______________

notes and other evidences of indebtedness, and to secure the


repayment thereof by mortgage, pledge, deed of trust or lien upon
the properties of the corporation or to issue pursuant to law
shares of its capital stock, debentures and other evidences of
indebtedness in payment for properties acquired by the
corporation or for money borrowed in the prosecution of its lawful
business;
(3) To invest and deal with the money and properties of the
corporation in such manner as may from time to time be
considered wise or expedient for the advancement of its interests
and to sell, dispose of or transfer the business, properties and
goodwill of the corporation or any part thereof for such
consideration and under such terms as it shall see fit to accept;
(4) To aid in any manner any corporation, association, or trust estate,
domestic or foreign, or any firm or individual, any shares of stock
in which or any bonds, debentures, notes, securities, evidences of
indebtedness, contracts, or obligations of which are held by or for
this corporation, directly or indirectly or through other
corporations or otherwise;
(5) To enter into any lawful arrangement for sharing profits, union of
interest, unitization or farmout agreement, reciprocal concession,
or cooperation, with any corporation, association, partnership,
syndicate, entity, person or governmental, municipal or public
authority, domestic or foreign, in the carrying on of any business
or transaction deemed necessary, convenient or incidental to
carrying out any of the purposes of this corporation;
(6) To acquire or obtain from any government or authority, national,
provincial, municipal or otherwise, or a corporation, company or

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partnership or person, such charter, contracts, franchise,


privileges, exemption, licenses and concessions as may be
conducive to any of the objects of the corporation;
(7) To establish and operate one or more branch offices of agencies
and to carry on any or all of its operations and business without
any restrictions as to place or amount including the right to hold,
purchase or otherwise acquire, lease, mortgage, pledge and
convey or otherwise deal in with real and personal property
anywhere within the Philippines;
(8) To conduct and transact any and all lawful business, and to do or
cause to be done any one or more of the acts and things

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the construction and operation of the Centennial


Exposition Project at the Clark Special Economic Zone.
Upon motion of Senator Franklin Drilon, Senator
CosetengÊs privilege speech was referred to the Committee
on Accountability of Public Officers and Investigation (The
Blue Ribbon Committee) and several other Senate
Committees for investigation.
On February 24, 1999, President Joseph Estrada issued
Administrative Order No. 35, creating an ad hoc and
independent citizensÊ committee to investigate all the facts
and circumstances surrounding the Philippine centennial
projects, including its component activities. Former
Senator Rene A.V. Saguisag was appointed to chair the
Committee.
On March 23, 1999, the Senate Blue Ribbon Committee
filed with the Secretary of the Senate its Committee Final
Report No. 30 dated February 26, 1999. Among the
CommitteeÊs recommendations was „the prosecution by the
Ombudsman/DOJ of Dr. Salvador Laurel, chair of NCC and
of EXPOCORP for violating the rules on public bidding,
relative to the award of centennial contracts to AK (Asia
Construction & Development Corp.); for exhibiting
manifest bias in the issuance of the NTP (Notice to
Proceed) to AK to construct the FR (Freedom Ring) even in

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the absence of a valid contract that has caused material


injury to government and for participating in the scheme to
preclude audit by COA of the funds infused by the
government for the implementation of 5
the said contracts all
in violation . . . of the anti-graft law.‰
Later, on November 5, 1999, the Saguisag Committee
issued its own report. It recommended „the further
investigation by the Ombudsman, and indictment, in
proper cases of,‰ among others, NCC Chair Salvador H.
Laurel for violations of Section 3(e) of R.A. No.

______________

herein set forth as its purposes, within or without the Philippines, and
in any and all foreign countries, and to do everything necessary,
desirable or incidental to the accomplishment of the purposes or the
exercise of any one or more of the powers herein enumerated, or which
shall at any time appear conducive to or expedient for the protection or
benefit of this corporation.
5 Rollo, p. 10.

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Laurel vs. Desierto

3019, Section 4(a) in relation to Section 11 of R.A. No. 6713,


and Article 217 of the Revised Penal Code.
The Reports of the Senate Blue Ribbon and the Saguisag
Committee were apparently referred to the Fact-finding
and Intelligence Bureau of the Office of the Ombudsman.
On January 27, 2000, the Bureau issued its Evaluation
Report, recommending:

1. That a formal complaint be filed and preliminary


investigation be conducted before the Evaluation
and Preliminary Investigation Bureau (EPIB),
Office of the Ombudsman against former NCC and
EXPOCORP chair Salvador H. Laurel, former
EXPOCORP President Teodoro Q. Peña and AK
President Edgardo H. Angeles for violation of Sec.
3(e) and (g) of R.A. No. 3019, as amended in

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relation to PD 1594 and COA Rules and


Regulations;
2. That the Fact Finding and Intelligence Bureau
6
of
this Office, act as the nominal complainant.

In an Order dated April 10, 2000, Pelagio S. Apostol, OIC-


Director of the Evaluation and Preliminary Investigation
Bureau, directed petitioner to submit his counter-affidavit
and those of his witnesses.
On April 24, 2000, petitioner filed with the Office of the
Ombudsman a Motion to Dismiss questioning the
jurisdiction of said office.
In an Order dated June 13, 2000, the Ombudsman
denied petitionerÊs motion to dismiss.
On July 3, 2000, petitioner moved for a reconsideration
of the June 13, 2000 Order but the motion was denied in an
Order dated October 5, 2000.
On October 25, 2000, petitioner filed the present petition
for certiorari.
On November 14, 2000, the Evaluation and Preliminary
Investigation Bureau issued a resolution finding „probable
cause to indict respondents SALVADOR H. LAUREL and
TEODORO Q. PEÑA before the Sandiganbayan for
conspiring to violate Section 3(e) of Republic Act No. 3019,
in relation to Republic Act No. 1594.‰ The

______________

6 Id., at 134-135.

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resolution also directed that an information for violation of


the said law be filed against Laurel and Peña. Ombudsman
Aniano A. Desierto approved the resolution with respect to
Laurel but dismissed the charge against Peña.
In a Resolution dated September 24, 2001, the Court
issued a temporary restraining order, commanding
respondents to desist from filing any information before the
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Sandiganbayan or any court against petitioner for alleged


violation of Section 3(e) of the Anti-Graft and Corrupt
Practices Act.
On November 14, 2001, the Court, upon motion of
petitioner, heard the parties in oral argument.
Petitioner assails the jurisdiction of the Ombudsman on
the ground that he is not a public officer because:

A.

EXPOCORP, THE CORPORATION CHAIRED BY PETITIONER


LAUREL WHICH UNDERTOOK THE FREEDOM RING
PROJECT IN CONNECTION WITH WHICH VIOLATIONS OF
THE ANTI-GRAFT AND CORRUPT PRACTICES WERE
ALLEGEDLY COMMITTED, WAS A PRIVATE CORPORATION,
NOT A GOVERNMENT-OWNED OR CONTROLLED
CORPORATION.

B.

THE NATIONAL CENTENNIAL COMMISSION (NCC) WAS


NOT A PUBLIC OFFICE.

C.

PETITIONER, BOTH AS CHAIRMAN OF THE NCC AND OF


EXPOCORP WAS NOT A „PUBLIC OFFICER‰ AS DEFINED
7
UNDER THE ANTI-GRAFT & CORRUPT PRACTICES ACT.
8
In addition, petitioner in his reply
9
invokes this CourtÊs
decision in Uy vs. Sandiganbayan, where it was held that
the jurisdiction of the Ombudsman was limited to cases
cognizable by the Sandi-

______________

7 Id., at 15.
8 Id., at 296-297.
9 312 SCRA 77 (1999).

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ganbayan, i.e., over public officers of Grade 27 and higher.


As petitionerÊs position was purportedly not classified as
Grade 27 or higher, the Sandiganbayan and, consequently,
the Ombudsman, would have no jurisdiction over him.
This last contention is easily dismissed. In the CourtÊs
decision in Uy, we held that „it is the prosecutor, not the
Ombudsman, who has the authority to file the
corresponding information/s against petitioner in the
regional trial court. The Ombudsman exercises
prosecutorial powers only in cases cognizable by the
Sandiganbayan.‰
In its Resolution of February 22, 2000, the Court
expounded:

The clear import of such pronouncement is to recognize the


authority of the State and regular provincial and city prosecutors
under the Department of Justice to have control over prosecution of
cases falling within the jurisdiction of the regular courts. The
investigation and prosecutorial powers of the Ombudsman relate to
cases rightfully falling within the jurisdiction of the Sandiganbayan
under Section 15 (1) of R.A. 6770 („An Act Providing for the
Functional and Structural Organization of the Office of the
Ombudsman, and for other purposes‰) which vests upon the
Ombudsman „primary jurisdiction over cases cognizable by the
Sandiganbayan...‰ And this is further buttressed by Section 11 (4a)
of R.A. 6770 which emphasizes that the Office of the Special
Prosecutor shall have the power to „conduct preliminary
investigation and prosecute criminal cases within the jurisdiction of
the Sandiganbayan.‰ Thus, repeated references to the
SandiganbayanÊs jurisdiction clearly serve to limit the
OmbudsmanÊs and Special ProsecutorÊs authority to cases
cognizable by the Sandiganbayan. [Emphasis in the original.]

The foregoing ruling in Uy, however, was short-lived. Upon


motion for clarification by the Ombudsman in the same
case, the Court set aside the foregoing pronouncement in
its Resolution dated March 20, 2001. The Court explained
the rationale for this reversal:

The power to investigate and to prosecute granted by law to the


Ombudsman is plenary and unqualified. It pertains to any act or
omission of any public officer or employee when such act or omission

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appears to be illegal, unjust, improper or inefficient. The law does


not make a distinction between cases cognizable by the
Sandiganbayan and those cognizable by regular courts. It has been
held that the clause „any illegal act or omission

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of any public official‰ is broad enough to embrace any crime


committed by a public officer or employee.
The reference made by RA 6770 to cases cognizable by the
Sandiganbayan, particularly in Section 15(1) giving the
Ombudsman primary jurisdiction over cases cognizable by the
Sandiganbayan, and Section 11(4) granting the Special Prosecutor
the power to conduct preliminary investigation and prosecute
criminal cases within the jurisdiction of the Sandiganbayan, should
not be construed as confining the scope of the investigatory and
prosecutory power of the Ombudsman to such cases.
Section 15 of RA 6770 gives the Ombudsman primary
jurisdiction over cases cognizable by the Sandiganbayan. The law
defines such primary jurisdiction as authorizing the Ombudsman
„to take over, at any stage, from any investigatory agency of the
government, the investigation of such cases.‰ The grant of this
authority does not necessarily imply the exclusion from its
jurisdiction of cases involving public officers and employees by other
courts. The exercise by the Ombudsman of his primary jurisdiction
over cases cognizable by the Sandiganbayan is not incompatible
with the discharge of his duty to investigate and prosecute other
offenses committed by public officers and employees. Indeed, it
must be stressed that the powers granted by the legislature to the
Ombudsman are very broad and encompass all kinds of
malfeasance, misfeasance and non-feasance committed by public
officers and employees during their tenure of office.
Moreover, the jurisdiction of the Office of the Ombudsman should
not be equated with the limited authority of the Special Prosecutor
under Section 11 of RA 6770. The Office of the Special Prosecutor is
merely a component of the Office of the Ombudsman and may only
act under the supervision and control and upon authority of the
Ombudsman. Its power to conduct preliminary investigation and to
prosecute is limited to criminal cases within the jurisdiction of the

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Sandiganbayan. Certainly, the lawmakers did not intend to confine


the investigatory and prosecutory power of the Ombudsman to
these types of cases. The Ombudsman is mandated by law to act on
all complaints against officers and employees of the government
and to enforce their administrative, civil and criminal liability in
every case where the evidence warrants. To carry out this duty, the
law allows him to utilize the personnel of his office and/or designate
any fiscal, state prosecutor or lawyer in the government service to
act as special investigator or prosecutor to assist in the
investigation and prosecution of certain cases. Those designated or
deputized to assist him work under his supervision and control. The
law likewise allows him to direct the Special Prosecutor to
prosecute cases outside the SandiganbayanÊs jurisdiction in
accordance with Section 11 (4c) of RA 6770.

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The prosecution of offenses committed by public officers and


employees is one of the most important functions of the
Ombudsman. In passing RA 6770, the Congress deliberately
endowed the Ombudsman with such power to make him a more
active and effective agent of the people in ensuring accountability in
public office. A review of the development of our Ombudsman law
reveals this intent. [Emphasis in the original.]

Having disposed of this contention, we proceed to the


principal grounds upon which petitioner relies. We first
address the argument that petitioner, as Chair of the NCC,
was not a public officer.
10
The Constitution describes the Ombudsman and his
Deputies as „protectors of the people,‰ who „shall act
promptly on complaints filed in any form or manner
against public officials or employees of the government, or
any subdivision, agency or instrumentality thereof,
including government-owned or controlled corporations.‰
Among the awesome 11
powers, functions, and duties vested
by the Constitution upon the Office of the Ombudsman is
to „[i]nvestigate... any act or omission of any public official,
employee, office or agency, when such act or omission

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appears to be illegal, unjust, improper, or inefficient.‰


The foregoing constitutional provisions are substantially
reproduced in R.A. No. 6770, otherwise known as the
„Ombudsman Act of 1989.‰ Sections 13 and 15(1) of said
law respectively provide:

SEC. 13. Mandate.·The Ombudsman and his Deputies, as


protectors of the people shall act promptly on complaints file 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 every case where the
evidence warrants in order to promote efficient service by the
Government to the people.
SEC. 15. Powers, Functions and Duties.·The Office of the
Ombudsman shall have the following powers, functions and duties:
(1) Investigate and prosecute on its own or on complaint by any
person, any act or omission of any public officer or employee, office
or agency, when such act or omission appears to be illegal unjust,
improper or inefficient? It has primary jurisdiction over cases
cognizable by the

______________

10 ART. XI, SEC. 12.


11 ART. XI, SEC. 13 (1).

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Laurel vs. Desierto

Sandiganbayan and, in the exercise of this primary jurisdiction, it


may take over, at any stage, from any investigatory agency of
Government, the investigation of such cases;
x x x.

The coverage of the law appears to be limited only by


Section 16, in relation to Section 13, supra:

SEC. 16. Applicability.·The provisions of this Act shall apply to all


kinds of malfeasance, misfeasance and non-feasance that have been
committed by any officer or employee as mentioned in Section 13

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hereof, during his tenure of office.

In sum, the Ombudsman has the power to investigate any


malfeasance, misfeasance and non-feasance by a public
officer or employee of the government, or of any
subdivision, agency or instrumentality thereof,12
including
government-owned or controlled corporations.
Neither the Constitution nor the Ombudsman Act of
1989, however, defines who public officers
13
are. A definition
of public officers cited in jurisprudence is that provided by
Mechem, a recognized authority on the subject:

A public office is the right, authority and duty, created and


conferred by law, by which, for a given period, either fixed by law or
enduring at the pleasure of the creating power, an individual is
invested with some portion

______________

12 Section 22 extends these investigatory powers, under certain conditions,


to private persons:

SEC. 22. Investigatory Power.·The Office of the Ombudsman shall have the power to

investigate any serious misconduct in office allegedly committed by officials removable by

impeachment, for the purpose of filing a verified complaint for impeachment or over Members

of Congress, and the Judiciary.

In all cases of conspiracy between an officer or employee of the government and a private

person, the Ombudsman and his Deputies shall have jurisdiction to include such private

person as the evidence may warrant. The officer or employee and the private person shall be

tried jointly and shall be subject to the same penalties and liabilities.

13 E.g., Fernandez vs. Ledesma, 1 SCRA 620 (1963); Aparri vs. Court of
Appeals, 127 SCRA 231 (1984).

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of the sovereign functions of the government, to be exercised by him


for the benefit of the public. The individual so invested is a public
14
officer.

The characteristics of a public office, according to Mechem,

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include the delegation of sovereign functions, its creation


by law and not by contract, an oath, salary, continuance of
the position, scope 15of duties, and the designation of the
position as an office.
Petitioner submits that some of these characteristics are
not present in the position of NCC Chair, namely: (1) the
delegation of sovereign functions; (2) salary, since he
purportedly did not receive any compensation; and (3)
continuance, the tenure of the NCC being temporary.
Mechem describes the delegation to the individual of
some of the sovereign functions of government as „[t]he
most important characteristic‰ in determining whether a
position is a public office or not.

The most important characteristic which distinguishes an office


from an employment or contract is that the creation and conferring
of an office involves a delegation to the individual of some of the
sovereign functions of government, to be exercised by him for the
benefit of the public;·that some portion of the sovereignty of the
country, either legislative, executive or judicial, attaches, for the
time being, to be exercised for the public benefit. Unless the powers
16
conferred are of this nature, the individual is not a public officer.

Did E.O. 128 delegate the NCC with some of the sovereign
functions of government? Certainly, the law did not
delegate upon the NCC functions that can be described as
legislative or judicial. May the functions of the NCC then
be described as executive?
We hold that the NCC performs executive functions. The
executive power „is generally defined as the power to
enforce and administer the laws. It is the power of carrying
the laws into practi-

______________

14 F.R. MECHEM, A TREATISE ON THE LAW OF PUBLIC OFFICES


AND OFFICERS, §1.
15 Id., at §§4-10. See also 63C Am Jur 2d, Public Officers and
Employees §1.
16 Id., at §4.

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Laurel vs. Desierto
17
cal operation and enforcing their due observance.‰ The
executive function, therefore, concerns the implementation
of the policies as set forth by law.
The Constitution provides in Article XIV (Education,
Science and Technology, Arts, Culture, and Sports) thereof:

SEC. 15. Arts and letters shall enjoy the patronage of the State. The
State shall conserve, promote, and popularize the nationÊs historical
and cultural heritage and resources, as well as artistic creations.

In its preamble, A.O. No. 223 states the purposes for the
creation of the Committee for the National Centennial
Celebrations in 1998:

WHEREAS, the birth of the Republic of the Philippines is to be


celebrated in 1998, and the centennial presents an important
vehicle for fostering nationhood and a strong sense of Filipino
identity;
WHEREAS, the centennial can effectively showcase Filipino
heritage and thereby strengthen Filipino values;
WHEREAS, the success of the Centennial Celebrations may be
insured only through long-range planning and continuous
developmental programming;
WHEREAS, the active participation of the private sector in all
areas of special expertise and capability, particularly in
communication and information dissemination, is necessary for
long-range planning and continuous developmental programming;
WHEREAS, there is a need to create a body which shall initiate
and undertake the primary task of harnessing the multisectoral
components from the business, cultural, and business sectors to
serve as effective instruments from the launching and overseeing of
this long-term project;
x x x.

E.O. No. 128, reconstituting the Committee for the


National Centennial Celebrations in 1998, cited the „need
to strengthen the said Committee to ensure a more
coordinated and synchronized celebrations of the
Philippine Centennial and wider participation from the
government and non-government or private organiza-

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______________

17 Ople vs. Torres, 293 SCRA 141 (1998).

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tions.‰ It also referred to the „need to rationalize the


relevance of historical links with other countries.‰
The NCC was precisely created to execute the foregoing
policies and objectives, to carry them into effect. Thus, the
Commission was vested with the following functions:

(a) To undertake the overall study, conceptualization,


formulation and implementation of programs and
projects on the utilization of culture, arts, literature
and media as vehicles for history, economic
endeavors, and reinvigorating the spirit of national
unity and sense of accomplishment in every Filipino
in the context of the Centennial Celebrations. In this
regard, it shall include a Philippine National
Exposition Â98 within Metro Manila, the original
eight provinces, and Clark Air Base as its major
venues;
(b) To act as principal coordinator for all the activities
related to awareness and celebration of the
Centennial;
(c) To serve as the clearing house for the preparation
and dissemination of all information about the
plans and events for the Centennial Celebrations;
(d) To constitute working groups which shall undertake
the implementation of the programs and projects;
(e) To prioritize the refurbishment of historical sites
and structures nationwide. In this regard, the
Commission shall formulate schemes (e.g. lease-
maintained-and-transfer, build-operate-transfer,
and similar arrangements) to ensure the
preservation and maintenance of the historical sites
and structures;

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(f) To call upon any government agency or


instrumentality and corporation, and to invite
private individuals and organizations to assist it in
the performance of its tasks; and,
(g) Submit regular reports to the President on the
plans, programs, projects, activities as well as18
the
status of the preparations for the Celebration.

It bears noting 19the President, upon whom the executive


power is vested, created the NCC by executive order. Book
III (Office of the President), Chapter 2 (Ordinance Power),
Section 2 describes the nature of executive orders:

______________

18 Id., at Sec. 2.
19 CONSTITUTION, ARTICLE VII, SECTION 1.

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SEC. 2. Executive Orders.·Acts of the President providing for rules


of a general or permanent character in implementation or execution
of constitutional or statutory powers shall be promulgated in
executive orders. [Italics ours.]

Furthermore, the NCC was not without a role in the


countryÊs economic development, especially in Central
Luzon. Petitioner himself admitted as much in the oral
arguments before this Court:

MR. JUSTICE REYNATO S. PUNO:


And in addition to that expounded by Former
President Ramos, donÊt you agree that the task of the
centennial commission was also to focus on the long
term over all socio economic development of the zone
and Central Luzon by attracting investors in the area
because of the eruption of Mt. Pinatubo.
FORMER VICE PRESIDENT SALVADOR H. LAUREL:

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I am glad Your Honor touched on that because that is


something I wanted to touch on by lack of material
time I could not but that is a very important point.
When I was made Chairman I wanted the Expo to be
in Batangas because I am a Batangeño but President
Ramos said Mr. Vice President the Central Luzon is
suffering, suffering because of the eruption of Mt.
Pinatubo let us try to catalize [sic] economic recovery
in that area by putting this Expo in Clark Field and so
it was done I agreed and Your Honor if I may also
mention we wanted to generate employment aside from
attracting business investments and employment. And
the Estrada administration decided to junk this
project there 48, 40 thousand people who lost job, they
were employed in Expo. And our target was to provide
75 thousand jobs. It would have really calibrated,
accelerated the development of Central Luzon. Now, I
think they are going back to that because they had the
airport and there are plan to revive the Expo site into
key park which was the original plan.

There can hardly be any dispute that the promotion of


industrialization
20
and full employment is a fundamental
state policy.

______________

20 Article XII (National Economy and Patrimony) of the Constitution


provides:

Section 1. x x x.

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Petitioner 21invokes the ruling of this Court in Torio vs.


Fontanilla that the holding by a municipality of a town
fiesta is a proprietary rather than a governmental function.
Petitioner argues that the „holding of a nationwide
celebration which marked the nationÊs 100th birthday may
be likened to a national fiesta which involved only the

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exercise 22of the national governmentÊs proprietary


function.‰ In Torio, we held:

[Section 2282 of the Chapter on Municipal Law of the Revised


Administrative Code] simply gives authority to the municipality to
[celebrate] a yearly fiesta but it does not impose upon it a duty to
observe one. Holding a fiesta even if the purpose is to commemorate
a religious or historical event of the town is in essence an act for the
special benefit of the community and not for the general welfare of
the public performed in pursuance of a policy of the state. The mere
fact that the celebration, as claimed, was not to secure profit or gain
but merely to provide entertainment to the town inhabitants is not
a conclusive test. For instance, the maintenance of parks is not a
source of income for the town, nonetheless it is [a] private
undertaking as distinguished from the maintenance of public
schools, jails, and the like which are for public service.
As stated earlier, there can be no hard and fast rule for purposes
of determining the true nature of an undertaking or function of a
municipality; the surrounding circumstances of a particular case
are to be considered and will be decisive. The basic element,
however beneficial to the public the undertaking may be, is that it
is government in essence, otherwise, the function becomes private or
propriety in character. Easily, no governmental or public policy of
the state is involved in the celebration of a town fiesta.

______________

The State shall promote industrialization and full employment based on sound
agricultural development and agrarian reform, through industries that make
full and efficient use of human and natural resources, and which are
competitive in both domestic and foreign markets. x x x.
In the pursuit of these goals, all sectors of the economy and all regions of the
country shall be given optimum opportunity to develop. x x x.

21 85 SCRA 599 (1978).


22 Rollo, p. 466.

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Torio, however, did not intend to lay down an all-


encompassing doctrine. Note that the Court cautioned that
„there can be no hard and fast rule for purposes of
determining the true nature of an undertaking or function
of a municipality; the surrounding circumstances of a
particular case are to be considered and will be decisive.‰
Thus, in footnote 15 of Torio, the Court, citing an American
case, illustrated how the „surrounding circumstances plus
the political, social, and cultural backgrounds‰ could
produce a conclusion different from that in Torio:

We came across an interesting case which shows that surrounding


circumstances plus the political, social, and cultural backgrounds
may have a decisive bearing on this question. The case of Pope v.
City of New Haven, et al. was an action to recover damages for
personal injuries caused during a Fourth of July fireworks display
resulting in the death of a bystander alleged to have been caused by
defendantsÊ negligence. The defendants demurred to the complaint
invoking the defense that the city was engaged in the performance
of a public governmental duty from which it received no pecuniary
benefit and for negligence in the performance of which no statutory
liability is imposed. This demurrer was sustained by the Superior
Court of New Haven Country. Plaintiff sought to amend his
complaint to allege that the celebration was for the corporate
advantage of the city. This was denied. In affirming the order, the
Supreme Court of Errors of Connecticut held inter alia:
Municipal corporations are exempt from liability for the
negligent performance of purely public governmental duties, unless
made liable by statute. . . .
A municipality corporation, which under permissive authority of
its charter or of statute, conducted a public Fourth of July
celebration, including a display of fireworks, and sent up a bomb
intended to explode in the air, but which failed to explode until it
reached the ground, and then killed a spectator, was engaged in the
performance of a governmental duty. (99 A.R. 51)
This decision was concurred in by three Judges while two
dissented.
At any rate the rationale of the Majority Opinion is evident from
[this] excerpt:
„July 4th, when that date falls upon Sunday, July 5th, is made a
public holiday, called Independence Day, by our statutes. All or
nearly all of the other states have similar statutes. While there is
no United States statute making a similar provision, the different

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departments of the government recognize, and have recognized


since the government was estab-

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Laurel vs. Desierto

lished, July 4th as a national holiday. Throughout the country it has


been recognized and celebrated as such. These celebrations,
calculated to entertain and instruct the people generally and to
arouse and stimulate patriotic sentiments and love of country,
frequently take the form of literary exercises consisting of patriotic
speeches and the reading of the Constitution, accompanied by a
musical program including patriotic air sometimes preceded by the
firing of cannon and followed by fireworks. That such celebrations
are of advantage to the general public and their promotion a proper
subject of legislation can hardly be questioned. x x x‰

Surely, a town fiesta cannot compare to the National


Centennial Celebrations. The Centennial Celebrations was
meant to commemorate the birth of our nation after
centuries of struggle against our former colonial master, to
memorialize the liberation of our people from oppression by
a foreign power. 1998 marked 100 years of independence
and sovereignty as one united nation. The Celebrations
was an occasion to reflect upon our history and reinvigorate
our patriotism. As A.O. 223 put it, it was a „vehicle for
fostering nationhood and a strong sense of Filipino
identity,‰ an opportunity to „showcase Filipino heritage and
thereby strengthen Filipino values.‰ The significance of the
Celebrations could not have been lost on petitioner, who
remarked during the hearing:

Oh, yes, certainly the State is interested in the unity of the people,
we wanted to rekindle the love for freedom, love for country, that is
the over-all goal that has to make everybody feel proud that he is a
Filipino, proud of our history, proud of what our forefather did in
their time. x x x.

Clearly, the NCC performs sovereign functions. It is,


therefore, a public office, and petitioner, as its Chair, is a
public officer.

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That petitioner allegedly did not receive any


compensation during his tenure is of little consequence. A
salary is a usual but not a necessary criterion for
determining the nature of the position. It is not conclusive.
The salary is a mere incident and forms no part of the
office. Where a salary or fees is annexed, the office is
provided for it is a naked or honorary office, and is 23
supposed to be accepted merely for the public good.
Hence, the office of petitioner as NCC

______________

23 Id., at §§7, 15. See also Triste vs. Leyte State College Board of
Trustees, 192 SCRA 326 (1990).

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Chair may be characterized as an honorary office, as


opposed to a lucrative office or an office of profit, 24i.e., one to
which salary, compensation or fees are attached. But it is
a public office, nonetheless.
Neither is the fact that the NCC was characterized by
E.O. No. 128 as an „ad-hoc body‰ make said commission
less of a public office.

The term office, it is said, embraces the idea of tenure and duration,
and certainly a position which is merely temporary and local cannot
ordinarily be considered an office. „But,‰ says Chief Justice
Marshall, „if a duty be a continuing one, which is defined by rules
prescribed by the government and not by contract, which an
individual is appointed by government to perform, who enters on
the duties pertaining to his station without any contract defining
them, if those duties continue though the person be changed,·it
seems very difficult to distinguish such a charge or employment
from an office of the person who performs the duties from an
officer.‰
At the same time, however, this element of continuance can not
be considered as indispensable, for, if the other elements are present
„it can make no difference,‰ says PEARSON, C.J., „whether there be

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but one act or a series of acts to be done,·whether the office expires


as soon as the one act is done, or is to be held for years or during
25
good behavior.‰

Our conclusion that petitioner


26
is a public officer finds
support in In Re Corliss. There the Supreme Court of
Rhode Island ruled that the office of Commissioner of the
United States Centennial Commission is an „office of trust‰
as to disqualify its holder as elector of the United States
President and Vice-President. (Under Article II of the
United States Constitution, a person holding an office of
trust or profit under the United States is disqualified from
being appointed an elector.)

x x x. We think a Commissioner of the United States Centennial


Commission holds an office of trust under the United States, and
that he

______________

24 Id., at §13.
25 Id., at §8. Emphasis supplied.
26 23 Am Rep. 538 (1876).

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Laurel vs. Desierto

is therefore disqualified for the office of elector of President and


Vice-President of the United States.
The commission was created under a statute of the United States
approved March 3, 1871. That statute provides for the holding of an
exhibition of American and foreign arts, products, and
manufactures, „under the auspices of the government of the United
States,‰ and for the constitution of a commission, to consist of more
than one delegate from each State and from each Territory of the
United States, „whose functions shall continue until close of the
exhibition,‰ and „whose duty it shall be to prepare and superintend
the execution of the plan for holding the exhibition.‰ Under the
statute the commissioners are appointed by the President of the
United States, on the nomination of the governor of the States and
Territories respectively. Various duties were imposed upon the

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commission, and under the statute provision was to be made for it


to have exclusive control of the exhibit before the President should
announce, by proclamation, the date and place of opening and
holding the exhibition. By an act of Congress approved June 1st,
1872, the duties and functions of the commission were further
increased and defined. That act created a corporation, called „The
Centennial Board of Finance,‰ to cooperate with the commission
and to raise and disburse the funds. It was to be organized under
the direction of the commission. The seventh section of the act
provides „that the grounds for exhibition shall be prepared and the
buildings erected by the corporation, in accordance with plans
which shall have been adopted by the United States Centennial
Commission; and the rules and regulations of said corporation,
governing rates for entrance and admission fees, or otherwise
affecting the rights, privileges, or interests of the exhibitors, or of
the public, shall be fixed and established by the United States
Centennial Commission; and no grant conferring rights or
privileges of any description connected with said grounds or
buildings, or relating to said exhibition or celebration, shall be
made without the consent of the United States Centennial
Commission, and said commission shall have power to control,
change, or revoke all such grants, and shall appoint all judges and
examiners and award all premiums.‰ The tenth section of the act
provides that „it shall be the duty of the United States Centennial
Commission to supervise the closing up of the affairs of said
corporation, to audit its accounts, and submit in a report to the
President of the United States the financial results of the
centennial exhibition.‰
It is apparent from this statement, which is but partial, that the
duties and functions of the commission were various, delicate, and
important; that they could be successfully performed only by men of
large experience and knowledge of affairs; and that they were not
merely subordinate and provisional, but in the highest degree
authoritative, discretion-

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Laurel vs. Desierto

ary, and final in their character. We think that persons performing


such duties and exercising such functions, in pursuance of statutory

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direction and authority, are not to be regarded as mere employees,


agents, or committee men, but that they are, properly speaking,
officers, and that the places which they hold are offices. It appears,
moreover, that they were originally regarded as officers by
Congress; for the act under which they were appointed declares,
section 7, that „no compensation for services shall be paid to the
commissioners or other officers, provided for in this act, from the
treasury of the United States.‰ The only other officers provided for
were the „alternates‰ appointed to serve as commissioners when the
commissioners were unable to attend.

Having arrived at the conclusion that the NCC performs


executive functions and is, therefore, a public office, we
need no longer delve at length on the issue of whether
Expocorp is a private or a public corporation. Even
assuming that Expocorp is a private corporation,
petitionerÊs position as Chief Executive Officer (CEO) of
Expocorp arose from his Chairmanship of the NCC.
Consequently, his acts or omissions as CEO of Expocorp
must be viewed
27
in the light of his powers and functions as
NCC Chair.
Finally, it is contended that since petitioner supposedly
did not receive any compensation for his services as NCC or
Expocorp Chair, he is not a public officer as defined in
Republic Act No. 3019 (The Anti-Graft and Corrupt
Practices Act) and is, therefore, beyond the jurisdiction of
the Ombudsman.
Respondent seeks to charge petitioner with violation of
Section 3 (e) of said law, which reads:

SEC. 3. Corrupt practices of public officers.·In addition to acts or


omissions of public officers already penalized by existing law, the
following shall constitute corrupt practices of any public officer and
are hereby declared to be unlawful:
xxx
(e) Causing any undue injury to any party, including the
Government, or giving any private party any unwarranted benefits,
advantage or preference in the discharge of his official,
administrative or judicial functions through manifest partiality,
evident bad faith or gross inexcusable negligence. This provision
shall apply to officers and employees of offices

______________

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27 See Yasay vs. Desierto, 300 SCRA 494 (1998).

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72 SUPREME COURT REPORTS ANNOTATED


Laurel vs. Desierto

or government corporations charged with the grant of licenses or


permits or other concessions.

A „public officer,‰ under R.A. No. 3019, is defined by Section


2 of said law as follows:

SEC. 2. Definition of terms.·As used in this Act, the term·


xxx
(b) „Public officer‰ includes elective and appointive officials and
employees, permanent or temporary, whether in the classified or
unclassified or exemption service receiving compensation, even
nominal, from the government as defined in the preceding
paragraph. [Emphasis supplied.]

It is clear from Section 2 (b), above, that the definition of a


„public officer‰ is expressly limited to the application of
R.A. No. 3019. Said definition does not apply for purposes
of determining the OmbudsmanÊs jurisdiction, as defined by
the Constitution and the Ombudsman Act of 1989.
Moreover, the question of whether petitioner is a public
officer under the Anti-Graft and Corrupt Practices Act
involves the appreciation of evidence and interpretation of
law, matters that are best resolved at trial.
To illustrate, the use of the term „includes‰ in Section
28
2
(b) indicates that the definition is not restrictive. The
Anti-Graft and Corrupt Practices Act is just one of several
laws that define „public officers.‰ Article 203 of the Revised
Penal Code, for example, provides that a public officer is:

x x x any person who, by direct provision of law, popular election or


appointment by competent authority, takes part in the performance
of public functions in the Government of Philippines, or performs in
said Government or in any of its branches public duties as an
employee, agent or subordinate‰ official, of any rank or class.

Section 2 (14) of the Introductory Provisions of the

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29
Administrative Code of 1987, on the other hand, states:

______________

28 Preclaro vs. Sandiganbayan, 247 SCRA 454 (1995).


29 Executive Order No. 292.

73

VOL. 381, APRIL 12, 2002 73


Laurel vs. Desierto

Officer·as distinguished from „clerk‰ or „employee‰, refers to a


person whose duties not being of a clerical or manual nature,
involves the exercise of discretion in the performance of the
functions of the government. When used with reference to a person
having authority to do a particular act or perform a particular
person in the exercise of governmental power, „officer‰ includes any
government employee, agent or body having authority to do the act
or exercise that function.

It bears noting that under Section 3 (b) of Republic Act No.


6713 (The Code of Conduct and Ethical Standards for
Public Officials and Employees), one may be considered a
„public official‰ whether or not one receives compensation,
thus:

„Public Officials‰ include elective and appointive officials and


employees, permanent or temporary, whether in the career or non-
career service including military and police personnel, whether or
not they receive compensation, regardless of amount.

Which of these definitions should apply, if at all?

Assuming that the definition of public officer in R.A. No.


3019 is exclusive, the term „compensation,‰ which is not
defined by said law, has many meanings.

Under particular circumstances, „compensation‰ has been held to


include allowance for personal expenses, commissions, expenses,
fees, an honorarium, mileage or traveling expenses, payments for
30
services, restitution or a balancing of accounts, salary, and wages.

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How then is „compensation,‰ as the term is used in Section


2 (b) of R.A. No. 3019, to be interpreted?
Did petitioner receive any compensation at all as NCC
Chair? Granting that petitioner did not receive any salary,
the records do not reveal if he received any allowance, fee,
honorarium, or some other form of compensation. Notably,
under the by-laws of Expocorp,
31
the CEO is entitled to per
diems and compensation. Would such fact bear any
significance?

______________

30 15 C.J.S. Compensation, p. 654.


31 Rollo, p. 470.

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74 SUPREME COURT REPORTS ANNOTATED


Tan vs. People

Obviously, this proceeding is not the proper forum to settle


these issues lest we preempt the trial court from resolving
them.
WHEREFORE, the petition is DISMISSED. The
preliminary injunction issued in the CourtÊs Resolution
dated September 24, 2001 is hereby LIFTED.
SO ORDERED.

Puno and Ynares-Santiago, JJ., concur.


Davide, Jr. (C.J., Chairman), No part due to close
relations with a party.

Petition dismissed, preliminary injunction lifted.

Note.·Public officer under Section 2 (b) of Republic Act


No. 3019 includes elective or appointive officials and
employees, permanent or temporary, whether in the Career
Service and Non-Career Service. (Preclaro vs.
Sandiganbayan, 247 SCRA 454 [1995])

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