Philippine Society v.

COA
GR 169752, September 25, 2007
MALONES, E.:

Point of the Case:

The principle of the Democratic state wherein all persons, parties and creatures of the state were
entitled to the equal protection of the law.

Facts of the Case:

Petitioner (Philippine Society for the prevention of cruelty to animals) filed a special civil action for
certiorari and Prohibition under Rule 65 of the Rules of Court assailing the Office Order issued by COA
audit team asking to conduct an audit survey on the petitioner. The Petitioner refused the audit survey and
maintained that it is a private corporation. It argues that even though it was created by special legislation in
1905, there was no general law existing during that time under which it may be organized or incorporated
and also it has no governmental functions because these have been revoked by C.A. No. 1489 through
E.O. No. 63 issued by former President Manuel L.Quezon which declares that the revocation of the powers
of the petitioner to appoint agents and powers of arrest “corrected a serious defect” in one of the laws
existing in the statutory books. .

The respondents contend that since the petitioner is a "body politic" created by virtue of special legislation
and endowed with a governmental purpose, then indubitably, the COA may audit the financial activities of
the latter. It also emphasizes the requirement under the special charter for the petitioner to render a report
to the Civil Governor, whose functions have been inherited by the Office of the President, clearly reflects
the nature of the petitioner as a government instrumentality.

Issue/s:

1. Whether or not the petitioner qualifies as a public corporation and be subjected to the audit
function of the COA

Ruling:

No, the court held that the petitioner is a private domestic corporation subject to the jurisdiction of
the Securities and Exchange Commission. Underpinnings of the charter test had been introduced by the
1935 Constitution and not earlier. Settled is the rule that laws in general have no retroactive effect, unless
the contrary is provided. Also, the amendments introduced by C.A. No. 1489 made it clear that the petitioner
was a private corporation and not an agency of the government. Lastly, te court ruled that reportorial
requirement applies to all corporations either public, quasi public and private because the state may see to
it that its creature acted according to the powers and functions conferred upon it.