VOL.

331, APRIL 27, 2000 227

Ley son, Jr. vs. Office of the Ombudsman
*
G.R. No. 134990. April 27, 2000.

MANUEL M. LEYSON, JR., petitioner, vs. OFFICE OF THE

OMBUDSMAN, TIRSO ANTIPORDA, Chairman, UCPB and CIIF
Oil Mills, and OSCAR A. TORRALBA, President, CIIF Oil Mills,
respondents.

Coconut Levy Funds; Classes.—We find no grave abuse of discretion

committed by the Ombudsman. COCOFED v. PCGG referred to in
Republic v. Sandiganbayan reviewed the history of the coconut levy funds.
These funds actually have four (4) general classes: (a) the Coconut
Investment Fund created under R.A. No. 6260; (b) the Coconut Consumers
Stabilization Fund created under P.D. No. 276;

_______________

* SECOND DIVISION.

228

228 SUPREME COURT REPORTS ANNOTATED

Leyson, Jr. vs. Office of the Ombudsman

(c) the Coconut Industry Development Fund created under P.D. No. 582;
and, (d) the Coconut Industry Stabilization Fund created under P.D. No.
1841. The various laws relating to the coconut industry were codified in
1976. On 21 October of that year, P.D. No. 961 was promulgated. On 11
June 1978 it was amended by P.D. No. 1468 by inserting a new provision
authorizing the use of the balance of the Coconut Industry Development
Fund for the acquisition of “shares of stocks in corporations organized for
the purpose of engaging in the establishment and operation of industries x x
x commercial activities and other allied business undertakings relating to
coconut and other palm oil indust(ries).” From this fund thus created, or the
CIIF, shares of stock in what have come to be known as the “CIIF
companies” were purchased.
Same; Police Power; Taxation; The coconut levy funds were raised by
the state’s police and taxing powers such that the utilization and proper
management thereof were certainly the concern of the Government.—We
then stated in COCOFED that the coconut levy funds were raised by the
State’s police and taxing powers such that the utilization and proper
management thereof were certainly the concern of the Government. These
funds have a public character and are clearly affected with public interest.
Government Owned and Controlled Corporations (GOCC); Requisites;
Any agency organized as a stock or non-stock corporation vested with
functions relating to public needs whether governmental or proprietary in
nature, and owned by the government directly or through its
instrumentalities either wholly, or, where applicable as in the case of stock
corporations, to the extent of at least fifty-one (51%) percent of its capital
stock.—Quimpo v. Tanodbayan involved the issue as to whether
PETROPHIL was a government owned or controlled corporation the
employees of which fell within the jurisdictional purview of the Tanodbayan
for purposes of The Anti-Graft and Corrupt Practices Act. We upheld the
jurisdiction of the Tanodbayan on the ratiocination that—While it may be
that PETROPHIL was not originally “created” as a government-owned or
controlled corporation, after it was acquired by PNOC, which is a
government-owned or controlled corporation, PETROPHIL became a
subsidiary of PNOC and thus shed-off its private status. It is now funded
and owned by the government as, in fact, it was acquired to perform
functions related to government programs and policies on oil, a vital
commodity in the economic life of the nation. It was acquired not

229

VOL. 331, APRIL 27, 2000 229

Leyson, Jr. vs. Office of the Ombudsman

temporarily but as a permanent adjunct to perform essential government or

government-related functions, as the marketing arm of the PNOC to assist
the latter in selling and distributing oil and petroleum products to assure and
maintain an adequate and stable domestic supply. But these jurisprudential
rules invoked by petitioner in support of his claim that the CIIF companies
are government owned and/or controlled corporations are incomplete
without resorting to the definition of “government owned or controlled
corporation” contained in par. (13), Sec. 2, Introductory Provisions of the
Administrative Code of 1987, i.e., any agency organized as a stock or non-
stock corporation vested with functions relating to public needs whether
governmental or proprietary in nature, and owned by the Government
directly or through its instrumentalities either wholly, or, where applicable
as in the case of stock corporations, to the extent of at least fifty-one (51)
percent of its capital stock. The definition mentions three (3) requisites,
namely, first, any agency organized as a stock or non-stock corporation;
second, vested with functions relating to public needs whether governmental
or proprietary in nature; and, third, owned by the Government directly or
through its instrumentalities either wholly, or, where applicable as in the
case of stock corporations, to the extent of at least fifty-one (51) percent of
its capital stock.
Same; Ombudsman; Where there is no showing that certain
corporations, majority of whose shares are owned by the UCPB-CIIF, are
vested with functions relating to public needs whether governmental or
proprietary in nature, they are not within the scope of the Ombudsman’s
jurisdiction.—In the present case, all three (3) corporations comprising the
CIIF companies were organized as stock corporations. The UCPB-CIIF
owns 44.10% of the shares of LEGASPI OIL, 91.24% of the shares of
GRANEXPORT, and 92.85% of the shares of UNITED COCONUT.
Obviously, the below 51% shares of stock in LEGASPI OIL removes this
firm from the definition of a government owned or controlled corporation.
Our concern has thus been limited to GRANEXPORT and UNITED
COCONUT as we go back to the second requisite. Unfortunately, it is in this
regard that petitioner failed to substantiate his contentions. There is no
showing that GRANEXPORT and/or UNITED COCONUT was vested with
functions relating to public needs whether governmental or proprietary in
nature unlike PETROPHIL in Quimpo. The Court thus concludes that the
CIIF companies are, as found by public respondent, private corporations not
within the scope of its jurisdiction.

230

230 SUPREME COURT REPORTS ANNOTATED

Leyson, Jr. vs. Office of the Ombudsman

Actions; Pleadings and Practice; Forum Shopping; Words and

Phrases; Forum shopping consists of filing multiple suits involving the same
parties for the same cause of action, either simultaneously or successively,
for the purpose of obtaining a favorable judgment; There is no forum
shopping where the cause of action in the case before the Ombudsman is for
violation of the Anti-Graft and Corrupt Practices Act while the cause of
action pending before the trial court is for collection of a sum of money plus
damages.—A brief note on private respondents’ charge of forum shopping.
Executive Secretary v. Gordon is instructive that forum shopping consists of
filing multiple suits involving the same parties for the same cause of action,
either simultaneously or successively, for the purpose of obtaining a
favorable judgment. It is readily apparent that the present charge will not
prosper because the cause of action herein, i.e., violation of The Anti-Graft
and Corrupt Practices Act, is different from the cause of action in the case
pending before the trial court which is collection of a sum of money plus
damages.

SPECIAL CIVIL ACTION in the Supreme Court. Certiorari.

The facts are stated in the opinion of the Court.

Dioscoro P. Timtiman, Jr. for petitioner.
Lope R. Torres for private respondents.

BELLOSILLO, J.:

On 7 February 1996 International Towage and Transport

Corporation (ITTC); a domestic corporation engaged in the
lighterage or shipping business, entered into a one (l)-year contract
with Legaspi Oil Company, Inc. (LEGASPI OIL), Granexport
Manufacturing Corporation (GRANEXPORT) and United Coconut
Chemicals, Inc. (UNITED COCONUT), comprising the Coconut
Industry Investment Fund (CIIF) companies, for the transport of
coconut oil in bulk through MT Transasia. The majority
shareholdings of these CIIF companies are owned by the United
Coconut Planters Bank (UCPB) as administrator of the CIIF. Under
the terms of the contract, either party could terminate the agreement
provided a three (3)-month advance notice was given to the other
party. How-

231

VOL. 331, APRIL 27, 2000 231

Leyson, Jr. vs. Office of the Ombudsman

ever, in August 1996, or prior to the expiration of the contract, the

CIIF companies with their new President, respondent Oscar A.
Torralba, terminated the contract without the requisite advance
notice. The CIIF companies engaged the services of another vessel,
MT Marilag, operated by Southwest Maritime Corporation.
On 11 March 1997 petitioner Manuel M. Leyson, Jr., Executive
Vice President of ITTC, filed with public respondent Office of the
Ombudsman a grievance case against respondent Oscar A. Torralba.
The following is a summary of the irregularities and corrupt
practices allegedly committed by respondent Torralba: (a) breach of
contract—unilateral cancellation of valid and existing contract; (b)
bad faith—falsification of documents and reports to stop the
operation of MT Transasia; (c) manipulation—influenced their
insurance to disqualify MT Transasia; (d) unreasonable denial of
requirement imposed; (e) double standards and inconsistent in favor
of MT Marilag; (f) engaged and entered into a contract with
Southwest Maritime Corp. which is not the owner of MT Marilag,
where liabilities were waived and whose paid-up capital is only
P250,000.00; and, (g) overpricing1 in the freight rate causing losses
of millions of pesos to Cocochem.
On 2 January 1998 petitioner charged respondent Tirso
Antiporda, Chairman of UCPB and CIIF Oil Mills, and respondent
Oscar A. Torralba with violation of The Anti-Graft and Corrupt
Practices Act also before the Ombudsman anchored on the
aforementioned alleged irregularities and corrupt practices.
On 30 January 1998 public respondent dismissed the complaint
based on its finding that—

The case is a simple case of breach of contract with damages which should
have been filed in the regular court. This Office has no jurisdiction to
determine the legality or validity of the termination of the contract entered
into by CIIF and ITTC. Besides the entities

_______________

1 Rollo, pp. 21-22.

232

232 SUPREME COURT REPORTS ANNOTATED

Leyson, Jr. vs. Office of the Ombudsman

involved are 2
private corporations (over) which this Office has no
jurisdiction.

On 4 June 1998 reconsideration of the dismissal of the complaint

was denied. The Ombudsman was unswayed in his finding that the
present controversy involved breach of contract as he also took into
account the circumstance that petitioner had already filed a
collection case before the Regional Trial Court of Manila-Br. 15,
docketed as Civil Case No. 97-83354. Moreover, the Ombudsman
found that the filing of the motion for reconsideration on 31 March
1998 was beyond the inextendible period of five 3
(5) days from
notice of the assailed resolution on 19 March 1998.
Petitioner now imputes grave abuse of discretion on public
respondent in dismissing his complaint. He submits that inasmuch as
Philippine
4
Coconut Producers Federation, 5
Inc. (COCOFED) v.
PCGG and Republic v. Sandiganbayan have declared that the
coconut levy funds
6
are public funds then, conformably with Quimpo
v. Tanodbayan, corporations formed and organized from those funds
or whose controlling stocks are from those funds should be regarded
as government owned and/or controlled corporations. As in the
present case, since the funding or controlling interest of the
companies being headed by private respondents was given or owned
by the CIIF7
as shown in the certification of their Corporate
Secretary, it follows that they are government owned and/or
controlled corporations. Corollarily. petitioner asserts that
_______________

2 Resolution of Graft Investigation Officer II David B. Corpuz approved by

Director Angel C. Mayoralgo, Assistant Ombudsman Abelardo L. Aportadera and
Ombudsman Aniano A. Desierto; Rollo, p. 22.
3 Rollo, pp. 56-57.
4 G.R. No. 75713, 2 October 1989, 178 SCRA 236.
5 G.R. No. 96073, 16 February 1993, En Banc Resolution.
6 G.R. No. 72553, 2 December 1986, 146 SCRA 137.
7 Annexes, “K,” “L” to “L-l,” and “M” to “M-1” of Petition; Rollo, pp. 80-84.

233

VOL. 331, APRIL 27, 2000 233

Leyson, Jr. vs. Office of the Ombudsman

respondents Antiporda and Torralba are public officers subject to the

jurisdiction of the Ombudsman.
Petitioner alleges next that public respondent’s conclusion that
his complaint refers to a breach of contract is whimsical, capricious
and irresponsible amounting to a total disregard of its main point,
i.e., whether private respondents violated The Anti-Graft and
Corrupt Practices Act when they entered into a contract with
Southwest Maritime Corporation which was grossly
disadvantageous to the government in general and to the CIIF in
particular. Petitioner admits that his motion for reconsideration was
filed out of time. Nonetheless, he advances that public respondent
should have relaxed its rules in the paramount interest of justice;
after all, the delay was just a matter of days and he, a layman not
aware of technicalities, personally filed the complaint.
Private respondents counter that the CIIF companies were duly
organized and are existing by virtue of the Corporation Code. Their
stockholders are private individuals and entities. In addition, private
respondents contend that they are not public officers as defined
under The Anti-Graft and Corrupt Practices Act but are private
executives appointed by the Boards of Directors of the CIIF
companies. They asseverate that petitioner’s motion for
reconsideration was filed through the expert assistance of a learned
counsel. They then charge petitioner with forum shopping since he
had similarly filed a case for collection of a sum of money plus
damages before the trial court.
The Office of the Solicitor General maintains that the
Ombudsman approved the recommendation of the investigating
officer to dismiss the complaint because he sincerely believed there
was no sufficient basis for the criminal indictment of private
respondents.
We find no grave abuse of discretion committed by the
Ombudsman. COCOFED v. PCGG referred to in Republic v.
Sandiganbayan reviewed the history of the coconut levy funds.
These funds actually have four (4) general classes: (a)

234

234 SUPREME COURT REPORTS ANNOTATED

Leyson, Jr. vs. Office of the Ombudsman
8
the Coconut Investment Fund created under R.A. No. 6260; (b) the9
Coconut Consumers Stabilization Fund created under P.D. No. 276;
(c) the
10
Coconut Industry Development Fund created under P.D. No.
582; and, (d) the
11
Coconut Industry Stabilization Fund created under
P.D. No. 1841.
The various laws relating to the coconut industry
12
were codified in
1976. On 21 October of that year, P.D. No. 961 was 13
promulgated.
On 11 June 1978 it was amended by P.D. No. 1468 by inserting a
new provision authorizing the use of the balance of the Coconut
Industry Development Fund for the acquisition of “shares of stocks
in corporations organized for the purpose of engaging in the
establishment and operation of industries x x x commercial activities
and other allied business
14
undertakings relating to coconut and other
palm oil industries).” From this fund thus created, or the CIIF,
shares of stock in what have come to be known as the “CIIF
companies” were purchased.
We then stated in COCOFED that the coconut levy funds were
raised by the State’s police and taxing powers such that the
utilization and proper management thereof were certainly the
concern of the Government. These funds have a public character and
are clearly affected with public interest.
Quimpo v. Tanodbayan involved the issue as to whether
PETROPHIL was a government owned or controlled corporation the
employees of which fell within the jurisdictional purview of the
Tanodbayan for purposes of The Anti-Graft and Corrupt Practices
Act. We upheld the jurisdiction of the Tanodbayan on the
ratiocination that—

_______________

8 Effective 19 June 1971.

9 Effective 20 August 1973.
10 Effective 14 November 1974.
11 Effective 2 October 1981.
12 Coconut Industry Code.
13 Revised Coconut Industry Code.
14 Sec. 9, PD No. 1468.

235
 VOL. 331, APRIL 27, 2000 235
Leyson, Jr. vs. Office of the Ombudsman

While it may be that PETROPHIL was not originally “created” as a

government-owned or controlled corporation, after it was acquired by
PNOC, which is a government-owned or controlled corporation,
PETROPHIL became a subsidiary of PNOC and thus shed-off its private
status. It is now funded and owned by the government as, in fact, it was
acquired to perform functions related to government programs and policies
on oil, a vital commodity in the economic life of the nation. It was acquired
not temporarily but as a permanent adjunct to perform essential government
or government-related functions, as the marketing arm of the PNOC to
assist the latter in selling and distributing oil and petroleum products to
assure and maintain an adequate and stable domestic supply.

But these jurisprudential rules invoked by petitioner in support of his

claim that the CIIF companies are government owned and/or
controlled corporations are incomplete without resorting to the
definition of “government owned or controlled corporation”
contained in par. (13), Sec. 2, Introductory Provisions of the
Administrative Code of 1987, i.e., any agency organized as a stock
or non-stock corporation vested with functions relating to public
needs whether governmental or proprietary in nature, and owned by
the Government directly or through its instrumentalities either
wholly, or, where applicable as in the case of stock corporations, to
the extent of at least fifty-one (51) percent of its capital stock. The
definition mentions three (3) requisites, namely, first, any agency
organized as a stock or non-stock corporation; second, vested with
functions relating to public needs whether governmental or
proprietary in nature; and, third, owned by the Government directly
or through its instrumentalities either wholly, or, where applicable as
in the case of stock corporations, to the extent of at least fifty-one
(51) percent of its capital stock.
In the present case, all three (3) corporations comprising the CIIF
companies were organized as stock corporations. The UCPB-CIIF
owns 44.10% of the shares of LEGASPI OIL, 91.24% of the shares
of GRANEXPORT,15
and 92.85% of the shares of UNITED
COCONUT. Obviously, the below 51%

_______________

15 See Note 7.

236

236 SUPREME COURT REPORTS ANNOTATED

Leyson, Jr. vs. Office of the Ombudsman
shares of stock in LEGASPI OIL removes this firm from the
definition of a government owned or controlled corporation. Our
concern has thus been limited to GRANEXPORT and UNITED
COCONUT as we go back to the second requisite. Unfortunately, it
is in this regard that petitioner failed to substantiate his contentions.
There is no showing that GRANEXPORT and/or UNITED
COCONUT was vested with functions relating to public needs
whether governmental or proprietary in nature unlike PETROPHIL
in Quimpo. The Court thus concludes that the CIIF companies are,
as found by public respondent, private corporations not within the
scope of its jurisdiction.
With the foregoing conclusion, we find it unnecessary to resolve
the other issues raised by petitioner.
A brief note on private respondents’
16
charge of forum shopping.
Executive Secretary v. Gordon is instructive that forum shopping
consists of filing multiple suits involving the same parties for the
same cause of action, either simultaneously or successively, for the
purpose of obtaining a favorable judgment. It is readily apparent that
the present charge will not prosper because the cause of action
herein, i.e., violation of The Anti-Graft and Corrupt Practices Act, is
different from the cause of action in the case pending before the trial
court which is collection of a sum of money plus damages.
WHEREFORE, the petition is DISMISSED. The Resolution of
public respondent Office of the Ombudsman of 30 January 1998
which dismissed the complaint of petitioner Manuel M. Leyson, Jr.,
as well as its Order of 4 June 1998 denying his motion for
reconsideration, is AFFIRMED. Costs against petitioner.
SO ORDERED.

Mendoza, Quisumbing, Buena and De Leon, Jr., JJ., concur.

_______________

16 G.R. No. 134171, 18 November 1998, 298 SCRA 736.

237

VOL. 331, APRIL 28, 2000 237

Philippine Aeolus Automotive United Corporation vs. NLRC

Petition dismissed, resolution affirmed.

Notes.—Even vested rights may be taken away by the State in

the exercise of its absolute police power. (Atok BigWedge Mining
Company vs. Intermediate Appellate Court, 261 SCRA 528 [1996])
As a general rule, the power to tax is an incident of sovereignty
and is unlimited in its range, acknowledging in its very nature no
limits, so that security against its abuse is to be found only in the
 responsibility of the legislature which imposes the tax on the
constituency who are to pay it. (Mactan Cebu International Airport
Authority vs. Marcos, 261 SCRA 667 [1996])

——o0o——

© Copyright 2019 Central Book Supply, Inc. All rights reserved.