GR 139554; (July, 2006) (Digest)
G.R. No. 139554 & 139565; July 21, 2006
ARMITA B. RUFINO, et al. vs. BALTAZAR N. ENDRIGA, et al. (Consolidated Cases)
FACTS
The controversy involves a quo warranto proceeding between two groups claiming the right to sit as the Board of Trustees of the Cultural Center of the Philippines (CCP). The CCP was created by Presidential Decree No. 15 as a non-municipal public corporation. In December 1998, President Joseph Estrada appointed seven new trustees, the Rufino group, to replace the incumbent Endriga group and others. The Endriga group challenged these appointments, arguing that under Section 6(b) of PD 15, vacancies in the Board should be filled by election by the remaining trustees, not by presidential appointment, unless the entire Board is vacant.
ISSUE
The core issue is the constitutionality of Section 6(b) of PD 15 regarding the manner of filling vacancies in the CCP Board of Trustees, specifically whether the President has the power to appoint trustees to fill vacancies.
RULING
The Supreme Court declared Section 6(b) of PD 15 unconstitutional. The legal logic proceeds from the nature of the CCP as a government-owned or controlled corporation (GOCC) without original charter. PD 15, while creating the CCP, did not constitute it as an “original charter” corporation for purposes of the Civil Service. The Court distinguished between GOCCs created by special law (original charter) and those incorporated under the general corporation law. The CCP, though created by PD 15, is governed in its corporate structure by provisions akin to the Corporation Code, particularly the self-perpetuating method of filling board vacancies.
Consequently, the CCP Board is classified as a private board, and its members are considered private corporate officers, not government employees subject to the President’s appointing power under the Administrative Code. The constitutional power of the President to control executive departments does not extend to controlling private corporations, even if government-owned. Therefore, the provision in PD 15 allowing the President to fill vacancies when the Board is entirely vacant, and by implication the President’s act of appointing the Rufino group, constitutes an unconstitutional encroachment into private corporate governance. The Court upheld the authority of the remaining incumbent trustees to elect successors to fill vacancies, reinstating the Endriga group to their positions.