G.R. No. 166355 ; May 30, 2011
PEOPLE OF THE PHILIPPINES, Petitioner, vs. LUIS J. MORALES, Respondent.

FACTS

On June 13, 1991, President Corazon Aquino issued Administrative Order No. 223 creating the Committee for the National Centennial Celebrations in 1998. In 1993, President Fidel V. Ramos issued Executive Order No. 128, reconstituting and renaming it as the National Centennial Commission (NCC). On March 10, 1996, the NCC and the Bases Conversion Development Authority (BCDA) organized the Philippine Centennial Expo ’98 Corporation (Expocorp) to operate the Philippine Centennial International Exposition 1998 (Expo ‘98). The project was later investigated for alleged anomalies. In 2001, the Office of the Ombudsman filed an Information against respondent Luis J. Morales, the acting president of Expocorp, for violation of Section 3(e) of Republic Act No. 3019 (Anti-Graft and Corrupt Practices Act). The charge alleged that Morales, in evident bad faith and manifest partiality, sold an Expocorp-owned Mercedes Benz to Rodolfo M. Lejano without public bidding or board approval and failed to deposit the proceeds to Expocorp’s account. Before the Sandiganbayan, Morales moved to dismiss the case, arguing that Expocorp is a private corporation, he is not a public officer, and the Sandiganbayan thus lacks jurisdiction over his person and the offense. The prosecution contended that Expocorp is a government-owned corporation, noting that BCDA initially held the vast majority of its subscribed capital stock, and that Morales, appointed by NCC Chairman Salvador Laurel (a public officer), was likewise a public officer. Morales countered that after incorporation, Global Clark Assets Corporation subscribed to most of the unissued shares, making it the majority (55.16%) stockholder and reducing BCDA to a minority (44.84%) holder, thereby privatizing Expocorp. The Sandiganbayan dismissed the Information, ruling that Expocorp is a private corporation organized under the Corporation Code, not by special law, and its officers are private individuals outside its jurisdiction. The Sandiganbayan denied the prosecution’s motion for reconsideration, prompting the present petition.

ISSUE

Whether the Sandiganbayan correctly dismissed the Information on the ground that it lacks jurisdiction over respondent Luis J. Morales, specifically: (1) whether Expocorp is a public office or a government-owned or controlled corporation whose president is a public officer; and (2) consequently, whether Morales, as president of Expocorp, is a “public officer” falling under the jurisdiction of the Sandiganbayan.

RULING

The Supreme Court DENIED the petition and AFFIRMED the Sandiganbayan’s dismissal of the case for lack of merit. The Court held that Expocorp is a private corporation. It was not created by a special law but was incorporated under the Corporation Code and registered with the Securities and Exchange Commission. While the Bases Conversion Development Authority (BCDA) was an original incorporator and held a significant number of shares, the subsequent subscription by Global Clark Assets Corporation to unissued shares made Global the majority stockholder (55.16%), reducing BCDA to a minority holder (44.84%). Under the Revised Administrative Code of 1987, a government-owned or controlled corporation requires that either the Government owns at least a majority of the capital stock, or it is created by special law. Expocorp met neither condition. The Court also rejected the argument that Expocorp was an extension of the National Centennial Commission (NCC) performing sovereign functions. The Court distinguished the case from Salvador H. Laurel v. Aniano A. Desierto, which held that NCC Chairman Laurel was a public officer because the NCC performed executive functions. That ruling pertained solely to Laurel’s capacity as NCC Chairman, not to Expocorp’s nature or its other officers. Morales was charged solely as president of Expocorp, not as an NCC official. Since Expocorp is a private corporation, its president is not a public officer as defined under Republic Act No. 3019 . Therefore, the Sandiganbayan correctly ruled that it had no jurisdiction over Morales, a private individual, for the offense charged.