PHILIPPINE SOCIETY FOR THE with special charters are government corporations

PREVENTION OF CRUELTY TO ANIMALS subject to its provisions, and its employees are under the
vs. COA. G.R. No. 169752 September 25, jurisdiction of the CSC, and are compulsory members of
2007 the GSIS.
And since the “charter test” had been introduced by the
1935 Constitution and not earlier, it follows that the test
FACTS:
cannot apply to the petitioner, which was incorporated
by virtue of Act No. 1285, enacted on January 19, 1905.
The petitioner was incorporated as a juridical entity over Settled is the rule that laws in general have no
one hundred years ago by virtue of Act No. 1285, retroactive effect, unless the contrary is provided.  All
enacted on January 19, 1905, by the Philippine statutes are to be construed as having only a prospective
Commission.  The petitioner, at the time it was created, operation, unless the purpose and intention of the
was composed of animal aficionados and animal legislature to give them a retrospective effect is
propagandists.  The objects of the petitioner, as stated in expressly declared or is necessarily implied from the
Section 2 of its charter, shall be to enforce laws relating language used.  In case of doubt, the doubt must be
to cruelty inflicted upon animals or the protection of resolved against the retrospective effect.  
animals in the Philippine Islands, and generally, to do         Second, a reading of petitioner’s charter shows that
and perform all things which may tend in any way to it is not subject to control or supervision by any agency
alleviate the suffering of animals and promote their of the State, unlike GOCCs.  No government
welfare.   representative sits on the board of trustees of the
At the time of the enactment of Act No. 1285, the petitioner.  Like all private corporations, the successors
original Corporation Law, Act No. 1459, was not yet in of its members are determined voluntarily and solely by
existence.  Act No. 1285 antedated both the Corporation the petitioner in accordance with its by-laws, and may
Law and the constitution of the SEC. exercise those powers generally accorded to private
For the purpose of enhancing its powers in promoting corporations, such as the powers to hold property, to sue
animal welfare and enforcing laws for the protection of and be sued, to use a common seal, and so forth.  It may
animals, the petitioner was initially imbued under its adopt by-laws for its internal operations: the petitioner
charter with the power to apprehend violators of animal shall be managed or operated by its officers “in
welfare laws.  In addition, the petitioner was to share 1/2 accordance with its by-laws in force.”  
of the fines imposed and collected through its efforts for         Third.  The employees of the petitioner are
violations of the laws related thereto.            registered and covered by the SSS at the latter’s
Subsequently, however, the power to make arrests as initiative, and not through the GSIS, which should be the
well as the privilege to retain a portion of the fines case if the employees are considered government
collected for violation of animal-related laws were employees.  This is another indication of petitioner’s
recalled by virtue of C.A. No. 148. Whereas, the cruel nature as a private entity.  
treatment of animals is now an offense against the State,         Fourth.  The respondents contend that the petitioner
penalized under our statutes, which the Government is is a “body politic” because its primary purpose is to
duty bound to enforce; secure the protection and welfare of animals which, in
When the COA was to perform an audit on them they turn, redounds to the public good. This argument, is not
refuse to do so, by the reason that they are a private tenable.  The fact that a certain juridical entity is
entity and not under the said commission. It argued that impressed with public interest does not, by that
COA covers only government entities. On the other hand circumstance alone, make the entity a public corporation,
the COA decided that it is a government entity. inasmuch as a corporation may be private although its
charter contains provisions of a public character,
ISSUE: WON the said petitioner is a private entity. incorporated solely for the public good.  This class of
corporations may be considered quasi-public
corporations, which are private corporations that render
RULING: public service, supply public wants, or pursue other
eleemosynary objectives.  While purposely organized for
YES. First, the Court agrees with the petitioner that the the gain or benefit of its members, they are required by
“charter test” cannot be applied.   Essentially, the law to discharge functions for the public benefit.
“charter test” provides that the test to determine whether Examples of these corporations are utility, railroad,
a corporation is government owned or controlled, or warehouse, telegraph, telephone, water supply
private in nature is simple. Is it created by its own corporations and transportation companies.  It must be
charter for the exercise of a public function, or by stressed that a quasi-public corporation is a species of
incorporation under the general corporation law? Those private corporations, but the qualifying factor is the type
of service the former renders to the public: if it performs
a public service, then it becomes a quasi-public
corporation.
Authorities are of the view that the purpose alone of the
corporation cannot be taken as a safe guide, for the fact
is that almost all corporations are nowadays created to
promote the interest, good, or convenience of the public.
A bank, for example, is a private corporation; yet, it is
created for a public benefit.  Private schools and
universities are likewise private corporations; and yet,
they are rendering public service.  Private hospitals and
wards are charged with heavy social responsibilities.
More so with all common carriers.  On the other hand,
there may exist a public corporation even if it is
endowed with gifts or donations from private
individuals.  
The true criterion, therefore, to determine whether a
corporation is public or private is found in the totality of
the relation of the corporation to the State.  If the
corporation is created by the State as the latter’s own
agency or instrumentality to help it in carrying out its
governmental functions, then that corporation is
considered public; otherwise, it is private.  Applying the
above test, provinces, chartered cities, and barangays can
best exemplify public corporations.  They are created by
the State as its own device and agency for the
accomplishment of parts of its own public works.
        Fifth.  The respondents argue that since the charter
of the petitioner requires the latter to render periodic
reports to the Civil Governor, whose functions have been
inherited by the President, the petitioner is, therefore, a
government instrumentality.  
        This contention is inconclusive.  By virtue of the
fiction that all corporations owe their very existence and
powers to the State, the reportorial requirement is
applicable to all corporations of whatever nature,
whether they are public, quasi-public, or private
corporations—as creatures of the State, there is a
reserved right in the legislature to investigate the
activities of a corporation to determine whether it acted
within its powers.  In other words, the reportorial
requirement is the principal means by which the State
may see to it that its creature acted according to the
powers and functions conferred upon it.