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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.

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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
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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

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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.

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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
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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-
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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

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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) overpricing in the
freight rate
1
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.

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232 SUPREME COURT REPORTS ANNOTATED

Leyson, Jr. vs. Office of the Ombudsman

involved are2 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
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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 (5) days 3
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 Coconut 4
Producers Federation,
Inc. (COCOFED)5
v. PCGG and Republic v.
Sandiganbayan have declared that the coconut levy funds
are public funds
6
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
CIIF as shown
7
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.

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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
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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

the Coconut
8
Investment Fund created under R.A. No.
6260; (b) the Coconut Consumers9
Stabilization Fund
created under P.D. No. 276; (c) the Coconut10 Industry
Development Fund created under P.D. No. 582; and, (d)
the Coconut Industry
11
Stabilization Fund created under
P.D. No. 1841.
The various laws relating to the coconut industry were 12
codified in 1976. On 21 October of that year, P.D. No. 961
was promulgated.
13
On 11 June 1978 it was amended by P.D.
No. 1468 by inserting a new provision authorizing the use
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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
14
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.

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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

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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.

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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
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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

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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——

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