LEYSON v.

OFFICE OF THE OMBUDSMAN

G.R No. 134990, April 27, 2000 

Facts:

 International Towage and Transport Corporation (ITTC), a domestic corporation eNgaged in the
lighterage or shipping business, entered into a 1-year contract with:
 Legaspi il Company, Inc! (L"#$%&I IL)
 #rane'port anuacturing Corporation (#*$N"+&*T) and
 nited Coconut Chemicals (NIT" CCNT),
or the transport o coconut oil in bul. through T T*$N%$%I$!

 C&/ owns the ma0ority shareholdings o these CI companies!

 nder the contract, either party could terminate the agreement pro2ided a three-month ad2ance notice
was gi2en to the other party!

 3owe2er, prior to the e'piration o the contract, the CI companies with their new &resident, scar
Torralba, terminated the contract 4IT3T the re5uisite ad2ance notice!

 The CI companies engaged the ser2ices o another 2essel, T arilag, operated by %outhwest
aritime Corporation!

 Leyson, "'ecuti2e 6& o ITTC, iled with ice o the mbudsman a grie2ance case against scar
Torralba alleging the ollowing:
o breach o contract - unilateral cancellation o 2alid and e'isting contract7
o bad aith - alsiiaction o documents and reports to stop the operation o T Transasia7
o manipulation - inluenced their insurance to dis5ualiy T Transasia7
o unreasonable denial o re5uirement imposed7
o double standards and inconsistent in a2or o T arilag7
o engaged and entered into a contract with %outhwest aritime Corp! which is not the owner o
T arilag7 and
o o2erpricing in the reight rate causing losses o millions o pesos to Cocochem!

  $lso, Leyson
Leyson charged
charged $ntiporda
$ntiporda (Chairman o
o C&/ and
and CI il ills) and To
Torralba with 2iolation o
o
The $nti-#rat and Corrupt &ractices $ct beore the mbudsman alleging the aoresaid irregularities
and corrupt practices!

 OMBUDSMAN:
 I%I%%" the complaint based on the inding that the case was a simple breach o contract with
damaged which should ha2e been iled in the regular court!
 It said that the oice has N 0urisdiaction to determine the legality or 2alidity o the termination o
the contract entered into by CI and ITTC!
 The entities in2ol2ed are pri2ate corporations o2er which the mbudsman has no 0urisdiction!

 Petitioner's contentions:
 coconut le2y unds are public unds and that corporations ormed and organi8ed rom those unds
or whose controlling stoc.s are rom those unds should be regarded as go2ernment and9or
controlled corporations! %ince the unding or controlling interest o the companies being headed by
pri2ate respondents was gi2en or owned by the CI, it ollows that they are go2ernment and9or
controlled corporations!
 &etitioner also asserts that respondents $ntiporda and Torralba are public oicers sub0ect to the
 0urisdiction o
o the mbudsman!
mbudsman!
 3e also asserts that the respondents conclusion that his complaint reers to a breach o contract is
whimsical, capricious and irresponsible amounting to total disregard o its main point as to whether
respondents 2iolated the $nti-grat and Corrupt &ractices $ct when they entered into a contract with
%outhwest aritime Corporation which was grossly disad2antageous to the go2ernment in general
and to CI in particular!
  es!on"ents' contentions:
 CI companies were duly organi8ed and are e'isting by 2irtue o the Corporation Code! Their
stoc.holders are pri2ate indi2iduals and entities!
 They are not public oicers as deined under The $nti-grat and Corrupt &ractices $ct but are
pri2ate e'ecuti2es appointed by the /oard o irectors o the CI companies!

Iss#e:
 4hether or not the mbudsman committed gra2e abuse o discretion! --N

He$":

PETITION DISMISSED.

 Definition of "government owned or controlled corportion"  contained in par! (1;), %ec! <,

Introductory &ro2isions o the $dministrati2e Code o 1=>?, i! e!, any agency organi8ed as a stoc. or
non-stoc. corporation 2ested with unctions relating to public needs whether go2ernmental or
proprietary in nature, and owned by the #o2ernment directly or through its instrumentalities either
wholly, or, where applicable as in the case o stoc. corporations, to the e'tent o at least ity-one (@1)
percent o its capital stoc.!

 The deinition mentions t%ree &( re)#isites, namely:

1! any agency organi8ed as a stoc. or non-stoc. corporation7
<! 2ested with unctions relating to public needs whether go2ernmental or proprietary in nature7 and,
;! owned by the #o2ernment directly or through its instrumentalities either wholly, or, where applicable
as in the case o stoc. corporations, to the e'tent o at least ity-one (@1) percent o its capital
stoc.!

 In the present case, all three (;) corporations comprising the CII companies were organi8ed as stoc.
corporations:
 The C&/-CII owns AA!1B o the shares o L"#$%&I IL, =1!<A o the shares o
#*$N"+&*T, and =<!>@ o the shares o NIT" CCNT!
 b2iously, the below @1 shares o stoc. in L"#$%&I IL remo2es this irm rom the deinition
o a go2ernment owned or controlled corporation!
 ur concern has thus been limited to #*$N"+&*T and NIT" CCNT as we go bac. to the
second re5uisite!
 nortunately, it is in this regard that petitioner ailed to substantiate his contentions! There is no
showing that #*$N"+&*T and9 or NIT" CCNT was 2ested with unctions relating to
public needs whether go2ernmental or proprietary in nature unli.e &"T*&3IL in Duimpo!
 The Court thus concludes that the CII companies are, as ound by public respondent, pri2ate
corporations not within the scope o its 0urisdiction!

 4ith the oregoing conclusion, we ind it unnecessary to resol2e the other issues raised by petitioner!
ODOLFO CUENCA v. HON. ATAS* et a$.
G.R. No. 14!214, cto#er $, 2007 

Facts:

 Cuenca was the incorporator, &resident and C" o the then Construction e2elopment Corporation o 
the &hilippines (CC&), now &NCC!

 CC& was granted a ranchise under & 111; to construct, operate and maintain toll acilities o the
North and %outh Lu8on "'pressway!

 In the course o its operation, CC& incurred substantial credit obligations rom both pri2ate and
go2ernment sources! Its unpaid obligations balloned and it became impossible or it to settle its
maturing and o2erdue accounts with vario#s +FIs &+overn,ent Financia$ Instit#tions(  namely:
&N/, /&, NC (National e2elopment Company), #%I%, L$N/$NE, &"L#C (&hilippine "'port
and oreign Loan #uarantee Corporation and Trade and In2estment e2elopment Corporation o the
&hilippines!

 &res! arcos issued Letter o- Instr#ction /01 directing creditor #Is to con2ert into CC&s shares
o the stoc. all o the direct obligations o CC& and those o its wholly-owned subsidiaries, including
but not limited to loans, credits, accrued interests, ees and ad2ances in any currency and direct
obligations o CC& and obligations maturing which were guaranteed by the #I%!

  $ special stoc.holders meeting, presided by Cuenca, was held whereby stoc.holders representing
more than <9; o the outstanding capital stoc. o CC& appro2ed the increase o its authori8ed capital
stoc. rom 1!Fbillion to <!?billion in accordance with LI 1<=@!

 Thus, CC& con2erted some o its obligations to #Is into e5uity!

 Conse5uently, CC& issued common shares to /&, NC, L/&, &"L#C and preerred shares to
&N/ in consideration or the e'tinguishment o some o CC&s outstanding loan obligation to said
#Is, all o which were duly recorded in its corporate boo.s!

 %"C appro2ed the increase o CC&s authori8ed capital stoc., and CC& Certiicate o %toc.s were
issued to #Is!

 Thus, with the implementation o LI 1<=@, #Is became the ma0ority stoc.holders o CC& to the
e'tent o ?B o the authori8ed capital stoc.s!

 CC& was renamed to &NCC to relect the &hilippine #o2ernment stoc.holding and became a
go2ernment-ac5uired asset corporation!

 Conse5uently, the 2arious #Is were gi2en seats in the /oard o irectors o &NCC and participated in
the management o the company!

 eanwhile, pursuant to $dministrati2e rder nos! 1A and FA, /&, &N/, &"#LC and NC transerred
their interests in &NCC to the *epublic o the &hils which in turn con2eyed them to the $sset
&ri2ati8ation Trust ($&T), now the &ri2ati8ation and anagement ice or the disposition to the pri2ate
sector pursuant to the go2ernments pri2ati8ation program!

 ore than a decade ater LI 1<=@ was implemented, Cuenca iled a complaint beore the %"C to
determine whether the #Is were registered stoc.holders o &NCC and the number o shares held by
each o them and to compel &NCC to call and hold regular stoc.holders meeting and election o
directors e2ery year!

 Cuenca a2erred that while &NCC issued the certiicates o stoc.s to the #Is pursuant to LI 1<=@, the
#Is, howe2er, reused to cancel and ne2er did cancel the loan in their boo.s as payment or the
 shares issued in their names by &NCC as they considered it to be diminution o the 2alue o their
in2estments!
 3e claimed that some o the #Is reused to accept deli2ery o the stoc. certiicates rom &NCC while
others were not e2en aware o the issuance o the certiicates o stoc. in their names!

 Conse5uently, #Is continued to charge and recei2e payments or their loan and interest charges rom
&NCC though these loans were supposed to ha2e been con2erted into common stoc. pursuant to LI
1<=@!

 Cuenca iled beore the %"C an rgent $pplication or Temporary *estraining rder and 4rit o
&reliminary In0unction see.ing to en0oin &NCC rom allowing the #Is to 2ote their shares o stoc. in
&NCC or rom e'ercising any right arising rom the shares!

 %"C granted petition o urgent T*!

 Cuenca iled a third amended complaint beore the *TC a.ati City or enorcement and strict
compliance with LI 1<=@7
o cancellation o all penalties, interest and surcharges7
o en0oinment o the #Is rom recei2ing any real or personal properties rom &NCC7 and
o cancellation o the trasner o a land co2ered by TCT to $&T!

 %"C granted preliminary in0unction!

 &NCC iled a petition or certiorari beore %"C en banc to re2iew and set aside the %"C orders!
--I%I%%"

 &NCC iled a otion to esignate 3earing &anel on the ground that the instant case would be better
heard and resol2ed by a hearing panel o three than by a sole hearing oicer, considering the interests
the &hilippine #o2ernment holds in &NCC through the #Is! --#*$NT"!

 %"C designated the ollowing as hearing oicers: $tas, abrero, Lobigas!

 Hearin2 Pane$ Decision: dismissed Cuencas complaint or lac. o merit and re2o.ing the writ o
preliminary in0unction issued!
 it ound that the e2idence presented by &NCC and #Is constituted substantial proo o the
implementation o LI 1<=@!
 it reasoned that not only did &NCC issue the shares o stoc. but such act was corrobated by
Ca2al %ecurities *egistry, Inc! (&NCC stoc. transer agent)
 prior to the iling o the instant case, #Is ha2e been nominating their representati2es to
&NCCs /oard o irectors which is an attribute o ownership o shares o stoc. in &NCC!
 it also too. cogni8ance the eed o Conirmation and %upplement to eed o Conirmation
e'ecuted by the #Is, which erased all doubts on the implementation o the LI 1<=@ by the
con2ersion o the #Is loan recei2ables rom &NCC into latters e5uity!
 it ound the pieces o e2idence presented by Cuenca to be inconse5uential and insuicient to
o2erthrow the weight o the e2idence presented by respondents that a con2ersion o &NCCs
debt into e5uity was implemented!

 SEC EN BANC: airmed decision o 3earing &anel

 CA: dismissed petition o Cuenca

Iss#e3s:
 4hether or not Cuenca was denied due process!

He$":

&"TITIN I%I%%"!

N D%N&A' ( D)% *R+% 

  The re5uirements spelled in $ng Tibay ha2e been complied with!

(&ND&NG ( (A+- ( AD&N&-RA-&/% D&% A++RD%D (&NA'&- %N )**R-%D 

)-AN-&A' %/&D%N+%.

 The rule is that the indings o act o administrati2e bodies, i based on substantial e2idence, are
controlling on the re2iewing authority!

 It has been held that it is not or the appellate court to substitute its own 0udgment or that o the
administrati2e agency on the suiciency o the e2idence and the credibility o the witnesses! The
3earing &anel had the optimum opportunity to re2iew the pieces o e2idence presented beore it and to
obser2e the demeanor o the witnesses!

  $dministrati2e decisions on matters within their 0urisdiction are entitled to respect and can only be set
aside on proo o gra2e abuse o discretion, raud, or error o law, which ha2e not been shown by
petitioner in this case!

 It is well-settled that actual indings o administrati2e agencies are generally held to be binding and
inal so long as they are supported by substantial e2idence in the record o the case!

 It is not the unction o this Court to analy8e or weigh all o2er again the e2idence and credibility o
witnesses presented beore the lower court, tribunal, or oice, as we are not a trier o acts! ur
 0urisdiction is limited to re2iewing and re2ising errors o law imputed to the lower court, the latters
indings o act being conclusi2e and not re2iewable by this Court!

 The C$ ound neither re2ersible error nor gra2e abuse o discretion on the part o the %"C en banc in
airming the decision o the %"C %IC 3earing &anel, which was supported by substantial e2idence!
Thus, we ind no reason to rule otherwise!