Philippine Society for the Prevention of Cruelty to Animals

vs Commission on Audit

G.R. No. 169752

September 25, 2007

Facts:

PSPCA was incorporated as a juridical entity by virtue of Act No. 1285 by the Philippine
Commission in order to enforce laws relating to the cruelty inflicted upon animals and for the
protection of and to perform all things which may tend to alleviate the suffering of animals
and promote their welfare.

In order to enhance its powers, PSPCA was initially imbued with (1) power to apprehend
violators of animal welfare laws and (2) share 50% of the fines imposed and collected
through its efforts pursuant to the violations of related laws.

However, Commonwealth Act No. 148 recalled the said powers. President Quezon then
issued Executive Order No. 63 directing the Commission of Public Safety, Provost Marshal
General as head of the Constabulary Division of the Philippine Army, Mayors of chartered
cities and every municipal president to detail and organize special officers to watch, capture,
and prosecute offenders of criminal-cruelty laws.

On December 1, 2003, an audit team from the Commission on Audit visited petitioner’s
office to conduct a survey. PSPCA demurred on the ground that it was a private entity and
not under the CoA’s jurisdiction, citing Sec .2(1), Art. IX of the Constitution (The CoA shall
have the power, authority, and duty to examine, audit, and settle all accounts pertaining to
the revenue and receipts of, and expenditures or uses of funds and property, owned or held
in trust by or pertaining to, the government, or any of its subdivisions, agencies, or
instrumentalities, including government- owned and controlled corporations with original
charters and on a post- audit basis: (a) constitutional bodies, commissions and offices that
have been granted fiscal autonomy under this Constitution; (b) autonomous state colleges
and universities; (c) other government- owned and controlled corporations and their
subsidiaries; and (d) such non- governmental entities receiving subsidy or equity, directly or
indirectly, from or through the Government, which are required by law or the granting
institution to submit to such audit as a condition of subsidy or equity. However, where the
internal control system of the audited agencies is inadequate, the Commission may adopt
such measures, including temporary or special pre-audit, as are necessary and appropriate
to correct the deficiencies. It shall keep the general accounts of the Government and, for
such period as may be provided by law, preserve the vouchers and other supporting papers
pertaining thereto.)

Issue:

Whether or not the PSPCA is subject to CoA’s Audit Authority.

Held:

No.

The charter test cannot be applied. It is predicated on the legal regime established by the
1935 Constitution, Sec.7, Art. XIII. Since the underpinnings of the charter test had been
introduced by the 1935 Constitution and not earlier, the test cannot be applied to PSPCA
which was incorporated on January 19, 1905. Laws, generally, have no retroactive effect
unless the contrary is provided. There are a few exceptions: (1) when expressly provided;
(2) remedial statutes; (3) curative statutes; and (4) laws interpreting others.

None of the exceptions apply in the instant case.

The mere fact that a corporation has been created by a special law doesn’t necessarily
qualify it as a public corporation. At the time PSPCA was formed, the Philippine Bill of 1902
was the applicable law and no proscription similar to the charter test can be found therein.
There was no restriction on the legislature to create private corporations in 1903. The
amendments introduced by CA 148 made it clear that PSPCA was a private corporation, not
a government agency.

PSPCA’s charter shows that it is not subject to control or supervision by any agency of the
State. Like all private corporations, the successors of its members are determined
voluntarily and solely by the petitioner, and may exercise powers generally accorded to
private corporations.

PSPCA’s employees are registered and covered by the SSS at the latter’s initiative and not
through the GSIS.
The fact that a private corporation is impressed with public interest does not make the entity
a public corporation. They may be considered quasi-public corporations which are private
corporations that render public service, supply public wants and pursue other exemplary
objectives. The true criterion to determine whether a corporation is public or private is found
in the totality of the relation of the corporate to the State. It is public if it is created by the
latter’s own agency or instrumentality, otherwise, it is private.