Case Summary (G.R. No. 145222)
Statutory Provision at Issue
Section 4 of Act No. 2705, as amended by §2 of Act No. 2822, declared that “the voting power of all stock owned by the Government of the Philippine Islands shall be vested exclusively in a committee consisting of the Governor-General, the President of the Senate, and the Speaker of the House of Representatives.” The Government subscribed over 99% of the Company’s 30,000 shares, making this committee determinative of director elections.
Executive Order No. 37 and Stockholders’ Meeting
On November 9, 1926, Executive Order No. 37—citing opinions of the U.S. Army Judge Advocate General and U.S. Attorney-General—held the legislative presiders’ participation in such committees null under the Organic Act and vested all voting power in the Governor-General alone. Despite notice, the Senate President and House Speaker met on November 29 to resolve how Government shares should be voted at the December 6 special shareholders’ meeting. Both the Governor-General’s representative and the legislative presiders appeared at that meeting, cast conflicting ballots, and the Chairman recognized the legislative vote, electing Springer, Costas, and Hilario.
Procedural Posture and Quo Warranto Invocation
The Government filed an original quo warranto to oust the defendants from their directorships and to substitute Government-slate directors (Agcaoili, Heath, Lagdameo). The trial demurred, admitting the material facts. The Court’s task was purely legal: whether the legislative presiders’ role in voting Government stock was constitutional under the Organic Act and related laws.
Organic Act’s Separation of Powers and Executive Authority
Under the Organic Act of 1916, all “supreme executive power” is vested in the Governor-General (secs. 21–22). Executive functions must be “directly under the Governor-General” or within departments he supervises. The Act confers “general supervision and control” over government agencies and charges him with “faithful execution of the laws.” Legislative power is separately vested in the Philippine Legislature, subject to congressional approval and review; it has no authority to execute laws.
Nature of the Voting Committee and the Offices Involved
The Court held that membership in the voting committee constitutes a public office and that voting Government-owned shares in an instrumentality created by the Legislature is an executive function—part of administering government property and fulfilling statutory duties. Such functions cannot be delegated to the Legislature or its members without violating the Organic Act’s separation-of-powers mandate.
Severability and Enforcement of §4’s Valid Portion
Applying severability principles, the Court struck from §4 the provision naming the Senate President and House Speaker, leaving intact the Legislature’s valid corporate-formation provision and vesting Government stock voting power solely in the Governor-General. The Judiciary will “read the statute as if the unconstitutional provision was not there,” so long as the remaining text effectuates legislative intent (promoting coal development).
Majority Judgment and Relief Granted
The Court overruled the demurrer, declared the legislative presiders’ participation unconstitutional, and granted quo warranto
...continue readingCase Syllabus (G.R. No. 145222)
Factual Background and Origin of Action
- The Government of the Philippine Islands brought an original quo warranto action against three directors of the National Coal Company—Milton E. Springer, Dalmacio Costas, and Anselmo Hilario—challenging their right to hold office.
- Under Act No. 2705, as amended by Act No. 2822, the Government owned over 99% of the Company’s 30,000 shares and the charter provided that “the voting power of all such stock owned by the Government of the Philippine Islands shall be vested exclusively in a committee consisting of the Governor-General, the President of the Senate, and the Speaker of the House of Representatives.”
- Executive Order No. 37 (Nov. 9, 1926) declared invalid the legislative creation of “voting committees” or “boards of control” over Government-owned corporate stock and announced that the Governor-General would thereafter exercise those voting powers alone.
Special Stockholders’ Meeting and Conflict
- A special shareholders’ meeting was called for December 6, 1926, to elect directors of the National Coal Company.
- Prior to that meeting, on November 29, the Senate President and House Speaker (as two members of the committee) requested the Governor-General to convene the committee; he declined.
- At the shareholders’ meeting, the Governor-General’s representative asserted sole voting power; the Senate President and House Speaker attempted to vote Government stock on behalf of the committee and filed certified minutes.
- Mutual protests ensued, the chair recognized the legislative members’ ballot, electing Alberto Barretto, Milton E. Springer, Dalmacio Costas, Anselmo Hilario, and Frank B. Ingersoll; the Governor-General’s ballot for an alternative slate was rejected.
Organization of the Newly Elected Board
- Immediately after the shareholders’ meeting, the persons declared elected by the chair met to organize the board of directors.
- All five directors from the Senate/Speaker slate, including defendants Springer, Costas, and Hilario, participated in that organization meeting and assumed their seats.
Issues Presented
- Does the participation of the Senate President and House Speaker in voting Government-owned corporate stock invade the exclusive executive authority of the Governor-General under the Organic Act and Administrative Code?
- Is so much of section 4 of Act No. 2705, as amended by sect