G.R. No. 169752.
September 25, 2007 (Case Brief / Digest)
**Title:** Philippine Society for the Prevention of Cruelty to Animals vs. Commission on
Audit
**Facts:**
The Philippine Society for the Prevention of Cruelty to Animals (PSPCA) was incorporated
over a century ago, via Act No. 1285, enacted on January 19, 1905, by the Philippine
Commission. Its initial powers included enforcing animal welfare laws and sharing fines
imposed for violations. Subsequent legislation and executive action, however, curtailed
these powers.
In 2003, the Commission on Audit (COA) sought to audit PSPCA, positing that it fell under
its jurisdiction. PSPCA refuted, asserting its status as a private entity, thus outside COA’s
audit scope. When COA, through successive assessments and a formal memorandum,
maintained its stance, PSPCA escalated the dispute to the Supreme Court, arguing COA’s
overreach.
**Issues:**
1. Whether PSPCA, having been created by a special act predating the Corporation Law and
the 1935 Constitution, qualifies as a government agency subject to COA’s audit jurisdiction.
2. The application of the “charter test” in determining PSPCA’s nature as a public or private
corporation.
3. The implications of amendments to PSPCA’s charter and related executive orders on its
governmental or private status.
4. The relevance of PSPCA’s operational funding, employee benefits system, and reportorial
requirements in defining its character.
**Court’s Decision:**
The Supreme Court sided with PSPCA, ruling it as a private domestic corporation, thereby
outside COA’s jurisdiction. The Court reasoned:
1. The “charter test” does not apply retroactively to PSPCA’s creation; thus, its special
legislative incorporation does not inherently make it a government agency.
2. Amendments and executive orders have clarified PSPCA’s function as non-governmental,
stripping it of governmental powers and altering its funding aspects.
3. Operational indicators, e.g., SSS coverage for employees and independence in corporate
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G.R. No. 169752. September 25, 2007 (Case Brief / Digest)
governance, support PSPCA’s private status.
4. The mandate for PSPCA to submit periodic reports does not denote governmental
function, as such requisites apply to both public and private entities for regulatory
compliance.
**Doctrine:**
This case reiterates the principle that the legal nature of an entity, as a government agency
or private corporation, can be determined through a combination of legislative intent,
historical functions, and operational indicators, rather than solely by the “charter test”.
**Class Notes:**
– **”Charter Test” Applicability:** Not all entities formed via special legislation are public
corporations; historical context and operational attributes matter.
– **Retroactivity of Laws:** New constitutional or legal frameworks do not automatically
apply to pre-existing entities unless explicitly stated or clearly implied.
– **Public vs. Private Corporations:** A corporation’s obligation to report to government
offices or its public-interest service does not, in themselves, make it a government agency.
– **Quasi-Public Corporations:** Entities serving the public good but governed, funded, and
operated independently of government control are considered private corporations with
public functions.
**Historical Background:**
PSPCA’s evolution from a legislatively established entity with governmental powers to its
recognition as a private corporation underscores the shifting boundaries between public
administrative responsibilities and private advocacy roles in governance. This transition,
precipitated by legislative and executive actions across different political eras, highlights
the dynamic nature of legal classifications in response to evolving governance structures
and societal values concerning animal welfare.
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