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LUZON STEVEDORING vs Anti Dummy Board G.R. No. L-26094 August 18, 1972 Anti-Dummy Law applies to partially nationalized corps FACTS Luzon Stevedoring employs non american aliens, Anti Dummy Board claims that this violates Anti Dummy Law, Luzon files a motion for declaratory relief. plaintiff-appellant Luzon Stevedoring Corporation filed a complaint for declaratory relief alleging that it has nine (9) non-American aliens under its employ since long before the decision entitled "Macario King vs. Pedro S. Hernaez", which ruled that aliens other than Americans may not be employed in whatever capacity in any retail business in the Philippine because of Section 1 of Republic Act No. 1180 (Retail Trade Law), in conjunction with Section 2-A of Commonwealth Act No. 108, as amended by Republic Act No. 134; and that defendantappellee Anti-Dummy Board in a letter advised plaintiffappellant that the Secretary of Justice rendered an opinion to the effect that the employment of nonAmerican aliens in public utility corporations is prohibited by Section 2-A of the Anti-Dummy Law; and prays for a judicial construction of the provisions of Section 16(a) of the Public Service Act in relation to Section 2-A of the Anti-Dummy Law, as amended with particular reference to the right of public utility corporations to keep non-American aliens in their employ Luzon Argues that Sec 2-A of Commonwealth Act No. 108 as amended by RA No. 134 comprehends only wholly nationalized businesses and not those partly nationalized. Plaintiff-appellant in launching its main argument that the third predicate in Section 2-A of Commonwealth Act No. 108 as amended by Republic Act No. 134 comprehends only wholly nationalized businesses and excludes those partly nationalized. Plaintiff-appellant further contends that because, unlike in the first two dependent clauses, of the absence of the phrase "or to qualified corporations or associations" immediately after the phrase "citizens of the Philippines or of any other specific country" in Clause 3 of Section 2A of the Anti-Dummy Law, Congress by such omission intended to limit the prohibition against the employment of non-American aliens in the operation of public utilities to such public utilities as are owned wholly by citizens of the Philippines or of any other specific country. Issue: WON the prohibition against the employment of non-American aliens in public utility corporations refers only to business, right, franchise or privilege which is completely nationalized. (NO)
Held: Luzon Admits that it is a P ublic Utility Corporation Under the stipulation of facts plaintiff-appellant admits that it is a "public utility corporation recognized and existing under the laws of the Philippines. ... ." Section 8 of Article XIV, Constitution No franchise, certificate, or any other form of authorization for the operation of public utility shall be granted except to citizens of the Philippines or to corporations or other entities organized under the laws of the Philippines, sixty per centum of the capital of which is owned by citizens of the Philippines
Section 16a, CA No. 146, (Public Service Law) Certificates of public convenience and necessity will be granted only to citizens of the Philippines or of the United States or to corporations, co-partnerships, associations or joint-stock companies constituted and organized under the laws of the Philippines: provided, That sixty per centum of the stock or paid-up capital of any such stock corporation, co-partnership, association or joint-stock company must belong entirely to citizens of the Philippines or of the United States
Commonwealth Act No. 108 (Anti Dummy Law) SECTION 1. In all cases in which any constitutional or legal provision requires Philippine or United States citizenship as a requisite for the exercise or enjoyment of a right, franchise or privilege, any citizen of the Philippines or the United States who allows his name or citizenship to be used for the purpose of evading such provision, and any alien or foreigner profiting thereby, shall be punished by imprisonment imprisonment for not less than two nor more than ten years, and by a fine of not less than two thousand nor more than ten thousand pesos. The fact that the citizen of the Philippines or of the United States charged with a violation of this Act had, at the time of the acquisition of his holdings in t he corporations or associations referred to in section two of this Act, no real or personal property, credit or other assets the value of which shall at least be equivalent to said holdings shall be admissible as circumstantial evidence of a violation of this Act. SEC. 2. In all cases in which a constitutional or legal provision requires that, in order that a corporation or association may exercise or enjoy a right, franchise or privilege, not less than a certain per centum of its capital must be owned by citizens of the Philippines or the United States, or both, it shall be unlawful to falsely simulate the existence of such minimum of stock or capital as owned by such citizens of the Philippines or the United States or both, for the purpose of evading said provision. The president or manager and directors or trustees of corporations or associations convicted of a violation of this section shall be punished by imprisonment for not less than two nor more than ten years, and by a fine of not less than two thousand nor more than ten thousand pesos. SEC. 2-A. Any person, corporation, or association which, having in its name or under its control, a right, franchise, privilege, property or business, the exercise or enjoyment of which is expressly reserved by the Constitution or the laws to citizens of the Philippines or of any other specific country, or to corporations or associations at least sixty per centum of the capital of which is owned by such citizens, permits or allows the use, exploitation or enjoyment thereof by a person, corporation or association not possessing the requisites prescribed by the Constitution or the laws of the Philippines; or leases, or in any other way transfers or conveys said right, franchise, privilege, property or business to a person, corporation or association not otherwise qualified under the Constitution, or the provisions of the existing laws; or in any manner permits or allows any person not possessing the
CHAN GOMASAN OF SITO BERDE
(2) || FINLAW || CHOI qualifications required by the Constitution or existing laws to acquire, use, exploit or enjoy a right, franchise, privilege, property or business, the exercise and enjoyment of which are expressly reserved by the Constitution or existing laws to citizens of the Philippines or of any other specific country, intervene in the management, operation, administration or control thereof, whether as an officer, employee or laborer therein with or without remuneration except technical personnel whose employment may be specifically authorized by the President of the Philippines upon recommendation recommendation of the Department Heads concerned, if any, and any person who knowingly aids, assists or abets in the planning, consummation or perpetration of the acts hereinabove enumerated shall be punished by imprisonment for not less than five nor more than fifteen years, a by a fine of not less than the value of the right, franchise, privilege enjoyed or acquired in violation of the provisions here but in no case less than five thousand pesos: Provided, however That the president, managers, or persons in charge of corporations, association, or partnerships violating the provisions this section shall be criminally liable in lieu thereof: Provided, further, That any person, corporation or association shall, addition to the penalty imposed herein, forfeit such right, franchise, privilege, and the property or business enjoyed or acquired in violation of the provisions of this Act.
corporation or association. This theory offends all logic or reason, which could not have been intended by Congress in enacting Republic Act No. 134 purposely fashioned to implement and strengthen the provisions of Commonwealth Act No. 108.
SEC. 3. Any corporation or association violating any of the provisions of this Act shall, upon proper court proceedings, be dissolved.
The purpose of the anti-dummy law was to plug all loopholes that circumvent our nationalization laws The policy or purpose of the amendatory law, Republic Act No. 134, in inserting Clause 3 in Section 2-A of Commonwealth Act No. 108 was to plug all loopholes that may be utilized by designing foreigners to circumvent the nationalization laws of the country, regardless of whether such laws provide for complete or only partial nationalization of the right, franchise, privilege, property or business covered thereby. Furthermore, the law does not distinguish between party and wholly nationalized businesses The law does not distinguish between wholly and partly nationalized businesses. It is axiomatic that where the law does not distinguish, WE should not make any distinction. Luzon’s interpretation
of the law would lead to an absurd conclusion where a partly nationalized corporation would have more rights than a wholly nationalized corporation.
Under Luzon’s contention, a partially nationalized corporation or association will not be liable under the questioned provision of Section 2-A of Commonwealth Act No. 108, as amended, for employing non-American aliens in the management, operation, administration or control of the business; whereas a Filipino citizen or a wholly nationalized corporation or association operating the same business is subject to the penal provision of the law if he or it maintains in his or its employ non-American aliens. This would grant more rights and greater immunities to a partially nationalized corporation or association, a mere creature of the law, than to a Filipino citizen or a completely nationalized CHAN GOMASAN OF SITO BERDE
