28 March, 2020
The extraordinary writ of quo warranto has been raised to public consciousness again recently that it begs to be understood further. It will be recalled that an action for quo warranto was filed by the Office of the Solicitor General (OSG) a couple of years ago to challenge Chief Justice Maria Lourdes Sereno’s right to her to public position. This Petition was eventually granted by the Supreme Court and caused her removal as a public officer. This is the same type of Petition filed by the OSG again, but this time not against a public officer, but against a private entity, ABS-CBN Broadcasting Corp. and ABS-CBN Convergence, Inc.
There is therefore some confusion as to the nature of the remedy, which is often associated with challenges to individuals holding public office.
The special civil action of quo warranto is actually a writ of inquiry that determines whether or not there is legal right to a public office, position, or franchise and may be instituted against an individual or entity, as the case may be.
Under the Rules of Court, quo warranto must be commenced by the Solicitor General when directed by the President of the Philippines, or when upon complaint or otherwise, he has good reason to believe that any of the following can be established by proof: (1.) A person usurps, intrudes into, or unlawfully holds or exercises a public office, position or franchise; (2.) A public officer does or suffers an act which, by the provision of law, constitutes a ground for the forfeiture of his office; or, (3.) An association which acts as a corporation within the Philippines without being legally incorporated or without lawful authority so to act.
It can be gathered from the foregoing that as applied to entities, an action for quo warranto is proper in assailing either the existence of a de facto corporation or the unlawful exercise of a franchise by a de jure or legally incorporated entity.
While the Rules of Court do not distinguish between the kinds of franchise that may be subject of quo warranto against a de jure corporation (i.e., whether it is the “primary franchise” which is the certificate of registration of corporations or the “secondary franchise” which is the legislative franchise), Republic Act No. 8799 is clear that the revocation of a corporation’s certificate of registration is within the jurisdiction of the Securities and Exchange Commission (SEC). This means that the “franchise” referred to in the rules on quo warranto proceedings that may be instituted in courts of competent jurisdiction must refer to legislative franchises.
The use of quo warranto to challenge a corporation’s legislative franchise is not novel in Philippine jurisprudence, but neither is it prevalent. Thus, there is more to be explored and tested in this legal remedy.
With particular regard to the revocation of a franchise of a broadcasting corporation, the case of Divinagracia vs. Consolidated Broadcasting System, Inc. and People’s Broadcasting Service discussed the propriety of quo warranto proceedings. Here, the issue involved is the regulatory jurisdiction of the NTC (i.e., whether or not it has the power to cancel a license issued to a broadcasting company that is also a grantee of legislative franchise on the ground of violation of its franchise). The Supreme Court in this case said that the regulatory agency cannot extend its power to revoke the mother franchise, and if there is a need to do so, it should be by an action for quo warranto.
Be that as it may, the action for quo warranto against ABS-CBN may present an actual controversy for the Supreme Court to finally make a pronouncement on the issue. It must be noted that under the Constitution, Congress has the power to grant (and hence also revoke) franchises, and an argument can be made that resort to courts may interfere with this process. Indeed, this may give rise to the situation where one branch of government decides, for instance that the franchise is warranted, while the other rules in an opposite manner. If only to reconcile the apparent clash of powers, the Supreme Court may need to eventually decide on the matter of the limitations of branches of government in this regard.
For further information, please contact:
Maritoni B. Molina, Angara Abello Concepcion Regala & Cruz (ACCRALAW)
accra@accralaw.com
