Political Law Question No. 14

280 fps · **Joined:** Mon Jul 07, 2008 7:35 am **Posts:** 195

XIV.

In 1963, Congress passed a law creating a government-owned corporation named Manila War Memorial Commission (MWMC), with the primary function of overseeing the construction of a massive memorial in the heart of Manila to commemorate the victims of the 1945 Battle of Manila.

The MWMC charter provided an initial appropriation of P1,000,000, empowered the corporation to raise funds in its own name, and set aside a parcel of land in Malate for the memorial site. The charter set the corporate life of MWMC at 50 years with a proviso that Congress may not abolish MWMC until after the completion of the memorial.

Forty-five (45) years later, the memorial was only 1/3 complete, and the memorial site itself had long been overrun by squatters. Congress enacted a law abolishing the MWMC and requiring that the funds raised by it be remitted to the National Treasury. The MWMC challenged the validity of the law, arguing that under its charter its mandate is to complete the memorial no matter how long it takes. Decide with reasons.

Let me try, neither suggested nor alternative answer

The contention of MWMC is tenable, because no law shall be passed impairing obligation and contract.

jon_E · **Joined:** Mon Sep 08, 2008 2:27 pm **Posts:** 67

The issue here is whether the Manila War Memorial Commission (MWMC), a government-owned and controlled corporation (GOCC) with its own charter (that is, it was created by law, not simply incorporated by registering with the Securities and Exchange Commission) which was created for the purpose of building a memorial to the 1945 Battle of Manila may be abolished by Congress considering the proviso in MWMC's charter that it (MWMC) can be abolished by Congress only after the completion of the memorial.

Points to consider:

1. Does Congress have the power to abolish a GOCC which Congress itself has created?

2. Does the MWMC, as a GOCC, have a vested right to its existence by virtue of the proviso in its charter that Congress may not abolish it until after the completion of the memorial?

3. What is the significance of the proviso?
a. Does it mean that while MWMC's corporate life terminates after 50 years it can still exist thereafter and function as a pseudo-entity until it completes the memorial? Or does it mean that Congress is prohibited from abolishing MWMC until after the completion of the memorial but this prohibition applies only during the 50-year corporate life of MWMC such that MWMC completely and automatically (that is, ipso jure/facto?) ceases to be a legal entity after the lapse of 50 years?
b. Does the proviso (un)reasonably tie the hand of Congress insofar as its power to amend, revise or repeal laws is concerned? In other words, does the proviso effectively make the law creating the MWMC (that is, MWMC's charter) irrepealable? (In this connection, note and consider MWMC's corporate life...)

4. Assuming that MWMC's charter is effectively an irrepealable law, does Congress have the power to enact irrepealable laws?

Oliver · **Posted:** Fri Sep 12, 2008 8:54 am

jon_E wrote:

1. Does Congress has the power to abolish a GOCC which Congress itself has created?

I partly agree with 280 fps' foregoing answer.

However, on the other side of the coin, although it is well-settled that, under the Constitution, the non-impairment clause of obligations and contracts shall be inviolable, the same is not an iron-clad rule. It admits of exception more especially when the violation of such clause is buttressed by the all-embracing police power of the state. It must be noted that the non-impairment of obligations and contracts should be subordinated to the inherent and plenary police power of the estate.

If the the abolition of Manila War Memorial Commission (MWMC) is grounded on the police power of the state, the same should be held as a valid exercise of the legislative powers of the Congress. Otherwise, we should countenance a situation where Congress cannot undo what it had previously done. We must bear in mind that the power to create necessarily involves also the power to abolish, under the doctrine of necessary implication.

Therefore, to quote Jon's point of consideration above, it is well within the powers of Congress to abolish MWMC without violating the non-impairment clause equally-guarded under the Constitution.

jon_E · **Joined:** Mon Sep 08, 2008 2:27 pm **Posts:** 67

Point for reflection re obligation of contracts angle:

1. Will the non-impairment of contract clause apply where there is no contract to speak of in the first place?

2. Does the law which created MWMC constitute a contract of the State, acting through Congress, with MWMC?

280 fps · **Joined:** Mon Jul 07, 2008 7:35 am **Posts:** 195

1. Will the non-impairment of contract clause apply where there is no contract to speak of in the first place?

I believe that there is a contract as well as obligation.

Based on facts presented:

In 1963, Congress passed a law creating a government-owned corporation named Manila War Memorial Commission (MWMC), with the primary function of overseeing the construction of a massive memorial in the heart of Manila to commemorate the victims of the 1945 Battle of Manila.

The rationale behind for passing a law and to create the MWMC is to obliged such government-owned corporation to render service for the construction of such massive memorial tenement.

Under Art. 1156. An obligation is a juridical necessity to give, to do or not to do.

Under Art. 1157. Obligations arise from:
(1) Law;
(2) Contracts;
(3) Quasi-contracts;
(4) Acts or omissions punished by law; and
(5) Quasi-delicts.

Under Art. 1158. Obligations derived from law are not presumed. Only those expressly determined in this Code or in special laws are demandable, and shall be regulated by the precepts of the law which establishes them; and as to what has not been foreseen.

Under Art. 1305. A contract is a meeting of minds between two persons whereby one binds himself, with respect to the other, to give something or to render some service

The MWMC charter provided an initial appropriation of P1,000,000, empowered the corporation to raise funds in its own name, and set aside a parcel of land in Malate for the memorial site. The charter set the corporate life of MWMC at 50 years with a proviso that Congress may not abolish MWMC until after the completion of the memorial.

Under Art. 1306. The contracting parties may establish such stipulations, clauses, terms and conditions as they may deem convenient, provided they are not contrary to law, morals, good customs, public order, or public policy.

Sir, correct me if im wrong, but I humbly submit that based on those Civil Code articles presented, it is conclusive that there is a contract existed.

jon_E · **Joined:** Mon Sep 08, 2008 2:27 pm **Posts:** 67

Quote:

I believe that there is a contract as well as obligation.

Based on facts presented:

In 1963, Congress passed a law creating a government-owned corporation named Manila War Memorial Commission (MWMC), with the primary function of overseeing the construction of a massive memorial in the heart of Manila to commemorate the victims of the 1945 Battle of Manila.

The rationale behind for passing a law and to create the MWMC is to obliged such government-owned corporation to render service for the construction of such massive memorial tenement.

Under Art. 1156. An obligation is a juridical necessity to give, to do or not to do.

Under Art. 1157. Obligations arise from:
(1) Law;
(2) Contracts;
(3) Quasi-contracts;
(4) Acts or omissions punished by law; and
(5) Quasi-delicts.

Under Art. 1158. Obligations derived from law are not presumed. Only those expressly determined in this Code or in special laws are demandable, and shall be regulated by the precepts of the law which establishes them; and as to what has not been foreseen.

Under Art. 1305. A contract is a meeting of minds between two persons whereby one binds himself, with respect to the other, to give something or to render some service

The MWMC charter provided an initial appropriation of P1,000,000, empowered the corporation to raise funds in its own name, and set aside a parcel of land in Malate for the memorial site. The charter set the corporate life of MWMC at 50 years with a proviso that Congress may not abolish MWMC until after the completion of the memorial.

Under Art. 1306. The contracting parties may establish such stipulations, clauses, terms and conditions as they may deem convenient, provided they are not contrary to law, morals, good customs, public order, or public policy.

Sir, correct me if im wrong, but I humbly submit that based on those Civil Code articles presented, it is conclusive that there is a contract existed.

Points for reflection:

1. What does the Constitution protect from impairment? Obligation of contracts, that is, an obligation arising from contract, right? (Distinguish this from obligations and contracts...)

2. True, MWMC was given the function of building a war memorial. It was both an investiture of power and an imposition of a legal duty or obligation. But what is the source of the obligation? Law or contract? And law and contract are two different and distinct sources of obligation, aren't they? (Please see Article 1157 of the Civil Code.)

3. A contract requires a meeting of the minds of the parties, right? It is created or perfected when an offer is accepted unqualifiedly, isn't it? (Unless, of course it is a real contract in which case delivery is necessary for its perfection.)
a. When did the meeting of the minds between the State, thru Congress, and MWMC occur? Did not MWMC acquire legal personality only after the law creating it became effective?
b. Assuming the law was an offer on the part of the State, did MWMC have a choice other than to accept it? (Or should it be considered a contract of adhesion?)

OzqC · **Posted:** Fri Sep 12, 2008 6:31 pm

aysus.... iba na naman take ko sa question na ito

The contention of MWMC is bereft of merit. The proviso that Congress may not abolish MWMC is unconstitutional for being violative of the principle that Congress cannot pass irrepealable laws. Even if the said proviso is given legal credence, it is merely directory and not a mandatory provision.

joey_jrc · **Posted:** Fri Sep 12, 2008 7:32 pm

Hi all , if I may...My answer here is that MWMC's contention would be untenable. Congress giveth life to MWMC through legislation and thus the latter came to be. But after 45 years (!) of non-performance, the same has been sort of dissolved by Congress.

MWMC came to being by legislation and thus, the one who breathed life to it impliedly has the power to take it away. I agree that by virtue of the Police Power of the State, such is possible

I would agree also that there seems to be no impairment of obligation against whom or whatsoever. MWMC and the Legislative are not parties to a contract but the former is a creation of the latter.

Granting that there is an obligation and contract (thru a legislative franchise?) ; still the State/Congress has the power to abolish if it deems proper for the public as a whole. Such have been in the Philippine Jai-Alai and the American Lotto cases

Macka™ · **Posted:** Fri Sep 12, 2008 11:51 pm

OzqC wrote:

aysus.... iba na naman take ko sa question na ito

The contention of MWMC is bereft of merit. The proviso that Congress may not abolish MWMC is unconstitutional for being violative of the principle that Congress cannot pass irrepealable laws. Even if the said proviso is given legal credence, it is merely directory and not a mandatory provision.

This is my gf's answer.

I agree with this. There is truism in the thought that what the Congress has created or given, it can abolish or take away. The past Congress cannot impose itself in perpetuity or against future Congresses.

ultrasapien · **Joined:** Tue Jan 22, 2008 10:22 pm **Posts:** 354

i have the same view that congress cannot pass laws that cannot be repealed. second, the MWMC is a mere creation of law which congress created and thus may also be abolished by the authority that created it.

non-impairment of obligation of contracts do not apply here because there is no contract to speak of.

mikermart · **Joined:** Sat Jun 07, 2008 1:17 pm **Posts:** 4

the doctrine "the power to create includes the power to destroy" is applicable in this case.

restless · **Joined:** Tue Aug 12, 2008 8:49 am **Posts:** 14

I also answered that the power to create necessarily carries with it the power to abolish. This is by virtue of the doctine of necessary implication.

marcm · **Joined:** Fri Sep 14, 2007 3:41 am **Posts:** 34

I agree with the answer that Congress cannot pass irrepealable laws because of the concept that legislative power is plenary in nature.

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Political Law Question No. 14

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