Bataan Shipyard Engineering Co., Inc. vs. PCGG (G.R. No.

75885 May 27, 1987)

Facts: Challenged in this special civil action of certiorari and prohibition by a private corporation
known as the Bataan Shipyard and Engineering Co., Inc. are: (1) Executive Orders Numbered 1
and 2, promulgated by President Corazon C. Aquino on February 28, 1986 and March 12, 1986,
respectively, and (2) the sequestration, takeover, and other orders issued, and acts done, in
accordance with said executive orders by the Presidential Commission on Good Government
and/or its Commissioners and agents, affecting said corporation. The sequestration order issued
on April 14, 1986 was addressed to three of the agents of the Commission, ordering them to
sequester several companies among which is Bataan Shipyard and Engineering Co., Inc. On the
strength of the above sequestration order, several letters were sent to BASECO among which is
that from Mr. Jose M. Balde, acting for the PCGG, addressed a letter dated April 18, 1986 to the
President and other officers of petitioner firm, reiterating an earlier request for the production of
certain documents. The letter closed with the warning that if the documents were not submitted
within five days, the officers would be cited for "contempt in pursuance with Presidential
Executive Order Nos. 1 and 2." BASECO contends that its right against self incrimination and
unreasonable searches and seizures had been transgressed by the Order of April 18, 1986 which
required it "to produce corporate records from 1973 to 1986 under pain of contempt of the
Commission if it fails to do so." BASECO prays that the Court 1) declare unconstitutional and void
Executive Orders Numbered 1 and 2; 2) annul the sequestration order dated April- 14, 1986, and
all other orders subsequently issued and acts done on the basis thereof, inclusive of the
takeover order of July 14, 1986 and the termination of the services of the BASECO executives.
Issue: Whether or not BASECOs right against self-incrimination and unreasonable searches and
seizures was violated.
Ruling: No. The order to produce documents was issued upon the authority of Section 3 (e) of
Executive Order No. 1, treating of the PCGG's power to "issue subpoenas requiring * * the
production of such books, papers, contracts, records, statements of accounts and other
documents as may be material to the investigation conducted by the Commission. It is
elementary that the right against self-incrimination has no application to juridical persons. While
an individual may lawfully refuse to answer incriminating questions unless protected by an
immunity statute, it does not follow that a corporation, vested with special privileges and
franchises, may refuse to show its hand when charged with an abuse of such privileges.
Corporations are not entitled to all of the constitutional protections, which private individuals
have. They are not at all within the privilege against self-incrimination; although this court more
than once has said that the privilege runs very closely with the 4th Amendment's Search and
Seizure provisions. It is also settled that an officer of the company cannot refuse to produce its
records in its possession upon the plea that they will either incriminate him or may incriminate
it." The corporation is a creature of the state. It is presumed to be incorporated for the benefit of
the public. It received certain special privileges and franchises, and holds them subject to the
laws of the state and the limitations of its charter. Its powers are limited by law. It can make no
contract not authorized by its charter. Its rights to act as a corporation are only preserved to it so
long as it obeys the laws of its creation. There is a reserve right in the legislature to investigate
its contracts and find out whether it has exceeded its powers. It would be a strange anomaly to
hold that a state, having chartered a corporation to make use of certain franchises, could not, in
the exercise of sovereignty, inquire how these franchises had been employed, and whether they
had been abused, and demand the production of the corporate books and papers for that
purpose. The defense amounts to this, that an officer of the corporation which is charged with a
criminal violation of the statute may plead the criminality of such corporation as a refusal to
produce its books. To state this proposition is to answer it. While an individual may lawfully
refuse to answer incriminating questions unless protected by an immunity statute, it does not
follow that a corporation, vested with special privileges and franchises may refuse to show its
hand when charged with an abuse of such privileges. (Wilson v. United States, 55 Law Ed., 771,
780 [emphasis, the Solicitor General's]) The constitutional safeguard against unreasonable
searches and seizures finds no application to the case at bar either. There has been no search
undertaken by any agent or representative of the PCGG, and of course no seizure on the
occasion thereof.