Admin Case Compilation.pdf

MILLER vs MARDO

RULING:

2 SCRA 898

Yes. The "functions" referred to in R.A. No. 1241 which could thus be created, obviously refer

Restriction on Grant of Judicial Power

merely to administrative, not judicial functions. For the Government Survey and Reorganization Commission was created to carry out the reorganization of the Executive Branch of the National Government which plainly did not include the creation of courts. It may be conceded that the legislature may confer on administrative boards or bodies quasi-judicial powers involving the exercise of judgment and discretion, as incident to the performance of administrative functions. But in so doing, the legislature must state its intention in express terms that would leave no doubt, as even such quasi-judicial prerogatives must be limited, if they are to be valid, only to those incidental to or in connection with the performance of jurisdiction over a matter exclusively vested in the courts. If a statute itself actually passed by the Congress must be clear in its terms when clothing administrative bodies with quasi-judicial functions, then certainly such conferment can not be implied from a mere grant of power to a body such as the Government Survey and Reorganization Commission to create "functions" in connection with the reorganization of the Executive Branch of the Government.

FACTS: Manuel Gonzales filed with Regional Office No. 3 of the Department of Labor, in Manila, a complaint against Bill Miller, owner and manager of Miller Motors, claiming to be a driver of Miller from December 1, 1956 to October 31, 1957, on which latter date he was allegedly arbitrarily dismissed, without being paid separation pay. Miller filed with the Court of First Instance of Baguio a petition praying for judgment prohibiting Chief Hearing Officer Atanacio Mardo of Regional Office No. 3 of the Department of Labor, from proceeding with the case, for the reason that said Hearing Officer had no jurisdiction to hear and decide the subject matter of the complaint. He questions the validity of Reorganization Plan No. 20-A, prepared and submitted by the Government Survey and Reorganization Commission under the authority of Republic Act No. 997, as amended by Republic Act No. 1241, insofar as it confers jurisdiction to the Regional Offices of the Department of Labor created in said Plan to decide claims of laborers for wages, overtime and separation pay, etc. Under , Reorganization Plan No. 20-A, the regional offices of the Department of Labor have been given original and exclusive jurisdiction over: (a) all cases falling under the Workmen's Compensation law; (b) all cases affecting money claims arising from violations of labor standards on working conditions, unpaid wages, underpayment, overtime, separation pay and maternity leave of employees and laborers; and (c) all cases for unpaid wages, overtime, separation pay, vacation pay and payment for medical services of domestic help

RATIO: Restriction on grant of judicial power. The doctrine of separation of powers of government also operates to restrict the exercise of judicial functions to administrative agencies. Since the legislature cannot exercise judicial functions, it certainly is precluded from delegating the exercise of judicial functions to administrative agencies or officers. While the legislature is powerless to confer purely or strictly judicial powers, functions, and duties to an administrative agency, it, by no means, follows that it may not perform functions which are in their nature, judicial, and possess and exercise quasi-judicial powers. It is recognized that some judicial powers may be conferred upon and exercised by administrative agencies without violating constitutional powers inhibiting the "delegation" of judicial power. However, the judicial power which may be exercises by administrative agencies is a restricted one, limited to what is incidental and reasonably necessary to the proper and efficient administration of the statutes that are committed to them for administration. Of course, arbitrary powers or uncontrolled discretion may not be conferred upon administrative agencies either in the exercise of rule-making or adjudicatory functions

Before the effectivity of Reorganization Plan No. 20-A, however, the Department of Labor, except the Workmen's Compensation Commission with respect to claims for compensation under the Workmen's Compensation law, had no compulsory power to settle cases under (b) and (c) above. Republic Act No. 1241, amending Section 4 of Republic Act 997, which created the Government Survey and Reorganization Commission, empowered the latter to abolish departments, offices, agencies, or functions which may not be necessary, or create those which way be necessary for the efficient conduct of the government service, activities, and functions.

SECOND DIVISION

ISSUE:

TORRES, JR., J.:

Whether or not Reorganization Plan No. 20-A, insofar as confers judicial power to the Regional Offices over cases other than these falling under the Workmen's Compensation on Law, invalid and of no effect

On August 30, 1996, Mr. Jesus Cabarrus, Jr. filed and administrative complaint for disbarment against Atty. Jose Antonio Bernas for alleged violations of Article 172 of the Revised Penal

[A.C. No. 4634. September 24, 1997] JESUS CABARRUS, JR., complainant, vs. JOSE ANTONIO BERNAS, respondents. DECISION

Page 1 of 192

Code and Code of professional Resposibility. In his complaint-affidavit [1] dated August 12, 1996, complainant alleged as follows: A.That on April 16, 1996, respondent Ramon B. Pascual, Jr., subscribe under oath before Marie Lourdes T. Sia Bernas, a notary public in Makati City, wife of lawyer jose Antonio Bernas, a verification and certification of non-forum shopping which was appended to a complaint for reconveyance of property and damages, denominated as Civil Case No. 65646, filed before the Regional Trial Court in National Capital Region, RTC, which case was raffled to RTC Branch 159 in Pasig City. A photocopy of said complaint is hereto attached and marked as Annexex (sic) A, A-1, A-3, A-4, A-5 and A-6; B.That as basis for the instant complaint for falsification of public document, I am hereto quoting verbatim, the test (sic) of Annex A-6, the verification and certification of non-forum shopping which states:

verification-certification was placed under oath and was conveniently notarized by the wife of the counsel of respondent in both cases at Branch 159 of the RTC in Pasig and at the NBI, an agency within the ambis (sic) and purview of the circulus (sic) of the Supreme Court prohibiting forum shopping. F. That Jose Antonio Bernas, the counsel on record of the respondents in Civil Case No. 65646 is the same lawyer who instigated a criminal complaint at the NBI for forgery and respondents themselves conspired and confabulated with each other in facilitating and insuring the open, blatant and deliberate violation of Art. 172 of the Revised Penal Code which states: Art. 172. Falsification by private individual and use of falsified documents.- The penalty of prison correctional in its medium and maximum periods and a fine of not more than p 5,000 pesos shall be imposed upon: 1. Any private individual who shall commit any of the falsifications enumerated in the next preceding article in any public or official document or letter of exchange (sic) or any other kind of commercial documents; and

Ramon B. Pascual, Jr., under oath, depose and states: He is the plaintiff in this case, and certify that he cause the preparation of the foregoing pleading, the content of which are true to his personal knowledge and that he has not commenced any other action or proceeding involving the same issues in any court, including the Supreme Court, the Court of Appeals, or any other tribunal or agency. If he should learn that a similar action of (sic) proceeding has been filed or is pending before the Supreme Court or any other Tribunal agency, he undertake to report to (sic) that the fact within Five (5) days from the notice to this notice (sic) to this Honorable Court. Underscoring supplied. C.That the cause of action relied upon by the respondents in Civil Case No. 65646 is fraud, facilitated by forgery as gleaned from paragraph 15, 16, and 22; D.That contrary to the tenor, import and meanoing (sic) of the allegation under 1-B of the instant complaint, respondent and his counsel Jose Antonio Bernas caused the preparation and filing of a criminal complaint for falsification of a public document on April 11, 1996, (three days before the filing of the aforecited Civil Case) at the AOED of the National Bureau of Investigation if (sic) Taff (sic) Ave., a xerox copy of said complaint is hereto attached and marked as Annex B. D-1.That as stated in Annex B, the gravaman of the affidavit complaint of the respondent is forgery, the same legal issue in Civil Case No. 65646;

2. Any person who, to the damage of the third party, or with the intent to cause such damage, shall in any private document commit any of the acts of falsification enumerated in the next preceding article. Any person who shall knowingly introduce in evidence in any judicial proceeding or the damage of another or who, with the intent to cause such damage , shall use any of the false documents embraced in the next preceding article, or any of the foregoing subdivisions of this article, shall be punished by the penalty next lower in degree. G. That Atty. Jose Antonio Bernas should be disbarred for having instigated abetted and facilitated the perversion and subversion of truth in the said verification and certification of nonforum shopping.Contrary to Canon 1, Rule 1.01, 1.02, Canon 3, 3.01, Canon 10 of the code of Professional responsibility for Lawyers, the pertinent provisions of which are herein below quoted and a copy of said code is hereto attached and marked as Annex E; CANON 1. A. LAWYER SHALL UPHOLD THE CONSTITUTION, OBEY THE LAWS OF THE LAND AND PROMOTE RESPECT FOR LAW AND LEGAL PROCESSES. Rule 1.01 - A lawyer shall not engage in lawful, dishonest, immoral or deceitful (sic) conduct.

D-2.That as early as August 14, 1995, respondent counsel, Jose Antonio Bernas filed a written complaint at the NBI for the same cause of action which was reiterated in another letter submitting to the NBI standard specimen signitures dated October 1995, copies of said letter complaint are hereto attached and marked as Annexes (sic) C. E. That respondent Ramon B. Pascual, Jr., on the basis of Annexes A, B, C, D, inclusive of submarkings knowingly subverted and perverted the truth when he falsify certified (sic) and verified under oath in the verification and certification of non-forum shopping, that: He has not commenced any other action or proceeding involving the same issues in any court, including the Supreme Court, the Court of Appeals, or any other Tribunal or agency. Where

Rule 1.02 - A lawyer shall not counsel or abet activities simed (sic) at defiance of the law or at lessening confidence in the legal system. CANON 3 A. LAWYER IN MAKING KNOWN HIS LEGAL SERVICES SHALL USE ONLY TRUE, HONEST, FAIR, DIGNIFIED AND OBJECTIVE INFORMATION OF (sic) STATEMENT OF FACTS. Rule 3.01 - A lawyer shall not use or permit the use of any false, fraudulent, misleading, deceptive, undignified, self-laudatory or unfair statement or claim regarding his qualified (sic) or legal services.

Page 2 of 192

CANON 10. A LAWYER OWES CANDOR, FAIRNESS AND GOOD FAITH TO THE COURT. In his Comment, [2] respondents Jose Antonio Bernas avers that he has not committed forum shopping because the criminal action is not an action that involves the same issue as those in the civil action and both suits can exist without constituting forum shopping so long as the civil aspect has not yet been prosecuted in the criminal case. He emphasized that forum shopping only exist when identical reliefs are issued by the same parties in multiple fora. In his Supplemental Comment,[3] respondent further contends that neither he or his client Pascual has commenced any criminal action. Pascual merely requested the NBI to assist in the investigation or prosecution, and left it to the NBI to determine whether the filing of an endorsement to the prosecutor, who would determine probable caused, would be appropriate. It was only upon request of the NBI the he assisted Ramon Pascual in drafting an affidavitcomplaint for falsification of public documents against complainant. Likewise, respondent by counsel reiterates that the letter transmitted to the NBI cannot constitute an action or proceeding because the NBIs functions are merely investigatory and informational in nature. NBI has no prosecutorial functions or quasi-judicial power and is incapable of granting relief or remedy. The NBI cannot be an agency contemplated by the circular. The core issue to be resolved here is whether respondent Atty. Bernas transgressed Circular No. 28-91, Revised Circular No. 28-91, and administrative Circular No. 04-94 on forum shopping. After a careful scrutiny of the records, we find the administrative complaint bereft of merit and should be dismissed. There is forum-shopping whenever, as a result of an adverse opinion in one forum, a party seeks a favorable opinion (other than by appeal or certiorari) in another. Therefore, a party to a case resort to forum shopping because by filling another petition involving the same essential facts and circumstances, xxx, respondents approached two different for a in order to increase their chances of obtaining a favorable decision or action, [4] In this case, there is no forum shopping to speak of Atty. Bernas, as counsel of Mr. Pascual, Jr., merely requested the assistance of the NBI to investigate the the alleged fraud and forgery committed by Mr. Jesus Cabarrus.[5] The filing of the civil case for conveyance and damages before the Regional Trial Court of Pasig City does not preclude respondent to institute a criminal action. The rule allows the filing of a civil case independently with the criminal case without violating the circulars on forum shopping. It is scarcely necessary to add that Circular No. 28-91 must be so interpreted and applied as to achieve the purposes projected by the Supreme Court when it promulgated that Circular No. 28-91 was designed to serve as an instrument to promote and facilitate the orderly administration of justice and should not be interpreted with such absolute literalness as to subvert and legitimate objective or the goal of all rules of procedure-which is to achieve substantial justice as expeditiously as possible.[6]

(a) To undertake investigation of crimes and other offenses against the laws of the Philippines, upon its initiative and as public interest may require; (b) To render assistance, whenever properly requested in the investigation or detection of crimes and other offenses; (c) To act as a national clearing house of criminal and other infromations for the benefit and use of the prosecuting and law-enforcement entities of the Philippines, identification records of all person without criminal convictions, records of identifying marks, characteristics, and ownership or possession of all firearms as well as bullets fired therefrom; (d) To give technical aid to all prosecuting and law-enforcement officers and entities of the Government as well as the courts that may request its services; (e) To extend its services, whenever properly requested in the investigation of cases of administrative or civil nature in which the Government is interested; (f) To undertake the instruction and training of representative number of city and municipal peace officers at the request of their respective superiors along effective methods of crime investigation and detection in order to insure greater efficiency in the discharge of their duties; (g) To establish and maintain an up-to-date scientific crime laboratory and to conduct researches inn furtherance of scientific knowledge in criminal investigation; (h) To perform such other related function as the secretary of Justice may assign from time to time. Explicitly, the function of the National Bureau of Investigations are merely investigatory and informational in nature. It has no judicial or quasi-judicial powers and is incapable of granting any relief to a party. It cannot even determine probable cause. It is an investigative agency whose findings are merely recommendatory. It undertakes investigation of crimes upon its own initiative and as public welfare may require. It renders assistance when requested in the investigation or detection of crimes which precisely what Atty. Bernas sought in order to prosecute those person responsible for defrauding his client. The courts, tribunal and agencies referred to under Circular No. 28-91, revised Circular No. 2891 and Administrative Circular No. 04-94 are those vested with judicial powers or quasi-judicial powers and those who not only hear and determine controversies between adverse parties, but to make binding orders or judgments. As succinctly put it by R.A. 157, the NBI is not performing judicial or quasi-judicial functions. The NBI cannot therefore be among those forums contemplated by the Circular that can entertain an action or proceeding, or even grant any relief, declaratory or otherwise.

Adjunct to this, Act No. 157 [7], specifically section 1 hereof provides, viz:

WHEREFORE, premises considered, the instant complaint is hereby DISMISSED.

Section 1. There is hereby created a Bureau of Investigation under the Department of Justice which shall have the following functions:

SO ORDERED. Regalado (Chairman), and Puno, JJ., concur.

Page 3 of 192

Mendoza, J., on leave.

Appellants elevated the case to the Office of the President on October 11, 1961. After reviewing the records, said office affirmed on November 10, 1961 the decision of July 11, 1961. Appellants filed a motion to reconsider based on an alleged decision of Public Works Secretary Moreno rendered on November 24, 1961, reversing the former ruling of July 11, 1961. On January 10, 1962, the Office of the President denied the motion, on two grounds: (1) An official examination of the records of the case showed that said decision of Secretary Moreno did not form part thereof, and (2) even if it were genuine, it had no legal effect since the Secretary had already lost jurisdiction when appellants filed their appeal to the President.

Republic of the Philippines SUPREME COURT Manila EN BANC G.R. No. L-24281

On February 9, 1962, Taleon was informed by the District Engineer of Davao that her dams would be demolished on February 16, 1962, upon orders of the Executive Secretary, the administrative decision having become final and executory. To stop the threatened demolition, appellants filed suit in the Court of First Instance of Davao against the Public Works Secretary and the Engineer of Davao. They were able to obtain a writ of preliminary injunction on February 15, 1962.

May 16, 1967

ROSITA C. TALEON and MIGUEL SOLIS, petitioners appellants, vs. THE SECRETARY OF PUBLIC WORKS AND COMMUNICATIONS, THE DISTRICT ENGINEER, Province of Davao, and LUCIA O . TOLENTINO, respondents-appellees. Antonio Enrile Inton for petitioners-appellants. Tolentino, Amoguis and Madrazo for respondent-appellee L. O. Tolentino. Office of the Solicitor General Arturo A. Alafriz, Assistant Solicitor General Pacifico de Castro and Solicitor C. S. Gaddi for respondent-appellee Secretary of Public Works and Communications. BENGZON, J.P., J.: Petitioner-appellant Rosita Taleon is the registered owner of a parcel of land in Lupon, Davao, which she acquired from her co-petitioner-appellant Miguel Solis who had constructed therein man-made canals and fishpond dikes. On April 17, 1961, respondent-appellee Lucia Tolentino wrote a letter-complaint to the Secretary of Public Works stating that several fishpond operators and/or owners in Lupon, Davao have built dams across and closed the Cabatan River, a public navigable stream, thereby depriving her and the residents therein of passageway, fishing ground and water supply. This letter-complaint was formally amended on June 9, 1961, wherein Tolentino specified appellants Taleon and Solis, and another neighbor, one Humberto de los Santos, as those responsible for the closing of the alleged Cabatan River, on the banks of which their lands abutted. On June 13, 1961, Taleon filed her answer denying the existence of the alleged river and claiming that the dams were constructed inside her registered property and that her water source was a man-made canal connected to the sea. An administrative hearing was thereafter held. On July 11, 1961, the Secretary of Public Works, through the department undersecretary, rendered a decision finding that appellants were indeed obstructing the Cabatan River, a Public navigable stream which used to pass inside their lands, with the dams they constructed thereon, and ordering their demolition. Appellants filed a motion to reconsider claiming that the ruling was contrary to the facts established and that the Secretary had no jurisdiction over the Case. This was denied.

On September 1, 1962, appellants filed a similar petition for certiorari and prohibition with preliminary injunction against the herein respondents-appellees in the Court of First Instance of Manila. After the latters' respective answers were filed and the case in Davao was dismissed, upon appellants' motion, said Manila court issued the writ of preliminary injunction prayed for, altho in form a temporary restraining order with bond. The issues having been joined, a pre-trial conference was held and the Court of First Instance of Manila allowed respondents to file a motion to dismiss the petition. Upon orders of said court, the administrative records were sent up. On January 11, 1965, acting on the respective memoranda submitted by the parties in support of and in opposition to the pending motion to dismiss, the court a quo ruled that appellants were given a fair hearing in the administrative case and that the decision therein was supported by the evidence adduced and dismissed the petition stating: WHEREFORE, finding merit in the respondents' Motion to Dismiss, GRANTED. Let this petition be, as it hereby DISMISSED, with costs against petitioners. The temporary restraining order issued on 17 December 1962 is hereby dissolved and the bond filed by petitioners, cancelled. Taking issue with this ruling, the petitioners instituted the present appeal, raising questions purely of law. They submit that the court a quo erred in dismissing the case without giving them a full trial, thereby depriving them of the opportunity to prove that the alleged extension of the Cabatan River passing across their property is but a depression and that the decision rendered by Secretary Moreno on November 24, 1961, is genuine. Appellants also reiterate that the Secretary of Public Works has no jurisdiction over the case, since the dams and the body of water in question were located inside registered private property. Appellants' contentions are without merit. First of all, full trial was not needed. The issues raised before the court a quo were all purely legal and thus could be resolved on the basis of the pleadings and memoranda filed and the administrative records sent up to it. No necessity was there for further reception of evidence.

Page 4 of 192

Anent the jurisdiction of the Secretary of Public Works, this point has been squarely covered in Lovina v. Moreno, L-17821, November 29, 1963.1 There We upheld the power of the Public Works Secretary under Republic Act 2056 to declare as a public navigable stream any alleged depression or bodies of water even inside titled properties. That case involved a creek, located inside a titled land, which was alleged to be privately owned. The Public Works Secretary declared it as part of a public stream which plaintiffs therein had blocked with their dams. In sustaining the Secretary, We there ruled that such fact-finding power on his part was merely incidental to his duly to clear all navigable streams of unauthorized obstructions and, hence, its grant did not constitute an unlawful delegation of judicial power. And we remarked there that although the title was silent as to the existence of any stream inside the property, that did not confer a right to the stream, it being of a public nature and not subject to private appropriation, even by prescription.

Concepcion, C.J., Reyes, J.B.L., Dizon, Regala, Makalintal, Zaldivar, Sanchez and Castro, JJ., concur.

Appellants would offer affidavits — which are hearsay2 — and testimonies aliunde to show that the alleged Cabatan River inside their property is really a mere depression. As also enunciated in Lovina v. Moreno, supra, however, there cannot be a trial de novo in cases of this nature, since a review of an administrative finding is limited to the evidence already presented before the administrative body.3 This rule bars presentation of evidence aliunde and limits the trial court's functions to determining whether there is evidence in the administrative records substantial enough to support the findings therein. Here, the records of the administrative case were actually brought up and submitted to the court a quo and it held that the administrative finding that the alleged depression was really a part of the navigable Cabatan River was supported by substantial evidence. Said court fully did its duty, to have gone further would have been exceeding its power.

5

Regarding the alleged second decision of the Secretary, its non-existence has been officially certified by the Chief of the Records Division of the Department of Public Works, the official custodian.4 This alone is proof enough that there is no such decision.5 But even granting that there is really such a decision, it would not help appellants' cause any. Said decision would still be wanting of legal force and effect since Secretary Moreno had already lost jurisdiction to revoke the former ruling because of the appeal then already taken by appellants themselves to the Office of the President, which affirmed the former ruling. And even conceding jurisdiction, the second decision could still affect nothing since it was actually revoked and reversed by the ruling of the Office of the President, dated January 10, 1962, which denied the motion to reconsider filed by appellants wherein they invoked said new decision. So, a full trial to prove the authenticity of the Moreno decision would be a pointless waste of the court a quo's time. It is recognized that the trial court may dismiss a petition for certiorari even after an answer is filed upon a motion to dismiss, where said petition is found to be patently without merit. 6 But the court a quo did not summarily dismiss the petition. It conducted a pre-trial conference and even ordered the records in the administrative case to be elevated to it. Now the Rules of Court7 authorizes the trial court to render judgment on the pleadings or a summary judgment, as justice may require, if at the pre-trial it finds that facts exist which would warrant such judgment. All the necessary facts being already before the court a quo, no further trial was required. Its decision rendered at that stage was therefore sanctioned by the Rules.

Footnotes 1

See also Borja v. Moreno, L-16487, July 31, 1964.

2

Ismael v Guanzon, 2 Phil. 347.

3

See also Timbancaya v. Vicente, L-19100, Dec. 27, 1963.

4

Records, p. 221. Sec. 29, Rule 132, Rev. Rules of Court; People vs. Quebral, 68 Phil. 564.

6

Arvisu vs. Vergara, 90 Phil. 621; Chan vs. Galang, L-21732, Oct. 17, 1966.

7

Sec. 3, Rule 20, Rev. Rules of Court.

The Lawphil Project - Arellano Law Foundation

Republic of the Philippines SUPREME COURT Manila FIRST DIVISION G.R. No. L-43653 November 29, 1977 RADIO COMMUNICATIONS OF THE PHILIPPINES, INC. (RCPI), petitioner, vs. BOARD OF COMMUNICATIONS and DIEGO MORALES, respondents. G.R. No. L-45378 November 29, 1977 RADIO COMMUNICATIONS OF THE PHILIPPINES. INC. (RCPI), petitioner, vs. BOARD OF COMMUNICATIONS and PACIFICO INNOCENCIO, respondents. Treñas & Aligaen for petitioner. R. Mag. Bernardo for respondent Morales.

Wherefore, the judgment appealed from is hereby affirmed, with costs against petitionersappellants. So ordered.

Silvestre T. de la Cruz for respondent Innocencio.

Page 5 of 192

Primitivo C. Santos for respondent Board.

MARTIN, J., These two petitions (G.R. No. L-43653 and G.R. No. L-45378) for review by certiorari of the decisions of the Board of Communications in BC Case No. 75-01-OC, entitled "Diego T Morales vs. Radio Communications of the Philippines, Inc. (RCPI)" and BC Case No. 75-08-OC, entitled "Pacifica Innocencio vs. Radio Communications of the Philippines, Inc. (RCPI)," have been Consolidated as per resolution of this Court dated March 21, 1977, as they involve the same issue as to whether the Board of Communications has jurisdiction over claims for damages allegedly suffered by private respondents for failure to receive telegrams sent thru the petitioner Radio Communications of the Philippines, Inc., RCPI for short. In BC Case No. 75-01-OC (G.R. No. L-43653) complainant respondent Diego Morales claims that while he was in Manila his daughter sent him a telegram on October 15, 1974 from Santiago, Isabela, informing him of the death of his wife, Mrs. Diego T. Morales. The telegram sent thru the petitioner RCPI however never reached him. He had to be informed personally about the death of his wife and so to catch up with the burial of his wife, he had to take the trip by airplane to Isabela. In its answer petitioner RCPI claims that the telegram sent by respondent was transmitted from Santiago, lsabela to its Message Center at Cubao, Quezon City but when it was relayed from Cubao, the radio signal became intermittent making the copy received at Sta. Cruz, Manila unreadable and unintelligible. Because of the failure of the RCPI to transmit said telegram to him, respondent allegedly suffered inconvenience and additional expenses and prays for damages. In BC Case No. 75-08-OC (G.R. No. L-45378) complainant respondent Pacifico Innocencio claim that on July 13, 1975 Lourdes Innocencio sent a telegram from Paniqui, Tarlac, thru the facilities of the petitioner RCPI to him at Barrio Lomot, Cavinti, Laguna for the Purpose of informing him about the death of their father. The telegram was never received by Pacifico Innocencio. Inspite of the non-receipt and/or non-delivery of the message sent to said address, the sender (Lourdes Innocencio has not been notified about its non-delivery, As a consequence Pacifica Innocencio was not able to attend the internment of their father at Moncada, Tarlac. Because of the failure of RCPI to deliver to him said telegram he allegedly was "shocked when he learned about the death of their father when he visited his hometown Moncada Tarlac on August 14, 1975," and thus suffered mental anguish and personal inconveniences. Likewise, he prays for damages. After hearing. the respondent Board in both cases held that the service rendered by petitioner was inadequate and unsatisfactory and imposed upon the petitioner in each case a disciplinary fine of P200 pursuant to Section 21 of Commonwealth Act 146, as amended, by Presidential Decree No. I and Letter of Implementation No. 1. The main thrust of the argument of petitioner is that respondent Board has no jurisdiction to entertain and take cognizance of complaints for injury caused by breach of contractual obligation arising from negligence covered by Article 1170 of the Civil Code 1 and injury caused by quasi delict or tort liability under Article 2176 of the Civil Code 2 which according to it should be ventilated in the proper courts of justice and not in the Board of Communications.

We agree with petitioner RCPI. In one case We have ruled that the Public Service Commission and its successor in interest, the Board of Communications, "being a creature of the legislature and not a court, can exercise only such jurisdiction and powers as are expressly or by necessary implication,. conferred upon it by statute".3 The functions of the Public Service Commission are limited and administrative in nature and it has only jurisdiction and power as are expressly or by necessary implication conferred upon it by statute. 4 As successor in interest of the Public Service Commission, the Board of Communications exercises the same powers jurisdiction and functions as that provided for in the Public Service Act for the Public Service Commission. One of these powers as provided under Section 129 of the Public Service Act governing the organization of the Specialized Regulatory Board, is to issue certificate of public convenience. But this power to issue certificate of public convenience does not carry with it the power of supervision and control over matters not related to the issuance of certificate of public convenience or in the performance therewith in a manner suitable to promote public interest. But even assuming that the respondent Board of Communications has the power or jurisdiction over petitioner in the exercise of its supervision to insure adequate public service, petitioner cannot be subjected to payment of fine under Section 21 of the Public Service Act, because this provision of the law subjects to a fine every public service that violates or falls to comply with the terms and conditions of any certificate or any orders, decisions or regulations of the Commission. In the two cases before us petitioner is not being charged nor investigated for violation of the terms and conditions of its certificate of public convenience or of any order, decision or regulations of the respondent Board of Communications. The complaint of respondents in the two case was that they were allegedly inconvenienced or injured by the failure of the petitioner to transmit to them telegrams informing them of the deaths of close relatives which according to them constitute breach of contractual obligation through negligence under the Civil Code. The charges however, do not necessarily involve petitioners failure to comply with its certificate of public convenience or any order, decision or regulation of respondent Board of Communication. It is clear from the record that petitioner has not been charge of any violation or failure to comply with the terms and condition of its certificates of public convenience or of any order, decision or regulation of the respondent Board. The charge does not relate to the management of the facilities and system of transmission of messages by petitioner in accordance with its certificate of public convenience. If in the two cases before Us complainants Diego Morales and Pacifica Innocencio allegedly suffered injury due to petitioner's breach of contractual obligation arising from negligence, the proper forum for them to ventilate their grievances for possible recovery of damages against petitioner should be in the courts and not in the respondent Board of Communications. Much less can it impose the disciplinary fine of P200 upon the petitioner. In Francisco Santiago vs. RCPI (G.R. No. L-29236) and Constancio Langan vs. RCPI (G.R. No. L-29247), this Court speaking thru Justice Enrique Fernando, ruled: There can be no justification then for the Public Service Commission (now the Board of Communications as successor in interest) imposing the fines in these two petitions. The law cannot be any clearer . The only power it possessed over radio companies as noted was to fix rates It could not take to task a radio company for an negligence or misfeasance. It was not vested with such authority. That it did then in these two petitions lacked the impress of validity. In the face of the provision itself, it is rather apparent that the Public Service Commission lacked the required power to proceed against petitioner. There is nothing in Section 21 thereof which empowers it to impose a fine that calls for a different conclusion.

Page 6 of 192

WHEREFORE. both decisions of respondent Board of Communications in BC Case No. 75-01 OC and BC Case No. 75- 08-0C are hereby reversed, set aside, declared null and void for lack of jurisdiction to take cognizance of both cases. Without costs.

LAAN SANTOS, ANDRES NEPOMUCENO, SPS. ALBERTO and HERMINIA HAGOS, LEON GUILALAS, SPS. OSCAR and HAYDEE BADILLO,

SO ORDERED. Respondents. Teehankee (Chairman), Makasiar, Muñoz Palma, Fernandez and Guerrero, JJ., concur. Footnotes Promulgated:

1 ART. 1170. Those who in the performance of their obligations are guilty of fraud, negligence, or delay, and those who in any manner contravene the tenor thereof, are liable for damages. 2 ART. 2176, Whoever by act or omission causes damage to another, there being fault or negligence, is obliged to pay for the damage done. Such fault or negligence, if there is no preexisting contractual relation between the parties, is called a quasi- delict and is governed by the provision of this Chapter.

October 23, 2006 x---------------------------------------------------------------------------------------x

3 Filipino Bus Co. vs. Phil. Railway Co., 57 Phil. 860. 4 Batangas Laguna Tayabas Bus Co. vs. Public Service Commission, L-25994 and L-2600426046, August 31, 1966, 17 SCRA 1111.

D E C I S I O N

SECOND DIVISION SANDOVAL-GUTIERREZ, J.:

NATIONAL HOUSING AUTHORITY,

G.R. No. 142601

Petitioner, Present:

- versus -

PUNO, J., Chairperson,

Before us is a Petition for Review on Certiorari[1] assailing the Decision[2] of the Court of Appeals dated November 16, 1999 and Resolution dated March 13, 2000 in CA-G.R. SP No. 54495, entitled NATIONAL HOUSING AUTHORITY, petitioner, versus, THE HON. RUFINO V. MIJARES, in his capacity as Commissioner, COMMISSION ON THE SETTLEMENT OF LAND PROBLEMS (COSLAP), MUNICIPALITY OF SAN JOSE DEL MONTE, BULACAN, represented by Hon. Eduardo V. Roquero, in his capacity as Municipal Mayor of San Jose del Monte, Bulacan, JOSEPH ELMER S. GUEVARRA, Sheriff IV of the Ex-Officio Sheriff, Malolos, Bulacan, SPS. ANGEL A. CRUZ and ROSARIO C. CRUZ, RUFINO LAAN, RUFINA LAAN SANTOS, ANDRES NEPOMUCENO, SPS. ALBERTO HAGOS and HERMINIA HAGOS, LEON GUILALAS, SPS. OSCAR R. BADILLO and HAYDEE M. BADILLO, and LEONCIO LAAN, respondents.

SANDOVAL-GUTIERREZ, CORONA, The undisputed facts are: COMMISSION ON THE SETTLEMENT OF LAND PROBLEMS, MUNICIPALITY OF SAN JOSE DEL MONTE, BULACAN, SPS. ANGEL and ROSARIO CRUZ, RUFINO LAAN, RUFINO

AZCUNA, and GARCIA, JJ.

Page 7 of 192

Since 1968, there has been an existing boundary dispute between the Municipality of San Jose del Monte, Bulacan (one of herein respondents) and the City of Caloocan. In order to resolve the long-challenged conflict, the Sangguniang Bayan of San Jose del Monte passed and approved Resolution No. 20-02-94[3] on February 10, 1994. This resolution recognizes the official boundary of respondent municipality and the City of Caloocan, described as follows:

2. The FNSP-G surveying team plotted/drafted in a topographic map all pertinent records affecting boundary disputes of the two locality, such as the geographic positions and coordinates of MBM Nos. 22 to 33 Cad 267 Caloocan Cadastre, BM Nos. 11 to 23 of Tala Estate lot lines. Tala Estate lot lines were plotted approximately by scale, because there were no records on its geographic coordinates and incomplete cadastral maps. The findings are the following:

ON JOINT MOTION of all members present; a) The plotted positions of MBM Nos. 23 to 30, 32 and 33 Cad 267 Caloocan Cadastre are almost identical or equivalent to BM Nos. 12 to 16, 18 to 20, 22 and 23 of Tala Estate. RESOLVED, as it is hereby resolved to recognize the official boundary of the Municipality of San Jose del Monte, Bulacan and the City of Caloocan, Metro Manila as the true and correct line marking between the two Local Government Units as shown by the attached certified true copy of the geographic position and plain grid coordinates of Caloocan, Rizal per CAD-267 specifically from MBM (Municipal Boundary Monument) 22 to MBM 33;

b)

The lot lines of Tala Estate traverses thru Marilao River.

c) The northern portion of the lot lines of Parcels 1, 2 and 3 SWO-41615 Tala Estate indicated that it traverses thru Marilao River.

xxx

On August 8, 1995, another Resolution[4] was passed by the Sangguniang Bayan of San Jose del Monte recognizing the geographic position and plane coordinates of Tala Estate, Caloocan City contained in BM No. 11-24 as the lot lines delineating the boundary between the Municipality of San Jose del Monte and Caloocan City. This prompted the Department of Environment and Natural Resources (DENR), Region III to conduct a relocation survey.

On September 15, 1995, the survey team submitted a Comprehensive Report, [5] some excerpts of which provide:

3. In Municipal Resolution No. 06-08-95 dated August 8, 1995, it is requested that the geographic positions of BM Nos. 11 to 24, Tala Estate shall be recognized as the official lots lines which delineates the boundaries of San Jose del Monte, Bulacan and Caloocan City. Moreover, the resolution is opposed to the delineation of Marilao River as the boundary of two localities, as embodied in SWO-41615.

4. If the lot lines of Parcels 1, 2 and 3, SWO-41615 will be the basis for the boundaries of the two LGUs, Marilao River will be the natural boundary between the two LGUs; if BM 11 to 24, Tala Estate shall be the basis for the boundaries, some northern portions of Parcels 1, 2 and 3, SWO-41615, portions of Bankers Village and Pangarap Village belongs to the Municipality of San Jose del Monte, Bulacan.

ISSUES, PROBLEMS AND ANALYSIS 1. The geographic positions of MBM Nos. 22 to 33, Cad 267, Caloocan Cadastre was the basis for the establishment of the true and correct boundary between the municipality and Caloocan City. However, during the dialogue with concerned government agencies on May 12, 1995, the municipality of San Jose del Monte, Bulacan, emphasized that the boundary between the two local government units is the imaginary straight line between two boundary monuments, starting from MBM Nos. 22 to 33.

The Comprehensive Report states that the San Jose del Monte Sangguniang Bayan Resolutions contradict the delineation embodied in SWO-41615 of the Tala Estate, a 598-hectare property allotted by the government mainly for housing and resettlement site under the administration of the National Housing Authority (NHA), pursuant to Presidential Proclamation No. 843 issued by then President Ferdinand E. Marcos on April 26, 1971. Unsatisfied with the report of the DENR, respondent municipality filed a complaint with the Commission on Settlement of Land Problems (COSLAP),[6] against petitioner NHA. Several

Page 8 of 192

residents of San Jose del Monte, namely: spouses Angel and Rosario Cruz, Rufino Laan, Rufina Laan Santos, Andres Nepomuceno, spouses Alberto and Herminia Hagos, Leon Guilalas, spouses Oscar and Haydee Badillo, and Leoncio Laan (herein private respondents) joined the municipality as complainants in the said case. They alleged that their properties are within the Municipality of San Jose del Monte; that Presidential Proclamation No. 843 does not cover their properties; and that the NHAs Bagong Silang Resettlement Project encroaches on their landholdings. They prayed that the NHA be ordered to award them damages. Incidentally, the City of Caloocan was not impleaded as a party in their complaint.

Hence, this petition for review on certiorari.

At the threshold, let it be stated that a judgment issued by a quasi-judicial body without jurisdiction is void. It can never become final and executory, hence, an appeal is out of the question.[7] On June 22, 1998, the COSLAP rendered its Resolution ruling that the correct boundary between respondents San Jose del Monte and Caloocan City is that specified in the twin Resolutions of the Sangguniang Bayan of said respondents. The COSLAP likewise held that all other issues, such as those raised by respondents, are mere incidents of such ruling. In effect, the COSLAP ruled that the land covered by the NHA project, being within the Municipality of San Jose del Monte, encroaches upon respondents properties.

On January 14, 1999, petitioner NHA, upon invitation of the Bureau of Local Government Supervision of the Department of Interior and Local Government (Bureau), attended a meeting held on January 26, 1999 between the local officials of respondent municipality and Caloocan City. The purpose of the meeting was to provide an avenue for the discussion of the territorial boundary between the two local government units. During the meeting, petitioner NHA posed strong opposition to the COSLAP Resolution, contending that the latter has no jurisdiction over the boundary dispute. Subsequently, the Bureau directed the parties to submit their respective position papers within 30 days.

The main issue for our resolution is whether the COSLAP has jurisdiction over the boundary dispute between respondent municipality and Caloocan City. COSLAP was created by Executive Order No. 561 issued on September 21, 1979 by then President Ferdinand E. Marcos. The Commission is an administrative body established as a means of providing a mechanism for the expeditious settlement of land problems to avoid social unrest. Its objective is to settle land conflicts among small settlers, landowners and members of cultural minorities.

The powers and functions of the COSLAP are laid down in Section 3 of Executive Order No. 561, thus:

Sec. 3. Powers and Functions. The Commission shall have the following powers and functions: Instead of submitting a position paper, respondent municipality filed with the COSLAP a motion for execution of its Resolution dated June 22, 1998. On May 17, 1999, the COSLAP granted the motion and issued a writ of execution.

Petitioner NHA then filed with the Court of Appeals a petition for certiorari alleging that in issuing the June 22, 1998 Resolution and the writ of execution, COSLAP acted without jurisdiction. On November 16, 1999, the Appellate Court dismissed the petition for having been filed out of time and for petitioners failure to avail of the remedy of appeal.

xxx

2. Refer and follow up for immediate action by the agency having appropriate jurisdiction any land problem or dispute referred to the Commission: Provided, That the Commission may, in the following cases, assume jurisdiction and resolve land problems or disputes which are critical and explosive in nature considering, for instance, the large number of parties involved, the presence or emergence of social tension or unrest, or other similar critical situations requiring immediate action:

(a) Between occupants/squatters and pasture lease agreement holders or timber concessionaires; Petitioner then filed a motion for reconsideration but it was denied. (b)

Page 9 of 192

Between occupants/squatters and government reservation grantees;

(c)

Between occupants/squatters and public land claimants or applicants;

(d) Petitions for classification, release and/or subdivisions of lands of the public domain; and Rule III implementing the above provisions states: (e)

Other similar land problems of grave urgency and magnitude. Rule III

xxx

SETTLEMENT OF BOUNDARY DISPUTES

Administrative agencies, like the COSLAP, are tribunals of limited jurisdiction and as such could wield only such as are specifically granted to them by the enabling statutes.[8] In acting on a land dispute, the COSLAP may either assume jurisdiction if the matter falls under paragraph 2(a) to (e) or refer the matter to an agency having appropriate jurisdiction.

Art. 15. Definition and Policy. There is boundary dispute when a portion or the whole of the territorial area of an LGU is claimed by two or more LGUs. Boundary disputes between or among LGUs shall, as much as possible, be settled amicably.

There is no provision in Executive Order No. 561 that COSLAP has jurisdiction over boundary dispute between two local government units. Under Republic Act No. 7160 or the Local Government Code, the respective legislative councils of the contending local government units have jurisdiction over their boundary disputes. Sections 118 and 119 provide:

Art. 16. Jurisdictional Responsibility. Boundary disputes shall be referred for settlement to the following:

(a) Sangguniang Panlungsod or Sangguniang Bayan for disputes involving two (2) or more barangays in the same city or municipality, as the case may be;

Section 118. Jurisdictional Responsibility for Settlement of Boundary Dispute. xxx

(b) Sangguniang panlalawigan for those involving two (2) or more municipalities within the same province; (d) Boundary disputes involving a component city or municipality on the one hand and a highly urbanized city on the other, or two (2) or more highly urbanized cities, shall be jointly referred for settlement to the respective sanggunians of the parties.

(c) Jointly, to the sanggunians of provinces concerned, for those involving component cities or municipalities of different provinces; or (d) Jointly, to the respective sanggunians, for those involving a component city or municipality and a highly urbanized city or two (2) or more highly-urbanized cities. x x x

(e) In the event the Sanggunian fails to effect an amicable settlement within sixty (60) days from the date the dispute was referred thereto, it shall issue a certification to that effect. Thereafter, the dispute shall be formally tried by the Sanggunian concerned which shall decide the issue within sixty (60) days from the date of the certification referred to above.

Section 119. Appeal. Within the time and manner prescribed by the Rules of Court, any party may elevate the decision of the Sanggunian concerned to the proper Regional Trial Court having jurisdiction over the area in dispute. The Regional Trial Court shall decide the appeal within one (1) year from the filing thereof. Pending final resolution of the disputed area prior to the dispute shall be maintained and continued for all legal purposes.

Thus, instead of assuming jurisdiction over the case, the COSLAP should have referred respondents complaint to the Sangguniang Panglungsod of Caloocan City and the Sangguniang Bayan of San Jose del Monte. Their decision may be appealed to the proper Regional Trial Court.

Consequently, we rule that the COSLAP does not have jurisdiction over the boundary dispute between San Jose del Monte and Caloocan City. We have consistently ruled that a judgment for want of jurisdiction is no judgment at all. It cannot be the source of any right or the creator of

Page 10 of 192

any obligation. All acts performed pursuant to it and all claims emanating from it have no legal effect. Hence, it can never become final and any writ of execution based on it is void. [9] Such nullity is correctable only by certiorari.[10] And certiorari cannot be dismissed for timeliness inasmuch as a void judgment never acquires finality and any action to declare its nullity does not prescribe.[11] Having no legal effect, the situation is the same as it would be as if there was no judgment at all. It leaves the parties in the position they were in before the trial.[12]

Chairperson

RENATO C. CORONA

ADOLFO S. AZCUNA

Associate Justice

Associate Justice

Clearly, the Court of Appeals erred in disposing NHAs petition for certiorari. It should have dismissed the petition, not on the grounds that it was filed late and that certiorari is not a substitute for a lost appeal, but solely on the ground that the COSLAP has no jurisdiction over the subject boundary dispute. CANCIO C. GARCIA WHEREFORE, we GRANT the petition. The assailed Decision and Resolution of the Court of Appeals in CA-G.R. SP No. 54495 are SET ASIDE.

Associate Justice

SO ORDERED. ANGELINA SANDOVAL-GUTIERREZ ATTESTATION Associate Justice

I attest that the conclusions in the above Decision were reached in consultation before the case was assigned to the writer of the opinion of the Court's Division.

REYNATO S. PUNO WE CONCUR:

Associate Justice Chairperson, Second Division

REYNATO S. PUNO Associate Justice

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CERTIFICATION [11]

Heirs of Mayor Nemencio Galvez v. Court of Appeals, G.R. No. 119193, March 29, 1996, 255 SCRA 672. Pursuant to Article VIII, Section 13 of the Constitution, and the Division Chairpersons Attestation, it is hereby certified that the conclusions in the above Decision were reached in consultation before the case was assigned to the writer of the opinion of the Court. [12]

MWSS v. Sison, No. L-40309, August 31, 1983, 124 SCRA 394.

THIRD DIVISION ARTEMIO V. PANGANIBAN G.R. No. 164763

February 12, 2008

Chief Justice ZENON R. PEREZ, petitioner, vs. PEOPLE OF THE PHILIPPINES and SANDIGANBAYAN, respondents. DECISION [1]

Under Rule 45 of the 1997 Revised Rules of Civil Procedure, as amended.

[2]

REYES, R.T., J.:

Penned by Associate Justice Delilah Vidallon-Magtolis (retired) and concurred in by Associate Justices Rodrigo V. Cosico and Eriberto U. Rosario, Jr. (retired)

PETITIONER Zenon R. Perez seeks a review1 of his conviction by the Sandiganbayan2 for malversation of public funds3 under Article 217 of the Revised Penal Code.

[3]

Annex C, Rollo, pp.30-31.

This is not a big case but its implications are wide-ranging and the issues We resolve include the rights to speedy trial and speedy disposition of a criminal case, the balancing test, due process, and cruel and unusual punishment.

[4]

Kapasiyahan Blg. 06-08-95.

The Facts

[5]

Annex D, Rollo, pp.32-36.

[6]

COSLAP Case No. 98-038.

On December 28, 1988, an audit team headed by Auditor I Arlene R. Mandin, Provincial Auditor’s Office, Bohol,4conducted a cash examination on the account of petitioner, who was then the acting municipal treasurer of Tubigon, Bohol.

[7]

Longino v. General, et al., G.R. No. 147956, February 16, 2005, 451 SCRA 423.

[8]

Ibid.

[9]

Leonor v. Court of Appeals, G.R. No. 112597, April 2, 1996, 256 SCRA 69.

[10]

Cochingyan, Jr. v. Cloribel, et al., Nos. L-27070-71, April 22, 1977, 76 SCRA 361.

Petitioner was absent on the first scheduled audit at his office on December 28, 1988. A radio message was sent to Loon, the town where he resided, to apprise him of the on-going audit. The following day, the audit team counted the cash contained in the safe of petitioner in his presence. In the course of the audit, the amount of P21,331.79 was found in the safe of petitioner. The audit team embodied their findings in the Report of Cash Examination,5 which also contained an inventory of cash items. Based on the said audit, petitioner was supposed to have on hand the total amount of P94,116.36, instead of the P21,331.79, incurring a shortage of P72,784.57.6 The report also contained the Cash Production Notice7 dated January 4, 1989, where petitioner was informed and required to produce the amount of P72,784.57, and the cash count sheet

Page 12 of 192

signed and acknowledged by petitioner indicating the correctness of the amount of P21,331.79 found in his safe and counted in his presence. A separate demand letter8 dated January 4, 1989 requiring the production of the missing funds was sent and received by petitioner on January 5, 1989. When asked by the auditing team as to the location of the missing funds, petitioner verbally explained that part of the money was used to pay for the loan of his late brother, another portion was spent for the food of his family, and the rest for his medicine. 9 As a result of the audit, Arlene R. Mandin prepared a memorandum 10 dated January 13, 1989 addressed to the Provincial Auditor of Bohol recommending the filing of the appropriate criminal case against petitioner.

the jurisdiction of this Honorable Court, the above-named accused Zenon R. Perez, a public officer being then Acting Municipal Treasury of the said Municipality, by reason of the duties of his official position was accountable for the public funds collected and received by him, with grave abuse of confidence did then and there willfully, unlawfully and feloniously misappropriate, misapply, embezzle and take away from the said funds the total amount of SEVENTY-TWO THOUSAND SEVEN HUNDRED EIGHTY-FOUR PESOS and 57/100 (P72,784.57), which said fund was appropriated and converted by the said accused to his own personal use and benefit to the damage and prejudice of the government in the aforementioned amount. CONTRARY TO LAW.13 (Underscoring supplied) On March 1, 1990, petitioner, duly assisted by counsel de parte, entered a plea of "not guilty."14

On January 16, 1989, petitioner remitted to the Office of the Provincial Treasurer of Bohol the amounts of P10,000.00 and P15,000.00, respectively. On February 14, 1989, petitioner again remitted to the Provincial Treasurer an additional amount of P35,000.00, followed by remittances made on February 16, 1989 in the amounts of P2,000.00 and P2,784.00. An administrative case was filed against petitioner on February 13, 1989. He filed an Answer11 dated February 22, 1989 reiterating his earlier verbal admission before the audit team. On April 17, 1989, petitioner again remitted the amount of P8,000.00 to the Provincial Treasurer of Bohol. Petitioner had then fully restituted his shortage in the amount of P72,784.57. The full restitution of the missing money was confirmed and shown by the following receipts: 12 Official Receipt No.

Date Issued and Received

Amount

8266659

January 16, 1989

P10,000.00

8266660

January 16, 1989

P15,000.00

8266662

February 14, 1989

P35,000.00

8266667

February 16, 1989

P 2,000.00

8266668

February 16, 1989

P 2,784.00

8266675

April 17, 1989

P 8,000.00

TOTAL -

P72,784.57

Pre-trial was initially set on June 4-5, 1990 but petitioner’s counsel moved for postponement. The Sandiganbayan, however, proceeded to hear the case on June 5, 1990, as previously scheduled, due to the presence of prosecution witness Arlene R. Mandin, who came all the way from Bohol. On said date, the Sandiganbayan dispensed with pre-trial and allowed the prosecution to present its witness. Arlene R. Mandin testified as narrated above. The defense presented evidence through petitioner Zenon R. Perez himself. He denied the contents of his first Answer15 to the administrative case filed against him by the audit team. He claimed it was prepared without the assistance of counsel and that at the time of its preparation and submission, he was not in peak mental and physical condition, having been stricken with diabetes mellitus.16 He then revoked his Answer dated February 22, 1989 and filed his second Answer dated March 2, 1989.17 In the latter, he vehemently denied that he incurred a cash shortage P72,784.57. According to petitioner, the alleged shortage was in the possession and custody of his accountable personnel at the time of the audit examination. Several amounts totalling P64,784.00 were remitted to him on separate dates by his accountable officer, starting January 16, 1989 to February 16, 1989. The same were turned over by him to the Office of the Provincial Treasurer, leaving an unremitted sum of P8,000.00 as of February 16, 1989.18 He remitted the P8,000.00 on April 17, 1989 to the Provincial Treasurer of Bohol, fully restoring the cash shortage. Petitioner further testified that on July 30, 1989, he submitted his Position Paper19 before the Office of the Ombudsman, Cebu City and maintained that the alleged cash shortage was only due to oversight. Petitioner argued that the government did not suffer any damage or prejudice since the alleged cash shortage was actually deposited with the Office of the Provincial Treasurer as evidenced by official receipts.20

Later, petitioner was charged before the Sandiganbayan with malversation of public funds, defined and penalized by Article 217 of the Revised Penal Code in an Information that read: That on or about the period covering from December 28, 1988 to January 5, 1989, and for sometime prior thereto, in the Municipality of Tubigon, Province of Bohol, Philippines and within

Petitioner completed his testimony on September 20, 1990. He rested his case on October 20, 1990.21 Sandiganbayan Disposition

Page 13 of 192

On September 24, 2003, the Sandiganbayan rendered a judgment of conviction with a fallo reading:

(b) That he had the custody or control of funds or property by reason of the duties of his office;

WHEREFORE, judgment is hereby rendered finding the accused ZENON R. PEREZ, GUILTY beyond reasonable doubt of the crime of Malversation of Public Funds as defined in and penalized by Article 217 of the Revised Penal Code and, there being one mitigating circumstance without any aggravating circumstance to offset the same, is hereby sentenced to suffer an indeterminate penalty of from TEN (10) YEARS and ONE (1) DAY of prision mayor as the minimum to FOURTEEN (14) YEARS and EIGHT (8) MONTHS of reclusion temporal as the maximum and to suffer perpetual special disqualification. The accused Zenon R. Perez is likewise ordered to pay a FINE equal to the total amount of the funds malversed, which is Seventy-Two Thousand Seven Hundred Eighty-Four Pesos and FiftySeven Centavos (P72, 784.57).

(c) That those funds or property involved were public funds or property for which he is accountable; and (d) That he has appropriated, took or misappropriated or consented or, through abandonment or negligence, permitted another person to take them.29 Evidently, the first three elements are present in the case at bar. At the time of the commission of the crime charged, petitioner was a public officer, being then the acting municipal treasurer of Tubigon, Bohol. By reason of his public office, he was accountable for the public funds under his custody or control.

SO ORDERED.22 (Emphasis in the original)

The question then is whether or not petitioner has appropriated, took or misappropriated, or consented or through abandonment or negligence, permitted another person to take such funds.

On January 13, 2004, petitioner filed a motion for reconsideration23 which the prosecution opposed on January 28, 2004.24 Petitioner replied25 to the opposition. On August 6, 2004, petitioner’s motion was denied with finality.

We rule in the affirmative.

On September 23, 2004, petitioner resorted to the instant appeal26 raising the following issues, to wit: I. THE HON. SANDIGANBAYAN BY UNDULY AND UNREASONABLY DELAYING THE DECISION OF THE CASE FOR OVER THIRTEEN (13) YEARS VIOLATED THE PETITIONER’S RIGHT TO SPEEDY DISPOSITION OF HIS CASE AND DUE PROCESS. II. THE LAW RELIED UPON IN CONVICTING THE PETITIONER AND THE SENTENCE IMPOSED IS CRUEL AND THEREFORE VIOLATES SECTION 19 OF ARTICLE III (BILL OF RIGHTS) OF THE CONSTITUTION.27 (Underscoring supplied)

Verily, an accountable public officer may be found guilty of malversation even if there is no direct evidence of malversation because the law establishes a presumption that mere failure of an accountable officer to produce public funds which have come into his hands on demand by an officer duly authorized to examine his accounts is prima facie case of conversion.31 Because of the prima facie presumption in Article 217, the burden of evidence is shifted to the accused to adequately explain the location of the funds or property under his custody or control in order to rebut the presumption that he has appropriated or misappropriated for himself the missing funds. Failing to do so, the accused may be convicted under the said provision.

Our Ruling Before addressing petitioner’s twin assignment of errors, We first tackle the propriety of petitioner’s conviction for malversation of public funds. I. Petitioner was correctly convicted of malversation. Malversation is defined and penalized under Article 217 of the Revised Penal Code. The acts punished as malversation are: (1) appropriating public funds or property, (2) taking or misappropriating the same, (3) consenting, or through abandonment or negligence, permitting any other person to take such public funds or property, and (4) being otherwise guilty of the misappropriation or malversation of such funds or property. 28 There are four elements that must concur in order that one may be found guilty of the crime. They are: (a) That the offender be a public officer;

In malversation, all that is necessary to prove is that the defendant received in his possession public funds; that he could not account for them and did not have them in his possession; and that he could not give a reasonable excuse for its disappearance. An accountable public officer may be convicted of malversation even if there is no direct evidence of misappropriation and the only evidence is shortage in his accounts which he has not been able to explain satisfactorily.30

However, the presumption is merely prima facie and a rebuttable one. The accountable officer may overcome the presumption by proof to the contrary. If he adduces evidence showing that, in fact, he has not put said funds or property to personal use, then that presumption is at end and the prima facie case is destroyed.32 In the case at bar, petitioner was not able to present any credible evidence to rebut the presumption that he malversed the missing funds in his custody or control. What is extant in the records is that the prosecution, through witness Arlene R. Mandin, was able to prove that petitioner malversed the funds under his custody and control. As testified by Mandin: Atty. Caballero: Q: Was Mr. Zenon Perez actually and physically present during the time of your cash examination?

Page 14 of 192

Witness: A.

Yes, Sir.

Q:

From December 28, to January 5, 1989?

A:

He was present on December 28, 1988 and January 4 and 5, 1989, Sir.

True it is that petitioner filed another Answer on March 2, 1989 with the Office of the Provincial Treasurer of Bohol, substantially changing the contents of his earlier answer of February 22, 1989. His second Answer averred: 3. That the truth of the matter is that the alleged total cash shortage of P72,784.57 were still in the possession and custody of his accountable personnel at the time of the examination held by the auditor of the Commission on Audit;

Q: Did he not make any verbal explanation as the reason why he was short of about P72,000.00, after you conducted the cash count on January 5, 1989? A:

Yes, Sir, he did.

Q:

What did he tell you?

4. That out of the alleged cash shortage of P72,784.57, almost all of said amount were already remitted to him by his accountable personnel after January 5, 1989, and only the remaining amount of P8,000.00 remains to be remitted to him by his accountable personnel. 35 The sudden turnaround of petitioner fails to convince Us. To Our mind, petitioner only changed his story to exonerate himself, after realizing that his first Answer put him in a hole, so to speak.

A: He told us that he used some of the money to pay for the loan of his brother and the other portion was spent for food of his family; and the rest for his medicine.33 (Emphasis supplied)

It is contended that petitioner’s first Answer of February 22, 1989 should not have been given probative weight because it was executed without the assistance of counsel. 36

Petitioner gave himself away with his first Answer filed at the Office of the Provincial Treasurer of Bohol in the administrative case filed against him.

There is no law, jurisprudence or rule which mandates that an employee should be assisted by counsel in an administrative case. On the contrary, jurisprudence is in unison in saying that assistance of counsel is not indispensable in administrative proceedings.

In that Answer, petitioner narrated how he disposed of the missing funds under his custody and control, to wit: (1) about P30,000.00 was used to pay the commercial loan of his late brother; (2) he spent P10,000.00 for the treatment of his toxic goiter; and (3) about P32,000.00 was spent for food and clothing of his family, and the education of his children. He there stated:

Walang batas, hurisprudensiya, o tuntunin na nagsasabi na ang isang kawani ay dapat may tulong ng abogado sa isang kasong administratibo. Sa katunayan, ang hurisprudensiya ay iisa ang sinasabi na ang pagtulong ng isang abogado ay hindi kailangang-kailangan sa kasong administratibo.

1. That the circumstances surrounding the cash shortage in the total amount of P72,784.57 during the examination of the respondent’s cash accounts by the Commission on Audit on December 28-29, 1988 and January 4-5, 1989 are as follows, to wit:

The right to counsel, which cannot be waived unless the waiver is in writing and in the presence of counsel, is a right afforded a suspect or accused during custodial investigation. It is not an absolute right and may be invoked or rejected in a criminal proceeding and, with more reason, in an administrative inquiry.37

(a) That respondent paid the amount of about P30,000.00 to the Philippine National Bank, Tagbilaran Branch as interests of the commercial loan of his late brother Carino R. Perez using respondent’s house and lot as collateral thereof. If the interests would not be paid, the loan would be foreclosed to respondent’s great prejudice and disadvantage considering that he and his family are residing in said house used as collateral; (b) That respondent spent the amount of P10,000.00 in connection with the treatment of his toxic goiter; (c) That the rest of the amount amounting to about P32,000.00 was spent by him for his family’s foods, clothings (sic), and education of his children because his monthly salary is not enough for the needs of his family.34 By the explicit admission of petitioner, coupled with the testimony of Arlene R. Mandin, the fourth element of the crime of malversation was duly established. His conviction thus stands in terra firma.

Ang karapatang magkaroon ng abogado, na hindi maaaring talikdan malibang ang waiver ay nakasulat at sa harap ng abogado, ay karapatang ibinibigay sa suspek o nasasakdal sa isang custodial investigation. Ito ay hindi lubos na karapatan at maaring hingin o tanggihan sa isang prosesong kriminal, at lalo na sa isang administratibong pagsisiyasat. While investigations conducted by an administrative body may at times be akin to a criminal proceeding, the fact remains that under existing laws, a party in an administrative inquiry may or may not be assisted by counsel, irrespective of the nature of the charges and of respondent’s capacity to represent himself, and no duty rests on such body to furnish the person being investigated with counsel.38 Thus, the right to counsel is not imperative in administrative investigations because such inquiries are conducted merely to determine whether there are facts that merit disciplinary measures against erring public officers and employees, with the purpose of maintaining the dignity of government service.39

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Kung gayon, ang karapatang magkaroon ng abogado ay hindi sapilitan sa isang administratibong imbestigasyon sapagkat ito ay ginagawa lamang upang malaman kung may sapat na batayan na patawan ng disiplina ang nagkasalang opisyal o empleyado, para mapanatili ang dignidad ng paglilingkod sa pamahalaan. There is nothing in the Constitution that says that a party in a non-litigation proceeding is entitled to be represented by counsel and that, without such representation, he shall not be bound by such proceedings. The assistance of lawyers, while desirable, is not indispensable. The legal profession was not engrafted in the due process clause such that without the participation of its members, the safeguard is deemed ignored or violated. The ordinary citizen is not that helpless that he cannot validly act at all except only with a lawyer at his side.40 More than that, petitioner’s first Answer may be taken against him, as he executed it in the course of the administrative proceedings below. This is pursuant to Rule 130, Section 26 of the Rules of Court which provides that the "act, declaration or omission of a party as to a relevant fact may be given against him." In People v. Lising,41 the Court held: Extrajudicial statements are as a rule, admissible as against their respective declarants, pursuant to the rule that the act, declaration or omission of a party as to a relevant fact may be given against him. This is based upon the presumption that no man would declare anything against himself, unless such declarations were true. A man’s act, conduct and declarations wherever made, provided they be voluntary, are admissible against him, for the reason that it is fair to presume that they correspond with the truth and it is his fault if they are not. There is also no merit in the contention that petitioner’s sickness affected the preparation of his first Answer. He presented no convincing evidence that his disease at the time he formulated that answer diminished his capacity to formulate a true, clear and coherent response to any query. In fact, its contents merely reiterated his verbal explanation to the auditing team on January 5, 1989 on how he disposed of the missing funds. II. There is no violation of the rights to a speedy disposition of the case and to due process of law. We now discuss the right to a speedy trial and disposition, the balancing test, due process, and cruel and unusual punishment. Petitioner asserts that his right to due process of law and to speedy disposition of his case was violated because the decision of the Sandiganbayan was handed down after the lapse of more than twelve years. The years that he had to wait for the outcome of his case were allegedly spent in limbo, pain and agony.42

Petitioner’s claim of violation of his right to a speedy disposition of his case must also fail. The 1987 Constitution44 guarantees the right of an accused to speedy trial. Both the 1973 Constitution in Section 16 of Article IV and the 1987 Constitution in Section 16 of Article III, Bill of Rights, are also explicit in granting to the accused the right to speedy disposition of his case.45 In Barker v. Wingo,46 the United States Supreme Court was confronted for the first time with two "rigid approaches" on speedy trial as "ways of eliminating some of the uncertainty which courts experience protecting the right."47 The first approach is the "fixed-time period" which holds the view that "the Constitution requires a criminal defendant to be offered a trial within a specified time period." 48 The second approach is the "demand-waiver rule"which provides that "a defendant waives any consideration of his right to speedy trial for any period prior to which he has not demanded trial. Under this rigid approach, a prior demand is a necessary condition to the consideration of the speedy trial right."49 The fixed-time period was rejected because there is "no constitutional basis for holding that the speedy trial can be quantified into a specific number of days or months." 50 The demand-waiver rule was likewise rejected because aside from the fact that it is "inconsistent with this Court’s pronouncements on waiver of constitutional rights,"51 "it is insensitive to a right which we have deemed fundamental."52 The Court went on to adopt a middle ground: the "balancing test," in which "the conduct of both the prosecution and defendant are weighed."53 Mr. Justice Powell, ponente, explained the concept, thus: A balancing test necessarily compels courts to approach speedy trial cases on an ad hoc basis. We can do little more than identify some of the factors which courts should assess in determining whether a particular defendant has been deprived of his right. Though some might express them in different ways, we identify four such factors: Length of delay, the reason for the delay, the defendant’s assertion of his right, and prejudice to the defendant. The length of the delay is to some extent a triggering mechanism. Until there is some delay which is presumptively prejudicial, there is no necessity for inquiry into the other factors that go into the balance. Nevertheless, because of the imprecision of the right to speedy trial, the length of delay that will provoke such an inquiry is necessarily dependent upon the peculiar circumstances of the case. To take but one example, the delay that can be tolerated for an ordinary street crime is considerably less than for a serious, complex conspiracy charge.

We are not persuaded. Due process of law as applied to judicial proceedings has been interpreted to mean "a law which hears before it condemns, which proceeds on inquiry, and renders judgment only after trial."43 Petitioner cannot complain that his right to due process has been violated. He was given all the chances in the world to present his case, and the Sandiganbayan rendered its decision only after considering all the pieces of evidence presented before it.

Closely related to length of delay is the reason the government assigns to justify the delay. Here, too, different weights should be assigned to different reasons. A deliberate attempt to delay the trial in order to hamper the defense should be weighted heavily against the government. A more neutral reason such as negligence or overcrowded courts should be weighted less heavily but nevertheless should be considered since the ultimate responsibility for such circumstances must rest with the government rather than with the defendant. Finally, a valid reason, such as a missing witness, should serve to justify appropriate delay. We have

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already discussed the third factor, the defendant’s responsibility to assert his right. Whether and how a defendant asserts his right is closely related to the other factors we have mentioned. The strength of his efforts will be affected by the length of the delay, to some extent by the reason for the delay, and most particularly by the personal prejudice, which is not always readily identifiable, that he experiences. The more serious the deprivation, the more likely a defendant is to complain. The defendant’s assertion of his speedy trial right, then, is entitled to strong evidentiary weight in determining whether the defendant is being deprived of the right. We emphasize that failure to assert the right will make it difficult for a defendant to prove that he was denied a speedy trial. A fourth factor is prejudice to the defendant. Prejudice, of course, should be assessed in the light of the interests of defendants which the speedy trial right was designed to protect. This Court has identified three such interests: (i) to prevent oppressive pretrial incarceration; (ii) to minimize anxiety and concern of the accused; and (iii) to limit the possibility that the defense will be impaired. Of these, the most serious is the last, because the inability of a defendant adequately to prepare his case skews the fairness of the entire system. If witnesses die or disappear during a delay, the prejudice is obvious. There is also prejudice if defense witnesses are unable to recall accurately events of the distant past. Loss of memory, however, is not always reflected in the record because what has been forgotten can rarely be shown.54(Emphasis supplied) Philippine jurisprudence has, on several occasions, adopted the balancing test.

Moreover, the determination of whether the delays are of said nature is relative and cannot be based on a mere mathematical reckoning of time.62 Measured by the foregoing yardstick, We rule that petitioner was not deprived of his right to a speedy disposition of his case. More important than the absence of serious prejudice, petitioner himself did not want a speedy disposition of his case.63 Petitioner was duly represented by counsel de parte in all stages of the proceedings before the Sandiganbayan. From the moment his case was deemed submitted for decision up to the time he was found guilty by the Sandiganbayan, however, petitioner has not filed a single motion or manifestation which could be construed even remotely as an indication that he wanted his case to be dispatched without delay. Petitioner has clearly slept on his right. The matter could have taken a different dimension if during all those twelve years, petitioner had shown signs of asserting his right to a speedy disposition of his case or at least made some overt acts, like filing a motion for early resolution, to show that he was not waiving that right.64 Currit tempus contra decides et sui juris contempores: Time runs against the slothful and those who neglect their rights. Ang panahon ay hindi panig sa mga tamad at pabaya sa kanilang karapatan. Vigilantis sed non dormientibus jura in re subveniunt. The law aids the vigilant and not those who slumber in their rights. Ang batas ay tumutulong sa mga mapagbantay at hindi sa mga humihimbing sa kanilang karapatan.

In 1991, in Gonzales v. Sandiganbayan,55 this Court ruled: It must be here emphasized that the right to a speedy disposition of a case, like the right to speedy trial, is deemed violated only when the proceeding is attended by vexatious, capricious, and oppressive delays; or when unjustified postponements of the trial are asked for and secured, or when without cause or justifiable motive a long period of time is allowed to elapse without the party having his case tried. Equally applicable is the balancing test used to determine whether a defendant has been denied his right to a speedy trial, or a speedy disposition of a case for that matter, in which the conduct of both the prosecution and the defendant are weighed, and such factors as length of the delay, reason for the delay, the defendant’s assertion or non-assertion of his right, and prejudice to the defendant resulting from the delay, are considered. (Underscoring supplied) Subsequently, in Dela Peña v. Sandiganbayan,56 this Court again enumerated the factors that should be considered and balanced, namely: (1) length of delay; (2) reasons for the delay; (3) assertion or failure to assert such right by the accused; and (4) prejudice caused by the delay.57 Once more, in Mendoza-Ong v. Sandiganbayan,58 this Court reiterated that the right to speedy disposition of cases, like the right to speedy trial, is violated only when the proceedings are attended by vexatious, capricious and oppressive delays.59 In the determination of whether said right has been violated, particular regard must be taken of the facts and circumstances peculiar to each case.60 The conduct of both the prosecution and defendant, the length of the delay, the reasons for such delay, the assertion or failure to assert such right by accused, and the prejudice caused by the delay are the factors to consider and balance.61

Pending his conviction by the Sandiganbayan, petitioner may have truly lived in suspicion and anxiety for over twelve years. However, any prejudice that may have been caused to him in all those years was only minimal. The supposed gravity of agony experienced by petitioner is more imagined than real. This case is analogous to Guerrero v. Court of Appeals.65 There, the Court ruled that there was no violation of petitioner’s right to speedy trial and disposition of his case inasmuch as he failed seasonably to assert his rights: In the present case, there is no question that petitioner raised the violation against his own right to speedy disposition only when the respondent trial judge reset the case for rehearing. It is fair to assume that he would have just continued to sleep on his right – a situation amounting to laches – had the respondent judge not taken the initiative of determining the non-completion of the records and of ordering the remedy precisely so he could dispose of the case. The matter could have taken a different dimension if during all those ten years between 1979 when accused filed his memorandum and 1989 when the case was re-raffled, the accused showed signs of asserting his right which was granted him in 1987 when the new Constitution took effect, or at least made some overt act (like a motion for early disposition or a motion to compel the stenographer to transcribe stenographic notes) that he was not waiving it. As it is, his silence would have to be interpreted as a waiver of such right. While this Court recognizes the right to speedy disposition quite distinctly from the right to a speedy trial, and although this Court has always zealously espoused protection from oppressive and vexatious delays not attributable to the party involved, at the same time, we hold that a party’s individual rights should not work against and preclude the people’s equally important

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right to public justice. In the instant case, three people died as a result of the crash of the airplane that the accused was flying. It appears to us that the delay in the disposition of the case prejudiced not just the accused but the people as well. Since the accused has completely failed to assert his right seasonably and inasmuch as the respondent judge was not in a position to dispose of the case on the merits due to the absence of factual basis, we hold it proper and equitable to give the parties fair opportunity to obtain (and the court to dispense) substantial justice in the premises. III. The law relied upon in convicting petitioner is not cruel and unusual. It does not violate Section 19, Article III of the Bill of Rights.

The Court adopted the American view that what is cruel and unusual is not fastened to the obsolete but may acquire meaning as public opinion becomes enlightened by humane justice and must draw its meaning from the evolving standards of decency that mark the progress of a maturing society.79 In his last ditch effort to exculpate himself, petitioner argues that the penalty meted for the crime of malversation of public funds "that ha[ve] been replenished, remitted and/or returned" to the government is cruel and therefore unconstitutional, "as government has not suffered any damage."80 The argument is specious on two grounds.

What constitutes cruel and unusual punishment has not been exactly defined. 66 The Eighth Amendment of the United States Constitution,67 the source of Section 19, Article III of the Bill of Rights68 of our own Constitution, has yet to be put to the test to finally determine what constitutes cruel and inhuman punishment.69 Cases that have been decided described, rather than defined, what is meant by cruel and unusual punishment. This is explained by the pronouncement of the United States Supreme Court that "[t]he clause of the Constitution, in the opinion of the learned commentators, may be therefore progressive, and is not fastened to the obsolete, but may acquire meaning as public opinion becomes enlightened by a humane justice."70 In Wilkerson v. Utah,71 Mr. Justice Clifford of the United States Supreme Court opined that "[d]ifficulty would attend the effort to define with exactness the extent of the constitutional provision which provides that cruel and unusual punishments shall not be inflicted; but it is safe to affirm that punishments of torture, x x x and all others in the same line of unnecessary cruelty, are forbidden by that amendment to the constitution."72 In In Re: Kemmler,73 Mr. Chief Justice Fuller of that same Court stated that "[p]unishments are cruel when they involve torture or a lingering death; but the punishment of death is not cruel within the meaning of that word as used in the constitution. It implies x x x something more inhuman and barbarous, something more than the mere extinguishment of life." 74 Again, in Weems v. U.S.,75 Mr. Justice McKenna held for the Court that cadena temporal and its accessory penalties "has no fellow in American legislation. Let us remember that it has come to us from a government of a different form and genus from ours. It is cruel in its excess of imprisonment and that which accompanies and follows imprisonment. It is unusual in character. Its punishments come under the condemnation of the Bill of Rights, both on account of their degree and kind. And they would have those bad attributes even if they were found in a Federal enactment, and not taken from an alien source." In Echegaray v. Executive Secretary,76 this Court in a per curiam Decision held that Republic Act No. 8177,77 even if it does not provide in particular the details involved in the execution by lethal injection, is not cruel, degrading or inhuman, and is thus constitutional. Any infliction of pain in lethal injection is merely incidental in carrying out the execution of the death penalty and does not fall within the constitutional proscription against cruel, degrading or inhuman punishment.78

First. What is punished by the crime of malversation is the act of a public officer who, by reason of the duties of his office, is accountable for public funds or property, shall appropriate the same, or shall take and misappropriate or shall consent, or through abandonment or negligence shall permit any other person to take such public funds or property, wholly or partially, or shall otherwise be guilty of the misappropriation or malversation of such funds or property. 81 Payment or reimbursement is not a defense for exoneration in malversation; it may only be considered as a mitigating circumstance. This is because damage is not an element of malversation. Second. There is strong presumption of constitutionality accorded to statutes. It is established doctrine that a statute should be construed whenever possible in harmony with, rather than in violation of, the Constitution.82 The presumption is that the legislature intended to enact a valid, sensible and just law and one which operates no further than may be necessary to effectuate the specific purpose of the law.83 It is presumed that the legislature has acted within its constitutional powers. So, it is the generally accepted rule that every statute, or regularly accepted act, is, or will be, or should be, presumed to be valid and constitutional.84 He who attacks the constitutionality of a law has the onus probandi to show why such law is repugnant to the Constitution. Failing to overcome its presumption of constitutionality, a claim that a law is cruel, unusual, or inhuman, like the stance of petitioner, must fail. IV. On the penalty The Sandiganbayan sentenced petitioner to an indeterminate sentence of ten (10) years and one (1) day of prision mayor, as minimum, to fourteen (14) years and eight (8) months of reclusion temporal, as maximum. In imposing the penalty, it found that petitioner was entitled to the mitigating circumstance of payment which is akin to voluntary surrender. Article 217 penalizes malversation in the following tenor: Article 217. Malversation of public funds or property. – Presumption of malversation. – Any public officer who, by reason of the duties of his office, is accountable for public funds or property, shall appropriate the same, or shall take and misappropriate or shall consent, or through abandonment or negligence shall permit any other person to take such public funds or

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property, wholly or partially, or shall otherwise be guilty of the misappropriation or malversation of such funds or property.

Of course, the end does not justify the means. To condone what petitioner has done because of the nobility of his purpose or financial emergencies will become a potent excuse for malefactors and open the floodgates for more corruption in the government, even from "small fry" like him.

xxxx 4. The penalty of reclusion temporal in its medium and maximum periods, if the amount involved is more than 12,000 but is less than 22,000 pesos. If the amount exceeds the latter, the penalty shall be reclusion temporal in its maximum period to reclusion perpetua.

The bottom line is a guilty person deserves the penalty given the attendant circumstances and commensurate with the gravity of the offense committed. Thus, a reduction in the imposable penalty by one degree is in order. Article 64 of the Revised Penal Code is explicit:

In all cases, persons guilty of malversation shall also suffer the penalty of perpetual special disqualification and a fine equal to the amount of the funds malversed or equal to the total value of the property embezzled.

Art. 64. Rules for the application of penalties which contain three periods. – In cases in which the penalties prescribed by law contains three periods, whether it be a single divisible penalty or composed of three difference penalties, each one of which forms a period in accordance with the provisions of Articles 76 and 77, the courts shall observe for the application of the penalty, the following rules, according to whether there are no mitigating or aggravating circumstances:

The failure of a public officer to have duly forthcoming any public funds or property with which he is chargeable upon demand by any duly authorized officer, shall be prima facie evidence that he has put such missing funds or property to personal uses. (Underscoring supplied)

xxxx

The amount malversed totalled P72,784.57. The prescribed penalty is reclusion temporal in its maximum period to reclusion perpetua, which has a range of seventeen (17) years, four (4) months and one (1) day to forty (40) years. However, the commission of the crime was attended by the mitigating circumstance akin to voluntary surrender. As correctly observed by the Sandiganbayan, petitioner restituted the full amount even before the prosecution could present its evidence. That is borne by the records. It bears stressing that the full restitution of the amount malversed will not in any way exonerate an accused, as payment is not one of the elements of extinction of criminal liability. Under the law, the refund of the sum misappropriated, even before the commencement of the criminal prosecution, does not exempt the guilty person from liability for the crime. 85 At most, then, payment of the amount malversed will only serve as a mitigating circumstance86 akin to voluntary surrender, as provided for in paragraph 7 of Article 1387 in relation to paragraph 1088 of the same Article of the Revised Penal Code. But the Court also holds that aside from voluntary surrender, petitioner is entitled to the mitigating circumstance of no intention to commit so grave a wrong, 89 again in relation to paragraph 10 of Article 13.90 The records bear out that petitioner misappropriated the missing funds under his custody and control because he was impelled by the genuine love for his brother and his family. Per his admission, petitioner used part of the funds to pay off a debt owed by his brother. Another portion of the misappropriated funds went to his medications for his debilitating diabetes. Further, as shown earlier, petitioner restituted all but Eight Thousand Pesos (P8,000.00) of the funds in less than one month and a half and said small balance in three (3) months from receipt of demand of COA on January 5, 1999. Evidently, there was no intention to commit so grave a wrong.

5. When there are two or more mitigating circumstances and no aggravating circumstances are present, the court shall impose the penalty next lower to that prescribed by law, in the period that it may deem applicable, according to the number and nature of such circumstances. (Underscoring supplied) Considering that there are two mitigating circumstances, the prescribed penalty is reduced to prision mayor in its maximum period to reclusion temporal in its medium period, to be imposed in any of its periods. The new penalty has a range of ten (10) years and one (1) day to seventeen (17) years and four (4) months. Applying the Indeterminate Sentence Law,91 the maximum term could be ten (10) years and one (1) day of prision mayormaximum, while the minimum term is again one degree lower92 and could be four (4) years, two (2) months and one (1) day of prision correccional maximum. In the 1910 case of U.S. v. Reyes,93 the trial judge entered a judgment of conviction against the accused and meted to him the penalty of "three years’ imprisonment, to pay a fine of P1,500.00, and in case of insolvency to suffer subsidiary imprisonment at the rate of one day for every P2.50 that he failed to pay, which subsidiary imprisonment, however, should not exceed one third of the principal penalty" and to be "perpetually disqualified for public office and to pay the costs." This was well within the imposable penalty then under Section 1 of Act No. 1740,94 which is "imprisonment for not less than two months nor more than ten years and, in the discretion of the court, by a fine of not more than the amount of such funds and the value of such property." On appeal to the Supreme Court, the accused’s conviction was affirmed but his sentence was modified and reduced to six months. The court, per Mr. Justice Torres, reasoned thus: For the foregoing reasons the several unfounded errors assigned to the judgment appealed from have been fully refuted, since in conclusion it is fully shown that the accused unlawfully disposed of a portion of the municipal funds, putting the same to his own use, and to that of other persons in violation of Act. No. 1740, and consequently he has incurred the penalty therein established as principal of the crime of misappropriation; and even though in imposing it, it is not necessary to adhere to the rules of the Penal Code, the court in using its discretional powers as authorized by law, believes that the circumstances present in the commission of

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crimes should be taken into consideration, and in the present case the amount misappropriated was refunded at the time the funds were counted.95 (Underscoring supplied) We opt to exercise an analogous discretion.

CERTIFICATION

WHEREFORE, the Decision of the Sandiganbayan dated September 24, 2003 is AFFIRMED with the MODIFICATION that petitioner is hereby sentenced to suffer the indeterminate penalty of four (4) years, two (2) months and one (1) day of prision correccional, as minimum term, to ten (10) years and one (1) day of prision mayor, as maximum term, with perpetual special disqualification. He is likewise ORDERED to pay a fine of P72,784.57, the amount equal to the funds malversed.

Pursuant to Section 13, Article VIII of the Constitution and the Division Chairperson’s Attestation, I certify that the conclusions in the above Decision had been reached in consultation before the case was assigned to the writer of the opinion of the Court’s Division.

Costs against petitioner.

Footnotes

SO ORDERED.

* Vice Associate Justice Minita V. Chico-Nazario. Justice Nazario is on official leave per Special Order No. 484 dated January 11, 2008.

RUBEN T. REYES Associate Justice

REYNATO S. PUNO Chief Justice

1

Under Rule 45 of the Rules of Court per A.M. No. 00-5-03-SC.

2

Penned by Associate Justice Diosdado M. Peralta, with Associate Justices Teresita LeonardoDe Castro (now a member of this Court) and Francisco H. Villaruz, Jr., concurring; rollo, pp. 2538. WE CONCUR: 3

CONSUELO YNARES-SANTIAGO Associate Justice Chairperson

Criminal Case No. 14230.

4

Pursuant to Office Order No. 88-55 dated December 22, 1988 issued by Provincial Auditor Fausto P. De La Serna. (Annex "B") 28

MA. ALICIA AUSTRIA-MARTINEZ Associate Justice

*RENATO C. CORONA Associate Justice

Reyes, L.B., The Revised Penal Code (Book II), 15th ed., rev. 2001, pp. 393-394.

29

Id. at 394. See also Nizurtado v. Sandiganbayan, G.R. No. 107838, December 7, 1994, 239 SCRA 33, 42; Peñanueva, Jr. v. Sandiganbayan, G.R. Nos. 98000-02, June 30, 1993, 224 SCRA 86, 92.

ANTONIO EDUARDO B. NACHURA Associate Justice

30

De Guzman v. People, G.R. No. L-54288, December 15, 1982, 119 SCRA 337, 347 (emphasis ours), citing Aquino, The Revised Penal Code, Vol. II, 1976 ed., citing People v. Mingoa, 92 Phil. 856 (1953); U.S. v. Javier, 6 Phil. 334 (1906); U.S. v. Melencio, 4 Phil. 331 (1905). See also Quizo v. Sandiganbayan, G.R. No. L-77120, April 6, 1987, 149 SCRA 108.

ATTESTATION

31

Quizo v. Sandiganbayan, supra at 113, citing U.S. v. Catolico, 18 Phil. 504 (1911).

I attest that the conclusions in the above Decision had been reached in consultation before the case was assigned to the writer of the opinion of the Court’s Division.

32

Id.

33

TSN, June 5, 1990, p. 25.

34

Exhibit "G."

35

Exhibit "5."

CONSUELO YNARES-SANTIAGO Associate Justice Chairperson

Page 20 of 192

36

TSN, September 20, 1990, pp. 37-39.

60

37

Lumiqued v. Exevea, G.R. No. 117565, November 18, 1997, 282 SCRA 125, 138-139.

61

Id., citing Rodriguez v. Sandiganbayan, G.R. No. 141710, March 3, 2004, 424 SCRA 236.

Id., citing Ty-Dazo v. Sandiganbayan, G.R. Nos. 143885-86, January 21, 2002, 374 SCRA 200, 203.

38

Id. at 140, citing Bancroft v. Board of Governors of Registered Dentists of Oklahoma, 210 P. 2d 666 (1949). 39

40

62

Id., citing Binay v. Sandiganbayan, G.R. Nos. 120681-83 & 128136, October 1, 1999, 316 SCRA 65.

Id. at 141. 63

See Barker v. Wingo, supra note 46.

64

See Dela Peña v. Sandiganbayan, supra note 56, at 488.

65

G.R. No. 107211, June 28, 1996, 257 SCRA 703, 715-716.

66

Weems v. U.S., 217 US 349, 30 S. Ct. 544, 54 L. Ed. 793, 19 Am. Ann. Cas. 705 (1910).

67

The Eighth Amendment of the United States Constitution provides:

Nera v. The Auditor General, G.R. No. L-24957, August 3, 1988, 164 SCRA 1.

41

G.R. Nos. 106210-11, January 30, 1998, 285 SCRA 595, 624, citing Vicente, F., Evidence, 1990 ed., p. 305. 42

Rollo, p. 19. Petitioner claims that he had to wait for more than thirteen (13) years. However, this is erroneous. The records would show that he rested his case on October 20, 1990, while the Sandiganbayan handed down its questioned Decision on September 24, 2003, or after the lapse of twelve (12) years and eleven (11) months. 43

16C C.J.S. Constitutional Law, Sec. 946.

44

Bill of Rights of the Constitution (1987), Art. III, Sec. 14 provides:

Excessive bail shall not be required, nor excessive fines imposed, nor cruel and unusual punishments inflicted. (Emphasis supplied) 68

(1) No person shall be heard to answer for a criminal offense without due process of law. (2) In all criminal prosecutions, the accused shall be presumed innocent until the contrary is proved, and shall enjoy the right to be heard by himself and counsel, to be informed of the nature and cause of the accusation against him, to have a speedy, impartial, and public trial, to meet the witness face to face, and to have compulsory process to secure the attendance of witnesses and the production of evidence in his behalf. However, after arraignment, trial may proceed notwithstanding the absence of the accused provided that he has been duly notified and his failure to appear is unjustifiable. (Emphasis supplied)

Bill of Rights of the Constitution (1987), Art. III, Sec. 19 provides:

Sec. 19. (1) Excessive fines shall not be imposed, nor cruel, degrading or inhuman punishment inflicted. Neither shall death penalty be imposed, unless, for compelling reasons involving heinous crimes, the Congress hereafter provides for it. Any death penalty already imposed shall be reduced to reclusion perpetua. (2) The employment of physical, psychological, or degrading punishment against any prisoner or detainee, or the use of substandard or inadequate penal facilities under subhuman condition shall be dealt with by law. (Emphasis supplied) 69

See note 43.

45

"All persons shall have the right to a speedy disposition of their cases before all judicial, quasi-judicial, or administrative bodies." 55

G.R. No. 94750, July 16, 1991, 199 SCRA 298, 307.

56

G.R. No. 144542, June 29, 2001, 360 SCRA 478.

70

Weems v. U.S., supra note 66, citing Mackin v. U.S., 117 US 348, 350, 29 L. Ed. 909, 910, 6 S. Ct. Rep. 777; Ex parte Wilson, 114 US 417, 427, 29 L. Ed. 89, 92. 71

99 US 130.

72

Wilkerson v. Utah, id. at 135.

73

136 US 436, 10 S. Ct. 930, 34 L. Ed. 519.

74

In Re: Kemmler, id. at 524.

75

Supra note 66.

76

G.R. No. 132601, October 12, 1998, 297 SCRA 754.

57

Dela Peña v. Sandiganbayan, id. at 485, citing Blanco v. Sandiganbayan, G.R. Nos. 13675758, November 27 2000, 346 SCRA 108; Dansal v. Fernandez, Sr., G.R. No. 126814, March 2, 2000, 327 SCRA 145, 153; Alvizo v. Sandiganbayan, G.R. No. 101689, March 17, 1993, 220 SCRA 55, 63. 58

59

G.R. Nos. 146368-69, October 18, 2004, 440 SCRA 423, 425-426.

Mendoza-Ong v. Sandiganbayan, id., citing Dimayacyac v. Court of Appeals, G.R. No. 136264, May 28, 2004, 430 SCRA 121.

Page 21 of 192

77

An Act Designating Death by Lethal Injection as the Method of Carrying Out Capital Punishment, Amending For the Purpose Article 81 of the Revised Penal Code, As Amended by Section 24 of Republic Act No. 7659. Sections 17 and 19 of the Rules and Regulations to Implement Republic Act No. 8177 were, however, declared INVALID: (a) Section 17 because it "contravenes Article 83 of the Revised Penal Code, as amended by Section 25 of Republic Act No. 7659;" and (b) Section 19 because it "fails to provide for review and approval of the Lethal Injection Manual by the Secretary of Justice, and unjustifiably makes the manual confidential, hence, unavailable to interested parties including the accused/convict and counsel." 78

Section 1. Hereafter, in imposing a prison sentence for an offense punished by the Revised Penal Code, or its amendments, the court shall sentence the accused to an indeterminate sentence the maximum term of which shall be that which, in view of the attending circumstances, could be properly imposed under the rules of the said Code, and the minimum of which shall be within the range of the penalty next lower to that prescribed by the Code for the offense; and if the offense is punished by any other law, the court shall sentence the accused to an indeterminate sentence, the maximum term of which shall not exceed the maximum fixed by said law and shall not be less than the minimum term prescribed by the same. (As amended by Act. No. 4225)

Echegaray v. Executive Secretary, supra at 777. 92

Guevarra v. Court of Appeals, G.R. No. 41061, July 16, 1990, 187 SCRA 484.

93

14 Phil. 718, 721 (1910).

94

Enacted on October 3, 1907.

95

Id. at 725-726.

79

Id. at 778-779, citing Ex Parte Granvel, 561 SW 2d 503, 509 (1978), citing Trop v. Dulles, 356 US 86, 78 S. Ct. 590, 2 L. Ed. 2d 630 (1958); Estella v. Gamble, 429 US 97, 97 S. Ct. 285, 290, 50 L. Ed. 2d 251, 258-259 (1976). 80

Rollo, p. 22.

81

See Revised Penal Code, Art. 217.

82

Cruz v. Secretary of Environment and Natural Resources, G.R. No. 135385, December 6, 2000, 347 SCRA 128, citing San Miguel Corporation v. Avelino, G.R. No. L-39699, March 14, 1979, 89 SCRA 69; Phil. Long Distance Telephone Co. v. Collector of Internal Revenue, 90 Phil. 674 (1952); Teehankee v. Rovira, 75 Phil. 634 (1945).

Republic of the Philippines SUPREME COURT Manila EN BANC

83

Id., citing In re Guarina, 24 Phil. 37 (1913).

G.R. No. L-29169

84

16A C.J.S. Constitutional Law, Sec. 96(a).

85

U.S. v. Reyes, 14 Phil. 718 (1910). See also People v. Livara, 94 Phil. 771 (1954).

ROGER CHAVEZ, petitioner, vs. THE HONORABLE COURT OF APPEALS, THE PEOPLE OF THE PHILIPPINES and THE WARDEN OF THE CITY JAIL OF MANILA, respondents.

August 19, 1968

86

Estamos con el. Hon. Procurador General en que ha lugar a estimar la devolución hecha por e apelante de la cantidad defraudada como circumstancia atenuante especial sin ninguna agravante que la compense. Esto así, procede condenar al apelante a sufrir en su grado minímo la pena señalada por la ley. (People v. Velasquez, 72 Phil. 98, 100 [1941]) (Italics supplied) 87

Revised Penal Code, Art. 13, Par. 7. That the offender had voluntarily surrendered himself to a person in authority or his agents, or that he had voluntarily confessed his guilt before the court prior to the presentation of the evidence for the prosecution. 88

Id., Sec. 10. And, finally, any other circumstance of a similar nature and analogous to those above mentioned. 89

Revised Penal Code, Art. 13, Par. 3. That the offender had no intention to commit so grave a wrong as that committed. 90

Supra note 88.

91

Act No. 4103, as amended, otherwise known as the Indeterminate Sentence Law, provides:

Estanislao E. Fernandez and Fausto Arce for petitioner. Office of the Solicitor General for respondents. SANCHEZ, J.: The thrust of petitioner's case presented in his original and supplementary petitions invoking jurisdiction of this Court is that he is entitled, on habeas corpus, to be freed from imprisonment upon the ground that in the trial which resulted in his conviction1 he was denied his constitutional right not to be compelled to testify against himself. There is his prayer, too, that, should he fail in this, he be granted the alternative remedies of certiorari to strike down the two resolutions of the Court of Appeals dismissing his appeal for failure to file brief, and of mandamus to direct the said court to forward his appeal to this Court for the reason that he was raising purely questions of law. The indictment in the court below — the third amended information — upon which the judgment of conviction herein challenged was rendered, was for qualified theft of a motor vehicle, one (1) Thunderbird car, Motor No. H9YH-143003, with Plate No. H-16648 Pasay City '62 together with its accessories worth P22,200.00. Accused were the following: Petitioner herein, Roger Chavez,

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Ricardo Sumilang alias "Romeo Vasquez", Edgardo P. Pascual alias"Ging" Pascual, Pedro Rebullo alias "Pita", Luis Asistio alias "Baby" Asistio, Lorenzo Meneses alias "Lory" Meneses, Peter Doe, Charlie Doe and Paul Doe.2

I am not making him as state witness, Your Honor. I am only presenting him as an ordinary witness. ATTY. CARBON:

Averred in the aforesaid information was that on or about the 14th day of November, 1962, in Quezon City, the accused conspired, with intent of gain, abuse of confidence and without the consent of the owner thereof, Dy Sun Hiok y Lim, in asporting the motor vehicle abovedescribed.

As a matter of right, because it will incriminate my client, I object. COURT:

Upon arraignment, all the accused, except the three Does who have not been identified nor apprehended, pleaded not guilty.1äwphï1.ñët

The Court will give counsel for Roger Chavez fifteen minutes within which to confer and explain to his client about the giving of his testimony.

On July 23, 1963, trial commenced before the judge presiding Branch IX of the Court of First Instance of Rizal in Quezon City.

xxx

xxx

xxx

COURT: [after the recess] The trial opened with the following dialogue, which for the great bearing it has on this case, is here reproduced:.

Are the parties ready? .

COURT:

FISCAL:

The parties may proceed.

We are ready to call on our first witness, Roger Chavez.

FISCAL GRECIA:

ATTY. CARBON:

Our first witness is Roger Chavez [one of the accused].

As per understanding, the proceeding was suspended in order to enable me to confer with my client.

ATTY. CARBON [Counsel for petitioner Chavez]: I am quite taken by surprise, as counsel for the accused Roger Chavez, with this move of the Fiscal in presenting him as his witness. I object.

I conferred with my client and he assured me that he will not testify for the prosecution this morning after I have explained to him the consequences of what will transpire. COURT:

COURT: What he will testify to does not necessarily incriminate him, counsel. On what ground, counsel? . And there is the right of the prosecution to ask anybody to act as witness on the witness-stand including the accused.

ATTY. CARBON:

If there should be any question that is incriminating then that is the time for counsel to interpose his objection and the court will sustain him if and when the court feels that the answer of this witness to the question would incriminate him.

On the ground that I have to confer with my client. It is really surprising that at this stage, without my being notified by the Fiscal, my client is being presented as witness for the prosecution. I want to say in passing that it is only at this very moment that I come to know about this strategy of the prosecution.

Counsel has all the assurance that the court will not require the witness to answer questions which would incriminate him.

COURT (To the Fiscal): You are not withdrawing the information against the accused Roger Chavez by making [him a] state witness?.

But surely, counsel could not object to have the accused called on the witnessstand. ATTY. CARBON:

FISCAL GRECIA: I submit.

Page 23 of 192

xxx

xxx

xxx

ATTY. CRUZ [Counsel for defendants Pascual and Meneses]: .

'The act or declaration of a conspirator relating to the conspiracy and during its existence, may be given in evidence against the co-conspirator after the conspiracy is shown by evidence other than such act or declaration.'

MAY IT PLEASE THE COURT:

COURT:

This incident of the accused Roger Chavez being called to testify for the prosecution is something so sudden that has come to the knowledge of this counsel.

That is premature, counsel. Neither the court nor counsels for the accused know what the prosecution eventsto establish by calling this witness to the witness stand.

This representation has been apprised of the witnesses embraced in the information.

ATTY. IBASCO:

For which reason I pray this court that I be given at least some days to meet whatever testimony this witness will bring about. I therefore move for postponement of today's hearing.

I submit. COURT: The Fiscal may proceed.3

COURT: The court will give counsel time within which to prepare his cross-examination of this witness. ATTY. CRUZ:

Came the judgment of February 1, 1965. The version of the prosecution as found by the court below may be briefly narrated as follows:

I labored under the impression that the witnesses for the prosecution in this criminal case are those only listed in the information. I did not know until this morning that one of the accused will testify as witness for the prosecution. COURT: That's the reason why the court will go along with counsels for the accused and will give them time within which to prepare for their cross-examination of this witness. The court will not defer the taking of the direct examination of the witness. Call the witness to the witness stand. EVIDENCE FOR THE PROSECUTION ROGER CHAVEZ, 31 years old, single, buy and sell merchant, presently detained at the Manila Police Department headquarters, after being duly sworn according to law, declared as follows: ATTY. IBASCO [Counsel for defendant Luis Asistio]: WITH THE LEAVE OF THE COURT: This witness, Roger Chavez is one of the accused in this case No. Q-5311. The information alleges conspiracy. Under Rule 123, Section 12, it states:

And so did the trial proceed. It began with the "direct examination" of Roger Chavez by "Fiscal Grecia".

A few days before November 12, 1962, Roger Chavez saw Johnson Lee, a Chinese, driving a Thunderbird car. With Ricardo Sumilang (movie actor Romeo Vasquez) in mind, whom he knew was in the market for such a car, Chavez asked Lee whether his car was for sale. Lee answered affirmatively and left his address with Chavez. Then, on November 12, Chavez met Sumilang at a barbershop informed him about the Thunderbird. But Sumilang said that he had changed his mind about buying a new car. Instead, he told Chavez that he wanted to mortgage his Buick car for P10,000.00 to cover an indebtedness in Pasay City. Upon the suggestion of Chavez, they went to see Luis Asistio, who he knew was lending money on car mortgages and who, on one occasion, already lent Romeo Vasquez P3,000.00 on the same Buick car. Asistio however told the two that he had a better idea on how to raise the money. His plan was to capitalize on Romeo Vasquez' reputation as a wealthy movie star, introduce him as a buyer to someone who was selling a car and, after the deed of sale is signed, by trickery to run away with the car. Asistio would then register it, sell it to a third person for a profit. Chavez known to be a car agent was included in the plan. He furnished the name of Johnson Lee who was selling his Thunderbird. 1äwphï1.ñët In the morning of November 14, Chavez telephoned Johnson Lee and arranged for an appointment. Sometime in the afternoon. Chavez and Sumilang met Lee in his Thunderbird on Highway 54. Sumilang was introduced as the interested buyer. Sumilang's driver inspected the car, took the wheel for a while. After Sumilang and Lee agreed on the purchase price (P21.000.00), they went to Binondo to Johnson Lee's cousin, Dy Sun Hiok, in whose name the car was registered. Thereafter, they went to see a lawyer notary public in Quezon City, known to Chavez for the drafting of the deed of sale. After the deed of sale was drawn up, it was signed by Sumilang as the vendee, Dy Sun Hiok the vendor, and Sumilang's driver and Johnson Lee the witnesses thereto.

Page 24 of 192

As payment was to be made at Eugene's restaurant in Quezon City, all of them then drove in the Thunderbird car to that place. The deed of sale and other papers remained in the pockets of Johnson Lee.

and another P4,000.00 from his aparador. He immediately gave P6,000.00 to Chavez, intending to pay out the balance upon the car's delivery. It was then that Chavez told Sumilang that the car was already bought by a Chinese who would be the vendor.

At Eugene's, a man approached Sumilang with a note which stated that the money was ready at the Dalisay Theater. Sumilang then wrote on the same note that the money should be brought to the restaurant. At the same time he requested Lee to exhibit the deed of sale of the car to the note bearer.4

The purchase price finally agreed upon between Sumilang and Johnson Lee was P21,000.00, plus P500.00 agents commission at the expense of the buyer. Sumilang told Lee that he already paid part of the price to Chavez.

Then, the two Chinese were left alone in the restaurant. For Sumilang, who had left the table to pose for pictures with some fans and come back, again left never to return. So did Chavez, who disappeared after he left on the pretext of buying cigarettes. The two Chinese could not locate Sumilang and Chavez. They went out to the place where the Thunderbird was parked, found that it was gone. They then immediately reported its loss to the police. Much later, the NBI recovered the already repainted car and impounded it. Right after the meeting at Eugene's, Chavez, Sumilang and Asistio converged that same day at Barrio Fiesta, a restaurant at Highway 54 near the Balintawak monument in Caloocan. There, Asistio handed to Sumilang P1,000.00 cash and a golf set worth P800.00 as the latter's share in the transaction. On the 14th of November, the registration of the car was transferred in the name of Sumilang in Cavite City, and three days later, in the name of Asistio in Caloocan. From the court's decision, Ricardo Sumilang's version, corroborated in part by Asistio, may be condensed as follows: In the last week of September, 1962, Sumilang saw Roger Chavez at a gas station. The latter informed him that there was a Thunderbird from Clark Field for sale for a price between P20,000.00 and P22,000.00. Chavez said that it could be held for him with a down payment of P10,000.00. To raise this sum, Sumilang and Chavez, on October 1, went to the house of a certain Nena Hernaez de los Reyes who wrote out a check for P5,000.00 as a loan to Sumilang. That check was exhibited in court. Sumilang and Chavez then went to Pasay City to see a certain Mario Baltazar, an agent of the Pasay City Mayor, and Narsing Cailles, Chief of the Fire Department. Sumilang asked the two for a P10,000-loan backed up by the P5,000.00-check aforesaid on condition that it should not be cashed immediately as there were not enough funds therefor. Baltazar and Cailles agreed to give the money the nextday as long as the check would be left with them and Sumilang would sign a promissory note for P10,000.00. Baltazar later informed Sumilang that Chavez picked up the money the next day. Four or five days afterwards, Chavez returned P4,000.00 to Sumilang because P6,000.00 was enough for the deposit. And so, Sumilang gave back the P4,000.00 to Baltazar. About the end of October or at the beginning of November, Chavez asked Sumilang for another P3,000.00. Sumilang sent Chavez to Baltazar and Cailles, with a note requesting that they accommodate him once more. He also sent a check, again without funds. Baltazar gave the money after verifying the authenticity of the note. On November 14, Chavez appeared at Sumilang's house with the news that the car was ready if Sumilang was ready with the rest of the money. So Sumilang got P9,000.00 from his mother

At Eugene's, Chavez asked Sumilang for the balance. Sumilang accommodated. There, Sumilang, also saw a friend, "Ging" Pascual. In the course of their conversation at the bar, Sumilang mentioned the proposed transaction thru Chavez. Pascual warned that Chavez was a "smart" agent and advised that Sumilang should have a receipt for his money. A certain Bimbo, a friend of Pascual, offered to make out a receipt for Chavez to sign. After Sumilang returned from posing for some photographs with some of his fans, Bimbo showed him the receipt already signed by Chavez. Sumilang requested Pascual and Bimbo to sign the receipt as witnesses. And they did. This receipt was offered as an exhibit by the prosecution and by Sumilang. When Sumilang was ready to leave Eugene's, Johnson Lee turned over to him the deed of sale, the registration papers and the keys to the car. After shaking hands with Lee, Sumilang drove away in the car with his driver at the wheel. Two or three days afterwards, Sumilang dropped by the Barrio Fiesta on his way to a film shooting at Bulacan. He saw Asistio with many companions. Asistio liked his Thunderbird parked outside. Asistio offered to buy it from him for P22,500.00. As the offer was good, and knowing Asistio's and his friends' reputation for always getting what they wanted, Sumilang consented to the sale. Asistio tendered a down payment of P1,000.00; the balance he promised to pay the next day after negotiating with some financing company. Before said balance could be paid, the car was impounded. The trial court gave evidence to Sumilang's averment, strengthened by Baltazar's and Cailles' corroborations, that he paid good money for the car. Sumilang was thus cleared. So was Asistio whom the trial court believed to be a mere buyer of the car. And so, the prosecution's theory of conspiracy was discounted. As to the other accused, the court found no case against Pedro Rebullo alias "Pita" and Lorenzo Meneses alias "Lory". The accused "Ging" Pascual was also acquitted for in the first place he was not identified by Johnson Lee in court. As to Roger Chavez, however, the court had this to say: "Roger Chavez does not offer any defense. As a matter of fact, his testimony as witness for the prosecution establishes his guilt beyond reasonable doubt."5 The trial court branded him "a self-confessed culprit".6 The court further continued: It is not improbable that true to the saying that misery loves company Roger Chavez tried to drag his co-accused down with him by coloring his story with fabrications which he expected would easily stick together what with the newspaper notoriety of one and the sensationalism caused by the other. But Roger Chavez' accusations of Asistio's participation is utterly

Page 25 of 192

uncorroborated. And coming, as it does, from a man who has had at least two convictions for acts not very different from those charged in this information, the Court would be too gullible if it were to give full credence to his words even if they concerned a man no less notorious than himself.7 The trial court then came to the conclusion that if Johnson Lee was not paid for his car, he had no one but Roger Chavez to blame. The sum of all these is that the trial court freed all the accused except Roger Chavez who was found guilty beyond reasonable doubt of the crime of qualified theft. He was accordingly sentenced to suffer an indeterminate penalty of not less than ten (10) years, one (1) day, as minimum and not more than fourteen (14) years, eight (8) months and one (1) day as maximum, to indemnify Dy Sun Hiok and/or Johnson Lee in the sum of P21,000.00 without subsidiary imprisonment in case of insolvency, to undergo the accessory penalties prescribed by law, and to pay the costs. The Thunderbird car then in the custody of the NBI was ordered to be turned over to Ricardo Sumilang, who was directed to return to Asistio the sum of P1,000.00 unless the latter chose to pay P21,500.00, representing the balance of the contract price for the car. The foregoing sentence was promulgated on March 8, 1965. Roger Chavez appealed to the Court of Appeals. On April 18, 1968, the Court of Appeals required Atty. Natividad Marquez, counsel for Roger Chavez, to show cause within ten days from notice why Chavez' appeal should not be considered abandoned and dismissed. Reason for this is that said lawyer received notice to file brief on December 28, 1967 and the period for the filing thereof lapsed on January 27, 1968 without any brief having been filed. On May 13, 1968, Atty. Marquez registered a detailed written explanation. She also stated that if she were allowed to file appellant's brief she would go along with the factual findings of the court below but will show however that its conclusion is erroneous.8 On May 14, 1968, the Court of Appeals, despite the foregoing explanation, resolved to dismiss the appeal. A move to reconsider was unavailing. For, on June 21, 1968, the Court of Appeals, through a per curiam resolution, disposed to maintain its May 14 resolution dismissing the appeal, directed the City Warden of Manila where Chavez is confined by virtue of the warrant of arrest issued by the Court of Appeals, to turn him over to Muntinlupa Bilibid Prisons pending execution of the judgment below, and ordered remand of the case to the Quezon City court for execution of judgment. It was at this stage that the present proceedings were commenced in this Court. Upon the petitions, the return, and the reply, and after hearing on oral arguments, we now come to grips with the main problem presented. We concentrate attention on that phase of the issues which relates petitioner's assertion that he was compelled to testify against himself. For indeed if this one question is resolved in the affirmative, we need not reach the others; in which case, these should not be pursued here.

1. Petitioner's plea on this score rests upon his averment, with proof, of violation of his right — constitutionally entrenched — against self-incrimination. He asks that the hand of this Court be made to bear down upon his conviction; that he be relieved of the effects thereof. He asks us to consider the constitutional injunction that "No person shall be compelled to be a witness against himself,"9 fully echoed in Section 1, Rule 115, Rules of Court where, in all criminal prosecutions, the defendant shall be entitled: "(e) To be exempt from being a witness against himself." . It has been said that forcing a man to be a witness against himself is at war with "the fundamentals of a republican government"; 10 that [i]t may suit the purposes of despotic power but it can not abide the pure atmosphere of political liberty and personal freedom." 11 Mr. Justice Abad Santos recounts the historical background of this constitutional inhibition, thus: " "The maxim Nemo tenetur seipsum accusare had its origin in a protest against the inquisitorial and manifestly unjust methods of interrogating accused persons, which has long obtained in the continental system, and, until the expulsion of the Stuarts from the British throne in 1688, and the erection of additional barriers for the protection of the people against the exercise of arbitrary power, was not uncommon even in England. While the admissions of confessions of the prisoner, when voluntarily and freely made, have always ranked high in the scale of incriminating evidence, if an accused person be asked to explain his apparent connection with a crime under investigation, the ease with which the questions put to him may assume an inquisitorial character, the temptation to press, the witness unduly, to browbeat him if he be timid or reluctant, to push him into a corner, and to entrap him into fatal contradictions, which is so painfully evident in many of the earlier state trials, notably in those of Sir Nicholas Throckmorton, and Udal, the Puritan minister, made the system so odious as to give rise to a demand for its total abolition. The change in the English criminal procedure in that particular seems to be founded upon no statute and no judicial opinion, but upon a general and silent acquiescence of the courts in a popular demand. But, however adopted, it has become firmly embedded in English, as well as in American jurisprudence. So deeply did the iniquities of the ancient system impress themselves upon the minds of the American colonists that the states, with one accord, made a denial of the right to question an accused person a part of their fundamental law, so that a maxim which in England was a mere rule of evidence, became clothed in this country with the impregnability of a constitutional enactment." (Brown vs. Walker, 161 U.S., 591, 597; 40 Law. ed., 819, 821)." 12 Mr. Justice Malcolm, in expressive language, tells us that this maxim was recognized in England in the early days "in a revolt against the thumbscrew and the rack." 13 An old Philippine case [1904] 14 speaks of this constitutional injunction as "older than the Government of the United States"; as having "its origin in a protest against the inquisitorial methods of interrogating the accused person"; and as having been adopted in the Philippines "to wipe out such practices as formerly prevailed in these Islands of requiring accused persons to submit to judicial examinations, and to give testimony regarding the offenses with which they were charged." So it is then that this right is "not merely a formal technical rule the enforcement of which is left to the discretion of the court"; it is mandatory; it secures to a defendant a valuable and substantive right; 15 it is fundamental to our scheme of justice. Just a few months ago, the Supreme Court of the United States (January 29, 1968), speaking thru Mr. Justice Harlan warned that "[t]he constitutional privilege was intended to shield the guilty and imprudent as well as the innocent and foresighted." 16

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It is in this context that we say that the constitutional guarantee may not be treated with unconcern. To repeat, it is mandatory; it secures to every defendant a valuable and substantive right. Tañada and Fernando (Constitution of the Philippines, 4th ed., vol. I, pp. 583-584) take note of U.S. vs. Navarro, supra, which reaffirms the rule that the constitutional proscription was established on broad grounds of public policy and humanity; of policy because it would place the witness against the strongest temptation to commit perjury, and of humanity because it would be to extort a confession of truth by a kind of duress every species and degree of which the law abhors. 17 Therefore, the court may not extract from a defendant's own lips and against his will an admission of his guilt. Nor may a court as much as resort to compulsory disclosure, directly or indirectly, of facts usable against him as a confession of the crime or the tendency of which is to prove the commission of a crime. Because, it is his right to forego testimony, to remain silent, unless he chooses to take the witness stand — with undiluted, unfettered exercise of his own free, genuine will. Compulsion as it is understood here does not necessarily connote the use of violence; it may be the product of unintentional statements. Pressure which operates to overbear his will, disable him from making a free and rational choice, or impair his capacity for rational judgment would in our opinion be sufficient. So is moral coercion "tending to force testimony from the unwilling lips of the defendant." 18 2. With the foregoing as guideposts, we now turn to the facts. Petitioner is a defendant in a criminal case. He was called by the prosecution as the first witness in that case to testify for the People during the first day of trial thereof. Petitioner objected and invoked the privilege of selfincrimination. This he broadened by the clear cut statement that he will not testify. But petitioner's protestations were met with the judge's emphatic statement that it "is the right of the prosecution to ask anybody to act as witness on the witness stand including the accused," and that defense counsel "could not object to have the accused called on the witness stand." The cumulative impact of all these is that accused-petitioner had to take the stand. He was thus peremptorily asked to create evidence against himself. The foregoing situation molds a solid case for petitioner, backed by the Constitution, the law, and jurisprudence. Petitioner, as accused, occupies a different tier of protection from an ordinary witness. Whereas an ordinary witness may be compelled to take the witness stand and claim the privilege as each question requiring an incriminating answer is shot at him, 19 and accused may altogether refuse to take the witness stand and refuse to answer any and all questions. 20 For, in reality, the purpose of calling an accused as a witness for the People would be to incriminate him. 21 The rule positively intends to avoid and prohibit the certainly inhuman procedure of compelling a person "to furnish the missing evidence necessary for his conviction." 22 This rule may apply even to a co-defendant in a joint trial.23 And the guide in the interpretation of the constitutional precept that the accused shall not be compelled to furnish evidence against himself "is not the probability of the evidence but it is the capability of abuse." 24 Thus it is, that it was undoubtedly erroneous for the trial judge to placate petitioner with these words:. What he will testify to does not necessarily incriminate him, counsel.

And there is the right of the prosecution to ask anybody to act as witness on the witness-stand including the accused. If there should be any question that is incriminating then that is the time for counsel to interpose his objection and the court will sustain him if and when the court feels that the answer of this witness to the question would incriminate him. Counsel has all the assurance that the court will not require the witness to answer questions which would incriminate him. But surely, counsel could not object to have the accused called on the witness stand. Paraphrasing Chief Justice Marshall in Aaron Burr's Trial, Robertsons Rep. I, 208, 244, quoted in VIII Wigmore, p. 355, 25 While a defendant's knowledge of the facts remains concealed within his bosom, he is safe; but draw it from thence, and he is exposed" — to conviction. The judge's words heretofore quoted — "But surely counsel could not object to have the accused called on the witness stand" — wielded authority. By those words, petitioner was enveloped by a coercive force; they deprived him of his will to resist; they foreclosed choice; the realities of human nature tell us that as he took his oath to tell the truth, the whole truth and nothing but the truth, no genuine consent underlay submission to take the witness stand. Constitutionally sound consent was absent. 3. Prejudice to the accused for having been compelled over his objections to be a witness for the People is at once apparent. The record discloses that by leading questions Chavez, the accused, was made to affirm his statement given to the NBI agents on July 17, 1963 at 5:00 o'clock in the afternoon. 26 And this statement detailed the plan and execution thereof by Sumilang (Vasquez), Asistio and himself to deprive the Chinese of his Thunderbird car. And he himself proceeded to narrate the same anew in open court. He identified the Thunderbird car involved in the case. 27 The decision convicting Roger Chavez was clearly of the view that the case for the People was built primarily around the admissions of Chavez himself. The trial court described Chavez as the "star witness for the prosecution". Indeed, the damaging facts forged in the decision were drawn directly from the lips of Chavez as a prosecution witness and of course Ricardo Sumilang for the defense. There are the unequivocal statements in the decision that "even accused Chavez" identified "the very same Thunderbird that Johnson Lee had offered for sale"; that Chavez "testimony as witness for the prosecution establishes his guilt beyond reasonable doubt and that Chavez is "a self-confessed culprit". 1äwphï1.ñët 4. With all these, we have no hesitancy in saying that petitioner was forced to testify to incriminate himself, in full breach of his constitutional right to remain silent. It cannot be said now that he has waived his right. He did not volunteer to take the stand and in his own defense; he did not offer himself as a witness; on the contrary, he claimed the right upon being called to testify. If petitioner nevertheless answered the questions inspite of his fear of being accused of perjury or being put under contempt, this circumstance cannot be counted against him. His testimony is not of his own choice. To him it was a case of compelled submission. He was a cowed participant in proceedings before a judge who possessed the power to put him under contempt had he chosen to remain silent. Nor could he escape testifying. The court made it

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abundantly clear that his testimony at least on direct examination would be taken right then and thereon the first day of the trial.

has jurisdiction to proceed. The judgment of conviction pronounced by a court without jurisdiction is void, and one imprisoned thereundermay obtain release of habeas corpus. 41

It matters not that, after all efforts to stave off petitioner's taking the stand became fruitless, no objections to questions propounded to him were made. Here involve is not a mere question of self-incrimination. It is a defendant's constitutional immunity from being called to testify against himself. And the objection made at the beginning is a continuing one. 1äwphï1.ñët

Under our own Rules of Court, to grant the remedy to the accused Roger Chavez whose case presents a clear picture of disregard of a constitutional right is absolutely proper. Section 1 of Rule 102 extends the writ, unless otherwise expressly provided by law, "to all cases of illegal confinement or detention by which any person is deprived of his liberty, or by which the rightful custody of any person is withheld from the person entitled thereto.

There is therefore no waiver of the privilege. "To be effective, a waiver must be certain and unequivocal, and intelligently, understandably, and willingly made; such waiver following only where liberty of choice has been fully accorded. After a claim a witness cannot properly be held to have waived his privilege on vague and uncertain evidence." 28 The teaching in Johnson vs. Zerbst 29 is this: "It has been pointed out that "courts indulge every reasonable presumption against waiver" of fundamental constitutional rights and that we "do not presume acquiescence in the loss of fundamental rights." A waiver is ordinarily an intentional relinquishment or abandonment of a known right or privilege." Renuntiatio non praesumitur. The foregoing guidelines, juxtaposed with the circumstances of the case heretofore adverted to, make waiver a shaky defense. It cannot stand. If, by his own admission, defendant proved his guilt, still, his original claim remains valid. For the privilege, we say again, is a rampart that gives protection - even to the guilty. 30 5. The course which petitioner takes is correct. Habeas corpus is a high prerogative writ. 31 It is traditionally considered as an exceptional remedy to release a person whose liberty is illegally restrained such as when the accused's constitutional rights are disregarded. 32 Such defect results in the absence or loss of jurisdiction 33 and therefore invalidates the trial and the consequent conviction of the accused whose fundamental right was violated. 34 That void judgment of conviction may be challenged by collateral attack, which precisely is the function of habeas corpus. 35 This writ may issue even if another remedy which is less effective may be availed of by the defendant. 36Thus, failure by the accused to perfect his appeal before the Court of Appeals does not preclude a recourse to the writ. 37 The writ may be granted upon a judgment already final. 38 For, as explained in Johnson vs. Zerbst, 39 the writ of habeas corpus as an extraordinary remedy must be liberally given effect 40 so as to protect well a person whose liberty is at stake. The propriety of the writ was given the nod in that case, involving a violation of another constitutional right, in this wise: Since the Sixth Amendment constitutionally entitles one charged with crime to the assistance of Counsel, compliance with this constitutional mandate is an essential jurisdictional prerequisite to a Federal Court's authority. When this right is properly waived, the assistance of Counsel is no longer a necessary element of the Court's jurisdiction to proceed to conviction and sentence. If the accused, however, is not represented by Counsel and has not competently and intelligently waived his constitutional right, the Sixth Amendment stands as a jurisdictional bar to a valid conviction and sentence depriving him of his liberty. A court's jurisdiction at the beginning of trial may be lost "in the course of the proceedings" due to failure to complete the court — as the Sixth Amendment requires — by providing Counsel for an accused who is unable to obtain Counsel, who has not intelligently waived this constitutional guaranty, and whose life or liberty is at stake. If this requirement of the Sixth Amendment is not complied with, the court no longer

Just as we are about to write finis to our task, we are prompted to restate that: "A void judgment is in legal effect no judgment. By it no rights are divested. From it no rights can be obtained. Being worthless in itself, all proceedings founded upon it are equally worthless. It neither binds nor bars any one. All acts performed under it and all claims flowing out of it are void. The parties attempting to enforce it may be responsible as trespassers. ... " 42 6. Respondents' return 43 shows that petitioner is still serving under a final and valid judgment of conviction for another offense. We should guard against the improvident issuance of an order discharging a petitioner from confinement. The position we take here is that petitioner herein is entitled to liberty thru habeas corpus only with respect to Criminal Case Q-5311 of the Court of First Instance of Rizal, Quezon City Branch, under which he was prosecuted and convicted. Upon the view we take of this case, judgment is hereby rendered directing the respondent Warden of the City Jail of Manila or the Director of Prisons or any other officer or person in custody of petitioner Roger Chavez by reason of the judgment of the Court of First Instance of Rizal, Quezon City Branch, in Criminal Case Q-5311, entitled "People of the Philippines, plaintiff, vs. Ricardo Sumilang, et al., accused," to discharge said Roger Chavez from custody, unless he is held, kept in custody or detained for any cause or reason other than the said judgment in said Criminal Case Q-5311 of the Court of First Instance of Rizal, Quezon City Branch, in which event the discharge herein directed shall be effected when such other cause or reason ceases to exist. No costs. So ordered. Concepcion, C.J., Reyes, J.B.L., Dizon, Makalintal, Zaldivar, Angeles and Fernando, JJ., concur. Castro, J., concurs in a separate opinion.

Separate Opinions CASTRO, J., dissenting : In 1901, early in the history of constitutional government in this country, this Court reversed the conviction of an accused who, having pleaded "not guilty," was required by the judge to testify and answer the complaint. The case was that of United States v. Junio, reported in the first volume of the Philippine Reports, on page 50 thereof.

Page 28 of 192

Resolution of the case did not require an extended opinion (it consumed no more than a page in the Reports). For indeed the facts fitted exactly into the prohibition contained in The President's Instruction to the (Second) Philippine Commission1 "that no person shall ... be compelled in any criminal case to be a witness against himself.". There was no need either for a dissertation on the Rights of Man, though occasion for this was not lacking as the predominant American members of the Court were under a special commission to prepare the Filipinos for self-government. The privilege against self-incrimination was fully understood by the Filipinos, whose own history provided the necessary backdrop for this privilege. 2 The Supreme Court simply said, "The judge had no right to compel the accused to make any statement whatever," and declared the proceedings void. Nor was there a similar judicial error likely to be committed in the years to come, what with the constant reminder of a Bill of Rights enshrined in successive organic acts intended for the Philippines.3 This is not to say that the Philippine history of the privilege ended with the Junio case. To be sure, violations of the privilege took other, and perhaps subtle, forms4 but not the form directly prohibited by the privilege. Even in the recent case of Cabal v. Kapunan5 it was assumed as a familiar learning that the accused in a criminal case cannot be required to give testimony and that if his testimony is needed at all against his co-accused, he must first be discharged.6 If Cabal, the respondent in an administrative case, was required by an investigating committee to testify, it was because it was thought that proceedings for forfeiture of illegally acquired property under Republic Act 13797 were civil and not criminal in nature. Thus Mr. Justice (now Chief Justice) Concepcion could confidently say: At the outset, it is not disputed that the accused in a criminal case may refuse not only to answer incriminatory questions but also to take the witness stand. (3 Whartons Criminal Evidence, pp. 1959-1960; 98 C.J.S., p. 264). Hence, the issue before us boils down to whether or not the proceedings before the aforementioned Committee is civil or criminal in character. Today, perhaps because of long separation from our past, we need what Holmes called "education in the obvious, more than investigation of the obscure."8 The past may have receded so far into the distance that our perspectives may have been altered and our vision blurred. When the court in the case at bar required the petitioner to testify, it in effect undid the libertarian gains made over half a century and overturned the settled law. The past was recreated with all its vividness and all its horrors: John Lilburne in England in 1637, refusing to testify before the Council of the Star Chamber and subsequently condemned by it to be whipped and pilloried for his "boldness in refusing to take a legal oath;" 9 the Filipino priests Gomez, Burgos and Zamora in 1872 condemned by the Inquisition to die by their own testimony. 10 It is for this reason that I deem this occasion important for the expression of my views on the larger question of constitutional dimension. No doubt the constitutional provision that "No person shall be compelled to be a witness against himself" 11 may, on occasion, save a guilty man from his just deserts, but it is aimed against a more far reaching evil — recurrence of the Inquisition and the Star Chamber, even if not in their

stark brutality. Prevention of the greater evil was deemed of more importance than occurrence of the lesser evil. 12 As Dean Griswold put the matter with eloquence:. [T]he privilege against self-incrimination is one of the great landmarks in man's struggle to make himself civilized ... [W]e do not make even the most hardened criminal sign his own death warrant, or dig his own grave, or pull the lever that springs the trap on which he stands. We have through the course of history developed considerable feeling of the dignity and intrinsic importance of the individual man. Even the evil man is a human being. 13 The Government must thus establish guilt by evidence independently and freely secured; it can not by coercion prove a charge against an accused out of his own mouth. 14 This is not what was done here. What was done here was to force the petitioner to take the witness stand and state his part in the crime charged as "star witness for the prosecution," to use the very words of the decision, and, by means of his testimony, prove his guilt. Thus, the trial court said in its decision: Roger Chavez does not offer any defense. As a matter of fact, his testimony as a witness for the prosecution establishes his guilt beyond reasonable doubt. The petitioner has been variously described by the trial court as "a car agent ... well versed in this kind of chicanery" "a self-confessed culprit," and "a man with at least two convictions for acts not very different from those charged in [the] information." But if he has thus been described it was on the basis of evidence wrung from his lips. If he was ultimately found guilty of the charge against him it was because of evidence which he was forced to give. In truth he was made the "star witness for the prosecution" against himself. But neither torture nor an oath nor the threat of punishment such as imprisonment for contempt can be used to compel him to provide the evidence to convict himself. No matter how evil he is, he is still a human being. The fact that the judgment of conviction became final with the dismissal of the appeal to the Court of Appeals for failure of the petitioner's former counsel to file a brief, 15 is of no moment. That judgment is void, and it is precisely the abiding concern of the writ of habeas corpus to provide redress for unconstitutional and wrongful convictions. Vindication of due process, it has been well said, is precisely the historic office of the Great Writ. 16 In many respects, this case is similar to that of Fay v. Noia. 17 Noia was convicted of murder in 1942 with Santo Caminito and Frank Bonino in the County Court of Kings County, New York, in the killing of one Hemmeroff during the commission of a robbery. The sole evidence against each defendant was his signed confession. Caminito and Bonino, but not Noia appealed their convictions to the Appellate Division of the New York Supreme Court. These appeals were unsuccessful but subsequent legal proceedings resulted in the releases of Caminito and Bonino upon findings that their confessions had been coerced and their conviction therefore procured in violation of the Fourteenth Amendment. Although Noia's confession was found to have been coerced, the United States District Court for the Southern District of New York held that, because of Noia's failure to appeal, he must be denied reliefin view of the provision of 28 U.S.C. sec. 2254 that "An application for a writ of habeas corpus in behalf of a person in custody pursuant to the judgment of a State court shall not be granted unless it appears that the

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applicant has exhausted the remedies available in the courts of the State. ..." The Court of Appeals for the Second Circuit reversed the judgment of the District Court and ordered Noia's conviction set aside, with direction to discharge him from custody unless given a new trial forthwith. From that judgment the State appealed. As the Supreme Court of the United States phrased the issue, the "narrow question is whether the respondent Noia may be granted federal habeas corpus relief from imprisonment under a New York conviction now admitted by the State to rest upon a confession obtained from him in violation of the Fourteenth Amendment, after he was denied state post-conviction relief because the coerced confession claim had been decided against him at the trial and Noia had allowed the time for a direct appeal to lapse without seeking review by a state appellate court."

The motives of these men are often commendable. What we must remember, however, is that preservation of liberties does not depend on motives. A suppression of liberty has the same effect whether the suppressor be a reformer or an outlaw. The only protection against misguided zeal is constant alertness to infractions of the guarantees of liberty contained in our Constitution. Each surrender of liberty to the demands of the moment makes easier another, larger surrender. The battle over the Bill of Rights is a never ending one. 1äwphï1.ñët xxx

Today as always few indeed is the number of State prisoners who eventually win their freedom by means of federal habeas corpus. These few who are ultimately successful are persons whom society has grievously wronged and for whom belated liberation is little enough compensation. Surely no fair minded person will contend that those who have been deprived of their liberty without due process of law ought nevertheless to languish in prison. Noia, no less than his co-defendants Caminito and Bonino, is conceded to have been the victim of unconstitutional state action. Noia's case stands on its own; but surely no just and humane legal system can tolerate a result whereby a Caminito and a Bonino are at liberty because their confessions were found to have been coerced yet Noia, whose confession was also coerced, remains in jail for life. For such anomalies, such affronts to the conscience of a civilized society, habeas corpus is predestined by its historical role in the struggle for personal liberty to be the ultimate remedy. If the States withhold effective remedy, the federal courts have the power and the duty to provide it. Habeas Corpus is one of the precious heritages of Anglo-American civilization. We do no more today than confirm its continuing efficacy. A fitting conclusion of this separate opinion may perhaps be found in two memorable admonitions from Marjorie G. Fribourg and Justice William O. Douglas.

xxx

The liberties of any person are the liberties of all of us. xxx

In affirming the judgment of the Court of Appeals, the United States Supreme Court, through Mr. Justice Brennan, spoke in enduring language that may well apply to the case of Roger Chavez. Said the Court: 1äwphï1.ñët

xxx

xxx

xxx

In short, the liberties of none are safe unless the liberties of all are protected. But even if we should sense no danger to our own liberties, even if we feel secure because we belong to a group that is important and respected, we must recognize that our Bill of Rights is a code of fair play for the less fortunate that we in all honor and good conscience must observe.19 Footnotes 1

Criminal Case No. Q-5311, Court of First Instance of Rizal, Quezon City, Branch IX.

2

The original information named only the accused Sumilang, Chavez, John Doe and Richard Doe. It was amended by substituting Edgardo P. Pascual for John Doe. Then, another amendment included the rest of the accused abovenamed. 3

Tr., July 23, 1963, pp. 2-11; emphasis supplied.

4

Chavez at this point testified on direct examination that the Chinese (Johnson Lee) handed the deed of sale to Romeo Vasquez who, in turn, delivered it to the emissary. Tr., (Annex A), p. 39. 5

Annex C, p. 7, Rollo, p. 101.

6

Id., p. 14, Rollo, p. 108.

Mrs. Fribourg, in her inimitable phrase, warns us that —

7

... Time has taught its age-old lesson. Well-meaning people burnt witches. Well-meaning prosecutors have convicted the innocent. Well-meaning objectives espoused by those not grounded in history can lure us from protecting our heritage of equal justice under the law. They can entice us, faster than we like to believe, into endangering our liberties. 18

Id., pp. 14-15, Rollo, pp. 108-109.

8

Petitioner here submits the theory that the facts found by the trial court make out a case of estafa, not qualified theft. 9

Section 1 (18), Bill of Rights, Article III, Constitution of the Philippines.

And these are the unforgettable words of Justice Douglas:

10

The challenge to our liberties comes frequently not from those who consciously seek to destroy our system of government, but from men of goodwill - good men who allow their proper concerns to blind them to the fact that what they propose to accomplish involves an impairment of liberty. xxx

xxx

Villaflor vs. Summers. 41 Phil. 62, 68.

11

U.S. vs. Navarro, 3 Phil. 143, 155.

12

Bermudez vs. Castillo, 64 Phil. 483, 495-496.

xxx

Page 30 of 192

13

33

14

34

Villaflor vs. Summers, supra at p. 68.

39 C.J.S., pp. 449-450.

U.S. vs. Navarro, supra, at p. 152, cited in Tañada and Carreon, Political Law of the Philippines, vol. II, 1962 ed., up. 278-279.

Mitchell vs. Youell, 130 F. 2d. 880, 882; U.S. vs. Lawn, 115 F. Supp. 674, 677.

35

Abriol vs. Homeres, 84 Phil. 525, 530, 534. See the dissenting opinion affirming the same view at pp. 538-539. See also: Camasura vs. Provost Marshall, supra, at p. 137.

15

III Martin, Rules of Court, 1964 ed., p. 262, citing 14 Am. Jur., 869.

16

Marchetti vs. United States (U.S. Supreme Court), No. 2-October Term, 1967, January 29 1968.

36

25 Am. Jur., p. 155.

37

39 C.J.S. p. 446, citing Johnson vs. Zerbst, supra.

17

See also: III Martin, p. 262; Tañada and Carreon, op. cit., pp. 278-279. 38

Abriol vs. Homeres, supra, at pp. 527, 534-535.

18

State vs. Wolfe, 266 N.W. 116, 125; 104 ALR 464, 476; Anno., p. 479. 39

Cabal vs. Kapunan, L-19052, December 29, 1962; 21 Am. Jur 2d., p. 383; 98 C.J.S., p. 265; 8 Wigmore, Evidence 1961 ed., p. 406; 3 Wharton's Criminal Evidence, 11th ed., pp. 1959-1960.

Supra, at p. 1467: "True, habeas corpus cannot be used as a means of reviewing errors of law and irregularities — not involving the question of jurisdiction — occurring during the course of trial; and the "writ of habeas corpus cannot be used as a writ of error." These principles, however, must be construed and applied so as to preserve — not destroy — constitutional safeguards of human life and liberty.".

21

40

19

Gonzales vs. Secretary of Labor, 94 Phil. 325, 326.

20

Navarro, Criminal Procedure, 1960; ed., p. 302.

III Martin, p. 267: "The prohibition against self-incrimination, in order that it may produce its desired purpose and may not be rendered a dead letter, should be interpreted liberally in favor of the person invoking the same." See: Bermudez vs. Castillo, supra, at p. 489.

22

Bermudez vs. Castillo supra, at pp. 488-489.

23

4 Moran, Comments on the Rules of Court, 1963 ed., p. 160; 98 C.J.S., p. 274; 3 Wharton's Criminal Evidence, 11th ed., pp. 1959-1960.

41

Cited in Abriol vs. Homeres, supra, at pp. 533-534; emphasis supplied.

42 24

Allen vs. State, 171 ALR 1138, 1143, citing Emery's Case, 107 Mass. 172, 9 Am. Rep. 22.

25

Isabela Sugar Company, Inc. vs. Macadaeg, 93 Phil. 995, 1000.

26

Tr., pp. 11, 13-23.

27

Gomez vs. Concepcion, 47 Phil. 717, 722, giving as authority Freeman on Judgments, see. 117 citing Campbell vs. McCahan, 41 Ill., 45; Roberts vs. Stowers, 7 Bush, 295; Huls vs. Buntin, 47 Ill., 396; Sherrell vs. Goodrum, 3 Humph., 418; Andrews vs. State, 2 Sheed, 549; Hollingsworth vs. Bagley, 35 Tex., 345; Morton vs. Root, 2 Dill., 312; Commercial Bank of Manchester vs. Martin, 9 Smedes & M., 613; Hargis vs. Morse, 7 Kan., 259. See also Cornell vs. Barnes, 7 Hill. 35; Dawson and Another vs. Wells, 3 Ind., 899; Meyer vs. Mintonye, 106 Ill., 414; Olson vs. Nunnally, 47 Kan., 391; White vs. Foote L. & M. Co, 29 W. Va. 385.

Tr., pp. 56-57. 43

Par. 2 (d).

28

98 C.J.S., p. 314; emphasis supplied. CASTRO J.:, dissenting :

29

304 U.S. 458, 464, 82 L. ed. 1461, 1466. 1

30

Pub. Laws lxiii, lxvi (1900).

Marchetti vs. United States, supra. 2

31

25 Am. Jur., p. 150.

32

See: Santiago vs. Director of Prisons, 77 Phil. 927, 930; Camasura vs. Provost Marshall, 78 Phil. 131; Harden vs. Director of Prisons, 81 Phil. 741, 746; Parulan vs. Director of Prisons, 1968A Phild. 514, 516; see also Counselman vs. Hitchcock (1867), 142 U.S. 547, 35 L. ed. 1110, a case involving a violation of the privilege against self-incrimination and the writ of habeas corpus was allowed; Sunal vs. Large, 332 U.S. 174, 178-179, 91 L. ed. 1982, 19861987.

See United States v. Navarro, 3 Phil. 143 (1904). In his majority opinion, Mr. Justice McDonough said that under the Spanish system of criminal procedure the privilege against selfincrimination was unavailing, a point seriously disputed in the dissenting opinion of Mr. Justice Mapa. Are both Justices half right and half wrong? Is it more accurate to say that while the Spanish system allowed no more than a comment on the failure of the accused to testify, no unfavorable inference being drawn therefrom (as Justice Mapa said at p. 161), in practice the accused was actually denied the privilege against self-incrimination (as Justice McDonough said at p. 152)? See, e.g., T. Agoncillo & 0. Alfonso, A Short History of the Filipino People, 103132 (1961).

Page 31 of 192

3

Act of July 1, 1902, sec. 5, par. 3, 1 Pub. Laws 1056; Jones Act of August 29, 1916, sec. 3, par. 3, 12 Pub. Laws 237; Act of March 24, 1934, ch. 84, 48 Stat. 456; see also General Orders 58, sec. 15(4), 1 Pub. Laws 1082 (1900). 4

Beltran v. Samson, 53 Phil. 570 (1929) (preliminary investigation; respondent required to give a specimen of his handwriting); Bermudes v. Castillo, 64 Phil. 483 (1937) (administrative investigation; person required to copy certain letters to establish her authorship of the letters). 5

L-19052, Dec. 29, 1962.

G.R. Nos. 71208-09 August 30, 1985 SATURNINA GALMAN AND REYNALDO GALMAN, petitioners, vs. THE HONORABLE PRESIDING JUSTICE MANUEL PAMARAN AND ASSOCIATE JUSTICES AUGUSTO AMORES AND BIENVENIDO VERA CRUZ OF THE SANDIGANBAYAN, THE HONORABLE BERNARDO FERNANDEZ, TANODBAYAN, GENERAL FABIAN C. VER, MAJOR GENERAL PROSPERO OLIVAS, SGT. PABLO MARTINEZ, SGT. TOMAS FERNANDEZ, SGT. LEONARDO MOJICA SGT. PEPITO TORIO, SGT. PROSPERO BONA AND AlC ANICETO ACUPIDO, respondents.

6

E.g., 4 M. Moran, Comments on the Rules of Court 160 (6th Ed., 1963). G.R. Nos. 71212-13 August 30, 1985

7

10 Laws & Res. 345 (1955). PEOPLE OF THE PHILIPPINES, represented by the TANODBAYAN (OMBUDSMAN), petitioner, vs. THE SANDIGANBAYAN, GENERAL FABIAN C. VER, MAJOR GEN. PROSPERO OLIVAS, SGT. PABLO MARTINEZ, SGT. TOMAS FERNANDEZ, SGT. LEONARDO MOJICA, SGT. PEPITO TORIO, SGT. PROSPERO BONA AND AIC ANICETO ACUPIDO, respondents.

8

O.W. Holmes, Law and the Court, in Speeches 98, 99 (1913).

9

E. Griswold, The Fifth Amendment Today 3 (1955).

10

T. Agoncillo & O. Alfonso, op. cit. supra note 2, at 156.

11

Phil. Const. art. III, sec. 1(18).

12

Ullmann v. United States, 356 U.S. 422 (1956).

CUEVAS, JR., J.:

Op. cit. supra note 9, at 7.

On August 21, 1983, a crime unparalleled in repercussions and ramifications was committed inside the premises of the Manila International Airport (MIA) in Pasay City. Former Senator Benigno S. Aquino, Jr., an opposition stalwart who was returning to the country after a longsojourn abroad, was gunned down to death. The assassination rippled shock-waves throughout the entire country which reverberated beyond the territorial confines of this Republic. The aftershocks stunned the nation even more as this ramified to all aspects of Philippine political, economic and social life.

13

14

Malley v. Hogan, 378 U.S. 1 (1964); accord, Murphy v. Waterfront Comm'n, 378 U.S. 52 (1964). 15

Resolutions of May 14, 1968 and June 21, 1968, CA-G.R. 06776-CR.

16

Fay v. Noia, 372 U.S. 391 (1963).

17

Id. For an account of a convict who served twenty-two years in prison before finally being released on habeas corpus or a finding that he was denied due process, see Marino v. Ragen, 332 U.S. 651 (1947). 18

The Bill of Rights (1967), p. 233.

19

A Living Bill of Rights (1961), pp. 61, 62, 64.

Republic of the Philippines SUPREME COURT Manila EN BANC

To determine the facts and circumstances surrounding the killing and to allow a free, unlimited and exhaustive investigation of all aspects of the tragedy, 1 P.D. 1886 was promulgated creating an ad hoc Fact Finding Board which later became more popularly known as the Agrava Board. 2 Pursuant to the powers vested in it by P.D. 1886, the Board conducted public hearings wherein various witnesses appeared and testified and/or produced documentary and other evidence either in obedience to a subpoena or in response to an invitation issued by the Board Among the witnesses who appeared, testified and produced evidence before the Board were the herein private respondents General Fabian C. Ver, Major General Prospero Olivas, 3 Sgt. Pablo Martinez, Sgt. Tomas Fernandez, Sgt. Leonardo Mojica, Sgt. Pepito Torio, Sgt. Prospero Bona and AIC Aniceto Acupido. 4 UPON termination of the investigation, two (2) reports were submitted to His Excellency, President Ferdinand E. Marcos. One, by its Chairman, the Hon. Justice Corazon Juliano Agrava; and another one, jointly authored by the other members of the Board — namely: Hon. Luciano Salazar, Hon. Amado Dizon, Hon. Dante Santos and Hon. Ernesto Herrera. 'the reports were thereafter referred and turned over to the TANODBAYAN for appropriate action. After conducting the necessary preliminary investigation, the TANODBAYAN 5 filed with the

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SANDIGANBAYAN two (2) Informations for MURDER-one for the killing of Sen. Benigno S. Aquino which was docketed as Criminal Case No. 10010 and another, criminal Case No. 10011, for the killing of Rolando Galman, who was found dead on the airport tarmac not far from the prostrate body of Sen. Aquino on that same fateful day. In both criminal cases, private respondents were charged as accessories, along with several principals, and one accomplice. Upon arraignment, all the accused, including the herein private ate Respondents pleaded NOT GUILTY. In the course of the joint trial of the two (2) aforementioned cases, the Prosecution represented by the Office of the petition TANODBAYAN, marked and thereafter offered as part of its evidence, the individual testimonies of private respondents before the Agrava Board. 6 Private respondents, through their respective counsel objected to the admission of said exhibits. Private respondent Gen. Ver filed a formal "Motion to Exclude Testimonies of Gen. Fabian C. Ver before the Fact Finding Board as Evidence against him in the above-entitled cases" 7 contending that its admission will be in derogation of his constitutional right against self-incrimination and violative of the immunity granted by P.D. 1886. He prayed that his aforesaid testimony be rejected as evidence for the prosecution. Major Gen. Olivas and the rest of the other private respondents likewise filed separate motions to exclude their respective individual testimonies invoking the same ground. 8 Petitioner TANODBAYAN opposed said motions contending that the immunity relied upon by the private respondents in support of their motions to exclude their respective testimonies, was not available to them because of their failure to invoke their right against self-incrimination before the ad hoc Fact Finding Board. 9 Respondent SANDIGANBAYAN ordered the TANODBAYAN and the private respondents to submit their respective memorandum on the issue after which said motions will be considered submitted for resolution. 10 On May 30, 1985, petitioner having no further witnesses to present and having been required to make its offer of evidence in writing, respondent SANDIGANBAYAN, without the pending motions for exclusion being resolved, issued a Resolution directing that by agreement of the parties, the pending motions for exclusion and the opposition thereto, together with the memorandum in support thereof, as well as the legal issues and arguments, raised therein are to be considered jointly in the Court's Resolution on the prosecution's formal offer of exhibits and other documentary evidences.11 On June 3, 1985, the prosecution made a written "Formal Offer of Evidence" which includes, among others, the testimonies of private respondents and other evidences produced by them before the Board, all of which have been previously marked in the course of the trial.12 All the private respondents objected to the prosecution's formal offer of evidence on the same ground relied upon by them in their respective motion for exclusion. On June 13, 1985, respondent SANDIGANBAYAN issued a Resolution, now assailed in these two (2) petitions, admitting all the evidences offered by the prosecution except the testimonies and/or other evidence produced by the private respondents in view of the immunity granted by P.D. 1886. 13 Petitioners' motion for the reconsideration of the said Resolution having been DENIED, they now come before Us by way of certiorari 14 praying for the amendment and/or setting aside of

the challenged Resolution on the ground that it was issued without jurisdiction and/or with grave abuse of discretion amounting to lack of jurisdiction. Private prosecutor below, as counsel for the mother of deceased Rolando Galman, also filed a separate petition for certiorari 15 on the same ground. Having arisen from the same factual beginnings and raising practically Identical issues, the two (2) petitioners were consolidated and will therefore be jointly dealt with and resolved in this Decision. The crux of the instant controversy is the admissibility in evidence of the testimonies given by the eight (8) private respondents who did not invoke their rights against self-incrimination before the Agrava Board. It is the submission of the prosecution, now represented by the petitioner TANODBAYAN, that said testimonies are admissible against the private respondents, respectively, because of the latter's failure to invoke before the Agrava Board the immunity granted by P.D. 1886. Since private respondents did not invoke said privilege, the immunity did not attach. Petitioners went further by contending that such failure to claim said constitutional privilege amounts to a waiver thereof. 16 The private respondents, on the other hand, claim that notwithstanding failure to set up the privilege against self- incrimination before the Agrava Board, said evidences cannot be used against them as mandated by Section 5 of the said P.D. 1886. They contend that without the immunity provided for by the second clause of Section 5, P.D. 1886, the legal compulsion imposed by the first clause of the same Section would suffer from constitutional infirmity for being violative of the witness' right against self- incrimination. 17 Thus, the protagonists are locked in horns on the effect and legal significance of failure to set up the privilege against selfincrimination. The question presented before Us is a novel one. Heretofore, this Court has not been previously called upon to rule on issues involving immunity statutes. The relative novelty of the question coupled with the extraordinary circumstance that had precipitated the same did nothing to ease the burden of laying down the criteria upon which this Court will henceforth build future jurisprudence on a heretofore unexplored area of judicial inquiry. In carrying out this monumental task, however, We shall be guided, as always, by the constitution and existing laws. The Agrava Board, 18 came into existence in response to a popular public clamor that an impartial and independent body, instead of any ordinary police agency, be charged with the task of conducting the investigation. The then early distortions and exaggerations, both in foreign and local media, relative to the probable motive behind the assassination and the person or persons responsible for or involved in the assassination hastened its creation and heavily contributed to its early formation. 19 Although referred to and designated as a mere Fact Finding Board, the Board is in truth and in fact, and to all legal intents and purposes, an entity charged, not only with the function of determining the facts and circumstances surrounding the killing, but more importantly, the determination of the person or persons criminally responsible therefor so that they may be brought before the bar of justice. For indeed, what good will it be to the entire nation and the more than 50 million Filipinos to know the facts and circumstances of the killing if the culprit or culprits will nevertheless not be dealt with criminally? This purpose is implicit from Section 12 of the said Presidential Decree, the pertinent portion of which provides —

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SECTION 12. The findings of the Board shall be made public. Should the findings warrant the prosecution of any person, the Board may initiate the filing of proper complaint with the appropriate got government agency. ... (Emphasis supplied) The investigation therefor is also geared, as any other similar investigation of its sort, to the ascertainment and/or determination of the culprit or culprits, their consequent prosecution and ultimately, their conviction. And as safeguard, the P.D. guarantees "any person called to testify before the Board the right to counsel at any stage of the proceedings." 20 Considering the foregoing environmental settings, it cannot be denied that in the course of receiving evidence, persons summoned to testify will include not merely plain witnesses but also those suspected as authors and co-participants in the tragic killing. And when suspects are summoned and called to testify and/or produce evidence, the situation is one where the person testifying or producing evidence is undergoing investigation for the commission of an offense and not merely in order to shed light on the facts and surrounding circumstances of the assassination, but more importantly, to determine the character and extent of his participation therein. Among this class of witnesses were the herein private respondents, suspects in the said assassination, all of whom except Generals Ver and Olivas, were detained (under technical arrest) at the time they were summoned and gave their testimonies before the Agrava Board. This notwithstanding, Presidential Decree No. 1886 denied them the right to remain silent. They were compelled to testify or be witnesses against themselves. Section 5 of P.D. 1886 leave them no choice. They have to take the witness stand, testify or produce evidence, under pain of contempt if they failed or refused to do so. 21 The jeopardy of being placed behind prison bars even before conviction dangled before their very eyes. Similarly, they cannot invoke the right not to be a witness against themselves, both of which are sacrosantly enshrined and protected by our fundamental law. 21-a Both these constitutional rights (to remain silent and not to be compelled to be a witness against himself) were right away totally foreclosed by P.D. 1886. And yet when they so testified and produced evidence as ordered, they were not immune from prosecution by reason of the testimony given by them. Of course, it may be argued is not the right to remain silent available only to a person undergoing custodial interrogation? We find no categorical statement in the constitutional provision on the matter which reads: ... Any person under investigation for the commission of an offense shall have the right to remain and to counsel, and to be informed of such right. ... 22 (Emphasis supplied) Since the effectivity of the 1973 Constitution, we now have a mass of jurisprudence 23 on this specific portion of the subject provision. In all these cases, it has been categorically declared that a person detained for the commission of an offense undergoing investigation has a right to be informed of his right to remain silent, to counsel, and to an admonition that any and all statements to be given by him may be used against him. Significantly however, there has been no pronouncement in any of these cases nor in any other that a person similarly undergoing investigation for the commission of an offense, if not detained, is not entitled to the constitutional admonition mandated by said Section 20, Art. IV of the Bill of Rights. The fact that the framers of our Constitution did not choose to use the term "custodial" by having it inserted between the words "under" and investigation", as in fact the sentence opens

with the phrase "any person " goes to prove that they did not adopt in toto the entire fabric of the Miranda doctrine. 24 Neither are we impressed by petitioners' contention that the use of the word "confession" in the last sentence of said Section 20, Article 4 connotes the Idea that it applies only to police investigation, for although the word "confession" is used, the protection covers not only "confessions" but also "admissions" made in violation of this section. They are inadmissible against the source of the confession or admission and against third person. 25 It is true a person in custody undergoing investigation labors under a more formidable ordeal and graver trying conditions than one who is at liberty while being investigated. But the common denominator in both which is sought to be avoided is the evil of extorting from the very mouth of the person undergoing interrogation for the commission of an offense, the very evidence with which to prosecute and thereafter convict him. This is the lamentable situation we have at hand. All the private respondents, except Generals Ver and Olivas, are members of the military contingent that escorted Sen. Aquino while disembarking from the plane that brought him home to Manila on that fateful day. Being at the scene of the crime as such, they were among the first line of suspects in the subject assassination. General Ver on the other hand, being the highest military authority of his co-petitioners labored under the same suspicion and so with General Olivas, the first designated investigator of the tragedy, but whom others suspected, felt and believed to have bungled the case. The papers, especially the foreign media, and rumors from uglywagging tongues, all point to them as having, in one way or another participated or have something to do, in the alleged conspiracy that brought about the assassination. Could there still be any doubt then that their being asked to testify, was to determine whether they were really conspirators and if so, the extent of their participation in the said conspiracy? It is too taxing upon one's credulity to believe that private respondents' being called to the witness stand was merely to elicit from them facts and circumstances surrounding the tragedy, which was already so abundantly supplied by other ordinary witnesses who had testified earlier. In fact, the records show that Generals Ver and Olivas were among the last witnesses called by the Agrava Board. The subject matter dealt with and the line of questioning as shown by the transcript of their testimonies before the Agrava Board, indubitably evinced purposes other than merely eliciting and determining the so-called surrounding facts and circumstances of the assassination. In the light of the examination reflected by the record, it is not far-fetched to conclude that they were called to the stand to determine their probable involvement in the crime being investigated. Yet they have not been informed or at the very least even warned while so testifying, even at that particular stage of their testimonies, of their right to remain silent and that any statement given by them may be used against them. If the investigation was conducted, say by the PC, NBI or by other police agency, all the herein private respondents could not have been compelled to give any statement whether incriminatory or exculpatory. Not only that. They are also entitled to be admonished of their constitutional right to remain silent, to counsel, and be informed that any and all statements given by them may be used against them. Did they lose their aforesaid constitutional rights simply because the investigation was by the Agrava Board and not by any police investigator, officer or agency? True, they continued testifying. May that be construed as a waiver of their rights to remain silent and not to be compelled to be a witness against themselves? The answer is yes, if they have the option to do so. But in the light of the first portion of Section 5 of P.D. 1886 and the awesome contempt power of the Board to punish any refusal to testify or produce evidence, We are not persuaded that when they testified, they voluntarily waived their constitutional rights not to be compelled to be a witness against themselves much less their right to remain silent.

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Compulsion as it is understood here does not necessarily connote the use of violence; it may be the product of unintentional statements. Pressure which operates to overbear his will, disable him from making a free and rational choice, or impair his capacity for rational judgment would in our opinion be sufficient. So is moral coercion 'tending to force testimony from the unwilling lips of the defendant. 26 Similarly, in the case of Louis J. Lefkowitz v. Russel 27 Turley" citing Garrity vs. New Jersey" where certain police officers summoned to an inquiry being conducted by the Attorney General involving the fixing of traffic tickets were asked questions following a warning that if they did not answer they would be removed from office and that anything they said might be used against them in any criminal proceeding, and the questions were answered, the answers given cannot over their objection be later used in their prosecutions for conspiracy. The United States Supreme Court went further in holding that: the protection of the individuals under the Fourteenth Amendment against coerced statements prohibits use in subsequent proceedings of statements obtained under threat or removal from office, and that it extends to all, whether they are policemen or other members of the body politic. 385 US at 500, 17 L Ed. 562. The Court also held that in the context of threats of removal from office the act of responding to interrogation was not voluntary and was not an effective waiver of the privilege against self- incrimination. To buttress their precarious stand and breathe life into a seemingly hopeless cause, petitioners and amicus curiae (Ex-Senator Ambrosio Padilla) assert that the "right not to be compelled to be a witness against himself" applies only in favor of an accused in a criminal case. Hence, it may not be invoked by any of the herein private respondents before the Agrava Board. The Cabal vs. Kapunan 28 doctrine militates very heavily against this theory. Said case is not a criminal case as its title very clearly indicates. It is not People vs. Cabal nor a prosecution for a criminal offense. And yet, when Cabal refused to take the stand, to be sworn and to testify upon being called as a witness for complainant Col. Maristela in a forfeiture of illegally acquired assets, this Court sustained Cabal's plea that for him to be compelled to testify will be in violation of his right against self- incrimination. We did not therein state that since he is not an accused and the case is not a criminal case, Cabal cannot refuse to take the witness stand and testify, and that he can invoke his right against self-incrimination only when a question which tends to elicit an answer that will incriminate him is profounded to him. Clearly then, it is not the character of the suit involved but the nature of the proceedings that controls. The privilege has consistently been held to extend to all proceedings sanctioned by law and to all cases in which punishment is sought to be visited upon a witness, whether a party or not. 29 If in a mere forfeiture case where only property rights were involved, "the right not to be compelled to be a witness against himself" is secured in favor of the defendant, then with more reason it cannot be denied to a person facing investigation before a Fact Finding Board where his life and liberty, by reason of the statements to be given by him, hang on the balance. Further enlightenment on the subject can be found in the historical background of this constitutional provision against selfincrimination. The privilege against self- incrimination is guaranteed in the Fifth Amendment to the Federal Constitution. In the Philippines, the same principle obtains as a direct result of American influence. At first, the provision in our organic laws were similar to the Constitution of the United States and was as follows: That no person shall be ... compelled in a criminal case to be a witness against himself.

As now worded, Section 20 of Article IV reads: No person shall be compelled to be a witness against himself. The deletion of the phrase "in a criminal case" connotes no other import except to make said provision also applicable to cases other than criminal. Decidedly then, the right "not to be compelled to testify against himself" applies to the herein private respondents notwithstanding that the proceedings before the Agrava Board is not, in its strictest sense, a criminal case No doubt, the private respondents were not merely denied the afore-discussed sacred constitutional rights, but also the right to "due process" which is fundamental fairness. 31 Quoting the highly-respected eminent constitutionalist that once graced this Court, the former Chief Justice Enrique M. Fernando, due process — ... is responsiveness to the supremacy of reason, obedience to the dictates of justice. Negatively put, arbitrariness is ruled out and unfairness avoided. To satisfy the due process requirement, official action, to paraphrase Cardozo, must not outrun the bounds of reason and result in sheer oppression. Due process is thus hostile to any official action marred by lack of reasonableness. Correctly, it has been Identified as freedom from arbitrariness. It is the embodiment of the sporting Idea of fair play (Frankfurter, Mr. Justice Holmes and the Supreme Court, 1983, pp. 32-33). It exacts fealty "to those strivings for justice and judges the act of officialdom of whatever branch "in the light of reason drawn from considerations of fairness that reflect (democratic) traditions of legal and political thought."(Frankfurter, Hannah v. Larche 1960, 363 US 20, at 487). It is not a narrow or '"echnical conception with fixed content unrelated to time, place and circumstances."(Cafeteria Workers v. McElroy 1961, 367 US 1230) Decisions based on such a clause requiring a 'close and perceptive inquiry into fundamental principles of our society. (Bartkus vs. Illinois, 1959, 359 US 121). Questions of due process are not to be treated narrowly or pedantically in slavery to form or phrases. (Pearson v. McGraw, 1939, 308 US 313). Our review of the pleadings and their annexes, together with the oral arguments, manifestations and admissions of both counsel, failed to reveal adherence to and compliance with due process. The manner in which the testimonies were taken from private respondents fall short of the constitutional standards both under the DUE PROCESS CLAUSE and under the EXCLUSIONARY RULE in Section 20, Article IV. In the face of such grave constitutional infirmities, the individual testimonies of private respondents cannot be admitted against them in ally criminal proceeding. This is true regardless of absence of claim of constitutional privilege or of the presence of a grant of immunity by law. Nevertheless, We shall rule on the effect of such absence of claim to the availability to private respondents of the immunity provided for in Section 5, P.D. 1886 which issue was squarely raised and extensively discussed in the pleadings and oral arguments of the parties. Immunity statutes may be generally classified into two: one, which grants "use immunity"; and the other, which grants what is known as "transactional immunity." The distinction between the two is as follows: "Use immunity" prohibits use of witness' compelled testimony and its fruits in any manner in connection with the criminal prosecution of the witness. On the other hand, "transactional immunity" grants immunity to the witness from prosecution for an offense to which

30

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his compelled testimony relates." 32 Examining Presidential Decree 1886, more specifically Section 5 thereof, which reads: SEC. 5. No person shall be excused from attending and testifying or from producing books, records, correspondence, documents, or other evidence in obedience to a subpoena issued by the Board on the ground that his testimony or the evidence required of him may tend to incriminate him or subject him to penalty or forfeiture; but his testimony or any evidence produced by him shall not be used against him in connection with any transaction, matter or thing concerning which he is compelled, after having invoked his privilege against selfincrimination, to testify or produce evidence, except that such individual so testifying shall not be exempt from prosecution and punishment for perjury committed in so testifying, nor shall he be exempt from demotion or removal from office. (Emphasis supplied) it is beyond dispute that said law belongs to the first type of immunity statutes. It grants merely immunity from use of any statement given before the Board, but not immunity from prosecution by reason or on the basis thereof. Merely testifying and/or producing evidence do not render the witness immuned from prosecution notwithstanding his invocation of the right against selfincrimination. He is merely saved from the use against him of such statement and nothing more. Stated otherwise ... he still runs the risk of being prosecuted even if he sets up his right against self- incrimination. The dictates of fair play, which is the hallmark of due process, demands that private respondents should have been informed of their rights to remain silent and warned that any and all statements to be given by them may be used against them. This, they were denied, under the pretense that they are not entitled to it and that the Board has no obligation to so inform them. It is for this reason that we cannot subscribe to the view adopted and urged upon Us by the petitioners that the right against self-incrimination must be invoked before the Board in order to prevent use of any given statement against the testifying witness in a subsequent criminal prosecution. A literal interpretation fashioned upon Us is repugnant to Article IV, Section 20 of the Constitution, which is the first test of admissibility. It reads: No person shall be compelled to be a witness against himself. Any person under investigation for the commission of an offense shall have the right to remain silent and to counsel, and to be informed of such right. No force, violence, threat, intimidation, or any other means which vitiates the free will shall be used against him. Any confession obtained in violation of this section shall be inadmissible in evidence. (Emphasis supplied) The aforequoted provision renders inadmissible any confession obtained in violation thereof. As herein earlier discussed, this exclusionary rule applies not only to confessions but also to admissions, 33 whether made by a witness in any proceeding or by an accused in a criminal proceeding or any person under investigation for the commission of an offense. Any interpretation of a statute which will give it a meaning in conflict with the Constitution must be avoided. So much so that if two or more constructions or interpretations could possibly be resorted to, then that one which will avoid unconstitutionality must be adopted even though it may be necessary for this purpose to disregard the more usual and apparent import of the language used. 34 To save the statute from a declaration of unconstitutionality it must be given a reasonable construction that will bring it within the fundamental law. 35Apparent conflict between two clauses should be harmonized. 36

But a literal application of a requirement of a claim of the privilege against self- incrimination as a condition sine qua non to the grant of immunity presupposes that from a layman's point of view, he has the option to refuse to answer questions and therefore, to make such claim. P.D. 1886, however, forecloses such option of refusal by imposing sanctions upon its exercise, thus: SEC. 4. The Board may hold any person in direct or indirect contempt, and impose appropriate penalties therefor. A person guilty of .... including ... refusal to be sworn or to answer as a witness or to subscribe to an affidavit or deposition when lawfully required to do so may be summarily adjudged in direct contempt by the Board. ... Such threat of punishment for making a claim of the privilege leaves the witness no choice but to answer and thereby forfeit the immunity purportedly granted by Sec. 5. The absurdity of such application is apparent Sec. 5 requires a claim which it, however, forecloses under threat of contempt proceedings against anyone who makes such claim. But the strong testimonial compulsion imposed by Section 5 of P.D. 1886 viewed in the light of the sanctions provided in Section 4,infringes upon the witness' right against self-incrimination. As a rule, such infringement of the constitutional right renders inoperative the testimonial compulsion, meaning, the witness cannot be compelled to answer UNLESS a co-extensive protection in the form of IMMUNITY is offered. 37 Hence, under the oppressive compulsion of P.D. 1886, immunity must in fact be offered to the witness before he can be required to answer, so as to safeguard his sacred constitutional right. But in this case, the compulsion has already produced its desired results the private respondents had all testified without offer of immunity. Their constitutional rights are therefore, in jeopardy. The only way to cure the law of its unconstitutional effects is to construe it in the manner as if IMMUNITY had in fact been offered. We hold, therefore, that in view of the potent sanctions imposed on the refusal to testify or to answer questions under Sec. 4 of P.D. 1886, the testimonies compelled thereby are deemed immunized under Section 5 of the same law. The applicability of the immunity granted by P.D. 1886 cannot be made to depend on a claim of the privilege against self-incrimination which the same law practically strips away from the witness. With the stand we take on the issue before Us, and considering the temper of the times, we run the risk of being consigned to unpopularity. Conscious as we are of, but undaunted by, the frightening consequences that hover before Us, we have strictly adhered to the Constitution in upholding the rule of law finding solace in the view very aptly articulated by that well-known civil libertarian and admired defender of human rights of this Court, Mr. Justice Claudio Teehankee, in the case of People vs. Manalang 38 and we quote: I am completely conscious of the need for a balancing of the interests of society with the rights and freedoms of the individuals. I have advocated the balancing-of-interests rule in an situations which call for an appraisal of the interplay of conflicting interests of consequential dimensions. But I reject any proposition that would blindly uphold the interests of society at the sacrifice of the dignity of any human being. (Emphasis supplied) Lest we be misunderstood, let it be known that we are not by this disposition passing upon the guilt or innocence of the herein private respondents an issue which is before the Sandiganbayan. We are merely resolving a question of law and the pronouncement herein made applies to all similarly situated, irrespective of one's rank and status in society.

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IN VIEW OF THE FOREGOING CONSIDERATIONS and finding the instant petitions without merit, same are DISMISSED. No pronouncement as to costs. SO ORDERED. Aquino, J., concurs (as certified by Makasiar, C.J.). Abad Santos, J., is on leave Separate Opinions MAKASIAR, C.J., concurring: To admit private respondents' testimonies and evidence before the Fact-Finding Board (FFB) against them in the criminal prosecution pending before the Sandiganbayan, would violate their constitutional or human rights the right to procedural due process, the right to remain silent, and the right against self- incrimination.

express assertion. On the contrary, the police and prosecution officers of the country should respect these constitutional liberties as directed in the recent decision in the Hildawa and Valmonte cases (G.R. Nos. 67766 and 70881, August 14, 1985). The established jurisprudence is that waiver by the citizen of his constitutional rights should be clear, categorical, knowing, and intelligent (Johnson vs. Zerbst, 304 US 458, 464, cited in Abriol vs. Homeres, 84 Phil. 525 [1949] and in Chavez vs. CA, 24 SCRA 663, 682-683). The use of testimonies and other evidence of private respondents before the FFB against them in the criminal cases subsequently filed before the Sandiganbayan would trench upon the constitutional guarantees that "no person shall be deprived of life, liberty, or property without due process of law ... that "no person shall be held to answer for a criminal offense without due process of law" and that (Section 17, Article IV, 1973 Constitution), that "no person shall be compelled to be a witness against himself. ..." and that " a person has the right to remain silent ..." (Section 20, Article IV, 1973 Constitution). There can be no implied waiver of a citizen's right against self-incrimination or of his right to remain silent.

That their testimonies and other evidence they submitted before the FFB in these criminal cases are incriminatory, is confirmed by the very fact that such testimonies and evidence were the very bases of the majority report of the FFB recommending the prosecution of private respondents as accessories.

Any such renunciation cannot be predicated on such a slender or tenuous reed as a dubious implication. Otherwise, it would be easier to lose the human rights guaranteed by the Bill of Rights than to protect or preserve them; it would be easier to enslave the citizen than for him to remain free. Such a result was never intended by the Founding Fathers.

It should be stressed that the basic purposes of the right against self- incrimination are (1) humanity or humanitarian reasons to prevent a witness or accused from being coerced, whether physically, morally, and/or psychologically, into incriminating himself, and (2) to protect the witness or accused from committing perjury, because the first law of nature is self- preservation.

The first sentence of Section 20 of the Bill of Rights stating that "no person shall be compelled to be a witness against himself," applies to both the ordinary witness and the suspect under custodial investigation.

The utilization in the prosecution against them before the Sandiganbayan of the testimonies and other evidence of private respondents before the FFB collides with Section 1, Section 17 and Section 20 of the Bill of Rights of the 1973 Constitution: Section 1. No person shall be deprived of life, liberty or property without due process of law, nor shall any person be denied the equal of the laws. xxx xxx xxx Section 17, No person shall be held to answer for a criminal offense without due process of law. xxx xxx xxx Section 20. No person shall be compelled to be a witness against himself. Any person under investigation for the commission of an offense shall have the right to remain silent and to counsel, and to be informed of such right. No force, violence, threat, intimidation, or any other means which vitiates the free will shall be used against him. Any confession obtained in violation of this Section shall be inadmissible in evidence. The Bill of Rights constitutes the reservation of the sovereign people against, as well as the limitation on, the delegated powers of government. These rights thus enshrined need no

In support of the rule that there can be no implied waiver of the right against self-incrimination and all other constitutional rights by the witness or by the accused, is the fact that the right against double jeopardy can only be renounced by the accused if the criminal case against him is dismissed or otherwise terminated with his express consent. Without such express consent to the dismissal or termination of the case, the accused can always invoke his constitutional right against double jeopardy. If Section 5 of P.D. 1886 were interpreted otherwise, said section would become a booby trap for the unsuspecting or unwary witness, A witness summoned either by subpoena or by Invitation to testify before the FFB under Section 5, cannot refuse, under pain of contempt, to testify or produce evidence required of him on the ground that his testimony or evidence may tend to incriminate or subject him to a penalty or forfeiture; because the same Section 5 prohibits the use of such testimony or evidence which may tend to incriminate him in any criminal prosecution that may be filed against him. The law or decree cannot diminish the scope and extent of the guarantee against self-incrimination or the right to remain silent or the right against being held to answer for a criminal offense without due process of law, or against deprivation of his life, liberty or property without due process of law. As a matter of fact, numerous decisions culled by American jurisprudence are partial to the rule that immunity statutes which compel a citizen to testify, should provide an immunity from prosecution that is as co-extensive, as total and as absolute as the guarantees themselves

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(Jones Law on Evidence, Chapter XVIII, Section 863, pp. 1621-1623; Kastigar vs. US 1972, 406 US 441).

initiative and resourcefulness of its counsel. He could prosecute private respondents on evidence other than their testimony and the evidence they gave before the FFB.

Even if the witness testified pursuant to an invitation, the invitation does not remove the veiled threat of compulsion, because as stated in the Chavez case, supra.

As heretofore stated, the private respondents were compelled to testify before the FFB whether by subpoena or by invitation which has the effect of a subpoena as provided for in Section 5 of P.D. 1886; because private respondents then believed, by reading the entire Section 5, that the testimony they gave before the FFB could not be used against them in the criminal cases subsequently filed before the Sandiganbayan. Because the Board was merely a fact-finding board and that it was riot conducting a criminal prosecution the private respondents were under the impression that there was no need for them to invoke their rights to remain silent, against self-incrimination and against being held for a criminal offense without due process of law.

Compulsion as it is understood here does not necessarily connote the use of violence; it may be the product of unintentional statements. Pressures which operate to overbear his will, disable him from making a free and rational choice, or impair his capacity for rational judgment would in our opinion be sufficient. So is moral coercion attending to force testimony from the unwilling lips of the defendant (Chavez vs. Court of Appeals, 24 SCRA 663, 679). The summons issued to private respondents has been euphemistically called as an invitation, instead of a subpoena or subpoena duces tecum, as a sign of respect for the important and high positions occupied by private respondents. But the effect of such an invitation thus worded is the same as a subpoena or subpoena duces tecum. Precisely, the phraseology of Section 5 of P.D. 1886 entices the unsuspecting private respondents to testify before the FFB, by dangling in the same Section 5 the assurance that their testimony or the evidence given by them will not be used against them in a criminal prosecution that may be instituted against them. At the very least, their consent to testify was under such misapprehension. Hence, there can be no clear, categorical, knowing and intelligent waiver of the right to remain silent, against selfincrimination, against being held to answer for a criminal offense without due process of law, and against being deprived of life, liberty or property without due process of law under such misapprehension. In any event, Section 5 of P.D. 1886 creates a doubt, which doubt is accentuated by the difference of opinion thereon among the counsels in these cases and among members of this Court. And it is basic in criminal law that doubts should be resolved liberally in favor of the accused and strictly against the government. The procedural due process both under Sections 1 and 17 of the Bill of Rights, Article IV of the 1973 Constitution, simply means, in the language of Justice Frankfurter, the sporting Idea of fair play. The FFB and its counsel did not inform the private respondents herein of their right to remain silent and their right against self-incrimination, and that their testimonies may be utilized against them in a court of law, before they testified. This is not fair to them, and hence, they were denied procedural due process. It should be stressed that the FFB was merely a fact-finding agency for the purpose of gathering all the possible facts that may lead to the Identity of the culprit. Such testimonies may provide leads for the FFB, its counsels and agents to follow up. The FFB and its counsels cannot rely solely on such testimonies to be used against the private respondents in these criminal cases. It should be recalled that the FFB had ample funds for the purpose of accomplishing its object. As a matter of fact. it refunded several million pesos to the government after it concluded its investigation. The Board and its counsel could have utilized the said amount to appoint additional agents to look for witnesses to the assassination. In this respect, the FFB counsel could be faulted in not utilizing the funds appropriated for them to ferret out all evidence that will Identify the culprit or culprits. The failure of the FFB's counsel to use said funds reflects on the

It should be recalled that the counsel of the FFB after submitting the majority report, refused to cooperate with the Tanodbayan in these cases with the pompous declaration that, after submitting their majority report, he automatically became functus oficio. Was his refusal to cooperate with, and assist, the Tanodbayan in the prosecution of these cases, born of the realization that the FFB majority report is as weak as it was precipitate? And when the Tanodbayan has now his back to the wall, as it were, by the ruling of the respondent Sandiganbayan excluding the testimonies and other evidence of private respondents herein on the ground that the use of their testimonies and other evidence will incriminate them, the FFB counsel, without being requested by the Tanodbayan, now files a memorandum in support of the position of the Tanodbayan. what is the reason for this turn-about to save his report from the fire which they started with such enthusiasm? As above emphasized, it is the duty of the police and the prosecuting authorities to respect their rights under the Constitution as we stated in the recent Hildawa and Valmonte cases, supra. The grant of immunity under Section 5 of P.D. 1886 would be meaningless if we follow the posture of petitioners herein. Such a posture would be correct if the phrase "after having invoked his privilege against self- incrimination" were transposed as the opening clause of Section 5 to read a follows "After having invoked his privilege against self-incrimination, no person shall be excused from attending and testifying ... etc." Said Section 5 has two clauses and contemplates two proceedings. The first clause from "No person shall be excused ... etc." up to "penalty or forfeiture refers to the proceeding before the FFB. The second clause after the semi-colon following the word "forfeiture which begins with but his testimony or any evidence produced by him shall not be used against him in connection with any transaction, matter, or thing concerning which he is compelled, after having invoked his privilege against self-incrimination to testify . refers to a subsequent criminal proceeding against him which second clause guarantees him against the use of his testimony in such criminal prosecution, but does not immunize him from such prosecution based on other evidence. The private respondents herein, if the contention of the prosecution were sustained, would be fried in their own fat. Consequently, the petition should be dismissed.

CONCEPCION, JR., J., concurring:

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1. Let me preface my opinion by quoting from my dissent in Pimentel.

1

1. We are committed to the mandate of the Rule of Law. We resolve controversies before Us without considering what is or what might be the popular decision. No. We never do. We only consider the facts and the law. Always the facts and the law. 2. The issue before Us is not I repeat not the guilt or innocence of Gen. Fabian C. Ver, Major Gen. Prospero Olivas, and others for their alleged participation in the assassination of former Senator Benigno S. Aquino, Jr. 3. The issue is: Are the testimonies given by them before the Agrava Board admissible in evidence against them in their trial before the Sandiganbayan? 4. The issue therefore is purely a question of law. It involves the interpretation of Sec. 5, P.D. No. 1886 and calls for the application of the Rule of Law. 5. Sec. 5, P.D. No. 1886 reads: No person shall be excused from attending and testifying or from producing books, records, correspondence, documents, or other evidence in obedience to a subpoena issued by the Board on the ground that his testimony or the evidence required of him may tend to incriminate him or subject him to penalty or forfeiture; but his testimony or any evidence produced by him shall not be used against him in connection with any transaction, matter or thing concerning which he is compelled. after having invoked his privilege against self-incrimination, to testify or produce evidence, except that such individual so testifying shall not be exempt from prosecution and punishment for perjury committed in so testifying, nor shall he be exempt from demotion or removal from office. 6. This section means that any person who is invited or summoned to appear must obey and testify as to what he knows. Even if the testimony tends to incriminate him he must testify. Even if he claims his constitutional right against self-incrimination, he still must testify. However, his testimony cannot be used against him in any subsequent proceeding, provided that at the time it is being presented, he invokes his privilege against self-incrimination. His testimony, no matter what it may be, cannot in any way cause him harm. The only exception is if the testimony he gave is false, in which case he can be prosecuted and punished for perjury. He may also be demoted or removed from office. 7. The testimonies given by private respondents before the Agrava Board are therefore not admissible against them in their trial before the Sandiganbayan, having invoked their privilege against self-incrimination.

PLANA, J., concurring:

1. According to the Constitution, no person shall be compelled to be a witness against himself. But the law (PD 1886) which created the Agrava Board decrees that no person shall be excused from testifying on the ground of self- incrimination. If the law had stopped after this command, it would have been plainly at variance with the Constitution and void. lt was to ward off such a Constitutional infirmity that the law provided for immunity against the use of coerced testimony or other evidence, an immunity which, to be constitutionally adequate, must give at least the same measure of protection as the fundamental guarantee against self-incrimination. 2. Presidential Decree 1886 was not intended either to restrict or expand the constitutional guarantee against self-incrimination. On the one hand, a law cannot restrict a constitutional provision. On the other hand, PD 1886 was adopted precisely to coerce the production of evidence that hopefully would unmask the killers of Senator Aquino, although the compulsory process is accompanied by "use" immunity. 3. It is argued that the right against self- incrimination must have been invoked before the Agrava Board if the use of evidence given therein against the witness in a subsequent criminal prosecution is to be barred. I did not agree. I fail to see why to preserve pursuant to law (PD 1886) one's constitutional right against selfincrimination, one has to offer resistance to giving testimony a resistance which the said law itself says is futile and cannot prevail, as no witness by its specific injunction can refuse to testify. 4. The constitutional right against self-incrimination may be waived expressly. It may also be waived impliedly by speaking when one has the option to hold his tongue. Waiver by implication presupposes the existence of the right to keep silent. Thus, when one speaks because the law orders him to do so, his action is not really voluntary and therefore his testimony should not be deemed an implied waiver of his constitutional right against self- incrimination. 5. Presidential Decree 1886 does not give private respondents absolute immunity from prosecution, It only bars the use against them of the evidence that was elicited from them by the Agrava Board. If there are other evidence available, private respondents are subject to indictment and conviction. 6. Moreover, the evidence given to the Agrava Board is not, in my view, completedly immunized. What PD 1886 bars from use is only the testimony of the witness who testified before the Agrava Board and whatever was presented as part of his testimony, as such. PD 1886 could not have intended to convert non-confidential official documents into shielded public records that cannot be used as evidence against private respondents, by the mere fact that they were admitted in evidence as part of private respondents' testimony before the Agrava Board. In other words, evidence otherwise available to the prosecution, such as official documents, do not become barred just because they have been referred to in the course of the testimony of private respondents and admitted in evidence as part of their testimony They may still be subpoenaed and offered in evidence. Conceivably, some objections might be raised; but the evidence will be unfettered by the exclusionary rule in PD 1886.

I would like to underscore some considerations underlying my concurrence: ESCOLIN, J., concurring:

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I concur in the dismissal of the petitions. The admission in evidence of the testimonies of private respondents given before the Agrava Board would constitute a violation of their right against self- incrimination guaranteed under Section 20, Article IV of the Constitution. I subscribe to the majority view that Section 5 of P.D. 1886 cannot be constitutionally tenable, unless a grant of immunity is read into it vis-a-vis the compulsion it imposes upon a witness to testify. Otherwise stated, Section 5 of P.D. 1886 should be interpreted as an immunity statute, which, while depriving one of the right to remain silent, provides an immunity from prosecution that is as coextensive, as total and as absolute as the guarantees themselves. (Jones Law on Evidence, Chapter XVIII, Section 863, pp. 1621-1623, Kastigar v. U.S., 1972, 406 US 441). Clearly, this is how the private respondents understood the legal provision under consideration. For ably assisted as they were by counsel, they would not have allowed themselves to be deliberately dragged into what the Chief Justice would call a "booby trap". Viewed from another angle, therefore, it could not be truly said that private respondents had waived their right against self- incrimination in a manner that is clear, categorical, knowing and intelligent. (Johnson v. Zerbst, 304 US 458, 464, cited in Abriol v. Homeres, 84 Phil. 525 and Chavez v. CA, 24 SCRA 663).

GUTIERREZ, JR., J., concurring: I concur in the majority opinion penned by Justice Serafin R. Cuevas and in the pithy separate opinion of Justice Nestor B. Alampay but would like to add some personal observations. This case furnishes an opportunity to appreciate the workings of our criminal justice system. The prosecutions which led to this petition serve as a timely reminder that all of us-civilian or military, layman or judge, powerful or helpless- need the Bill of Rights. And should the time ever come when like the respondents we may have to invoke the Constitution's protection, the guarantees of basic rights must be readily available, in their full strength and pristine glory, unaffected by what is currently popular or decreed and heedless of whoever may be involved In many petitions filed with this Court and lower courts, the military has often been charged with riding roughshod over the basic rights of citizens. Officers and enlisted men in the frontlines of the fight against subversion or rebellion may, in the heat of combat, see no need to be concerned over such ,niceties" as due process, unreasonable searches and seizures, freedom of expression, and right to counsel. They are best reminded that these rights are not luxuries to be discarded in times of crisis. These rights are the bedrock of a free and civilized society. They are the reason why we fight so hard to preserve our system of government. And as earlier stated, there may come times when we may have to personally invoke these basic freedoms for ourselves. When we deny a right to an accused, we deny it to ourselves. The decision of the Court underscores the importance of keeping inviolate the protections given by the Bill of Rights. Acts which erode or sacrifice constitutional rights under seductive claims of preserving or enhancing political and economic stability must be resisted. Any lessening of freedom will not at all increase stability. The liberties of individuals cannot be preserved by denying them.

The dividing line between legitimate dissent or opposition on one hand and subversion or rebellion on the other may be difficult to pinpoint during troubled times. The lesson of this petition is that those charged with suppressing the rebellion and those who sit in courts of justice should ever be vigilant in not lumping legitimate dissenters and rebels together in one indiscriminate classification. An abiding concern for principles of liberty and justice is especially imperative in periods of crisis and in times of transition. And all persons from the mighty to the lowy must be given the fullest measure of protection under the Bill of Rights if our constitutional guarantees are to have any meaning. In addition to the right against self- incrimination, of not being compelled to be a witness against one's self, so ably discussed by Justice Cuevas in the Court's opinion, I am constrained by considerations of basic fairness to vote against granting the petition. The private respondents were called to testify before the Agrava Commission. The decree creating the commission stated that no person may refuse to attend and testify or to produce evidence before it on the ground that what he says or produces may incriminate him. But since the witness is compelled to give all he knows or possesses in effect shorn by law of his right not to incriminate himself the decree states that the evidence wrung from that witness may not be used against him later. This is, simply speaking, what the petition is all about. The respondents may be prosecuted as indeed they have been prosecuted. They may eventually be convicted if the evidence warrants conviction. however, they may not be convicted solely on the evidence which came from their own mouths or was produced by their own hands. The evidence must come from other sources. It would be the height of unfairness and contrary to due process if a man is required to state what he knows even if it would incriminate him, is promised immunity if he talks freely, and is later convicted solely on the testimony he gave under such a promise of immunity. I believe that P.D. 1886 is the first Immunity Act to be enacted in the Philippines. It may be relevant, therefore, to refer to American decisions expounding on immunity statutes, more so when a comparison of P.D. 1886 with such statutes as the U.S. Immunity Act of 1954, 68 Stat. 745, 18 U.S.C.A. Section 3486, shows a similarity in the protection given by the statutes. The U.S. Immunity Act of 1954 was enacted to assist federal grand juries in their investigati•ns of attempts to endanger the national security or defense of the United States by treason, sabotage, espionage, sedition, seditious conspiracy, and violations of various laws on internal security, atomic or nuclear energy, and immigration and nationality. The law stated that a witness shall not be excused from testifying or from producing books, papers, or other evidence on the ground that it may tend to incriminate him or subject him to a penalty or forfeiture. The statute then provides: But no such witness shall be prosecuted or subjected to any penalty or forfeiture for or on account of any transaction, matter, or thing concerning which he is compelled, after having claimed his privilege against self- incrimination, to testify or produce evidence nor shall testimony so compelled be used as evidence in any criminal proceeding ... against him in any court.

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The American statute provides immunity against prosecution, penalties, and use of the testimony. P.D. 1886 is of more limited scope. Only the use of the compelled testimony is proscribed. The witness may still be prosecuted but the prosecution will have to look for evidence other than the words of the accused given before the Agrava Commission. In Brown v. Walker (161 U.S. 591) the U.S. Supreme Court was confronted with the validity of the 1893 Immunity Act. Brown was subpoenaed to testify before a grand jury investigating railroad anomalies. lie refused to testify on grounds of self- incrimination, arguing that the Immunity Act compelling him to testify was unconstitutional. The Court ruled that "(W)hile the constitutional provision in question is justly regarded as one of the most valuable prerogatives of the citizen, its object is fully accomplished by the statutory immunity and we are therefore of opinion that the witness was compellable to answer." In other words, the statutory immunity takes the place of the invocation of the constitutional guarantee. There is no need at the time of taking testimony to invoke the Fifth Amendment because it would be denied any way and the witness would be compelled to testify. It would be absurd to invoke a protection which cannot be availed of when compelled to testify. The time to invoke the immunity is when the testimony is being used contrary to the granted immunity. Protected by the statutory immunity, a witness cannot even insist on his right to remain silent when testifying.

oppressive that the statute does not give him true immunity. This, he alleges, is significantly different from the impact of testifying on the auditor in Brown v. Walker, who could the next day resume his job with reputation unaffected. But, as this Court has often held, the immunity granted need only remove those sanctions which generate the fear justifying the invocation of the privilege 'The interdiction of the other Amendment operates only here a witness may possibly expose him to a criminal charge. But if the criminality has already been taken away, the amendment ceased to apply.' Hale v. Henkel 201 U.S. 43, 67. Here, since the Immunity Act protects a witness who is compelled to answer to the extent of his constitutional immunity, he has of course, when a particular sanction is sought to be imposed against him, the right to claim that it is criminal in nature. (Emphasis supplied). In United States v. Murdock (284 U.S. 141), the court ruled that "the principle established is that full and complete immunity against prosecution by the government compelling the witness to answer is equivalent to the protection furnished by the rule against compulsory selfincrimination.

In Ullmann v. United States (350 U.S. 422), the court interpreted the Immunity Act of 1954 and stated.

P.D. 1886, being an immunity statute should not be given a strained or absurd interpretation in order to achieve a certain result. If the immunity given by the decree is equivalent to the protection furnished by the right against self- incrimination, then, paraphrasing Justice Frankfurter in Ullmann, the same protection given by one of the great landmarks in man's struggle to make himself civilized must not be interpreted in a hostile or niggardly spirit,

xxx xxx xxx

xxx xxx xxx

... Since that time the Court's holding in Brown v. Walker has never been challenged; the case and the doctrine it announced have consistently and without question been treated as definitive by this Court, in opinions written, among others, by Holmes and Brandeis, Justices. See, e.g., McCarthy v. Arndstein 226 U.S. 34, 42; Heike v. United States, 227 U.S. 131, 142. The 1893 statute has become part of our constitutional fabric and has been included in substantially the same terms, in virtually all of the major regulatory enactments of the Federal Government.' Shapiro v. United States, 335 U.S. 1, 6. For a partial list of these statutes, see, Id., 335 U.S. at pages 6-7, note 4. Moreover, the States, with one exception a case decided prior to Brown v. Walker have, under their own constitutions, enunciated the same doctrine, 8 Wigmore, Evidence (3d ed.), 2281, and have passed numerous statutes compelling testimony in exchange for immunity in the form either of complete amnesty or of prohibition of the use of the compelled testimony. For a list of such statutes, see 8 Wigmore, Evidence (3d ed.), 2281, n. 11 (pp. 478-501) and Pocket Supplement thereto, 2281, n. 11 (pp. 147-157). (Emphasis supplied)

... Too many, even those who should be better advised, view this privilege as a shelter for wrongdoers. They too readily assume that those who invoke it are either guilty of crime or commit perjury in claiming the privilege. Such a view does scant honor to the patriots who sponsored the Bill of Rights as a condition to acceptance of the Constitution by the ratifying States. The Founders of the Nation were not naive or disregard ful of the interest of justice ...

xxx xxx xxx It is interesting to note how the American Supreme Court in Ullmann treated the immunity not only against the use of the testimony (as under P.D. 1886) but even against prosecution. xxx xxx xxx Petitioner, however, attempts to distinguish Brown v. Walker. He argues that this case is different from Brown v. Walker because the impact of the disabilities imposed by federal and state authorities and the public in general such as loss of job, expulsion from labor unions, state registration and investigation statutes, passport eligibility and general public opprobrium-is so

I, therefore, join the majority in dismissing the petition.

DE LA FUENTE, J., concurring: No person shall be compelled to be a witness against himself." 1 This basic right against selfincrimination, which supplanted the inquisitorial methods of interrogating the accused as practiced during the Spanish regime, has become an indispensable part of our laws since 1900. Pursuant thereto, an accused in a criminal case has the right not only to refuse to answer incriminating questions but also to refuse to take the witness stand. He cannot be compelled even to utter a word in his defense. 2 As stressed in Chavez vs. Court of Appeals, 3 the rule may otherwise be stated as the constitutional right of the accused to remain silent. " The accused can forego testimony 4 without any adverse implication drawn from his decision to do so, The burden is on the State to establish the guilt of the accused beyond reasonable doubt; the prosecution must look elsewhere for other "evidence independently and freely secured," The rule forbids what has been considered as "the certainly inhuman procedure of compelling a person 'to furnish the missing evidence necessary for his conviction'." According to Justice Harlan, it was intended "to shield the guilty and imprudent as well as the innocent and

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foresighted." 5 Transplanted in this country with the advent of American sovereignty 6and firmly imbedded in our fundamental law, 7 the said privilege against compulsory self-incrimination, which is predicated on grounds of public policy and humanity, 8 "is fundamental to our scheme of justice" 9 and is one of the procedural guarantees of our accusatorial system. 1. As I see it, what the prosecution proposed to do in these cases was to present, as evidence of the alleged accessorial acts of private respondents, the transcripts of their respective testimonies before the Agrava Board. Confronted by the apparent unwillingness of said respondents to be called to the witness stand in subsequent criminal proceedings, the prosecution sought to put into the record of these criminal cases (in lieu of private respondents' testimonies) the said transcripts and other evidence given by them in the course of their testimony before the Agrava Board. If allowed over and despite private respondents' objection, this would be a clear infringement of the constitutional guarantee that they can invoke in said criminal proceedings, as all of them did. Since the prosecution cannot require said respondents to testify in the criminal cases before the Sandiganbayan, it stands to reason that it is equally disabled from indirectly compelling respondents to give evidence against themselves by using their Agrava Board testimonies. The prosecution must present evidence "derived from a legitimate source wholly independent of the compelled testimony." 10 2. It is contended, however, that these self- incriminatory testimonies were given voluntarily because they did not claim the constitutional guarantee before or while giving testimony to the Agrava Board. Voluntariness, I think. cannot be inferred simply from such failure to invoke the privilege. There was no fair warning or notice to the declarant that his testimony would be used against him if incriminatory, unless the privilege is invoked beforehand or during his testimony. If they were properly warned and still gave testimony without t invoking the privilege, then it would be clear that they knowingly waived the privilege. Otherwise, it meant at the most a willingness on their part to help the Agrava Board in its fact-finding investigation without waiving (a) the immunity granted by law, and (b) the constitutional guarantee against self- incrimination in case of subsequent prosecution based on their self-incriminatory testimony. For waiver, it is wellsettled, to be effective. "must be certain, unequivocal and intelligently, understandably and willingly made. " 11 Mere submission to an illegal search or seizure "is not consent or waiver of objection. 12 The prosecution has the burden to prove otherwise. The same standard should be observed in self-incrimination cases. PD No. 1886 (as amended), which created that "independent ad hoc fact-finding Board," vested it with "plenary powers to determine the facts and circumstances surrounding the killing [of former Senator Aquino] and to allow for a free, unlimited and exhaustive investigation into all aspects of said tragedy." In consonance with these objectives, the law declared that the privilege was unavailable to an Agrava Board "witness", as follows: "No person shall be excused from attending and testifying or from producing other evidence on the ground that his testimony or any evidence requested of him may tend to incriminate him, " 13 etc. At the same time, the Board was empowered to summarily hold and punish any person in direct contempt for "refusal to be sworn or to answer as a witness," its judgment being "final and unappealable." Quite plainly, the constitutional right against compulsory self-incrimination could not be invoked by Agrava Board witnesses, The privilege was suspended or temporarily taken away for purposes of the investigation, in order that the Board would have access to all relevant evidence and all sources of information, not excluding compelled incriminatory statements of

probable and possible or potential defendants. An Agrava Board witness was, under the terms of the quoted provision, placed in a dilemma: (1) to answer truthfully all questions including those tending to be self-incriminatory, since he cannot invoke the privilege; (2) to lie and become liable criminally for perjury; and (3) to insist on his right to remain silent and be summarily punished by the Board for direct contempt. It is plain that such a witness was under compulsion to give self-incriminatory testimony. It was not voluntary. Precisely because of its coerced nature (an infringement of his constitutional right against self- incrimination), PD No. 1886 promised. in exchange or as a substitute for the privilege, limited immunity (as provided in the next succeeding clause, same section), to wit: ... but his testimony or any evidence produced by him shall not be used against him in connection with any transaction, matter or thing concerning which he was compelled, after having invoked his privilege against self- incrimination, to testify or produce evidence. 14 Such immunity 15 would bar the prosecution's use against the witness of his said testimony in subsequent criminal proceedings (wherein he is charged with offenses related to his testimony). Nevertheless, this would not operate to change the involuntary nature of his self- incriminatory testimony. As far as the witness is concerned, it was "coerced", not freely given, because he was not fully accorded the "liberty of choice." The law withheld his basic freedom to choose between testifying and remaining silent without the risk of being punished for direct contempt to forego testimony which could possibly be to his detriment. 3. I cannot agree with the proposition that the privilege should be invoked by the witness before or while giving testimony to the Agrava Board. Section 5 should be reasonably construed and fairly applied to the cases at bar, in the light of the accused's constitutional right against compulsory self- incrimination. The formula of limited-immunity in-lieu-of-the-privilege contained in said section rendered unnecessary or superfluous, the invocation of the privilege before the Board. Under said formula, the witness was deprived of the privilege to protect himself against inquisitorial interrogation into matters that a targeted defendant or virtual respondent can keep to himself in ordinary investigations or proceedings. Even if the provision is susceptible of an interpretation in support of the petitioner's stand, it appears that the time for invoking the privilege is not clear enough or certain from the language of the law. Equally plausible and logical is the contrary view that it may be invoked later on when it became apparent that the prosecution intended to use the testimony given before the Board to secure conviction of the declarant in the subsequent criminal proceedings. The privilege cannot be deemed waived by implication merely as a consequence of failure to claim it before the Board. It bears emphasis that the right of an accused "witnesses" against compulsory self-incrimination is predicated on the constitutional guarantee, not on the special law in question. 3. In the United States, the generally accepted approach in Fifth Amendment Cases (involving the constitutional guarantee under consideration) was stated as follows in Johnson vs Zerbst:" 16 It has been pointed out that 'courts indulge in every reasonable presumption against a waiver of the fundamental rights and that we do not presume acquiescence in the loss of such fundamental rights.'" Because, as Dean Griswold of Harvard Law School (later, Solicitor General of the United States) eloquently puts it:

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[T]he privilege against self-incrimination is one of the great landmark,s in man's struggles to make himself civilized ... [W]e do not make even the most hardened criminal sign his own death warrant, or dig his own grave ... We have through the course of history developed a considerable feeling of the dignity and intrinsic importance of the individual man. Even the evil man is a human being. 17 In this jurisdiction, more than four decades ago, the late Justice Jose P. Laurela nationalist, constitutionalist and eminent jurist, whose incisive and authoritative opinions on constitutional questions are often cited by the bench and the bar- voted to sustain a claim of the constitutional guarantee in Bermudez vs. Castillo. 18 In his concurrence, he said inter alia: (1) As between two possible and equally rational constructions, that should prevail which is more in consonance with the purpose intended to be carried out by the Constitution. The provision ... should be construed with the utmost liberality in favor of the right of the individual intended to be secured. ... (2) I am averse to the enlargement of the rule allegedly calculated to gauge more fully the credibility of a witness if the witness would thereby be forced to furnish the means for his own destruction. Unless the evidence is voluntarily given, the policy of the constitution is one of protection on humanitarian considerations and grounds of public policy... (3) The privilege should not be disregarded merely because it often affords a shelter to the guilty and may prevent the disclosure of wrongdoing. Courts can not, under the guise of protecting the public interest and furthering the ends of justice, treat a sacred privilege as if it were mere excrescence in the Constitution. (Emphasis supplied; at page 493.) In sum, considering the pertinent legal provisions and judicial pronouncements as well as the climate prevailing when the private respondents testified before the Agrava Board, I find it unavoidable to reach the conclusion that they did so under legal, moral and psychological compulsion. Their compelled testimonies before the Agrava Board cannot thereafter be used against them in the cases at bar in view of the immunity granted by P.D. No. 1886. They were not obliged to invoke then and there the constitutional guarantee. If they did, that would have sufficed to afford them adequate protection. If they did not, they could do so later on when the Government prosecutors (in spite of the statutory grant of immunity) decided in the subsequent criminal proceedings, to use against them their Agrava Board testimonies. For, as earlier stated, there was no intelligent and knowing waiver on their part of their constitutional right against selfincrimination. Accordingly, and for other reasons well stated in the main separate concurring opinions, I vote to dismiss the petitions.

ALAMPAY, J., concurring: I vote for the dismissal of the petition in these consolidated cases.

respondents before the Ad Hoc Agrava Fact Finding Board and sought to be introduced against them in the Sandiganbayan wherein they have been accused were rightfully excluded as evidence against them. I find untenable the insistence of the petitioner Tanodbayan that the private respondents should have claimed the right against self-incrimination before the said Fact Finding Board and that having omitted doing so, the said privilege afforded to them by law can no longer be invoked by them before the Sandiganbayan. The right claimed by private respondents rests on the fundamental principle that no person shall be compelled to be a witness against himself as so stated in our Constitution and from the fact that Section 5 of P.D. 1886 disallows the use against him of such testimony or any evidence produced by him before the said Fact Finding Board, except for perjury. Petitioner argues however, that there was a waiver of this right to self-incrimination when respondents proceeded to give their testimonies on various dates before the Agrava Fact Finding Board without formally invoking on said occasions their right against self-incrimination. As private respondents could not have excused themselves from testifying before said Board as clearly emphasized in the very first clause of Section 5 of P.D. 1886, and as at that point of time, there was no reason for the declarant to anticipate or speculate that there would be any criminal charge or any proceeding instituted against them, it would therefore, be unnatural and illogical to expect that private respondents would even contemplate the need of prefacing their declarations with an invocation before the Fact Finding Board of their privilege against selfincrimination. In fact for a declarant to announce his claim of the aforestated privilege prior to or while testifying before said Fact Finding Board, would irresistibly create an inference and convey an impression that said witness is burdened with his own awareness that he stands already incriminated in some wrong. To insist therefore, even in the absence yet of any proceeding against him, that the witness invoke the said privilege before the Agrava Fact Finding Board, would be obviously self-demeaning. Such an effect could not have been intended by Section 5 of P.D. 1886, which was even meant to grant to the witness a benefit rather than a burden. It is more reasonable therefore, to conclude that the privilege against self-incrimination would be accorded to said witness after he has invoked the same in a subsequent proceeding wherein he has been charged of a wrong doing, except in a case for perjury. It is only at such time when the necessity of invoking the mantle of the privilege or the immunity afforded to him by law would arise. It cannot also be rightfully concluded that private respondents had intentionally relinquished or abandoned the said right which they claimed before the Sandiganbayan. The fact that the issue of when and before what forum should such claim to the right against self-incrimination be necessarily presented has provoked much discussion and debate because of divergent views. This has even prompted the submissions to the Court of opinions of amicus curiae or friends of the court as to how Section 5 of Presidential Decree 1886 should be construed and applied which are however different from and contrary to the views expressed by the Justices of the Sandiganbayan and other legal luminaries. These conflicting views negate the proposition that there was an effective waiver made by the private respondents of their rights.

What appears to be the basic and principal issue to which the consideration of the Court is addressed to is the singular question of whether testimonies adduced by the private

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It has earlier been stated by this Court that to be effective, such waiver must be certain and unequivocal and intelligently, understandably and willingly made. (Chavez vs. Court of Appeals, et al., 24 SCRA 663). In the same cited case, it has been stated that courts indulge in every reasonable presumption against waiver of fundamental constitutional rights and that we do not presume acquiescence in the loss of fundamental rights (Citing Johnson vs. Zerbst 304 U.S. 458, 464, 82 L. ed. 1461, 1466). Furthermore, whether the alleged waiver is express or implied, it must be intentional. (Davison vs. Klaess 20 N.E. 2d. 744, 748, 280 N.Y. 252; 92 CJS, 1058). I find it difficult to accept that private respondents had at any time, ever intended to relinquish or abandon their right against self-incrimination.

When they testified before the Board, they were given full assurance that whatever they say before the Board will not be used against them. Only if they testify falsely that they may be prosecuted for perjury. This is to prevent people from preventing the Board from finding out the truth about the Aquino assassination by giving false leads or information for ulterior reasons. Actually Section 5 of PD No. 1886 falls under that category of statutes which do not pronounce an entire immunity by forbidding punishment or prosecution for any testimony or evidence given in connection with the investigation of certain offenses more widely known as immunity statutes, but merely prohibit in any criminal prosecution the use of the testimony of the witness. Immunity statutes as well as statutes prohibiting the use of testimony in any subsequent criminal prosecution have been the expedients resorted for the investigation of many offenses, chiefly those whose proof or punishment were otherwise impracticable because of the implication in the offense itself of all who could bear useful testimony.

PATAJO, J., concurring: I vote for the dismissal of the petition in these consolidated cases. Said petitions do not merit being given due course and should be dismissed outright.

The expediency and practical utility of this mode of obtaining evidence may as a measure of legislation, be open to argument. But the tradition of it as a lawful method of annulling the privilege against self-incrimination is unquestioned in English history." ignore on Evidence, Vol. III, p. 469.

I hold the view that the testimonies and evidence given before the Agrava Board are inadmissible as evidence against those who testified or gave said evidence irrespective of whether said persons were subpoenaed or invited. I believe it is not a condition sine quo non to the non-admissibility of said evidence that at the time they testified or gave evidence before the Agrava Board that they had invoked their privilege against self-incrimination.

Speaking of this kind of privilege of non-admission of testimony given by the witness in subsequent prosecutions as allowed by the common law and modified by subsequent statutes, State vs. Quarles 13 Ark 307, 311, said:

The Agrava Board was created as an independent ad hoc fact finding board to determine all the facts and circumstances surrounding the assassination of former Senator Benigno S. Aquino, Jr. on August 21, 1983. It was given plenary powers to allow for a free, unlimited and exhaustive investigation into all the aspects of said tragedy. It was given the power to issue subpoena or subpoena duces tecum and "other compulsory processes" requiring the attendance and testimony of witnesses and the production of any evidence relative to any matter under investigation by said Board. Those who have been subpoenaed to appear and testify or produce any documentary evidence before the Board shall not be excused from testifying or presenting evidence before said Board on the ground that their testimony or evidence may tend to incriminate them or subject them to penalty or forfeiture. I believe an invitation from the Board is as much a compulsory process 1 to appear and testify before the Board as a subpoena and one receiving said invitation cannot also excuse himself from appearing and testifying before the Board. Petitioners appear to share this view when they said in subparagraph (c), paragraph 7 of their petition in G.R. No. L-71208-09. (c) People were either invited or issued subpoenas, depending upon their rank and office, to give testimony before the Board and among those invited were respondents General Fabian C. Ver and Major General Olivas while the rest of the military respondents were issued subpoenas. Unquestionably, it was the intention of the decree creating the Board to investigate the Aquino assassination to encourage all who have some information on any "aspect of said tragedy" to furnish the Board said information whether they are subpoenaed or issued other forms of compulsory process such as an invitation and to do so without fear that what they will say may be used against them. It is in this context that Section 5 of PD No. 1886 should be viewed.

The privilege in question, in its greatest scope, as allowed by the common law and no one, be he witness or accused, can pretend to claim it beyond its scope at the common law never did contemplate that the witness might not be proved guilty of the very crime about which he may be called to testify; but only that the witness should not be compelled to produce the evidence to prove himself guilty of that crime. His privilege, therefore, was not an exemption from the consequences of a crime that he might have committed; but only an exemption from the necessity of himself producing the evidence to establish his own crime ... So long as it might be lawful to produce in evidence against an accused party whatever he might before have voluntarily said as a witness on a prosecution against another, there were no means by which the privilege could be made available short of a claim by the witness to be silent; and as that was the rule of the common law, this was the common-law mode of making the privilege available. And that silence was but a mode of making the privilege available, and was not of the essence of the privilege itself, is conclusively proven by all that current of enlightened authority, to which we yield our fullest assent, which holds that the privilege has ceased when the crime has been pardoned, when the witness has been tried and acquitted, or is adjudged guilty, or when the prosecution, to which he was exposed, has been barred by lapse of time ... But the Legislature has so changed the common-law rule, by the enactment in question in the substitution of a rule that the testimony required to be given by the act, shall never be used against the witness for the purpose of procuring his conviction for the crime or misdemeanor to which it relates, that it is no longer necessary for him to claim his privilege as to such testimony, in order to prevent its being afterwards used against him. And the only question that can possibly arise under the present state of the law, as applicable to the case now before us, is as to whether our statutory regulations afford sufficient protection to the witness, responsive to this new rule and to his constitutional guarantee against compulsory self-accusation ...

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Considering the objectives sought to be achieved by PD No. 1886 the provision thereof making testimony and evidence given before the Board inadmissible in evidence against the ones giving the same, provides protection beyond that granted by the Constitutional provision against self- incrimination, otherwise it will be constitutionally suspect. Counselman vs. Hitchcock, 142 US 547, 35 L Ed 1110. Of relevance are the observations of the District Court, N.D. Illinois, in United States vs. Armour & Co., 112 Fed 808, 821, 822: All of these immunity acts are relied upon by the individual defendants, and, while expressed in, slightly varying language, they all mean the same thing, and each of them is a substitute for the privilege contained in that clause of the fifth amendment to the Constitution, reading: 'Nor shall any person be compelled in any criminal case to be a witness against himself.' This fifth amendment deals with one of the most cherished rights of the American citizen, and has been construed by the courts to mean that the witness shall have the right to remain silent when questioned upon any subject where the answer would tend to incriminate him. Congress by the immunity laws in question, and by each of them, has taken away the privilege contained in the amended it is conceded in argument that this cannot be done without giving to the citizen by way of immunity something as broad and valuable as the privilege thus destroyed We are not without authority on this question. By a previous act, Congress undertook to take away the constitutional privilege by giving the citizen an equivalent, and the Supreme Court held in the case of Counselman v. Hitchcock 142 U.S. 547, 12 Sup. Ct. 195, 35 I Ed., 1110, that the substitution so given was not an equivalent. Then, at various times, the immunity acts in question were passed by Congress with full knowledge that in furnishing a substitute for this great right of the citizen, it must give something as broad as the privilege taken away. It might be broader, but it could not be narrower. Now, in my judgment, the immunity law is broader than the privilege given by the fifth amendment, which the act was intended to substitute. The privilege of the amendment permits a refusal to answer. The act wipes out the offense about which the witness might have refused to answer. The privilege permits a refusal only as to incriminating evidence. The act gives immunity for evidence of or concerning the matter covered by the incident and the evidence need not be self-incriminating. The privilege must be personally claimed by the witness at the time. The immunity flows to the witness by action of law and without any claim on his part. Brown v. Walker, 161 U.S. 591, 16 Sup. Ct. 644, 40 L. Ed. 819; Hale vs. Henkel (recently decided) 26 Sup. Ct. 370, 50 L. Ed. -; State v. Quarles 13 Ark. 307, quoted in 142 U.S. 567, 12 Sup. Ct. 199 (35 L. Ed. 1110); People Sharp, 107 N.Y. 427, 14 N.E. 319, 1 Am. St. Rep. 851; Brown v. Walker approved in Lamson v. Boyden, 160 I11. 613, 620, 621, 43 N.E. 781: People v. Butler, St. Foundry, 201 I11. 236, 248, 66 N.E. 349. I am further of opinion that the immunity given by the act must be as broad as the liabilities imposed by the act. The act calls upon the citizen to answer any 'lawful requirement' of the Commissioner. 'Require' means to ask of right and by authority. Webster's Dictionary. Tenn. Coal Co. v. Saller (C.C.) 37 Fed. 545, 547. Anything is a requirement by a public officer which brings home to the person called upon that the officer is there officially and desires compliance. 'Demand' and' require' are synonymous. Miller v. Davis, 88 Me. 454, 34 Atl. 265. The citizen

may be punished for refusal to answer such lawful requirement. I am of opinion that when the Commissioner of Corporations, who has power to compel, makes his demand, it is the duty of the witness to obey. The contention has been made that in order to get immunity the citizen shall wait until the compulsion becomes irresistible. That is the effect of the government contention. I am not able to bring my mind to accept that doctrine. If I am right in saying that immunity flows from the law l, without any claim on the part of the defendant and at different times that has been conceded here in argument then no act of any kind on his part which amounts to a claim of immunity, which amounts to setting up a claim of immunity is demanded by the law. The law never puts a premium on contumacy. A person does not become a favored citizen by resistance to a lawful requirement. On the contrary, the policy of the law favors the willing giving of evidence whenever an officer entitled to make a demand makes it upon a citizen who has no right to refuse. And it would be absurd and un-American to favor the citizen who resists and places obstacles in the way of the government as against the citizen who, with a full knowledge of the law, obeys without resistance the demand of an officer who has the legal right to make the demand for something which the citizen has no legal right to refuse. This, then, is the proposition to which we are led. When an officer, who has a legal right to make a demand, makes such demand upon a citizen who has no legal light to refuse, and that citizen answers under such conditions, he answers under compulsion of the law. There is no merit then to the contention that private respondents should be invoked the privilege against self-incrimination before the Agrava Board for precisely PD No. 1886 had explicitly provided that the testimony of those who testified before the Board can not be used against them. It will be a meaningless act of supererogation to require that said witnesses before answering any question addressed to them must invoke their privilege against self-incrimination. The phrase "after having invoked his privilege against self-incrimination" in Section 5 of PD No. 1886 to be consistent with the intention of said decree, should refer to the time that the testimony of the witness will be used against him in another proceeding, such as the cases now pending before the Sandiganbayan. It could not refer to the proceedings before the Agrava Board because no one is being accused before said Board and no matter how self-incriminating the testimony of said witness is, he runs no risk of being prejudiced, much less convicted by the Agrava Board. It is in the prosecution of cases based on the report of said Board that the witness should invoke his right against self-incrimination. These private respondents did just that when they moved for the exclusion in evidence of their statement before the Agrava Board. Any other interpretation would defeat the very purpose of PD No. 1886.

TEEHANKEE, J., dissenting: The majority decision is based on erroneous premises, viz. what the case at bar presents a "novel question;" that "this Court has not been previously called upon to rule on issues involving immunity statute" and is burdened with the monumental task" of "laying the criteria ... (to) build future jurisprudence on a heretofore unexplored area of judicial inquiry." 1 The fact is that we have a wealth of settled jurisprudence and precedents, Philippine and foreign, that control the determination of the simple issue at bar and call for the setting aside of the exclusion order issued by respondent court (Sandiganbayan) which wrongly rules as totally and absolutely

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inadmissible the testimonies given by private respondents General Ver and Olivas and their six co- respondents (all charged as accessories) as well as all the documents, records and other evidence produced by them before the Fact-Finding Board, notwithstanding that all were represented by counsel 2 and none of them invoked the privilege or right against selfincrimination or made any claim or objection at the time of his testimony before the Board that any question propounded to him and which he willingly answered called for an incriminating answer against himself. The following vital considerations based on settled jurisprudence and precedents show that respondent court acted with gross error and misconception of the applicable principles of the right against self-incrimination: 1. Respondent court grossly disregarded the settled guidelines laid down for trial courts by this Court of Appeal vs. Paylo 3 thru Mr. Justice J.B.L. Reyes, speaking for a unanimous Court, Chat By so doing [ordering the exclusion of the proferred confessions of the two accused upon a ground not raised by counsel but motu proprio by the trial court, i.e. lack of independent proof of conspiracy] the [trial] court overlooked that the right to objection is a mere privilege which the parties may waive; and if the ground for objection is known and not seasonably made, the objection is deemed waived and the [trial] court has no power, on its own motion, to disregard the evidence (Marella vs. Reyes, 12 Phil. 1) ... Suffice it to say that the lower court should have allowed such confessions to be given in evidence at least as against the parties who made them, and admit the same conditionally to establish conspiracy, in order to give the prosecution a chance to get into the record all the relevant evidence at its disposal to probe the charges. At any rate, in the final determination and consideration of the case, the trial court should be able to distinguish the admissible from the inadmissible, and reject what, under the rules of evidence, should be excluded. Trial courts should be liberal in the matter of admission of proof and avoid the premature and precipitate exclusion of evidence on doubtful objections to its admissibility, citing the Court's long-standing basic ruling and policy in Prats & Co. vs. Phoenix Ins. Co. 4 that reception and admission of evidence objected to on doubtful or technical grounds is ultimately the less harmful course to either litigant, since the Supreme Court upon appeal would then have all the materials before it necessary to make a correct judgment (instead of returning the case for a new trial which only prolongs the determination of the case); and There is greater reason to adhere to such policy in criminal cases where questions arise as to admissibility of evidence for the prosecution, for the unjustified exclusion of evidence may lead to the erroneous acquittal of the accused or the dismissal of the charges, from which the People can no longer appeal 5 2. The right against self-incrimination is found in the first sentence of section 20 of the Bill of Rights of the 1973 Constitution stating that "No person shall be compelled to be a witness against himself." This single sentence constituted the whole text of section 18 of the Bill of Rights of the 19,7,5 Constitution. This right against self-incrimination has a settled meaning in jurisprudence which is fully applicable here since the right against self-incrimination was first enforced here as an inviolable rule" in U.S. President McKinley's instructions under date of April

7, 1900 to the Taft Commission. 6 As recounted by the late Mr. Justice Conrado Sanchez as ponente for a unanimous Court in the leading 1968 case of Chavez vs. Court of Appeals 7, "Mr. Justice Malcolm, in expressive language, tells us that this maxim was recognized in England in the early days 'in a revolt against the thumbscrew and the rack.' An old Philippine case [1904] speaks of this constitutional injunction as 'older than the Government of the United States;' as having 'its origin in a protest against the inquisitorial methods of interrogating the accused person;' and as having been adopted in the Philippines 'to wipe out such practices as formerly prevailed in these Islands of requiring accused persons to submit to judicial examinations, and to give testimony regarding the offenses will which they were charged.' " But Mr. Justice Sanchez equally stressed that "(an) accused occupies a different tier of protection from an ordinary witness. Whereas an ordinary witness may be compelled to take the witness stand and claim the privilege as each question requiring an incriminating answer is shot at him, 8 an accused may altogether refuse to take the witness stand and refuse to answer any and all questions." 9 As restated by Mr. Justice J.B.L. Reyes for a unanimous Court in Suarez vs. Tengco, 10 "No legal impediment exists against a litigant calling any of the adverse parties to be his witness. ... True, an accused in a criminal case may not be compelled to testify, or to so much as utter a word, even for his own defense (U.S. vs, Junio, 1 Phil. 50; U.S. vs. Luzon, 4 Phil. 344: U.S. vs. Binayoh 35 Phil. 23; Sec. l(c), Rule 111, Rules of Court). But while the constitutional guaranty against self-incrimination protects a person in all types of cases, be they criminal, civil, or administrative (Art. 111, Sec. 1, No. 18, Phil. constitution: Bermudez vs. Castillo, 64 Phil, 483), said privilege in, proceedings other than a criminal case against him who invokes it, is considered an option of refusal to answer incriminating question, and not a prohibition of inquiry. Except in criminal cases, there is no rule prohibiting a party litigant from utilizing his adversary as witness. As a matter of fact, section 83 of Rule 123, Rules of Court expressly authorizes a party to call an adverse party to the witness stand and interrogate him. This rule is, of course, subject to the constitutional injunction not to compel any person to testify against himself. But it is established that the privilege against self-incrimination must be invoked at the proper time, and the proper time to invoke it is when a question calling for a incriminating answer is propounded. This has to be so, because before a question is asked there would be no way of telling whether the information to be elicited from the witness is self-incriminating or not. As stated in Jones on Evidence (Vol. 6, pp. 4926-4927), a person who has been summoned to testify 'cannot decline to appear, nor can he decline to be sworn as a witness' and 'no claim of privilege can be made until a question calling for a incriminating answer is asked, at that time, and, generally speaking, at that time only, the claim of privilege may properly be interposed.' (Gonzales vs. Sec. of Labor, L-6409, February 5, 1954, 11 cit. in Navarro, Criminal Procedure, p. 302.)' Suarez was cited with favor and reaffirmed in Bagadiong vs. Gonzales, 12 wherein once again the Court, with the concurrence in the result of the now Chief Justice, under similar facts held that the petitioner (provincial treasurer) could not refuse to take the stand as an adverse party in a civil case since the privilege against self-incrimination "in proceedings other than a criminal case against him who invokes it, is considered an option to refuse to answer incriminating questions, and not a prohibition of inquiry" and "must be invoked when a question calling for an incriminating answer is propounded, because before a question is asked, there would be no

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way of telling whether the information to be elicited from the witness is self-incriminating or not." The Court therein denied "the petition to prohibit respondent judge from directing petitioner to take the witness stand and testify ... without prejudice to petitioner's properly invoking the guaranty against self-incrimination when questions are propounded to him on the stand. Costs against the petitioner." 3. All the respondents at bar were in this category of ordinary witnesses in the hearings of the Fact-Finding Board. They were not accused in any criminal case nor were they persons under custodial interrogation who under the second part of section 20 of the Bill of Rights (consisting of three additional sentences 13) were given additional rights to silence and counsel and to be informed of such rights and to the out-lawing of any confession obtained in violation of the rights guaranteed in the cited section, by virtue of the incorporation into the Bill of Rights of the rights granted in the rulings of the U.S. Supreme Court in the Miranda-Escobedo cases. As noted by former Chief Justice Enrique M. Fernando, "(I)t amounts to an acceptance of the applicability in this jurisdiction of the epochal American Supreme Court decision in Miranda vs. Arizona, the opinion being rendered by Chief Justice Warren. It is thus now a part of our fundamental law. Such doctrine was promulgated in response to the question of the admissibility of statements obtained from an individual interrogated under police custody, considering that such a time and under the stress of such conditions, his right against self-incrimination could be rendered futile." 14 The Miranda pronouncements thus became necessarily a part and parcel of the additional rights granted in the cited section 20, as made by the late U.S. Chief Justice Warren in the Miranda case thus: "The prosecution may not use statements, whether exculpatory or inculpatory, stemming from custodial interrogation of the defendant unless it demonstrates the use of procedural safeguards effective to secure the privilege against self-incrimination. By custodial interrogation we mean questioning initiated by law enforcement officers after a person has been taken into custody or otherwise deprived of his freedom of action in any significant way. " 15 These additional Miranda rights could not be invoked by respondents, as the members of the Fact-Finding Board were not law enforcement officers nor were respondents under custodial interrogation. As ordinary witnesses before the Fact-Finding Board and under the settled jurisprudence above-cited, they could not invoke the right to silence and refuse to take the witness stand. Their right and privilege (which is not self-executory or automatic ipso jure) was, while testifying, whether voluntarily or by subpoena, to invoke the privilege and refuse to answer as and when a question calling for an incriminating answer is propounded. Failure to invoke the privilege which is personal does automatically result in its loss ipso facto. The law, usage and settled jurisprudence uniformly require that the privilege must be asserted or else is lost. The court or board upon its invocation still has to pass upon and rule upon the proper application of the privilege. As restated by Francisco, the rule and exceptions are: "Certainly, where the witness, on oath declares his belief that the answer to the question would criminate or tend to criminate him, the court cannot compel him to answer, unless it is clear perfectly, from a careful consideration of all the circumstances of the case, that the witness is mistaken, or is acting in bad faith, and that the answer cannot possibly have any such tendency. " 16 4. The view that withal, it is best, although not required, that a warning to the witness of his option to refuse an answer to incriminating questions as advanced even by the Tanodbayan at the hearing dates back to a century ago and has been long discarded as "witnesses are usually well enough advised beforehand by counsel as to their rights when such issues impend" and

"as general knowledge spread among the masses and the preparation for testimony became more thorough." Thus, "ignore, the bible on the law of evidence so remarks and adds that "there is no reason for letting a wholesome custom degenerate into a technical rule." — It is plausible to argue that the witness should be warned and notified, when a incriminating fact is inquired about, that he has an option to refuse an answer; and this view was often insisted upon, a century ago, by leaders at the Bar, xxx xxx xxx But there are opposing considerations. In the first place, such a warning would be an anomaly; it is not given for any other privilege; witnesses are in other respects supposed to know their rights; and why not here? In the next place, it is not called for by principle, since, until the witness refuses, it can hardly be said that he is compelled to answer; nor is it material that he believes himself compelled; for the Court's action, and not the witness' state of mind, must be the test of compulsion. Again, the question can at any rate only be one of judicial propriety of conduct, for no one supposes that an answer given under such an erroneous belief should be struck out for lack of the warning. Finally, in practical convenience, there is no demand for such rule; witnesses are usually well enough advised beforehand by counsel as to their rights when such issues impend, and judges are too much concerned with other responsibilities to be burdened with the provision of individual witnesses' knowledge; the risk of their being in ignorance should fall rather upon the party summoning than the party opposing. Nevertheless, it is plain that the old practice was to give such a warning, when it appeared to be needed. But, as general knowledge spread among the masses, and the preparation for testimony became more thorough, this practice seems to have disappeared in England, so far at least as any general rule was concerned. In the United States, both the rule and the trial custom vary in the different jurisdictions. No doubt a capable and painstaking judge will give the warning, where need appears, but there is no reason for letting a wholesome custom degenerate into a technical rule. 17 But from the environmental facts and circumstances of the Fact-Finding Board hearings, to require such a warning to the witness of his option of refusal to answer incriminatory questions would have been an exercise in absurdity and futility, As is a matter of public knowledge, respondents had concluded in their investigation that Galman was the assassin of the late Senator Aquino. As observed by former Senator Ambrosio Padilla as amicus curiae at the hearing on the merits of August 15, 1985, they were all too eager to testify and make a strong effort to gain support from the Fact-Finding Board and the public for the military version and report that the assassin was Galman who was forthwith gunned down by the military escorts and guards at the tarmac. It would have been ridiculous, if not bordering on officiousness and impropriety, to warn them as the highest ranking military officers of their option of refusal to answer incriminatory questions and also as the majority holds, 18 of their right to remain silent. When respondents generals appeared before the Board, respondent Ver precisely made the opening statement that GENERAL VER:

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I welcome this opportunity, Madame Justice, members of this Honorable Board, Dean, Gentlemen this opportunity to assist ... this Honorable Board in the quest for truth and justice, We all deplore this tragic incident which is now the subject of inquiry, This Board, this Honorable Board is mandated to conduct a free, full and exhaustive investigation into the matter under investigation We all hope that my testimony, madame, will somehow dispel any misconception, or any misinformation surrounding this tragic incident. I am now ready to answer your questions. JUSTICE AGRAVA: Now, General, at the outset, we give the right and the privilege for every witness to be assisted by counsel Do you have your counsel with you this morning? GENERAL VER: I did not bring any counsel, madame, but ... if I need a counsel, madame, I could probably look for... probably ... JUSTICE AGRAVA: Yes? GENERAL VER: I may call Fiscal Parena or the Public Coordinator. I was talking to Atty. Tan to assist me, in the protection of my constitutional rights ... JUSTICE AGRAVA: Yes. GENERAL VER: ... if it is necessary: ATTY. TAN: Your Honor, please, it is part of the function of this office to help the witness if he doesn't have counsel, and so, if the General is willing to have me, I will happily serve as counsel, Your Honor. JUSTICE AGRAVA: All right. GENERAL VER: Thank you. 19

6. The majority decision would go around this by asserting without basis in the record that "(A)ll the private respondents, except Generals Ver and Olivas, are members of the military contingent that escorted Sen. Aquino while embarking from the plane that brought him home to Manila on that fateful day. Being at the scene of the crime as such, they were among the first line of suspects in the subject assassination. General Ver on the other hand, being the highest military authority of his co-petitioners labored under the same suspicion and so with General Olivas, the first designated investigator of the tragedy, but whom others suspected, felt and believed to have bungled the case. The papers, especially the foreign media, and rumors from ugly wagging tongues, all point to them as having, in one way or another participated or have something to do, in the alleged conspiracy that brought about the assassination. Could there still be any doubt then that their being asked to testify, was to determine whether they were really conspirators and if so, the extent of their participation in the said conspiracy?" In fact, the respondent court's decision and separate opinions as well as the majority decision at bar and the separate concurring opinions all fail to specify the particular portions of the testimonies of respondents or any specific question and answer that can be in any way deemed to be selfincriminating. Indeed, even if we assumed arguendo that they were warned of their right against self-incrimination and tried absurdly to invoke the same, there is no specific question and answer by way of testimony that could be pointed to them as having been made under compulsion for the simple reason that their testimony was in full support of their own military report that Galman was Aquino's killer and for which they were trying to gain the Board's acceptance. In the all too brief and inadequate deliberations held on August 20 and 21, 1985 after the hearing on the merits of August 15, 1985, without reaching a definite conclusion, the ponente reported and I share this view from a cursory examination, for want of material time, of the excluded testimonies only since the excluded documents, records and other evidence produced by them were not before the Court that there is nothing in the excluded testimonies that could in any way be deemed self-incriminatory perse. So there would be no legal basis whatever for their exclusion. But the ponente circulated only last August 26th at noon his draft for dismissal of the petitions which were filed only last month. And its release has been set for August 30th. 7. There has not been enough time to weigh and ponder on the far-reaching consequences of the decision at bar. The decision orders the total and unqualified exclusion of the testimonies and evidence produced before the Fact-Finding Board by the eight respondents charged as accessories "even though (they) failed to claim (their) privilege before giving the incriminating testimony" (citing 21 Am. Jur. 2d. 218). But the cited compilation of American State and Federal Law expressly cautions that "The question whether a witness must claim exemption . on from self-incrimination to be entitled to immunity from subsequent prosecution must in each case be determined in the light of constitutional and statutory provisions in the jurisdiction where the question arises" (21 Am. Jur. 2d. 151). It recites on the same cited page that "Under a statute granting immunity to persons who have been compelled to testify, one who has appeared voluntarily and testified without claiming his privilege against self-incrimination or one who has appeared and testified pursuant to a void subpoena or one addressed to another person, without claiming the privilege, cannot say he has been compelled to testify, and therefore, he is not entitled to immunity." And the necessity of claiming the privilege against self-incrimination before an administrative officer or board such as the Fact Finding Board is recognized to be essential, thus:

Respondent Olivas likewise testified before the Board in response to its invitation to assist it in determining the true facts and circumstances surrounding the double killing.

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This is not only equally true as for the case of testimony in a judicial trial, but the explicitness is here even more essential, and particularly where the administrative officer makes a general demand for documents or testimony upon a broad class of topics. The reason is clear. The officer has testimonial powers to extract a general mass of facts, or which some, many, or most will certainly be innocent and unprivileged, some may be privileged communications (e.g., between attorney and client) whose privilege remains unaffected by the statute defining his powers, and some may be privileged as self-incriminating but liable to become demandable by overriding this privilege with a grant of immunity. Among these mass of facts, then, the officer will seek those which are relevant to his administrative inquiry; he cannot know which of them fall within one or another privilege in particular, which of them tend to criminate at all, or to criminate a particular person; if such facts are there, he may not desire or be authorized to exercised the option of granting immunity so as to obtain them; his primary function and power is to obtain the relevant facts at large, and his power to obtain a special and limited class of facts by grant of immunity is only a secondary one, and one which he will not exercise till a cause arises, if even then. For these reasons of practical sense, then, as well as for the inherent requirements of principle already noticed for judicial officers, it is particularly true for an inquiry by an administrative officer that the witness must explicitly claim his privilege, and specifically the privilege against selfincrimination, and must then be overridden in that claim, before immunity can take effect. (VII Wigmore on Evidence, 2282, pp. 517-518) The concurrence of Justice Vera Cruz sounds even more ominous thus: I believe that where evidence is produced by a witness in accordance with the conditions of the statute granting immunity such as P.D. No. 1886, as amended, its immunity provisions attach instantly and it is entirely immaterial what use the investigation authority makes of it (People ex rel. Massarsky v. Adams, 47 N.Y.S. 2d 375, 62 N.E. 2d 244). Consequently, the evidence, given before the Agrava Board by the accused in the instant cases namely, Generals Fabian Ver and Prospero Olivas, and Sergeants Pablo Martinez, Tomas Fernandez, Leonardo Mojica, Pepito Torio, Prospero Bona and Aniceto Acupido cannot be used against them and this proscription did attach instantly when they testified before the same Board. Verily, the prohibition stands, irrespective of the purpose for which the prosecution would like to use this evidence. The total and unqualified exclusion of the testimony and evidence granted by respondent court and sustained by the majority decision herein refers expressly to the eight respondents charged as accessories. Would not this unprecedented grant of immunity and exclusion of testimony be now claimed by the rest of the twenty-two accused charged as principals except for the lone civilian? As reported by the press, respondent court has suspended its trial and placed the pressure on the Court to rush its decision, as "(T)he so-called 'trial of the century' has been delayed since last week on motion of the defense panel which had argued that the high court's decision on the admissibility of Ver's testimonies was a vital prerequisite to the presentation of witnesses for the defense. " 20 Would this not result in the People holding an empty bag of excluded testimonies and evidence, since to all intents and purposes all respondents-accused testified before the Fact-Finding Board? Would their testimonies be inadmissible for purposes even of impeaching such testimony as they may now give before respondent court? These

ponderous questions need not confront us had we but required respondent court to hew to the settled procedure and doctrine of Yatco (supra, par. I hereof) of giving the prosecution a chance to get into the record its relevant evidence until the final determination and consideration of the case, for the unjustified exclusion of evidence of the prosecution may lead to the erroneous acquittal of the accused or dismissal of the charges, from which the People can no longer appeal. 8. The alleged "ambiguous phraseology" of section 5 of P.D. 1886 cited in respondent court's questioned order and bolstered by the majority decision's "novel" conclusion and ruling that the cited section quoted therein 21 requires a claim from the witness of the privilege against selfincrimination but "forecloses under threat of contempt proceedings [under section 4] against anyone who makes such a claim. But the strong testimonial compulsion imposed by section 5 of P.D. 1886 viewed in the light, of the actions provided in section 4, infringes upon the witness' right against self- incrimination. As a rule, such infringement of the constitutional right renders inoperative the testimonial compulsion, meaning, the witness cannot be compelled to answer UNLESS a co-extensive protection in the form of IMMUNITY is offered. Hence, under the oppressive compulsion of P.D. 1886, immunity must in fact be offered to the witness before he can be required to answer, so as to safeguard his sacred constitutional right. But in this case, the compulsion has already produced its desired results the private respondents had all testified without offer of immunity. Their constitutional rights are, therefore, in jeopardy. The only way to cure the law of its unconstitutional effects is to construe it in the manner as if IMMUNITY had in fact been offered. We hold, therefore, that in view of the potent sanctions imposed on the refusal to testify or to answer questions under Sec. 4 of P.D. 1886, the testimonies compelled thereby are deemed immunized under Section 5 of the same law. The applicability of the immunity granted by P.D. 1886 cannot be made to depend on a claim of the privilege against self-incrimination which the same law practically strips away from the witness. " Emphasis supplied). It bears emphasis that none of respondents made any such claim against self-incrimination. The "oppressive compulsion" if it may be so-called, consists of a maximum penalty of P200. fine and/or 30 days imprisonment for direct contempt. As indicated, it would be ridiculous for any respondent to 1 make such claim when his testimony was but in full support of their own military theory and report that Galman killed Aquino. The language of the cited section 22 is plain and simple. It excuses no one from testifying and producing books and records but grants him immunity from prosecution (except for perjury) after having invoked his privilege against self-incrimination " There is nothing oppressive about such compulsion in exchange for immunity provided the witness invokes his and aims his privilege a against self-incrimination. In the Court's Resolution of July 9, 1985, Mr. Justice Aquino, voting to dismiss outright the petitions. opined that The clause 'concerning which lie is compelled to testify after having invoked his privilege against self-incrimination' is surplusage. It is in conflict with the first clause which, as already stated, gives immunity to the witness except in case of perjury. So, section 5 should be read as if that clause were not there.This is contrary to the rules of statutory construction that there is no room for construction when tile text is plain and simple, i.e. requires invocation and that the provisions must be taken in context and all the words taken into account and given their full meaning. The Anti-Gambling Law, Act No. 1757, enacted on October 9,

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1907 by the Philippine Commission (probably the first Philippine immunity statute) granted such absolute immunity and does not contain the conditional clause requiring that the witness invoke his privilege against self-incrimination. Section 10 of the cited Act reads:

from witnesses claiming the privilege against self-incrimination under the fifth amendment to the U.S. Constitution by providing for the grant of immunity to persons testifying under such compulsion." (Emphasis supplied). The cited Public Law reads:

Sec. 10. Upon any investigation or proceeding for violation of this Act no person shall be excused from giving testimony upon the ground that such testimony would tend to convict him of a crime, but such testimony cannot be received against him upon any criminal investigation or proceeding; Provided, however, That no person so testifying shall be exempt from prosecution or punishment for perjury committed in the course of any proceeding or investigation had by virtue of [his Act. (1 CPS [Rev. Ed.], 190)

(e) No person shall be excused from attending and testifying or from producing books, records, correspondence, documents, or other evidence in obedience to a subpoena, on the ground that the testimony or evidence required of him may tend to incriminate him or subject him to a penalty or forfeiture but no individual shall be prosecuted or subjected to any penalty or forfeiture (except demotion or removal from office) for or on account of any transaction matter, or thing concerning which he is compelled, after having claimed his privilege against selfincrimination to testify or produce evidence, except that such individual so testifying shall not be exempt from prosecution and punishment for perjury committed in so testifying. (Emphasis supplied).

But when the statute grants conditional immunity (and not absolute as in the above-quoted section 10 of the Anti-Gambling Act.), then it explicitly contains the cited conditional clause in section 5 of P.D. 1886 granting immunity only when "he is compelled to testify after having invoked his privilege against self-incrimination. " This is but in accord with long-settled Philippine jurisprudence cited above (supra. paragraph 2 hereof), that the witness has an option of refusal to answer incriminatory questions, which he loses ipso facto if he does not invoke the privilege and nevertheless answers the questions. Here, in review of the national and international importance of the case with the country's very prestige at stake, the P.D. added the incentive of offering immunity: "The purpose of immunity provisions is to aid prosecuting officers by inducing criminals or their confederates to turn state's evidence and tell on each other, to enable prosecuting officers to procure evidence which would otherwise be denied to them because of the constitutional right against self-incrimination, and at the same time to protect every person from gluing testimony which directly or indirectly would be helpful to the prosecution in securing an indictment or a conviction. The provisions for immunity are or should be as broad as or co-extensive with the constitutional provisions granting the privilege against self-incrimination." (21 Am. Jur. 2d. Criminal Law, sec. 148). It is bad enough that no state's evidence turned up to tell on his confederates in exchange of immunity. But to call the cited section " a booby trap for the unsuspecting or unwary witness" unless it was construed as granting absolute and unconditional immunity from the very fact of merely testifying as a witness before the Board without claiming immunity nor giving any incriminatory information that would aid the state to determine the true facts about Aquino's assassination would be a sell-out. It would make a shambles of the letter and spirit as well as the salutary intent and objective of the Decree to ferret out the truth and obtain state witnesses. 9. The truncated and distorted reading of the cited section 5 which consists of a single integrated paragraph and splitting it into two isolated parts so as to allow the privilege against self-incrimination (which was already lost for failure to claim it in the Board hearings) to be resurrected and raised in a much later time frame and "subsequent criminal proceeding" is against all usage and rules of statutory construction, not to mention the long line of above-cited jurisprudence to the contrary. And if there still be doubt, we need only reproduce hereunder the similar wording of Senate Joint Resolution 137 (Public Law 88-202) after which section 5 of P.D. 1886 was patterned. Said law was enacted by the U.S. Congress in December 1963 to empower the Warren Commission to issue subpoenas requiring the testimony of witness and the production of evidence relating to any matter under its investigation. The Report of the President's Commission on the Assassination of President John F. Kennedy in its foreword on page X stated that "In addition, the resolution authorized the Commission to compel testimony

10. As already indicated above, none of the respondents, public and private, has indicated the specific portions of their testimony that they have been "oppressively compelled" to glue, in alleged violation of their privilege against self-incrimination. The reason for this is that they all testified voluntarily and eagerly to support the military report and version that Galman killed Senator Aquino. The Board unanimously rejected the military report and found that the killings were the product of criminal conspiracy. A brief flashback is herein appropriate: Within 60 seconds from his being led away by soldiers from his plane that had just landed at the Manila International Airport on Sunday, August 21, 1983 at past one p.m., former Senator Benigno S. Aquino, Jr. who was coming home after three years of self-exile in the U.S. laid dead face down on the tarmac, with his brain smashed by a bullet fired point blank into the back of his head by a murderous assassin. 23 Also lying dead on the tarmac, face up, near the senator was another man, to be Identified much later as Rolando Galman, whom the soldiers admittedly gunned down. The military pointed to him as Aquino's assassin, who had somehow allegedly penetrated the air-tight security of close to 2000 men ringing the airport. The military version met with great public disbelief and skepticism. The first fact-finding commission created under Administrative Order No. 469 dated August 24, 1983 and P.D. 1879 dated August 27, 1983 was the object of several suits charging bias and that the President "had already prejudged the case, by rejecting the version of foreign media that it is one of the soldiers, supposed to guard Aquino, who fatally shot him." 24 The said commission was dissolved per P.D. 1886, dated October 14, 1983 (later amended by P.D. 1903 dated February 8, 1984) which created the ad hoc Fact-Finding Board with plenary powers to investigate "the treacherous and vicious assassination (which) has to all Filipinos become a national tragedy and national shame ... (and) to determine the facts and circumstances surrounding the killing and to allow for a free, unlimited and exhaustive investigation into all the aspects of said tragedy." The Board after extensive hearings, submitted to the President their majority report on October 24, 1984, while the chairman former Court of Appeals Justice Corazon Agrava submitted her minority report one day earlier on October 23, 1984. All five members of the Board unanimously rejected the official military version that Galman was the assassin and instead found that there was criminal conspiracy. Their main difference of opinion is that the four-member majority found twenty-five military men (headed by respondents Generals Ver, Olivas and Luther Custodia) and one civilian "indictable for the premeditated killing of Senator Benigno S. Aquino, Jr. and Rolando Galman at the MIA on August 21, 1983." The chairman's report confined the conspiracy to seven men headed by General Custodia. The Tanodbayan, after conducting the preliminary investigation, adopted the Board's majority report recommending the indictment of the accused as "involved in this

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conspiracy, either as principals, upon the theory that the act of one is the act of all, or as accessories, for attempting to hide the corpus of the offense." The eight accessories so indicted are the private respondents herein named headed by respondents Ver and Olivas. (The chairman in her minority report had found that "(T)he indications are that the plotters had agreed that only one would be the assassin; that the others can either point to Galman as the killer; or they can state that they did not see the shooting; and that they will give false testimony to mislead and confuse. 11. Only the former lawyers of the Fact-Finding Board created under P.D. No. 1886, consisting of Messrs. Andres R. Narvasa, Bienvenido A. Tan, Jr., Mario E. Ongkiko and Francisco A. Villa have given us the answer that there is nothing incriminatory per se in the testimonies of the respondents, in the Memorandum submitted by them, to wit: I. The so-called 'Galman Theory that it was Rolando Galman who killed Senator Aquino is either true or untrue, a matter the SANDIGANBAYAN will have to resolve. II. If the 'Galman Theory' be true as advocated by the military officers concerned then the testimony of Ver, et al. is true. It is not self-incriminatory. There would then be no reason to exclude it. If, on the other hand, the theory be untrue as the prosecution in turn advocates then the testimony of Ver, et al. is untrue. It is incriminatory of them, because by giving it and thereby seeking to hide the crime, they incriminated themselves. Withal there would also be no reason to exclude it. Surely, after their plot to deceive the Board had been exposed, they should not now be allowed to use the law to bring about exclusion of the very proof of their deception. In short, the testimonies of respondents could only be deemed incriminating if it be found that they sought thereby to hide or cover up the crime and thus incriminate themselves, as accessories to the murder of Senator Aquino. The former Fact-Finding Board lawyers amplify their theory, as follows: 5. The plain language of Section 5, PD 1886 precludes its interpretation as extending immunity to all testimony or evidence produced before the Board in obedience to subpoena regardless of whether the witness giving such evidence invokes the privilege against self-incrimination or not. —

a. given Section 5, PD 1886 a strained construction not justified by and contrary to its plain language; b. given Section 20, Article IV, Constitution, a meaning at odds with its plain terms and contrary to relevant decisions of this Honorable Supreme Court; and c. sanctioned the use of legal provisions to shield persons from criminal liability arising from their perfidious testimony before the Fact-Finding Board. There is no legal ground nor justification for the exclusion order. It is for respondent court, upon consideration of the evidence for the People, without any exclusion, and of the evidence for the defense in due course, to render its verdict of guilty or not guilty. With a word of commendation for the former Fact-Finding Board lawyers and former Senator Ambrosio Padilla and Atty. Ramon Gonzales, whose memoranda as amid curiae, have been of great assistance, I vote, accordingly, to grant the petitions at bar and to set aside the questioned exclusion order.

MELENCIO-HERRERA, J., dissenting: I vote to grant the Petitions and to reverse the ruling of the Sandiganbayan. The resolution of the issue revolves around the interpretation to be given to Sec. 5 of PD No. 1886, reading as follows: SEC. 5. No person shall be excused from attending and testifying or from producing books, records, correspondence, documents, or other evidence in obedience to a subpoena issued by the Board on the grounds that his testimony or the evidence required of him may tend to incriminate him or subject him to penalty or forfeiture; but his testimony or any evidence produced by him shall not be used against him in connection with any transaction, matter, or thing concerning which he is compelled, after having invoked his privilege against selfincrimination, to testify or produce evidence, except that such an individual so testifying shall not be exempt from prosecution and punishment for perjury committed in so testifying, nor shall he be exempt from demotion or removal from office. (Emphasis supplied)

6. The fact is, the invocation by Ver, et al. of such right would have been self-defeating first, it would have prevented them from presenting evidence in substantiation of the 'Galman Theory,' which they wished the Board to accept; and second, it might have exposed to some extent their real objective, which was to deceive the Board.

As I read the law, Section 5 does not require that the person testifying before the Agrava Fact Finding Board (the Board, for short) shall first invoke the privilege against self-incrimination. Under said statute it is obvious that he has no such privilege.

7. It would have been incongruous for Ver, et al. to have claimed that their testimony would incriminate them as accessories to the murder of Aquino when they were, by testifying, actually in process of committing that precise crime, becoming accessories.

But what is the effect of the second part providing that his testimony or any evidence produced by him shall not be used against him in connection with any transaction, matter or thing concerning which he is compelled, after having invoked his privilege against self-incrimination, to testify or produce evidence, except in case of perjury?

8. Neither PD 1886 nor the Constitution should be used as a shield for crime, fraud or trickery. 9. The foregoing propositions were ignored by the SANDIGANBAYAN. Instead, with all due respect, it has —

To my mind, the above portion does not grant to a person who has testified before the Board absolute or total immunity. It should not operate as a shield against criminal liability specially

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since, under Section 12 of the same Decree, the Board may initiate the filing of the proper complaint if its finding so warrant. Thus,

commission or of his connection with it may be obtained or made effectual for his subsequent prosecution and conviction is sufficient to comply with the constitutional requirements. Such a statute, however should be construed to effect a practical and beneficent purpose, namely, at the same time to secure the witness in his constitutional rights and to permit the prosecuting officer to secure evidence of a crime. It should not be construed so as to unduly impede, hinder, or obstruct the administration of criminal justice." Brown v. Walker 161 US 591, 16 Sup. Ct. 644, 40 L. Ed. 819. (People ex rel. Hunt vs. Lane, 116 N.Y.S. 990, 132 App. Div. 406)

SEC. 12. The findings of the Board shall be made public. Should the findings warrant the prosecution of any person the Board may initiate the filing of the proper complaint with the appropriate government agency. ... (Emphasis supplied) The inquiry before the Board was a general one. It was not directed against any particular individual or individuals. Private respondents did not testify therein as suspects or as accused persons. There should therefore be no hindrance to a criminal prosecution. It has been held that where an inquiry by a grand jury is a general one and is not directed against a particular individual the fact that on the basis of the information elicited, grounds for a criminal prosecution may evolve against a witness, may not serve as a bar to such prosecution (U.S. v. Okin D.C.N.J., 154 F. Supp. 553; Benson v. Goldstein, 124 N.Y.S. 2d 452) even though he testified before the grand jury without being warned of his constitutional privileges against self- incrimination. (U.S. v. Okin supra) (Emphasis supplied) The right against self incrimination is not a prohibition of inquiry but an option of refusal to answer incriminating questions Cabal vs. Kapunan, 6 SCRA 1059 [1962]). The kernel of the privilege is testimonial compulsion. Whether or not any specific portion of the testimonies of private respondents is incriminating should be determined by the Sandiganbayan itself. The claim against self-incrimination should be invoked when a specific question, which is incriminating in character, is put to a witness in the subsequent proceeding. There should be no automatic "immunity bath" of the entire testimony before the Board for immunity does not extend to such of the evidence as is not privileged. ... But it is established that the privilege against self-incrimination must be invoked at the proper time, and the proper time to invoke it is when a question calling for an incriminating answer is propounded. This has to be so, because before a question is asked there would be no way of telling whether the information to be elicited from the witness is self-incriminating or not. As stated in Jones on Evidence (Vol. 6, pp. 4926-4927), a person who has been summoned to testify 'cannot decline to appear, nor can be decline to be sworn as a witness' and 'no claim or privilege can be made until a question calling for a incriminating answer is asked; at that time, and generally speaking, at that time only, the claim of privilege may be interposed. (Gonzales vs. Sec. of Labor, et al., 94 Phil. 325, 326 [19541). Moreover, the issue actually addresses itself to a question of admissibility or competency of evidence and not to its credibility. Whether the evidence so admitted is to be given any probative weight or credence is best addressed to the Sandiganbayan. It should be recalled that the Board was not unanimous in its assessment of the testimonies given. There are additional considerations. While the right against self-incrimination is indubitably one of the most fundamental of human rights, Section 5 of PD No. 1886 should be construed so as to effect a practical and beneficent purpose and not in such a manner as to hinder or obstruct the administration of criminal justice.

The objective in all this exercise is to arrive at the truth. "Though the constitutional provisions for the protection of one who appears ... must be liberally and fairly applied, the interests of the people are also entitled to consideration" (Wharton's Criminal Evidence, 11th Ed., Vol. 1, p. 609; People vs. Coyle 15 N.Y.S. 2d 441, 172 Mis 593). Specially so since, in the language of PD No. 1886 itself, the "treacherous and vicious assassination of former Senator Benigno S. Aquino, Jr. on August 21, 1983, has to all Filipinos become a national tragedy and national shame. " In the interest of eliciting the truth, the excluded testimonies should be admitted, leaving it to the Sandiganbayan to determine which specific questions and answers are to be excluded because they are incriminatory, and which should be given credibility, in found to be competent and admissible.

RELOVA, J., dissenting: The issue raised in these two petitions is whether the testimonies and other evidence produced by the private respondents before the Agrava Board may be used as evidence against them before the Sandiganbayan Respondent Sandiganbayan rejected their testimonies on the ground that "under statutes providing in substance that no person shall be excused from testifying or furnishing evidence on the ground that the testimony or evidence may tend to incriminate him, but that no person shall be subject to indictment or prosecution for anything concerning which he may testify or furnish evidence, it has been held that one who testifies concerning criminal offenses when required to do so is entitled to immunity from prosecution even though he fails to claim his privilege before giving the incriminating testimony (21 Am Jur 2d 218). He could not be required, in order to gain the immunity which the law afforded, to go though the formality of an objection or protest which, however made, would be useless (VIII Wigmore 516)." (p. 4, Resolution of Sandiganbayan) Section 5 of Presidential Decree No. 1886 provides that: SEC. 5. No person shall be excused from attending and testifying or from producing books, records, correspondence, documents, or other evidence in obedience to a subpoena issued by the Board on the ground that his testimony or the evidence required of him may tend to incriminate him or subject him to penalty or forfeiture; but his testimony or any evidence produced by him shall not be used against him in connection with any transaction, matter or thing concerning which he is compelled, after having invoked his privilege against selfincrimination to testify or produce evidence ... (Emphasis supplied.)

... Any statute which, while it compels him to testify, protects the witness if he does disclose the circumstances of his offense and the sources from which or the means by which evidence of its

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Pursuant to the above Presidential Decree no one can refuse to testify or furnish evidence before the Fact Finding Board. However, his testimony or any evidence produced shall not be used against him after he invoked the privilege against self-incrimination. Stated differently, the privilege against self-incrimination must be invoked when the question at the hearing before the Board, calling for an incriminating answer is propounded; otherwise, before any question is asked of the witness, he would not know whether the information to be elicited from him is incriminating or not.

very bases of the majority report of the FFB recommending the prosecution of private respondents as accessories.

In the case of Gonzales vs. Secretary of Labor, et al., 94 Phil. 325, this Court held that "the privilege against self-incrimination must be invoked at the proper time, and the proper time to invoke it is when question calling for a incriminating answer is propounded. This has to be so, because before a question is asked there would be no way of telling whether the information to be elicited from the witness is self-incriminating or not. As stated in Jones on Evidence (Vol. 6, pp. 4926-4927), a person who has been summoned to testify 'cannot decline to appear, nor can he decline to be sworn as a witness' and 'no claim of privilege can be made until a question calling for a incriminating answer is asked; at that time, and generally speaking, at that time only, the claim of privilege may properly be interposed.'" And, since it is a personal right to be exercised only by the witness, this privilege against self-incrimination may be waived by him and, when so waived, cannot thereafter be asserted. The privilege is waived by his voluntary offer to testify by, answering questions without objecting and/or claiming the privilege.

The utilization in the prosecution against them before the Sandiganbayan of the testimonies and other evidence of private respondents before the FFB collides with Section 1, Section 17 and Section 20 of the Bill of Rights of the 1973 Constitution:

When private respondents gave testimonies before the Board they were not defendants but witnesses invited and/or subpoenaed "to ventilate the truth thorougly free, independent and dispassionate investigation." They could not refuse or withhold answers to questions propounded to them unless the inquiry calls for an incriminating answer and a timely objection is raised.

Section 20. No person shall be compelled to be a witness against himself. Any person under investigation for the commission of an offense shall have the right to remain silent and to counsel, and to be informed of such right. No force, violence, threat, intimidation, or any other means which vitiates the free will shall be used against him. Any confession obtained in violation of this Section shall be inadmissible in evidence.

In the case at bar, since the private respondents answered questions from the Fact Finding Board without claiming the privilege against self-incrimination they cannot now be allowed to invoke the immunity clause provided in Section 5 of Presidential Decree No. 1886.

The Bill of Rights constitutes the reservation of the sovereign people against, as well as the limitation on, the delegated powers of government. These rights thus enshrined need no express assertion. On the contrary, the police and prosecution officers of the country should respect these constitutional liberties as directed in the recent decision in the Hildawa and Valmonte cases (G.R. Nos. 67766 and 70881, August 14, 1985). The established jurisprudence is that waiver by the citizen of his constitutional rights should be clear, categorical, knowing, and intelligent (Johnson vs. Zerbst, 304 US 458, 464, cited in Abriol vs. Homeres, 84 Phil. 525 [1949] and in Chavez vs. CA, 24 SCRA 663, 682-683).

I vote to grant the petitions.

Separate Opinions MAKASIAR, C.J., concurring: To admit private respondents' testimonies and evidence before the Fact-Finding Board (FFB) against them in the criminal prosecution pending before the Sandiganbayan, would violate their constitutional or human rights the right to procedural due process, the right to remain silent, and the right against self- incrimination. That their testimonies and other evidence they submitted before the FFB in these criminal cases are incriminatory, is confirmed by the very fact that such testimonies and evidence were the

It should be stressed that the basic purposes of the right against self- incrimination are (1) humanity or humanitarian reasons to prevent a witness or accused from being coerced, whether physically, morally, and/or psychologically, into incriminating himself, and (2) to protect the witness or accused from committing perjury, because the first law of nature is self- preservation.

Section 1. No person shall be deprived of life, liberty or property without due process of law, nor shall any person be denied the equal of the laws. xxx xxx xxx Section 17, No person shall be held to answer for a criminal offense without due process of law. xxx xxx xxx

The use of testimonies and other evidence of private respondents before the FFB against them in the criminal cases subsequently filed before the Sandiganbayan would trench upon the constitutional guarantees that "no person shall be deprived of life, liberty, or property without due process of law ... that "no person shall be held to answer for a criminal offense without due process of law" and that (Section 17, Article IV, 1973 Constitution), that "no person shall be compelled to be a witness against himself. ..." and that " a person has the right to remain silent ..." (Section 20, Article IV, 1973 Constitution). There can be no implied waiver of a citizen's right against self-incrimination or of his right to remain silent. Any such renunciation cannot be predicated on such a slender or tenuous reed as a dubious implication. Otherwise, it would be easier to lose the human rights guaranteed by the Bill of

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Rights than to protect or preserve them; it would be easier to enslave the citizen than for him to remain free. Such a result was never intended by the Founding Fathers. The first sentence of Section 20 of the Bill of Rights stating that "no person shall be compelled to be a witness against himself," applies to both the ordinary witness and the suspect under custodial investigation. In support of the rule that there can be no implied waiver of the right against self-incrimination and all other constitutional rights by the witness or by the accused, is the fact that the right against double jeopardy can only be renounced by the accused if the criminal case against him is dismissed or otherwise terminated with his express consent. Without such express consent to the dismissal or termination of the case, the accused can always invoke his constitutional right against double jeopardy. If Section 5 of P.D. 1886 were interpreted otherwise, said section would become a booby trap for the unsuspecting or unwary witness, A witness summoned either by subpoena or by Invitation to testify before the FFB under Section 5, cannot refuse, under pain of contempt, to testify or produce evidence required of him on the ground that his testimony or evidence may tend to incriminate or subject him to a penalty or forfeiture; because the same Section 5 prohibits the use of such testimony or evidence which may tend to incriminate him in any criminal prosecution that may be filed against him. The law or decree cannot diminish the scope and extent of the guarantee against self-incrimination or the right to remain silent or the right against being held to answer for a criminal offense without due process of law, or against deprivation of his life, liberty or property without due process of law. As a matter of fact, numerous decisions culled by American jurisprudence are partial to the rule that immunity statutes which compel a citizen to testify, should provide an immunity from prosecution that is as co-extensive, as total and as absolute as the guarantees themselves (Jones Law on Evidence, Chapter XVIII, Section 863, pp. 1621-1623; Kastigar vs. US 1972, 406 US 441). Even if the witness testified pursuant to an invitation, the invitation does not remove the veiled threat of compulsion, because as stated in the Chavez case, supra.

At the very least, their consent to testify was under such misapprehension. Hence, there can be no clear, categorical, knowing and intelligent waiver of the right to remain silent, against selfincrimination, against being held to answer for a criminal offense without due process of law, and against being deprived of life, liberty or property without due process of law under such misapprehension. In any event, Section 5 of P.D. 1886 creates a doubt, which doubt is accentuated by the difference of opinion thereon among the counsels in these cases and among members of this Court. And it is basic in criminal law that doubts should be resolved liberally in favor of the accused and strictly against the government. The procedural due process both under Sections 1 and 17 of the Bill of Rights, Article IV of the 1973 Constitution, simply means, in the language of Justice Frankfurter, the sporting Idea of fair play. The FFB and its counsel did not inform the private respondents herein of their right to remain silent and their right against self-incrimination, and that their testimonies may be utilized against them in a court of law, before they testified. This is not fair to them, and hence, they were denied procedural due process. It should be stressed that the FFB was merely a fact-finding agency for the purpose of gathering all the possible facts that may lead to the Identity of the culprit. Such testimonies may provide leads for the FFB, its counsels and agents to follow up. The FFB and its counsels cannot rely solely on such testimonies to be used against the private respondents in these criminal cases. It should be recalled that the FFB had ample funds for the purpose of accomplishing its object. As a matter of fact. it refunded several million pesos to the government after it concluded its investigation. The Board and its counsel could have utilized the said amount to appoint additional agents to look for witnesses to the assassination. In this respect, the FFB counsel could be faulted in not utilizing the funds appropriated for them to ferret out all evidence that will Identify the culprit or culprits. The failure of the FFB's counsel to use said funds reflects on the initiative and resourcefulness of its counsel. He could prosecute private respondents on evidence other than their testimony and the evidence they gave before the FFB.

Compulsion as it is understood here does not necessarily connote the use of violence; it may be the product of unintentional statements. Pressures which operate to overbear his will, disable him from making a free and rational choice, or impair his capacity for rational judgment would in our opinion be sufficient. So is moral coercion attending to force testimony from the unwilling lips of the defendant (Chavez vs. Court of Appeals, 24 SCRA 663, 679).

As heretofore stated, the private respondents were compelled to testify before the FFB whether by subpoena or by invitation which has the effect of a subpoena as provided for in Section 5 of P.D. 1886; because private respondents then believed, by reading the entire Section 5, that the testimony they gave before the FFB could not be used against them in the criminal cases subsequently filed before the Sandiganbayan. Because the Board was merely a fact-finding board and that it was riot conducting a criminal prosecution the private respondents were under the impression that there was no need for them to invoke their rights to remain silent, against self-incrimination and against being held for a criminal offense without due process of law.

The summons issued to private respondents has been euphemistically called as an invitation, instead of a subpoena or subpoena duces tecum, as a sign of respect for the important and high positions occupied by private respondents. But the effect of such an invitation thus worded is the same as a subpoena or subpoena duces tecum. Precisely, the phraseology of Section 5 of P.D. 1886 entices the unsuspecting private respondents to testify before the FFB, by dangling in the same Section 5 the assurance that their testimony or the evidence given by them will not be used against them in a criminal prosecution that may be instituted against them.

It should be recalled that the counsel of the FFB after submitting the majority report, refused to cooperate with the Tanodbayan in these cases with the pompous declaration that, after submitting their majority report, he automatically became functus oficio. Was his refusal to cooperate with, and assist, the Tanodbayan in the prosecution of these cases, born of the realization that the FFB majority report is as weak as it was precipitate? And when the Tanodbayan has now his back to the wall, as it were, by the ruling of the respondent Sandiganbayan excluding the testimonies and other evidence of private respondents herein on the ground that the use of their testimonies and other evidence will incriminate them, the FFB

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counsel, without being requested by the Tanodbayan, now files a memorandum in support of the position of the Tanodbayan. what is the reason for this turn-about to save his report from the fire which they started with such enthusiasm? As above emphasized, it is the duty of the police and the prosecuting authorities to respect their rights under the Constitution as we stated in the recent Hildawa and Valmonte cases, supra. The grant of immunity under Section 5 of P.D. 1886 would be meaningless if we follow the posture of petitioners herein. Such a posture would be correct if the phrase "after having invoked his privilege against self- incrimination" were transposed as the opening clause of Section 5 to read a follows "After having invoked his privilege against self-incrimination, no person shall be excused from attending and testifying ... etc." Said Section 5 has two clauses and contemplates two proceedings. The first clause from "No person shall be excused ... etc." up to "penalty or forfeiture refers to the proceeding before the FFB. The second clause after the semi-colon following the word "forfeiture which begins with but his testimony or any evidence produced by him shall not be used against him in connection with any transaction, matter, or thing concerning which he is compelled, after having invoked his privilege against self-incrimination to testify . refers to a subsequent criminal proceeding against him which second clause guarantees him against the use of his testimony in such criminal prosecution, but does not immunize him from such prosecution based on other evidence.

Board on the ground that his testimony or the evidence required of him may tend to incriminate him or subject him to penalty or forfeiture; but his testimony or any evidence produced by him shall not be used against him in connection with any transaction, matter or thing concerning which he is compelled. after having invoked his privilege against self-incrimination, to testify or produce evidence, except that such individual so testifying shall not be exempt from prosecution and punishment for perjury committed in so testifying, nor shall he be exempt from demotion or removal from office. 6. This section means that any person who is invited or summoned to appear must obey and testify as to what he knows. Even if the testimony tends to incriminate him he must testify. Even if he claims his constitutional right against self-incrimination, he still must testify. However, his testimony cannot be used against him in any subsequent proceeding, provided that at the time it is being presented, he invokes his privilege against self-incrimination. His testimony, no matter what it may be, cannot in any way cause him harm. The only exception is if the testimony he gave is false, in which case he can be prosecuted and punished for perjury. He may also be demoted or removed from office. 7. The testimonies given by private respondents before the Agrava Board are therefore not admissible against them in their trial before the Sandiganbayan, having invoked their privilege against self-incrimination.

The private respondents herein, if the contention of the prosecution were sustained, would be fried in their own fat. Consequently, the petition should be dismissed. PLANA, J., concurring: I would like to underscore some considerations underlying my concurrence: CONCEPCION, JR., J., concurring: 1. Let me preface my opinion by quoting from my dissent in Pimentel.

1

1. We are committed to the mandate of the Rule of Law. We resolve controversies before Us without considering what is or what might be the popular decision. No. We never do. We only consider the facts and the law. Always the facts and the law. 2. The issue before Us is not I repeat not the guilt or innocence of Gen. Fabian C. Ver, Major Gen. Prospero Olivas, and others for their alleged participation in the assassination of former Senator Benigno S. Aquino, Jr. 3. The issue is: Are the testimonies given by them before the Agrava Board admissible in evidence against them in their trial before the Sandiganbayan? 4. The issue therefore is purely a question of law. It involves the interpretation of Sec. 5, P.D. No. 1886 and calls for the application of the Rule of Law.

1. According to the Constitution, no person shall be compelled to be a witness against himself. But the law (PD 1886) which created the Agrava Board decrees that no person shall be excused from testifying on the ground of self- incrimination. If the law had stopped after this command, it would have been plainly at variance with the Constitution and void. lt was to ward off such a Constitutional infirmity that the law provided for immunity against the use of coerced testimony or other evidence, an immunity which, to be constitutionally adequate, must give at least the same measure of protection as the fundamental guarantee against self-incrimination. 2. Presidential Decree 1886 was not intended either to restrict or expand the constitutional guarantee against self-incrimination. On the one hand, a law cannot restrict a constitutional provision. On the other hand, PD 1886 was adopted precisely to coerce the production of evidence that hopefully would unmask the killers of Senator Aquino, although the compulsory process is accompanied by "use" immunity. 3. It is argued that the right against self- incrimination must have been invoked before the Agrava Board if the use of evidence given therein against the witness in a subsequent criminal prosecution is to be barred. I did not agree.

5. Sec. 5, P.D. No. 1886 reads: No person shall be excused from attending and testifying or from producing books, records, correspondence, documents, or other evidence in obedience to a subpoena issued by the

I fail to see why to preserve pursuant to law (PD 1886) one's constitutional right against selfincrimination, one has to offer resistance to giving testimony a resistance which the said law

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itself says is futile and cannot prevail, as no witness by its specific injunction can refuse to testify.

GUTIERREZ, JR., J., concurring:

4. The constitutional right against self-incrimination may be waived expressly. It may also be waived impliedly by speaking when one has the option to hold his tongue. Waiver by implication presupposes the existence of the right to keep silent. Thus, when one speaks because the law orders him to do so, his action is not really voluntary and therefore his testimony should not be deemed an implied waiver of his constitutional right against self- incrimination. 5. Presidential Decree 1886 does not give private respondents absolute immunity from prosecution, It only bars the use against them of the evidence that was elicited from them by the Agrava Board. If there are other evidence available, private respondents are subject to indictment and conviction. 6. Moreover, the evidence given to the Agrava Board is not, in my view, completedly immunized. What PD 1886 bars from use is only the testimony of the witness who testified before the Agrava Board and whatever was presented as part of his testimony, as such. PD 1886 could not have intended to convert non-confidential official documents into shielded public records that cannot be used as evidence against private respondents, by the mere fact that they were admitted in evidence as part of private respondents' testimony before the Agrava Board. In other words, evidence otherwise available to the prosecution, such as official documents, do not become barred just because they have been referred to in the course of the testimony of private respondents and admitted in evidence as part of their testimony They may still be subpoenaed and offered in evidence. Conceivably, some objections might be raised; but the evidence will be unfettered by the exclusionary rule in PD 1886.

I concur in the majority opinion penned by Justice Serafin R. Cuevas and in the pithy separate opinion of Justice Nestor B. Alampay but would like to add some personal observations. This case furnishes an opportunity to appreciate the workings of our criminal justice system. The prosecutions which led to this petition serve as a timely reminder that all of us-civilian or military, layman or judge, powerful or helpless- need the Bill of Rights. And should the time ever come when like the respondents we may have to invoke the Constitution's protection, the guarantees of basic rights must be readily available, in their full strength and pristine glory, unaffected by what is currently popular or decreed and heedless of whoever may be involved In many petitions filed with this Court and lower courts, the military has often been charged with riding roughshod over the basic rights of citizens. Officers and enlisted men in the frontlines of the fight against subversion or rebellion may, in the heat of combat, see no need to be concerned over such ,niceties" as due process, unreasonable searches and seizures, freedom of expression, and right to counsel. They are best reminded that these rights are not luxuries to be discarded in times of crisis. These rights are the bedrock of a free and civilized society. They are the reason why we fight so hard to preserve our system of government. And as earlier stated, there may come times when we may have to personally invoke these basic freedoms for ourselves. When we deny a right to an accused, we deny it to ourselves. The decision of the Court underscores the importance of keeping inviolate the protections given by the Bill of Rights. Acts which erode or sacrifice constitutional rights under seductive claims of preserving or enhancing political and economic stability must be resisted. Any lessening of freedom will not at all increase stability. The liberties of individuals cannot be preserved by denying them.

ESCOLIN, J., concurring: I concur in the dismissal of the petitions. The admission in evidence of the testimonies of private respondents given before the Agrava Board would constitute a violation of their right against self- incrimination guaranteed under Section 20, Article IV of the Constitution. I subscribe to the majority view that Section 5 of P.D. 1886 cannot be constitutionally tenable, unless a grant of immunity is read into it vis-a-vis the compulsion it imposes upon a witness to testify. Otherwise stated, Section 5 of P.D. 1886 should be interpreted as an immunity statute, which, while depriving one of the right to remain silent, provides an immunity from prosecution that is as coextensive, as total and as absolute as the guarantees themselves. (Jones Law on Evidence, Chapter XVIII, Section 863, pp. 1621-1623, Kastigar v. U.S., 1972, 406 US 441). Clearly, this is how the private respondents understood the legal provision under consideration. For ably assisted as they were by counsel, they would not have allowed themselves to be deliberately dragged into what the Chief Justice would call a "booby trap". Viewed from another angle, therefore, it could not be truly said that private respondents had waived their right against self- incrimination in a manner that is clear, categorical, knowing and intelligent. (Johnson v. Zerbst, 304 US 458, 464, cited in Abriol v. Homeres, 84 Phil. 525 and Chavez v. CA, 24 SCRA 663).

The dividing line between legitimate dissent or opposition on one hand and subversion or rebellion on the other may be difficult to pinpoint during troubled times. The lesson of this petition is that those charged with suppressing the rebellion and those who sit in courts of justice should ever be vigilant in not lumping legitimate dissenters and rebels together in one indiscriminate classification. An abiding concern for principles of liberty and justice is especially imperative in periods of crisis and in times of transition. And all persons from the mighty to the lowy must be given the fullest measure of protection under the Bill of Rights if our constitutional guarantees are to have any meaning. In addition to the right against self- incrimination, of not being compelled to be a witness against one's self, so ably discussed by Justice Cuevas in the Court's opinion, I am constrained by considerations of basic fairness to vote against granting the petition. The private respondents were called to testify before the Agrava Commission. The decree creating the commission stated that no person may refuse to attend and testify or to produce evidence before it on the ground that what he says or produces may incriminate him. But since the witness is compelled to give all he knows or possesses in effect shorn by law of his right not

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to incriminate himself the decree states that the evidence wrung from that witness may not be used against him later. This is, simply speaking, what the petition is all about.

In Ullmann v. United States (350 U.S. 422), the court interpreted the Immunity Act of 1954 and stated.

The respondents may be prosecuted as indeed they have been prosecuted. They may eventually be convicted if the evidence warrants conviction. however, they may not be convicted solely on the evidence which came from their own mouths or was produced by their own hands. The evidence must come from other sources. It would be the height of unfairness and contrary to due process if a man is required to state what he knows even if it would incriminate him, is promised immunity if he talks freely, and is later convicted solely on the testimony he gave under such a promise of immunity.

xxx xxx xxx

I believe that P.D. 1886 is the first Immunity Act to be enacted in the Philippines. It may be relevant, therefore, to refer to American decisions expounding on immunity statutes, more so when a comparison of P.D. 1886 with such statutes as the U.S. Immunity Act of 1954, 68 Stat. 745, 18 U.S.C.A. Section 3486, shows a similarity in the protection given by the statutes. The U.S. Immunity Act of 1954 was enacted to assist federal grand juries in their investigations of attempts to endanger the national security or defense of the United States by treason, sabotage, espionage, sedition, seditious conspiracy, and violations of various laws on internal security, atomic or nuclear energy, and immigration and nationality. The law stated that a witness shall not be excused from testifying or from producing books, papers, or other evidence on the ground that it may tend to incriminate him or subject him to a penalty or forfeiture. The statute then provides: But no such witness shall be prosecuted or subjected to any penalty or forfeiture for or on account of any transaction, matter, or thing concerning which he is compelled, after having claimed his privilege against self- incrimination, to testify or produce evidence nor shall testimony so compelled be used as evidence in any criminal proceeding ... against him in any court. The American statute provides immunity against prosecution, penalties, and use of the testimony. P.D. 1886 is of more limited scope. Only the use of the compelled testimony is proscribed. The witness may still be prosecuted but the prosecution will have to look for evidence other than the words of the accused given before the Agrava Commission. In Brown v. Walker (161 U.S. 591) the U.S. Supreme Court was confronted with the validity of the 1893 Immunity Act. Brown was subpoenaed to testify before a grand jury investigating railroad anomalies. lie refused to testify on grounds of self- incrimination, arguing that the Immunity Act compelling him to testify was unconstitutional. The Court ruled that "(W)hile the constitutional provision in question is justly regarded as one of the most valuable prerogatives of the citizen, its object is fully accomplished by the statutory immunity and we are therefore of opinion that the witness was compellable to answer." In other words, the statutory immunity takes the place of the invocation of the constitutional guarantee. There is no need at the time of taking testimony to invoke the Fifth Amendment because it would be denied any way and the witness would be compelled to testify. It would be absurd to invoke a protection which cannot be availed of when compelled to testify. The time to invoke the immunity is when the testimony is being used contrary to the granted immunity. Protected by the statutory immunity, a witness cannot even insist on his right to remain silent when testifying.

... Since that time the Court's holding in Brown v. Walker has never been challenged; the case and the doctrine it announced have consistently and without question been treated as definitive by this Court, in opinions written, among others, by Holmes and Brandeis, Justices. See, e.g., McCarthy v. Arndstein 226 U.S. 34, 42; Heike v. United States, 227 U.S. 131, 142. The 1893 statute has become part of our constitutional fabric and has been included in substantially the same terms, in virtually all of the major regulatory enactments of the Federal Government.' Shapiro v. United States, 335 U.S. 1, 6. For a partial list of these statutes, see, Id., 335 U.S. at pages 6-7, note 4. Moreover, the States, with one exception a case decided prior to Brown v. Walker have, under their own constitutions, enunciated the same doctrine, 8 Wigmore, Evidence (3d ed.), 2281, and have passed numerous statutes compelling testimony in exchange for immunity in the form either of complete amnesty or of prohibition of the use of the compelled testimony. For a list of such statutes, see 8 Wigmore, Evidence (3d ed.), 2281, n. 11 (pp. 478-501) and Pocket Supplement thereto, 2281, n. 11 (pp. 147-157). (Emphasis supplied) xxx

xxx

xxx

It is interesting to note how the American Supreme Court in Ullmann treated the immunity not only against the use of the testimony (as under P.D. 1886) but even against prosecution. xxx xxx xxx Petitioner, however, attempts to distinguish Brown v. Walker. He argues that this case is different from Brown v. Walker because the impact of the disabilities imposed by federal and state authorities and the public in general such as loss of job, expulsion from labor unions, state registration and investigation statutes, passport eligibility and general public opprobrium-is so oppressive that the statute does not give him true immunity. This, he alleges, is significantly different from the impact of testifying on the auditor in Brown v. Walker, who could the next day resume his job with reputation unaffected. But, as this Court has often held, the immunity granted need only remove those sanctions which generate the fear justifying the invocation of the privilege 'The interdiction of the other Amendment operates only here a witness may possibly expose him to a criminal charge. But if the criminality has already been taken away, the amendment ceased to apply.' Hale v. Henkel 201 U.S. 43, 67. Here, since the Immunity Act protects a witness who is compelled to answer to the extent of his constitutional immunity, he has of course, when a particular sanction is sought to be imposed against him, the right to claim that it is criminal in nature. (Emphasis supplied). In United States v. Murdock (284 U.S. 141), the court ruled that "the principle established is that full and complete immunity against prosecution by the government compelling the witness to answer is equivalent to the protection furnished by the rule against compulsory selfincrimination. P.D. 1886, being an immunity statute should not be given a strained or absurd interpretation in order to achieve a certain result. If the immunity given by the decree is equivalent to the protection furnished by the right against self- incrimination, then, paraphrasing Justice

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Frankfurter in Ullmann, the same protection given by one of the great landmarks in man's struggle to make himself civilized must not be interpreted in a hostile or niggardly spirit, xxx xxx xxx ... Too many, even those who should be better advised, view this privilege as a shelter for wrongdoers. They too readily assume that those who invoke it are either guilty of crime or commit perjury in claiming the privilege. Such a view does scant honor to the patriots who sponsored the Bill of Rights as a condition to acceptance of the Constitution by the ratifying States. The Founders of the Nation were not naive or disregard ful of the interest of justice ... I, therefore, join the majority in dismissing the petition.

DE LA FUENTE, J., concurring: No person shall be compelled to be a witness against himself." 1 This basic right against selfincrimination, which supplanted the inquisitorial methods of interrogating the accused as practiced during the Spanish regime, has become an indispensable part of our laws since 1900. Pursuant thereto, an accused in a criminal case has the right not only to refuse to answer incriminating questions but also to refuse to take the witness stand. He cannot be compelled even to utter a word in his defense. 2 As stressed in Chavez vs. Court of Appeals, 3 the rule may otherwise be stated as the constitutional right of the accused to remain silent. " The accused can forego testimony 4 without any adverse implication drawn from his decision to do so, The burden is on the State to establish the guilt of the accused beyond reasonable doubt; the prosecution must look elsewhere for other "evidence independently and freely secured," The rule forbids what has been considered as "the certainly inhuman procedure of compelling a person 'to furnish the missing evidence necessary for his conviction'." According to Justice Harlan, it was intended "to shield the guilty and imprudent as well as the innocent and foresighted." 5 Transplanted in this country with the advent of American sovereignty 6and firmly imbedded in our fundamental law, 7 the said privilege against compulsory self-incrimination, which is predicated on grounds of public policy and humanity, 8 "is fundamental to our scheme of justice" 9 and is one of the procedural guarantees of our accusatorial system. 1. As I see it, what the prosecution proposed to do in these cases was to present, as evidence of the alleged accessorial acts of private respondents, the transcripts of their respective testimonies before the Agrava Board. Confronted by the apparent unwillingness of said respondents to be called to the witness stand in subsequent criminal proceedings, the prosecution sought to put into the record of these criminal cases (in lieu of private respondents' testimonies) the said transcripts and other evidence given by them in the course of their testimony before the Agrava Board. If allowed over and despite private respondents' objection, this would be a clear infringement of the constitutional guarantee that they can invoke in said criminal proceedings, as all of them did. Since the prosecution cannot require said respondents to testify in the criminal cases before the Sandiganbayan, it stands to reason that it is equally disabled from indirectly compelling respondents to give evidence against themselves by using their Agrava Board testimonies. The prosecution must present evidence "derived from a legitimate source wholly independent of the compelled testimony." 10

2. It is contended, however, that these self- incriminatory testimonies were given voluntarily because they did not claim the constitutional guarantee before or while giving testimony to the Agrava Board. Voluntariness, I think. cannot be inferred simply from such failure to invoke the privilege. There was no fair warning or notice to the declarant that his testimony would be used against him if incriminatory, unless the privilege is invoked beforehand or during his testimony. If they were properly warned and still gave testimony without t invoking the privilege, then it would be clear that they knowingly waived the privilege. Otherwise, it meant at the most a willingness on their part to help the Agrava Board in its fact-finding investigation without waiving (a) the immunity granted by law, and (b) the constitutional guarantee against self- incrimination in case of subsequent prosecution based on their self-incriminatory testimony. For waiver, it is wellsettled, to be effective. "must be certain, unequivocal and intelligently, understandably and willingly made. " 11 Mere submission to an illegal search or seizure "is not consent or waiver of objection. 12 The prosecution has the burden to prove otherwise. The same standard should be observed in self-incrimination cases. PD No. 1886 (as amended), which created that "independent ad hoc fact-finding Board," vested it with "plenary powers to determine the facts and circumstances surrounding the killing [of former Senator Aquino] and to allow for a free, unlimited and exhaustive investigation into all aspects of said tragedy." In consonance with these objectives, the law declared that the privilege was unavailable to an Agrava Board "witness", as follows: "No person shall be excused from attending and testifying or from producing other evidence on the ground that his testimony or any evidence requested of him may tend to incriminate him, " 13 etc. At the same time, the Board was empowered to summarily hold and punish any person in direct contempt for "refusal to be sworn or to answer as a witness," its judgment being "final and unappealable." Quite plainly, the constitutional right against compulsory self-incrimination could not be invoked by Agrava Board witnesses, The privilege was suspended or temporarily taken away for purposes of the investigation, in order that the Board would have access to all relevant evidence and all sources of information, not excluding compelled incriminatory statements of probable and possible or potential defendants. An Agrava Board witness was, under the terms of the quoted provision, placed in a dilemma: (1) to answer truthfully all questions including those tending to be self-incriminatory, since he cannot invoke the privilege; (2) to lie and become liable criminally for perjury; and (3) to insist on his right to remain silent and be summarily punished by the Board for direct contempt. It is plain that such a witness was under compulsion to give self-incriminatory testimony. It was not voluntary. Precisely because of its coerced nature (an infringement of his constitutional right against self- incrimination), PD No. 1886 promised. in exchange or as a substitute for the privilege, limited immunity (as provided in the next succeeding clause, same section), to wit: ... but his testimony or any evidence produced by him shall not be used against him in connection with any transaction, matter or thing concerning which he was compelled, after having invoked his privilege against self- incrimination, to testify or produce evidence. 14 Such immunity 15 would bar the prosecution's use against the witness of his said testimony in subsequent criminal proceedings (wherein he is charged with offenses related to his testimony). Nevertheless, this would not operate to change the involuntary nature of his self- incriminatory testimony. As far as the witness is concerned, it was "coerced", not freely given, because he was not fully accorded the "liberty of choice." The law withheld his basic freedom to choose

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between testifying and remaining silent without the risk of being punished for direct contempt to forego testimony which could possibly be to his detriment. 3. I cannot agree with the proposition that the privilege should be invoked by the witness before or while giving testimony to the Agrava Board. Section 5 should be reasonably construed and fairly applied to the cases at bar, in the light of the accused's constitutional right against compulsory self- incrimination. The formula of limited-immunity in-lieu-of-the-privilege contained in said section rendered unnecessary or superfluous, the invocation of the privilege before the Board. Under said formula, the witness was deprived of the privilege to protect himself against inquisitorial interrogation into matters that a targeted defendant or virtual respondent can keep to himself in ordinary investigations or proceedings. Even if the provision is susceptible of an interpretation in support of the petitioner's stand, it appears that the time for invoking the privilege is not clear enough or certain from the language of the law. Equally plausible and logical is the contrary view that it may be invoked later on when it became apparent that the prosecution intended to use the testimony given before the Board to secure conviction of the declarant in the subsequent criminal proceedings. The privilege cannot be deemed waived by implication merely as a consequence of failure to claim it before the Board. It bears emphasis that the right of an accused "witnesses" against compulsory self-incrimination is predicated on the constitutional guarantee, not on the special law in question. 3. In the United States, the generally accepted approach in Fifth Amendment Cases (involving the constitutional guarantee under consideration) was stated as follows in Johnson vs Zerbst:" 16 It has been pointed out that 'courts indulge in every reasonable presumption against a waiver of the fundamental rights and that we do not presume acquiescence in the loss of such fundamental rights.'" Because, as Dean Griswold of Harvard Law School (later, Solicitor General of the United States) eloquently puts it: [T]he privilege against self-incrimination is one of the great landmark,s in man's struggles to make himself civilized ... [W]e do not make even the most hardened criminal sign his own death warrant, or dig his own grave ... We have through the course of history developed a considerable feeling of the dignity and intrinsic importance of the individual man. Even the evil man is a human being. 17 In this jurisdiction, more than four decades ago, the late Justice Jose P. Laurela nationalist, constitutionalist and eminent jurist, whose incisive and authoritative opinions on constitutional questions are often cited by the bench and the bar- voted to sustain a claim of the constitutional guarantee in Bermudez vs. Castillo. 18 In his concurrence, he said inter alia:

(3) The privilege should not be disregarded merely because it often affords a shelter to the guilty and may prevent the disclosure of wrongdoing. Courts can not, under the guise of protecting the public interest and furthering the ends of justice, treat a sacred privilege as if it were mere excrescence in the Constitution. (Emphasis supplied; at page 493.) In sum, considering the pertinent legal provisions and judicial pronouncements as well as the climate prevailing when the private respondents testified before the Agrava Board, I find it unavoidable to reach the conclusion that they did so under legal, moral and psychological compulsion. Their compelled testimonies before the Agrava Board cannot thereafter be used against them in the cases at bar in view of the immunity granted by P.D. No. 1886. They were not obliged to invoke then and there the constitutional guarantee. If they did, that would have sufficed to afford them adequate protection. If they did not, they could do so later on when the Government prosecutors (in spite of the statutory grant of immunity) decided in the subsequent criminal proceedings, to use against them their Agrava Board testimonies. For, as earlier stated, there was no intelligent and knowing waiver on their part of their constitutional right against selfincrimination. Accordingly, and for other reasons well stated in the main separate concurring opinions, I vote to dismiss the petitions.

ALAMPAY, J., concurring: I vote for the dismissal of the petition in these consolidated cases. What appears to be the basic and principal issue to which the consideration of the Court is addressed to is the singular question of whether testimonies adduced by the private respondents before the Ad Hoc Agrava Fact Finding Board and sought to be introduced against them in the Sandiganbayan wherein they have been accused were rightfully excluded as evidence against them. I find untenable the insistence of the petitioner Tanodbayan that the private respondents should have claimed the right against self-incrimination before the said Fact Finding Board and that having omitted doing so, the said privilege afforded to them by law can no longer be invoked by them before the Sandiganbayan.

(1) As between two possible and equally rational constructions, that should prevail which is more in consonance with the purpose intended to be carried out by the Constitution. The provision ... should be construed with the utmost liberality in favor of the right of the individual intended to be secured. ...

The right claimed by private respondents rests on the fundamental principle that no person shall be compelled to be a witness against himself as so stated in our Constitution and from the fact that Section 5 of P.D. 1886 disallows the use against him of such testimony or any evidence produced by him before the said Fact Finding Board, except for perjury. Petitioner argues however, that there was a waiver of this right to self-incrimination when respondents proceeded to give their testimonies on various dates before the Agrava Fact Finding Board without formally invoking on said occasions their right against self-incrimination.

(2) I am averse to the enlargement of the rule allegedly calculated to gauge more fully the credibility of a witness if the witness would thereby be forced to furnish the means for his own destruction. Unless the evidence is voluntarily given, the policy of the constitution is one of protection on humanitarian considerations and grounds of public policy...

As private respondents could not have excused themselves from testifying before said Board as clearly emphasized in the very first clause of Section 5 of P.D. 1886, and as at that point of time, there was no reason for the declarant to anticipate or speculate that there would be any criminal charge or any proceeding instituted against them, it would therefore, be unnatural and

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illogical to expect that private respondents would even contemplate the need of prefacing their declarations with an invocation before the Fact Finding Board of their privilege against selfincrimination. In fact for a declarant to announce his claim of the aforestated privilege prior to or while testifying before said Fact Finding Board, would irresistibly create an inference and convey an impression that said witness is burdened with his own awareness that he stands already incriminated in some wrong. To insist therefore, even in the absence yet of any proceeding against him, that the witness invoke the said privilege before the Agrava Fact Finding Board, would be obviously self-demeaning. Such an effect could not have been intended by Section 5 of P.D. 1886, which was even meant to grant to the witness a benefit rather than a burden. It is more reasonable therefore, to conclude that the privilege against self-incrimination would be accorded to said witness after he has invoked the same in a subsequent proceeding wherein he has been charged of a wrong doing, except in a case for perjury. It is only at such time when the necessity of invoking the mantle of the privilege or the immunity afforded to him by law would arise. It cannot also be rightfully concluded that private respondents had intentionally relinquished or abandoned the said right which they claimed before the Sandiganbayan. The fact that the issue of when and before what forum should such claim to the right against self-incrimination be necessarily presented has provoked much discussion and debate because of divergent views. This has even prompted the submissions to the Court of opinions of amicus curiae or friends of the court as to how Section 5 of Presidential Decree 1886 should be construed and applied which are however different from and contrary to the views expressed by the Justices of the Sandiganbayan and other legal luminaries. These conflicting views negate the proposition that there was an effective waiver made by the private respondents of their rights. It has earlier been stated by this Court that to be effective, such waiver must be certain and unequivocal and intelligently, understandably and willingly made. (Chavez vs. Court of Appeals, et al., 24 SCRA 663). In the same cited case, it has been stated that courts indulge in every reasonable presumption against waiver of fundamental constitutional rights and that we do not presume acquiescence in the loss of fundamental rights (Citing Johnson vs. Zerbst 304 U.S. 458, 464, 82 L. ed. 1461, 1466). Furthermore, whether the alleged waiver is express or implied, it must be intentional. (Davison vs. Klaess 20 N.E. 2d. 744, 748, 280 N.Y. 252; 92 CJS, 1058). I find it difficult to accept that private respondents had at any time, ever intended to relinquish or abandon their right against self-incrimination.

PATAJO, J., concurring: I vote for the dismissal of the petition in these consolidated cases. Said petitions do not merit being given due course and should be dismissed outright. I hold the view that the testimonies and evidence given before the Agrava Board are inadmissible as evidence against those who testified or gave said evidence irrespective of whether said persons were subpoenaed or invited. I believe it is not a condition sine quo non to

the non-admissibility of said evidence that at the time they testified or gave evidence before the Agrava Board that they had invoked their privilege against self-incrimination. The Agrava Board was created as an independent ad hoc fact finding board to determine all the facts and circumstances surrounding the assassination of former Senator Benigno S. Aquino, Jr. on August 21, 1983. It was given plenary powers to allow for a free, unlimited and exhaustive investigation into all the aspects of said tragedy. It was given the power to issue subpoena or subpoena duces tecum and "other compulsory processes" requiring the attendance and testimony of witnesses and the production of any evidence relative to any matter under investigation by said Board. Those who have been subpoenaed to appear and testify or produce any documentary evidence before the Board shall not be excused from testifying or presenting evidence before said Board on the ground that their testimony or evidence may tend to incriminate them or subject them to penalty or forfeiture. I believe an invitation from the Board is as much a compulsory process 1 to appear and testify before the Board as a subpoena and one receiving said invitation cannot also excuse himself from appearing and testifying before the Board. Petitioners appear to share this view when they said in subparagraph (c), paragraph 7 of their petition in G.R. No. L-71208-09. (c) People were either invited or issued subpoenas, depending upon their rank and office, to give testimony before the Board and among those invited were respondents General Fabian C. Ver and Major General Olivas while the rest of the military respondents were issued subpoenas. Unquestionably, it was the intention of the decree creating the Board to investigate the Aquino assassination to encourage all who have some information on any "aspect of said tragedy" to furnish the Board said information whether they are subpoenaed or issued other forms of compulsory process such as an invitation and to do so without fear that what they will say may be used against them. It is in this context that Section 5 of PD No. 1886 should be viewed. When they testified before the Board, they were given full assurance that whatever they say before the Board will not be used against them. Only if they testify falsely that they may be prosecuted for perjury. This is to prevent people from preventing the Board from finding out the truth about the Aquino assassination by giving false leads or information for ulterior reasons. Actually Section 5 of PD No. 1886 falls under that category of statutes which do not pronounce an entire immunity by forbidding punishment or prosecution for any testimony or evidence given in connection with the investigation of certain offenses more widely known as immunity statutes, but merely prohibit in any criminal prosecution the use of the testimony of the witness. Immunity statutes as well as statutes prohibiting the use of testimony in any subsequent criminal prosecution have been the expedients resorted for the investigation of many offenses, chiefly those whose proof or punishment were otherwise impracticable because of the implication in the offense itself of all who could bear useful testimony. The expediency and practical utility of this mode of obtaining evidence may as a measure of legislation, be open to argument. But the tradition of it as a lawful method of annulling the privilege against self-incrimination is unquestioned in English history." ignore on Evidence, Vol. III, p. 469.

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Speaking of this kind of privilege of non-admission of testimony given by the witness in subsequent prosecutions as allowed by the common law and modified by subsequent statutes, State vs. Quarles 13 Ark 307, 311, said: The privilege in question, in its greatest scope, as allowed by the common law and no one, be he witness or accused, can pretend to claim it beyond its scope at the common law never did contemplate that the witness might not be proved guilty of the very crime about which he may be called to testify; but only that the witness should not be compelled to produce the evidence to prove himself guilty of that crime. His privilege, therefore, was not an exemption from the consequences of a crime that he might have committed; but only an exemption from the necessity of himself producing the evidence to establish his own crime ... So long as it might be lawful to produce in evidence against an accused party whatever he might before have voluntarily said as a witness on a prosecution against another, there were no means by which the privilege could be made available short of a claim by the witness to be silent; and as that was the rule of the common law, this was the common-law mode of making the privilege available. And that silence was but a mode of making the privilege available, and was not of the essence of the privilege itself, is conclusively proven by all that current of enlightened authority, to which we yield our fullest assent, which holds that the privilege has ceased when the crime has been pardoned, when the witness has been tried and acquitted, or is adjudged guilty, or when the prosecution, to which he was exposed, has been barred by lapse of time ... But the Legislature has so changed the common-law rule, by the enactment in question in the substitution of a rule that the testimony required to be given by the act, shall never be used against the witness for the purpose of procuring his conviction for the crime or misdemeanor to which it relates, that it is no longer necessary for him to claim his privilege as to such testimony, in order to prevent its being afterwards used against him. And the only question that can possibly arise under the present state of the law, as applicable to the case now before us, is as to whether our statutory regulations afford sufficient protection to the witness, responsive to this new rule and to his constitutional guarantee against compulsory self-accusation ... Considering the objectives sought to be achieved by PD No. 1886 the provision thereof making testimony and evidence given before the Board inadmissible in evidence against the ones giving the same, provides protection beyond that granted by the Constitutional provision against self- incrimination, otherwise it will be constitutionally suspect. Counselman vs. Hitchcock, 142 US 547, 35 L Ed 1110. Of relevance are the observations of the District Court, N.D. Illinois, in United States vs. Armour & Co., 112 Fed 808, 821, 822: All of these immunity acts are relied upon by the individual defendants, and, while expressed in, slightly varying language, they all mean the same thing, and each of them is a substitute for the privilege contained in that clause of the fifth amendment to the Constitution, reading: 'Nor shall any person be compelled in any criminal case to be a witness against himself.' This fifth amendment deals with one of the most cherished rights of the American citizen, and has been construed by the courts to mean that the witness shall have the right to remain silent when questioned upon any subject where the answer would tend to incriminate him. Congress by the immunity laws in question, and by each of them, has taken away the privilege contained

in the amended it is conceded in argument that this cannot be done without giving to the citizen by way of immunity something as broad and valuable as the privilege thus destroyed We are not without authority on this question. By a previous act, Congress undertook to take away the constitutional privilege by giving the citizen an equivalent, and the Supreme Court held in the case of Counselman v. Hitchcock 142 U.S. 547, 12 Sup. Ct. 195, 35 I Ed., 1110, that the substitution so given was not an equivalent. Then, at various times, the immunity acts in question were passed by Congress with full knowledge that in furnishing a substitute for this great right of the citizen, it must give something as broad as the privilege taken away. It might be broader, but it could not be narrower. Now, in my judgment, the immunity law is broader than the privilege given by the fifth amendment, which the act was intended to substitute. The privilege of the amendment permits a refusal to answer. The act wipes out the offense about which the witness might have refused to answer. The privilege permits a refusal only as to incriminating evidence. The act gives immunity for evidence of or concerning the matter covered by the incident and the evidence need not be self-incriminating. The privilege must be personally claimed by the witness at the time. The immunity flows to the witness by action of law and without any claim on his part. Brown v. Walker, 161 U.S. 591, 16 Sup. Ct. 644, 40 L. Ed. 819; Hale vs. Henkel (recently decided) 26 Sup. Ct. 370, 50 L. Ed. -; State v. Quarles 13 Ark. 307, quoted in 142 U.S. 567, 12 Sup. Ct. 199 (35 L. Ed. 1110); People Sharp, 107 N.Y. 427, 14 N.E. 319, 1 Am. St. Rep. 851; Brown v. Walker approved in Lamson v. Boyden, 160 I11. 613, 620, 621, 43 N.E. 781: People v. Butler, St. Foundry, 201 I11. 236, 248, 66 N.E. 349. I am further of opinion that the immunity given by the act must be as broad as the liabilities imposed by the act. The act calls upon the citizen to answer any 'lawful requirement' of the Commissioner. 'Require' means to ask of right and by authority. Webster's Dictionary. Tenn. Coal Co. v. Saller (C.C.) 37 Fed. 545, 547. Anything is a requirement by a public officer which brings home to the person called upon that the officer is there officially and desires compliance. 'Demand' and' require' are synonymous. Miller v. Davis, 88 Me. 454, 34 Atl. 265. The citizen may be punished for refusal to answer such lawful requirement. I am of opinion that when the Commissioner of Corporations, who has power to compel, makes his demand, it is the duty of the witness to obey. The contention has been made that in order to get immunity the citizen shall wait until the compulsion becomes irresistible. That is the effect of the government contention. I am not able to bring my mind to accept that doctrine. If I am right in saying that immunity flows from the law l, without any claim on the part of the defendant and at different times that has been conceded here in argument then no act of any kind on his part which amounts to a claim of immunity, which amounts to setting up a claim of immunity is demanded by the law. The law never puts a premium on contumacy. A person does not become a favored citizen by resistance to a lawful requirement. On the contrary, the policy of the law favors the willing giving of evidence whenever an officer entitled to make a demand makes it upon a citizen who has no right to refuse. And it would be absurd and un-American to favor the citizen who resists and places obstacles in the way of the government as against the citizen who, with a full knowledge of the law, obeys without resistance the demand of an officer who has the legal right to make the demand for something which the citizen has no legal right to refuse. This, then, is the proposition to which we are led. When an officer, who has a legal right to make a demand,

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makes such demand upon a citizen who has no legal light to refuse, and that citizen answers under such conditions, he answers under compulsion of the law. There is no merit then to the contention that private respondents should be invoked the privilege against self-incrimination before the Agrava Board for precisely PD No. 1886 had explicitly provided that the testimony of those who testified before the Board can not be used against them. It will be a meaningless act of supererogation to require that said witnesses before answering any question addressed to them must invoke their privilege against self-incrimination. The phrase "after having invoked his privilege against self-incrimination" in Section 5 of PD No. 1886 to be consistent with the intention of said decree, should refer to the time that the testimony of the witness will be used against him in another proceeding, such as the cases now pending before the Sandiganbayan. It could not refer to the proceedings before the Agrava Board because no one is being accused before said Board and no matter how self-incriminating the testimony of said witness is, he runs no risk of being prejudiced, much less convicted by the Agrava Board. It is in the prosecution of cases based on the report of said Board that the witness should invoke his right against self-incrimination. These private respondents did just that when they moved for the exclusion in evidence of their statement before the Agrava Board. Any other interpretation would defeat the very purpose of PD No. 1886.

parties may waive; and if the ground for objection is known and not seasonably made, the objection is deemed waived and the [trial] court has no power, on its own motion, to disregard the evidence (Marella vs. Reyes, 12 Phil. 1) ... Suffice it to say that the lower court should have allowed such confessions to be given in evidence at least as against the parties who made them, and admit the same conditionally to establish conspiracy, in order to give the prosecution a chance to get into the record all the relevant evidence at its disposal to probe the charges. At any rate, in the final determination and consideration of the case, the trial court should be able to distinguish the admissible from the inadmissible, and reject what, under the rules of evidence, should be excluded. Trial courts should be liberal in the matter of admission of proof and avoid the premature and precipitate exclusion of evidence on doubtful objections to its admissibility, citing the Court's long-standing basic ruling and policy in Prats & Co. vs. Phoenix Ins. Co. 4 that reception and admission of evidence objected to on doubtful or technical grounds is ultimately the less harmful course to either litigant, since the Supreme Court upon appeal would then have all the materials before it necessary to make a correct judgment (instead of returning the case for a new trial which only prolongs the determination of the case); and There is greater reason to adhere to such policy in criminal cases where questions arise as to admissibility of evidence for the prosecution, for the unjustified exclusion of evidence may lead to the erroneous acquittal of the accused or the dismissal of the charges, from which the People can no longer appeal 5

TEEHANKEE, J., dissenting: The majority decision is based on erroneous premises, viz. what the case at bar presents a "novel question;" that "this Court has not been previously called upon to rule on issues involving immunity statute" and is burdened with the monumental task" of "laying the criteria ... (to) build future jurisprudence on a heretofore unexplored area of judicial inquiry." 1 The fact is that we have a wealth of settled jurisprudence and precedents, Philippine and foreign, that control the determination of the simple issue at bar and call for the setting aside of the exclusion order issued by respondent court (Sandiganbayan) which wrongly rules as totally and absolutely inadmissible the testimonies given by private respondents General Ver and Olivas and their six co- respondents (all charged as accessories) as well as all the documents, records and other evidence produced by them before the Fact-Finding Board, notwithstanding that all were represented by counsel 2 and none of them invoked the privilege or right against selfincrimination or made any claim or objection at the time of his testimony before the Board that any question propounded to him and which he willingly answered called for an incriminating answer against himself. The following vital considerations based on settled jurisprudence and precedents show that respondent court acted with gross error and misconception of the applicable principles of the right against self-incrimination: 1. Respondent court grossly disregarded the settled guidelines laid down for trial courts by this Court of Appeal vs. Paylo 3 thru Mr. Justice J.B.L. Reyes, speaking for a unanimous Court, Chat By so doing [ordering the exclusion of the proferred confessions of the two accused upon a ground not raised by counsel but motu proprio by the trial court, i.e. lack of independent proof of conspiracy] the [trial] court overlooked that the right to objection is a mere privilege which the

2. The right against self-incrimination is found in the first sentence of section 20 of the Bill of Rights of the 1973 Constitution stating that "No person shall be compelled to be a witness against himself." This single sentence constituted the whole text of section 18 of the Bill of Rights of the 19,7,5 Constitution. This right against self-incrimination has a settled meaning in jurisprudence which is fully applicable here since the right against self-incrimination was first enforced here as an inviolable rule" in U.S. President McKinley's instructions under date of April 7, 1900 to the Taft Commission. 6 As recounted by the late Mr. Justice Conrado Sanchez as ponente for a unanimous Court in the leading 1968 case of Chavez vs. Court of Appeals 7, "Mr. Justice Malcolm, in expressive language, tells us that this maxim was recognized in England in the early days 'in a revolt against the thumbscrew and the rack.' An old Philippine case [1904] speaks of this constitutional injunction as 'older than the Government of the United States;' as having 'its origin in a protest against the inquisitorial methods of interrogating the accused person;' and as having been adopted in the Philippines 'to wipe out such practices as formerly prevailed in these Islands of requiring accused persons to submit to judicial examinations, and to give testimony regarding the offenses will which they were charged.' " But Mr. Justice Sanchez equally stressed that "(an) accused occupies a different tier of protection from an ordinary witness. Whereas an ordinary witness may be compelled to take the witness stand and claim the privilege as each question requiring an incriminating answer is shot at him, 8 an accused may altogether refuse to take the witness stand and refuse to answer any and all questions." 9 As restated by Mr. Justice J.B.L. Reyes for a unanimous Court in Suarez vs. Tengco, 10 "No legal impediment exists against a litigant calling any of the adverse parties to be his witness. ... True, an accused in a criminal case may not be compelled to testify, or to so much as utter a word, even for his own defense (U.S. vs, Junio, 1 Phil. 50; U.S. vs. Luzon, 4 Phil. 344: U.S. vs.

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Binayoh 35 Phil. 23; Sec. l(c), Rule 111, Rules of Court). But while the constitutional guaranty against self-incrimination protects a person in all types of cases, be they criminal, civil, or administrative (Art. 111, Sec. 1, No. 18, Phil. constitution: Bermudez vs. Castillo, 64 Phil, 483), said privilege in, proceedings other than a criminal case against him who invokes it, is considered an option of refusal to answer incriminating question, and not a prohibition of inquiry. Except in criminal cases, there is no rule prohibiting a party litigant from utilizing his adversary as witness. As a matter of fact, section 83 of Rule 123, Rules of Court expressly authorizes a party to call an adverse party to the witness stand and interrogate him. This rule is, of course, subject to the constitutional injunction not to compel any person to testify against himself. But it is established that the privilege against self-incrimination must be invoked at the proper time, and the proper time to invoke it is when a question calling for a incriminating answer is propounded. This has to be so, because before a question is asked there would be no way of telling whether the information to be elicited from the witness is self-incriminating or not. As stated in Jones on Evidence (Vol. 6, pp. 4926-4927), a person who has been summoned to testify 'cannot decline to appear, nor can he decline to be sworn as a witness' and 'no claim of privilege can be made until a question calling for a incriminating answer is asked, at that time, and, generally speaking, at that time only, the claim of privilege may properly be interposed.' (Gonzales vs. Sec. of Labor, L-6409, February 5, 1954, 11 cit. in Navarro, Criminal Procedure, p. 302.)' Suarez was cited with favor and reaffirmed in Bagadiong vs. Gonzales, 12 wherein once again the Court, with the concurrence in the result of the now Chief Justice, under similar facts held that the petitioner (provincial treasurer) could not refuse to take the stand as an adverse party in a civil case since the privilege against self-incrimination "in proceedings other than a criminal case against him who invokes it, is considered an option to refuse to answer incriminating questions, and not a prohibition of inquiry" and "must be invoked when a question calling for an incriminating answer is propounded, because before a question is asked, there would be no way of telling whether the information to be elicited from the witness is self-incriminating or not." The Court therein denied "the petition to prohibit respondent judge from directing petitioner to take the witness stand and testify ... without prejudice to petitioner's properly invoking the guaranty against self-incrimination when questions are propounded to him on the stand. Costs against the petitioner." 3. All the respondents at bar were in this category of ordinary witnesses in the hearings of the Fact-Finding Board. They were not accused in any criminal case nor were they persons under custodial interrogation who under the second part of section 20 of the Bill of Rights (consisting of three additional sentences 13) were given additional rights to silence and counsel and to be informed of such rights and to the out-lawing of any confession obtained in violation of the rights guaranteed in the cited section, by virtue of the incorporation into the Bill of Rights of the rights granted in the rulings of the U.S. Supreme Court in the Miranda-Escobedo cases. As noted by former Chief Justice Enrique M. Fernando, "(I)t amounts to an acceptance of the applicability in this jurisdiction of the epochal American Supreme Court decision in Miranda vs. Arizona, the opinion being rendered by Chief Justice Warren. It is thus now a part of our fundamental law. Such doctrine was promulgated in response to the question of the admissibility of statements obtained from an individual interrogated under police custody, considering that such a time and under the stress of such conditions, his right against self-incrimination could be rendered

futile." 14 The Miranda pronouncements thus became necessarily a part and parcel of the additional rights granted in the cited section 20, as made by the late U.S. Chief Justice Warren in the Miranda case thus: "The prosecution may not use statements, whether exculpatory or inculpatory, stemming from custodial interrogation of the defendant unless it demonstrates the use of procedural safeguards effective to secure the privilege against self-incrimination. By custodial interrogation we mean questioning initiated by law enforcement officers after a person has been taken into custody or otherwise deprived of his freedom of action in any significant way. " 15 These additional Miranda rights could not be invoked by respondents, as the members of the Fact-Finding Board were not law enforcement officers nor were respondents under custodial interrogation. As ordinary witnesses before the Fact-Finding Board and under the settled jurisprudence above-cited, they could not invoke the right to silence and refuse to take the witness stand. Their right and privilege (which is not self-executory or automatic ipso jure) was, while testifying, whether voluntarily or by subpoena, to invoke the privilege and refuse to answer as and when a question calling for an incriminating answer is propounded. Failure to invoke the privilege which is personal does automatically result in its loss ipso facto. The law, usage and settled jurisprudence uniformly require that the privilege must be asserted or else is lost. The court or board upon its invocation still has to pass upon and rule upon the proper application of the privilege. As restated by Francisco, the rule and exceptions are: "Certainly, where the witness, on oath declares his belief that the answer to the question would criminate or tend to criminate him, the court cannot compel him to answer, unless it is clear perfectly, from a careful consideration of all the circumstances of the case, that the witness is mistaken, or is acting in bad faith, and that the answer cannot possibly have any such tendency. " 16 4. The view that withal, it is best, although not required, that a warning to the witness of his option to refuse an answer to incriminating questions as advanced even by the Tanodbayan at the hearing dates back to a century ago and has been long discarded as "witnesses are usually well enough advised beforehand by counsel as to their rights when such issues impend" and "as general knowledge spread among the masses and the preparation for testimony became more thorough." Thus, "ignore, the bible on the law of evidence so remarks and adds that "there is no reason for letting a wholesome custom degenerate into a technical rule." — It is plausible to argue that the witness should be warned and notified, when a incriminating fact is inquired about, that he has an option to refuse an answer; and this view was often insisted upon, a century ago, by leaders at the Bar, xxx xxx xxx But there are opposing considerations. In the first place, such a warning would be an anomaly; it is not given for any other privilege; witnesses are in other respects supposed to know their rights; and why not here? In the next place, it is not called for by principle, since, until the witness refuses, it can hardly be said that he is compelled to answer; nor is it material that he believes himself compelled; for the Court's action, and not the witness' state of mind, must be the test of compulsion. Again, the question can at any rate only be one of judicial propriety of conduct, for no one supposes that an answer given under such an erroneous belief should be struck out for lack of the warning. Finally, in practical convenience, there is no demand for such rule; witnesses are usually well enough advised beforehand by counsel as to their rights when

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such issues impend, and judges are too much concerned with other responsibilities to be burdened with the provision of individual witnesses' knowledge; the risk of their being in ignorance should fall rather upon the party summoning than the party opposing.

GENERAL VER: I may call Fiscal Parena or the Public Coordinator. I was talking to Atty. Tan to assist me, in the protection of my constitutional rights ...

Nevertheless, it is plain that the old practice was to give such a warning, when it appeared to be needed. But, as general knowledge spread among the masses, and the preparation for testimony became more thorough, this practice seems to have disappeared in England, so far at least as any general rule was concerned.

JUSTICE AGRAVA: Yes.

In the United States, both the rule and the trial custom vary in the different jurisdictions. No doubt a capable and painstaking judge will give the warning, where need appears, but there is no reason for letting a wholesome custom degenerate into a technical rule. 17

GENERAL VER:

But from the environmental facts and circumstances of the Fact-Finding Board hearings, to require such a warning to the witness of his option of refusal to answer incriminatory questions would have been an exercise in absurdity and futility, As is a matter of public knowledge, respondents had concluded in their investigation that Galman was the assassin of the late Senator Aquino. As observed by former Senator Ambrosio Padilla as amicus curiae at the hearing on the merits of August 15, 1985, they were all too eager to testify and make a strong effort to gain support from the Fact-Finding Board and the public for the military version and report that the assassin was Galman who was forthwith gunned down by the military escorts and guards at the tarmac. It would have been ridiculous, if not bordering on officiousness and impropriety, to warn them as the highest ranking military officers of their option of refusal to answer incriminatory questions and also as the majority holds, 18 of their right to remain silent. When respondents generals appeared before the Board, respondent Ver precisely made the opening statement that

ATTY. TAN:

GENERAL VER: I welcome this opportunity, Madame Justice, members of this Honorable Board, Dean, Gentlemen this opportunity to assist ... this Honorable Board in the quest for truth and justice, We all deplore this tragic incident which is now the subject of inquiry, This Board, this Honorable Board is mandated to conduct a free, full and exhaustive investigation into the matter under investigation We all hope that my testimony, madame, will somehow dispel any misconception, or any misinformation surrounding this tragic incident. I am now ready to answer your questions. JUSTICE AGRAVA: Now, General, at the outset, we give the right and the privilege for every witness to be assisted by counsel Do you have your counsel with you this morning? GENERAL VER: I did not bring any counsel, madame, but ... if I need a counsel, madame, I could probably look for... probably ... JUSTICE AGRAVA: Yes?

... if it is necessary:

Your Honor, please, it is part of the function of this office to help the witness if he doesn't have counsel, and so, if the General is willing to have me, I will happily serve as counsel, Your Honor. JUSTICE AGRAVA: All right. GENERAL VER: Thank you. 19 Respondent Olivas likewise testified before the Board in response to its invitation to assist it in determining the true facts and circumstances surrounding the double killing. 6. The majority decision would go around this by asserting without basis in the record that "(A)ll the private respondents, except Generals Ver and Olivas, are members of the military contingent that escorted Sen. Aquino while embarking from the plane that brought him home to Manila on that fateful day. Being at the scene of the crime as such, they were among the first line of suspects in the subject assassination. General Ver on the other hand, being the highest military authority of his co-petitioners labored under the same suspicion and so with General Olivas, the first designated investigator of the tragedy, but whom others suspected, felt and believed to have bungled the case. The papers, especially the foreign media, and rumors from ugly wagging tongues, all point to them as having, in one way or another participated or have something to do, in the alleged conspiracy that brought about the assassination. Could there still be any doubt then that their being asked to testify, was to determine whether they were really conspirators and if so, the extent of their participation in the said conspiracy?" In fact, the respondent court's decision and separate opinions as well as the majority decision at bar and the separate concurring opinions all fail to specify the particular portions of the testimonies of respondents or any specific question and answer that can be in any way deemed to be selfincriminating. Indeed, even if we assumed arguendo that they were warned of their right against self-incrimination and tried absurdly to invoke the same, there is no specific question and answer by way of testimony that could be pointed to them as having been made under compulsion for the simple reason that their testimony was in full support of their own military report that Galman was Aquino's killer and for which they were trying to gain the Board's

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acceptance. In the all too brief and inadequate deliberations held on August 20 and 21, 1985 after the hearing on the merits of August 15, 1985, without reaching a definite conclusion, the ponente reported and I share this view from a cursory examination, for want of material time, of the excluded testimonies only since the excluded documents, records and other evidence produced by them were not before the Court that there is nothing in the excluded testimonies that could in any way be deemed self-incriminatory perse. So there would be no legal basis whatever for their exclusion. But the ponente circulated only last August 26th at noon his draft for dismissal of the petitions which were filed only last month. And its release has been set for August 30th. 7. There has not been enough time to weigh and ponder on the far-reaching consequences of the decision at bar. The decision orders the total and unqualified exclusion of the testimonies and evidence produced before the Fact-Finding Board by the eight respondents charged as accessories "even though (they) failed to claim (their) privilege before giving the incriminating testimony" (citing 21 Am. Jur. 2d. 218). But the cited compilation of American State and Federal Law expressly cautions that "The question whether a witness must claim exemption . on from self-incrimination to be entitled to immunity from subsequent prosecution must in each case be determined in the light of constitutional and statutory provisions in the jurisdiction where the question arises" (21 Am. Jur. 2d. 151). It recites on the same cited page that "Under a statute granting immunity to persons who have been compelled to testify, one who has appeared voluntarily and testified without claiming his privilege against self-incrimination or one who has appeared and testified pursuant to a void subpoena or one addressed to another person, without claiming the privilege, cannot say he has been compelled to testify, and therefore, he is not entitled to immunity." And the necessity of claiming the privilege against self-incrimination before an administrative officer or board such as the Fact Finding Board is recognized to be essential, thus: This is not only equally true as for the case of testimony in a judicial trial, but the explicitness is here even more essential, and particularly where the administrative officer makes a general demand for documents or testimony upon a broad class of topics. The reason is clear. The officer has testimonial powers to extract a general mass of facts, or which some, many, or most will certainly be innocent and unprivileged, some may be privileged communications (e.g., between attorney and client) whose privilege remains unaffected by the statute defining his powers, and some may be privileged as self-incriminating but liable to become demandable by overriding this privilege with a grant of immunity. Among these mass of facts, then, the officer will seek those which are relevant to his administrative inquiry; he cannot know which of them fall within one or another privilege in particular, which of them tend to criminate at all, or to criminate a particular person; if such facts are there, he may not desire or be authorized to exercised the option of granting immunity so as to obtain them; his primary function and power is to obtain the relevant facts at large, and his power to obtain a special and limited class of facts by grant of immunity is only a secondary one, and one which he will not exercise till a cause arises, if even then. For these reasons of practical sense, then, as well as for the inherent requirements of principle already noticed for judicial officers, it is particularly true for an inquiry by an administrative officer that the witness must explicitly claim his privilege, and specifically the privilege against selfincrimination, and must then be overridden in that claim, before immunity can take effect. (VII Wigmore on Evidence, 2282, pp. 517-518)

The concurrence of Justice Vera Cruz sounds even more ominous thus: I believe that where evidence is produced by a witness in accordance with the conditions of the statute granting immunity such as P.D. No. 1886, as amended, its immunity provisions attach instantly and it is entirely immaterial what use the investigation authority makes of it (People ex rel. Massarsky v. Adams, 47 N.Y.S. 2d 375, 62 N.E. 2d 244). Consequently, the evidence, given before the Agrava Board by the accused in the instant cases namely, Generals Fabian Ver and Prospero Olivas, and Sergeants Pablo Martinez, Tomas Fernandez, Leonardo Mojica, Pepito Torio, Prospero Bona and Aniceto Acupido cannot be used against them and this proscription did attach instantly when they testified before the same Board. Verily, the prohibition stands, irrespective of the purpose for which the prosecution would like to use this evidence. The total and unqualified exclusion of the testimony and evidence granted by respondent court and sustained by the majority decision herein refers expressly to the eight respondents charged as accessories. Would not this unprecedented grant of immunity and exclusion of testimony be now claimed by the rest of the twenty-two accused charged as principals except for the lone civilian? As reported by the press, respondent court has suspended its trial and placed the pressure on the Court to rush its decision, as "(T)he so-called 'trial of the century' has been delayed since last week on motion of the defense panel which had argued that the high court's decision on the admissibility of Ver's testimonies was a vital prerequisite to the presentation of witnesses for the defense. " 20 Would this not result in the People holding an empty bag of excluded testimonies and evidence, since to all intents and purposes all respondents-accused testified before the Fact-Finding Board? Would their testimonies be inadmissible for purposes even of impeaching such testimony as they may now give before respondent court? These ponderous questions need not confront us had we but required respondent court to hew to the settled procedure and doctrine of Yatco (supra, par. I hereof) of giving the prosecution a chance to get into the record its relevant evidence until the final determination and consideration of the case, for the unjustified exclusion of evidence of the prosecution may lead to the erroneous acquittal of the accused or dismissal of the charges, from which the People can no longer appeal. 8. The alleged "ambiguous phraseology" of section 5 of P.D. 1886 cited in respondent court's questioned order and bolstered by the majority decision's "novel" conclusion and ruling that the cited section quoted therein 21 requires a claim from the witness of the privilege against selfincrimination but "forecloses under threat of contempt proceedings [under section 4] against anyone who makes such a claim. But the strong testimonial compulsion imposed by section 5 of P.D. 1886 viewed in the light, of the actions provided in section 4, infringes upon the witness' right against self- incrimination. As a rule, such infringement of the constitutional right renders inoperative the testimonial compulsion, meaning, the witness cannot be compelled to answer UNLESS a co-extensive protection in the form of IMMUNITY is offered. Hence, under the oppressive compulsion of P.D. 1886, immunity must in fact be offered to the witness before he can be required to answer, so as to safeguard his sacred constitutional right. But in this case, the compulsion has already produced its desired results the private respondents had all testified without offer of immunity. Their constitutional rights are, therefore, in jeopardy. The only way to cure the law of its unconstitutional effects is to construe it in the manner as if IMMUNITY had in fact been offered. We hold, therefore, that in view of the potent sanctions imposed on the

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refusal to testify or to answer questions under Sec. 4 of P.D. 1886, the testimonies compelled thereby are deemed immunized under Section 5 of the same law. The applicability of the immunity granted by P.D. 1886 cannot be made to depend on a claim of the privilege against self-incrimination which the same law practically strips away from the witness. " Emphasis supplied). It bears emphasis that none of respondents made any such claim against self-incrimination. The "oppressive compulsion" if it may be so-called, consists of a maximum penalty of P200. fine and/or 30 days imprisonment for direct contempt. As indicated, it would be ridiculous for any respondent to 1 make such claim when his testimony was but in full support of their own military theory and report that Galman killed Aquino. The language of the cited section 22 is plain and simple. It excuses no one from testifying and producing books and records but grants him immunity from prosecution (except for perjury) after having invoked his privilege against self-incrimination " There is nothing oppressive about such compulsion in exchange for immunity provided the witness invokes his and aims his privilege a against self-incrimination. In the Court's Resolution of July 9, 1985, Mr. Justice Aquino, voting to dismiss outright the petitions. opined that The clause 'concerning which lie is compelled to testify after having invoked his privilege against self-incrimination' is surplusage. It is in conflict with the first clause which, as already stated, gives immunity to the witness except in case of perjury. So, section 5 should be read as if that clause were not there.This is contrary to the rules of statutory construction that there is no room for construction when tile text is plain and simple, i.e. requires invocation and that the provisions must be taken in context and all the words taken into account and given their full meaning. The Anti-Gambling Law, Act No. 1757, enacted on October 9, 1907 by the Philippine Commission (probably the first Philippine immunity statute) granted such absolute immunity and does not contain the conditional clause requiring that the witness invoke his privilege against self-incrimination. Section 10 of the cited Act reads: Sec. 10. Upon any investigation or proceeding for violation of this Act no person shall be excused from giving testimony upon the ground that such testimony would tend to convict him of a crime, but such testimony cannot be received against him upon any criminal investigation or proceeding; Provided, however, That no person so testifying shall be exempt from prosecution or punishment for perjury committed in the course of any proceeding or investigation had by virtue of [his Act. (1 CPS [Rev. Ed.], 190) But when the statute grants conditional immunity (and not absolute as in the above-quoted section 10 of the Anti-Gambling Act.), then it explicitly contains the cited conditional clause in section 5 of P.D. 1886 granting immunity only when "he is compelled to testify after having invoked his privilege against self-incrimination. " This is but in accord with long-settled Philippine jurisprudence cited above (supra. paragraph 2 hereof), that the witness has an option of refusal to answer incriminatory questions, which he loses ipso facto if he does not invoke the privilege and nevertheless answers the questions. Here, in review of the national and international importance of the case with the country's very prestige at stake, the P.D. added the incentive of offering immunity: "The purpose of immunity provisions is to aid prosecuting officers by inducing criminals or their confederates to turn state's

evidence and tell on each other, to enable prosecuting officers to procure evidence which would otherwise be denied to them because of the constitutional right against self-incrimination, and at the same time to protect every person from gluing testimony which directly or indirectly would be helpful to the prosecution in securing an indictment or a conviction. The provisions for immunity are or should be as broad as or co-extensive with the constitutional provisions granting the privilege against self-incrimination." (21 Am. Jur. 2d. Criminal Law, sec. 148). It is bad enough that no state's evidence turned up to tell on his confederates in exchange of immunity. But to call the cited section " a booby trap for the unsuspecting or unwary witness" unless it was construed as granting absolute and unconditional immunity from the very fact of merely testifying as a witness before the Board without claiming immunity nor giving any incriminatory information that would aid the state to determine the true facts about Aquino's assassination would be a sell-out. It would make a shambles of the letter and spirit as well as the salutary intent and objective of the Decree to ferret out the truth and obtain state witnesses. 9. The truncated and distorted reading of the cited section 5 which consists of a single integrated paragraph and splitting it into two isolated parts so as to allow the privilege against self-incrimination (which was already lost for failure to claim it in the Board hearings) to be resurrected and raised in a much later time frame and "subsequent criminal proceeding" is against all usage and rules of statutory construction, not to mention the long line of above-cited jurisprudence to the contrary. And if there still be doubt, we need only reproduce hereunder the similar wording of Senate Joint Resolution 137 (Public Law 88-202) after which section 5 of P.D. 1886 was patterned. Said law was enacted by the U.S. Congress in December 1963 to empower the Warren Commission to issue subpoenas requiring the testimony of witness and the production of evidence relating to any matter under its investigation. The Report of the President's Commission on the Assassination of President John F. Kennedy in its foreword on page X stated that "In addition, the resolution authorized the Commission to compel testimony from witnesses claiming the privilege against self-incrimination under the fifth amendment to the U.S. Constitution by providing for the grant of immunity to persons testifying under such compulsion." (Emphasis supplied). The cited Public Law reads: (e) No person shall be excused from attending and testifying or from producing books, records, correspondence, documents, or other evidence in obedience to a subpoena, on the ground that the testimony or evidence required of him may tend to incriminate him or subject him to a penalty or forfeiture but no individual shall be prosecuted or subjected to any penalty or forfeiture (except demotion or removal from office) for or on account of any transaction matter, or thing concerning which he is compelled, after having claimed his privilege against selfincrimination to testify or produce evidence, except that such individual so testifying shall not be exempt from prosecution and punishment for perjury committed in so testifying. (Emphasis supplied). 10. As already indicated above, none of the respondents, public and private, has indicated the specific portions of their testimony that they have been "oppressively compelled" to glue, in alleged violation of their privilege against self-incrimination. The reason for this is that they all testified voluntarily and eagerly to support the military report and version that Galman killed Senator Aquino. The Board unanimously rejected the military report and found that the killings were the product of criminal conspiracy. A brief flashback is herein appropriate: Within 60 seconds from his being led away by soldiers from his plane that had just landed at the Manila International Airport on Sunday, August 21, 1983 at past one p.m., former Senator Benigno S.

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Aquino, Jr. who was coming home after three years of self-exile in the U.S. laid dead face down on the tarmac, with his brain smashed by a bullet fired point blank into the back of his head by a murderous assassin. 23 Also lying dead on the tarmac, face up, near the senator was another man, to be Identified much later as Rolando Galman, whom the soldiers admittedly gunned down. The military pointed to him as Aquino's assassin, who had somehow allegedly penetrated the air-tight security of close to 2000 men ringing the airport. The military version met with great public disbelief and skepticism. The first fact-finding commission created under Administrative Order No. 469 dated August 24, 1983 and P.D. 1879 dated August 27, 1983 was the object of several suits charging bias and that the President "had already prejudged the case, by rejecting the version of foreign media that it is one of the soldiers, supposed to guard Aquino, who fatally shot him." 24 The said commission was dissolved per P.D. 1886, dated October 14, 1983 (later amended by P.D. 1903 dated February 8, 1984) which created the ad hoc Fact-Finding Board with plenary powers to investigate "the treacherous and vicious assassination (which) has to all Filipinos become a national tragedy and national shame ... (and) to determine the facts and circumstances surrounding the killing and to allow for a free, unlimited and exhaustive investigation into all the aspects of said tragedy." The Board after extensive hearings, submitted to the President their majority report on October 24, 1984, while the chairman former Court of Appeals Justice Corazon Agrava submitted her minority report one day earlier on October 23, 1984. All five members of the Board unanimously rejected the official military version that Galman was the assassin and instead found that there was criminal conspiracy. Their main difference of opinion is that the four-member majority found twenty-five military men (headed by respondents Generals Ver, Olivas and Luther Custodia) and one civilian "indictable for the premeditated killing of Senator Benigno S. Aquino, Jr. and Rolando Galman at the MIA on August 21, 1983." The chairman's report confined the conspiracy to seven men headed by General Custodia. The Tanodbayan, after conducting the preliminary investigation, adopted the Board's majority report recommending the indictment of the accused as "involved in this conspiracy, either as principals, upon the theory that the act of one is the act of all, or as accessories, for attempting to hide the corpus of the offense." The eight accessories so indicted are the private respondents herein named headed by respondents Ver and Olivas. (The chairman in her minority report had found that "(T)he indications are that the plotters had agreed that only one would be the assassin; that the others can either point to Galman as the killer; or they can state that they did not see the shooting; and that they will give false testimony to mislead and confuse. 11. Only the former lawyers of the Fact-Finding Board created under P.D. No. 1886, consisting of Messrs. Andres R. Narvasa, Bienvenido A. Tan, Jr., Mario E. Ongkiko and Francisco A. Villa have given us the answer that there is nothing incriminatory per se in the testimonies of the respondents, in the Memorandum submitted by them, to wit: I. The so-called 'Galman Theory that it was Rolando Galman who killed Senator Aquino is either true or untrue, a matter the SANDIGANBAYAN will have to resolve. II. If the 'Galman Theory' be true as advocated by the military officers concerned then the testimony of Ver, et al. is true. It is not self-incriminatory. There would then be no reason to exclude it. If, on the other hand, the theory be untrue as the prosecution in turn advocates then the testimony of Ver, et al. is untrue. It is incriminatory of them, because by giving it and thereby

seeking to hide the crime, they incriminated themselves. Withal there would also be no reason to exclude it. Surely, after their plot to deceive the Board had been exposed, they should not now be allowed to use the law to bring about exclusion of the very proof of their deception. In short, the testimonies of respondents could only be deemed incriminating if it be found that they sought thereby to hide or cover up the crime and thus incriminate themselves, as accessories to the murder of Senator Aquino. The former Fact-Finding Board lawyers amplify their theory, as follows: 5. The plain language of Section 5, PD 1886 precludes its interpretation as extending immunity to all testimony or evidence produced before the Board in obedience to subpoena regardless of whether the witness giving such evidence invokes the privilege against self-incrimination or not. — 6. The fact is, the invocation by Ver, et al. of such right would have been self-defeating first, it would have prevented them from presenting evidence in substantiation of the 'Galman Theory,' which they wished the Board to accept; and second, it might have exposed to some extent their real objective, which was to deceive the Board. 7. It would have been incongruous for Ver, et al. to have claimed that their testimony would incriminate them as accessories to the murder of Aquino when they were, by testifying, actually in process of committing that precise crime, becoming accessories. 8. Neither PD 1886 nor the Constitution should be used as a shield for crime, fraud or trickery. 9. The foregoing propositions were ignored by the SANDIGANBAYAN. Instead, with all due respect, it has — a. given Section 5, PD 1886 a strained construction not justified by and contrary to its plain language; b. given Section 20, Article IV, Constitution, a meaning at odds with its plain terms and contrary to relevant decisions of this Honorable Supreme Court; and c. sanctioned the use of legal provisions to shield persons from criminal liability arising from their perfidious testimony before the Fact-Finding Board. There is no legal ground nor justification for the exclusion order. It is for respondent court, upon consideration of the evidence for the People, without any exclusion, and of the evidence for the defense in due course, to render its verdict of guilty or not guilty. With a word of commendation for the former Fact-Finding Board lawyers and former Senator Ambrosio Padilla and Atty. Ramon Gonzales, whose memoranda as amid curiae, have been of great assistance, I vote, accordingly, to grant the petitions at bar and to set aside the questioned exclusion order.

MELENCIO-HERRERA, J., dissenting:

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I vote to grant the Petitions and to reverse the ruling of the Sandiganbayan. The resolution of the issue revolves around the interpretation to be given to Sec. 5 of PD No. 1886, reading as follows: SEC. 5. No person shall be excused from attending and testifying or from producing books, records, correspondence, documents, or other evidence in obedience to a subpoena issued by the Board on the grounds that his testimony or the evidence required of him may tend to incriminate him or subject him to penalty or forfeiture; but his testimony or any evidence produced by him shall not be used against him in connection with any transaction, matter, or thing concerning which he is compelled, after having invoked his privilege against selfincrimination, to testify or produce evidence, except that such an individual so testifying shall not be exempt from prosecution and punishment for perjury committed in so testifying, nor shall he be exempt from demotion or removal from office. (Emphasis supplied)

incriminating in character, is put to a witness in the subsequent proceeding. There should be no automatic "immunity bath" of the entire testimony before the Board for immunity does not extend to such of the evidence as is not privileged. ... But it is established that the privilege against self-incrimination must be invoked at the proper time, and the proper time to invoke it is when a question calling for an incriminating answer is propounded. This has to be so, because before a question is asked there would be no way of telling whether the information to be elicited from the witness is self-incriminating or not. As stated in Jones on Evidence (Vol. 6, pp. 4926-4927), a person who has been summoned to testify 'cannot decline to appear, nor can be decline to be sworn as a witness' and 'no claim or privilege can be made until a question calling for a incriminating answer is asked; at that time, and generally speaking, at that time only, the claim of privilege may be interposed. (Gonzales vs. Sec. of Labor, et al., 94 Phil. 325, 326 [19541).

As I read the law, Section 5 does not require that the person testifying before the Agrava Fact Finding Board (the Board, for short) shall first invoke the privilege against self-incrimination. Under said statute it is obvious that he has no such privilege.

Moreover, the issue actually addresses itself to a question of admissibility or competency of evidence and not to its credibility. Whether the evidence so admitted is to be given any probative weight or credence is best addressed to the Sandiganbayan. It should be recalled that the Board was not unanimous in its assessment of the testimonies given.

But what is the effect of the second part providing that his testimony or any evidence produced by him shall not be used against him in connection with any transaction, matter or thing concerning which he is compelled, after having invoked his privilege against self-incrimination, to testify or produce evidence, except in case of perjury?

There are additional considerations. While the right against self-incrimination is indubitably one of the most fundamental of human rights, Section 5 of PD No. 1886 should be construed so as to effect a practical and beneficent purpose and not in such a manner as to hinder or obstruct the administration of criminal justice.

To my mind, the above portion does not grant to a person who has testified before the Board absolute or total immunity. It should not operate as a shield against criminal liability specially since, under Section 12 of the same Decree, the Board may initiate the filing of the proper complaint if its finding so warrant. Thus,

... Any statute which, while it compels him to testify, protects the witness if he does disclose the circumstances of his offense and the sources from which or the means by which evidence of its commission or of his connection with it may be obtained or made effectual for his subsequent prosecution and conviction is sufficient to comply with the constitutional requirements. Such a statute, however should be construed to effect a practical and beneficent purpose, namely, at the same time to secure the witness in his constitutional rights and to permit the prosecuting officer to secure evidence of a crime. It should not be construed so as to unduly impede, hinder, or obstruct the administration of criminal justice." Brown v. Walker 161 US 591, 16 Sup. Ct. 644, 40 L. Ed. 819. (People ex rel. Hunt vs. Lane, 116 N.Y.S. 990, 132 App. Div. 406)

SEC. 12. The findings of the Board shall be made public. Should the findings warrant the prosecution of any person the Board may initiate the filing of the proper complaint with the appropriate government agency. ... (Emphasis supplied) The inquiry before the Board was a general one. It was not directed against any particular individual or individuals. Private respondents did not testify therein as suspects or as accused persons. There should therefore be no hindrance to a criminal prosecution. It has been held that where an inquiry by a grand jury is a general one and is not directed against a particular individual the fact that on the basis of the information elicited, grounds for a criminal prosecution may evolve against a witness, may not serve as a bar to such prosecution (U.S. v. Okin D.C.N.J., 154 F. Supp. 553; Benson v. Goldstein, 124 N.Y.S. 2d 452) even though he testified before the grand jury without being warned of his constitutional privileges against self- incrimination. (U.S. v. Okin supra) (Emphasis supplied) The right against self incrimination is not a prohibition of inquiry but an option of refusal to answer incriminating questions Cabal vs. Kapunan, 6 SCRA 1059 [1962]). The kernel of the privilege is testimonial compulsion. Whether or not any specific portion of the testimonies of private respondents is incriminating should be determined by the Sandiganbayan itself. The claim against self-incrimination should be invoked when a specific question, which is

The objective in all this exercise is to arrive at the truth. "Though the constitutional provisions for the protection of one who appears ... must be liberally and fairly applied, the interests of the people are also entitled to consideration" (Wharton's Criminal Evidence, 11th Ed., Vol. 1, p. 609; People vs. Coyle 15 N.Y.S. 2d 441, 172 Mis 593). Specially so since, in the language of PD No. 1886 itself, the "treacherous and vicious assassination of former Senator Benigno S. Aquino, Jr. on August 21, 1983, has to all Filipinos become a national tragedy and national shame. " In the interest of eliciting the truth, the excluded testimonies should be admitted, leaving it to the Sandiganbayan to determine which specific questions and answers are to be excluded because they are incriminatory, and which should be given credibility, in found to be competent and admissible.

RELOVA, J., dissenting:

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The issue raised in these two petitions is whether the testimonies and other evidence produced by the private respondents before the Agrava Board may be used as evidence against them before the Sandiganbayan Respondent Sandiganbayan rejected their testimonies on the ground that "under statutes providing in substance that no person shall be excused from testifying or furnishing evidence on the ground that the testimony or evidence may tend to incriminate him, but that no person shall be subject to indictment or prosecution for anything concerning which he may testify or furnish evidence, it has been held that one who testifies concerning criminal offenses when required to do so is entitled to immunity from prosecution even though he fails to claim his privilege before giving the incriminating testimony (21 Am Jur 2d 218). He could not be required, in order to gain the immunity which the law afforded, to go though the formality of an objection or protest which, however made, would be useless (VIII Wigmore 516)." (p. 4, Resolution of Sandiganbayan)

propounded to them unless the inquiry calls for an incriminating answer and a timely objection is raised. In the case at bar, since the private respondents answered questions from the Fact Finding Board without claiming the privilege against self-incrimination they cannot now be allowed to invoke the immunity clause provided in Section 5 of Presidential Decree No. 1886. I vote to grant the petitions.

Footnotes 1 SECOND WHEREAS.

Section 5 of Presidential Decree No. 1886 provides that: SEC. 5. No person shall be excused from attending and testifying or from producing books, records, correspondence, documents, or other evidence in obedience to a subpoena issued by the Board on the ground that his testimony or the evidence required of him may tend to incriminate him or subject him to penalty or forfeiture; but his testimony or any evidence produced by him shall not be used against him in connection with any transaction, matter or thing concerning which he is compelled, after having invoked his privilege against selfincrimination to testify or produce evidence ... (Emphasis supplied.) Pursuant to the above Presidential Decree no one can refuse to testify or furnish evidence before the Fact Finding Board. However, his testimony or any evidence produced shall not be used against him after he invoked the privilege against self-incrimination. Stated differently, the privilege against self-incrimination must be invoked when the question at the hearing before the Board, calling for an incriminating answer is propounded; otherwise, before any question is asked of the witness, he would not know whether the information to be elicited from him is incriminating or not. In the case of Gonzales vs. Secretary of Labor, et al., 94 Phil. 325, this Court held that "the privilege against self-incrimination must be invoked at the proper time, and the proper time to invoke it is when question calling for a incriminating answer is propounded. This has to be so, because before a question is asked there would be no way of telling whether the information to be elicited from the witness is self-incriminating or not. As stated in Jones on Evidence (Vol. 6, pp. 4926-4927), a person who has been summoned to testify 'cannot decline to appear, nor can he decline to be sworn as a witness' and 'no claim of privilege can be made until a question calling for a incriminating answer is asked; at that time, and generally speaking, at that time only, the claim of privilege may properly be interposed.'" And, since it is a personal right to be exercised only by the witness, this privilege against self-incrimination may be waived by him and, when so waived, cannot thereafter be asserted. The privilege is waived by his voluntary offer to testify by, answering questions without objecting and/or claiming the privilege. When private respondents gave testimonies before the Board they were not defendants but witnesses invited and/or subpoenaed "to ventilate the truth thorougly free, independent and dispassionate investigation." They could not refuse or withhold answers to questions

2 Justice Corazon Juliano Agrava being the appointed Chairman of this ad hoc Fact Finding Board. 3 Gen. Fabian C, Ver & Major Gen. Prospero Olivas both appeared and testified in response to an invitation-p. 6, COMMENT. 4 The other private respondents appeared and testified pursuant to subpoenas. 5 Petitioner in G. R. Nos. -71212-13. 6 Exh. VVV, tsn, April 6, 1984-Gen. Ver (1-97); Exh. VVV-1, tsn, April 6, 1984-Gen. Ver (1-54); Exh. VVV-2, tsn, April 10, 1984-Gen. Ver (1- 150); Exh. VVV-3, tsn, April 23, 1984- Gen. Ver (1135): Exh. VVV-4, tsn, April 23, 1984 -Gen. Ver (1-43, 90); Exh. WWW, tsn, June 27, 1984Gen. Olivas (1-87); Exh. WWW-1, tsn, June 27, 1984-Gen. Olivas (1-81, 93); Exh. XXX, tsn, Dec. 22, 1983-Martinez (1-93); Exh. XXX-1, Dec. 22, 1983- Martinez (1-82); Exh. XXX-2, tsn, Jan. 12, 1984-Martinez (1-20, 91); Exh. YYY, tsn, Dec. 28, 1983- Fernandez (1-60); Exh. YYY1, tsn, April 25, 1984-Fernandez (18-86, 104 with page 48); Exh. YYY-2, tsn, April 30, 1984Fernandez (1-27, 80); Exh. ZZZ, tsn, Jan. 17, 1984-Mojica (1- 83); Exh. ZZZ-1, tsn, Jan. 17, 1984-Mojica Exh. ZZZ-2, no date-Mojica (57-106); Exh. ZZZ-3, tsn, March 23, 1984- Kavinta and Mojica (1-7); Exh. ZZZ-4, tsn, April 2, 1984- Mojica and Kavinta (1-43, 112); Exh. AAAA, tsn, Dec. 27, 1983-Torio (1-79); Exh. AAAA-1, tsn, Dec. 27, 1983-Torio (1-25, 62): Exh. AAAA2, tsn, no date-Torio (36- 54); Exh. AAAA-3, tsn, June 21, 1984-Torio (43153); Exh. BBBB, tsn, no date-Bona (80-93): Exh. BBBB-1, tsn, June 28, 1984-Bona (1- 36, 83 without page 15); Exh. BBBB-2 no date-Bona (84-110); Exh. CCCC, tsn, April 25, 1984-Acupido (87104); Exh. CCCC1, tsn, April 30,1984- Acupido (1-46). 7 Annex "B", Petition. 8 Annexes "B" & "C", Petition. 9 Annex "E", Petition. 10 Annex "F", Petition.

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11 Annex "J", Petition.

29 70 C.J. Sec. 875, page 722; Wigmore on Evidence, Volume 8, Section 2252, pages 834835.

12 Petition. page 9. 30 President's Instructions to the Philippine Commission; Philippines Bill of July 1, 1902, Section 5, par. 3-cited in Francisco's Revised Rules of Court in Criminal Procedure, pages 390391.

13 Annex "N", Petition. 14 G.R. Nos. 71212-13.

31 Pinkerton v. Farr W., Va., 220 S.E. 2d 682,687. 15 G.R. Nos. 71208-09. 32 Black Law Dictionary, 5th Edition, 1979. 16 Petition, pages 14-18. 17 17 Comment, pages 8-11.

33 Proceedings of the Convention, Session of November 29, 1972, cited in BERNAS The 1973 Philippine Constitution Notes and Cases, Part 11, 1974 ed., page 745.

18 Ad Hoc Board,

34 In Re Guarina 24 Phil. 375; Paredes v. Executive Secretary, 128 SCRA 6 (1984).

19 Whereas-P.D. 1886.

35 Yu Cong vs. Trinidad, 47 Phil. 385; Automotive Parts & Equipment, 30 SCRA 248 (1969).

20 Sec. 10, 3rd par., P.D. 1886.

36 Araneta vs. Concepcion, 52 O.G. 151.

21 Section 4, P.D. 1886.

37 Lefkowitz vs. Turley, 414 US 70, at 85.

21-A Art. IV, Sec. 20, 1973 Constitution.

38 123 SCRA 583, 603 (1983).

22 Art. IV, Sec. 20, 1973 Constitution.

Concepcion, J.

23 Magtoto vs. Manguera, 63 SCRA 4 (1975); People vs. Jimenez, 71 SCRA 186 (1976); People vs. Buscato, 74 SCRA 30 (1976); People vs. Pena, 80 SCRA 589 (1977); People vs. Page, 77 SCRA 348 (1977); Draculan vs. Donato, 85 SCRA 266 (1978); People vs. Molleda 86 SCRA 667 (1978); People vs. Saldua 87 SCRA 169 (1978); People vs. Beralde, 91 SCRA 125 (1979); People vs. Tampus 96 SCRA 624 (1980); People vs. Comendador, 100 SCRA 155 (1980); People vs. Hipolito, 106 SCRA 610 (1981); People vs. Matilla, 105 SCRA 768 (1981); People vs. Umali, 116 SCRA 23 (1982); Morales, Jr. vs. Enrile, 121 SCRA 538 (1983); People vs. Ramos, 122 SCRA 312(1983); People vs. Jose, 124 SCRA 89 (1983); People vs. Colana, 126 SCRA 23 (1983); People vs. Tuvera, 130 SCRA 168 (1984); People vs. Pizarro, 131 SCRA 624 (1984); People vs, Lachica, 132 SCRA 230 1984); People vs. Pizarro, 131 SCRA 624 (1984).

1 G.R. No. 68113, Aquilino Q. Pimentel , Jr., versus Commission on Elections, et al., promulgated December 19, 1984. Dela Fuente, J. 1 Section 20, Art. IV, 1973 Constitution. 2 Bagadiong vs. Gonzales, 94 SCRA 906. 3 24 SCRA 663. 4 Pascual vs. Board of Medical Examiner, 28 SCRA 344, at 350, citing Chavez.

24 Miranda vs. Arizona, 384 US 436. 5 Marchetti vs. United States, mentioned also in Chavez at page 678. 25 Bernas, the 1973 Philippine Constitution, Cases & Materials, Part II, 1974 Ed., p. 745 citing Session of November 25, 1972; Session of November 27, 1972 of the 1971 Constitutional Convention.

6 President McKinley's Instructions, under date of April 7, 1900. 7 Section 1(18), Art, III. 1935 Constitution: Section 20, Art. IV, 1 973 Constitution.

26 Chavez vs. CA, 24 SCRA 663, citing State vs. Wolfe, 266 N.W. 11 6,125; 104 ALR 464. 27 414 U.S. 70,38 L. Ed. 2d 274 (1973).

8 "... of policy because it would place the witnesses against the strongest temptation to commit perjury, and of humanity because it would be to extort a confession of truth by a kind of duress species and degree of which the law abhors." (Chavez at page 679)

28 6 SCRA 1059.

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9 Ibid, at page 678.

1 At page 6.

10 Kastigar vs. US, 406 US 441, 32 L. Ed. 2d 212.

2 Except respondent General Olivas. who as a member of the bar, represented himself.

11 Chavez, at page 682.

3 97 Phil. 940 (1955); emphasis supplied.

12 Passion Vda. de Garcia vs. Locson, 65 Phil. 689. 695.

4 52 Phil. 807, 816-817 (1929).

13 Section 5, PD No. 1886.

5 Emphasis supplied.

14 "except that such individual so testifying shall not be exempt from prosecution and punishment for perjury committed in so testifying, nor shall he be exempt from demotion or removal from office."

6 Vol- 1, Public Laws of the Phil., p, 1 XIII

15 which is not an immunity against prosecution as that found in RA No. 1379.

8 Gonzales vs. Secretary of Labor, 94 Phil. 325, 326.

16 304 U.S. 458, 464, cited in Chavez at p. 683.

9 Cabal vs. Kapunan, L-19052, December 29, 1962; 21 Am. Jur. 2d p. 383; 98 C.J.S., p. 265; 8 Wigmore, Evidence 1961 ed., p. 406: 3 Wharton's Criminal Evidence, 11th ed., pp. 1959- 1960.

7 24 SCRA 663 (1968).

17 E. Griswold, the Fifth Amendment Today, 1955, cited by Justice Fred Ruiz Castro in his separate opinion in Chavez, at page 689, emphasis supplied.

10 2 SCRA 71 (1961); emphasis supplied.

18 64 Phil. 483.

11 94 Phil. 325.

Patajo, J.

12 94 SCRA 906 (Dec. 28, 1979), First Division, per Pacifico de Castro, J.

1 Section 3, PD No. 1886 empowers the Board to issue subpoena and "other compulsory processes." An invitation is such a compulsory process. The use of the word invitation is a mere euphemism used instead of subpoenas in deference to the exalted position of those "invited." As this Court had occasion to say in Babst vs. National Intelligence Board, 132 SCRA 316, under certain circumstances and invitation to appear for interview are in fact "thinly veiled commands," in short summons or subpoena to appear.

13 "... Any person under investigation for the commission of an offense shall have the right to remain silent and to counsel, and to be informed of such right. No force, violence, threat, intimidation, or any other means which vitiates the free will shall be used against him. Any confession obtained in violation of this section shall be inadmissible in evidence."

In States vs. Sacks, 116 Kan. 148, 225 Pac. 738, the Supreme Court of Kansas said:

15 Miranda vs. Arizona, 384 U.S. 436 (1966).

"The State contends that appellant cannot take advantage of this statute for the reason that no subpoena was issued for him. No subpoena was necessary. 4 Wigmore on Evidence 960; U.S. vs. Armour (DC) 142 Fed 808; Atkinson vs. State, 190 Ind. 1, 128 N.E. 433. The purpose of issuing a subpoena is to get a witness into court. If he appears by request of attorney for either side, it is no longer material whether a subpoena has been issued for him. His testimony is subject to the same objections and should be given the same weight and he is entitled to immunity to the same extent as though he had been served with a subpoena." See also Atkinson vs. State, 190 Ind. 1, 128 N.E. 433.

16 VIII Francisco's Revised Rules of Court, Evidence, Part II, p. 226.

We may assume that if the one invited will not appear in response to said invitation, he would be issued a subpoena. The Board will be remiss of its duty if it does not do so. Those invited certainly know this to be so and, therefore, regard the invitation to be as much a compulsory process as an invitation.

14 Fernando, The Constitution of the Philippines, 2nd Ed., p. 710.

17 VIII Wigmore on Evidence, 2268, sec. 398-400. 18 Separate opinion of the Chief Justice at page 4. 19 Petition in G.R. No. 71208-09, p. 9. 20 Metro Manila Times issue of Aug. 28, 1985. 21 Quoted in full at page 14, majority decision. 22 At page 14, majority decision.

Teehankee, J.

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23 Par. 1.0.0., Board members' Majority Report, composed of Messrs. Luciano S. Salazar, Amado C. Dizon, Dante G. Santos and Ernesto F. Herrera. 24 Petition in G.R. No. 64969, Ramon A. Gonzales vs. Fernando Commission, page 5; G.R. No. 64983, LABAN vs, Chief Justice Enrique M. Fernando, and G.R. No. v4993, Demetrio G. Demetria vs. Hon. E. M. Fernando, etc., et al. The three cases were eventually dismissed as moot and academic by joint Resolution of the Court dated October 20, 1983 "considering that the respondent Chairman and Our members of the respondent Commission created by Administrative Order No. 469 had already tendered their resignations, which the President of the Philippines accepted with deep regret; and that the respondent Commission had been dissolved and superseded by the Commission created by P.D. No. 1886.

On 30 July 1987, the Republic of the Philippines, represented by the Presidential Commission on Good Government (PCGG), assisted by the Solicitor General, filed with the Sandiganbayan Civil Case No. 0035 (PCGG Case No. 35) entitled "Republic of the Philippines vs. Benjamin "Kokoy" Romualdez, et al.", for reconveyance, reversion, accounting, restitution and damages. The complaint was amended several times by impleading new defendants and/or amplifying the allegations therein. Under the Second Amended Complaint, 1 the herein petitioners were impleaded as party defendants. The complaint insofar as pertinent to herein petitioners, as defendants, alleges among others that: 14. Defendants Benjamin (Kokoy) Romualdez and Juliette Gomez Romualdez, acting by themselves and/or in unlawful concert with Defendants Ferdinand E. Marcos and Imelda R. Marcos, and taking undue advantage of their relationship, influence and connection with the latter Defendant spouses, engaged in devices, schemes and strategems to unjuestly enrigh themselves at the expense of Plaintiff and the Filipino people, among others:

Republic of the Philippines SUPREME COURT Manila EN BANC

G.R. No. 89914 November 20, 1991 JOSE F.S. BENGZON JR., ABELARDO TERMULO, JOSE MANTECON, VICENTE MILLS JR., LEONARDO GAMBOA, KURT BACHMANN JR., JOSE V.E. JIMENEZ, ERNESTO CALUYA, AGERICO UNGSON, SUSAN ROXAS, ELVIE CASTILLO, and CYNTHIA SABIDO LIMJAP, petitioners, vs. THE SENATE BLUE RIBBON COMMITTEE AND ITS MEMBERS, represented by and through the CHAIRMAN, HON. WIGBERTO TAÑADA, respondents, JOSE S. SANDEJAS, intervenor. Bengzon, Zarraga, Narciso, Cudala, Pecson & Bengson for petitioners. Balgos & Perez for intervening petitioner.

(a) Obatained, with the active collaboration of Defendants Sene J. Gabaldon, Mario D. Camacho, Mamerto Nepomuceno, Carlos J. Valdez, Cesar C. Zalamea and Francisco Tantuico, Atty. Jose Bengzon, Jr. and his law partners, namely: Edilberto S. Narciso, Jr., Jose Vicente E. Jimenez, Amando V. Faustino, Jr., and Leonardo C. Cruz; Jose S. Sandejas and his fellow senior managers of FMMC/PNI Holdings groups of companies such as Leonardo Gamboa, Vicente T. Mills, Jr., Jose M. Mantecon, Abelardo S. Termulo, Rex C. Drilon II and Kurt Bachmann, Jr., control of some of the biggest business enterprises in the Philippines, such as the Manila Corporation (MERALCO), Benguet Consolidated and the Philippine Commercial International Bank (PCI Bank) by employing devious financial schemes and techniques calculated to require the massive infusion and hemorrhage of government funds with minimum or negligible "cashout" from Defendant Benjamin Romualdez... xxx

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(m) manipulated, with the support, assistance and collaboration of Philgurantee officials led by chairman Cesar E.A. Virata and the Senior managers of FMMC/PNI Holdings, Inc. led by Jose S. Sandejas, Jr., Jose M. Mantecom and Kurt S. Bachmann, Jr., among others, the formation of Erectors Holdings, Inc. without infusing additional capital solely for the purpose of Erectors Incorporated with Philguarantee in the amount of P527,387,440.71 with insufficient securities/collaterals just to enable Erectors Inc, to appear viable and to borrow more capitals, so much so that its obligation with Philgurantee has reached a total of more than P2 Billion as of June 30, 1987.

Eddie Tamondong and Antonio T. Tagaro for respondents.

PADILLA, J.: This is a petition for prohibition with prayer for the issuance of a temporary restraining order and/or injuective relief, to enjoin the respondent Senate Blue Ribbon committee from requiring the petitioners to testify and produce evidence at its inquiry into the alleged sale of the equity of Benjamin "Kokoy" Romualdez to the Lopa Group in thirty-six (36) or thirty-nine (39) corporations.

(n) at the onset of the present Administration and/or within the week following the February 1986 People's Revolution, in conspiracy with, supoort, assistance and collaboration of the abovenamed lawyers of the Bengzon Law Offices, or specifically Defendants Jose F.S. Bengzon, Jr., V.E. Jimenez, Amando V. Faustino, Jr., and Edilberto S. Narciso, Jr., manipulated, shcemed, and/or executed a series of devices intended to conceal and place, and/or for the purpose of concealing and placing, beyond the inquiry and jurisdiction of the Presidential Commission on Good Government (PCGG) herein Defendant's individual and collective funds, properties, and assets subject of and/or suited int he instant Complaint.

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(o) manuevered, with the technical know-how and legalitic talents of the FMMC senior manager and some of the Bengzon law partners, such as Attys. Jose F.S. Bengzon, Jr., Edilberto S. Narciso, Jr., Amando V. Faustino, Jose Vicente E. Jimenez and Leonardo C. Cruz, the purported sale of defendant Benjamin Romualdez's interests in the (i) Professional Managers, (ii) A & E International Corporation (A & E), (iii) First Manila Managerment Corporation (FMMC), (iv) Philippine World Travel Inc. (PWTI) and its subsidiaries consisting of 36 corporations in all, to PNI Holdings, Inc. (wjose purported incorporations are all members of Atty. Jose F.S. Bengzon's law firm) for only P5 million on March 3, 1986 or three days after the creation of the Presidential Commission on Good Government on February 28, 1986, for the sole purpose of deceiving and preempting the Government, particularly the PCGG, and making it appear that defendant Benjamin Romualdez had already divested himself of his ownership of the same when in truth and in fact, his interests are well intact and being protected by Atty. Jose F.S. Bengzon, Jr. and some of his law partners, together with the FMMC senior managers who still control and run the affiars of said corporations, and in order to entice the PCGG to approve the said fictitious sale, the above-named defendants offered P20 million as "donation" to the Government;

First Manila Managerment Corp. group" supposedly owned by them although the truth is that all the said firms are still beneficially owned by defendants Benjamin Romualdez.

(p) misused, with the connivance, support and technical assitance of the Bengzon law firm represented by Atty. Jose F.S. Bengzon, Jr. as legal counsel, together with defendants Cesar Zalamea, Antonio Ozaeta, Mario D. Camacho amd Senen J. Gabaldon as members of the Board of Directors of the Philippine Commercial International bank (PCIB), the Meralco Pension Fund (Fund, for short) in the amount of P25 million by cuasing it to be invested in the PCIB and through the Bank's TSG, assigned to PCI Development and PCI Equity at 50% each, the Fund's (a) 8,028.011 common shares in the Bank and (b) "Deposit in Subscription" in the amount of P4,929.972.50 but of the agreed consideration of P28 million for the said assignment, PCI Development and PCI Equity were able to pay only P5,500.00 downpayment and the first amortization of P3,937,500.00 thus prompting the Fund to rescind its assignment, and the consequent reversion of the assigned brought the total shareholding of the Fund to 11,470,555 voting shares or 36.8% of the voting stock of the PCIB, and this development (which the defendants themselves orchestrated or allowed to happen) was used by them as an excuse for the unlawful dismantling or cancellation of the Fund's 10 million shares for allegedly exceeding the 30-percent ceiling prescribed by Section 12-B of the General Banking Act, although they know for a fact that what the law declares as unlawful and void ab initio are the subscriptions in excess of the 30% ceiling "to the extent of the excess over any of the ceilings prescribed ..." and not the whole or entire stockholding which they allowed to stay for six years (from June 30, 1980 to March 24, 1986);

On 13 September 1988, the Senate Minority Floor Leader, Hon. Juan Ponce Enrile delivered a speech "on a matter of personal privilege" before the

(q) cleverly hid behind the veil of corporate entity, through the use of the names and managerial expertise of the FMMC senior manager and lawyers identified as Jose B. Sandejas, Leonardo Gamboa, Vicente T. Mills, Abelardo S, Termulo, Edilberto S. Narciso, Jr., Jose M. Mantecon, Rex C. Drilon II, Kurt Bachmann, Jr. together with the legal talents of corporate lawyers, such as Attys. Jose F.S. Bengzon, Jr., Jose V.E. Jimenez, Amando V. Faustino, Jr., and Leonardo C. Cruz, the ill-gotten wealth of Benjamin T. Romualdez including, among others, the 6,229,177 shares in PCIB registered in the names of Trans Middle East Phils. Equities, Inc. and Edilberto S. Narciso, Jr. which they refused to surrender to PCGG despite their disclosure as they tried and continue to exert efforts in getting hold of the same as well as the shares in Benguet registered in the names of Palm Avenue Holdings and Palm Avenue Realty Development Corp. purportedly to be applied as payment for the claim of P70 million of a "merger company of the

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On 28 September 1988, petitioner (as defendants) filed their respective answers. 2 Meanwhile, from 2 to 6 August 1988, conflicting reports on the disposition by the PCGG of the "Romualdez corporations" were carried in various metropolitan newspapers. Thus, one newspaper reported that the Romuladez firms had not been sequestered because of the opposition of certain PCGG officials who "had worked prviously as lawyers of the Marcos crony firms." Another daily reported otherwise, while others declared that on 3 March 1986, or shortly after the EDSA February 1986 revolution, the Romualdez companies" were sold for P5 million, without PCGG approval, to a holding company controlled by Romualdez, and that Ricardo Lopa, the President's brother-in-law, had effectively taken over the firms, even pending negotiations for the purchase of the corporations, for the same price of P5 million which was reportedly way below the fair value of their assets. 3

Senate on the alleged "take-over personal privilege" before the Senate on the alleged "take-over of SOLOIL Incorporated, the flaship of the First Manila Management of Companies (FMMC) by Ricardo Lopa" and called upon "the Senate to look into the possible violation of the law in the case, particularly with regard to Republic Act No. 3019, the Anti-Graft and Corrupt Practices Act." 4

On motion of Senator Orlando Mercado, the matter was referred by the Senate to the Committee on Accountability of Public Officers (Blue Ribbon Committee). 5

Thereafter, the Senate Blue Ribbon Committee started its investigation on the matter. Petitioners and Ricardo Lopa were subpoenaed by the Committee to appear before it and testify on "what they know" regarding the "sale of thirty-six (36) corporations belonging to Benjamin "Kokoy" Romualdez." At the hearing held on 23 May 1989, Ricardo Lopa declined to testify on the ground that his testimony may "unduly prejudice" the defendants in Civil Case No. 0035 before the Sandiganbayan. Petitioner Jose F.S. Bengzon, Jr. likewise refused to testify involing his constitutional right to due process, and averring that the publicity generated by respondents Committee's inquiry could adversely affect his rights as well as those of the other petitioners who are his co-defendants in Civil Case No. 0035 before the Sandiganbayan. The Senate Blue Ribbon Committee, thereupon, suspended its inquiry and directed the petitioners to file their memorandum on the constitutional issues raised, after which, it issued a resolution 6 dated 5 June 1989 rejecting the petitioner's plea to be excused from testifying, and the Committee voted to pursue and continue its investigation of the matter. Senator Neptali Gonzales dissented. 7

Claiming that the Senate Blue Ribbon Committee is poised to subpoena them and required their attendance and testimony in proceedings before the Committee, in excess of its jurisdiction and legislative purpose, in clear and blatant disregard of their constitutional rights, and to their grave and irreparable damager, prejudice and injury, and that there is no appeal nor any other plain, speedy and adequate remedy in the ordinary course of law, the petitioners filed the present petition for prohibition with a prayer for temporary restraning order and/or injunctive relief.

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Meanwhile, one of the defendants in Civil Case No. 0035 before the Sandiganbayan, Jose S. Sandejas, filed with the Court of motion for intervention, 8

which the Court granted in the resolution 9 of 21 December 1989, and required the respondent Senate Blue Ribbon Committee to comment on the petition in intervention. In compliance, therewith, respondent Senate Blue Ribbon Committee filed its comment 10 thereon. Before discussing the issues raised by petitioner and intervenor, we will first tackle the jurisdictional question raised by the respondent Committee. In its comment, respondent Committee claims that this court cannot properly inquire into the motives of the lawmakers in conducting legislative investigations, much less cna it enjoin the Congress or any its regular and special commitees — like what petitioners seek — from making inquiries in aid of legislation, under the doctrine of separation of powers, which obtaines in our present system of government.

only lead to dialectics and barren legal questions and to sterile conclusions unrelated to actualities. Narrowed as its function is in this manner, the judiciary does not pass upon questions of wisdom, justice or expediency of legislation. More thatn that, courts accord the presumption of constitutionality to legislative enactments, not only because the legislature is presumed to abide by the Constitution but also becuase the judiciary in the determination of actual cases and controversies must reflect the wisdom and justice of the people as expressed through their representatives in the executive and legislative departments of the government. The "allocation of constituional boundaries" is a task that this Court must perfomr under the Constitution. Moreowever, as held in a recent case, 12 "(t)he political question doctrine neither interposes an obstacle to judicial determination of the rival claims. The jurisdiction to delimit constitutional boundaries has been given to this Court. It cannot abdicate that obligation mandated by the 1987 Constitution, although said provision by no means does away with kthe applicability of the principle in appropriate cases." 13

The contention is untenable. In Angara vs. Electoral Commission, 11 the Court held: The separation of powers is a fundamental principle in our system of government. It obtains not hrough express provision but by actual division in our Constitution. Each department of the government has exclusive cognizance of matters wihtin its jurisdiction, and is supreme within its own sphere. But it does not follow from the fact that the three powers are to be kept separate and distinct that the Constitution intended them to be absolutely unrestrained and independent of each other. The Constitution has provided for an elaborate system of checks and balances to secure coordination in the workings of the various departments of the government... xxx

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The Court is thus of the considered view that it has jurisdiction over the present controversy for the purpose of determining the scope and extent of the power of the Senate Blue Ribbon Committee to conduct inquiries into private affirs in purported aid of legislation.

Coming to the specific issues raised in this case, petitioners contend that (1) the Senate Blue Ribbon Committee's inquiry has no valid legislative purpose, i.e., it is not done in aid of legislation; (2) the sale or disposition of hte Romualdez corporations is a "purely private transaction" which is beyond the power of the Senate Blue Ribbon Committee to inquire into; and (3) the inquiry violates their right to due process.

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But in the main, the Constitution has blocked out with deft strokes and in bold lines, allotment of power to the executive, the legislative and the judicial departments of the government. The ovelapping and interlacing of funcstions and duties between the several deaprtments, however, sometimes makes it hard to say just where the political excitement, the great landmarks of the Constitution are apt to be forgotten or marred, if not entirely obliterated, in cases of conflict, the judicial departments is the only constitutional organ which can be called upon to determine the proper allocation of powers between the several departments and among the integral or constituent units thereof.

The 1987 Constition expressly recognizes the power of both houses of Congress to conduct inquiries in aid of legislation. 14

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The power of both houses of Congress to conduct inquiries in aid of legislation is not, therefore, absolute or unlimited. Its exercise is circumscribed by the

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Thus, Section 21,

Article VI thereof provides: The Senate or the House of Representatives or any of its respective committee may conduct inquiries in aid of legislation in accordance with its duly published rules of procedure. The rights of persons appearing in or affected by such inquiries shall be respected. 15

afore-quoted provision of the Constitution. Thus, as provided therein, the investigation must be "in aid of legislation in accordance with its duly published

The Constitution is a definition of the powers of government. Who is to determine the nature, scope and extent of such powers? The Constitution itself has provided for the instrumentality of the judiciary as the rational way. And when the judiciary mediates to allocate constitutional boundaries; it does not assert any superiority over the other departments; it does not inr eality nullify or invalidate an act of the legislature, but only asserts the solemn and sacred obligation assigned to it by tyhe Constitution to determine conflicting claims of authority under the Constitution and to established for the parties in an actual controversy the rights which that instrument secures and guarantess to them. This is in thruth all that is involved in what is termed "judicial supremacy" which properly is the power of judicial review under the Constitution. Even the, this power of judicial review is limited to actual cases and controversies to be exercised after full opportunity of argument by the parties, and limited further to the constitutional question raised or the very lis mota presented. Any attempt at abstraction could

rules of procedure" and that "the rights of persons appearing in or affected by such inquiries shall be respected." It follows then that the rights of persons under the Bill of Rights must be respected, including the right to due process and the right not to be compelled to testify against one's self.

The power to conduct formal inquiries or investigations in specifically provided for in Sec. 1 of the Senate Rules of Procedure Governing Inquiries in Aid of Legislation. Such inquiries may refer to the implementation or re-examination of any law or in connection with any proposed legislation or the formulation of future legislation. They may also extend to any and all matters vested by the Constitution in Congress and/or in the Seante alone.

As held in Jean L. Arnault vs. Leon Nazareno, et al., 16

the inquiry, to be within the jurisdiction of the legislative body making it, must be material or necessary to the exervise of a power in it vested by the Constitution, such as to legislate or to expel a member.

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Under Sec. 4 of the aforementioned Rules, the Senate may refer to any committee or committees any speech or resolution filed by any Senator which in tis judgment requires an appropriate inquiry in aid of legislation. In order therefore to ascertain the character or nature of an inquiry, resort must be had to the speech or resolution under which such an inquiry is proposed to be made. A perusal of the speech of Senator Enrile reveals that he (Senator Enrile) made a statement which was published in various newspapers on 2 September 1988 accusing Mr. Ricardo "Baby" Lopa of "having taken over the FMMC Group of Companies." As a consequence thereof, Mr. Lopa wrote a letter to Senator Enrile on 4 September 1988 categorically denying that he had "taken over " the FMMC Group of Companies; that former PCGG Chairman Ramon Diaz himself categorically stated in a telecast interview by Mr. Luis Beltran on Channel 7 on 31 August 1988 that there has been no takeover by him (Lopa); and that theses repeated allegations of a "takeover" on his (Lopa's) part of FMMC are baseless as they are malicious. The Lopa reply prompted Senator Enrile, during the session of the Senate on 13 September 1988, to avail of the privilege hour, 17 so that he could repond to the said Lopa letter, and also to vindicate his reputation as a Member of the Senate of the Philippines, considering the claim of Mr. Lopa that his (Enrile's) charges that he (Lopa) had taken over the FMMC Group of Companies are "baseless" and "malicious." Thus, in his speech, 18Senator Enrile said, among others, as follows:

moment we insist on doing normally our assigned task. In view of the impending threat, and to avoid any untoward incident we decided to temporarily suspend our work until there is a more categorical stand of this Commission in view of the seemingly influential represetation being made by SOLOIL for us not to continue our work." Another pertinent portion of the same memorandum is paragraph five, which reads as follows, and I quote Mr. President: "The President, Mr. Gamboa, this is, I understand, the President of SOLOIL, and the Plant Superintendent, Mr. Jimenez including their chief counsel, Atty. Mandong Mendiola are now saying that there have been divestment, and that the new owner is now Mr. Ricardo Lopa who according to them, is the brother-in-law of the President. They even went further by telling us that even Peping Cojuangco who we know is the brother of her excellency is also interested in the ownership and management of SOLOIL. When he demanded for supporting papers which will indicate aforesaid divestment, Messrs. Gamboa, Jimenez and Mendiola refused vehemently to submit these papers to us, instead they said it will be submitted directly to this Commission. To our mind their continuous dropping of names is not good for this Commission and even to the President if our dersire is to achieve respectability and stability of the government." The contents of the memorandum of then Governor and now Congressman Jose Ramirez were personally confirmed by him in a news interview last September 7, 1988.

Mr. President, I rise this afternnon on a matter of personal privilege; the privilege being that I received, Mr. President, a letter dated September 4, 1988, signed by Mr. ricardo A. Lopa, a.k.a. or Baby Lopa, wherein he denied categorically that he has taken over the First Manila Management Group of Companies which includes SOLOIL Incorporated.

xxx xxxx xxx

xxx xxxx xxx

Mr. Lopa states in the last paragraph of the published letter and I quote him:

In answer to Mr. Lopa, I will quote pertinent portions from an Official Memorandum to the Presidential Commission of Good Government written and signed by former Governor, now Congressman Jose Ramirez, in his capacity as head of the PCGG Task Force for Region VIII. In his memorandum dated July 3, 1986, then Governor Ramirez stated that when he and the members of his task force sought to serve a sequestration order on the management of SOLOIL in Tanauan, Leyte, management officials assured him that relatives of the President of the Philippines were personally discussing and representing SOLOIL so that the order of sequestration would be lifted and that the new owner was Mr. Ricardo A. Lopa.

12. As of this writing, the sales agreement is under review by the PCGG solely to determine the appropriate price. The sale of these companies and our prior rigtht to requires them have never been at issue.

I will quote the pertinent portions in the Ramire's memorandum. The first paragraph of the memorandum reads as follows and I quote, Mr. President:

Mr. President, it may be worthwhile for the Senate to look into the possible violation of the law in the case particularly with regard to Republic Act No. 3019, the Anti-Graft and Corrupt Practices Act, Section 5 of which reads as follows and I quote:

"Our sequestration work of SOLOIL in Tanauan, Leyte was not heeded by management because they said another representation was being made to this Commission for the ventual lifting of our sequestrationorder. They even assured us that Mr. Ricardo Lopa and Peping Cojunangco were personally discussing and representing SOLOIL, so the order of sequestration will finally be lifted. While we attempted to carry on our order, management refused to cooperate and vehemently turned down our request to make available to us the records of the company. In fact it was obviously clear that they will meet us with forcethe

Sec. 5. Prohibition on certain relatives. — It shall be unlawful for the spouse or for nay relative, by consanguinity or affinity, within the third civil degree, of the President of the Philippines, the Vice-President of the Philippines, the President of the Senate, or the Speaker of the House of Representatives, to intervene directly or indirectly, in any business, transaction, contract or application with the Government: Provided, that this section shall not apply to any person who prior to the assumption of office of any of the above officials to whom he is related, has been already dealing with the Government along the same line of business, nor to any transaction,

Also relevant to this case, Mr. President, is a letter of Mr. Ricardo Lopa himself in August 11, 1988 issue of the newspaper Malaya headlined "On Alleged Takeover of Romualdez Firms."

Perhaps I could not make it any clearer to Mr. Lopa that I was not really making baseless and malicious statements. Senator Enrile concluded his privilege speech in the following tenor:

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contract or application filed by him for approval of which is not discretionary on the part of the officials concerned but depends upon compliance with requisites provided by law, nor to any act lawfully performed in an official capacity or in the exercise of a profession.

Resolved by the Senate, That the activities of the Presidential Commission on Good Government be investigated by the appropriate Committee in connection with the implementation of Section 26, Article XVIII of the Constitution. 19

Mr. President, I have done duty to this Senate and to myself. I leave it to this august Body to make its own conclusion. Thus, the inquiry under Senate Resolution No. 212 is to look into the charges against the PCGG filed by the three (3) stockholders of Oriental Petroleum

Verily, the speech of Senator Enrile contained no suggestion of contemplated legislation; he merely called upon the Senate to look into a possible violation of Sec. 5 of RA No. 3019, otherwise known as "The Anti-Graft and Corrupt Practices Act." I other words, the purpose of the inquiry to be conducted by respondent Blue Ribbon commitee was to find out whether or not the relatives of President Aquino, particularly Mr. ricardo Lopa, had violated the law in connection with the alleged sale of the 36 or 39 corporations belonging to Benjamin "Kokoy" Romualdez to the Lopaa Group. There appears to be, therefore, no intended legislation involved.

in connection with the implementation of Section 26, Article XVIII of the Constitution.

The Court is also not impressed with the respondent Committee's argument that the questioned inquiry is to be conducted pursuant to Senate Resolution No. 212. The said resolution was introduced by Senator Jose D. Lina in view of the representaions made by leaders of school youth, community groups and youth of non-governmental organizations to the Senate Committee on Youth and Sports Development, to look into the charges against the PCGG filed by three (3) stockholders of Oriental petroleum, i.e., that it has adopted a "get-rich-quick scheme" for its nominee-directors in a sequestered oil exploration firm.The pertinent portion of Senate Resolution No. 212 reads as follows:

It appeals, therefore, that the contemplated inquiry by respondent Committee is not really "in aid of legislation" becuase it is not related to a purpose

xxx

xxx

xxx

WHEREAS, recent developments have shown that no less than the Solicitor-General has stated that the PCGG Chairman and at least three Commissioners should resign and that the agency should rid itself of "ineptness, incompetence and corruption" and that the Sandiganbayan has reportedly ordered the PCGG to answer charges filed by three stockholders of Oriental Petroleum that it has adopted a "get-rich-quick scheme" for its nominee-directors in a sequestered oil exploration firm; WHEREAS, leaders of school youth, community groups and youth of non-governmental organization had made representations to the Senate Committee on Youth and Sports Development to look into the charges against the PCGG since said agency is a symbol of the changes expected by the people when the EDSA revolution took place and that the ill-gotten wealth to be recovered will fund priority projects which will benefit our people such as CARP, free education in the elementary and secondary levels reforestration, and employment generation for rural and urban workers; WHEREAS, the government and the present leadeship must demonstrate in their public and private lives integrity, honor and efficient management of government services lest our youth become disillusioned and lose hope and return to an Idelogy and form of government which is repugnant to true freedom, democratic participation and human rights: Now, therefore, be it.

It cannot, therefore, be said that the contemplated inquiry on the subject of the privilege speech of Senator Juan Ponce Enrile, i.e., the alleged sale of the 36 (or 39) corporations belonging to Benjamin "Kokoy" Romualdez to the Lopa Group is to be conducted pursuant to Senate Resolution No. 212 because, firstly, Senator Enrile did not indict the PCGG, and, secondly, neither Mr. Ricardo Lopa nor the herein petitioners are connected with the government but are private citizens.

within the jurisdiction of Congress, since the aim of the investigation is to find out whether or not the ralatives of the President or Mr. Ricardo Lopa had violated Section 5 RA No. 3019, the "Anti-Graft and Corrupt Practices Act", a matter that appears more within the province of the courts rather than of the legislature. Besides, the Court may take judicial notice that Mr. Ricardo Lopa died during the pendency of this case. In John T. Watkins vs. United States, 20

it was held held:

... The power of congress to conduct investigations in inherent in the legislative process. That power is broad. it encompasses inquiries concerning the administration of existing laws as well as proposed, or possibly needed statutes. It includes surveys of defects in our social,economic, or political system for the purpose of enabling Congress to remedy them. It comprehends probes into departments of the Federal Government to expose corruption, inefficiency or waste. But broad asis this power of inquiry, it is not unlimited. There is no general authority to expose the private affairs ofindividuals without justification in terms of the functions of congress. This was freely conceded by Solicitor General in his argument in this case. Nor is the Congress a law enforcement or trial agency. These are functions of the executive and judicial departments of government. No inquiry is an end in itself; it must be related to and in furtherance of a legitimate task of Congress. Investigations conducted soly for the personal aggrandizement of the investigators or to "punish" those investigated are indefensible. (emphasis supplied) It can not be overlooked that when respondent Committee decide to conduct its investigation of the petitioners, the complaint in Civil No. 0035 had already been filed with the Sandiganbayan. A perusal of that complaint shows that one of its principal causes of action against herein petitioners, as defendants therein, is the alleged sale of the 36 (or 39) corporations belonging to Benjamin "Kokoy" Romualdez. Since the issues in said complaint had long been joined by the filing of petitioner's respective answers thereto, the issue sought to be investigated by the respondent Commitee is one over which jurisdiction had been acquired by the Sandiganbayan. In short, the issue had been pre-empted by that court. To allow the respondent Committee to conduct its own investigation of an issue already before the Sandiganbayan would not only pose the possibility of conflicting judgments betweena legislative commitee and a judicial tribunal, but if the Committee's judgment were to be reached before that of the Sandiganbayan, the possibility of its influence being made to bear on the ultimate judgment of the Sandiganbayan can not be discounted.

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In fine, for the rspondent Committee to probe and inquire into the same justiciable controversy already before the Sandiganbayan, would be an encroachment into the exclusive domain of judicial jurisdiction that had much earlier set in. In Baremblatt vs. United States, 21 it was held that: Broad as it is, the power is not, howevern, without limitations. Since congress may only investigate into those areas in which it may potentially legislate or appropriate, it cannot inquire into matters which are within the exclusive province of one of the other branches of the government. Lacking the judicial power given to the Judiciary, it cannot inquire into mattes that are exclusively the concern of the Judiciary. Neither can it suplant the Executive in what exclusively belongs to the Executive. ... Now to another matter. It has been held that "a congressional committee's right to inquire is 'subject to all relevant limitations placed by the Constitution on governmental action,' including "'the relevant limitations of the Bill of Rights'." 22

In another case —

We did not therein state that since he is not an accused and the case is not a criminal case, Cabal cannot refuse to take the witness stand and testify, and that he can invoke his right against self-incrimination only when a question which tends to elicit an answer that will incriminate him is propounded to him. Clearly then, it is not the characeter of the suit involved but the nature of the proceedings that controls. The privilege has consistenly been held to extend to all proceedings sanctioned by law and to all cases in which punishment is sought to be visited upon a witness, whether a party or not. We do not here modify these doctrines. If we presently rule that petitioners may not be compelled by the respondent Committee to appear, testify and produce evidenc before it, it is only becuase we hold that the questioned inquiry is not in aid of legislation and, if pursued, would be violative of the principle of separation of powers between the legislative and the judicial departments of government, ordained by the Constitution. WHEREFORE, the petition is GRANTED. The Court holds that, under the facts, including the circumtance that petitioners are presently impleaded as defendants in a case before the Sandiganbayan, which involves issues intimately related to the subject of contemplated inquiry before the respondet Committee, the respondent Senate Blue Ribbon Committee is hereby enjoined from compelling the petitioners and intervenor to testify before it and produce evidence at the said inquiry. SO ORDERED.

... the mere semblance of legislative purpose would not justify an inquiry in the face of the Bill of Rights. The critical element is the exeistence of, and the weight to be ascribed to, the interest of the Congress in demanding disclosures from an unwilling witness. We cannot simply assume, however, that every congressional investigation is justified by a public need that over-balances any private rights affected. To do so would be to abdicate the responsibility

Fernan, C.J., Melencio-Herrera, Feliciano, Bidin, Griño-Aquino, Medialdea, Regalado, Davide, Jr. and Romero, JJ., concur.

placed by the Constitution upon the judiciary to insure that the Congress does not unjustifiably encroah upon an individual's right to privacy nor abridge his liberty of speech, press, religion or assembly. 23

One of the basic rights guaranteed by the Constitution to an individual is the right against self-incrimination. 24

Thir right constured as the right to remain completely silent may be availed of by the accused in a criminal case; but kit may be invoked by other witnesses only as questions are asked of them.

Separate Opinions

This distinction was enunciated by the Court in Romeo Chavez vs. The Honorable Court of Appeals, et al. 25thus — PARAS, J., concurring: Petitioner, as accused, occupies a different tier of protection from an ordinary witness. Whereas an ordinary witness may be compelled to take the witness stand and claim the privilege as each question requiring an incriminating answer is hot at him, an accused may altother refuse to take the witness stand and refuse to answer any all questions.

I concur principally because any decision of the respondent committee may unduly influence the Sandiganbayan GUTIERREZ, JR., J., dissenting:

Moreover, this right of the accused is extended to respondents in administrative investigations but only if they partake of the nature of a criminal proceeding or analogous to a criminal proceeding. In Galman vs. Pamaran,26 the Court reiterated the doctrine in Cabal vs. Kapuanan (6 SCRA 1059) to illustrate the right of witnesses to invoke the right against selfincrimination not only in criminal proceedings but also in all other types of suit It was held that:

I regret that I must express a strong dissent the Court's opinion in this case. The Court is asserting a power which I believe we do not possess. We are encroaching on the turf of Congress. We are prohibiting the Senate from proceeding with a consitutionally vested function. We are stopping the Senate Blue Ribbon Committee from exercising a legislative prerogative — investigations in aid of legislation. We do so becuase we somehow feel that the purported aim is not the real purpose.

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The Court has no power to second guess the motives behind an act of a House of Congress. Neither can we substitute our judgment for its judgment on a matter specifically given to it by the Constitution. The scope of the legislative power is broad. it emcompasses practically every aspect of human or corporate behavior capable of regulation. How can this Court say that unraveling the tangled and secret skeins behind the acquisition by Benjamin "Kokoy" Romualdez of 39 corporations under the past regime and their sudden sale to the Lopa Group at the outset of the new dispensation will not result in useful legislation? The power of either House of Congress to conduct investigations is inherent. It needs no textual grant. As stated in Arnault v. Nazareno, 87 Phil. 29 (1950) Our form of government being patterned after the American system — the framers of our Constitution having drawn largely from American institutions and practices — we can, in this case, properly draw also from American precedents in interpreting analogous provisions of our Constitution, as we have done in other cases in the past. Although there is no provision in the Constitution expressly investing either House of Congress with power to make investigations and exact testimony to the end that it may exercise its legislative functions advisely and effectively, such power is so far incidental to the legislative function as to be implied. In other words, the power of inquiry — with process to enforce it — is an essential and appropriate auxiliary to the legislative function. A legislative body cannot legislate wisely or effectively in the absence of information respecting the conditions which the legislation is intended to affect or change: and where the legislative body does not itself possess the requisite information — which is not infrequently true — recourse must be had to others who do possess it. ... (At p. 45) The framers of the present Constitution were not content to leave the power inherent, incidental or implied. The power is now expressed as follows: Sec. 21 — The Senate or the House of Representatives or may of its respective committees may conduct inquiries in aid of legialtion in accordance with its duly published rules of precedure. The rights of persons appearing in or affected by such inquiries shall be respected. Apart from the formal requirement of publishing the rules of procedure, I agree that there are three queries which, if answered in the affirmative, may give us cause to intervene. First, is the matter being investigated one on which no valid legislation could possibly be enacted? Second, is Congress encroaching on terrain which the Constitution has reserved as the exclusive domain of another branch of government? And third, is Congress violating the basic liberties of an individual? The classic formulation of the power of the Court to interpret the meaning of "in aid of legislation" is expressed in Kilbourn v. Thompson, 103 U.S. 168 (1880).

pool. A debtor of Jay Cooke and Co, Kilbourn, general manager of the pool refused to answer questions put to him by the Committee and to produce certain book sna papers. Consequently, he was ordered jailed for forty-five days. He brought an action for false imprisonment and the Supreme Court decided in his favor. Speaking through Justice Miller, the Court ruled: The resolution adopted as a sequence of this preamble contains no hint of any intention of final action by Congress on the subject, In all the argument of the case no suggestion has been made of what the House of Respresentatives or the Congress could have done in the way of remedying the wrong or securing the creditors of Jay Cooke and Co., or even the United States. Was it to be simply a fruitless investigation into the personal affiars of individuals? If so the House of Representatives had no power or authority in the matter more than any other equal number of gentlemen interested for the government of their country. By fruitless we mean that it could result in no valid legislation on the subject to which the inquiry referrred. (Kilbourn v. Thompson, Id. at page 388) The Kilbourn decision is, however, crica 1880. The world has turned over many times since that era. The same court which validated separate but equal facilities against of racial discrimination and ruled that a private contract may bar improved labor standards and social justice legislation has reversed itslef on these and many other questions. In McGrain v. Daugherty, 273 U.S. 135; 71 L. Ed. 580 [1927], the court went beyond the express terms of the Senate resolution directing the investigation of a former Attorney General for non-feasance, misfeasance, and malfeasance in office. It presumed that the action of the Senate was with a legitimate object. ... Plainly the subject was one on which legislation could be had and would be materially aided by the information which the investigation was calculated to elicit. This becomes manifest when it is reflected that the functions of the Department of Justice, the powers and duties of the Attorney-General and the duties of his assitants, are all subject to regulation by congressional legislation, and that the department is maintained and its activitites are carried on under such appropriations as in the judgment of Congress are needed from year to year. The only legitimate object the Senate could have in ordering the investigation was to aid it in legislating, and we think the subject was the real object. An express avowal of the object would have been better; but in view of the particular subject matter was not indispenable. In People ex rel. Mc Donald v. Keeler, 99, N.Y. 463, 52 Am. Rep. 49, 2 N.E. 615, where the Court of Appeals of New york sustained an investigation order by the House of Representatives of that state where the resolution contained no avowal, but disclosed that it definitely related to the administrative of public office the duties of which were subject to legislative regulation, the court said (pp. 485, 487): Where public institutions under the control of the State are ordered to be investigated, it is generally with the view of some legislative action respecting them, and the same may be said in respect of public officers,' And again "We are bound to presume that the action of the legislative body was with a legitimate object if it is capable of being so construed, and we have no right to assume that the contrary was intended." (McGrain v. Daugherty Id., at page 594-595, Emphasis supplied)

The House of Representatives passed a resolution creating a committee to investigate the financial relations between Jay Cooke and Co., a depositary of federal funds and a real estate

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The American Court was more categorical in United States v. Josephson, 333 U.S. 858 (1938). It declared that declaration of legislative purpose was conclusive on the Courts: Whatever may be said of the Committee on the un-American activities, its authorizing resolution recites it is in aid of legislation and that fact is establshed for courts. And since the matter before us in somethingwe inherited from the American constitutional system, rulings from the decision of federal courts may be apropos. (Stamler v. Willis, 287 F. Supp. 734 [1968] The Court cannot probe into the motives of the members of the Congress. Barsky v. United States, 167 F. 2d 241 [1948] The measure of the power of inquiry is the potentiality that constitutional legislation might ensue from information derived from such inquiry. The possibility that invalid as well as valid legislation might ensue from an inquiry does not limit the power of inquiry, since invalid legislation might ensue from any inquiry. United States v. Shelton, 148 F. Supp. 926 [1957] The contention of the defendant that the hearing at which he testified and from which the indictment arose was not in furtherance og a legislative purpose proceeds on the assumption that a failure to have specific legislation in contemplation, or a failure to show that legislation was in fact enacted, estabished an absence of legislative purpose. This argument is patently unsound. The investigative power of Congress is not subject to the limitation that hearings must result in legislation or recommendations for legislation. United States v. Deutch (147 F. Supp. 89 (1956) Under the Constitution of the U.S., the Federal Government is a government of limited powers. The Congress, being the legislative branch of the Federal Government, is also clothed with limited legislative powers. In orders, however, to carry its legislative powers into effect successfully, it has always been held that Congress has the power to secure information concerning matters in respect to which it has the authority to legislate. In fact, it would seem that Congress must secure information in order to legislate intelligently. Beyond that, the Congress has the right secure information in order to determine whether or not to legislate on a particular subject matter on which it is within its constitutional powers to act. — (Emphasis Supplied) The even broader scope of legislative investigation in the Philippine context is explained by a member of the Constitutional Commission. The requirement that the investigation be "in aid of legislation" is an essential element for establishing the jurisdiction of the legislative body. It is, however, a requirement which is not difficult to satisfy becuase, unlike in the United States, where legislative power is shared by the United State Congress and the states legislatures, the totality of legislative power is possessed by the Congress nad its legislative field is well-nigh unlimited. "It would be difficult to define any limits by which the subject matter of its inquiry can be bounded." (Supra, at p. 46) Moreover, it is

not necessary that every question propounded to a witness must be material to a proposed legislation. "In other words, the materiality of the question must be determined by its direct relation to the subject of the inquiry and not by its indirect relation to any proposed or possible legislation. The reason is that the necessity or lack of necessity for legislative action and form and character of the action itself are determined by the sum total of the information to be gathered as a result of the investigation, and not by a fraction to be gathered as a result of the investigation, and not by a fraction of such information elicited from a single question. (Id., at 48) On the basis of this interpretation of what "in aid of legislation" means, it can readily be seen that the phrase contributes practically nothing towards protecting witnesses. Practically any investigation can be in aid of the broad legislative power of Congress. The limitation, therefore cannot effectively prevent what Kilbourn v. Thompson (103 U.S. 168 [1880]) characterized as "roving commissions" or what Watkins v. United States (354 U.S. 178, 200 [1957] labeled as exposure for the sake of exposure. (Bernas, Constitution of the Republic of the Philippines, Vol. II, 1st Ed., page 132). Applying the above principles to the present casem, it can readily be seen that the Senate is investigating an area where it may potentially legislate. The ease with which relatives of the President were allegedly able to amass great wealth under the past regime is a legitimate area of inquiry. And if we tack on the alleged attempts o f relatives of a succeeding adminsitration to duplicate the feat, the need for remedial legislation becomes more imperative. Our second area of concern is congressional encroachment on matters reserved by the Constitution for the Executive or the Judiciary. The majority opinion cites the decision in Angara v. Electoral Commission, 63 Phil. 139 (1936) explaining our power to determined conflicting claims of authority. It is indeed the function on this Court to allocate constitutional boundaries but in the exercise of this "umpire" function we have to take care that we do not keep any of the three great departments of government from performing functions peculiar to each department or specifically vested to it sby the Constitution. When a power is vested, ti carries with is everything legitimately neede to exercise it. It may be argued that the investigation into the Romualdez — Lopa transactions is more appropriate for the Department of Justice and the judiciary. This argument misses the point of legislative inquiry. The prosecution of offenders by the Department of Justice or the Ombudsman and their trial before courts of justice is intended to punish persons who violate the law. Legislative investigations go further. The aim is to arrive at policy determinations which may or may not be enacted into legislation. Referral to prosecutors or courts of justice is an added bonus. For sure, the Senate Blue Ribbon Committee knows it cannot sentence any offender, no matter how overwhelming the proof that it may gatherm to a jail term. But certainly, the Committee can recommend to Congress how the situation which enabled get-rich-quick schemes to flourish may be remedied. The fact that the subject of the investigation may currently be undergoing trial does not restrict the power of Congress to investigate for its own purposes. The legislative purpose is distinctly different from the judicial purpose. In Sinclair v. United States, 279 U.S. 263, 73 L ed. 692 (1928), leases of naval reservations to oil companies were investigated by the United States Senate. On a finding that certain leases

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were fraudulent, court action was recommended. In other words, court action on one hand and legislation on the other, are not mutually exclusive. They may complement each other.

was extracted. Only when the imprisonment became ureasonably prolonged and the situation in Congress had changed was he released.

... It may be conceded that Congress is without authority to compel disclosyres for the purpose of aiding the prosecution of pending suits; but the authority of that body, directly or through it Committees, to require pertinent disclosures in aid of its own consitutional power is not abridged because the information sought to be elicited may also be of use in such suits... It is plain that investigation of the matters involved in suits brought or to be commenced under the Senate resolution directing the institution of suits for the cancellation of the leases might directly aid in respect of legislative action... (Sinclair v. United States, Id.at page 698).

As pointed out by the respondents, not one question has been asked requiring an answer that would incriminate the petitioners. The allegation that their basic rights are vilolated is not only without basis but is also premature.

In United States v. Orman, 207 F. 2d Ed. 148 (1953), the court declared that it was pertinent for a legislative committee to seek facts indicating that a witness was linked to unlawful intestate gambling.

I agree with the respondents that the slae of 39 Romualdez corporations to Mr. Lopa is not a purely private transaction into which the Senate may not inquire. if this were so, much of the work of the Presidential Commission on Good Government (PCGG) as it seeks to recover illegally acquired wealth would be negated. Much of what PCGG is trying to recover is the product of arrangements which are not only private but also secret and hidden. I therefore, vote to DISMISS the petition.

The power of a congressional committee to investigate matters cannot be challenged on the ground that the Committee went beyond the scope of any contemplated legislative and assumed the functions of a grand jury. Whre the genral subject of investigation is one concerning which Congress can legislate, and the information sought might aid the congressional consideration, in such a situation a legitimate legislative purpose must be presumed...

Narvasa, J., dissents.

I submit that the filing of indictments or informations or the trial of certain persons cannot, by themselves, half the intitiation or stop the progress of legislative investigations.

In Arnault v. Nazareno, 87 Phil. 29, this Court observed that "we are bound to presume that the action of the legislative body was with a legitimate object if it is capable of being so construed, and we have no right ot assume that the contrary was intended." (People ex rel. Mc Donald vs. Keeler, 99 N.Y. 463; 52 Am. Rep., 49; 2 N.E., 615, quoted with approval by the U.S. Supreme Court in McGrain vs. Daugherty, 273 U.S. 135). As far as I know, that is still the rule today.

The other ground which I consider the more important one is where the legislative investigation violates the liberties of the witnesses. The Constitution expressly provides that "the rights of persons appearing in or affected by such inquiries shall be respected. It should be emphasized that the constitutional restriction does not call for the banning or prohibition of investigations where a violation of a basis rights is claimed. It only requires that in the course of the proceedings, the right of persons should be respected. What the majority opinion mandates is a blanket prohibition against a witness testifying at all, simply because he is already facing charges before the Sandiganbayan. To my mind, the Consitution allows him to interpose objections whenever an incriminating question is posed or when he is compelled to reveal his ocurt defenses, but not ot refuse to take the witness stand completely.

CRUZ, J., dissenting: I regret I am unable to give my concurrence, I do not agree that the investigation being conducted by the Blue Ribbon Committee is not in aid of legislation.

More importantly, the presumption is supported by the established facts. The inquiry is sustainable as an implied of power the legislature and even as expressly limited by the Constitution. The inquiry deals with alleged manipulations of public funds and illicit acquisitions of properties now being claimed by the PCGG for the Republic of the Philippines. The purpose of the Committee is to ascertain if and how such anomalies have been committed. It is settled that the legislature has a right to investigate the disposition of the public funds it has appropriated; indeed, "an inquiry into the expenditure of all public money is na indispensable duty of the legislature." Moreover, an investigation of a possible violation of a law may be useful in the drafting of amendatory legislation to correct or strengthen that law. The ponencia quotes lengthily from Senator Enrile's speech and concludes that it "contained no suggestions of contemplated legislation; he merely called upon the Senate to look into a possible violation of section 5 of R.A. No. 3019." However, according to McGrain v. Daugherty, supra:

Arnault v. Nazareno, supra, illustrates the reticence, with which the court views petitions to curtail legislative investigations even where an invocation of individual liberties is made. In Arnault, the entire country already knew the name of the presidential realtive whom the Sentate was trying to link to the Tambobong-Buenavista estate anomalies. Still, the Court did not interfere when Arnault refused to answer specific questions directed at him and he was punished for hir refusal. The Court did not restrain the Senate when Arnault was sent o the national penitentiary for an indefinite visit until the name which the Senate wanted him to utter

Primarily, the purpose for which legislative inquiry and investigation is pursued is to serve as an aid in legislation. Through it, the legislature is able to obtain facts or data in aid fo proposed legislation. However, it is not necessary that the resolution ordering an investigation should in terms expressly state that the object of the inquiry is to obtain data in aid of proposed

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legislation. It is enough that such purpose appears from a consideration of the entire proceedings or one in which legislation could be had and would be materially aided by the information which the investigation was calculated to elicit. An express avowal of the object would be better, but such is not indispensable. (Emphasis supplied).

unraveling the tangled and secret skeins behind the acquisition by Benjamin "Kokoy" Romualdez of 39 corporations under the past regime and their sudden sale to the Lopa Group at the outset of the new dispensation will not result in useful legislation?

The petitioner's contention that the questioned investigation would compel them to reveal their defense in the cases now pending against them in the Sandigangbayan is untenable. They know or should know that they cannot be compelled to answer incriminating questions. The case of Chavez v. Court of Appeals, 24 SCRA 663, where we held that an accused may refuse at the outset to take the stand on the ground that the questions to be put by the prosecutor will tend to incriminate him is, of course, not applicable to them. They are not facing criminal charges before the Blue Ribbon Committee. Like any ordinary witness, they can invoke the right against self-incrimination only when and as the incriminating question is propounded. While it is true that the Court is now allowed more leeway in reviewing the traditionally political acts of the legislative and executive departments, the power must be exercised with the utmost circumspection lest we unduly trench on their prerogatives and disarrange the constitutional separation of powers. That power is available to us only if there is a clear showing of a grave abuse of discretion, which I do not see in the case at bar. Guided by the presumption and the facts, I vote to DISMISS the petition. Narvasa, J., dissents.

The power of either House of Congress to conduct investigations is inherent. It needs no textual grant. As stated in Arnault v. Nazareno, 87 Phil. 29 (1950) Our form of government being patterned after the American system — the framers of our Constitution having drawn largely from American institutions and practices — we can, in this case, properly draw also from American precedents in interpreting analogous provisions of our Constitution, as we have done in other cases in the past. Although there is no provision in the Constitution expressly investing either House of Congress with power to make investigations and exact testimony to the end that it may exercise its legislative functions advisely and effectively, such power is so far incidental to the legislative function as to be implied. In other words, the power of inquiry — with process to enforce it — is an essential and appropriate auxiliary to the legislative function. A legislative body cannot legislate wisely or effectively in the absence of information respecting the conditions which the legislation is intended to affect or change: and where the legislative body does not itself possess the requisite information — which is not infrequently true — recourse must be had to others who do possess it. ... (At p. 45) The framers of the present Constitution were not content to leave the power inherent, incidental or implied. The power is now expressed as follows: Sec. 21 — The Senate or the House of Representatives or may of its respective committees may conduct inquiries in aid of legialtion in accordance with its duly published rules of precedure. The rights of persons appearing in or affected by such inquiries shall be respected.

# Separate Opinions PARAS, J., concurring:

Apart from the formal requirement of publishing the rules of procedure, I agree that there are three queries which, if answered in the affirmative, may give us cause to intervene.

I concur principally because any decision of the respondent committee may unduly influence the Sandiganbayan

First, is the matter being investigated one on which no valid legislation could possibly be enacted?

GUTIERREZ, JR., J., dissenting:

Second, is Congress encroaching on terrain which the Constitution has reserved as the exclusive domain of another branch of government?

I regret that I must express a strong dissent the Court's opinion in this case. And third, is Congress violating the basic liberties of an individual? The Court is asserting a power which I believe we do not possess. We are encroaching on the turf of Congress. We are prohibiting the Senate from proceeding with a consitutionally vested function. We are stopping the Senate Blue Ribbon Committee from exercising a legislative prerogative — investigations in aid of legislation. We do so becuase we somehow feel that the purported aim is not the real purpose. The Court has no power to second guess the motives behind an act of a House of Congress. Neither can we substitute our judgment for its judgment on a matter specifically given to it by the Constitution. The scope of the legislative power is broad. it emcompasses practically every aspect of human or corporate behavior capable of regulation. How can this Court say that

The classic formulation of the power of the Court to interpret the meaning of "in aid of legislation" is expressed in Kilbourn v. Thompson, 103 U.S. 168 (1880). The House of Representatives passed a resolution creating a committee to investigate the financial relations between Jay Cooke and Co., a depositary of federal funds and a real estate pool. A debtor of Jay Cooke and Co, Kilbourn, general manager of the pool refused to answer questions put to him by the Committee and to produce certain book sna papers. Consequently, he was ordered jailed for forty-five days. He brought an action for false imprisonment and the Supreme Court decided in his favor.

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Speaking through Justice Miller, the Court ruled: The resolution adopted as a sequence of this preamble contains no hint of any intention of final action by Congress on the subject, In all the argument of the case no suggestion has been made of what the House of Respresentatives or the Congress could have done in the way of remedying the wrong or securing the creditors of Jay Cooke and Co., or even the United States. Was it to be simply a fruitless investigation into the personal affiars of individuals? If so the House of Representatives had no power or authority in the matter more than any other equal number of gentlemen interested for the government of their country. By fruitless we mean that it could result in no valid legislation on the subject to which the inquiry referrred. (Kilbourn v. Thompson, Id. at page 388) The Kilbourn decision is, however, crica 1880. The world has turned over many times since that era. The same court which validated separate but equal facilities against of racial discrimination and ruled that a private contract may bar improved labor standards and social justice legislation has reversed itslef on these and many other questions. In McGrain v. Daugherty, 273 U.S. 135; 71 L. Ed. 580 [1927], the court went beyond the express terms of the Senate resolution directing the investigation of a former Attorney General for non-feasance, misfeasance, and malfeasance in office. It presumed that the action of the Senate was with a legitimate object. ... Plainly the subject was one on which legislation could be had and would be materially aided by the information which the investigation was calculated to elicit. This becomes manifest when it is reflected that the functions of the Department of Justice, the powers and duties of the Attorney-General and the duties of his assitants, are all subject to regulation by congressional legislation, and that the department is maintained and its activitites are carried on under such appropriations as in the judgment of Congress are needed from year to year. The only legitimate object the Senate could have in ordering the investigation was to aid it in legislating, and we think the subject was the real object. An express avowal of the object would have been better; but in view of the particular subject matter was not indispenable. In People ex rel. Mc Donald v. Keeler, 99, N.Y. 463, 52 Am. Rep. 49, 2 N.E. 615, where the Court of Appeals of New york sustained an investigation order by the House of Representatives of that state where the resolution contained no avowal, but disclosed that it definitely related to the administrative of public office the duties of which were subject to legislative regulation, the court said (pp. 485, 487): Where public institutions under the control of the State are ordered to be investigated, it is generally with the view of some legislative action respecting them, and the same may be said in respect of public officers,' And again "We are bound to presume that the action of the legislative body was with a legitimate object if it is capable of being so construed, and we have no right to assume that the contrary was intended." (McGrain v. Daugherty Id., at page 594-595, Emphasis supplied) The American Court was more categorical in United States v. Josephson, 333 U.S. 858 (1938). It declared that declaration of legislative purpose was conclusive on the Courts: Whatever may be said of the Committee on the un-American activities, its authorizing resolution recites it is in aid of legislation and that fact is establshed for courts.

And since the matter before us in somethingwe inherited from the American constitutional system, rulings from the decision of federal courts may be apropos. (Stamler v. Willis, 287 F. Supp. 734 [1968] The Court cannot probe into the motives of the members of the Congress. Barsky v. United States, 167 F. 2d 241 [1948] The measure of the power of inquiry is the potentiality that constitutional legislation might ensue from information derived from such inquiry. The possibility that invalid as well as valid legislation might ensue from an inquiry does not limit the power of inquiry, since invalid legislation might ensue from any inquiry. United States v. Shelton, 148 F. Supp. 926 [1957] The contention of the defendant that the hearing at which he testified and from which the indictment arose was not in furtherance og a legislative purpose proceeds on the assumption that a failure to have specific legislation in contemplation, or a failure to show that legislation was in fact enacted, estabished an absence of legislative purpose. This argument is patently unsound. The investigative power of Congress is not subject to the limitation that hearings must result in legislation or recommendations for legislation. United States v. Deutch (147 F. Supp. 89 (1956) Under the Constitution of the U.S., the Federal Government is a government of limited powers. The Congress, being the legislative branch of the Federal Government, is also clothed with limited legislative powers. In orders, however, to carry its legislative powers into effect successfully, it has always been held that Congress has the power to secure information concerning matters in respect to which it has the authority to legislate. In fact, it would seem that Congress must secure information in order to legislate intelligently. Beyond that, the Congress has the right secure information in order to determine whether or not to legislate on a particular subject matter on which it is within its constitutional powers to act. — (Emphasis Supplied) The even broader scope of legislative investigation in the Philippine context is explained by a member of the Constitutional Commission. The requirement that the investigation be "in aid of legislation" is an essential element for establishing the jurisdiction of the legislative body. It is, however, a requirement which is not difficult to satisfy becuase, unlike in the United States, where legislative power is shared by the United State Congress and the states legislatures, the totality of legislative power is possessed by the Congress nad its legislative field is well-nigh unlimited. "It would be difficult to define any limits by which the subject matter of its inquiry can be bounded." (Supra, at p. 46) Moreover, it is not necessary that every question propounded to a witness must be material to a proposed legislation. "In other words, the materiality of the question must be determined by its direct relation to the subject of the inquiry and not by its indirect relation to any proposed or possible legislation. The reason is that the necessity or lack of necessity for legislative action and form and character of the action itself are determined by the sum total of the information to be

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gathered as a result of the investigation, and not by a fraction to be gathered as a result of the investigation, and not by a fraction of such information elicited from a single question. (Id., at 48) On the basis of this interpretation of what "in aid of legislation" means, it can readily be seen that the phrase contributes practically nothing towards protecting witnesses. Practically any investigation can be in aid of the broad legislative power of Congress. The limitation, therefore cannot effectively prevent what Kilbourn v. Thompson (103 U.S. 168 [1880]) characterized as "roving commissions" or what Watkins v. United States (354 U.S. 178, 200 [1957] labeled as exposure for the sake of exposure. (Bernas, Constitution of the Republic of the Philippines, Vol. II, 1st Ed., page 132).

Committees, to require pertinent disclosures in aid of its own consitutional power is not abridged because the information sought to be elicited may also be of use in such suits... It is plain that investigation of the matters involved in suits brought or to be commenced under the Senate resolution directing the institution of suits for the cancellation of the leases might directly aid in respect of legislative action... (Sinclair v. United States, Id.at page 698). In United States v. Orman, 207 F. 2d Ed. 148 (1953), the court declared that it was pertinent for a legislative committee to seek facts indicating that a witness was linked to unlawful intestate gambling.

Applying the above principles to the present casem, it can readily be seen that the Senate is investigating an area where it may potentially legislate. The ease with which relatives of the President were allegedly able to amass great wealth under the past regime is a legitimate area of inquiry. And if we tack on the alleged attempts o f relatives of a succeeding adminsitration to duplicate the feat, the need for remedial legislation becomes more imperative.

The power of a congressional committee to investigate matters cannot be challenged on the ground that the Committee went beyond the scope of any contemplated legislative and assumed the functions of a grand jury. Whre the genral subject of investigation is one concerning which Congress can legislate, and the information sought might aid the congressional consideration, in such a situation a legitimate legislative purpose must be presumed...

Our second area of concern is congressional encroachment on matters reserved by the Constitution for the Executive or the Judiciary.

I submit that the filing of indictments or informations or the trial of certain persons cannot, by themselves, half the intitiation or stop the progress of legislative investigations.

The majority opinion cites the decision in Angara v. Electoral Commission, 63 Phil. 139 (1936) explaining our power to determined conflicting claims of authority. It is indeed the function on this Court to allocate constitutional boundaries but in the exercise of this "umpire" function we have to take care that we do not keep any of the three great departments of government from performing functions peculiar to each department or specifically vested to it sby the Constitution. When a power is vested, ti carries with is everything legitimately neede to exercise it.

The other ground which I consider the more important one is where the legislative investigation violates the liberties of the witnesses.

It may be argued that the investigation into the Romualdez — Lopa transactions is more appropriate for the Department of Justice and the judiciary. This argument misses the point of legislative inquiry. The prosecution of offenders by the Department of Justice or the Ombudsman and their trial before courts of justice is intended to punish persons who violate the law. Legislative investigations go further. The aim is to arrive at policy determinations which may or may not be enacted into legislation. Referral to prosecutors or courts of justice is an added bonus. For sure, the Senate Blue Ribbon Committee knows it cannot sentence any offender, no matter how overwhelming the proof that it may gatherm to a jail term. But certainly, the Committee can recommend to Congress how the situation which enabled get-rich-quick schemes to flourish may be remedied. The fact that the subject of the investigation may currently be undergoing trial does not restrict the power of Congress to investigate for its own purposes. The legislative purpose is distinctly different from the judicial purpose. In Sinclair v. United States, 279 U.S. 263, 73 L ed. 692 (1928), leases of naval reservations to oil companies were investigated by the United States Senate. On a finding that certain leases were fraudulent, court action was recommended. In other words, court action on one hand and legislation on the other, are not mutually exclusive. They may complement each other.

The Constitution expressly provides that "the rights of persons appearing in or affected by such inquiries shall be respected. It should be emphasized that the constitutional restriction does not call for the banning or prohibition of investigations where a violation of a basis rights is claimed. It only requires that in the course of the proceedings, the right of persons should be respected. What the majority opinion mandates is a blanket prohibition against a witness testifying at all, simply because he is already facing charges before the Sandiganbayan. To my mind, the Consitution allows him to interpose objections whenever an incriminating question is posed or when he is compelled to reveal his ocurt defenses, but not ot refuse to take the witness stand completely. Arnault v. Nazareno, supra, illustrates the reticence, with which the court views petitions to curtail legislative investigations even where an invocation of individual liberties is made. In Arnault, the entire country already knew the name of the presidential realtive whom the Sentate was trying to link to the Tambobong-Buenavista estate anomalies. Still, the Court did not interfere when Arnault refused to answer specific questions directed at him and he was punished for hir refusal. The Court did not restrain the Senate when Arnault was sent o the national penitentiary for an indefinite visit until the name which the Senate wanted him to utter was extracted. Only when the imprisonment became ureasonably prolonged and the situation in Congress had changed was he released.

... It may be conceded that Congress is without authority to compel disclosyres for the purpose of aiding the prosecution of pending suits; but the authority of that body, directly or through it

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As pointed out by the respondents, not one question has been asked requiring an answer that would incriminate the petitioners. The allegation that their basic rights are vilolated is not only without basis but is also premature. I agree with the respondents that the slae of 39 Romualdez corporations to Mr. Lopa is not a purely private transaction into which the Senate may not inquire. if this were so, much of the work of the Presidential Commission on Good Government (PCGG) as it seeks to recover illegally acquired wealth would be negated. Much of what PCGG is trying to recover is the product of arrangements which are not only private but also secret and hidden. I therefore, vote to DISMISS the petition. Narvasa, J., dissents.

information which the investigation was calculated to elicit. An express avowal of the object would be better, but such is not indispensable. (Emphasis supplied). The petitioner's contention that the questioned investigation would compel them to reveal their defense in the cases now pending against them in the Sandigangbayan is untenable. They know or should know that they cannot be compelled to answer incriminating questions. The case of Chavez v. Court of Appeals, 24 SCRA 663, where we held that an accused may refuse at the outset to take the stand on the ground that the questions to be put by the prosecutor will tend to incriminate him is, of course, not applicable to them. They are not facing criminal charges before the Blue Ribbon Committee. Like any ordinary witness, they can invoke the right against self-incrimination only when and as the incriminating question is propounded. While it is true that the Court is now allowed more leeway in reviewing the traditionally political acts of the legislative and executive departments, the power must be exercised with the utmost circumspection lest we unduly trench on their prerogatives and disarrange the constitutional separation of powers. That power is available to us only if there is a clear showing of a grave abuse of discretion, which I do not see in the case at bar.

CRUZ, J., dissenting: I regret I am unable to give my concurrence, I do not agree that the investigation being conducted by the Blue Ribbon Committee is not in aid of legislation.

Guided by the presumption and the facts, I vote to DISMISS the petition. In Arnault v. Nazareno, 87 Phil. 29, this Court observed that "we are bound to presume that the action of the legislative body was with a legitimate object if it is capable of being so construed, and we have no right ot assume that the contrary was intended." (People ex rel. Mc Donald vs. Keeler, 99 N.Y. 463; 52 Am. Rep., 49; 2 N.E., 615, quoted with approval by the U.S. Supreme Court in McGrain vs. Daugherty, 273 U.S. 135). As far as I know, that is still the rule today.

Narvasa, J., dissents.

Footnotes

More importantly, the presumption is supported by the established facts. The inquiry is sustainable as an implied of power the legislature and even as expressly limited by the Constitution.

1 Annex "A", Rollo, p. 38.

2 Annexes "B", "C" and "D", Rollo, pp. 98, 114 and 128.

The inquiry deals with alleged manipulations of public funds and illicit acquisitions of properties now being claimed by the PCGG for the Republic of the Philippines. The purpose of the Committee is to ascertain if and how such anomalies have been committed. It is settled that the legislature has a right to investigate the disposition of the public funds it has appropriated; indeed, "an inquiry into the expenditure of all public money is na indispensable duty of the legislature." Moreover, an investigation of a possible violation of a law may be useful in the drafting of amendatory legislation to correct or strengthen that law. The ponencia quotes lengthily from Senator Enrile's speech and concludes that it "contained no suggestions of contemplated legislation; he merely called upon the Senate to look into a possible violation of section 5 of R.A. No. 3019." However, according to McGrain v. Daugherty, supra: Primarily, the purpose for which legislative inquiry and investigation is pursued is to serve as an aid in legislation. Through it, the legislature is able to obtain facts or data in aid fo proposed legislation. However, it is not necessary that the resolution ordering an investigation should in terms expressly state that the object of the inquiry is to obtain data in aid of proposed legislation. It is enough that such purpose appears from a consideration of the entire proceedings or one in which legislation could be had and would be materially aided by the

3 Rollo, pp. 219-220.

4 Annex "E-1", Rollo, p. 143.

5 Annex "E", Rollo, p. 142.

6 Annex "H-1", Rollo, p. 162.

7 Annex "H-2", Rollo, p. 189.

8 Rollo, p. 264.

9 Ibid., p. 263.

10 Ibid., p. 284.

11 63 Phil. 139, 156, 157, 158-159.

12 Neptali A. Gonzales, et al. vs. Hon. Catalino Macaraig, Jr., et al., G.R. No. 87636, 19 November 1990, 191 SCRA 452, 463.

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13 Section 1, Article VII of the 1987 Constitution provides:

G.R. No. L-46496

Section 1. The judicial power shall be vested in one Supreme Court and in such lower courts as may be established by law.

ANG TIBAY, represented by TORIBIO TEODORO, manager and propietor, and NATIONAL WORKERS BROTHERHOOD, petitioners, vs. THE COURT OF INDUSTRIAL RELATIONS and NATIONAL LABOR UNION, INC., respondents.

Judicial power includes the duty of the courts of justice to settle actual controversies involving rights which are legally demandable and enforceable, and to determine whether or not there has been grave abuse of discretion amounting to lack or excess of jurisdiction on the part of any branch or instrumentality of the Government.

14 In Arnault vs. Nazareno, 87 Phil. 29, this Court held that although there was no express provision in the 1935 Constitution giving such power to both houses of Congress, it was so incidental to the legislative function as to be implied.

15 This was taken from Section 12(2), Article VII of the 1973 Constitution.

February 27, 1940

Office of the Solicitor-General Ozaeta and Assistant Attorney Barcelona for the Court of Industrial Relations. Antonio D. Paguia for National Labor Unon. Claro M. Recto for petitioner "Ang Tibay". Jose M. Casal for National Workers' Brotherhood.

16 No. L-3820, July 18, 1950, 87 Phil. 29.

LAUREL, J.: 17 Questions of privilege are those affecting the rights, privileges, reputation, conduct, decorum and dignity of the Senate or its Members as well as the integrity of its proceedings." (Sec. 8, Rule XXXIX, Rules of hte Senate.)

The Solicitor-General in behalf of the respondent Court of Industrial Relations in the aboveentitled case has filed a motion for reconsideration and moves that, for the reasons stated in his motion, we reconsider the following legal conclusions of the majority opinion of this Court:

18 Annex — 2, Rollo, p. 242.

19 Sec. 26, Article XVIII of the Constitution provides: The authority to issue sequestration or freeze orders under Proclamation No. 3, dated March 24, 1986 in relation to the recovery of ill-gotten wealth shall remain operative for not more than eighteen months after the retification of this Constitution. However, in the national interest, as certified by the President, the Congress may extend said period.

20 354 U.S. 178, 1 L. ed. 1273 (1957).

21 360 U.S. 109, 3 L ed. 2d 1115, S CT 1081 (1959).

22 Maurice A. Hutcheson vs. U.S., 369 US 599.

23 Watkins vs. US, 354 USS 178 citing US vs. Rumely, 345 US 41.

24 Sec. 17, Article III of the Constitution provides:

No person shall be compelled to be a witness against himself.

25 G.R. No. L-29169, August 19, 1968, 24 SCRA 663.

1. Que un contrato de trabajo, asi individual como colectivo, sin termino fijo de duracion o que no sea para una determinada, termina o bien por voluntad de cualquiera de las partes o cada vez que ilega el plazo fijado para el pago de los salarios segun costumbre en la localidad o cunado se termine la obra; 2. Que los obreros de una empresa fabril, que han celebrado contrato, ya individual ya colectivamente, con ell, sin tiempo fijo, y que se han visto obligados a cesar en sus tarbajos por haberse declarando paro forzoso en la fabrica en la cual tarbajan, dejan de ser empleados u obreros de la misma; 3. Que un patrono o sociedad que ha celebrado un contrato colectivo de trabajo con sus osbreros sin tiempo fijo de duracion y sin ser para una obra determiminada y que se niega a readmitir a dichos obreros que cesaron como consecuencia de un paro forzoso, no es culpable de practica injusta in incurre en la sancion penal del articulo 5 de la Ley No. 213 del Commonwealth, aunque su negativa a readmitir se deba a que dichos obreros pertenecen a un determinado organismo obrero, puesto que tales ya han dejado deser empleados suyos por terminacion del contrato en virtud del paro.

26 G.R. Nos. 71208-09, August 30, 1985, 138 SCRA 294.

The respondent National Labor Union, Inc., on the other hand, prays for the vacation of the judgement rendered by the majority of this Court and the remanding of the case to the Court of Industrial Relations for a new trial, and avers:

Republic of the Philippines SUPREME COURT Manila

1. That Toribio Teodoro's claim that on September 26, 1938, there was shortage of leather soles in ANG TIBAY making it necessary for him to temporarily lay off the members of the National Labor Union Inc., is entirely false and unsupported by the records of the Bureau of Customs and the Books of Accounts of native dealers in leather.

EN BANC

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2. That the supposed lack of leather materials claimed by Toribio Teodoro was but a scheme to systematically prevent the forfeiture of this bond despite the breach of his CONTRACT with the Philippine Army. 3. That Toribio Teodoro's letter to the Philippine Army dated September 29, 1938, (re supposed delay of leather soles from the States) was but a scheme to systematically prevent the forfeiture of this bond despite the breach of his CONTRACT with the Philippine Army. 4. That the National Worker's Brotherhood of ANG TIBAY is a company or employer union dominated by Toribio Teodoro, the existence and functions of which are illegal. (281 U.S., 548, petitioner's printed memorandum, p. 25.) 5. That in the exercise by the laborers of their rights to collective bargaining, majority rule and elective representation are highly essential and indispensable. (Sections 2 and 5, Commonwealth Act No. 213.) 6. That the century provisions of the Civil Code which had been (the) principal source of dissensions and continuous civil war in Spain cannot and should not be made applicable in interpreting and applying the salutary provisions of a modern labor legislation of American origin where the industrial peace has always been the rule. 7. That the employer Toribio Teodoro was guilty of unfair labor practice for discriminating against the National Labor Union, Inc., and unjustly favoring the National Workers' Brotherhood. 8. That the exhibits hereto attached are so inaccessible to the respondents that even with the exercise of due diligence they could not be expected to have obtained them and offered as evidence in the Court of Industrial Relations. 9. That the attached documents and exhibits are of such far-reaching importance and effect that their admission would necessarily mean the modification and reversal of the judgment rendered herein. The petitioner, Ang Tibay, has filed an opposition both to the motion for reconsideration of the respondent National Labor Union, Inc. In view of the conclusion reached by us and to be herein after stead with reference to the motion for a new trial of the respondent National Labor Union, Inc., we are of the opinion that it is not necessary to pass upon the motion for reconsideration of the Solicitor-General. We shall proceed to dispose of the motion for new trial of the respondent labor union. Before doing this, however, we deem it necessary, in the interest of orderly procedure in cases of this nature, in interest of orderly procedure in cases of this nature, to make several observations regarding the nature of the powers of the Court of Industrial Relations and emphasize certain guiding principles which should be observed in the trial of cases brought before it. We have reexamined the entire record of the proceedings had before the Court of Industrial Relations in this case, and we have found no substantial evidence that the exclusion of the 89 laborers here was due to their union affiliation or activity. The whole transcript taken contains what transpired during the hearing and is more of a record of contradictory and conflicting statements of opposing counsel, with sporadic conclusion drawn to suit their own views. It is evident that these statements and expressions of views of counsel have no evidentiary value.

The Court of Industrial Relations is a special court whose functions are specifically stated in the law of its creation (Commonwealth Act No. 103). It is more an administrative than a part of the integrated judicial system of the nation. It is not intended to be a mere receptive organ of the Government. Unlike a court of justice which is essentially passive, acting only when its jurisdiction is invoked and deciding only cases that are presented to it by the parties litigant, the function of the Court of Industrial Relations, as will appear from perusal of its organic law, is more active, affirmative and dynamic. It not only exercises judicial or quasi-judicial functions in the determination of disputes between employers and employees but its functions in the determination of disputes between employers and employees but its functions are far more comprehensive and expensive. It has jurisdiction over the entire Philippines, to consider, investigate, decide, and settle any question, matter controversy or dispute arising between, and/or affecting employers and employees or laborers, and regulate the relations between them, subject to, and in accordance with, the provisions of Commonwealth Act No. 103 (section 1). It shall take cognizance or purposes of prevention, arbitration, decision and settlement, of any industrial or agricultural dispute causing or likely to cause a strike or lockout, arising from differences as regards wages, shares or compensation, hours of labor or conditions of tenancy or employment, between landlords and tenants or farm-laborers, provided that the number of employees, laborers or tenants of farm-laborers involved exceeds thirty, and such industrial or agricultural dispute is submitted to the Court by the Secretary of Labor or by any or both of the parties to the controversy and certified by the Secretary of labor as existing and proper to be by the Secretary of Labor as existing and proper to be dealth with by the Court for the sake of public interest. (Section 4, ibid.) It shall, before hearing the dispute and in the course of such hearing, endeavor to reconcile the parties and induce them to settle the dispute by amicable agreement. (Paragraph 2, section 4, ibid.) When directed by the President of the Philippines, it shall investigate and study all industries established in a designated locality, with a view to determinating the necessity and fairness of fixing and adopting for such industry or locality a minimum wage or share of laborers or tenants, or a maximum "canon" or rental to be paid by the "inquilinos" or tenants or less to landowners. (Section 5, ibid.) In fine, it may appeal to voluntary arbitration in the settlement of industrial disputes; may employ mediation or conciliation for that purpose, or recur to the more effective system of official investigation and compulsory arbitration in order to determine specific controversies between labor and capital industry and in agriculture. There is in reality here a mingling of executive and judicial functions, which is a departure from the rigid doctrine of the separation of governmental powers. In the case of Goseco vs. Court of Industrial Relations et al., G.R. No. 46673, promulgated September 13, 1939, we had occasion to joint out that the Court of Industrial Relations et al., G. R. No. 46673, promulgated September 13, 1939, we had occasion to point out that the Court of Industrial Relations is not narrowly constrained by technical rules of procedure, and the Act requires it to "act according to justice and equity and substantial merits of the case, without regard to technicalities or legal forms and shall not be bound by any technicalities or legal forms and shall not be bound by any technical rules of legal evidence but may inform its mind in such manner as it may deem just and equitable." (Section 20, Commonwealth Act No. 103.) It shall not be restricted to the specific relief claimed or demands made by the parties to the industrial or agricultural dispute, but may include in the award, order or decision any matter or determination which may be deemed necessary or expedient for the purpose of settling the dispute or of preventing further industrial or agricultural disputes. (section 13, ibid.) And in the light of this legislative policy, appeals to this Court have been especially regulated by the rules recently promulgated by the rules recently promulgated by this Court to carry into the effect the

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avowed legislative purpose. The fact, however, that the Court of Industrial Relations may be said to be free from the rigidity of certain procedural requirements does not mean that it can, in justifiable cases before it, entirely ignore or disregard the fundamental and essential requirements of due process in trials and investigations of an administrative character. There are primary rights which must be respected even in proceedings of this character: (1) The first of these rights is the right to a hearing, which includes the right of the party interested or affected to present his own case and submit evidence in support thereof. In the language of Chief Hughes, in Morgan v. U.S., 304 U.S. 1, 58 S. Ct. 773, 999, 82 Law. ed. 1129, "the liberty and property of the citizen shall be protected by the rudimentary requirements of fair play. (2) Not only must the party be given an opportunity to present his case and to adduce evidence tending to establish the rights which he asserts but the tribunal must consider the evidence presented. (Chief Justice Hughes in Morgan v. U.S. 298 U.S. 468, 56 S. Ct. 906, 80 law. ed. 1288.) In the language of this court in Edwards vs. McCoy, 22 Phil., 598, "the right to adduce evidence, without the corresponding duty on the part of the board to consider it, is vain. Such right is conspicuously futile if the person or persons to whom the evidence is presented can thrust it aside without notice or consideration." (3) "While the duty to deliberate does not impose the obligation to decide right, it does imply a necessity which cannot be disregarded, namely, that of having something to support it is a nullity, a place when directly attached." (Edwards vs. McCoy, supra.) This principle emanates from the more fundamental is contrary to the vesting of unlimited power anywhere. Law is both a grant and a limitation upon power. (4) Not only must there be some evidence to support a finding or conclusion (City of Manila vs. Agustin, G.R. No. 45844, promulgated November 29, 1937, XXXVI O. G. 1335), but the evidence must be "substantial." (Washington, Virginia and Maryland Coach Co. v. national labor Relations Board, 301 U.S. 142, 147, 57 S. Ct. 648, 650, 81 Law. ed. 965.) It means such relevant evidence as a reasonable mind accept as adequate to support a conclusion." (Appalachian Electric Power v. National Labor Relations Board, 4 Cir., 93 F. 2d 985, 989; National Labor Relations Board v. Thompson Products, 6 Cir., 97 F. 2d 13, 15; BallstonStillwater Knitting Co. v. National Labor Relations Board, 2 Cir., 98 F. 2d 758, 760.) . . . The statute provides that "the rules of evidence prevailing in courts of law and equity shall not be controlling.' The obvious purpose of this and similar provisions is to free administrative boards from the compulsion of technical rules so that the mere admission of matter which would be deemed incompetent inn judicial proceedings would not invalidate the administrative order. (Interstate Commerce Commission v. Baird, 194 U.S. 25, 44, 24 S. Ct. 563, 568, 48 Law. ed. 860; Interstate Commerce Commission v. Louisville and Nashville R. Co., 227 U.S. 88, 93 33 S. Ct. 185, 187, 57 Law. ed. 431; United States v. Abilene and Southern Ry. Co. S. Ct. 220, 225, 74 Law. ed. 624.) But this assurance of a desirable flexibility in administrative procedure does not go far as to justify orders without a basis in evidence having rational probative force. Mere uncorroborated hearsay or rumor does not constitute substantial evidence. (Consolidated Edison Co. v. National Labor Relations Board, 59 S. Ct. 206, 83 Law. ed. No. 4, Adv. Op., p. 131.)"

(5) The decision must be rendered on the evidence presented at the hearing, or at least contained in the record and disclosed to the parties affected. (Interstate Commence Commission vs. L. & N. R. Co., 227 U.S. 88, 33 S. Ct. 185, 57 Law. ed. 431.) Only by confining the administrative tribunal to the evidence disclosed to the parties, can the latter be protected in their right to know and meet the case against them. It should not, however, detract from their duty actively to see that the law is enforced, and for that purpose, to use the authorized legal methods of securing evidence and informing itself of facts material and relevant to the controversy. Boards of inquiry may be appointed for the purpose of investigating and determining the facts in any given case, but their report and decision are only advisory. (Section 9, Commonwealth Act No. 103.) The Court of Industrial Relations may refer any industrial or agricultural dispute or any matter under its consideration or advisement to a local board of inquiry, a provincial fiscal. a justice of the peace or any public official in any part of the Philippines for investigation, report and recommendation, and may delegate to such board or public official such powers and functions as the said Court of Industrial Relations may deem necessary, but such delegation shall not affect the exercise of the Court itself of any of its powers. (Section 10, ibid.) (6) The Court of Industrial Relations or any of its judges, therefore, must act on its or his own independent consideration of the law and facts of the controversy, and not simply accept the views of a subordinate in arriving at a decision. It may be that the volume of work is such that it is literally Relations personally to decide all controversies coming before them. In the United States the difficulty is solved with the enactment of statutory authority authorizing examiners or other subordinates to render final decision, with the right to appeal to board or commission, but in our case there is no such statutory authority. (7) The Court of Industrial Relations should, in all controversial questions, render its decision in such a manner that the parties to the proceeding can know the various issues involved, and the reasons for the decision rendered. The performance of this duty is inseparable from the authority conferred upon it. In the right of the foregoing fundamental principles, it is sufficient to observe here that, except as to the alleged agreement between the Ang Tibay and the National Worker's Brotherhood (appendix A), the record is barren and does not satisfy the thirst for a factual basis upon which to predicate, in a national way, a conclusion of law. This result, however, does not now preclude the concession of a new trial prayed for the by respondent National Labor Union, Inc., it is alleged that "the supposed lack of material claimed by Toribio Teodoro was but a scheme adopted to systematically discharged all the members of the National Labor Union Inc., from work" and this avernment is desired to be proved by the petitioner with the "records of the Bureau of Customs and the Books of Accounts of native dealers in leather"; that "the National Workers Brotherhood Union of Ang Tibay is a company or employer union dominated by Toribio Teodoro, the existence and functions of which are illegal." Petitioner further alleges under oath that the exhibits attached to the petition to prove his substantial avernments" are so inaccessible to the respondents that even within the exercise of due diligence they could not be expected to have obtained them and offered as evidence in the Court of Industrial Relations", and that the documents attached to the petition "are of such far reaching importance and effect that their admission would necessarily mean the modification and reversal of the judgment rendered herein." We have considered the reply of Ang Tibay and

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its arguments against the petition. By and large, after considerable discussions, we have come to the conclusion that the interest of justice would be better served if the movant is given opportunity to present at the hearing the documents referred to in his motion and such other evidence as may be relevant to the main issue involved. The legislation which created the Court of Industrial Relations and under which it acts is new. The failure to grasp the fundamental issue involved is not entirely attributable to the parties adversely affected by the result. Accordingly, the motion for a new trial should be and the same is hereby granted, and the entire record of this case shall be remanded to the Court of Industrial Relations, with instruction that it reopen the case, receive all such evidence as may be relevant and otherwise proceed in accordance with the requirements set forth hereinabove. So ordered. Avanceña, C. J., Villa-Real, Imperial, Diaz, Concepcion and Moran, JJ., concur. SECOND DIVISION

DR. CASTOR C. DE JESUS,

G.R. No. 171491

Petitioner, Present:

QUISUMBING, J., Chairperson, - versus -

CARPIO MORALES, BRION, DEL CASTILLO, and ABAD, JJ.

RAFAEL D. GUERRERO III, CESARIO R. PAGDILAO, AND FORTUNATA B. AQUINO,

Promulgated:

September 4, 2009 x- - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - -x

QUISUMBING, J.:

Culled from the records are the following facts: Nilo A. Bareza, Records Officer III of the Philippine Council for Aquatic and Marine Research and Development (PCAMRD), made out a check payable to himself and drawn against the Asean-Canada Project Fund, a foreign-assisted project being implemented by PCAMRD. To avoid being caught, Bareza stole Land Bank Check No. 070343 from the trust fund of the PCAMRD from the desk of Arminda S. Atienza, PCAMRD Cashier III. He filled out the check for the amount of P385,000.00, forged the signatures of the authorized signatories, made it appear that the check was endorsed to Atienza, and with him as the endorsee, encashed the check that was drawn against the PCAMRD Trust Fund. Then, he deposited part of the money to the Asean-Canada Project Fund and pocketed the difference.[3] Atienza discovered that the check in question was missing on the third week of February 1999 while preparing the Report of Checks Issued and Cancelled for the Trust Fund for the month of January. Not finding the check anywhere in her office, Atienza called the bank to look for the same. She was shocked to learn from a bank employee that the check had been issued payable in her name. When Atienza went to the bank to examine the check, she noticed that her signature and the signature of Dir. Rafael D. Guerrero III (Guerrero), PCAMRD Executive Director, were forged. She also found out that Bareza appeared to be the person who encashed the check.[4] Bareza admitted his wrongdoings when he was confronted by Atienza about the incident, but begged that he be not reported to the management. Bareza also promised to return the money in a few days. Against her good judgment, Atienza acquiesced to Barezas request, seeing Barezas remorse over his transgressions. But Atienza also felt uneasy over her decision to keep silent about the whole thing, so Atienza persuaded Bareza to inform Fortunata B. Aquino (Aquino), PCAMRD Director of Finance and Administrative Division, about what he did. Bareza, however, decided to confess to Carolina T. Bosque, PCAMRD Accountant III, instead.[5] When Bareza revealed to Bosque what he had done, he was also advised to report the matter to Aquino, but, Bareza became hysterical and threatened to commit suicide if his misdeeds were ever exposed. Due to his fervent pleading and his promise to repay the amount he took, Bosque, like Atienza, assented to his plea for her to remain silent. [6] True to his word, Bareza deposited back P385,000.00 to the PCAMRD account on February 25, 1999.[7]

Respondents.

DECISION

Before us is a petition for review seeking to reverse and set aside the Decision[1] dated September 30, 2005 of the Court of Appeals, in CA-G.R. SP No. 83779, and its Resolution[2] dated February 9, 2006 denying petitioners motion for reconsideration.

On July 27, 2001, following rumors that an investigation will be conducted concerning irregularities in the said project, Bareza set fire to the PCAMRD Records Section in order to clear his tracks.[8] A fact-finding committee was thus created by virtue of PCAMRD Memorandum Circular No. 30[9] to investigate the burning incident and forgery of checks by Bareza. After investigation, the fact-finding committee found sufficient evidence to charge Bareza with dishonesty, grave misconduct and falsification of official document.[10] The fact-finding committee likewise found

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sufficient evidence to charge Atienza with inefficiency and incompetence in the performance of official duties[11] and Bosque with simple neglect of duty.[12] Concomitant to the above findings, Guerrero formed an investigation committee to conduct formal investigations on the charges filed against Bareza, Atienza and Bosque. [13] The investigation committee found Bareza guilty of dishonesty and grave misconduct and recommended his dismissal from the service. It also found sufficient basis to uphold the charge filed against Atienza and Bosque, and recommended a minimum penalty of six (6) months and one (1) day suspension for Atienza, and a maximum penalty of six (6) months suspension for Bosque.[14] On September 10, 2001 the PCAMRD adopted the findings of the investigation committee but imposed only the penalty of six (6) months suspension on Atienza and only three (3) months suspension on Bosque.[15] Not convinced with the results of the investigation and the penalties imposed on Bareza, Atienza and Bosque, petitioner exerted efforts to obtain a copy of the complete records of the proceedings had. Upon reading the same, petitioner was of the opinion that the investigation conducted by the fact-finding committee and investigation committee was perfunctorily and superficially done, and made only to whitewash and cover-up the real issues because the report exonerated other persons involved in the crimes and omitted other erroneous acts. According to him, these circumstances led to partiality in deciding the charges. Hence, petitioner filed with the Office of the Deputy Ombudsman for Luzon(Ombudsman) a complaint against Guerrero, Cesario R. Pagdilao (Pagdilao), PCAMRD Deputy Executive Director, and Aquino, among others, for incompetence and gross negligence.[16] The case was docketed as OMB Case No. LA-02-0209-D. In their Joint Counter-Affidavit and Complaint for Malicious Prosecution[17] dated July 9, 2002, the respondents argued that the complaint is wanting in material, relevant and substantive allegations and is clearly intended only to harass them. Furthermore, they contended that petitioner failed to identify the persons he claims were exonerated, and worse, petitioner failed to state with particularity their participation in the crimes. [18] In his Consolidated Reply and Counter-Affidavit[19] dated July 25, 2002, petitioner belied the allegation of the respondents that his complaint was lacking in substance. He stressed that the report of the investigation committee that was submitted by the respondents reinforced his claim that the investigation relative to the forgery and arson case was indeed perfunctory and superficial, designed only to whitewash and cover-up the real issues. To bolster his contention, he pointed out that the sworn affidavit of Bareza revealed that the latter was able to use certain funds of the Asean-Canada Project by encashing blank checks that were previously signed by Pagdilao. Thus, he averred that the failure to implicate Pagdilao as a conspirator to the crime of forgery shows that the investigation was just a farce. Petitioner also claimed that Atienza and Bosque were not charged with the proper administrative offense to avoid their dismissal from the service. Petitioner pointed to the command responsibility of respondents over Bareza, Atienza and Bosque. He maintained that had they been prudent enough in handling PCAMRDs finances, the forgery of checks and the arson incident could have been avoided. Furthermore, petitioner alleged that being the head of PCAMRD, Guerrero should have pursued investigations on the criminal aspect of the cases of forgery and arson because a huge amount

of government money was involved therein. His act, therefore, of declaring the cases closed after the conduct of the investigations in the administrative aspect only is contrary to the AntiGraft and Corrupt Practices Act (Republic Act No. 3019) because its object is to conceal more big anomalies and issues.[20] In a Decision[21] dated August 5, 2002, the Ombudsman recommended the dismissal of the administrative case filed against the respondents for lack of merit. It agreed with the respondents that the complaint was couched in general terms that contains no material, relevant and substantial allegation to support the theory of cover-up or whitewash.The Ombudsman also held that there is nothing to sustain petitioners allegation that Pagdilao should be implicated in the forgery because petitioner failed to sufficiently prove that the check that was signed in blank by Pagdilao was Land Bank Check No. 070343, or the subject check encashed by Bareza. Even assuming that the forged check was the one signed in blank by Pagdilao, the Ombudsman opined that the latter still cannot be said to have participated in the forgery because the check was in the custody and safekeeping of Atienza, the cashier, when it was stolen. In the same vein, the Ombudsman found no adequate basis in the petitioners allegation that Guerrero charged Atienza and Bosque with erroneous administrative infractions to lessen their liability, noting that Guerrero merely adopted the recommendation of the fact-finding and investigation committees as to what they should be charged with. The Ombudsman added that Guerrero cannot be indicted for violation of Section 3(e) of Rep. Act No. 3019 or be held administratively liable for his failure to initiate criminal cases against Bareza, Atienza and Bosque because he had no personal knowledge of the commission of the crimes allegedly committed by them.[22] Petitioner moved for reconsideration, but the Ombudsman denied it in an Order[23] dated November 25, 2003. According to the Ombudsman, nowhere in petitioners complaint did he allege that respondents should be blamed for arson and forgery because of command responsibility. It held that petitioners averment of the same only in his reply-affidavit and in his motion for reconsideration should be disregarded altogether since it materially and belatedly alters his original cause of action against the respondents, which cannot be allowed.[24] Not accepting defeat, petitioner elevated the matter by way of a petition for review[25] under Rule 43 before the appellate court. Petitioner claimed that the Ombudsman gravely erred when it recommended the dismissal of the charges against the respondents and denied his motion for reconsideration despite the existence of a prima facie case against them for incompetence and gross negligence. On September 30, 2005, the Court of Appeals rendered a Decision affirming the August 5, 2002 Decision and November 25, 2003 Order of the Ombudsman in OMB Case No. L-A-020209-D. The appellate court found that the Ombudsman correctly dismissed the complaint against the respondents. The appellate court held that petitioner questioned the handling of the PCAMRD finances without specifying the particular acts or omissions constituting the gross negligence of the respondents. The charges, being broad, sweeping, general and purely speculative, cannot, by their nature, constitute a prima facie case against the respondents.[26] Petitioner moved for the reconsideration of the said Decision but it was denied by the appellate court in the Resolution dated February 9, 2006.

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Hence, the present petition raising the following issues for our resolution: I. WHETHER OR NOT THE HONORABLE COURT OF APPEALS COMMITTED A GRAVE AND REVERSIBLE ERROR WHEN IT DENIED IN ITS DECISION PETITIONERS PETITION AND AFFIRMED THE OMBUDSMANS DECISION OF AUGUST 5, 2002 IN OMB-L[-A]-02-020[9]-D, RECOMMENDING DISMISSAL OF THE CASE BY RELYING SOLELY AND EXCLUSIVELY ON THE GENERAL RULE/PRINCIPLE THAT THE COURTS WILL NOT INTERFERE IN THE INVESTIGATORY AND PROSECUTORY POWERS OF THE OMBUDSMAN, IGNORING THE EXCEPTIONS TO THE RULE PRESENCE OF COMPELLING REASONS AND GRAVE ABUSE OF DISCRETION IN THE EXERCISE THEREOF. II. WHETHER OR NOT THE HONORABLE COURT OF APPEALS COMMITTED A SERIOUS REVERSIBLE ERROR AND A GRAVE MISAPPREHENSION OF FACTS AND MISAPPRECIATION OF THE EVIDENCE WHEN IT RULED THAT THERE IS NO PRIMA FACIE OR PROBABLE CAUSE AGAINST RESPONDENTS, [THAT] IF CONSIDERED, WILL ALTER THE OUTCOME OF THE CASE. III. WHETHER OR NOT THE HONORABLE COURT OF APPEALS COMMITTED A GRAVE AND REVERSIBLE ERROR WHEN IT RULED THAT RESPONDENTS ARE NOT ADMINISTRATIVELY LIABLE.[27] Simply put, we are asked to resolve whether the appellate court erred in affirming the dismissal of the complaint. We hold that it did not. In administrative proceedings, the quantum of proof necessary for a finding of guilt is substantial evidence, i.e., that amount of relevant evidence that a reasonable mind might accept as adequate to support a conclusion. Further, the complainant has the burden of proving by substantial evidence the allegations in his complaint. The basic rule is that mere allegation is not evidence and is not equivalent to proof. Charges based on mere suspicion and speculation likewise cannot be given credence. Hence, when the complainant relies on mere conjectures and suppositions, and fails to substantiate his allegations, the administrative complaint must be dismissed for lack of merit.[28] Mainly, petitioner ascribes incompetence and gross negligence to respondents because according to him, the fraudulent use of PCAMRD funds and arson would not have happened had they not been remiss in the performance of their duties. Specifically, he averred that Guerrero, being the head of PCAMRD, should have seen to it that all the resources of the government are managed and expended in accordance with laws and regulations, and safeguarded against loss and waste; Pagdilao should have ensured that the signed blank checks were used for what they were intended; and that anomalies would have been avoided had Aquino supervised Bareza, Atienza and Bosque, her subordinates, properly and efficiently. In sum, petitioner argues that they are accountable because of command responsibility.[29]

We agree with the appellate court and the Ombudsman that the complaint against the respondents should be dismissed. A perusal of petitioners allegations clearly shows that they are mere general statements or conclusions of law, wanting in evidentiary support and substantiation. It is not enough for petitioner to simply aver that respondents had been derelict in their duties; he must show the specific acts or omissions committed by them which amount to incompetence and gross negligence. This, he failed to do. Hence, the complaint was correctly dismissed for lack of merit. Petitioners allegation that he has specified the acts and omissions of respondents which show that they are guilty of dishonesty and falsification lacks merit. Aside from the fact that nowhere in the records does it appear that he has indeed shown the particular acts or omissions of respondents constituting dishonesty or which amounted to falsification of whatever nature, it must be emphasized that the case he filed before the Ombudsman was an administrative complaint for incompetence and gross negligence. Hence, these are the two charges he needed to prove by substantial evidence, not any other crime or administrative infraction. At the very least, petitioner should have shown how his accusations of dishonesty and falsification constituted incompetence and gross negligence on the part of the respondents. To further persuade us that his complaint was wrongly dismissed, petitioner argues that he had in his petition established the existence of probable cause to hold respondents liable for violation of Section 3(e) of Rep. Act No. 3019, or the Anti-Graft and Corrupt Practices Act.[30] He then concludes that if there is sufficient basis to indict the respondents of a criminal offense then with more reason that they should be made accountable administratively considering the fact that the quantum of evidence required in administrative proceedings is merely substantial evidence.[31] This argument likewise has no merit. It is worthy to note that petitioner is merely proceeding from his own belief that there exists sufficient basis to charge respondents criminally. This is not within his province to decide. He could not arrogate unto himself the power that pertains to the proper authorities enjoined by law to determine the absence or existence of probable cause to indict one of a criminal offense. More importantly, an administrative proceeding is different from a criminal case and may proceed independently thereof.[32] Even if respondents would subsequently be found guilty of a crime based on the same set of facts obtaining in the present administrative complaint, the same will not automatically mean that they are also administratively liable. As we have said in Gatchalian Promotions Talents Pool, Inc. v. Naldoza[33] and which we have reiterated in a host of cases,[34] a finding of guilt in the criminal case will not necessarily result in a finding of liability in the administrative case. Conversely, respondents acquittal will not necessarily exculpate them administratively. The basic premise is that criminal and civil cases are altogether different from administrative matters, such that the disposition in the first two will not inevitably govern the third and vice versa.[35] It must be stressed that the basis of administrative liability differs from criminal liability. The purpose of administrative proceedings is mainly to protect the public service, based on the timehonored principle that a public office is a public trust. On the other hand, the purpose of criminal

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prosecution is the punishment of crime.[36] To state it simply, petitioner erroneously equated criminal liability to administrative liability. Neither will the allegation of the principle of command responsibility make the respondents liable. In the absence of substantial evidence of gross negligence of the respondents, administrative liability could not be based on the principle of command responsibility.[37] Without proof that the head of office was negligent, no administrative liability may attach. Indeed, the negligence of subordinates cannot always be ascribed to their superior in the absence of evidence of the latters own negligence.[38] While it may be true that certain PCAMRD employees were sanctioned for negligence and some other administrative infractions, it does not follow that those holding responsible positions, like the respondents in this case, are likewise negligent, especially so when the contentions of petitioner remain unsubstantiated. WHEREFORE, there being no sufficient showing of grave and reversible error in the assailed decision and resolution, the petition is DENIED. Said Decision dated September 30, 2005 and Resolution dated February 9, 2006 of the Court of Appeals in CA-G.R. SP No. 83779 are hereby AFFIRMED. No pronouncement as to costs.

ARTURO D. BRION

MARIANO C. DEL CASTILLO

Associate Justice

Associate Justice

ROBERTO A. ABAD Associate Justice

SO ORDERED.

ATTESTATION LEONARDO A. QUISUMBING Associate Justice

I attest that the conclusions in the above Decision had been reached in consultation before the case was assigned to the writer of the opinion of the Courts Division.

WE CONCUR:

LEONARDO A. QUISUMBING CONCHITA CARPIO MORALES Associate Justice

Associate Justice Chairperson

Page 91 of 192

[13]

Id. at 91.

[14]

Id. at 65.

[15]

Id. at 42-43.

[16]

Id. at 37.

[17]

Id. at 49-52.

[18]

Id. at 50.

[19]

Id. at 150-158.

[20]

Id. at 151-154.

REYNATO S. PUNO

[21]

Id. at 159-165.

Chief Justice

[22]

Id. at 161-162, 164.

[23]

Id. at 171-176.

[24]

Id. at 174-175.

CERTIFICATION

Pursuant to Section 13, Article VIII of the Constitution and the Division Chairpersons Attestation, I certify that the conclusions in the above Decision had been reached in consultation before the case was assigned to the writer of the opinion of the Courts Division.

[25]

CA rollo, pp. 7-21.

Rollo, pp. 25-32. Penned by Associate Justice Santiago Javier Ranada, with Associate Justices Mario L. Guaria III and Jose Catral Mendoza concurring.

[26]

Rollo, p. 31.

[2]

Id. at 34.

[27]

Id. at 208.

[3]

Id. at 57.

[28]

[4]

Id. at 85.

[5]

Id.

[6]

Id. at 87.

[1]

[7]

[8]

Manalabe v. Cabie, A.M. No. P-05-1984, July 6, 2007, 526 SCRA 582, 589; See also Adajar v. Develos, A.M. No. P-05-2056, November 18, 2005, 475 SCRA 361, 376-377; Ong v. Rosete, A.M. No. MTJ-04-1538, October 22, 2004, 441 SCRA 150, 160; Datuin, Jr. v. Soriano, A.M. No. RTJ-01-1640, October 15, 2002, 391 SCRA 1, 5. [29]

Rollo, pp. 218-219.

[30]

Id. at 211-217.

[31]

Id. at 217.

Id. at 90. Id. at 78. [32]

[9]

Id. at 70-71.

[10]

Id. at 67.

[11]

Id. at 68.

[12]

Id. at 69.

Miralles v. Go, G.R. No. 139943, January 18, 2001, 349 SCRA 596, 609; See also Barillo v. Gervacio, G.R. No. 155088, August 31, 2006, 500 SCRA 561, 572; J. King & Sons Company, Inc. v. Hontanosas, Jr., A.M. No. RTJ-03-1802, September 21, 2004, 438 SCRA 525, 552, citing Bejarasco, Jr. v. Buenconsejo, A.M. No. MTJ-02-1417, May 27, 2004, 429 SCRA 212, 221; Paredes v. Court of Appeals, G.R. No. 169534, July 30, 2007, 528 SCRA 577, 587. [33]

A.C. No. 4017, September 29, 1999, 315 SCRA 406.

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[34]

Miralles v. Go, supra at 609; Office of the Court Administrator v. Sardido, A.M. No. MTJ-011370, April 25, 2003, 401 SCRA 583, 591; Saludo, Jr. v. Court of Appeals, G.R. No. 121404, May 3, 2006, 489 SCRA 14, 19. [35]

Gatchalian Promotions Talents Pool, Inc. v. Naldoza, supra at 413.

[36]

Valencia v. Sandiganbayan, G.R. No. 141336, June 29, 2004, 433 SCRA 88, 99.

[37]

Principe v. Fact-Finding & Intelligence Bureau, G.R. No. 145973, January 23, 2002, 374 SCRA 460, 468. [38]

Nicolas v. Desierto, G.R. No. 154668, December 16, 2004, 447 SCRA 154, 167; Soriano v. Marcelo, G.R. No. 167743, November 22, 2006, 507 SCRA 571, 591-592.

IT IS ORDERED that, upon the filing of a bond in the amount of P5,000.00, let the writ of preliminary injunction prayed for by the petitioner [private respondent] be issued restraining the respondents [petitioners], their agents, representatives, attorneys and/or other persons acting in their behalf from further issuing subpoenas in connection with the fact-finding investigations to the petitioner [private respondent] and from instituting contempt proceedings against the petitioner [private respondent] under Section 580 of the Revised Administrative Code. (Stress supplied). Pursuant to his special powers and duties under Section 64 of the Revised Administrative Code,1 the President of the Philippines created the Presidential Agency on Reforms and Government Operations (PARGO) under Executive Order No. 4 of January 7, 1966.2 Purposedly, he charged the Agency with the following functions and responsibilities: 3 b. To investigate all activities involving or affecting immoral practices, graft and corruptions, smuggling (physical or technical), lawlessness, subversion, and all other activities which are prejudicial to the government and the public interests, and to submit proper recommendations to the President of the Philippines.

Republic of the Philippines SUPREME COURT Manila EN BANC

c. To investigate cases of graft and corruption and violations of Republic Acts Nos. 1379 and 3019, and gather necessary evidence to establish prima facie, acts of graft and acquisition of unlawfully amassed wealth ... .

G.R. No. L-29274 November 27, 1975

h. To receive and evaluate, and to conduct fact-finding investigations of sworn complaints against the acts, conduct or behavior of any public official or employee and to file and prosecute the proper charges with the appropriate agency.

SEC. QUIRICO P. EVANGELISTA, in his capacity as Secretary of the Presidential Agency on Reforms and Government Operations, and the PRESIDENTIAL AGENCY ON REFORMS AND GOVERNMENT OPERATIONS (PARGO), petitioner, vs. HON. HILARION U. JARENCIO, as Presiding Judge, Court of First Instance of Manila, Branch XXIII, and FERNANDO MANALASTAS, Assistant City Public Service Officer of Manila, and ALL OTHER CITY OFFICIALS AND EMPLOYEES SIMILARLY SITUATED, respondents. Office of the Solicitor General Antonio P. Barredo, Ist. Assistant Solicitor General Esmeraldo Umali and Solicitor Bernardo P. Pardo for petitioners.

For a realistic performance of these functions, the President vested in the Agency all the powers of an investigating committee under Sections 71 and 580 of the Revised Administrative Code, including the power to summon witnesses by subpoena or subpoena duces tecum, administer oaths, take testimony or evidence relevant to the investigation.4 Whereupon, on June 7, 1968, petitioner Quirico Evangelista, as Undersecretary of the Agency, issued to respondent Fernando Manalastas, then Acting City Public Service Officer of Manila, a subpoena ad testificandum commanding him "to be and appear as witness at the Office of the PRESIDENTIAL AGENCY ON REFORMS AND GOVERNMENT OPERATIONS ... then and there to declare and testify in a certain investigation pending therein." Instead of obeying the subpoena, respondent Fernando Manalastas filed on June 25, 1968 with the Court of First Instance of Manila an Amended Petition for prohibition, certiorari and/or injunction with preliminary injunction and/or restraining order docketed as Civil Case No. 73305 and assailed its legality.

Gregorio A. Ejercito and Felix C. Chavez for respondents.

MARTIN, J.:

On July 1, 1968, respondent Judge issued the aforementioned Order:

This is an original action for certiorari and prohibition with preliminary injunction, under Rule 65 of the Rules of Court, seeking to annul and set aside the order of respondent Judge, the Honorable Hilarion J. Jarencio, Presiding Judge of the Court of First Instance of Manila, dated July 1, 1968, in Civil Case No. 73305, entitled "Fernando Manalastas vs. Sec. Ramon D. Bagatsing, etc.", which reads as follows:

IT IS ORDERED that, upon the filing of a bond in the amount of P5,000.00, let the writ of preliminary injunction prayed for by the petitioner [private respondent] be issued restraining the respondents [petitioners], their agents, representatives, attorneys and/or other persons acting in their behalf from further issuing subpoenas in connection with the fact-finding investigations to the petitioner [private respondent] and from instituting contempt proceedings against the

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petitioner [private respondent] under Section 530 of the Revised Administrative Code. (Stress supplied). Because of this, petitioners 5 elevated the matter direct to Us without a motion for reconsideration first filed on the fundamental submission that the Order is a patent nullity. 6 As unfurled, the dominant issue in this case is whether the Agency, acting thru its officials, enjoys the authority to issue subpoenas in its conduct of fact-finding investigations. It has been essayed that the life blood of the administrative process is the flow of fact, the gathering, the organization and the analysis of evidence.7 Investigations are useful for all administrative functions, not only for rule making, adjudication, and licensing, but also for prosecuting, for supervising and directing, for determining general policy, for recommending, legislation, and for purposes no more specific than illuminating obscure areas to find out what if anything should be done.8 An administrative agency may be authorized to make investigations, not only in proceedings of a legislative or judicial nature, but also in proceedings whose sole purpose is to obtain information upon which future action of a legislative or judicial nature may be taken 9 and may require the attendance of witnesses in proceedings of a purely investigatory nature. It may conduct general inquiries into evils calling for correction, and to report findings to appropriate bodies and make recommendations for actions. 10 We recognize that in the case before Us, petitioner Agency draws its subpoena power from Executive Order No. 4, para. 5 which, in an effectuating mood, empowered it to "summon witness, administer oaths, and take testimony relevant to the investigation" 11 with the authority "to require the production of documents under a subpoena duces tecum or otherwise, subject in all respects to the same restrictions and qualifications as apply in judicial proceedings of a similar character." 12 Such subpoena power operates in extenso to all the functions of the Agency as laid out in the aforequoted sub-paragraphs (b),(e), and (h). It is not bordered by nor is it merely exercisable, as respondents would have it, in quasi-judicial or adjudicatory function under sub-paragraph (b). The functions enumerated in all these sub-paragraphs (b), (e), and (h) interlink or intertwine with one another with the principal aim of meeting the very purpose of the creation of the Agency, which is to forestall and erode nefarious activities and anomalies in the civil service. To hold that the subpoena power of the Agency is confined to mere quasi-judicial or adjudicatory functions would therefore imperil or inactiviate the Agency in its investigatory functions under sub-paragraphs (e) and (h). More than that, the enabling authority itself (Executive Order No. 4, para. 5) fixes no distinction when and in what function should the subpoena power be exercised. Similarly, We see no reason to depart from the established rule that forbids differentiation when the law itself makes none. Nor could We impress upon this subpoena power the alleged strictures of a subpoena issued under the Rules of Court 13 to abridge its application. The seeming proviso in Section 580 of the Revised Administrative Code that the right to summon witnesses and the authority to require the production of documents under a subpoena duces tecumor otherwise shall be "subject in all respects to the same restrictions and qualifications as apply in judicial proceedings of a similar character" cannot be validly seized upon to require, in respondents' formulation, that, as in a subpoena under the Rules, a specific case must be pending before a court for hearing or trial and that the hearing or trial must be in connection with the exercise of the court's judicial or

adjudicatory functions 14 before a non-judicial subpoena can be issued by an administrative agency like petitioner Agency. It must be emphasized, however, that an administrative subpoena differs in essence from a judicial subpoena. Clearly, what the Rules speaks of is a judicial subpoena, one procurable from and issuable by a competent court, and not an administrative subpoena. To an extent, therefore, the "restrictions and qualifications" referred to in Section 580 of the Revised Administrative Code could mean the restraints against infringement of constitutional rights or when the subpoena is unreasonable or oppressive and when the relevancy of the books, documents or things does not appear. 15 Rightly, administrative agencies may enforce subpoenas issued in the course of investigations, whether or not adjudication is involved, and whether or not probable cause is shown 16 and even before the issuance of a complaint. 17 It is not necessary, as in the case of a warrant, that a specific charge or complaint of violation of law be pending or that the order be made pursuant to one. It is enough that the investigation be for a lawfully authorized purpose. 18 The purpose of the subpoena is to discover evidence, not to prove a pending charge, but upon which to make one if the discovered evidence so justifies. 19 Its obligation cannot rest on a trial of the value of testimony sought; it is enough that the proposed investigation be for a lawfully authorized purpose, and that the proposed witness be claimed to have information that might shed some helpful light. 20 Because judicial power is reluctant if not unable to summon evidence until it is shown to be relevant to issues on litigations it does not follow that an administrative agency charged with seeing that the laws are enforced may not have and exercise powers of original inquiry. The administrative agency has the power of inquisition which is not dependent upon a case or controversy in order to get evidence, but can investigate merely on suspicion that the law is being violated or even just because it wants assurance that it is not. When investigative and accusatory duties are delegated by statute to an administrative body, it, too may take steps to inform itself as to whether there is probable violation of the law. 21 In sum, it may be stated that a subpoena meets the requirements for enforcement if the inquiry is (1) within the authority of the agency; (2) the demand is not too indefinite; and (3) the information is reasonably relevant. 22 There is no doubt that the fact-finding investigations being conducted by the Agency upon sworn statements implicating certain public officials of the City Government of Manila in anomalous transactions 23 fall within the Agency's sphere of authority and that the information sought to be elicited from respondent Fernando Manalastas, of which he is claimed to be in possession, 24 is reasonably relevant to the investigations. We are mindful that the privilege against self-incrimination extends in administrative investigations, generally, in scope similar to adversary proceedings. 25 In Cabal v. Kapunan, Jr., 26 the Court ruled that since the administrative charge of unexplained wealth against the respondent therein may result in the forfeiture of the property under the Anti-Graft and Corrupt Practices Act, a proceeding criminal or penal in nature, the complainant cannot call the respondent to the witness stand without encroaching upon his constitutional privilege against self-incrimination. Later, in Pascual, Jr. v. Board of Medical Examiners, 27 the same approach was followed in the administrative proceedings against a medical practitioner that could possibly result in the loss of his privilege to practice the medical profession. Nevertheless, in the present case, We find that respondent Fernando Manalastas is not facing any administrative charge. 28 He is merely cited as a witness in connection with the fact-finding investigation of anomalies and irregularities in the City Government of Manila with the object of submitting the

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assembled facts to the President of the Philippines or to file the corresponding charges. 29 Since the only purpose of investigation is to discover facts as a basis of future action, any unnecessary extension of the privilege would thus be unwise. 30Anyway, by all means, respondent Fernando Manalastas may contest any attempt in the investigation that tends to disregard his privilege against self-incrimination. A question of constitutional dimension is raised by respondents on the inherent power of the President of the Philippines to issue subpoena. 31 More tersely stated, respondents would now challenge, in a collateral way, the validity of the basic authority, Executive Order No. 4, as amended in part by Executive Order No. 88. Unfortunately, for reasons of public policy, the constitutionality of executive orders, which are commonly said to have the force and effect of statutes 32 cannot be collaterally impeached. 33 Much more when the issue was not duly pleaded in the court below as to be acceptable for adjudication now. 34 The settled rule is that the Court will not anticipate a question of constitutional law in advance of the necessity of deciding it. 35 Nothing then appears conclusive than that the disputed subpoena issued by petitioner Quirico Evangelista to respondent Fernando Manalastas is well within the legal competence of the Agency to issue. WHEREFORE, the aforequoted order of respondent Judge, dated July 1, 1968, is hereby set aside and declared of no force and effect. Without pronouncement as to costs. SO ORDERED. Castro, Antonio, Esguerra, Muñoz Palma and Aquino, JJ., concur. Makalintal, C.J., concurs in the result. Barredo, Makasiar, and Concepcion, Jr., JJ, took no part.

Separate Opinions

FERNANDO, J., concurring: The opinion of the Court, ably penned by Justice Martin, is both learned and comprehensive. It reflects the current state of doctrinal pronouncements in American Administrative Law, which up to now possesses worth in this jurisdiction. It is in accordance with the views expressed in two authoritative American treatises that of

Davis1 and that of Jaffe.2 The compact but highly useful text of Parker yields the same conclusion.3 A similar approach may be discerned in the casebooks of Katz, 4 and McFarland and Vanderbelt.5 A concurrence is thus called for. That for me does not conclude matters though. The constitutional rights of a person who may be involved in such administrative investigation, call for respect. A recognition of the expanded reach of the administrative process in order to assure that the objectives of a regulatory statute be attained cannot obscure the protection that the Constitution affords a person who may find himself in the position of a respondent. It is worthwhile to my mind that there be a reference, even if far from detailed, to such an aspect. Hence this separate opinion. 1. The right to be protected against unreasonable search and seizure should not fall by the wayside. 6 The broad sweep of the administrative power of investigation cannot, consistently with the Constitution, go so far as to render it meaningless. It is with such a reading in mind that I view the pronouncement in United States v. Morton Salt Co.,7 on which reliance is placed in the opinion of Justice Martin. The doctrine formulated in such American case by Justice Jackson reads thus: "Of course a governmental investigation into corporate matters may be of such a sweeping nature and so unrelated to the matter properly under inquiry as to exceed the investigatory power. Federal Trade Comm. v. American Tobacco Co., ... . But it is sufficient if the inquiry is within the authority of the agency, the demand is not too indefinite and the information sought is reasonably relevant. "The gist of the protection is in the requirement, expressed in terms, that the disclosure sought shall not be unreasonable.""8 It has been given approval in an impressive number of subsequent adjudications. 9 It suffices, however, to call attention to the words of Justice Jackson in the two paragraphs preceding the excerpts cited to remove any doubt as to its lending itself to the construction that an inroad into the right of search and seizure is now permissible: "The Commission's order is criticized upon grounds that the order transgresses the Fourth Amendment's proscription of unreasonable searches and seizures and the Fifth Amendment's due process of law clause. It is unnecessary here to examine the question of whether a corporation is entitled to the protection of the Fourth Amendment. ... Although the "right to be let alone — the most comprehensive of rights and the right most valued by civilized men," ... is not confined literally to searches and seizures as such, but extends as well to the orderly taking under compulsion of process, ... neither incorporated nor unincorporated associations can plead an unqualified right to conduct their affairs in secret. ... While they may and should have protection from unlawful demands made in the name of public investigation, ... corporations can claim no equality with individuals in the enjoyment of a right to privacy . ... They are endowed with public attributes. They have a collective impact upon society, from which they derive the privilege of acting as artificial entities. The Federal Government allows them the privilege of engaging in interstate commerce. Favors from government often carry with them an enhanced measure of regulation. ... Even if one were to regard the request for information in this case as caused by nothing more than official curiosity, nevertheless law-enforcing agencies have a legitimate right to satisfy themselves that corporate behavior is consistent with the law and the public interest." 10 Thus is rendered clear that the landmark Boyd decision which warned against the use of the subpoena power to trench upon this guarantee still speaks authoritatively. This Court has spoken to the same effect, Boyd having been cited in a number of cases. 11 I would, therefore, read the opinion of my brethren as not departing from but precisely adhering to its command. Whatever relaxation of its compelling force may be allowable in case of corporations should not apply where an individual is concerned. That should reassure respondent

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Manalastas that if he could demonstrate a failure to abide by the constitutional mandate on search and seizure, he is not without a remedy.

reference to some overpriced equipment sold by him to the City of Manila wherein he likewise narrated in detail the modus operandi and specifically named respondent Manalastas and five other officials to whom he allegedly gave: "due monetary consideration."

2. Nor can I fully reconcile myself to the implications lurking in this observation in the opinion of the Court: "Since the only purpose of investigation is to discover facts as a basis of future action, any unnecessary extension of the privilege would thus be unwise." 12 The right not to incriminate oneself 13 is equally deserving of the utmost deference and respect. What is more, the present Constitution by the adoption of the Miranda doctrine has vitalized it even further. 14 There is, happily, the last sentence of such paragraph: "Anyway, by all means, respondent Fernando Manalastas may contest any attempt in the investigation that tends to disregard his privilege against selfincrimination." 15 When read in connection with the earlier reference to the fact that the respondent is called as a witness not as the party proceeded against, it cannot be said, in the light of the ruling in Planas v. Gil, 16 that it offends against this constitutional guarantee. As of now then, with the question of any modification of the Planas doctrine not being properly before us, I can yield my concurrence. Candor compels the statement, however, that for me a reexamination of such a pronouncement is desirable. A distinction between a witness and a respondent may be too tenuous if the realities of the situation be fully considered. I am bothered by the thought that the force of the Cabal 17 and the Pascual, Jr. decisions 18 may be eroded if the prospective respondent is first called as a witness and is thus compelled to testify. For the present, it may suffice if I express my misgivings. At any rate, concurrence is not ruled out in view of the aforementioned caveat in the able opinion of Justice Martin. TEEHANKEE, J., dissenting: I am constrained to dissent from the main opinion of Mr. Justice Martin which grants the petition and sets aside respondent court's order and writ of preliminary injunction of July 1, 1968 and would therefore require respondent Fernando Manalastas as assistant city public service officer of Manila (and all other city officials similarly situated) to comply with the PARGO subpoena "to testify to matters relevant to the investigation of anomalies and sworn statements involving or implicating certain City officials or other public officers."1 While the subpoena commands respondent Manalastas to appear as witness before the PARGO,2 on the basis whereof the main opinion finds that said respondent "is not facing any administrative charge" and that "he is merely cited as witness in connection with the fact-finding investigation of anomalies and irregularities in the City Government of Manila with the object of submitting the assembled facts to the President of the Philippines or to file the corresponding charges",3 it is a fact shown by the very petition at bar itself and its Annexes B and B-1 that respondent Manalastas is in fact and for all intents and purposes subpoenaed as a respondent or one directly implicated with alleged bribery and graft in the said sworn statements that concededly as per the petition itself initiated the PARGO's alleged "fact-finding investigation."4 Thus Annex B of the petition which is a sworn statement of one Edilberto Arguelles, investigated by the PARGO on the overpricing of eight steam cleaners sold through him as commission agent to the City of Manila, sets forth the detailed allegations of said declarant that respondent Manalastas and a number of other city officials named and unnamed got the lion's share of the overpricing. Annex B-1 of the petition is the sworn statement of one Carlos Montañez with

All claims of PARGO to the contrary notwithstanding, the very petition and said annexed sworn statements (which were not shown to respondent judge in spite of his expressly asking for them during the course of the hearing 5) show that respondent Manalastas (and others similarly situated) are indeed not merely witnesses but in reality respondents (subject to administrative and criminal charges.) Respondent has therefore correctly invoked Cabal vs. Kapunan,6 wherein the Court through then Chief Justice Roberto Concepcion held that therein petitioner rightfully refused to take the witness stand as against the order of the Presidential Committee investigating the complaint against him for alleged unexplained wealth (since such proceedings were in substance and effect a criminal one and his position was virtually that of an accused on trial and he therefore had the right to remain silent and invoke the privilege against self-incrimination in support of a blanket refusal to answer any and all questions) and ordered the dismissal of the criminal contempt charge against him. Pascual Jr. vs. Bd. of Examiners7 is equally in point, wherein the Court sustained the lower court's writ of injunction against the respondent board's order compelling therein petitioner to take the witness stand in a malpractice case (wherein he was respondent) in view of the penal nature of the proceedings and the right of the accused to refuse "not only to answer incriminatory questions, but also to take the witness stand."8 The Court therein stressed that "the constitutional guarantee, along with other rights granted an accused, stands for a belief that while crime should not go unpunished and that the truth must be revealed, such desirable objectives should not be accomplished according to means or methods offensive to the high sense of respect accorded the human personality. More and more in line with the democratic creed, the deference accorded an individual even those suspected of the most heinous crimes is given due weight. To quote from Chief Justice Warren, "the constitutional foundation underlying the privilege is the respect a government ... must accord to the dignity and integrity of its citizens."" and that "while earlier decisions stressed the principle of humanity on which this right is predicated, precluding as it does all resort to force or compulsion, whether physical or mental, current judicial opinion places equal emphasis on its identification with the right to privacy. Thus according to Justice Douglas: "The Fifth Amendment in its Self-Incrimination clause enables the citizen to create a zone of privacy which government may not force to surrender to his detriment." That petitioner's investigation and subpoena against respondent Manalastas were in substance and effect criminal in nature against him as a respondent (and not merely as witness) as indicated above, is borne out by the fact of record in Sugay vs. Pamaran 9 (of which the Court can well take judicial notice) that on July 22, 1971 respondent Manalastas as well as Carlos Montañez the trader (affiant in Annex B-1, petition, supra, 10) and a number of other city officials were charged by the city fiscal in the Circuit Criminal Court of Manila for violations of Republic Act 3019 (Anti-Graft Law) in connection with the alleged gross overpricing of the same equipment (steam cleaners and air compressor) purchased for the City.

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The main opinion's justification for upholding the subpoena, viz, that "since the only purpose of investigation is to discover facts as a basis of future action, any unnecessary extension of the privilege (against self-incrimination)would thus be unnecessary" 11 thus appears to be flawed in fact and in law: respondent was in factbeing investigated as respondent-suspect and without submitting to the investigation was actually criminally charged in court; as a pure matter of legal principle, the 1973 Constitution has recognized the necessity of strengthening (and extending) the privilege against self-incrimination by expressly providing as a constitutional mandate in the Bill of Rights that "Any person under investigation for the commission of an offense shall have the right to remain silentand to counsel, and to be informed of such right" (Article IV, section 20) and outlawing the use of any confession obtained in violation of said section by declaring its inadmissibility in evidence. Respondent Manalastas was therefore justified in invoking the privilege against selfincrimination and in securing the respondent court's injunction against enforcement of petitioner's subpoena. Respondent was unquestionably a party respondent who under the doctrine of Cabal and Pascual, supra, had the right to remain silent and invoke the privilege against self-incrimination and refuse to take the witness stand. This legal and constitutional right may not be defeated by the transparent expedient of citing respondent as a supposed witness in what was avowed to be a general fact-finding investigation but obviously was a fishing expedition to ensnare respondent as a prime suspect, as borne out by the sworn statements withheld from respondent court and now annexed to the very petition at bar and petitioner's contention that "In effect, the injunction issued by the lower court is one to restrain criminal prosecutions." This contention has of course been proven baseless by the events already cited above that such criminal prosecutions were in fact filed in court against respondent and others without the need of petitioner's "fact-finding investigation" and subpoenas. The thrust of all this is that the State with its overwhelming and vast powers and resources can and must ferret out and investigate wrongdoing, graft and corruption and at the same time respect the constitutional guarantees of the individual's right to privacy, silence and due process and against self-incrimination and unreasonable search and seizure. This means that leads and charges must be investigated and followed up through the assistance of the corresponding police and law enforcement agencies as provided in the petitioner's executive charter 12 and the evidence secured by proper applications for search warrants, and as conceded in the petition itself, after the corresponding report to the President "to file the corresponding charges against the persons who may appear responsible or merely refer them to other appropriate offices such as the Fiscal's office, like what was done in other cases." 13 There appears to be validity in respondent's contention that the subpoena power granted petitioner in its executive charter does not apply to general fact-finding investigations conducted by it. 14 I find no need, however, of going further into this issue, since this dissent is based directly on the fundamental tenet that respondent Manalastas was unquestionably being investigated by petitioner as respondent and a prime suspect (and not as a mere witness) and accordingly, under settled doctrine, he had every right to remain silent and to invoke his right against self-incrimination and to refuse to take the witness stand. I therefore vote for upholding respondent court's injunction against enforcement of petitioner's subpoena.

Separate Opinions FERNANDO, J., concurring: The opinion of the Court, ably penned by Justice Martin, is both learned and comprehensive. It reflects the current state of doctrinal pronouncements in American Administrative Law, which up to now possesses worth in this jurisdiction. It is in accordance with the views expressed in two authoritative American treatises that of Davis1 and that of Jaffe.2 The compact but highly useful text of Parker yields the same conclusion.3 A similar approach may be discerned in the casebooks of Katz, 4 and McFarland and Vanderbelt.5 A concurrence is thus called for. That for me does not conclude matters though. The constitutional rights of a person who may be involved in such administrative investigation, call for respect. A recognition of the expanded reach of the administrative process in order to assure that the objectives of a regulatory statute be attained cannot obscure the protection that the Constitution affords a person who may find himself in the position of a respondent. It is worthwhile to my mind that there be a reference, even if far from detailed, to such an aspect. Hence this separate opinion. 1. The right to be protected against unreasonable search and seizure should not fall by the wayside. 6 The broad sweep of the administrative power of investigation cannot, consistently with the Constitution, go so far as to render it meaningless. It is with such a reading in mind that I view the pronouncement in United States v. Morton Salt Co.,7 on which reliance is placed in the opinion of Justice Martin. The doctrine formulated in such American case by Justice Jackson reads thus: "Of course a governmental investigation into corporate matters may be of such a sweeping nature and so unrelated to the matter properly under inquiry as to exceed the investigatory power. Federal Trade Comm. v. American Tobacco Co., ... . But it is sufficient if the inquiry is within the authority of the agency, the demand is not too indefinite and the information sought is reasonably relevant. "The gist of the protection is in the requirement, expressed in terms, that the disclosure sought shall not be unreasonable.""8 It has been given approval in an impressive number of subsequent adjudications. 9 It suffices, however, to call attention to the words of Justice Jackson in the two paragraphs preceding the excerpts cited to remove any doubt as to its lending itself to the construction that an inroad into the right of search and seizure is now permissible: "The Commission's order is criticized upon grounds that the order transgresses the Fourth Amendment's proscription of unreasonable searches and seizures and the Fifth Amendment's due process of law clause. It is unnecessary here to examine the question of whether a corporation is entitled to the protection of the Fourth Amendment. ... Although the "right to be let alone — the most comprehensive of rights and the right most valued by civilized men," ... is not confined literally to searches and seizures as such, but extends as well to the orderly taking under compulsion of process, ... neither incorporated nor unincorporated associations can plead an unqualified right to conduct their affairs in secret. ... While they may and should have protection from unlawful demands made in the name of public investigation, ... corporations can claim no equality with individuals in the enjoyment of a right to privacy . ... They are endowed with public attributes. They have a collective impact upon society, from which they derive the

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privilege of acting as artificial entities. The Federal Government allows them the privilege of engaging in interstate commerce. Favors from government often carry with them an enhanced measure of regulation. ... Even if one were to regard the request for information in this case as caused by nothing more than official curiosity, nevertheless law-enforcing agencies have a legitimate right to satisfy themselves that corporate behavior is consistent with the law and the public interest." 10 Thus is rendered clear that the landmark Boyd decision which warned against the use of the subpoena power to trench upon this guarantee still speaks authoritatively. This Court has spoken to the same effect, Boyd having been cited in a number of cases. 11 I would, therefore, read the opinion of my brethren as not departing from but precisely adhering to its command. Whatever relaxation of its compelling force may be allowable in case of corporations should not apply where an individual is concerned. That should reassure respondent Manalastas that if he could demonstrate a failure to abide by the constitutional mandate on search and seizure, he is not without a remedy. 2. Nor can I fully reconcile myself to the implications lurking in this observation in the opinion of the Court: "Since the only purpose of investigation is to discover facts as a basis of future action, any unnecessary extension of the privilege would thus be unwise." 12 The right not to incriminate oneself 13 is equally deserving of the utmost deference and respect. What is more, the present Constitution by the adoption of the Miranda doctrine has vitalized it even further. 14 There is, happily, the last sentence of such paragraph: "Anyway, by all means, respondent Fernando Manalastas may contest any attempt in the investigation that tends to disregard his privilege against selfincrimination." 15 When read in connection with the earlier reference to the fact that the respondent is called as a witness not as the party proceeded against, it cannot be said, in the light of the ruling in Planas v. Gil, 16 that it offends against this constitutional guarantee. As of now then, with the question of any modification of the Planas doctrine not being properly before us, I can yield my concurrence. Candor compels the statement, however, that for me a reexamination of such a pronouncement is desirable. A distinction between a witness and a respondent may be too tenuous if the realities of the situation be fully considered. I am bothered by the thought that the force of the Cabal 17 and the Pascual, Jr. decisions 18 may be eroded if the prospective respondent is first called as a witness and is thus compelled to testify. For the present, it may suffice if I express my misgivings. At any rate, concurrence is not ruled out in view of the aforementioned caveat in the able opinion of Justice Martin. TEEHANKEE, J., dissenting: I am constrained to dissent from the main opinion of Mr. Justice Martin which grants the petition and sets aside respondent court's order and writ of preliminary injunction of July 1, 1968 and would therefore require respondent Fernando Manalastas as assistant city public service officer of Manila (and all other city officials similarly situated) to comply with the PARGO subpoena "to testify to matters relevant to the investigation of anomalies and sworn statements involving or implicating certain City officials or other public officers."1 While the subpoena commands respondent Manalastas to appear as witness before the PARGO,2 on the basis whereof the main opinion finds that said respondent "is not facing any administrative charge" and that "he is merely cited as witness in connection with the fact-finding investigation of anomalies and irregularities in the City Government of Manila with the object of submitting the assembled facts to the President of the Philippines or to file the corresponding

charges",3 it is a fact shown by the very petition at bar itself and its Annexes B and B-1 that respondent Manalastas is in fact and for all intents and purposes subpoenaed as a respondent or one directly implicated with alleged bribery and graft in the said sworn statements that concededly as per the petition itself initiated the PARGO's alleged "fact-finding investigation."4 Thus Annex B of the petition which is a sworn statement of one Edilberto Arguelles, investigated by the PARGO on the overpricing of eight steam cleaners sold through him as commission agent to the City of Manila, sets forth the detailed allegations of said declarant that respondent Manalastas and a number of other city officials named and unnamed got the lion's share of the overpricing. Annex B-1 of the petition is the sworn statement of one Carlos Montañez with reference to some overpriced equipment sold by him to the City of Manila wherein he likewise narrated in detail the modus operandi and specifically named respondent Manalastas and five other officials to whom he allegedly gave: "due monetary consideration." All claims of PARGO to the contrary notwithstanding, the very petition and said annexed sworn statements (which were not shown to respondent judge in spite of his expressly asking for them during the course of the hearing 5) show that respondent Manalastas (and others similarly situated) are indeed not merely witnesses but in reality respondents (subject to administrative and criminal charges.) Respondent has therefore correctly invoked Cabal vs. Kapunan,6 wherein the Court through then Chief Justice Roberto Concepcion held that therein petitioner rightfully refused to take the witness stand as against the order of the Presidential Committee investigating the complaint against him for alleged unexplained wealth (since such proceedings were in substance and effect a criminal one and his position was virtually that of an accused on trial and he therefore had the right to remain silent and invoke the privilege against self-incrimination in support of a blanket refusal to answer any and all questions) and ordered the dismissal of the criminal contempt charge against him. Pascual Jr. vs. Bd. of Examiners7 is equally in point, wherein the Court sustained the lower court's writ of injunction against the respondent board's order compelling therein petitioner to take the witness stand in a malpractice case (wherein he was respondent) in view of the penal nature of the proceedings and the right of the accused to refuse "not only to answer incriminatory questions, but also to take the witness stand."8 The Court therein stressed that "the constitutional guarantee, along with other rights granted an accused, stands for a belief that while crime should not go unpunished and that the truth must be revealed, such desirable objectives should not be accomplished according to means or methods offensive to the high sense of respect accorded the human personality. More and more in line with the democratic creed, the deference accorded an individual even those suspected of the most heinous crimes is given due weight. To quote from Chief Justice Warren, "the constitutional foundation underlying the privilege is the respect a government ... must accord to the dignity and integrity of its citizens."" and that "while earlier decisions stressed the principle of humanity on which this right is predicated, precluding as it does all resort to force or compulsion, whether physical or mental, current judicial opinion places equal emphasis on its identification with the right to privacy. Thus according to Justice Douglas: "The Fifth Amendment in its Self-Incrimination clause enables the citizen to create a zone of privacy which government may not force to surrender to his detriment."

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That petitioner's investigation and subpoena against respondent Manalastas were in substance and effect criminal in nature against him as a respondent (and not merely as witness) as indicated above, is borne out by the fact of record in Sugay vs. Pamaran 9 (of which the Court can well take judicial notice) that on July 22, 1971 respondent Manalastas as well as Carlos Montañez the trader (affiant in Annex B-1, petition, supra, 10) and a number of other city officials were charged by the city fiscal in the Circuit Criminal Court of Manila for violations of Republic Act 3019 (Anti-Graft Law) in connection with the alleged gross overpricing of the same equipment (steam cleaners and air compressor) purchased for the City. The main opinion's justification for upholding the subpoena, viz, that "since the only purpose of investigation is to discover facts as a basis of future action, any unnecessary extension of the privilege (against self-incrimination)would thus be unnecessary" 11 thus appears to be flawed in fact and in law: respondent was in factbeing investigated as respondent-suspect and without submitting to the investigation was actually criminally charged in court; as a pure matter of legal principle, the 1973 Constitution has recognized the necessity of strengthening (and extending) the privilege against self-incrimination by expressly providing as a constitutional mandate in the Bill of Rights that "Any person under investigation for the commission of an offense shall have the right to remain silentand to counsel, and to be informed of such right" (Article IV, section 20) and outlawing the use of any confession obtained in violation of said section by declaring its inadmissibility in evidence. Respondent Manalastas was therefore justified in invoking the privilege against selfincrimination and in securing the respondent court's injunction against enforcement of petitioner's subpoena. Respondent was unquestionably a party respondent who under the doctrine of Cabal and Pascual, supra, had the right to remain silent and invoke the privilege against self-incrimination and refuse to take the witness stand. This legal and constitutional right may not be defeated by the transparent expedient of citing respondent as a supposed witness in what was avowed to be a general fact-finding investigation but obviously was a fishing expedition to ensnare respondent as a prime suspect, as borne out by the sworn statements withheld from respondent court and now annexed to the very petition at bar and petitioner's contention that "In effect, the injunction issued by the lower court is one to restrain criminal prosecutions." This contention has of course been proven baseless by the events already cited above that such criminal prosecutions were in fact filed in court against respondent and others without the need of petitioner's "fact-finding investigation" and subpoenas. The thrust of all this is that the State with its overwhelming and vast powers and resources can and must ferret out and investigate wrongdoing, graft and corruption and at the same time respect the constitutional guarantees of the individual's right to privacy, silence and due process and against self-incrimination and unreasonable search and seizure. This means that leads and charges must be investigated and followed up through the assistance of the corresponding police and law enforcement agencies as provided in the petitioner's executive charter 12 and the evidence secured by proper applications for search warrants, and as conceded in the petition itself, after the corresponding report to the President "to file the corresponding charges against the persons who may appear responsible or merely refer them to other appropriate offices such as the Fiscal's office, like what was done in other cases." 13

There appears to be validity in respondent's contention that the subpoena power granted petitioner in its executive charter does not apply to general fact-finding investigations conducted by it. 14 I find no need, however, of going further into this issue, since this dissent is based directly on the fundamental tenet that respondent Manalastas was unquestionably being investigated by petitioner as respondent and a prime suspect (and not as a mere witness) and accordingly, under settled doctrine, he had every right to remain silent and to invoke his right against self-incrimination and to refuse to take the witness stand. I therefore vote for upholding respondent court's injunction against enforcement of petitioner's subpoena. Footnotes 1 "Sec. 64 (c). To order, when in his opinion the good of the public service so requires, an investigation of any action or the conduct of any person in the Government service, and in connection therewith to designate the official, committee, or person by whom such investigation shall be conducted." 2 Executive Order No. 208, dated February 9, 1967, converted the Agency into a division under the Executive Office and is now known as "Complaints and Investigating Office". 3 Executive Order No. 88, dated September 25, 1967, amending in part Executive Order No. 4. 4 Executive Order No. 4, para. (5). "The Agency is hereby vested with all the powers of an investigating committee under Sections 71 and 580 of the Revised Administrative Code, including the power to summon witnesses by subpoena duces tecum, administer oaths, take testimony or evidence relevant to the investigation. 5 Resolution of the Court on November 28, 1969 excluded Ramon D. Bagatsing as petitioner in the case. 6 See Matute v. Court of Appeals, 31 Jan. 1969, 26 SCRA 799, 800; Central Bank v. Cloribel, L-26971, 11 April 1972, 44 SCRA 314. 7 Administrative Law, Jaffe and Nathanson, 1961 ed., 491. 8 Pope & Talbot, Inc. v. Smith, 340 P. 2d 964, citing 1 Davis Administrative Law Treatise, 160. 9 See Notes on 27 ALR 2d 1208, 1209, and cases cited. 10 Marchitto v. Waterfront Commission of New York Harbor, 160 A 2d 832. 11 Section 71, Revised Administrative Code. 12 Section 580, Revised Administrative Code. 13 See Sections 1 and 3, Rule 23, Rules of Court. 14 Answer, Respondents, at 43, 45 Case Records.

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15 See Section 4, Rule 23, Rules of Court.

3 Cf. Parker, Administrative Law, 135-143 (1952). .

16 1 Davis, Administrative Law Treatise 171.

4 Cf. Katz Cases and Materials in Administrative Law, 175-221 (1947).

17 NLRB v. Anchor Rome Mills, Inc., 197 F. 2d 447 (5th Cir. 1952).

5 Cf. McFarland and Vanderbilt, Administrative Law: Cases and Materials, 83-86 (1952).

18 Oklahoma Press Pub. Co. v. Walling, 327 US 185 (1946).

6 According to Article IV, Section 3 of the present Constitution:

19 SEC v. Vacuum Can Co., 157 F. 2d 530, cert den 330 US 820 (1947).

21 United States v. Morton Salt Co., 338 US 632 (1950), abandoning the Harriman, 211 US 407; (1908) and American Tobacco, 264 US 298; (1924) doctrine against "fishing expedition".

"The right of the people to be secure in their persons, houses, papers and effects against unreasonable searches and seizures of whatever nature and for any purpose shall not be violated, and no search warrant or warrant of arrest shall issue except upon probable cause to be determined by the judge, or such other responsible officer as may be authorized by law, after examination under oath or affirmation of the complainant and the witnesses he may produce, and particularly describing the place to be searched, and the persons or things to be seized."

22 Adams v. FTC 296 F, 2d 861, cert den 369 US 864 (1962).

7 338 US 632 (1950).

23 Petition, at 6, Case Records; See Annexes B, B-1, Petition; at 17-24, Case Records.

8 Ibid, 652-653.

24 Petition, at 7, Case Records.

9 Cf. F. T. C. v. Browning, 435 F2d 96 (1970); Local No. 104, Sheet Metal Worker's International Association v. Equal Employment Opportunity Commission, 439 F2d 237 (1971); United States v. Newman 441 F2d 165 (1971);Securities and Exchange Commission v. First Security Bank of Utah, 447 F2d 166(1971); Modine Manufacturing Company v. National Labor Relations, 453 F2d 292(1971); United States v. Litton Industries, Inc., 462 F2d 14 (1972); Burlington Northern Inc. v. Interstate Commerce Commission, 462 F2d 280 (1972); Wilmoth v. Hansel, 25 A 86 (1892); Flanagan v. New York LE & W.R. Co., 32 S. 84 (1895); Mobil Oil Corporation v. Durkin, 278 A2d 477 (1971); Fred Depkin & Son, Inc. v. Director, New Jersey Division of Taxation, 276 A2d 161 (1971); Appeal of Ohio Radio, Inc., 266 NE 2d 575 (1970); Mckay v. Stewart & Cecire v. Stewart, 272 NE 2d 887 (1971); McKay v. Cecire 324 S2d 302 (1971); Koch v. Kosydar 290 NE 2d 847 (1972); State Real Estate Commission v. Roberts, 271 A2d 246 (1970).

20 See Marchitto, ante.

25 Rights of Witnesses in Administrative Investigations, 54 Harv. L. Rev. 1214. 26 L-19052, 29 Dec. 1962, 6 SCRA 1064, per Concepcion, J. 27 L-25018, 26 May 1969, 28 SCRA 345, per Fernando, J. 28 Memorandum, Petitioners, at 154, Case Records. 29 Idem; Petition, at 8, Case Records. 30 Rights of Witnesses in Administrative Investigations, ante.

10 338 US 632, 651-652 (1950).

31 Memorandum, Respondents, at 160, 161, Case Records. 32 US v. Borja, 191 F. Supp 563, 566; Farkas vs. Texas Instrument, Inc., 375 F. 2d 629, 632, dert den 389 US 977. 33 San Miguel Brewery, Inc. vs. Magno, L-21879, 29 Sept. 1967, 21 SCRA 297. 34 Idem; also 2 Modern Constitutional Law, Antieau 1969 ed., 648. 35 Petite vs. United States, 361 US 529 (1960). FERNANDO J., concurring. 1 Cf. I Davis, Administrative Law Treatise 159-232 (1958). 2 Cf. Jaffe Judicial Control of Administrative Action, 115-119 (1965).

11 Cf. U.S. v. Navarro, 3 Phil, 143 (1904); Ocampo v. Jenkins, 14 Phil. 681 (1909); Worcester v. Ocampo, 22 Phil. 42 (1912); U.S. v. Ipil, 27 Phil. 530 (1914); Uy Kheytin v. Villareal, 42 Phil. 886 (1920); People v. Carlos, 47 Phil. 626 (1925); Alvarez v. Court of First Instance, 64 Phil. 33 (1937); Rodriguez v. Villamiel, 65 Phil. 230 (1937); Yee Sue Kay v. Almeda, 70 Phil. 141 (1940); Moncado v. Peoples Court, 80 Phil. 1 (1948). 12 At 9. 13 According to Article IV, Section 20 of the present Constitution: "No person shall be compelled to be a witness against himself. Any person under investigation for the commission of an offense shall have the right to remain silent and to counsel, and to be informed of such right. No force, violence, threat, intimidation, or any other means which vitiate the free will shall be used against him. Any confession obtained in violation of this section shall be inadmissible in evidence."

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14 Cf. Magtoto v. Manguera, L-37021, March 3, 1975, 63 SCRA 4.

investigation of specific subjects that might have been the object of complaint. In the second case, Justice Holmes likewise ruled against a federal commission's fishing expeditions into private papers on the mere possibility that they may disclose evidence of crime in view of the Constitutional provision against unreasonable searches and seizures.

15 At 9. 16 67 Phil. 62 (1939). 17 Cabal v. Kapunan, Jr., L-19052, December 29, 1962, 6 SCRA 1064. .

Republic of the Philippines SUPREME COURT Manila

18 Pascual, Jr. v. Board of Medical Examiners, L-25018, May 26, 1969,28 SCRA 345. TEEHANKEE, J., dissenting.

EN BANC 1 Petition, p. 11, prayer (b). G.R. No. L-13827 2 Now known as Complaints and Investigating Office (CIO) under Ex. Order No. 208, dated Feb. 9, 1967. 3 Main opinion at p. 9 thereof, citing petitioners' Memorandum at p. 154, Rollo, emphasis supplied.

September 28, 1962

BENJAMIN MASANGCAY, petitioner, vs. THE COMMISSION ON ELECTIONS, respondent. Godofredo A. Ramos and Ruby Salazar-Alberto for petitioner. Office of the Solicitor General and Dominador D. Dayot for respondent.

4 Petition, p. 3, par. 5. 5. Answer, Rollo, p. 40. 6 6 SCRA 1064.

BAUTISTA ANGELO, J.: 7 28 SCRA 344, per Fernando, J.; emphasis supplied. 8 Idem. at p. 348; citing Chavez vs. CA, 24 SCRA 663. 9 L-33877-79, 41 SCRA 260 (Sept. 30, 1971). 10 At page 2 hereof. 11 At page 9. 12 Ex. Order No. 88, dated Sept. 25, 1967, amending Ex. Order No. 9 which created petitioner "as the executive instrumentality in the Office of the President" thus provides that petitioner shall "receive and evaluate, and (to) conduct fact-finding investigations of sworn complaints against the acts, conduct or behavior of any public official or employee and (to) file aid prosecute the proper charges with the appropriate agency." Petition, Annexes A and A-1. (Emphasis supplied). . 13 Petition, at page 8. 14 Vide Harriman vs. Interstate Commerce Commission, 211 U.S. 407 and Federal Trade Commission vs. American Tobacco Co., 264 U.S. 298, where Justice Holmes in the first case ruled out a federal commission's application to require witness to testify before it except in connection with specific complaints for violation of the Interstate Commerce Act or with its

Benjamin Masangcay, with several others, was on October 14, 1957 charged before the Commission on Election with contempt for having opened three boxes bearing serial numbers l8071, l-8072 and l-8073 containing official and sample ballots for the municipalities of the province of Aklan, in violation of the instructions of said Commission embodied in its resolution promulgated September 2, 1957, and its unnumbered resolution date March 5, 1957, inasmuch as he opened said boxes not the presence of the division superintendent of schools of Aklan, the provincial auditor, and the authorized representatives of the Nacionalista Party, the Liberal Party and the Citizens' Party, as required in the aforesaid resolutions, which are punishable under Section 5 of the Revised Election Code and Rule 64 of the Rules of Court. Masangcay was then the provincial treasurer of Aklan designated by the Commission in its resolution in Case CE-No. 270, part II 2 (b) thereof, to take charge of the receipt and custody of the official ballots, election forms and supplies, as well as of their distribution, among the different municipalities of the province. In compliance with the summons issued to Masangcay and his co-respondents to appear and show cause why they should not be punished for contempt on the basis of the aforementioned charge, they all appeared before the Commission on October 21, 1957 and entered a plea of not guilty. Thereupon, evidence was presented by both the prosecution and the defense, and on December 16, 1957 the Commission rendered its decision finding Masangcay and his corespondent Molo guilty as charged and sentencing each of them to suffer three months imprisonment and pay a fine of P500, with subsidiary imprisonment of two months in case of

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insolvency, to be served in the provincial jail of Aklan. The other respondents were exonerated for lack of evidence. Masangcay brought the present petition for review raising as main issue the constitutionality of Section 5 of the Revised Election Code which grants the Commission on Elections as well as its members the power to punish acts of contempt against said body under the same procedure and with the same penalties provided for in Rule 64 of the Rules of Court in that the portion of said section which grants to the Commission and members the power to punish for contempt is unconstitutional for it infringes the principle underlying the separation of powers that exists among the three departments of our constitutional form of government. In other words, it is contended that, even if petitioner can be held guilty of the act of contempt charged, the decision is null and void for lack of valid power on the part of the Commission to impose such disciplinary penalty under the principle of separation of powers. There is merit in the contention that the Commission on Elections lacks power to impose the disciplinary penalty meted out to petitioner in the decision subject of review. We had occasion to stress in the case of Guevara v. The Commission on Elections 1 that under the law and the constitution, the Commission on Elections has only the duty to enforce and administer all laws to the conduct of elections, but also the power to try, hear and decide any controversy that may be submitted to it in connection with the elections. In this sense, said, the Commission, although it cannot be classified a court of justice within the meaning of the Constitution (Section 30, Article VIII), for it is merely an administrative body, may however exercise quasi-judicial functions insofar as controversies that by express provision law come under its jurisdiction. The difficulty lies in drawing the demarcation line between the duty which inherently is administrative in character and a function which calls for the exercise of the quasi-judicial function of the Commission. In the same case, we also expressed the view that when the Commission exercises a ministerial function it cannot exercise the power to punish contempt because such power is inherently judicial in nature, as can be clearly gleaned from the following doctrine we laid down therein: . . . In proceeding on this matter, it only discharged a ministerial duty; it did not exercise any judicial function. Such being the case, it could not exercise the power to punish for contempt as postulated in the law, for such power is inherently judicial in nature. As this Court has aptly said: 'The power to punish for contempt is inherent in all courts; its existence is essential to the preservation of order in judicial proceedings, and to the enforcement of judgments, orders and mandates courts, and, consequently, in the administration of justice (Slade Perkins v. Director of Prisons, 58 Phil., 271; U.S. v. Lee Hoc, 36 Phil., 867; In Re Sotto, 46 O.G., 2570; In Re Kelly, Phil., 944). The exercise of this power has always been regarded as a necessary incident and attribute of courts (Slade Perkins v. Director of Prisons, Ibid.). Its exercise by administrative bodies has been invariably limited to making effective the power to elicit testimony (People v. Swena, 296 P., 271). And the exercise of that power by an administrative body in furtherance of its administrative function has been held invalid (Langenberg v. Lecker, 31 N.E., 190; In Re Sims, 37 P., 135; Roberts v. Hacney, 58 SW., 810).1awphîl.nèt In the instant case, the resolutions which the Commission tried to enforce and for whose violation the charge for contempt was filed against petitioner Masangcay merely call for the exercise of an administrative or ministerial function for they merely concern the procedure to be followed in the distribution of ballots and other election paraphernalia among the different municipalities. In fact, Masangcay, who as provincial treasurer of Aklan was the one designated to take charge of the receipt, custody and distribution of election supplies in that province, was

charged with having opened three boxes containing official ballots for distribution among several municipalities in violation of the instructions of the Commission which enjoin that the same cannot be opened except in the presence of the division superintendent of schools, the provincial auditor, and the authorized representatives of the Nacionalista Party, the Liberal Party, and the Citizens' Party, for he ordered their opening and distribution not in accordance with the manner and procedure laid down in said resolutions. And because of such violation he was dealt as for contempt of the Commission and was sentenced accordingly. In this sense, the Commission has exceeded its jurisdiction in punishing him for contempt, and so its decision is null and void. Having reached the foregoing conclusion, we deem it unnecessary to pass on the question of constitutionality raised by petitioner with regard to the portion of Section 5 of the Revised Election Code which confers upon the Commission on Elections the power to punish for contempt for acts provided for in Rule 64 of our rules of court. WHEREFORE, the decision appealed from insofar as petitioner Benjamin Masangcay is concerned, as well as the resolution denying petitioner's motion for reconsideration, insofar as it concerns him, are hereby reversed, without pronouncement as to costs. Bengzon, C. J., Padilla, Labrador, Concepcion, Barrera, Paredez, Dizon, Regala and Makalintal, JJ., concur. Reyes, J. B. L., J., took no part Footnotes 1

G. R. No. L-12596, July 31, 1958.

Republic of the Philippines SUPREME COURT Manila EN BANC G.R. No. L-20383

May 24, 1967

THE PHILIPPINE AMERICAN LIFE INSURANCE COMPANY, petitioner-appellee, vs. SOCIAL SECURITY COMMISSION, respondent-appellant. Office of the Solicitor General Arturo A. Alafriz, Solicitor Camilo D. Quiason, L.L. Javellana and L.B. Topacio for respondent appellant. Manuel Lim, Manuel Macias, Ricardo T. Bacod and Associates for petitioner-appellee. CONCEPCION, C.J.: Appeal, taken by the Social Security Commission, from a decision of the Court of First Instance of Manila, the dispositive part of which reads:

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IN VIEW OF THE FOREGOING, judgment is hereby rendered (1) holding that plaintiff's agents, solicitors or underwriters are not employees of plaintiff, the Philippine American Life Insurance Company, and that plaintiff is not their employer so that plaintiff's said insurance agents, solicitors or underwriters do not fall under the compulsory coverage of the Social Security System; (2) commanding defendant Social Security Commission to desist absolutely from taking criminal action against plaintiff's officers under the provisions of Section 28 (e) and (f) of the Social Security Act, and from requiring plaintiff to remit contributions to the defendant Social Security Commission or its administrative arm, the Social Security System, to be applied to the coverage of plaintiff's said agents, solicitors or underwriters under the Social Security Act, without pronouncement as to costs. On November 6, 1960, the Social Security System — hereinafter referred to as the System — issued, with the approval of the Chairman of the Social Security Commission — hereinafter referred to as the Commission — Circular No. 34 (Exhibit A), requiring all insurance firms to submit immediately the names of their agents, solicitors or underwriters, who, pursuant to the Social Security Act1 — hereinafter referred to as the Act — are employees of said firms, subject to compulsory coverage of the System, and to pay the corresponding, premiums, based on the actual commissions received by each agent during each month. Sometime later, the System, through the manager of the Production Department, sent to the Philippine American Life Insurance Company — hereinafter referred to as the plaintiff — the communication Exhibit B, dated February 11, 1961, enclosing therewith SSS Form R-1-A-1, advising plaintiff that pursuant to said Circular No. 34, the insurance agents thereof are considered its employees, subject to compulsory coverage under said Act, and urging plaintiff to accomplish said SSS Form (for the purpose of supplying the necessary data concerning said agents, solicitors and underwriters) and to submit the same, within ten (10) days, to avoid the penalties provided for by law. This "advise" was reiterated in another letter (Exhibit B-1) of the same officer dated March 3, 1961. Plaintiff replied to these letters with a communication (Exhibit C), dated March 7, 1961, objecting to the aforementioned compulsory coverage upon the ground that plaintiff's insurance agent, solicitors or underwriters are not its employees. Still on May 14, 1961, the System sent to plaintiff another letter (Exhibit D), with several copies of SSS Form R-1-A-1, with the request that these forms be accomplished and submitted, as soon as possible, to facilitate early adjudication of the coverage of its insurance agents under the System. Instead of complying with this request, on May 30, 1961, plaintiff commenced, in the Court of First Instance of Manila, the present action, for prohibition with preliminary injunction, against the Commission — to restrain the latter 1) from compelling plaintiff to remit contributions to the administrative branch of the System, as an incident of the alleged inclusion of plaintiff's agents, solicitors or underwriters in the compulsory coverage of the System, and 2) from prosecuting plaintiff and its officers for their refusal to make the aforementioned contributions — upon the theory that said agents of the plaintiff are not employees thereof. After appropriate proceedings, the lower court rendered the aforementioned decision. Hence, the present appeal to this Court, since questions purely of law are involved therein, namely: 1) whether or not the trial court had jurisdiction to hear and decide this case; 2) whether plaintiff has a cause of action against the Commission; and 3) whether insurance agents of a life

insurance company, like plaintiff herein, are its employees, for purposes of the compulsory coverage under the System. The System maintains that the first two issues should be resolved in the negative, upon the ground, inter alia, that decisions of the Commission may not be reviewed by courts of first instance, not only because the two have the same rank, but, also, because said decisions are, pursuant to the Acts2 reviewable by the Court of Appeals on questions of law and fact, or by the Supreme Court, on questions purely of law; that plaintiff has no cause of action against the Commission, inasmuch as the former has not appealed to the latter from the action taken by the System upon the question of coverage, under the Act; and that plaintiff has not exhausted the administrative remedies available thereto under the same.3 Upon the other hand, plaintiff urges an affirmative answer, upon the theory that the Commission is, at least, a board within the meaning of Rule 67 of the Rules of Court of 1940; 4 that being empowered by law to sue and be sued, the Commission may sue and be sued in any court of the Philippines; that Section 5 of Republic Act No. 1161 is inapplicable to the case at bar, because the question of coverage herein involved, is not a "claim" within the purview of said section; that the issue whether a given person is an employee of a particular firm and subject to coverage under said Act, is not one that plaintiff is hound to submit to the Commission in the first instance; that where the employer-employee relationship is contested, the ruling of the Commission to the effect that such relationship exists presents a legal dispute, which may not be decided unilaterally by the Commission; that the theory of the Commission to the effect that it has the same rank as courts of first instance may be true insofar only as the settlement of "claims," but not as regards the question of compulsory coverage; that an appeal from the System to the Commission would have been an empty gesture, for all actions of and proceedings in the System are under the direction and control of the Commission, and Circular No. 34 (Exhibit A) bears the approval of the Commission, through its chairman, apart from the fact that the Commission was poised to take criminal action against the plaintiff and its officers to compel them to obey the ruling complained of; and that the insistence of the Commission on enforcing its ruling regarding said coverage amounts to an act performed without or in excess of jurisdiction or with grave abuse of discretion. We find that the appeal taken by the Commission is well-founded for the present action is one for a writ of prohibition, which may be issued only by a superior court to an inferior court, corporation, board or person, to prevent the latter from usurping or exercising a jurisdiction or power it does not have (3 Moran on Rules of Court, 1963 ed., p. 157). Section 5 (a) of the Act acknowledges in the Commission the power to determine and settle claims which partakes of a quasi-judicial function, in the exercise of which, the Commission is not inferior to courts of first instance, in much the same way as the Public Service Commission, as a board performing quasi-judicial functions, is not inferior to said courts.5 The quasi-judicial nature of the functions of the Commission is emphasized by its authority, expressly granted by said Section 5 (a), to promulgate rules and regulations governing "the filing, determination and settlement of claims." Hence, the lower court had no jurisdiction to issue the writ of prohibition prayed for. Besides, the Commission performs administrative, as well as quasi-judicial, functions. Although it can sue and be sued in courts of first instance, either as regards its administrative functions, or in the enforcement and protection of its private rights, the rule is otherwise when the act complained of forms part of its quasi-judicial functions. For this reason, Section 5 (c) of said Act,

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explicitly provides, in connection with "decisions" of the Commission, or the determinations thereof in the exercise of said functions, that the same "may be reviewed both upon the law and the facts by the Court of Appeals," or, "if the decision of the Commission involves only questions of law, . . . by the Supreme Court." What is more, pursuant to Section 5(b) of said Act, the judicial review of "any decision of the Commission . . . shall be permitted only after any party claiming to be aggrieved thereby has exhausted his remedies before the Commission." In the case at bar, plaintiff has not exhausted its remedies before the Commission. The Commission has not even been given a chance to render a decision on the issue raised by plaintiff herein, because the latter has not appealed to the Commission from the action taken by the in insisting upon the enforcement of Circular No. 34. (Exh. A.) It is true that the same bears the approval of the Chairman of the Commission. Even if this fact were construed an approval of the Circular by the Commission itself, such approval would not constitute a "decision" thereof, as the term is used in said section 5, which regulates the judicial review of such decision. Indeed, a "decision" connotes the adjudication or settlement of a controversy, and the same did not exist between the System and the plaintiff when the Chairman of the Commission affixed his signature to said Circular No. 34, on or before November 6, 1960. The issue did not arise until March 7, 1961, when plaintiff expressed its objection to the circular upon the ground that the agents, solicitors and underwriters thereof are not its employees. It is only fair and just, therefore, as well as administratively expedient, that before a judicial review could be sought, said issue be previously submitted to and passed upon by the Commission, on appeal from the action taken or contemplated to be taken by the System, since, prior to such submission to and determination by the Commission, the same had no occasion to consider the specific reasons adduced by the plaintiff in support of its objection to said Circular No. 34. But, even if the approval of the circular by the Chairman of the Commission were hypothetically regarded as a decision or proof of a decision of the Commission itself, still section 5(b) ordains positively that a judicial review of said decision "shall he permitted only after any party claiming to be aggrieved thereby has exhausted his remedy dies before the Commission." In other words, he must first seek therefrom a reconsideration of the decision complained of. This, be the way, is the general rule applicable to actions for certiorari and prohibition against a tribunal, board or officer, who must first be given, through a motion for reconsideration, an opportunity to correct the error or mistake complained of. No such reconsideration has been asked by plaintiff herein. Hence, it has no cause of action for prohibition, which does not lie except in the absence of appeal or any other plain, speedy and adequate remedy in the ordinary course of law.

the Act. Then, again, over two (2) months after plaintiff had objected to the compulsory coverage of its agents, solicitors and underwriters, or on May 14, 1961, the System wrote to the plaintiff the letter Exhibit D, enclosing therewith several copies of SSS Form R-1-A-1, with the entreatment that the same be " please" accomplished and submitted to facilitate early adjudication of the compulsory coverage of its agents "under the system," and winding up with the "hope" of receiving the "form properly accomplished as soon as possible." The System thus implied that plaintiff could then seek an adjudication or decision on said coverage by the Commission. At any rate, had plaintiff appealed to the Commission, the latter could have restrained the System from causing the plaintiff and its officers from being prosecuted criminally, during the pendency of the appeal. In short, once again, the same was a plain, speedy and adequate remedy in the ordinary course of law. Inasmuch as the lower court had no jurisdiction to hear and decide this case, and, at any rate, plaintiff has no cause of action against the Commission, it is unnecessary to pass upon the third issue raised by plaintiff herein. In fact, said issue has become moot on account of the approval of Republic Act No. 4857, on September 1, 1966, section 2 of which amended section 5(a) of Republic Act No. 1161, to read as follows: Any dispute arising under this Act with respect to coverage, entitlement to benefits, collection and settlement of premium contributions and penalties thereon, or any other matter related thereto, shall be cognizable by the Commission, and any case filed with the Commission with respect thereto shall be heard by the Commission or any of its members, or by hearing officers duly authorized by the Commission, and decided within twenty days after the submission of the evidence. The filing, determination and settlement of claims shall be governed by the rules and regulations promulgated by the Commission. (Emphasis supplied). Hence, there can be no question now that any dispute with respect to coverage is cognizable by the Commission. Wherefore, the decision appealed from is hereby reversed and another one shall be entered, dismissing the complaint herein, with costs against plaintiff-appellee the Philippine American Life Insurance Company. It is so ordered. Reyes, J.B.L., Dizon, Regala, Makalintal, Bengzon, J.P., Zaldivar, Sanchez and Castro, JJ., concur. Footnotes 1

Republic Act No. 1161, as amended.

It is urged that the Commission had already made clear its intention to prosecute criminally the plaintiff and its officers. This is not true. The one which no more than intimated such intention was not the Commission, but the System. Precisely, an appeal from the latter to the former, which admittedly has control over the System, would have been a plain, speedy and adequate remedy in the ordinary course of law. Moreover, it appeared from the acts of the System that the danger of prosecution was not imminent or even approximate. Indeed, the letter Exhibit B, urging plaintiff to " please accomplish and submit the enclosed SSS Form R-1-A-1, . . . within ten (10) days . . . to avoid the penalties provided by law," was written by the "Manager, Production Department" of the System, which is not in charge of the prosecution of violators of

2

Section 5 (c) of Republic Act No. 1161, as amended.

3

Sec. 5 (c) Republic Act No. 1161, as amended, and Rule No. 10, of the Rules and Regulations of the System. 4

Now Rule 65 of the Rules of Court of 1964.

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5

Poblete Construction Co. vs. Social Security Commission, L-17605, January 22, 1964; Iloilo Commercial & Ice Co. vs. Public Service Commission, 56 Phil. 238, and Regalado vs. Provincia, Constabulary, L-15674, November 29, 1961.

UNITED COCONUT PLANTERS BANK, JERONIMO U. KILAYKO, LORENZO V. TAN, ENRIQUE L. GANA, JAIME W. JACINTO and EMILY R. LAZARO,

G.R. No. 168859

Petitioners, THIRD DIVISION

- versus -

E. GANZON, INC., Respondent.

x---------------------x E. GANZON, INC., Petitioner,

G.R. No. 168897 - versus -

Present:

YNARES-SANTIAGO, J., UNITED COCONUT PLANTERS BANK, JAIME W. JACINTO and EMILY R. LAZARO,

Chairperson,

Respondents.

CHICO-NAZARIO,

Page 105 of 192

VELASCO, JR., NACHURA, and

DECISION

PERALTA, JJ.

Promulgated: CHICO-NAZARIO, J.: June 30, 2009

These are two consolidated[1] Petitions for Review on Certiorari under Rule 45 of the 1997 Revised Rules of Civil Procedure.

United Coconut Planters Bank (UCPB) is a universal bank duly organized and existing under Philippine Laws. In G.R. No. 168859, UCPB and its corporate officers, i.e., Jeronimo U. Kilayko, Lorenzo V. Tan, Enrique L. Gana, Jaime W. Jacinto and Emily R. Lazaro (UCPB, et al.) seek the reversal and setting aside of the Decision[2] dated 14 October 2004 and Resolution[3] dated 7 July 2005 of the Court of Appeals in CA-G.R. SP No. 81385 and the affirmation, instead, of the letter-decision[4] dated 16 September 2003 of the Monetary Board of the Bangko Sentral ng Pilipinas (BSP). The Court of Appeals, in its assailed Decision, set aside the aforesaid letterdecision of the BSP Monetary Board and remanded the case to the latter for further proceedings; and in its questioned Resolution, denied for lack of merit the Motion for Reconsideration of UCPB, et al., as well as the Partial Motion for Reconsideration of E. Ganzon, Inc. (EGI).

On the other hand, EGI is a corporation duly organized and existing under Philippine laws and engaged in real estate construction and development business. In G.R. No. 168897, EGI prays for this Court to review the same Decision dated 14 October 2004 and Resolution dated 7 July 2005 of the Court of Appeals in CA-G.R. SP No. 81385, and to order the appellate court to (1) act on its findings in the case instead of remanding the same to the BSP Monetary Board for further proceedings; (2) direct the BSP Monetary Board to impose the applicable administrative sanctions upon UCPB, et al.; and (3) to amend its assailed Decision and Resolution by deleting therefrom the statements requiring the BSP Monetary Board to scrutinize and dig deeper into the acts of UCPB, et al., and to determine if, indeed, there were irregular and unsound practices in its business dealings with EGI. x- - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - -x

The factual antecedents of these consolidated petitions are as follows:

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Beginning 1995 to 1998, EGI availed itself of credit facilities from UCPB to finance its business expansion. To secure said credit facilities, EGI mortgaged to UCPB its condominium unit inventories in EGI Rufino Plaza, located at the intersection of Buendia and Taft Avenues, Manila.

Initially, EGI was able to make periodic amortization payments of its loans to UCPB. When the negative effects of the Asian economic crisis on the property development sector finally caught up with the corporation in the middle of 1998, EGI started defaulting in its payment of amortizations, thus, making all of its obligations due and demandable.Subsequently, EGI was declared in default by UCPB in its letters dated 2 October 1998[5] and 16 February 1999.[6] Thereafter, UCPB stopped sending EGI monthly statements of its accounts.

In 1999, EGI and UCPB explored the possibility of using the mortgaged condominium unit inventories of EGI in EGI Rufino Plaza as payment for the loans of EGI to UCPB.Upon agreeing on the valuation of said mortgaged properties, EGI and UCPB entered into a Memorandum of Agreement (MOA)[7] on 28 December 1998 in settlement of the loans of EGI from UCPB. Based on this MOA, the outstanding loan obligations of EGI with UCPB amounted to P915,838,822.50, inclusive of all interest, charges and fees.UCPB, through its corporate officers, assured EGI that the said amount already represented the total loan obligations of EGI to UCPB.

On 18 January 2000, EGI and UCPB executed an Amendment of Agreement[8] to reflect the true and correct valuation of the properties of EGI listed in the MOA that would be transferred to UCPB in settlement of the total loan obligations of the former with the latter. The properties of EGI to be used in paying for its debt with UCPB were valued at P904,491,052.00.

According to the MOA and its amendments, titles to the properties of EGI shall be transferred to UCPB by the following modes: (1) foreclosure of mortgage; (2) dacion en pago; (3) creation of a holding company; and (4) use of other alternatives as may be deemed appropriate by UCPB.

UCPB proceeded to foreclose some of the properties of EGI listed in the MOA. Per the Certificate of Sale[9] dated 13 April 2000, the foreclosure proceeds of said properties amounted only to P723,592,000.00, less than the value of the properties of EGI stipulated in its amended MOA with UCPB.

UCPB applied the entire foreclosure proceeds of P723,592,000.00 to the principal amount of the loan obligations of EGI, pursuant to BSP Circular No. 239,[10] which provided that partial property payments shall first be applied to the principal. After deducting the said amount from the total loan obligations of EGI, there was still an unpaid balance of P192,246,822.50.

On 8 May 2001, some of the other properties of EGI at EGI Rufino Plaza, valued at P166,127,369.50, were transferred by way of dacion en pago to UCPB. However, during the signing of the transaction papers for the dacion en pago, EGI Senior Vice-President, Architect Grace S. Layug (Layug), noticed that said papers stated that the remaining loan balance of EGI in the amount of P192,246,822.50 had increased to P226,963,905.50. The increase was allegedly due to the addition of the transaction costs amounting to P34,717,083.00. EGI complained to UCPB about the increase, yet UCPB did not take any action on the matter.

This prompted EGI President Engineer Eulalio Ganzon (Ganzon) and Senior Vice-President Layug to review their files to verify the figures on the loan obligations of EGI as computed by UCPB. In the process, they discovered the UCPB Internal Memorandum dated 22 February 2001,[11] signed by UCPB corporate officers. The said Internal Memorandum presented two columns, one with the heading ACTUAL and the other DISCLOSED TO EGI. The figures in the two columns were conflicting. The figures in the DISCLOSED TO EGI column computed the unpaid balance of the loan obligations of EGI to be P226,967,194.80, the amount which UCPB actually made known to and demanded from EGI. The figures in the ACTUAL column calculated the remaining loan obligations of EGI to be only P146,849,412.58.

Consequently, EGI wrote UCPB a letter dated 21 May 2001,[12] which included, among other demands, the refund by UCPB to EGI of the over-payment of P83,000,000.00;[13]return to EGI of all the remaining Transfer Certificates of Title (TCTs)/Condominium Certificates of Title (CCTs) in the possession of UCPB; and cost of damage to EGI for the delay in the release of its certificates of title.

In response, UCPB explained[14] that the ACTUAL column in its Internal Memorandum dated 22 February 2001 contained the same amounts reflected or recorded in its financial statements, in accordance with the Manual of Accounts for Banks, Manual of Regulations for Banks [15] and BSP Circular No. 202,[16] Series of 1999. In contrast, the DISCLOSED TO EGI column showed the total amount still due from EGI, including the total principal, interests, transaction and other costs after the foreclosure, whether reflected in the financial books of UCPB or not. Further, UCPB maintained that the difference in the figures in the two columns was because BSP Circular No. 202 and Section X305.4 of the Manual of Regulations for Bank disallowed banks from accruing in its books interest on loans which had become non-performing.

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Despite the explanation of UCPB, EGI insisted that the figures appearing in the ACTUAL column of the formers Internal Memorandum dated 22 February 2001 revealed the true and actual amount of its loan obligations to UCPB, P146,849,412.58.

EGI Senior Vice-President Layug met with UCPB Vice-President, Jaime W. Jacinto (Jacinto) to discuss the demand of EGI for the return of its overpayment. UCPB Vice-President Jacinto, however, refused to concede that UCPB had any obligation to make a refund to EGI and, instead, insisted that EGI Senior Vice-President Layug disclose who gave her a copy of the UCPB Internal Memorandum dated 22 February 2001.

Based on the possession by EGI of the UCPB Internal Memorandum dated 22 February 2001, UCPB filed a criminal case for theft and/or discovery of secrets against EGI President Ganzon and Senior Vice-President Layug, but the said case was dismissed.[17]

On 5 November 2002, EGI, also on the basis of the UCPB Internal Memorandum dated 22 February 2001, EGI filed with the BSP an administrative complaint[18] against UCPB, et al., for violation of Sections 36[19] and 37,[20] Article IV of Republic Act No. 7653,[21] in relation to Section 55.1(a)[22] of Republic Act No. 8791;[23] and for the commission of irregularities and conducting business in an unsafe or unsound manner.

Loan Agreement stating that the proceeds shall be used to pay outstanding availments and interest servicing.

4. There is no finding by Supervision and Examination Department I on the alleged double charging and/or padding of transaction costs.[25]

EGI filed a Motion for Reconsideration and a Supplemental Motion for Reconsideration of the aforequoted letter-decision of the BSP Monetary Board. The BSP Monetary Board denied both motions in its letter[26] dated 8 December 2003 as there was no sufficient basis to grant the same. EGI then filed a Petition for Review under Rule 43 of the 1997 Revised Rules of Civil Procedure with the Court of Appeals raising the sole issue of whether the Bangko Sentral ng Pilipinas erred in dismissing the administrative complaint filed by EGI against UCPB, et al. The case was docketed as CA-G.R. SP No. 81385.

On 14 October 2004, the Court of Appeals rendered its assailed Decision granting the Petition for Review of EGI, thus, setting aside the BSP letter-decision dated 16 September 2003 and remanding the case to the BSP Monetary Board for further proceedings.

In a letter-decision[24] dated 16 September 2003, the BSP Monetary Board dismissed the administrative complaint of EGI, holding as follows:

Please be informed that the Monetary Board decided to dismiss the complaint based on the evaluation conducted by the Supervision and Examination Department I and the Office of the General Counsel and Legal Services to the effect that:

UCPB, et al., moved for the reconsideration of the 14 October 2004 Decision of the appellate court, praying for a new judgment dismissing the appeal of EGI for lack of jurisdiction and/or lack of merit. EGI also filed a Partial Motion for Reconsideration of the same Court of Appeals Decision, with the prayer that the appellate court, instead of still remanding the case to the BSP Monetary Board for further proceedings, already direct the latter to impose the applicable administrative sanctions upon UCPB, et al.,.

1. UCPB computed interest on the loans based on BSP rules and regulations which prohibit banks from accruing interest on loans that have become non-performing (BSP Circular No. 202). This is different from interest which may have run and accrued based on the promissory notes/loan documents from the date of default up to settlement date.

In a Resolution dated 7 July 2005, the Court of Appeals denied for lack of merit both the Motion for Reconsideration of UCPB, et al. and the Motion for Partial Reconsideration of EGI.

2. Fair market value of assets to be foreclosed is different from the bid price submitted during foreclosure and there is no statutory obligation for the latter to be equivalent to the former.

G.R. No. 168859

3. Regarding the alleged P145,163,000.00 fabricated loan, the documents showed that there were the EGI Board Resolution to borrow, promissory note signed by Mr. Eulalio Ganzon, and

Page 108 of 192

Aggrieved by the 14 October 2004 Decision and 7 July 2005 Resolution of the Court of Appeals, UCPB, et al. comes before this Court, via a Petition for Review on Certiorariunder Rule 45 of the 1997 Revised Rules of Civil Procedure, based on the following assignment of errors:

I. THE HONORABLE COURT OF APPEALS ACTED WITHOUT JURISDICTION AND GRAVELY ERRED IN HOLDING THAT IT HAS APPELLATE JURISDICTION OVER DECISIONS OF THE BSP/MONETARY BOARD.

Partial Reconsideration. In its letter-decision dated 16 September 2003, the BSP Monetary Board stated in no uncertain terms that the dismissal of the complaint of EGI was based on the evaluation conducted by its Supervision and Examination Department I and the Office of the General Counsel and Legal Services. Also, in its letter dated 8 December 2003, the BSP Monetary Board denied the Motion for Reconsideration and Supplemental Motion for Reconsideration of EGI because the latter did not present any new evidence in support of its motions. Hence, there is no basis for the claim of EGI that the BSP Monetary Board overlooked and completely ignored its accusations of irregular and unsound banking practice against UCPB, et al.

III. THE HONORABLE COURT OF APPEALS GRAVELY ERRED IN DISREGARDING THE FINDINGS OF FACT OF THE BANGKO SENTRAL AND IN HOLDING THAT [UCPB, et al.] COMMITTED IRREGULAR AND UNSOUND BANKING PRACTICES IN THE SUBJECT TRANSACTIONS.[27]

Finally, UCPB, et al., maintain that the findings of fact of administrative bodies like the BSP Monetary Board are accorded great respect, if not finality, especially if supported by substantial evidence. Such findings are to be respected by the courts, especially in the absence of grave abuse of discretion or grave errors by the BSP Monetary Board. No other office, much less an appellate tribunal, can substitute its own findings of fact over that of the concerned administrative agency in view of the expertise and specialized knowledge acquired by it on matters falling within its areas of concern. UCPB, et al. insist that it is the BSP which has the necessary expertise to draft guidelines for the evaluation of the performance and conduct of banks. Thus, the Court of Appeals committed grave error in disregarding the findings of fact of the BSP Monetary Board which justified the latters dismissal of the administrative complaint of EGI against UCPB, et al.

The Petition is docketed as G.R. No. 168859.

The issue of jurisdiction of the Court of Appeals over appeals of decisions, orders and/or resolutions of the BSP Monetary Board on administrative matters must first be resolved, before the other issues raised herein by UCPB, et al.

II. THE HONORABLE COURT OF APPEALS GRAVELY ERRED IN HOLDING THAT THE BANGKO SENTRAL SUMMARILY DISMISSED THE COMPLAINT OF [EGI].

UCPB, et al., aver that the Court of Appeals has no appellate jurisdiction over decisions, orders and/or resolutions of the BSP Monetary Board on administrative matters. The BSP Monetary Board is not among the quasi-judicial agencies enumerated under Rule 43 of the 1997 Revised Rules of Civil Procedure, over which the Court of Appeals has appellate jurisdiction. Further, there is nothing in Republic Act No. 7653 or in Republic Act No. 8791 which explicitly allows an appeal of the decisions or orders of the BSP Monetary Board to the Court of Appeals. Resultantly, the Court of Appeals has no power to review, much less set aside, the findings of fact of the BSP Monetary Board as contained in its letter-decision dated 16 September 2003.

Truly, there is nothing in Republic Act No. 7653 or in Republic Act No. 8791 which explicitly allows an appeal of the decisions of the BSP Monetary Board to the Court of Appeals. However, this shall not mean that said decisions are beyond judicial review. Section 9(3) of Batas Pambansa Blg. 129, otherwise known as The Judiciary Reorganization Act of 1980, as amended, reads:

SEC. 9. Jurisdiction. The Court of Appeals shall exercise:

xxxx UCPB, et al. also claim that, contrary to the ruling of the Court of Appeals, the letter-decision dated 16 September 2003 of the BSP Monetary Board plainly reveals that the administrative complaint of EGI against UCPB, et al. was not summarily dismissed. The charges of EGI against UCPB, et al. was resolved only after the BSP Monetary Board thoroughly reviewed pertinent bank records and studied the arguments raised by EGI in its complaint and Motion for

(3) Exclusive appellate jurisdiction over all final judgments, decisions, resolutions, orders or awards of Regional Trial Courts and quasi-judicial agencies, instrumentalities, boards or

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commissions, including the Securities and Exchange Commission, the Social Security Commission, the Employees Compensation Commission and the Civil Service Commission, exceptthose falling within the appellate jurisdiction of the Supreme Court in accordance with the Constitution, the Labor Code of the Philippines under Presidential Decree No. 442, as amended, the provisions of this Act, and of subparagraph (1) of the third paragraph and subparagraph 4 of the fourth paragraph of Section 17 of the Judiciary Act of 1948. (Emphasis ours.)

In accordance with the afore-quoted provision, Rule 43 of the 1997 Revised Rules of Civil Procedure, on Appeals from the Court of Tax Appeals and Quasi-Judicial Agencies to the Court of Appeals, defines its scope as follows:

SECTION 1. Scope. - This Rule shall apply to appeals from judgments or final orders of the Court of Tax Appeals and from awards, judgments, final orders or resolutions of or authorized by any quasi-judicial agency in the exercise of its quasi-judicial functions. Among these agencies are the Civil Service Commission, Central Board of Assessment Appeals, Securities and Exchange Commission, Office of the President, Land Registration Authority, Social Security Commission, Civil Aeronautics Board, Bureau of Patents, Trademarks and Technology Transfer, National Electrification Administration, Energy Regulatory Board, National Telecommunications Commission, Department of Agrarian Reform under Republic Act No. 6657, Government Service Insurance System, Employees Compensation Commission, Agricultural Inventions Board, Insurance Commission, Philippine Atomic Energy Commission, Board of Investments, Construction Industry Arbitration Commission, and voluntary arbitrators authorized by law. (Emphasis ours.)

A perusal of Section 9(3) of Batas Pambansa Blg. 129, as amended, and Section 1, Rule 43 of the 1997 Revised Rules of Civil Procedure reveals that the BSP Monetary Board is not included among the quasi-judicial agencies explicitly named therein, whose final judgments, orders, resolutions or awards are appealable to the Court of Appeals. Such omission, however, does not necessarily mean that the Court of Appeals has no appellate jurisdiction over the judgments, orders, resolutions or awards of the BSP Monetary Board.

It bears stressing that Section 9(3) of Batas Pambansa Blg. 129, as amended, on the appellate jurisdiction of the Court of Appeals, generally refers to quasi-judicial agencies, instrumentalities, boards, or commissions. The use of the word including in the said provision, prior to the naming of several quasi-judicial agencies, necessarily conveys the very idea of non-exclusivity of the enumeration. The principle of expressio unius est exclusio alterius does not apply where other

circumstances indicate that the enumeration was not intended to be exclusive, or where the enumeration is by way of example only.[28] Similarly, Section 1, Rule 43 of the 1997 Revised Rules of Civil Procedure merely mentions several quasi-judicial agencies without exclusivity in its phraseology.[29]The enumeration of the agencies therein mentioned is not exclusive.[30] The introductory phrase [a]mong these agencies are preceding the enumeration of specific quasi-judicial agencies only highlights the fact that the list is not meant to be exclusive or conclusive. Further, the overture stresses and acknowledges the existence of other quasi-judicial agencies not included in the enumeration but should be deemed included.[31]

A quasi-judicial agency or body is an organ of government other than a court and other than a legislature, which affects the rights of private parties through either adjudication or rulemaking.[32] The very definition of an administrative agency includes its being vested with quasijudicial powers. The ever increasing variety of powers and functions given to administrative agencies recognizes the need for the active intervention of administrative agencies in matters calling for technical knowledge and speed in countless controversies which cannot possibly be handled by regular courts.[33] A "quasi-judicial function" is a term which applies to the action, discretion, etc., of public administrative officers or bodies, who are required to investigate facts, or ascertain the existence of facts, hold hearings, and draw conclusions from them, as a basis for their official action and to exercise discretion of a judicial nature.[34]

Undoubtedly, the BSP Monetary Board is a quasi-judicial agency exercising quasi-judicial powers or functions. As aptly observed by the Court of Appeals, the BSP Monetary Board is an independent central monetary authority and a body corporate with fiscal and administrative autonomy, mandated to provide policy directions in the areas of money, banking and credit. [35] It has power to issue subpoena, to sue for contempt those refusing to obey the subpoena without justifiable reason,[36] to administer oaths and compel presentation of books, records and others, needed in its examination,[37] to impose fines and other sanctions and to issue cease and desist order.[38] Section 37 of Republic Act No. 7653,[39] in particular, explicitly provides that the BSP Monetary Board shall exercise its discretion in determining whether administrative sanctions should be imposed on banks and quasi-banks, which necessarily implies that the BSP Monetary Board must conduct some form of investigation or hearing regarding the same.

Having established that the BSP Monetary Board is indeed a quasi-judicial body exercising quasi-judicial functions; then as such, it is one of those quasi-judicial agencies, though not specifically mentioned in Section 9(3) of Batas Pambansa Blg. 129, as amended, and Section 1, Rule 43 of the 1997 Revised Rules of Civil Procedure, are deemed included therein. Therefore, the Court of Appeals has appellate jurisdiction over final judgments, orders, resolutions or awards of the BSP Monetary Board on administrative complaints against banks and quasi-banks, which the former acquires through the filing by the aggrieved party of a Petition for Review under Rule 43 of the 1997 Revised Rules of Civil Procedure.

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for Certiorari before a court when the same was issued in excess of jurisdiction or with such grave abuse of discretion as to amount to lack or excess of jurisdiction. The court referred to therein can be construed to mean the Court of Appeals because it is in the said court where a Petition for Certiorari can be filed following the hierarchy of courts.

As a futile effort of UCPB, et al. to convince this Court that the Court of Appeals has no appellate jurisdiction over the final judgments, orders, resolutions or awards of the BSP Monetary Board, it cited Salud v. Central Bank of the Philippines.[40]

Moreover, the appellate jurisdiction of the Court of Appeals over the final judgments, orders, resolutions or awards of the BSP Monetary Board in administrative cases involving directors and officers of banks, quasi-banks, and trust entities, is affirmed in BSP Circular No. 477, Series of 2005. The said BSP Circular expressly provides that the resolution rendered by the BSP Monetary Board in administrative cases may be appealed to the Court of Appeals within the period and the manner provided under Rule 43 of the 1997 Revised Rules of Civil Procedure.

The invocation of UCPB, et al. of Salud is evidently misplaced.

The present case involves a decision of the BSP Monetary Board as regards an administrative complaint against a bank and its corporate officers for the alleged violation of Sections 36 and 37, Article IV of Republic Act No. 7653, in relation to Section 55.1(a) of Republic Act No. 8791, and for the commission of irregularity and unsafe or unsound banking practice. There is nothing in the aforesaid laws which state that the final judgments, orders, resolutions or awards of the BSP Monetary Board on administrative complaints against banks or quasi-banks shall be final and executory and beyond the subject of judicial review. Without being explicitly excepted or exempted, the final judgments, orders, resolutions or awards of the BSP Monetary Board are among those appealable to the Court of Appeals by way of Petition for Review, as provided in Section 9(3) of Batas Pambansa Blg. 129, as amended, and Section 1, Rule 43 of the 1997 Revised Rules of Civil Procedure.

Although in Salud, this Court declared that the Intermediate Appellate Court (now Court of Appeals) has no appellate jurisdiction over resolutions or orders of the Monetary Board of the Central Bank of the Philippines (CBP, now BSP), because no law prescribes any mode of appeal therefrom, the factual settings of the said case are totally different from the one presently before us. Salud involved a resolution issued by the Monetary Board, pursuant to Section 29 of Republic Act No. 265, otherwise known as the old Central Bank Act, forbidding banking institutions to do business on account of a "condition of insolvency" or because "its continuance in business would involve probable loss to depositors or creditors;" or appointing a receiver to take charge of the assets and liabilities of the bank; or determining whether the banking institutions should be rehabilitated or liquidated, and if in the latter case, appointing a liquidator towards this end. The said Section 29 of the old Central Bank Act was explicit that the determination by the Monetary Board of whether a banking institution is insolvent, or should be rehabilitated or liquidated, is final and executory. However, said determination could be set aside by the trial court if there was convincing proof that the Monetary Board acted arbitrarily or in bad faith. Under the circumstances obtaining in Salud, it is apparent that our ruling therein is limited to cases of insolvency, and not to all cases cognizable by the Monetary Board.

At any rate, under the new law, i.e., Section 30 of Republic Act No. 7653, otherwise known as The New Central Bank Act, which took effect on 3 July 1993, the order of the BSP Monetary Board, even regarding the liquidation of a bank, can be questioned via a Petition

With all the foregoing, it cannot now be questioned that the Court of Appeals has appellate jurisdiction over the final judgments, orders, resolutions or awards rendered by the BSP Monetary Board in administrative cases against banks and their directors and officers, such as UCPB, et al.

The Court then proceeds to resolve the issue of whether the Court of Appeals erred in holding that the BSP Monetary Board summarily dismissed the administrative complaint of EGI against UCPB, et al.

After a meticulous scrutiny of the 16 September 2003 letter-decision of the BSP Monetary Board, this Court rules in the negative and affirms the finding of the Court of Appeals that the BSP Monetary Board did, indeed, summarily dismiss administrative complaint of EGI against UCPB, et al., for violation of Sections 36 and 37, Article IV of Republic Act No. 7653, in relation to Section 55.1(a) of Republic Act No. 8791, and for the commission of irregularity and unsafe or unsound banking practice.

Given the gravity and seriousness of the charges of EGI against UCPB, et al., the sweeping statement of the BSP Monetary Board that it was inclined to dismiss the complaint of EGI based on the evaluation made by its Supervision and Examination Department I and Office of the General Counsel and Legal Services, is simply insufficient and unsatisfactory. Worse, the BSP Monetary Board merely presented the following conclusions without bothering to explain its bases for the same: (1) UCPB computed interest on loans based on BSP rules and regulations which prohibit banks from accruing interest on loans that have become non-performing (BSP Circular No. 202); (2) fair market value of assets to be foreclosed is different from the bid price submitted during foreclosure and there is no statutory obligation for the latter to be equivalent to the former; (3) regarding the alleged P145,163,000.00 fabricated loan, the documents showed that there were the EGI Board resolution to borrow, promissory note signed by Mr. Eulalio Ganzon, and Loan Agreement stating the proceeds shall be used to pay outstanding availments

Page 111 of 192

and interest servicing; and (4) there is no finding by Supervision and Examination Department I on the alleged double charging and/or padding of transaction costs.

Further, in resolving the matter before it, the BSP Monetary Board never considered the UCPB Internal Memorandum dated 22 February 2001, which was the heart of the administrative complaint of EGI against UCPB, et al. The BSP Monetary Board did not even attempt to establish whether it was regular or sound practice for a bank to keep a record of its borrowers loan obligations with two different sets of figures, one higher than the other; and to disclose to the borrower only the higher figures. The explanation of UCPB, et al., adopted by the BSP Monetary Board that the figures in the ACTUAL column were lower than those in the DISCLOSED TO EGI column because the former was computed in accordance with BSP rules and regulations prohibiting the accrual of interest on loans that have become non-performing gives rise to more questions than answers.Examples of some of these questions would be whether the loan obligations of EGI have become non-performing; whether the differences between the figures in the ACTUAL and DISCLOSED TO EGI columns indeed corresponded to the interest that should be excluded from the figures in the first column per BSP rules and regulations; and whether the computations of the figures in both columns should have been freely disclosed and sufficiently explained to EGI in the name of transparency.

The BSP Monetary Board similarly failed to clarify whether UCPB can foreclose the mortgaged properties of EGI in amounts that were less than the values of the said properties as determined and stipulated by EGI and UCPB in their amended MOA. The Court once more agrees in the ruling of the Court of Appeals that the MOA entered into by EGI and UCPB serves as a contract between them, and it is the law that should govern their relationship, which neither of the parties can simply abrogate, violate, or disregard.Unfortunately, the BSP Monetary Board never even referred to the MOA executed by the parties in its letter-decision dated 16 September 2003.

Moreover, the BSP Monetary Board found that the P145,163,000.00 loan of EGI from UCPB was not fabricated based on several documents. However, there is absolute lack of explanation by the BSP Monetary Board as to why said documents deserved more weight vis--vis evidence of EGI of suspicious circumstances surrounding the said loan, such as UCPB granting EGI said loan even when the latter was already in default on its prior loan obligations, and without requiring additional security, detailed business plan, and financial projections from EGI.

The disregard by BSP Monetary Board of all the foregoing facts and issues in its letter-decision dated 16 September 2003 leads this Court to declare that it summarily dismissed the administrative complaint of EGI against UCPB, et al. There can be no complete resolution of the administrative complaint of EGI without consideration of these facts and judgment on said issues.

Finally, there is no merit in the assertion of UCPB, et al. that the Court of Appeals erred in disregarding the findings of fact of the BSP Monetary Board in the absence of grave abuse of discretion or lack of basis for the same.

Although, as a general rule, findings of facts of an administrative agency, which has acquired expertise in the particular field of its endeavor, are accorded great weight on appeal, such rule cannot be applied with respect to the assailed findings of the BSP Monetary Board in this case. Rather, what applies is the recognized exception that if such findings are not supported by substantial evidence, the Court can make its own independent evaluation of the facts.[41]

The standard of substantial evidence required in administrative proceedings is more than a mere scintilla. It means such relevant evidence as a reasonable mind might accept as adequate to support a conclusion. While rules of evidence prevailing in courts of law and equity shall not be controlling, the obvious purpose being to free administrative boards from the compulsion of technical rules so that the mere admission of matter which would be deemed incompetent in judicial proceedings would not invalidate the administrative order, this assurance of a desirable flexibility in administrative procedure does not go so far as to justify orders without basis in evidence having rational probative force.[42]

It cannot be convincingly said herein that the factual findings of the BSP Monetary Board in its letter-decision dated 16 September 2003 was supported by substantial evidence since (1) most of the findings were not supported by references to specific evidence; and (2) the findings were made without consideration of the primary evidence presented by EGI (i.e., the MOA and its amendments and the UCPB Internal Memorandum dated 22 February 2001).

Even then, the Court of Appeals stopped short of categorically ruling that UCPB, et al. committed irregularities, or unsound or unsafe banking practice in its transactions with EGI. What the Court of Appeals positively pronounced was that the BSP Monetary Board failed to give the necessary consideration to the administrative complaint of EGI, summarily dismissing the same in its 16 September 2003 letter-decision. The 14 October 2004 Decision of the Court of Appeals clearly remanded the case to the BSP for further proceedings since the BSP, with its specialized knowledge and expertise on banking matters, is more up to task to receive evidence, hold hearings, and thereafter resolve the issues based on its findings of fact and law. G.R. No. 168897 Also unsatisfied with the Decision dated 14 October 2004 and Resolution dated 7 July 2005 of the Court of Appeals, EGI filed with this Court its own Petition for Review on Certiorari under Rule 45 of the 1997 Revised Rules of Civil Procedure, raising the following issues:

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I. The Honorable Court of Appeals does have appellate jurisdiction over decisions, orders, and resolutions of the BSP/Monetary Board.

II. The Honorable Court of Appeals was correct in FINDING that the [BSP] summarily dismissed the complaint of EGI.

III. Whether or not the Honorable Court of Appeals committed patent, grave, and reversible error when it remanded the case to the [BSP] for further proceedings instead of acting upon its findings as narrated in its Decision.

IV. Whether or not the Honorable Court of Appeals committed patent, grave, and reversible error in not directing the [BSP] to impose the appropriate penalties against [UCPB, et al.].[43]

The Petition is docketed as G.R. No. 168897. Since the first two issues have already been addressed by this Court in its previous discussion herein on G.R. No. 168859, we now proceed to resolve the next two issues raised by EGI in its Petition in G.R. No. 168897. EGI avers that the Court of Appeals committed reversible error when it remanded the case to the BSP for further proceedings instead of directing the BSP to impose the applicable sanctions on UCPB, et al. EGI reasons that the appellate court, in its Decision dated 14 October 2004, already found that UCPB had committed several acts of serious irregularity and conducted business in an unsafe and unsound manner. By reason thereof, there was no more need for the Court of Appeals to remand this case to the BSP for a further determination of whether there were irregular and unsound practices by UCPB, et al. in its dealings with EGI. Should this case be remanded to the BSP, there would be nothing to prevent the BSP from ruling again that UCPB, et al., did not commit any irregularity and unsafe or unsound business practice. To require that this case be reviewed by the BSP would only lead to multiplicity of suits, promote unnecessary delay and negate the constitutional rights of all persons to a speedy disposition of their cases before all judicial, quasi-judicial or administrative bodies.

unsafe banking practices in their business dealings with EGI. The appellate court only adjudged that the BSP Monetary Board summarily dismissed the administrative complaint of EGI, without fully appreciating the facts and evidence presented by the latter. Given the seriousness of the charges of EGI against UCPB, et al., the BSP Monetary Board should have conducted a more intensive inquiry and rendered a more comprehensive decision.

By remanding the case to the BSP Monetary Board, the Court of Appeals only acted in accordance with Republic Act No. 7653 and Republic Act No. 8791, which tasked the BSP, through the Monetary Board, to determine whether a particular act or omission, which is not otherwise prohibited by any law, rule or regulation affecting banks, quasi-banks or trust entities, may be deemed as conducting business in an unsafe or unsound manner. Also, the BSP Monetary Board is the proper body to impose the necessary administrative sanctions for the erring bank and its directors or officers.

The Court of Appeals did not deem it appropriate, on appeal, to outright reverse the judgment of the BSP Monetary Board. The Court of Appeals held that the BSP Monetary Board did not have sufficient basis for dismissing the administrative complaint of EGI in its 16 September 2003 letter-decision; yet, the appellate court likewise did not find enough evidence on record to already resolve the administrative complaint in favor of EGI and against UCPB, et al., precisely the reason why it still remanded the case to the BSP Monetary Board for further proceedings. The Court of Appeals never meant to give EGI an assurance of a favorable judgment; it only ensured that the BSP Monetary Board shall accord all parties concerned to equal opportunity for presentation and consideration of their allegations, arguments, and evidence. While the speedy disposition of cases is a constitutionally mandated right, the paramount duty of the courts, as well as quasi-judicial bodies, is to render justice by following the basic rules and principles of due process and fair play. WHEREFORE, premises considered, the Petition for Review on Certiorari of United Coconut Planters Bank, Jeronimo U. Kilayko, Lorenzo V. Tan, Enrique L. Gana, Jaime W. Jacinto and Emily R. Lazaro, in G.R. No. 168859; as well as the Petition for Review on Certiorari of E. Ganzon, Inc. in G.R. No. 168897, are hereby DENIED. The Decision dated 14 October 2004 and Resolution dated 7 July 2005 of the Court of Appeals in CA-G.R. SP No. 81385 are hereby AFFIRMED in toto. No costs. SO ORDERED.

MINITA V. CHICO-NAZARIO Associate Justice

The Court reiterates that the Court of Appeals did not yet make conclusive findings in its Decision dated 14 October 2004, that UCPB, et al., committed irregularities and unsound or

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WE CONCUR: CONSUELO YNARES-SANTIAGO Associate Justice [1]

These two Petitions were consolidated per Resolution dated 19 September 2005, rollo (G.R. No. 168859), p. 836.

Chairperson

[2]

Penned by Associate Justice Lucenito N. Tagle with Associate Justices Eloy R. Bello, Jr. and Regalado E. Maambong, concurring, rollo (G.R. No. 168859), pp. 8-24. PRESBITERO J. VELASCO, JR. ANTONIO EDUARDO B. NACHURA [3]

Penned by Associate Justice Lucenito N. Tagle with Associate Justices Rosmari D. Carandang and Estela Perlas M. Bernabe, concurring, rollo (G.R. No. 168859), pp. 26-29.

Associate Justice Associate Justice

[4]

DIOSDADO M. PERALTA

Signed by Juan de Zuiga, Jr., BSPs Assistant Governor and General Counsel, and Ma. Corazon J. Guerrero, BSPs Supervision and Examination Department; rollo (G.R. No. 168859), pp. 339-340.

Associate Justice

[5]

Rollo (G.R. No. 168859), p. 342.

[6]

Id. at 343.

[7]

Id. at 193-200.

[8]

Id. at 363-372.

[9]

Id. at 374-375.

ATTESTATION

I attest that the conclusions in the above Decision were reached in consultation before the case was assigned to the writer of the opinion of the Courts Division.

[10]

CONSUELO YNARES-SANTIAGO

[11]

Rollo (G.R. No. 168859), pp. 376-380.

Associate Justice

[12]

Id. at 386-387.

Chairperson, Third Division

[13]

CERTIFICATION

Pursuant to Section 13, Article VIII of the Constitution, and the Division Chairpersons Attestation, it is hereby certified that the conclusions in the above Decision were reached in consultation before the case was assigned to the writer of the opinion of the Courts Division. REYNATO S. PUNO Chief Justice

Amendments to the Manual of Regulations and the Manual of Accounts for Banks and for Non-Bank Financial Institutions, Series of 2000; id. at 217-221.

Based on EGIs letter dated 21 May 2001, EGI claimed that after the foreclosure its remaining obligation to UCPB was only P83M as indicated in UCPBs own documents. The said P83M is composed of the following: 1) remaining principal balance of P41,605,981.73; 2) accrued interest receivable of P2,436,457.00; and 3) P38,963,060.51. Thus, when it transferred to UCPB via dacion en pago some of its properties in the EGI Rufino Plaza valued at P166,127,369.50, it overpaid UCPB in the amount of P83M. [14]

This was the explanation given by UCPB, et al. when they were confronted as regards the discrepancy appearing in its Internal Memorandum with a DISCLOSED TO EGI and ACTUAL columns. But, there was no mention if this explanation was made through a letter sent to EGI or it is just done verbally. [15]

Rollo (G.R. No. 168859), pp. 212-213.

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[16]

Policies on the Non-Performing Loans and Restructured Loans of Banks; id. at 209-211.

Resignation or termination from office shall not exempt such director or officer from administrative or criminal sanctions.

[17]

The case was filed before the Office of the Prosecutor of Makati City but it was dismissed. UCPB, et al. then filed a Petition for Review before the Department of Justice (DOJ), but the DOJ similarly dismissed the same in its Resolution dated 2 September 2002, rollo (G.R. No. 168859), pp. 395-396. [18]

Id. at 407-425.

[19]

Section 36. Proceedings Upon Violation of This Act and Other Banking Laws, Rules, Regulations, Orders or Instructions. Whenever a bank or quasi-bank, or whenever any person or entity willfully violates this Act or other pertinent banking laws being enforced or implemented by the Bangko Sentral or any order, instruction, rule or regulation issued by the Monetary Board, the person or persons responsible for such violation shall unless otherwise provided in this Act be punished by a fine of not less than Fifty thousand pesos (P50,000) nor more than Two hundred thousand pesos (P200,000) or by imprisonment of not less than two (2) years nor more than ten (10) years, or both, at the discretion of the court. Whenever a bank or quasi-bank persists in carrying on its business in an unlawful or unsafe manner, the Board may, without prejudice to the penalties provided in the preceding paragraph of this section and the administrative sanctions provided in Section 37 of this Act, take action under Section 30 of this Act. [20]

Section 37. Administrative Sanctions on Banks and Quasi-banks. Without prejudice to the criminal sanctions against the culpable persons provided in Sections 34, 35, and 36 of this Act, the Monetary Board may, at its discretion, impose upon any bank or quasi-bank, their directors and/or officers, for any willful violation of its charter or by-laws, willful delay in the submission of reports or publications thereof as required by law, rules and regulations; any refusal to permit examination into the affairs of the institution; any willful making of a false or misleading statement to the Board or the appropriate supervising and examining department or its examiners; any willful failure or refusal to comply with, or violation of, any banking law or any order, instruction or regulation issued by the Monetary Board, or any order, instruction or ruling by the Governor; or any commission of irregularities, and/or conducting business in an unsafe or unsound manner as may be determined by the Monetary Board, the following administrative sanctions, whenever applicable: (a) fines in amounts as may be determined by the Monetary Board to be appropriate, but in no case to exceed Thirty thousand pesos (P30,000) a day for each violation, taking into consideration the attendant circumstances, such as the nature and gravity of the violation or irregularity and the size of the bank or quasi-bank;

The Monetary Board may, whenever warranted by circumstances, preventively suspend any director or officer of a bank or quasi-bank pending an investigation: Provided, That should the case be not finally decided by the Bangko Sentral within a period of one hundred twenty (120) days after the date of suspension, said director or officer shall be reinstated in his position: Provided, further, That when the delay in the disposition of the case is due to the fault, negligence or petition of the director or officer, the period of delay shall not be counted in computing the period of suspension herein provided. The above administrative sanctions need not be applied in the order of their severity. Whether or not there is an administrative proceeding, if the institution and/or the directors and/or officers concerned continue with or otherwise persist in the commission of the indicated practice or violation, the Monetary Board may issue an order requiring the institution and/or the directors and/or officers concerned to cease and desist from the indicated practice or violation, and may further order that immediate action be taken to correct the conditions resulting from such practice or violation. The cease and desist order shall be immediately effective upon service on the respondents. The respondents shall be afforded an opportunity to defend their action in a hearing before the Monetary Board or any committee chaired by any Monetary Board member created for the purpose, upon request made by the respondents within five (5) days from their receipt of the order. If no such hearing is requested within said period, the order shall be final. If a hearing is conducted, all issues shall be determined on the basis of records, after which the Monetary Board may either reconsider or make final its order. The Governor is hereby authorized, at his discretion, to impose upon banking institutions, for any failure to comply with the requirements of law, Monetary Board regulations and policies, and/or instructions issued by the Monetary Board or by the Governor, fines not in excess of Ten thousand pesos (P10,000) a day for each violation, the imposition of which shall be final and executory until reversed, modified or lifted by the Monetary Board on appeal. [21]

Known as The New Central Bank Act.

[22]

Section 55. Prohibited Transactions.

55.1. No director, officer, employee, or agent of any bank shall

(b) suspension of rediscounting privileges or access to Bangko Sentral credit facilities;

(a) Make false entries in any bank report or statement or participate in any fraudulent transaction, thereby affecting the financial interest of, or causing damage to, the bank or any person;

(c) suspension of lending or foreign exchange operations or authority to accept new deposits or make new investments;

[23]

Otherwise known as The General Banking Law of 2000.

(d) suspension of interbank clearing privileges; and/or

[24]

Rollo (G.R. No. 168859), pp. 290-291.

(e) revocation of quasi-banking license.

[25]

Id.

Page 115 of 192

[26]

Id. at 331.

[27]

Id. at 59.

[28]

Binay v. Sandiganbayan, 374 Phil. 413, 440-441 (1999).

[29]

Land Bank of the Philippines v. De Leon, 437 Phil. 347, 357 (2002).

[30]

Sy v. Commission on Settlement of Land Problems, 417 Phil. 378, 393-394 (2001).

[31]

Metro Construction, Inc. v. Chatham Properties, Inc., 418 Phil. 176, 203 (2001).

(c) suspension of lending or foreign exchange operations or authority to accept new deposits or make new investments; (d) suspension of interbank clearing privileges; and/or (e) revocation of quasi-banking license. Resignation or termination from office shall not exempt such director or officer from administrative or criminal sanctions.

[32]

The Presidential Anti-Dollar Salting Task Force v. Court of Appeals, G.R. No. 83578, 16 March 1989, 171 SCRA 348, 360. [33]

Tropical Homes, Inc. v. National Housing Authority, G.R. No. L-48672, 31 July 1987, 152 SCRA 540, 548-549.

The Monetary Board may, whenever warranted by circumstances, preventively suspend any director or officer of a bank or quasi-bank pending an investigation: Provided, That should the case be not finally decided by the Bangko Sentral within a period of one hundred twenty (120) days after the date of suspension, said director or officer shall be reinstated in his position: Provided, further, That when the delay in the disposition of the case is due to the fault, negligence or petition of the director or officer, the period of delay shall not be counted in computing the period of suspension herein provided.

[34]

Villarosa v. Commission on Elections, 377 Phil. 497, 506-507 (1999).

The above administrative sanctions need not be applied in the order of their severity.

[35]

Section 3, Chapter 1, Article 1, Republic Act No. 7653.

[36]

Section 23, Chapter 1, Article IV, Republic Act No. 7653.

[37]

Section 25, Chapter 1, Article IV, Republic Act No. 7653.

[38]

Sections 36 and 37, Chapter 1, Article IV, Republic Act No. 7653.

Whether or not there is an administrative proceeding, if the institution and/or the directors and/or officers concerned continue with or otherwise persist in the commission of the indicated practice or violation, the Monetary Board may issue an order requiring the institution and/or the directors and/or officers concerned to cease and desist from the indicated practice or violation, and may further order that immediate action be taken to correct the conditions resulting from such practice or violation. The cease and desist order shall be immediately effective upon service on the respondents.

[39]

Section 37. Administrative Sanctions on Banks and Quasi-banks. Without prejudice to the criminal sanctions against the culpable persons provided in Sections 34, 35, and 36 of this Act, the Monetary Board may, at its discretion, impose upon any bank or quasi-bank, their directors and/or officers, for any willful violation of its charter or by-laws, willful delay in the submission of reports or publications thereof as required by law, rules and regulations; any refusal to permit examination into the affairs of the institution; any willful making of a false or misleading statement to the Board or the appropriate supervising and examining department or its examiners; any willful failure or refusal to comply with, or violation of, any banking law or any order, instruction or regulation issued by the Monetary Board, or any order, instruction or ruling by the Governor; or any commission of irregularities, and/or conducting business in an unsafe or unsound manner as may be determined by the Monetary Board, the following administrative sanctions, whenever applicable: (a) fines in amounts as may be determined by the Monetary Board to be appropriate, but in no case to exceed Thirty thousand pesos (P30,000) a day for each violation, taking into consideration the attendant circumstances, such as the nature and gravity of the violation or irregularity and the size of the bank or quasi-bank;

The respondents shall be afforded an opportunity to defend their action in a hearing before the Monetary Board or any committee chaired by any Monetary Board member created for the purpose, upon request made by the respondents within five (5) days from their receipt of the order. If no such hearing is requested within said period, the order shall be final. If a hearing is conducted, all issues shall be determined on the basis of records, after which the Monetary Board may either reconsider or make final its order. The Governor is hereby authorized, at his discretion, to impose upon banking institutions, for any failure to comply with the requirements of law, Monetary Board regulations and policies, and/or instructions issued by the Monetary Board or by the Governor, fines not in excess of Ten thousand pesos (P10,000) a day for each violation, the imposition of which shall be final and executory until reversed, modified or lifted by the Monetary Board on appeal.

[40]

227 Phil. 551 (1986).

[41]

(b) suspension of rediscounting privileges or access to Bangko Sentral credit facilities;

Pepsi-Cola Distributors of the Philippines, Inc. v. National Labor Relations Commission, 338 Phil. 773, 780-781 (1997). [42]

Spouses Boyboy v. Atty. Yabut, Jr., 449 Phil. 664, 670 (2003).

Page 116 of 192

[43]

Rollo (G.R. No. 168897), p. 1013.

Respondent. March 6, 2007 x- - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - x

Republic of the Philippines Supreme Court Manila

DECISION

AUSTRIA-MARTINEZ, J.: THIRD DIVISION

This resolves the Petition for Review on Certiorari assailing the Resolutions dated March 8, 2002[1] and July 4, 2002,[2] respectively, issued by the Court of Appeals (CA). DEPUTY DIRECTOR GENERAL G.R. NO. 154243 ROBERTO LASTIMOSO, ACTING CHIEF PHILIPPINE NATIONAL Present: The antecedent facts, as gathered from the records, are as follows. POLICE (PNP), DIRECTORATE FOR PERSONNEL AND RECORDS YNARES-SANTIAGO, J., MANAGEMENT (DPRM), Chairperson, INSPECTOR GENERAL, P/CHIEF AUSTRIA-MARTINEZ,

Sometime in 1997, a certain Delia Buo (Buo) filed with the Office of the Inspector General of the PNP an administrative complaint for abuse of authority/harassment against P/Senior Inspector Jose J. Asayo (respondent). The latter allegedly obstructed police officers from arresting his brother Lamberto Asayo, one of the suspects in the shooting of Buo's son.

SUPT. RAMSEY OCAMPO and CALLEJO, SR.,* P/SUPT. ELMER REJANO, CHICO-NAZARIO, and Petitioners, NACHURA, JJ.

The complaint was referred to the Inspector General for pre-charge investigation. When summoned, respondent did not appear but filed a motion to dismiss, arguing that it was the People's Law Enforcement Board (PLEB) which had jurisdiction over the case.

- versus -

P/SENIOR INSPECTOR JOSE J. ASAYO, Promulgated:

On September 23, 1998, the Inspector General submitted a report to the PNP Chief recommending the commencement of summary dismissal proceedings against respondent.Upon approval of said recommendation, the administrative complaint was referred to the PNP Legal Service for summary hearing. At the hearing before the designated summary hearing officer, respondent was furnished with copies of the pre-charge investigation report of

Page 117 of 192

the Inspector General and the affidavits of Buo and her witnesses. Thereafter, respondent submitted his counter-affidavit and a rejoinder. Respondent was asked by the hearing officer if he wanted to cross-examine Buo and her witnesses but he declined and instead agreed to submit the case for resolution based on the pleadings.

Hence, herein petition to set aside the aforementioned CA Resolutions on the following grounds:

I On December 28, 1998, the hearing officer recommended that respondent be dismissed from police service for grave misconduct. On January 22, 1999, the PNP Chief, then Deputy Director General Roberto Lastimoso, rendered a decision dismissing respondent from police service. Respondent filed a motion for reconsideration of the PNP Chief's Decision but withdrew the same and instead filed a petition for certiorari and prohibition, with prayer for the issuance of a temporary restraining order and writ of preliminary injunction with the Regional Trial Court of Manila (RTC).

RESPONDENT FAILED TO EXHAUST ALL THE AVAILABLE ADMINISTRATIVE REMEDIES PRIOR TO THE FILING OF HIS PETITION BEFORE THE COURT A QUO.

II

On August 27, 1999, the RTC rendered its Decision, the dispositive portion of which reads as follows:

WHEREFORE, the subject petition of petitioner Asayo is GRANTED. The assailed decision of the public respondents dated 22 January 1999 (Exhibit J) is annulled and set aside for having been rendered with grave abuse of discretion amounting to lack and or excess of jurisdiction. Consequently, public respondents, their subordinates, agents, representatives and successors are permanently enjoined from enforcing or causing the execution in any manner of the aforesaid decision against herein petitioner Jose J. Asayo.

THE CHIEF OF THE PHILIPPINE NATIONAL POLICE HAS THE AUTHORITY OR JURISDICTION UNDER REPUBLIC ACT NO. 6975 TO HEAR AND TRY THE CITIZEN'S COMPLAINT AGAINST RESPONDENT.[5]

With regard to the first issue, the respondent rightfully invoked the jurisdiction of the courts without first going through all the administrative remedies because the principle of exhaustion of administrative remedies admits of exceptions, such as when the issue involved is a purely legal question.[6] The only issue presented by respondent in his petition for certiorari and prohibition before the RTC was whether or not the PNP Chief had jurisdiction to take cognizance of the complaint filed by a private citizen against him. Said issue being a purely legal one, the principle of exhaustion of administrative remedies did not apply to the case.

Pursuant to Section 9 of Rule 65, a certified true copy of this decision should be served by personal service on the public and private respondents, on the Office of the Solicitor General and on the counsel for the petitioner.[3] Herein petitioners then appealed the case to the CA. On August 17, 2001, the CA promulgated its Decision[4] nullifying the RTC Decision and holding that (1) the PNP Chief had jurisdiction to try the civilian complaint filed against respondent; and, (2) respondent's failure to exhaust the administrative remedy of filing an appeal with the National Appellate Board was fatal to his cause. Respondent moved for reconsideration thereof.

On March 8, 2002, the CA issued the herein assailed Resolution reversing its Decision. The CA ruled that since the offense charged is punishable by dismissal, then it was the PLEB which had jurisdiction over the case. The CA further held that the principle of exhaustion of administrative remedies was not applicable to the case since the issue involved was purely legal in nature. The RTC Decision was then affirmed. The CA denied petitioners motion for reconsideration per its Resolution dated July 4, 2002.

However, as to the question of whether the PNP Chief had jurisdiction to act on a private citizen's complaint against respondent, the Court finds merit in petitioners' position.

The Court has previously ruled on this issue in Quiambao v. Court of Appeals,[7] to wit:

Republic Act (R.A.) No. 6975 or the Department of the Interior and Local Government Act of 1990, which took effect on 1 January 1991, x x x delineates the procedural framework in pursuing administrative complaints against erring members of the police organization. Section 41 of the law enumerates the authorities to which a complaint against an erring member of the PNP may be filed, thus;

Page 118 of 192

Section 41. (a) Citizens Complaints. Any complaint by an individual person against any member of the PNP shall be brought before the following:

(1) Chiefs of police, where the offense is punishable by withholding of privileges, restriction to specified limits, suspension or forfeiture of salary, or any combination thereof, for a period not exceeding fifteen (15) days;

(2) Mayors of cities or municipalities, where the offense is punishable by withholding of privileges, restriction to specified limits, suspension or forfeiture of salary, or any combination thereof, for a period of not less than sixteen (16) days but not exceeding thirty (30) days;

(3) Peoples Law Enforcement Board, as created under Section 43 hereof, where the offense is punishable by withholding of privileges, restriction to specified limits, suspension or forfeiture of salary, or any combination thereof, for a period exceeding thirty (30) days; or by dismissal. . . . (Emphasis added) It is readily apparent that a complaint against a PNP member which would warrant dismissal from service is within the jurisdiction of the PLEB. However, Section 41 should be read in conjunction with Section 42 of the same statute which reads, thus:

Sec. 42. Summary Dismissal Powers of the PNP Chief and Regional Directors. - The Chief of the PNP and regional directors, after due notice and summary hearings, may immediately remove or dismiss any respondent PNP member in any of the following cases:

Evidently, the PNP Chief and regional directors are vested with the power to summarily dismiss erring PNP members if any of the causes for summary dismissal enumerated in Section 42 is attendant. Thus, the power to dismiss PNP members is not only the prerogative of PLEB but concurrently exercised by the PNP Chief and regional directors. This shared power is likewise evident in Section 45.

SEC. 45. Finality of Disciplinary Action. The disciplinary action imposed upon a member of the PNP shall be final and executory: Provided, That a disciplinary action imposed by the regional director or by the PLEB involving demotion or dismissal from the service may be appealed to the regional appellate board within ten (10) days from receipt of the copy of the notice of decision: Provided, further, That the disciplinary action imposed by the Chief of the PNP involving demotion or dismissal may be appealed to the National Appellate Board within ten (10) days from receipt thereof: Provided, furthermore, That the regional or National Appellate Board, as the case may be, shall decide the appeal within sixty (60) days from receipt of the notice of appeal: Provided, finally, That failure of the regional appellate board to act on the appeal within said period shall render the decision final and executory without prejudice, however, to the filing of an appeal by either party with the Secretary. (Emphasis ours)

Once a complaint is filed with any of the disciplining authorities under R.A. No. 6975, the latter shall acquire exclusive original jurisdiction over the case although other disciplining authority has concurrent jurisdiction over the case. Paragraph (c) of Section 41 explicitly declares this point.

(c) Exclusive Jurisdiction A complaint or a charge filed against a PNP member shall be heard and decided exclusively by the disciplining authority who has acquired original jurisdiction over the case and notwithstanding the existence of concurrent jurisdiction as regards the offense; Provided, That offenses which carry higher penalties referred to a disciplinary authority shall be referred to the appropriate authority which has jurisdiction over the offense. (Emphasis ours)

(a) When the charge is serious and the evidence of guilt is strong; Clearly, the PLEB and the PNP Chief and regional directors have concurrent jurisdiction over administrative cases filed against members of the PNP which may warrant dismissal from service.

(b) When the respondent is a recidivist or has been repeatedly charged and there are reasonable grounds to believe that he is guilty of the charges; and

(c ) When the respondent is guilty of conduct unbecoming of a police officer. (Emphasis ours)

x x x The Court further declared that R.A. No. 6975 defines the summary dismissal powers of the PNP Chief and regional directors, among others in cases, where the respondent is guilty of conduct unbecoming of a police officer.

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Memorandum Circular No. 92-006 prescribes the rules and regulations in the conduct of summary dismissal proceedings against erring PNP members and defines conduct unbecoming of a police officer under Section 3(c), Rule II, as follows:

Conduct unbecoming of a police officer refers to any behavior or action of a PNP member, irrespective of rank, done in his official capacity, which, in dishonoring or otherwise disgracing himself as a PNP member, seriously compromise his character and standing as a gentleman in such a manner as to indicate his vitiated or corrupt state of moral character; it may also refer to acts or behavior of any PNP member in an unofficial or private capacity which, in dishonoring or disgracing himself personally as a gentleman, seriously compromises his position as a PNP member and exhibits himself as morally unworthy to remain as a member of the organization.[8] (Underscoring supplied)

Petitioners maintain that the charge against respondent, which is grave misconduct for preventing responding policemen from apprehending suspects and threatening one of the witnesses, constitutes conduct unbecoming a police officer, one of the cases under Section 42 of R.A. No. 6975, hence, the case falls within the summary dismissal powers of the PNP Chief. The Court agrees with petitioner on this point.

Even assuming that the charge against petitioner is not serious within the contemplation of paragraph (a) of Section 42 above quoted, or that he is not a recidivist within the context of paragraph (b), he could nonetheless fall within the ambit of paragraph (c) thereof, in that, because of his laxity and inefficiency in the performance of his duties, he is guilty of conduct unbecoming of a police officer.[11]

Clearly, the charges against respondent in this case are also covered by paragraph (c), Section 42 of R.A. No. 6975, vesting the PNP Chief with jurisdiction to take cognizance of the complaint against respondent.

Respondent then insists that petitioners acted with grave abuse of discretion by not giving him the opportunity to cross-examine the complainant and her witnesses despite the fact that Memorandum Circular No. 94-0422, providing for rules on how the summary hearing is to be conducted, grants him such right to cross-examine. This claim is belied by the testimony of the summary hearing officer, S/Insp. Ermilando O. Villafuerte, to wit:

Q Now, after submission of these pleadings what are the other steps, if any, that you have taken, Mr. Witness? The allegations in the complaint-affidavit,[9] i.e., that respondent gave refuge to the suspects in the shooting of complainant's son, and intimidated and harassed complainant's witness, are acts or behavior of any PNP member in an unofficial or private capacity which, in dishonoring or disgracing himself personally as a gentleman, seriously compromises his position as a PNP member and exhibits himself as morally unworthy to remain as a member of the organization, which constitute conduct unbecoming a police officer as defined under Section 3(c), Rule II, of Memorandum Circular No. 92-006.

A When he submitted his last pleading that is the rejoinder, I asked him [herein respondent] whether he still he is still submitting any evidence or going to cross examine the witnesses, but he moved that the case be submitted for resolution based on the last pleading he submitted, sir.[12]

xxx In Zacarias v. National Police Commission,[10] the Court discussed the meaning of conduct unbecoming, in this wise: CROSS-EXAMINATION: Webster defines unbecoming conduct as improper performance. Such term applies to a broader range of transgressions of rules not only of social behavior but of ethical practice or logical procedure or prescribed method. Obviously, the charges of neglect of duty, inefficiency and incompetence in the performance of official duties fall within the scope of conduct unbecoming a police officer. Thus, we agree with the Court of Appeals when it ruled:

xxx

Q When you apprized (sic) the respondent about his right to cross-examine the complainant and her witnesses, is that in writing?

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A No, sir.

x x x in administrative proceedings, technical rules of procedure and evidence are not strictly applied and administrative due process cannot be fully equated with due process in its strict judicial sense.

Q As a matter of fact, you did that, if ever you did, without the presence of the counsel of the respondent. Is it not? Nothing on record shows he asked for cross-examination as most of the submissions were written. In our view, petitioner cannot argue that he has been deprived of due process merely because no cross-examination took place. The rule is well-established that due process is satisfied when the parties are afforded fair and reasonable opportunity to explain their side of the controversy or given opportunity to move for reconsideration of the action or ruling complained of. x x x[15] (Emphasis supplied)

A Yes, sir.

x x x[13] (Emphasis supplied) With regard to the right to be assisted by counsel, it has been held in Sebastian v. Garchitorena[16] that:

The foregoing testimony reveals that respondent was indeed given the opportunity to crossexamine his accusers but he chose to waive the same. The fact that the hearing officer merely orally informed respondent that he may cross-examine the complainant and her witnesses and that respondent was not assisted by counsel when he waived the right to cross-examine, does not constitute grave abuse of discretion on the part of the summary hearing officer.

In the first place, Section 4 of Memorandum Circular No. 94-0422 only provides thus:

Being summary in nature, direct examination of witnesses shall be dispensed with and the sworn statements of witnesses or their affidavits shall take the place of their oral testimony.Either party shall limit cross-examination to the sworn statements on hand. Crossexamination must be confined only to material and relevant matters. Prolonged arguments and other dilatory proceedings shall not be entertained. Insofar as may be compatible with the ends of justice, cross-examination shall be limited to not more than fifteen (15) minutes for each witness.

While an investigation conducted by an administrative body may at times be akin to a criminal proceeding, the fact remains that under existing laws, a party in an administrative inquiry may or may not be assisted by counsel, irrespective of the nature of the charges and of the respondent's capacity to represent himself, and no duty rests on such a body to furnish the person being investigated with counsel. It has been held in the case of Lumiqued v. Exevea that the right to counsel is not imperative in administrative investigations because such inquiries are conducted merely to determine whether there are facts that merit disciplinary measures against erring public officers and employees, with the purpose of maintaining the dignity of government service.[17] (Emphasis supplied)

Verily, the assistance of counsel was not required for respondent to validly waive his right to cross-examine the witnesses in the administrative case against him.

In sum, the charges against respondent fall well within the scope of paragraph (c), Section 42 of R.A. No. 6975, thus, the PNP Chief had jurisdiction to take cognizance of the complaint against respondent; and the summary hearing officer accorded respondent due process and never deprived respondent any of his rights.

The foregoing rules on summary hearings do not require the summary hearing officer to even inform a party, either orally or in writing, of such right to cross-examine.

Moreover, as held in Emin v. De Leon,[14] to wit:

WHEREFORE, the petition is GRANTED. The Resolutions of the Court of Appeals dated March 8, 2002 and July 4, 2002, respectively, are SET ASIDE. The Court of Appeals Decision dated August 17, 2001 is hereby REINSTATED. No costs

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I attest that the conclusions in the above Decision had been reached in consultation before the case was assigned to the writer of the opinion of the Courts Division. SO ORDERED.

MA. ALICIA AUSTRIA-MARTINEZ Associate Justice CONSUELO YNARES-SANTIAGO Associate Justice Chairperson, Third Division WE CONCUR:

CONSUELO YNARES-SANTIAGO CERTIFICATION Associate Justice Chairperson Pursuant to Section 13, Article VIII of the Constitution, and the Division Chairpersons attestation, it is hereby certified that the conclusions in the above Decision had been reached in consultation before the case was assigned to the writer of the opinion of the Courts Division. (On Leave) ROMEO J. CALLEJO, SR. MINITA V. CHICO-NAZARIO Associate Justice Associate Justice REYNATO S. PUNO Chief Justice

ANTONIO EDUARDO B. NACHURA *

On Leave.

Associate Justice [1]

Penned by Associate Justice Alicia L. Santos, with Associate Justices Mercedes GozoDadole and Josefina G. Salonga concurring; rollo, pp. 41-46. ATTESTATION

[2]

Penned by Associate Justice Mercedes Gozo-Dadole, with Associate Justices Josefina G. Salonga and Jose L. Sabio, Jr. concurring; id. at 47-48. [3]

Rollo, p. 117

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[4]

See Decision penned by Associate Justice Alicia L. Santos, with Associate Justices Ramon A. Barcelona and Mercedes Gozo-Dadole concurring, id. at 167-178.

administrative agencies to carry out their functions and discharge their responsibilities within the specialized areas of their respective competence.1

[5]

Rollo, p. 12.

[6]

Estrada v. Court of Appeals, G.R. No. 137862, November 11, 2004, 442 SCRA 117, 127.

This is a petition for review on certiorari2 from a decision of the Court of Appeals3 which reversed a decision of a hearing panel of the Securities and Exchange Commission (SEC),4 and the appellate court’s resolution denying reconsideration.5

[7]

G.R. No. 128305, March 28, 2005, 454 SCRA 17.

The undisputed facts of the case follow.

[8]

Quiambao v. Court of Appeals, supra note 7, at 32-36.

[9]

Rollo, p. 50.

On August 29, 1997, respondent G.G. Sportswear (G.G.) filed a petition with the SEC for a "Declaration of State of Suspension of Payments, for Approval of Proposed Rehabilitation Plan and for Appointment of Management Committee," docketed as SEC Case No. 08-97-5752.6

[10]

460 Phil. 555 (2003).

[11]

Id. at 562.

[12]

Rollo, p. 16.

[13]

Folder of TSNs, TSN of the Hearing of July 12, 1999, p. 8.

[14]

428 Phil. 172 (2002).

[15]

Id. at 186.

[16]

397 Phil. 519 (2000).

[17]

Sebastian v. Garchitorena case, supra note 16, at 527.

On September 3, 1997, the SEC hearing panel issued an order directing the suspension of all actions, claims and proceedings against G.G. pending before any court, tribunal, office, board, body and/or commission. The SEC hearing panel likewise enjoined G.G. from disposing of any of its properties in any manner except in the ordinary course of business and from making any payment outside the legitimate and ordinary expenses of its business operation during the pendency of the proceedings. The hearing panel also scheduled a creditors’ meeting on October 29, 1997 and directed the publication of a notice to this effect in a newspaper of general circulation once a week for two (2) consecutive weeks. 7 Three of respondent’s creditors, Philippine Commercial and International Bank (PCIB), Dao Heng Bank and Standard Chartered Bank filed an urgent motion for the immediate constitution of a management committee. Another creditor, FEB Leasing and Finance Corporation, on the other hand, filed a motion for exclusion with manifestation. Despite notice, respondent’s representatives failed to appear at the hearings, as well as at the scheduled creditors’ meeting. 8 The hearing panel issued an order dated October 30, 1997 dismissing respondent’s petition and lifting the suspension order.9 Upon motion, the hearing panel reconsidered its October 30, 1997 order and reset the creditors’ meeting to December 12, 1997. It also extended the suspension order for 30 days. Creditors PCIB, Dao Heng Bank and Standard Chartered Bank questioned the jurisdiction of the hearing panel to have a creditors meeting sanspublication of the extended order of suspension. Failing to get affirmative relief from the hearing panel, Dao Heng and Standard Chartered elevated the matter to the SEC en banc by means of a petition for certiorari with prayer for preliminary injunction. This was docketed as SEC-AC No. 604. 10

SECOND DIVISION G.R. No. 146526

May 5, 2006

HONGKONG & SHANGHAI BANKING CORPORATION, LTD. and CITIBANK, N.A., Petitioners, vs. G.G. SPORTSWEAR MANUFACTURING CORPORATION, Respondent,

On December 29, 1997, the hearing panel issued another order extending the suspension to January 31, 1998.11

DECISION CORONA, J.: The doctrine of exhaustion of administrative remedies is a cornerstone of our judicial system. The thrust of the rule on exhaustion of administrative remedies is that the courts must allow the

During the hearings conducted on February 19, 1998 and April 17, 1998, respondent presented as its lone witness Mainrado M. Laygo, its external auditor, to substantiate the feasibility of its rehabilitation plans. Laygo’s cross-examination was suspended due to respondent’s failure to attach to its petition and/or to furnish the creditors with the requisite financial documents and other records.12 It was then terminated for lack of material time.13

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On February 26, 1998, the hearing panel extended the suspension order one last time, to April 30, 1998.14 During the en banc hearings on SEC-AC No. 604 regarding the injunction aspect of the petition, it was deduced that respondent was merely suffering from liquidity problems rather than insolvency. Respondent G.G. was therefore ordered to amend its petition and limit the issue before the hearing panel to the propriety of the declaration of suspension of payments. The SEC en banc then enjoined the hearing panel from proceeding with SEC Case No. 08-97-5752 until after respondent had amended its petition accordingly. 15 On May 7, 1998, respondent filed its amended petition, which the hearing panel admitted on November 11, 199816and set for hearing along with several motions filed by both respondent G.G. and its creditors.1avvphil.net On January 25, 1999, Solid Mills, Inc. and Unisol Industries Manufacturing Corporation informed the hearing panel that respondent attempted to sell 500,000 pieces of garments valued at US $1,500,000 to US Apparel and Collection Pte. Ltd., a Singaporean company, but was enjoined by the High Court of Singapore upon application by Dao Heng Bank in Suit No. 82 of 1999.17 Respondent never informed the hearing panel of this aborted transaction.

I. THERE WAS NO VALID GROUND FOR GG SPORTSWEAR TO DISPENSE WITH A MOTION FOR RECONSIDERATION. II. THERE WAS NO VALID GROUND FOR GG SPORTSWEAR TO DISPENSE WITH AN APPEAL TO THE [SEC] EN BANC. III. THE HEARING PANEL OF THE [SEC] DID NOT ACT WITH GRAVE ABUSE OF DISCRETION IN DISMISSING THE PETITION. IV. GG SPORTSWEAR FAILED TO COMPLY WITH THE REQUIREMENTS OF SECTION 5, RULE 7 OF THE RULES OF COURT.24

On May 20, 1999, petitioner Hongkong & Shanghai Banking Corporation, Ltd. (HSBC) manifested that it was exercising its right not to participate in the proceedings in the amended petition.18

The first three arguments can be compressed into one pivotal issue, namely, whether or not the Court of Appeals should have dismissed respondent’s special civil action for certiorari for failure to exhaust administrative remedies.

On July 26, 1999, respondent filed a motion to withdraw its amended petition19 with a view to filing another one to include its sister corporation, Magic Apparel Corporation (MAC), as copetitioner. This petition was docketed as SEC Case No. 17-99-6374.20 PCIB, Dao Heng Bank and Standard Charter Bank opposed the motion and prayed that the amended petition be dismissed instead.21

We find for the petitioner.

In an order dated August 18, 1999, the SEC hearing panel in SEC Case No. 17-99-6374 dismissed the joint petition

Nowhere in its petition did respondent explain why it did not appeal to the SEC en banc. It simply attributed the two-year delay of its case to the injunction imposed by the SEC en banc. Nothing more.

filed by respondent G.G. and its sister company MAC.22 On September 9, 1999, respondent filed a manifestation with the hearing panel that its amended petition be maintained. The hearing panel resolved to maintain the petition but, considering it on the merits, dismissed it. On October 13, 1999, respondent filed a "petition for certiorari, prohibition and mandamus with a prayer for the issuance of a restraining order/injunction"23 with the Court of Appeals. On May 31, 2000, the Court of Appeals rendered the assailed decision reversing the SEC hearing panel and, on December 14, 2000, the assailed resolution denying reconsideration. Hence, the instant petition. Petitioner posits four arguments, namely:

The remedies available to respondent were stated clearly enough in the 1999 SEC Rules of Procedure. According to Rule VI,25 the proper remedy from an adverse decision of a hearing officer was an appeal which, according to Rule XV,26 was to be made to the SEC en banc. Respondent likewise had a remedy under Rule 43 of the 1997 Revised Rules of Civil Procedure.27

The exceptions to the doctrine of exhaustion of administrative remedies, as enumerated in Province of Zamboanga del Norte v. Court of Appeals 28 are: (1) when there is a violation of due process; (2) when the issue involved is purely a legal question; (3) when the administrative action is patently illegal amounting to lack or excess of jurisdiction; (4) when there is estoppel on the part of the administrative agency concerned; (5) when there is irreparable injury; (6) when the respondent is a department secretary whose acts as an alter ego of the President bears the implied and assumed approval of the latter; (7) when to require exhaustion of administrative remedies would be unreasonable; (8) when it would amount to a nullification of a claim; (9) when the subject matter is a private land in land case proceedings; (10) when the rule does not provide a plain, speedy and adequate remedy, and (11) when there are circumstances indicating the urgency of judicial intervention, and unreasonable delay would greatly prejudice

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the complainant; (12) where no administrative review is provided by law; (13) where the rule of qualified political agency applies and (14) where the issue of non-exhaustion of administrative remedies has been rendered moot. From among these exceptions, respondent claims denial of due process by the hearing panel and grave abuse of discretion on the part of the hearing panel amounting to lack or excess of jurisdiction. The facts on record, however, do not bear out respondent’s allegations. Respondent did not dispute that the hearing panel extended the suspension order in its favor three times for a total period of almost eight months. During this time, the panel provided respondent more than ample opportunity to present its evidence. Neither did respondent dispute the fact that the cross-examination of its witness, external auditor Mainrado M. Laygo, was suspended during the hearing due to its own failure to attach the requisite financial documents and records to its petition, in violation of the SEC Policy Guidelines. When the cross-examination was terminated, if anyone was deprived of due process, it was the creditors who were unable to propound searching questions to respondent’s witness. Respondent’s claim that it was not given due process is therefore without basis. Even more baseless is the argument that an appeal to the SEC en banc was useless. Respondent itself, as a matter of fact, never even raised such a ground in its petition; it was the Court of Appeals that erroneously drew the conclusion that the SEC en banc could not supposedly provide respondent with adequate relief. According to the Court of Appeals, the reasons were based on its understanding of respondent’s "perception." 29 In other words, there was no factual basis for such a conclusion. In Union Bank v. Court of Appeals,30 petitioner Union Bank was likewise of the persuasion that the SEC en bancwould be unsympathetic to its pleas. In dismissing its petition for certiorari, we said:

banc would not have been empowered at all by the statute to take cognizance of appeals from its subordinate units. But the lawmakers, having faith in a collegial body such as the SEC en banc, precisely empowered it to act as such appellate body cannot override the fact that the law mandates recourse thereto. (emphasis ours) The fact that the SEC was, at the time respondent filed its special civil action for certiorari, empowered by PD 902-A31 to issue writs of injunction refuted respondent’s claim that urgency dictated its decision to take its case straight to the Court of Appeals. Furthermore, as earlier mentioned, the SEC en banc enjoined the hearing panel from proceeding with SEC Case No. 08-97-5752, pending amendment by respondent of its petition so as to limit the issue before the hearing panel to the propriety of the declaration of suspension of payments. Respondent never complained that the hearing panel ignored that injunction. This clearly contradicts the Court of Appeals’ statement that the hearing panel "would not respect whatever directive the SEC en banc would issue."32 It further puts into sharp relief the simple fact that respondent’s suppositions (regarding the futility of an appeal to the SEC en banc) were nothing but speculation. Distrust of an administrative agency alone, unsupported by concrete evidence, is not sufficient reason to dispense with the doctrine of administrative remedies, which serves a very useful purpose in ensuring the efficient and speedy disposal of cases. Once the courts condone the circumvention of the mechanisms of administrative appeals on mere suspicion of an agency’s integrity, the doctrine is as good as dead. WHEREFORE, the instant petition is hereby GRANTED. The decision and resolution of the Court of Appeals in CA-G.R. SP No. 55270 are hereby REVERSED. The decision of the SEC hearing panel dismissing SEC Case No. 08-97-5752 is REINSTATED. SO ORDERED.

In this case, petitioner was actually not without remedy to correct what it perceived and supposed was an erroneous assumption of jurisdiction by the SEC, without having recourse immediately to the Court of Appeals. Under Section 6(m) of P.D. No. 902-A, it has been expressly provided that "the decision, ruling or order of any such Commissioner, bodies, boards, committees and/or officer may be appealed to the Commission sitting en banc within thirty days after receipt by the appellant of notice of such decision, ruling or order." Such procedure being available, could have been resorted to by petitioner which, however, it chose to forego. Furthermore, by taking up the matter with the SEC, it could still have obtained an injunction which it similarly sought from the appellate court via its petition for certiorari because the said body has been empowered by Section 6(a) of P.D. No. 902-A "to issue preliminary or permanent injunctions, whether prohibitory or mandatory, in all cases in which it has jurisdiction…" Finally, petitioner itself hardly concealed the fact that it distrusted altogether the whole mechanism of appeal to the SEC en banc, which is why it did not find resort thereto imperative. Thus, it explicitly stated that "it is a given that SEC will not reverse itself, therefore, any reconsideration or appeal en banc would be a mere exercise of futility, [particularly] when public respondent Associate Commissioner Fe Gloria is the acting Chairperson of SEC." What basis does petitioner have in casting doubt on the integrity and competence of the SEC en banc? This baseless, even reckless, reasoning hardly deserves an iota of attention. It cannot justify a procedural short-cut quite contrary to law. If this were so, then the SEC en

RENATO C. CORONA Associate Justice WE CONCUR: (on leave) REYNATO S. PUNO Associate Justice Chairperson (No Part) ANGELINA SANDOVAL-GUTIERREZ Associate Justice Acting Chairperson CANCIO C. GARCIA Associate Justice

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ADOLFO S. AZCUNA Asscociate Justice

ATTESTATION

10

Id., p. 54.

I attest that the conclusions in the above Decision had been reached in consultation before the case was assigned to the writer of the opinion of the Court’s Division.

11

Id., p. 82.

12

Id., p. 22.

13

Id., p. 54.

14

Id., p. 440.

15

Id., pp. 54-55.

16

Id., pp. 91-92.

17

Id., pp. 93-98.

18

Id., pp. 101-103.

19

Id., pp. 125-126.

20

Id., pp. 107-121.

21

Id., pp. 125-126.

22

Id., pp. 123-124.

23

Id., pp. 127-161.

24

Rollo, pp. 28-29.

ANGELINA SANDOVAL-GUTIERREZ Associate Justice Acting Chairperson, Second Division CERTIFICATION Pursuant to Article VIII, Section 13 of the Constitution and the Division Chairman’s Attestation, I certify that the conclusions in the above decision had been reached in consultation before the case was assigned to the writer of the opinion of the Court’s Division. ARTEMIO V. PANGANIBAN Chief Justice

Footnotes 1

Caballes v. Perez-Sison, G.R. No. 131759, March 23, 2004, 426 SCRA 98.

2

Under Rule 45.

3

CA Decision dated May 31, 2000 in CA-G.R. SP No. 55270, penned by Associate Justice Wenceslao I. Agnir and concurred in by Associate Justices Angelina Sandoval-Gutierrez (now Associate Justice of the Supreme Court) and Renato C. Dacudao of the Special Fifth Division of the Court of Appeals; Rollo, pp. 52-63.

SEC. 2. Finality of Decision. – The decision of the Hearing Officer, in the absence of appeal therefrom, shall become final and executory fifteen (15) days from the date of receipt thereof. 25

4

Order dated September 17, 2000 in SEC Case No. 08-97-5752, signed by Associate Commissioner Rosalinda U. Casiguran and Hearing Officer Marciano S. Bacalla; Rollo, p. 125126. 5

CA Resolution dated December 14, 2000 (affirming the May 31, 2000 Decision) in CA-G.R. No. SP No. 55270, penned by penned by Associate Justice Wenceslao I. Agnir and concurred in by Associate Justices Angelina Sandoval-Gutierrez (now Associate Justice of the Supreme Court) and Renato C. Dacudao of the Special Fifth Division of the Court of Appeals; Rollo, pp. 65-67. 6

Rollo, pp. 68-75.

7

Id., pp. 76-79.

8

Id., p. 53.

9

Id., pp. 80-81.

SECTION 1. Appeal from the Resolution, Ruling or Order of the Hearing Officer. – Any decision, ruling or order of the Hearing Officer may be appealed by the aggrieved party to the Commission sitting En Banc within fifteen (15) days from receipt by the appellant of notice of such resolution, ruling or order. 26

SECTION 1. Scope. – This Rule shall apply to appeals from judgments or final orders of the Court of Tax Appeals and from awards, judgments, final orders or resolutions of or authorized by any quasi-judicial agency in the exercise of its quasi-judicial functions. Among these agencies are the Civil Service Commission, Central Board of Assessment Appeals, Securities and Exchange Commission, Office of the President, Land Registration Authority, Social Security Commission, Civil Aeronautics Board, Bureau of Patents, Trademarks and Technology Transfer, National Electrification Administration, Energy Regulatory Board, National Telecommunications Commission, Department of Agrarian Reform under Republic Act No. 6657, Government Service Insurance System, Employees Compensation Commission, Agricultural Inventions Board, Insurance Commission, Philippine Atomic Energy Commission, 27

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Board of Investments, Construction Industry Arbitration Commission, and voluntary arbitrators authorized by law (emphasis ours). SEC. 3. Where to appeal. – An appeal under this Rule may be taken to the Court of Appeals within the period and in the manner herein provided, whether the appeal involves questions of fact, of law, or mixed questions of fact and law. 28

396 Phil. 709 (2000), as quoted in SSS v. CA, G.R. No. 152058, September 27, 2004, 439 SCRA 239. 29

Rollo, pp. 59-60.

30

352 Phil. 808 (1998).

On 8 January 2003, eight members of the Sangguniang Bayan of Aliaga, Nueva Ecija ("SB Members"), filed with the Sangguniang Panlalawigan an administrative complaint against the incumbent Municipal Mayor of Aliaga, Elizabeth R. Vargas ("Mayor Vargas"), for dishonesty, misconduct in office, and abuse of authority. The SB Members alleged that Mayor Vargas submitted to the Provincial Budget Officer two falsified documents, namely, Appropriation Ordinance No. 1, series of 2002 ("Appropriation Ordinance No. 1") and Resolution No. 2, series of 2002, approving the enactment of Appropriation Ordinance No. 1. The administrative case was docketed as ADM. CASE No. 02-S-2003. On 13 February 2003, Mayor Vargas filed a complaint for annulment of falsified minutes of session and appropriation ordinance with damages against the SB members before the Regional Trial Court of Cabanatuan City ("Cabanatuan RTC"). The case was docketed as Civil Case No. 4442.

31

SEC. 6. In order to effectively exercise such jurisdiction, the Commission shall possess the following powers:

Rollo, p. 60.

On 18 February 2003, Mayor Vargas filed before the Sangguniang Panlalawigan a motion to suspend proceedings and/or motion to dismiss due to the pendency of a prejudicial question in Civil Case No. 4442, specifically questioning the genuineness of the documents she allegedly falsified.2 Without resolving the motion, the Sangguniang Panlalawiganpassed Resolution No. 80-S-2003, dated 3 March 2003, recommending to Governor Joson the preventive suspension of Mayor Vargas for 60 days.3On 17 March 2003, the Sangguniang Panlalawigan issued Resolution No. 105-S-2003, denying Mayor Vargas' motion to suspend proceedings and/or motion to dismiss.4

THIRD DIVISION

Mayor Vargas appealed to the Office of the President praying for the reversal of Resolution No. 105-S-2003 of the Sangguniang Panlalawigan. The case was docketed as O.P. Case No. 03-D164.

a) To issue preliminary or permanent injunctions, whether prohibitory or mandatory, in all cases in which it has jurisdiction, and in which cases the pertinent provisions of the Rules of Court shall apply; 32

[G.R. NO. 160652 : February 13, 2006] HON. TOMAS N. JOSON III, in his capacity as Governor of the Province of Nueva Ecija, and The SANGGUNIANG PANLALAWIGAN OF NUEVA ECIJA, Petitioners, v. COURT OF APPEALS and ELIZABETH R. VARGAS, Respondent. DECISION

On 22 April 2003, the Office of the President, through Acting Deputy Executive Secretary Manuel B. Gaite ("Secretary Gaite"), issued an Order, the dispositive portion of which reads: ACCORDINGLY, the instant motion is GRANTED and the undated Preventive Suspension Order against Mayor Elizabeth R. Vargas of the municipality of Aliaga, Nueva Ecija is hereby lifted and set aside.

CARPIO, J.: The Case This is a petition for certiorari 1 with a prayer for the issuance of a temporary restraining order or writ of preliminary injunction. The petition seeks to set aside the Resolution dated 13 October 2003 of the Court of Appeals in CA-G.R. SP No. 78247 granting the writ of preliminary injunction enjoining and restraining Governor Tomas N. Joson III ("Governor Joson") and the Sangguniang Panlalawigan of Nueva Ecija ("Sangguniang Panlalawigan") from conducting proceedings in the administrative case against Mayor Elizabeth R. Vargas and from imposing the order of preventive suspension. The Facts

In April 2003, Governor Joson issued an order of preventive suspension against Mayor Vargas. Mayor Vargas filed before the Office of the President a very urgent petition to set aside the suspension order.

Vice Mayor Victorino E. Reyes who may have assumed the position of Acting Municipal Mayor of Aliaga, Nueva Ecija, is hereby directed to cease and desist from performing the duties of and functions of municipal mayor and vacate the same pending final resolution of Administrative Case No. 02-s-2003. Mayor Vargas may now reassume his (sic) position as such. The Department of the Interior and Local Government is hereby directed to implement this Order immediately. SO ORDERED.5

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On 25 April 2003, Governor Joson filed with the Office of the President a motion for reconsideration. On 8 July 2003, the Office of the President issued a Resolution, the dispositive portion of which reads:

and the Sangguniang Panlalawigan from conducting proceedings in the administrative case against Mayor Vargas. Hence, this petition.

WHEREFORE, the instant motion is hereby GRANTED, and the April 22, 2003 Order subject thereof is hereby recalled and set aside. Accordingly, the Order of Governor Tomas N. Joson III placing Mayor Elizabeth R. Vargas under preventive suspension for a period of sixty (60) days is hereby reinstated.

The Issues Petitioners contend that:

The Department of Interior and Local Government is directed to implement this resolution immediately.

1. THE COURT OF APPEALS ACTED WITH MANIFEST PARTIALITY, ARBITRARILY, AND IN GRAVE ABUSE OF DISCRETION IN ISSUING THE QUESTIONED ORDER BECAUSE '

SO ORDERED.6

A. RESPONDENT VARGAS AVAILED OF THE WRONG REMEDY WHEN SHE FILED CAG.R. SP NO. 78247;

On 17 July 2003, Mayor Vargas moved for reconsideration of the Resolution dated 8 July 2003. On 18 July 2003, Mayor Vargas filed before the Office of the President an urgent motion to resolve O.P. Case No. 03-D-164.

b. RESPONDENT VARGAS CLEARLY FAILED TO EXHAUST ADMINISTRATIVE REMEDIES BEFORE SEEKING JUDICIAL RELIEF; c. THE PREVENTIVE SUSPENSION ORDER WAS LEGALLY AND VALIDLY ISSUED.

On 23 July 2003, Mayor Vargas filed before the Court of Appeals a petition for "Certiorari, Prohibition and Mandamus, with Urgent Prayer for Preliminary Injunction or Temporary Restraining Order," docketed as CA-G.R. SP No. 78247. On 14 August 2003, the Court of Appeals issued a Resolution, the dispositive portion of which reads: WHEREFORE, in the interest of justice, to the end that undue prejudice and/or injury may be avoided to any and all parties affected by these proceedings, as well as not to render nugatory and ineffectual the resolution of this Court of the issues herein presented, let a TEMPORARY RESTRAINING ORDER be issued, to be effective upon service and for a period of SIXTY (60) days, unless sooner lifted. ACCORDINGLY, respondents Provincial Governor and the SANGGUNIANG PANLALAWIGAN of the Province of Nueva Ecija are hereby commanded to cease and desist from conducting proceedings in ADMINISTRATIVE CASE No. 02-S-2003, and from enforcing the assailed July 8, 2003 Resolution of the Office of the President, through the Executive Secretary, which directed the reinstatement of the order for petitioner's preventive suspension. Furthermore, in view of the serious issues involved, let the hearing and consideration of the propriety of the issuance of a preliminary injunction be scheduled on September 2, 2003 at 10:30 AM, Paras Hall, Second Floor, Main Building, Court of Appeals, Ma. Orosa St., Ermita, Manila. In the meantime, without necessarily giving due course to the instant petition for certiorari, respondents are directed to file a comment, not a motion to dismiss, within ten (10) days from notice. Petitioner, upon the other hand, has five (5) days from receipt of respondents' comment, to file her reply.

2. THE COURT OF APPEALS ACTED ARBITRARILY AND IN GRAVE ABUSE OF DISCRETION AMOUNTING TO LACK OR EXCESS OF JURISDICTION IN DIRECTING PETITIONERS "TO CEASE AND DESIST FROM CONDUCTING PROCEEDINGS IN ADMINISTRATIVE CASE NO. 02-S-2003." 3. THE INSTANT CASE PRESENTS A SITUATION WHEREIN A MOTION FOR RECONSIDERATION MAY BE DISPENSED WITH BEFORE THE INSTANT CERTIORARI CASE CAN BE FILED.8 The Ruling of the Court The petition is without merit. Petitioners allege that Mayor Vargas should have filed with the Court of Appeals a Petition for Review under Rule 43 of the 1997 Rules of Civil Procedure and not a special civil action for certiorari under Rule 65. Furthermore, Mayor Vargas filed the action for certiorari even while her motion for reconsideration was still pending resolution before the Office of the President. According to petitioners, the Court of Appeals acted with manifest bias and partiality when it issued the writ of preliminary injunction against petitioners despite the filing of a wrong remedy and the non-exhaustion of administrative remedies. Under Section 1, Rule 65 of the 1997 Rules of Civil Procedure, the writ of certiorari is proper when the following requisites are present: 1. It is directed against any tribunal, board or officer exercising judicial or quasi-judicial functions;

SO ORDERED.7 On 13 October 2003, the Court of Appeals resolved to issue a writ of preliminary injunction to further enjoin and restrain Governor Joson from imposing the order of preventive suspension

2. Such tribunal, board or officer has acted without or in excess of its or his jurisdiction, or with grave abuse of discretion amounting to lack or excess of its or his jurisdiction; andcralawlibrary

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3. There is no appeal or any plain, speedy and adequate remedy in the ordinary course of law. Mayor Vargas filed with the Court of Appeals a special civil action for certiorari under Rule 65 alleging grave abuse of discretion on the part of Secretary Gaite. Thus, in a Resolution dated 14 August 2003, the Court of Appeals stated: To question the foregoing Resolution of respondent Executive Secretary, petitioner interposed the instant petition for certiorari under Rule 65 of the 1997 Rules of Civil Procedure, essentially posing the following issues: (1) was it proper for respondent Executive Secretary to have ruled that petitioner is considered in default pursuant to Article 126, Rule XIX of the Rules Implementing the Local Government Code of 1991; (2) can the civil case filed by petitioner before the Cabanatuan RTC for annulment of falsified minutes of session and appropriation ordinance with damages be considered a prejudicial question which warrants the suspension of the proceedings in the administrative case; (3) has the respondent Sanggunian[g] Panlalawigan jurisdiction to hear the administrative case filed against herein petitioner, when the relief sought therein is her removal from office. At first blush, the assailed resolution having being issued by the Office of the President, through the Executive Secretary, it would seem that the proper remedy is an appeal via a Petition for Review under Rule 43 of the 1997 Rules of Civil Procedure. A perusal of the instant petition for certiorari would, however, reveal that petitioner is alleging that the challenged resolution was issued with grave abuse of discretion and beyond respondents' jurisdiction, hence, the appropriate remedy is certiorari under Rule 65. Moreover, assuming arguendo that the proper remedy is a Petition for Review under Rule 43, the Supreme Court has oftentimes ruled that, in accordance with the liberal spirit pervading the Rules of Court and in the interest of justice, a petition for certiorari may be treated as having been filed under Rule 43, in which case this Court chooses to do so, in view of the gravity and seriousness of the issues involved herein.9 (Emphasis supplied)cralawlibrary The Court finds no grave abuse of discretion on the part of the appellate court in assuming jurisdiction over the case. The special civil action of certiorari is proper to correct errors of jurisdiction including the commission of grave abuse of discretion amounting to lack or excess of jurisdiction.10 All the issues submitted for resolution in the Court of Appeals involve questions of law which are reviewable on certiorari .11 Exception to the Application of Exhaustion of Administrative Remedies Under the doctrine of exhaustion of administrative remedies, a litigant cannot go to court without first pursuing his administrative remedies, otherwise his action is premature and his case is not ripe for judicial determination.12 A litigant should first exhaust the administrative remedies provided by law before seeking judicial intervention in order to give the administrative agency an opportunity to decide correctly the matter and prevent unnecessary and premature resort to the court.13

and its flexibility is called upon by the peculiarity and uniqueness of the factual and circumstantial settings of a case. Hence, it is disregarded (1) when there is a violation of due process, (2) when the issue involved is purely a legal question, (3) when the administrative action is patently illegal amounting to lack or excess of jurisdiction, (4) when there is estoppel on the part of the administrative agency concerned, (5) when there is irreparable injury, (6) when the respondent is a department secretary whose acts as an alter ego of the President bears the implied and assumed approval of the latter, (7) when to require exhaustion of administrative remedies would be unreasonable, (8) when it would amount to a nullification of a claim, (9) when the subject matter is a private land in land case proceedings, (10) when the rule does not provide a plain, speedy and adequate remedy, and (11) when there are circumstances indicating the urgency of judicial intervention. The requirement of prior exhaustion of administrative remedies may likewise be dispensed with in the following instances: (1) when the claim involved is small; (2) when strong public interest is involved; and (3) in quo warranto proceedings.15 In this case, Mayor Vargas filed the petition for certiorari with the Court of Appeals alleging that Secretary Gaite issued the Resolution dated 8 July 2003 with grave abuse of discretion. Mayor Vargas raised the following issues: (1) whether it was proper for Secretary Gaite to have ruled that Mayor Vargas is considered in default pursuant to Article 126, Rule XIX of the Rules Implementing the Local Government Code of 1991; (2) whether the civil case filed by Mayor Vargas before the Cabanatuan RTC for annulment of falsified minutes of session and appropriation ordinance with damages is a prejudicial question which warrants the suspension of the proceedings in the administrative case; (3) whether the Sangguniang Panlalawigan has jurisdiction to hear the administrative case filed against Mayor Vargas, when the relief sought is her removal from office.16 The issues raised are questions of law which involve the interpretation and application of laws. Resolution of such questions constitutes essentially an exercise of judicial power which is exclusively allocated to the Supreme Court and such courts as the Legislature may establish.17Since the issues involve purely legal questions which the court may review, exhaustion of administrative remedies may be dispensed with.18 Propriety of the Preventive Suspension Order Under Section 63 of the Local Government Code, preventive suspension may be imposed (a) after the issues are joined; (b) when the evidence of guilt is strong; and (c) given the gravity of the offense, there is great probability that the continuance in office of the respondent could influence the witnesses or pose a threat to the safety and integrity of the records and other evidence. Issues are considered joined when the complaint has been answered and there are no longer any substantial preliminary issues that remain to be threshed out.19

However, the Court recognizes some exceptions to the rule of exhaustion of administrative remedies. As held in Paat v. Court of Appeals:14

In its Order dated 22 April 2003, the Office of the President stated that the facts of the case do not warrant a conclusion that issues are deemed joined. Furthermore, the Office of the President found no basis for the issuance of the preventive suspension. The Office of the President explained:

x x x However, we are not amiss to reiterate that the principle of exhaustion of administrative remedies as tested by a battery of cases is not an ironclad rule. This doctrine is a relative one

In the administrative case, it appears that petitioner did not file, so far, an answer to the complaint thus the issues could not have been considered joined. What she did was to file a

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Motion To Suspend Proceedings And/Or Motion To Dismiss which was treated by the sanggunian as her answer. However, nothing in the records can be inferred that the petitioner intended the said motion to be her answer. In fact, when the motion was denied on March 17, 2003 through SP Resolution No. 105-s-2003, she immediately appealed the said Resolution to this Office. In fine, no inference can be had that the motion filed was considered her answer otherwise, petitioner could have stated so therein. Finally, even assuming that petitioner's motion was already her answer and therefore, the issues have been joined, it is observed that the grounds cited by the sanggunian in recommending the assailed preventive suspension are general statements - mere verbatim reproduction of the provision of law, unsupported by any factual and substantial evidence. There is no showing that the evidence of guilt is strong, with both parties charging each other with falsification of documents. In fact, that is the subject of Civil Case No. 4442. Moreover, it cannot be said that the continuance in office of respondent could influence the witnesses or pose a threat to the safety and integrity of the records and other evidence. The recitals in SP Resolution No. 105 s. 2003 are unconvincing. ACCORDINGLY, the instant motion is GRANTED and the undated Preventive Suspension Order against Mayor Elizabeth R. Vargas of the municipality of Aliaga, Nueva Ecija is hereby lifted and set aside.20(Emphasis supplied)cralawlibrary It would thus appear that the grounds cited by the Sangguniang Panlalawigan for recommending the preventive suspension of Mayor Vargas were just general statements unsupported by any evidence. This is contrary to the requisites for a preventive suspension which require that evidence of guilt must be strong and that given the gravity of the offense, there is great probability that the continuance in office of the respondent could influence the witnesses or pose a threat to the safety and integrity of the records and other evidence. The haste in issuing the resolution recommending the preventive suspension of Mayor Vargas is unreasonable considering the gravity of the effects of such suspension. Suspension from office of an elective official would deprive the electorate of the services of the person they have voted into office. As held in Ganzon v. Court of Appeals:21 The plain truth is that this Court has been ill at ease with suspensions x x x because it is out of the ordinary to have a vacancy in local government. The sole objective of a suspension, as we have held, is simply "to prevent the accused from hampering the normal cause (sic) of the investigation with his influence and authority over possible witnesses" or to keep him off "the records and other evidence." It is a means, and no more, to assist prosecutors in firming up a case, if any, against an erring local official. Under the Local Government Code, it cannot exceed sixty days, which is to say that it need not be exactly sixty days long if a shorter period is otherwise sufficient, and which is also to say that it ought to be lifted if prosecutors have achieved their purpose in a shorter span. However, upon motion of Governor Joson, the Office of the President reversed its previous order. Citing the case of Joson v. Torres,22 the Office of the President held that Mayor Vargas' failure to file her answer in ADM. CASE No. 02-S-2003 was deemed a waiver of her right to file

answer and present evidence. As a consequence, the issues were deemed to have been joined. In the Joson case, this Court found inexcusable the failure of petitioner there to file an answer despite the grant of three extensions of the period to file an answer. It was only seven months later and after the lapse of all the extensions of time for filing an answer that petitioner there filed a motion to dismiss. In this case, Mayor Vargas moved for a 15-day extension to file an answer. Before the lapse of the period of extension, Mayor Vargas filed before the Cabanatuan RTC a civil case for annulment of Appropriation Ordinance No. 1 and the Minutes of the Session of 7 February 2002 which were the bases of the administrative charge against her. Four days after the lapse of the period of extension, Mayor Vargas filed a Motion to Suspend Proceedings and/or Motion to Dismiss due to prejudicial question. Without resolving Mayor Vargas' motion, the Sangguniang Panlalawigan issued a resolution recommending the preventive suspension of Mayor Vargas for a period of 60 days. Unlike the Joson case, there was no unreasonable delay employed by Mayor Vargas in filing an answer. Instead of an answer, Mayor Vargas filed a Motion to Suspend Proceedings and/or Motion to Dismiss because of a civil case which she had earlier filed seeking the annulment of the appropriation ordinance and the minutes of session. The Joson case is therefore inapplicable to this case. Validity of appellate court's order for petitioners to cease and desist from conducting proceedings in Administrative Case No. 02-S-2003 In a Resolution dated 13 October 2003, the Court of Appeals issued a preliminary injunction to further enjoin petitioners from conducting proceedings in the administrative case against Mayor Vargas in order to prevent injustice. The Court of Appeals explained: In a Resolution dated August 14, 2003, in order not to render nugatory the resolution of the present petition by this Court, We issued a temporary restraining order temporarily enjoining the Provincial Governor and the Sangguniang Panlalawigan of the Province of Nueva Ecija from conducting further proceedings in Administrative Case No. 02-S-2003, and from enforcing the assailed resolution of the Office of the President, which directed the reinstatement of the order for petitioner's preventive suspension. After taking into account the parties' arguments for and against the issuance of a writ of preliminary injunction in a hearing conducted on September 2, 2003, as well as respondents' comment and opposition dated August 25, 2003, and considering that the present petition is still pending resolution before this Court, We deem it wise to issue a preliminary injunction to further enjoin and restrain public respondents Provincial Governor and the Sangguniang Panlalawigan from conducting proceedings in the administrative case against herein petitioner, particularly in imposing the order of preventive suspension, so as to prevent any injustice and irreparable injury that might inure to herein petitioner if it is adjudged by this Court that a reversal of the assailed resolution is warranted. WHEREFORE, for the foregoing premises, petitioner's prayer for the issuance of a writ of preliminary injunction is hereby GRANTED. Petitioner is hereby required to post a bond in the amount of FIFTY THOUSAND PESOS (P50,000.00) for the issuance of said writ, as required by Section 4(b), Rule 58 of the 1997 Rules of Civil Procedure.

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SO ORDERED.23

7

Id., pp. 64-65.

Petitioners allege that the only issue presented in CA-G.R. SP No. 78247 is the validity of the reinstatement of the preventive suspension order issued against Mayor Vargas as embodied in the Resolution dated 8 July 2003 of the Office of the President. According to petitioners, the Court of Appeals therefore acted arbitrarily and in grave abuse of discretion amounting to lack or excess of jurisdiction in directing the Sangguniang Panlalawigan to cease and desist from conducting proceedings in Administrative Case No. 02-S-2003.

8

Id., pp. 10-11.

9

Id., pp. 63-64.

Petitioners' contention is without merit. Two of the issues raised by Mayor Vargas in her petition to the Court of Appeals pertain to the proceedings in Administrative Case No. 02-S-2003, to wit: (1) whether the civil case filed by Mayor Vargas before the Cabanatuan RTC for annulment of falsified minutes of session and appropriation ordinance with damages is a prejudicial question which warrants the suspension of the proceedings in the administrative case, and (2) whether the Sangguniang Panlalawigan has jurisdiction to hear the administrative case filed against Mayor Vargas, when the relief sought is her removal from office.24 It is, therefore, apparent that the jurisdiction of the Sangguniang Panlalawigan in the administrative case is an issue in the certiorari case filed in the Court of Appeals. Mayor Vargas is questioning the propriety of the proceedings of the Sangguniang Panlalawigan despite the alleged prejudicial question in the civil case. Likewise, Mayor Vargas alleges that the Sangguniang Panlalawigan is bereft of jurisdiction over the administrative case which seeks her removal from office since under Section 60 of the Local Government Code, only the proper court may order the dismissal from public office of an elective local official.25

10

Argel v. Court of Appeals, 374 Phil. 867 (1999).

11

BF Corporation v. CA, 351 Phil. 507 (1998).

12

Bordallo v. Professional Regulations Commission, 421 Phil. 281 (2001); Abe-abe v. Manta, No. L-4827, 31 May 1979, 90 SCRA 524; Pestanas v. Dyogi, No. L-25786, 27 February 1978, 81 SCRA 574. 13

Ambil, Jr. v. Comelec, 398 Phil. 257 (2000); Jariol v. Comelec, 336 Phil. 990 (1997).

14

G.R. No. 111107, 10 January 1997, 266 SCRA 167, 176-177.

15

Celestial v. Cachopero, G.R. No. 142595, 15 October 2003, 413 SCRA 469.

16

Rollo, pp. 63-64.

17

Philex Mining Corporation v. Zaldivia, et al., 150 Phil. 547 (1972).

18

See note 14.

We find no grave abuse of discretion on the part of the Court of Appeals in issuing the Resolution dated 13 October 2003.

19

WHEREFORE, we DISMISS the petition for lack of merit, and DENY the prayer for the issuance of a temporary restraining order or writ of preliminary injunction.

20

Rollo, p. 34.

21

G.R. NOS. 93252, 93746 & 95245, 5 August 1991, 200 SCRA 271, 288.

22

352 Phil. 888 (1998).

23

Rollo, pp. 28-29.

24

Id., pp. 63-64.

25

Id., pp. 79-81.

A. Pimentel, The Local Government Code of 1991 The Key to National Development 177 (1993).

SO ORDERED. Endnotes:

1

Under Rule 65 of the 1997 Rules of Civil Procedure.

2

Rollo, pp. 41-42, 61.

3

Id., pp. 30-31.

4

Id., p. 61.

5

Id., pp. 34-35.

6

Id., p. 39.

SECOND DIVISION [G.R. No. 128305. March 28, 2005] FELINO QUIAMBAO, petitioner, vs. THE COURT OF APPEALS, NATIONAL APPELLATE BOARD, Represented by its CHAIRMAN FEDERICO S. COMANDANTE and MEMBERS,

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ATTYS. ROBERTO T. AGAGON and ADELAIDA T. AGUILOS of the NATIONAL POLICE COMMISSION, RAUL S. IMPERIAL, Police Chief, Philippine National Police and ESPIE S / L CATOLICO, respondents.

affirming the dismissal of petitioner from police service. [11] The motion for reconsideration filed by petitioner was denied in a Resolution dated 27 December 1993.[12] But it was only on 23 September 1996 when petitioner received a certified xerox copy of the Resolution of the NAB denying his petition for reconsideration.[13]

DECISION On 7 October 1996, petitioner filed a petition for review with the Court of Appeals.[14] On 10 January 1997, the appellate court dismissed the petition for review for lack of merit.

TINGA, J.: This petition assails the Resolution[1] dated 10 January 1997 of the Court of Appeals which affirmed the Decision[2] dated 25 October 1993 and the Resolution[3] dated 27 December 1993 of National Appellate Board (Board), Third Division, National Police Commission (NAPOLCOM). The Boards ruling in turn, which likewise affirmed the Decision[4] dated 31 October 1992 of Acting PNP Chief and Police Deputy Director General dismissing PO3 Felino Quiambao from the police service. The operative facts of the case follow: On 22 December 1990, at around 8:00 in the evening, Espie Catolico (Catolico) was walking along Capulong Street in Tondo, Manila, inquiring as to the whereabouts of her housemaid Gynalin Garais who left the house the day before. After having asked her neighbors and bystanders to no avail, an old woman told her that a certain policeman was looking for her as her housemaid was in his custody. She went to the area as directed by the old woman but there she was allegedly accosted by petitioner, PO3 Felino Quiambao, a member of the Philippine National Police (PNP), Western Police District Command, and five (5) other persons. Quiambao and his companions forcibly took Catolicos handbag and carried away its contents consisting of precious assorted merchandise, jewelry and other personal items worth approximately Nine Thousand Pesos (P9,000.00). Thereafter, petitioner forcibly herded Catolico to his owner-type jeep and brought her to the dimly lit portion of North Harbor and, while thereat, he slapped her on the face several times and warned her not to look anymore for her housemaid. [5] In view of the incident, Catolico filed a sworn statement on 24 June 1991 with the PNP Inspectorate Division, accusing petitioner and six (6) others, with robbery-holdup and mauling committed on 22 December 1990.[6] The complaint was corroborated by Grace Commendador who witnessed the actual incident and confirmed the statement of Catolico.[7] On 22 August 1991, Catolico filed another administrative complaint with the Office of the Hearing Officer at NAPOLCOM, Western Police District, Manila, charging petitioner with grave misconduct for the same incident which occurred on 22 December 1990. [8] An investigation was conducted on this administrative charge by the Office of the Hearing Officer of NAPOLCOM. On 30 March 1993, the case was forwarded to the City of Manilas Peoples Law Enforcement Board (PLEB) for adjudication.[9] The PNP Inspectorate Division likewise conducted an investigation on the charges filed. On 31 October 1992, the Summary Dismissal Hearing Officer (SDHO) recommended the dismissal of petitioner. This recommendation was approved by Acting PNP Chief and Police Deputy Director General, Raul S. Imperial (Acting PNP Chief).[10]

The appellate court ruled that the petition did not state all the specific material dates showing that it was filed within the reglementary period provided by law as it failed to state the date when petitioner received a copy of the Resolution of NAB dated 27 December 1993, denying his motion for reconsideration of NABs decision dated 25 October 1993. It found out that NABs decision dated 25 October 1993 was received by petitioner on 22 November 1993, and on 2 December 1993, he filed his motion for reconsideration. The said motion, however, was denied on 27 December 1993, but according to the appellate court, petitioner did not disclose the date when he received such denial. The fifteen-day reglementary period for filing a petition for review with the Court of Appeals started to run from such date.[15] Further, the appellate court ruled that the issue of which administrative disciplinary authority had jurisdiction over the case was raised by petitioner only for the first time before it. He did not raise it before the SDHO nor before the NAB. More importantly, it found that the PNP Inspectorate Division had original, exclusive and summary jurisdiction over the instant case, and that NAB did not commit any reversible error in deciding the appealed case without a priori pronouncement as to which among the disciplinary authorities under Republic Act No. 6975 had jurisdiction over the case.[16] It also added that NABs not having all the records requested by petitioner after it had rendered its decision did not necessarily mean that it did not have such documents at the time it rendered its decision.[17] Petitioners claim was further belied by the fact that Catolico was able to obtain certified true copies of the relevant documents which the PNP Chief transmitted to the NAPOLCOM. Additionally, the appellate court found that a perusal of the annexes to the comment of Catolico would readily show that NAB resolved petitioners case based on substantial evidence appearing on the record before it.[18] It observed that petitioners claim that his case was decided on the basis of an incomplete record was merely an afterthought. Said defense was not raised by petitioner in his motion for reconsideration of NABs decision dated 25 October 1993.[19] Likewise, petitioner was not denied due process as he was afforded reasonable opportunity to be heard and to submit his evidence before the SDHO and to appeal to NAB the decision of the Acting PNP Chief dismissing him from the police service, the Court of Appeals ruled.[20] On 27 January 1997, petitioner filed a Motion for Extension of Time to File Motion for Reconsideration followed by the filing of his Motion for Reconsideration on 17 February 1997. On the same day, the appellate court issued a Resolution denying petitioners motion for extension of time. On 5 March 1997, it issued a resolution stating that the Motion for Reconsiderationwas merely NOTED, the Resolution dated 10 January 1997 being already final.[21] Hence, the instant judicial recourse.

Petitioner appealed the 31 October 1992 resolution to the National Appellate Board (NAB) of the NAPOLCOM. On 25 October 1993, the Third Division of the NAB, rendered a decision

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The primordial thrust of the petition seeks the reversal of the decisions and resolutions of Acting PNP Chief, the NAB and the Court of Appeals, all upholding the validity of the dismissal of petitioner from police service, and his corresponding reinstatement in the police service. Petitioner argues that the appellate court erred and acted without or in excess of jurisdiction and/or with grave abuse of discretion in holding that the petition is not meritorious.[22] He specifically assigns the following as errors which need to be rectified, to wit: (1) that the appellate court ruled that petition did not state the date when petitioner received a copy of the Resolution of NAB dated 27 December 1993 to determine if it was filed within the reglementary period;[23] (2) that the appellate court sustained the findings of the Acting PNP Chief and the NAB without first resolving and/or giving a reason why it was the Acting PNP Chief and neither the NAPOLCOM Hearing Officer nor the PLEB that had the power to hear and decide the case;[24] (3) that the appellate court sustained, through misapprehension of facts and/or contrary to evidence, the decision of NAB which was not based on the complete records of the case;[25] (4) that the appellate court ruled that the petition was not meritorious and sustained the findings of the Acting PNP Chief and the NAB although such findings were arrived at without a hearing and absent substantial evidence; [26] (5) that the appellate courts denial of the motion for reconsideration was based on purely technical considerations;[27] and (6) that the appellate court had been passive to Catolicos surreptitious introduction into the records of the case evidentiary documents of which petitioner was not furnished and to the latters prejudice. [28]

Even if we take this case as so exceptional as to permit a factual review, the petition at bar fails to persuade us to rule in favor of petitioner. Petitioner contends that the appellate court acted with grave abuse of discretion amounting to lack or excess of jurisdiction in holding that the petition was not meritorious since the petition filed with the appellate court did not state the date when petitioner received a copy of the Resolution of NAB dated 27 December 1993 to determine if the petition was indeed filed within the reglementary period. There is reason basis for such contention. The petition with the appellate court by petitioner substantially complied with Revised Administrative Circular No. 1-95[33]. The pertinent portion of the circular reads, SECTION 6. Contents of the petition. The petition for review shall (a) state the full names of the parties to the case, without impleading the court or agencies either as petitioners or respondents; (b) contain a concise statement of the facts and issues involved and the grounds relied upon for the review; (c) be accompanied by a clearly legible duplicate original or a certified true copy of the award, judgment, final order or resolution appealed from, together with certified true copies of such material portions of the record as are referred to therein and other supporting papers; and (d) contain a sworn certification against forum shopping as provided in Revised Circular No. 28-91. The petition shall state the specific material dates showing that it was filed within the period fixed herein.[34]

The petition is not imbued with merit. Readily glaring upon examination of the petition filed by petitioner is its title Petition for Review on Certiorari.[29] The title would immediately lead us to conclude that the petition is primarily anchored on Rule 45 of the 1997 Revised Rules of Civil Procedure. Under this mode of appeal, only questions of law may be entertained by this Court and factual issues raised are beyond the ambit of this review. Yet, the issues raised by petitioner in the petition are fundamentally factual in nature which are inappropriate for resolution via the mode of review he availed of. However, a perusal of issues in the petition would indicate that the petition is actually anchored on Rule 65 as the issues principally sought to assail the resolution rendered by the appellate court on the ground of grave abuse of discretion amounting to lack or excess of jurisdiction. [30] Nonetheless, even assuming that the petition was brought under Rule 65, the petition would still not lie as the implausibility of the grounds on which the petition rests are convincingly manifest and the grave abuse of discretion amounting to lack or excess of jurisdiction as the core of this mode of review is strikingly wanting. Grave abuse of discretion means such capricious and whimsical exercise of judgment which is equivalent to an excess, or a lack of jurisdiction, and the abuse of discretion must be so patent and gross as to amount to an evasion of a positive duty or a virtual refusal to perform a duty enjoined by law, or to act at all in contemplation of law as where the power is exercised in an arbitrary and despotic manner by reason of passion or hostility.[31] In certiorari proceedings under Rule 65, questions of fact are not generally permitted, the inquiry being limited essentially to whether or not the respondent tribunal had acted without or in excess of its jurisdiction or with grave abuse of discretion.[32] These grounds under Rule 65 are not attendant in the instant case.

The records reveal that the petition filed with the Court of Appeals by petitioner provides the following, 18. On December 27, 1993, respondent National Appellate Board rendered its Resolution denying the motion in this manner: WHEREFORE, finding no merit on this instant petition, the same is hereby denied. A certified xerox copy thereof, duly RECEIVED BY PETITIONER ON SEPTEMBER 23, 1996 is hereto attached as ANNEX M.[35] A reading of the foregoing allegation, however, disclosed the fact that on 27 December 1993, NAB rendered a resolution denying petitioners motion for reconsideration. Although it would seem anomalous as it is unnatural that the purported resolution was received only by petitioner on 23 September 1996, we are inclined to sustain petitioners assertion for the same is supported by the certified xerox copy of the resolution[36] and the evidence is bereft of any showing that will warrant a contrary conclusion. Thus, the aforecited allegation substantially complied with the requirements under Section 6. The appellate court believed that petitioner had already been served with a copy of the resolution prior to 23 September 1996.[37] Such a conclusion, however, is bereft of any evidentiary basis and, thus, has no leg to stand on. It is noteworthy that the date when petitioner received NABs resolution denying his motion for reconsideration is material in determining when the fifteen (15)-day reglementary period for filing a petition for review with the Court of Appeals starts to run.[38] The failure to specifically state in the petition on material dates such as the date when the resolution or order denying a motion for reconsideration was received is a ground for dismissal in accordance with Section 7 of the administrative circular and Rule 43. [39] But the scenario is

Page 133 of 192

not present in the case at bar for the aforecited paragraph 18 of the petition filed with the appellate court reflected the date when petitioner actually received the resolution denying his motion for reconsideration, which is 23 September 1996. Procedural rules must be liberally interpreted and applied so as not to frustrate substantial justice that this Court seeks to achieve. Now, on substantial issues rather than on mere technicality. The pivotal questions posed in this petition are whether the Acting Chief of the PNP had authority to conduct summary dismissal proceedings over members of the PNP and whether the summary dismissal of petitioner was sufficiently established by the evidence on record. Republic Act (R.A.) No. 6975 or the Department of the Interior and Local Government Act of 1990, which took effect on 1 January 1991, defines the structural components, powers and functions of the PNP as the citizens guardian of peace and order and enforcer of the law. The statute likewise delineates the procedural framework in pursuing administrative complaints against erring members of the police organization. Section 41 of the law enumerates the authorities to which a complaint against an erring member of the PNP may be filed, thus; Section 41. (a) Citizens Complaints. Any complaint by an individual person against any member of the PNP shall be brought before the following: (1) Chiefs of police, where the offense is punishable by withholding of privileges, restriction to specified limits, suspension or forfeiture of salary, or any combination thereof, for a period not exceeding fifteen (15) days; (2) Mayors of cities or municipalities, where the offense is punishable by withholding of privileges, restriction to specified limits, suspension or forfeiture of salary, or any combination thereof, for a period of not less than sixteen (16) days but not exceeding thirty (30) days; (3) Peoples Law Enforcement Board, as created under Section 43 hereof, where the offense is punishable by withholding of privileges, restriction to specified limits, suspension or forfeiture of salary, or any combination thereof, for a period exceeding thirty (30) days; or by dismissal. . . . (Emphasis added)[40] It is readily apparent that a complaint against a PNP member which would warrant dismissal from service is within the jurisdiction of the PLEB. However, Section 41 should be read in conjunction with Section 42 of the same statute which reads, thus: Sec. 42. Summary Dismissal Powers of the PNP Chief and Regional Directors. - The Chief of the PNP and regional directors, after due notice and summary hearings, may immediately remove or dismiss any respondent PNP member in any of the following cases:

Evidently, the PNP Chief and regional directors are vested with the power to summarily dismiss erring PNP members if any of the causes for summary dismissal enumerated in Section 42 is attendant. Thus, the power to dismiss PNP members is not only the prerogative of PLEB but concurrently exercised by the PNP Chief and regional directors. This shared power is likewise evident in Section 45. SEC. 45. Finality of Disciplinary Action. The disciplinary action imposed upon a member of the PNP shall be final and executory: Provided, That a disciplinary action imposed by the regional director or by the PLEB involving demotion or dismissal from the service may be appealed to the regional appellate board within ten (10) days from receipt of the copy of the notice of decision: Provided, further, That the disciplinary action imposed by the Chief of the PNP involving demotion or dismissal may be appealed to the National Appellate Board within ten (10) days from receipt thereof: Provided, furthermore, That the regional or National Appellate Board, as the case may be, shall decide the appeal within sixty (60) days from receipt of the notice of appeal: Provided, finally, That failure of the regional appellate board to act on the appeal within said period shall render the decision final and executory without prejudice, however, to the filing of an appeal by either party with the Secretary. (Emphasis ours) Once a complaint is filed with any of the disciplining authorities under R.A. No. 6975, the latter shall acquire exclusive original jurisdiction over the case although other disciplining authority has concurrent jurisdiction over the case. Paragraph (c) of Section 41 explicitly declares this point. (c) Exclusive Jurisdiction A complaint or a charge filed against a PNP member shall be heard and decided exclusively by the disciplining authority who has acquired original jurisdiction over the case and notwithstanding the existence of concurrent jurisdiction as regards the offense; Provided, That offenses which carry higher penalties referred to a disciplinary authority shall be referred to the appropriate authority which has jurisdiction over the offense. (Emphasis ours) Clearly, the PLEB and the PNP Chief and regional directors have concurrent jurisdiction over administrative cases filed against members of the PNP which may warrant dismissal from service. This Court in Summary Dismissal Board and the Regional Appellate Board, PNP, Region VI, Iloilo City v. Torcita[41] recognized the authority of both the Summary Dismissal Board and the Regional Appellate Board of the PNP, Region VI, Iloilo City, to act on twelve (12) administrative complaints filed against C/Insp. Lazaro Torcita, even though the controversy occurred in 1994, after the effectivity of R.A. No. 6975. The Court further declared that R.A. No. 6975 defines the summary dismissal powers of the PNP Chief and regional directors, among others in cases, where the respondent is guilty of conduct unbecoming of a police officer.

(a) When the charge is serious and the evidence of guilt is strong; Memorandum Circular No. 92-006 prescribes the rules and regulations in the conduct of summary dismissal proceedings against erring PNP members and defines conduct unbecoming of a police officer under Section 3(c), Rule II, as follows:

(b) When the respondent is a recidivist or has been repeatedly charged and there are reasonable grounds to believe that he is guilty of the charges; and (c) When the respondent is guilty of conduct unbecoming of a police officer. (Emphasis ours)

Conduct unbecoming of a police officer refers to any behavior or action of a PNP member, irrespective of rank, done in his official capacity, which, in dishonoring or otherwise disgracing himself as a PNP member, seriously compromise his character and standing as a gentleman in

Page 134 of 192

such a manner as to indicate his vitiated or corrupt state of moral character; it may also refer to acts or behavior of any PNP member in an unofficial or private capacity which, in dishonoring or disgracing himself personally as a gentleman, seriously compromises his position as a PNP member and exhibits himself as morally unworthy to remain as a member of the organization.[42] The same Memorandum Circular also defines the phrase serious charge as a ground for summary dismissal of PNP members. This includes charges for commission of heinous crimes and those committed by organized/syndicated crime groups wherein PNP members are involved, gunrunning, illegal logging, robbery, kidnapping for ransom, white slave trade, illegal recruitment, carnapping, smuggling, piracy, drug trafficking, falsification of land title and other government forms, large scale swindling, film piracy, counterfeiting, and bank frauds. Clearly, the robbery-holdup and mauling incident which occurred on 22 December 1990 fall under the summary dismissal power of PNP Chief and regional directors. In the case at bar, the complaint for grave misconduct against petitioner was first filed by Catolico before the PNP Inspectorate Division on 24 June 1991. However, another case was filed by Catolico with the Office of the Hearing Officer, NAPOLCOM, WPD, on 22 August 1991. The charges filed with the PNP Inspectorate Division were investigated, and on 31 October 1992, the SDHO recommended the dismissal of petitioner which was approved by the Acting PNP Chief. Petitioner appealed the case to the NAB which affirmed the decision of the Acting PNP Chief. The motion for reconsideration was also denied. Thus, in accordance with paragraph (c) of Section 41, the PNP Inspectorate Division had acquired exclusive original jurisdiction over the complaint of Catolico to the exclusion of other investigating body. It is as if the second complaint filed by Catolico with the Office of the Hearing Officer, NAPOLCOM, WPD, had not been filed. Even assuming ex gratia argumenti that the Acting PNP Chief and the NAB were bereft of jurisdiction to rule on the complaint filed by Catolico, petitioner, at the earliest opportunity, neither raised the issue of lack of jurisdiction before the PNP Inspectorate Division nor with the NAB but only before the appellate court.[43] Despite the existence of a jurisprudential rule[44]that jurisdictional question may be raised at any stage of the proceedings, an equitable exceptional rule has also been laid down by this Court bars a party from raising jurisdictional question on ground of laches or estoppel.[45] Although the lack of jurisdiction of a court may be raised at any stage of the action, a party may be estopped from raising such questions if he has actively taken part in the very proceedings which he questions, belatedly objecting to the courts jurisdiction in the event that the judgment or order subsequently rendered is adverse to him.[46] Petitioner also argues that the appellate court erred in affirming the findings of the Acting PNP Chief and the NAB, which was arrived at without hearing and substantial evidence. We are not persuaded. Summary dismissal proceedings are governed by specific requirements of notification of the charges together with copies of affidavits and other attachments supporting the complaints, and the filing of an answer, together with supporting documents. It is true that consistent with its summary nature, the duration of the hearing is limited, and the manner of conducting the hearing is summary, in that sworn statements may take the place of oral testimonies of witnesses, cross-examination is confined only to material and relevant matters, and prolonged arguments and dilatory proceedings shall not be entertained.[47]

Notably, the recommendation of the SDHO was approved by the Acting PNP Chief whose decision was affirmed by the NAB. The findings of the NAB was also affirmed by the Court of Appeals. The unanimity in their conclusions cannot just be disregarded and their factual determinations are conclusive upon this Court for the records show that petitioner was afforded reasonable opportunity to defend his side, as he filed position papers to substantiate his defense and arguments and even filed motions for reconsideration to set aside adverse decisions rendered against him. This opportunity to defend himself was more than sufficient to comply with due process requirements in administrative proceedings Well-entrenched is the rule that courts will not interfere in matters which are addressed to the sound discretion of the government agency entrusted with the regulation of activities coming under the special and technical training and knowledge of such agency. Administrative agencies are given a wide latitude in the evaluation of evidence and in the exercise of their adjudicative functions, latitude which includes the authority to take judicial notice of facts within their special competence.[48] The instant case filed by Catolico is an administrative case for grave misconduct against petitioner for the alleged robbery-holdup and mauling incident that took place on 22 December 1990. In resolving administrative cases, conduct of full-blown trial is not indispensable to dispense justice to the parties. The requirement of notice and hearing does not connote full adversarial proceedings.[49] Submission of position papers may be sufficient for as long as the parties thereto are given the opportunity to be heard. In administrative proceedings, the essence of due process is simply an opportunity to be heard, or an opportunity to explain ones side or opportunity to seek a reconsideration of the action or ruling complained of. [50] This constitutional mandate is deemed satisfied if a person is granted an opportunity to seek reconsideration of an action or a ruling.[51] It does not require trial-type proceedings similar to those in the courts of justice. Where opportunity to be heard either through oral arguments or through pleadings is accorded, there is no denial of procedural due process.[52] In administrative proceedings, only substantial evidence or that amount of relevant evidence that a reasonable mind might accept as adequate to support a conclusion is required.[53]Thus, findings of fact of quasi-judicial agencies are generally accorded respect and even finality by the Supreme Court, if supported by substantial evidence, in recognition of their expertise on the specific matters under their consideration.[54] Thus, factual determinations made by the SDHO and the NAB as affirmed by the Court of Appeals are undoubtedly beyond review and conclusive upon this Court, they being triers of facts. The congruence in their conclusion forecloses any possibility of reversible error or misappreciation of facts. Such being the case, we cannot but affirm their common conclusion as petitioner failed to advance substantial and convincing evidence and arguments that will merit the reversal of prior decisions on the case. Finally, petitioner also argues that the appellate court erred in being passive to Catolicos surreptitious introduction into the records of the case evidentiary documents of which petitioner was not furnished and to the latters prejudice. Sad to say, the matter is a factual one which is outside the ambit of this mode of review. Besides, this issue was not even raised in the motion for reconsideration filed by petitioner with the Court of Appeals.[55]

Page 135 of 192

WHEREFORE, foregoing premises considered, the Petition is hereby DISMISSED and the Decision of the Court of Appeals dated 10 January 1997 AFFIRMED. Costs against petitioner.

WHEREFORE, premises considered, this Headquarters hereby approves the recommendation of the SDHO dismissing PO3 Felino Quiambao from the police service, pursuant to Section 42, RA No. 6975, effective upon issuance of orders (sic).

SO ORDERED.

SO ORDERED.

Puno, (Chairman), Austria-Martinez, Callejo, Sr., and Chico-Nazario, JJ., concur.

[11]

Supra note 2. The pertinent portion of the decision reads:

....

Rollo, p. 175. Resolution penned by Justice Hector Hofileňa and concurred in by Justices Jainal Rasul and Artemio Toquero. [1]

[2]

Id. at 98-100.

[3]

Id. at 109-110.

[4]

Id. at 138-139.

[5]

Id. at 54-55. See also 48.

[6]

Id. at 176.

[7]

Supra note 4.

[8]

Supra note 6.

[9]

Supra note 6. See also p. 178. Petitioner claims that PLEB had already rendered a decision dismissing the case against him but failed to adduce a copy of the decision before the Court. [10]

Ibid. See also pp. 138-139. The pertinent portion of the decision reads:

After a careful perusal of the records of the case and thorough evaluation of the evidence adduced by both parties, this Board finds no compelling reason to disturb the finding of guilt upon appellant by the PNP Director General. The detailed narration of circumstances surrounding the acts complained of which were corroborated in their material points by one, Grace Commendador, who actually witnessed the incident, more than constitutes (sic) the substantial evidence necessary to sustain an administrative action against appellant, notwithstanding the dismissal of the criminal aspect of the case by the Manila City Prosecutors Office on the basis of the alleged failure of the complainant and her witnesses to identify the perpetrators of the aforesaid offense. However, the legal basis in said Prosecutors Resolution is belied by respondents own admission that during the incident, he took complainants bag to ascertain her identity and thereafter returned the same to her with all the items intact. Besides, prior thereto, appeallant (sic) was pointed at and identified as the one responsible for the concealment of complainants maid, for which reason a personal confrontation between the parties ensued. Under these circumstances it is highly improbable to maintain that both parties did not know each others identity. Regarding appellants claim that he was exonerated in the administrative aspect of the case by the Peoples Law Enforcement Board of Manila, no written decision was submitted in support thereof. Assuming that the same case between the herein parties is still pending thereat, the PNP Dismissal Authority had already taken cognizance of the case, assumed jurisdiction over it and had already validly rendered judgment thereon. Thus, the PLEB of Manila would have no other alternative except to dismiss the case for lack of jurisdiction. WHEREFORE, in the light of all the foregoing, the decision of the PNP Director General dismissing appellant from the police service is hereby AFFIRMED.

.... After perusal of the records and evidences (sic) presented, the allegations of complainant was (sic) substantially corroborated by the testimony of Grace Commendador who actually witnessed the incident. Although no proof that complainant sustained physical injuries except the referral for Medico-Legal Examination (issued by the Office of the NBI), it can be inferred from the facts that complainant was maltreated by respondent and his cohorts. On the contrary, the denial of respondent on the charged (sic) imputed against him was not substantiated by testimonial or documentary evidence, hence, his allegations (sic) is considered self-serving. The Summary Dismissal Hearing Officer (SDHO) finds substantial evidence that the respondent committed Grave Misconduct (Abuse of Authority and Physical Injuries) which may warrants (sic) his dismissal from the PNP service, pursuant to Section 42 of Republic Act No. 6975, for which Chief, Internal Affairs Division concurs with and recommends approval thereto.

SO ORDERED. [12]

Supra note 6.

[13]

Id. at 13.

[14]

Ibid.

[15]

Id. at 177.

[16]

Id. at 181.

[17]

Id. at 182.

Page 136 of 192

[18]

Id. at 183.

[19]

Ibid.

[20]

Ibid.

[39]

[21]

Id. at 15.

[22]

Id. at 16.

[23]

Id. at 17.

SEC. 7. Effect of failure to comply with requirements.The failure of the petitioner to comply with any of the foregoing requirements regarding the payment of the docket and other lawful fees, deposit for costs, proof of service of the petition, and the contents of and the documents which should accompany the petition shall be sufficient ground for the dismissal thereof. (Emphasis added)

[24]

Id. at 18.

[40]

[25]

Id. at 21.

Pertinent portions of Memorandum Circular No. 92-006 or the Rules and Regulations in the Conduct of Summary Dismissal Proceedings Against Erring PNP Members which was approved on 6 August 1992 provide:

[26]

Id. at 23.

RULE I

[27]

Id. at 24.

PNP SUMMARY DISMISSAL AUTHORITIES

[28]

Id. at 26.

[29]

Id. at 7.

[30]

Supra note 22.

Section 1. Officials Authorized. The Chief PNP is the summary dismissal authority for all members of the PNP. On the other hand, the PNP Regional Directors, including the Northern and Southern CAPCOM Directors in Metro Manila, are the summary dismissal authorities for PNP personnel within their respective jurisdiction. For presidential appointees, no summary dismissal proceedings may be conducted without prior authority from the President.

[31]

Duero v. Court of Appeals, 424 Phil. 12 (2002).

required by law for its effectivity, or of the denial of petitioners motion for new trial or reconsideration duly filed in accordance with the governing law of the court or agency a quo. xxx

[32]

Busmente, Jr. v. National Labor Relations Commission, G.R. No. 73647, April 8, 1991, 195 SCRA 710; Taihei Company, Ltd. v. National Labor Relations Commission, G.R. Nos. 7505253, August 12, 1991, 200 SCRA 498.

Section 2. Who May Conduct Summary Dismissal Proceedings. The Chief PNP, PNP Regional Directors and the Directors of the Northern and Southern CAPCOM in Metro Manila are the officials authorized to conduct summary dismissal proceedings. However, this authority may be delegated to their designated representative or any officer or body authorized by them. [41]

386 Phil. 350 (2000).

[42]

Ibid at 162-163.

[33]

Rules Governing Appeals to the Court of Appeals from Judgments or Final Orders of the Court of Tax Appeals and Quasi-Judicial Agencies. This administrative circular took effect on February 15, 1995 and was substantially incorporated as Rule 43 in the 1997 Revised Rules of Civil Procedure. [34]

Now incorporated in the 1997 Revised Rules of Civil Procedure as Section 6 of Rule 43.

[35]

Id. at 85.

[36]

Annex M, CA Rollo, p. 80.

[37]

Rollo, p. 178.

[38]

Section 4 of Rule 43 is substantially similar to section 4 of the administrative circular. Thus,

SEC.4. Period of appeal. The appeal shall be taken within fifteen (15) days from notice of the award, judgment, final order or resolution, or from the date of its last publication, if publication is

Section 7, supra, provides:

See also NAPOLCOM Memorandum Circular No. 91-007. Sections 2 and 3 thereof provide: Section 2. Perfection of an appeal. An appeal shall be perfected by the respondent-appellant by filing and serving upon the PNP Summary Dismissal Authority a Notice of Appeal within ten (10) days from receipt of the notice of appeal, the PNP Summary Dismissal Authority concerned shall forward the entire records of the case, to include the transcription of stenographic notes, should there be any, to the NAPOLCOM appellate board concerned. Section 3. Period within which to Decide Appealed cases: Finality of RAB/NAB Decision. The NAPOLCOM appellate board concerned shall decide the appealed cases within sixty (60) days from receipt of the entire records of the case from the PNP Summary Dismissal Authority. [43]

Rollo, p. 101. In petitioners Motion for Reconsideration filed with the NAB-NAPOLCOM dated December 2, 1993, only the following issues were raised with the said body, to wit:

Page 137 of 192

I. With due respect, the Honorable Board erred in holding that the complainant was able to prove by substantial evidence the guilt of the respondent because: A. Complainants (sic) evidence is unrealiable and suspect;

[54]

Baybay Water District v. Commission on Audit, 425 Phil. 326 (2002); Utto v. Commission on Elections, Supra note 50; Camacho v. Coresis, Jr. 436 Phil. 449 (200); JMM Promotions and Management, Inc. v. Court of Appeals, 439 Phil. 1 (2002); Tuazon, Jr. v. Godoy, 442 Phil. 130 (2002).

B. Complainants (sic) evidence is hearsay;

[55]

C. Complainant has no competent and admissible evidence that she suffered physical injuries.

EN BANC

II. With due respect, the Honorable Boards decision as well as the summary dismissal order of the PNP Director General on 31 October 1992 is based on assumptions, surmises and conjectures prejudicial to the respondent.

[G.R. No. 130866. September 16, 1998]

III. With due respect, the Honorable Board failed to appreciate the dismissal of the criminal case as well as the exoneration of the respondent by the Peoples Law Enforcement Board of Manila for the same offense allegedly committed by the respondent.

Rollo, pp. 185-186.

ST. MARTIN FUNERAL HOME, petitioner, vs. NATIONAL LABOR RELATIONS MARTINEZ, COMMISSION and BIENVENIDO ARICAYOS, respondents. DECISION REGALADO, J.:

[44]

Monsanto v. Zerna, 423 Phil. 150 (2001); Del Rosario v. Bonga, G.R. No. 136308, January 23, 2001, 350 SCRA 101. [45]

Bank of the Philippine Islands, et al v. Als Management and Development Corporation, G.R. No. 151821, April 14, 2004; Lopez, et al v. David, Jr., et al, G.R. No. 152145, March 30, 2004, 426 SCRA 535; Jose Lam v. Adriana Chua, G.R. No. 131286, March 18, 2004, 926 SCRA 29; Tijam v. Sibonghanoy, 131 Phil. 556 (1968); Ignacio v. Basilio, G.R. No. 122824, September 26, 2001, 366 SCRA 15; TCL Sales Corporation v. Court of Appeals, G.R. No. 129777, January 5, 2001, 349 SCRA 35; Prudential Bank and Trust Company v. Reyes, G.R. No. 141093, February 20, 2001, 352 SCRA 316. [46]

Alday v. FGU Insurance Corporation, G.R. No. 138822, January 23, 2001; 350 SCRA 113; Sta. Lucia Realty and Development, Inc. v. Cabrigas, 411 Phil. 369 (2001); Meat Packing Corporation of the Philippines v.Sandiganbayan, 411 Phil. 959 (2001);

The present petition for certiorari stemmed from a complaint for illegal dismissal filed by herein private respondent before the National Labor Relations Commission (NLRC), Regional Arbitration Branch No. III, in San Fernando, Pampanga. Private respondent alleges that he started working as Operations Manager of petitioner St. Martin Funeral Home on February 6, 1995. However, there was no contract of employment executed between him and petitioner nor was his name included in the semi-monthly payroll. On January 22, 1996, he was dismissed from his employment for allegedly misappropriating P38,000.00 which was intended for payment by petitioner of its value added tax (VAT) to the Bureau of Internal Revenue (BIR).[1] Petitioner on the other hand claims that private respondent was not its employee but only the uncle of Amelita Malabed, the owner of petitioner St. Martins Funeral Home. Sometime in 1995, private respondent, who was formerly working as an overseas contract worker, asked for financial assistance from the mother of Amelita. Since then, as an indication of gratitude, private respondent voluntarily helped the mother of Amelita in overseeing the business.

[47]

Section 4, Memorandum Circular No. 92-006 of the National Police Commission cited in Summary Dismissal Board and the Regional Appellate Board, PNP, Region VI, Iloilo City v. Torcita, supra note 41. [48]

Republic v. Express Telecommunication Co., Inc., 424 Phil. 372 (2002).

[49]

Artezuela v. Maderazo, 431 Phil. 135 (2002).

[50]

Utto v. Commission on Elections, 426 Phil. 225 (2002).

[51]

Garcia v. Pajaro, 433 Phil. 470 (2002).

[52]

Liguid v. Camano, Jr., 435 Phil. 695 (2002).

[53]

Resngit-Marquez v. Llamas, Jr., 434 Phil. 124 (2002); Mariano v. Roxas, 434 Phil. 742 (2002).

In January 1996, the mother of Amelita passed away, so the latter she took over the management of the business. She then discovered that there were arrears in the payment of taxes and other government fees, although the records purported to show that the same were already paid. Amelita then made some changes in the business operation and private respondent and his wife were no longer allowed to participate in the management thereof. As a consequence, the latter filed a complaint charging that petitioner had illegally terminated his employment.[2] Based on the position papers of the parties, the labor arbiter rendered a decision in favor of petitioner on October 25, 1996 declaring that no employer-employee relationship existed between the parties and, therefore, his office had no jurisdiction over the case.[3] Not satisfied with the said decision, private respondent appealed to the NLRC contending that the labor arbiter erred (1) in not giving credence to the evidence submitted by him; (2) in holding that he worked as a volunteer and not as an employee of St. Martin Funeral Home

Page 138 of 192

from February 6, 1995 to January 23, 1996, or a period of about one year; and (3) in ruling that there was no employer-employee relationship between him and petitioner.[4] On June 13, 1997, the NLRC rendered a resolution setting aside the questioned decision and remanding the case to the labor arbiter for immediate appropriate proceedings. [5] Petitioner then filed a motion for reconsideration which was denied by the NLRC in its resolution dated August 18, 1997 for lack of merit,[6] hence the present petition alleging that the NLRC committed grave abuse of discretion.[7] Before proceeding further into the merits of the case at bar, the Court feels that it is now exigent and opportune to reexamine the functional validity and systemic practicability of the mode of judicial review it has long adopted and still follows with respect to decisions of the NLRC. The increasing number of labor disputes that find their way to this Court and the legislative changes introduced over the years into the provisions of Presidential Decree (P.D.) No. 442 (The Labor Code of the Philippines and Batas Pambansa Blg. (B.P. No.) 129 (The Judiciary Reorganization Act of 1980) now stridently call for and warrant a reassessment of that procedural aspect. We prefatorily delve into the legal history of the NLRC. It was first established in the Department of Labor by P.D. No. 21 on October 14, 1972, and its decisions were expressly declared to be appealable to the Secretary of Labor and, ultimately, to the President of the Philippines. On May 1, 1974, P.D. No. 442 enacted the Labor Code of the Philippines, the same to take effect six months after its promulgation.[8] Created and regulated therein is the present NLRC which was attached to the Department of Labor and Employment for program and policy coordination only.[9] Initially, Article 302 (now, Article 223) thereof also granted an aggrieved party the remedy of appeal from the decision of the NLRC to the Secretary of Labor, but P.D. No. 1391 subsequently amended said provision and abolished such appeals. No appellate review has since then been provided for. Thus, to repeat, under the present state of the law, there is no provision for appeals from the decision of the NLRC.[10] The present Section 223, as last amended by Section 12 of R.A. No. 6715, instead merely provides that the Commission shall decide all cases within twenty days from receipt of the answer of the appellee, and that such decision shall be final and executory after ten calendar days from receipt thereof by the parties.

of the NLRC may already have lapsed as contemplated in Section 223 of the Labor Code, it has been held that this Court may still take cognizance of the petition for certiorari on jurisdictional and due process considerations if filed within the reglementary period under Rule 65. [14] Turning now to the matter of judicial review of NLRC decisions, B.P. No. 129 originally provided as follows: SEC. 9. Jurisdiction. - The Intermediate Appellate Court shall exercise: (1) Original jurisdiction to issue writs of mandamus, prohibition, certiorari, habeas corpus, and quo warranto, and auxiliary writs or processes, whether or not in aid of its appellate jurisdiction; (2) Exclusive original jurisdiction over actions for annulment of judgments of Regional Trial Courts; and (3) Exclusive appellate jurisdiction over all final judgments, decisions, resolutions, orders, or awards of Regional Trial Courts and quasi-judicial agencies, instrumentalities, boards, or commissions, except those falling within the appellate jurisdiction of the Supreme Court in accordance with the Constitution, the provisions of this Act, and of subparagraph (1) of the third paragraph and subparagraph (4) of the fourth paragraph of Section 17 of the Judiciary Act of 1948. The Intermediate Appellate Court shall have the power to try cases and conduct hearings, receive evidence and perform any and all acts necessary to resolve factual issues raised in cases falling within its original and appellate jurisdiction, including the power to grant and conduct new trials or further proceedings. These provisions shall not apply to decisions and interlocutory orders issued under the Labor Code of the Philippines and by the Central Board of Assessment Appeals.[15] Subsequently, and as it presently reads, this provision was amended by R.A. No. 7902 effective March 18, 1995, to wit: SEC. 9. Jurisdiction. - The Court of Appeals shall exercise:

When the issue was raised in an early case on the argument that this Court has no jurisdiction to review the decisions of the NLRC, and formerly of the Secretary of Labor, since there is no legal provision for appellate review thereof, the Court nevertheless rejected that thesis. It held that there is an underlying power of the courts to scrutinize the acts of such agencies on questions of law and jurisdiction even though no right of review is given by statute; that the purpose of judicial review is to keep the administrative agency within its jurisdiction and protect the substantial rights of the parties; and that it is that part of the checks and balances which restricts the separation of powers and forestalls arbitrary and unjust adjudications.[11] Pursuant to such ruling, and as sanctioned by subsequent decisions of this Court, the remedy of the aggrieved party is to timely file a motion for reconsideration as a precondition for any further or subsequent remedy,[12] and then seasonably avail of the special civil action of certiorari under Rule 65,[13] for which said Rule has now fixed the reglementary period of sixty days from notice of the decision.Curiously, although the 10-day period for finality of the decision

(1) Original jurisdiction to issue writs of mandamus, prohibition, certiorari, habeas corpus, and quo warranto, and auxiliary writs or processes, whether or not in aid of its appellate jurisdiction; (2) Exclusive original jurisdiction over actions for annulment of judgments of Regional Trial Courts; and (3) Exclusive appellate jurisdiction over all final judgments, decisions, resolutions, orders or awards of Regional Trial Courts and quasi-judicial agencies, instrumentalities, boards or commissions, including the Securities and Exchange Commission, the Social Security Commission, the Employees Compensation Commission and the Civil Service Commission, except those falling within the appellate jurisdiction of the Supreme Court in accordance with the Constitution, the Labor Code of the Philippines under Presidential Decree No. 442, as

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amended, the provisions of this Act, and of subparagraph (1) of the third paragraph and subparagraph (4) of the fourth paragraph of Section 17 of the Judiciary Act of 1948. The Court of Appeals shall have the power to try cases and conduct hearings, receive evidence and perform any and all acts necessary to resolve factual issues raised in cases falling within its original and appellate jurisdiction, including the power to grant and conduct new trials or further proceedings. Trials or hearings in the Court of Appeals must be continuous and must be completed within, three (3) months, unless extended by the Chief Justice. It will readily be observed that, aside from the change in the name of the lower appellate court,[16] the following amendments of the original provisions of Section 9 of B.P. No. 129 were effected by R.A. No. 7902, viz.: 1. The last paragraph which excluded its application to the Labor Code of the Philippines and the Central Board of Assessment Appeals was deleted and replaced by a new paragraph granting the Court of Appeals limited powers to conduct trials and hearings in cases within its jurisdiction. 2. The reference to the Labor Code in that last paragraph was transposed to paragraph (3) of the section, such that the original exclusionary clause therein now provides except those falling within the appellate jurisdiction of the Supreme Court in accordance with the Constitution, the Labor Code of the Philippines under Presidential Decree No. 442, as amended, the provisions of this Act, and of subparagraph (1) of the third paragraph and subparagraph (4) of the fourth paragraph of Section 17 of the Judiciary Act of 1948. (Italics supplied) 3. Contrarily, however, specifically added to and included among the quasi-judicial agencies over which the Court of Appeals shall have exclusive appellate jurisdiction are the Securities and Exchange Commission, the Social Security Commission, the Employees Compensation Commission and the Civil Service Commission. This, then, brings us to a somewhat perplexing impass, both in point of purpose and terminology. As earlier explained, our mode of judicial review over decisions of the NLRC has for some time now been understood to be by a petition for certiorari under Rule 65 of the Rules of Court. This is, of course, a special original action limited to the resolution of jurisdictional issues, that is, lack or excess of jurisdiction and, in almost all cases that have been brought to us, grave abuse of discretion amounting to lack of jurisdiction. It will, however, be noted that paragraph (3), Section 9 of B.P. No. 129 now grants exclusive appellate jurisdiction to the Court of Appeals over all final adjudications of the Regional Trial Courts and the quasi-judicial agencies generally or specifically referred to therein except, among others, those falling within the appellate jurisdiction of the Supreme Court in accordance with x x x the Labor Code of the Philippines under Presidential Decree No. 442, as amended, x x x. This would necessarily contradict what has been ruled and said all along that appeal does not lie from decisions of the NLRC.[17] Yet, under such excepting clause literally construed, the appeal from the NLRC cannot be brought to the Court of Appeals, but to this Court by necessary implication.

Supreme Court in accordance with the Constitution, the provisions of B.P. No. 129, and those specified cases in Section 17 of the Judiciary Act of 1948. These cases can, of course, be properly excluded from the exclusive appellate jurisdiction of the Court of Appeals. However, because of the aforementioned amendment by transposition, also supposedly excluded are cases falling within the appellate jurisdiction of the Supreme Court in accordance with the Labor Code. This is illogical and impracticable, and Congress could not have intended that procedural gaffe, since there are no cases in the Labor Code the decisions, resolutions, orders or awards wherein are within the appellate jurisdiction of the Supreme Court or of any other court for that matter. A review of the legislative records on the antecedents of R.A. No. 7902 persuades us that there may have been an oversight in the course of the deliberations on the said Act or an imprecision in the terminology used therein. In fine, Congress did intend to provide for judicial review of the adjudications of the NLRC in labor cases by the Supreme Court, but there was an inaccuracy in the term used for the intended mode of review. This conclusion which we have reluctantly but prudently arrived at has been drawn from the considerations extant in the records of Congress, more particularly on Senate Bill No. 1495 and the Reference Committee Report on S. No. 1495/H. No. 10452.[18] In sponsoring Senate Bill No. 1495, Senator Raul S. Roco delivered his sponsorship speech[19] from which we reproduce the following excerpts: The Judiciary Reorganization Act, Mr. President, Batas Pambansa Blg. 129, reorganized the Court of Appeals and at the same time expanded its jurisdiction and powers. Among others, its appellate jurisdiction was expanded to cover not only final judgment of Regional Trial Courts, but also all final judgment(s), decisions, resolutions, orders or awards of quasi-judicial agencies, instrumentalities, boards and commissions, except those falling within the appellate jurisdiction of the Supreme Court in accordance with the Constitution, the provisions of BP Blg. 129 and of subparagraph 1 of the third paragraph and subparagraph 4 of Section 17 of the Judiciary Act of 1948. Mr. President, the purpose of the law is to ease the workload of the Supreme Court by the transfer of some of its burden of review of factual issues to the Court of Appeals. However, whatever benefits that can be derived from the expansion of the appellate jurisdiction of the Court of Appeals was cut short by the last paragraph of Section 9 of Batas Pambansa Blg. 129 which excludes from its coverage the decisions and interlocutory orders issued under the Labor Code of the Philippines and by the Central Board of Assessment Appeals. Among the highest number of cases that are brought up to the Supreme Court are labor cases. Hence, Senate Bill No. 1495 seeks to eliminate the exceptions enumerated in Section 9 and, additionally, extends the coverage of appellate review of the Court of Appeals in the decision(s) of the Securities and Exchange Commission, the Social Security Commission, and the Employees Compensation Commission to reduce the number of cases elevated to the Supreme Court. (Emphases and corrections ours) xxx

The same exceptive clause further confuses the situation by declaring that the Court of Appeals has no appellate jurisdiction over decisions falling within the appellate jurisdiction of the

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Senate Bill No. 1495 authored by our distinguished Colleague from Laguna provides the ideal situation of drastically reducing the workload of the Supreme Court without depriving the litigants of the privilege of review by an appellate tribunal. In closing, allow me to quote the observations of former Chief Justice Teehankee in 1986 in the Annual Report of the Supreme Court: x x x Amendatory legislation is suggested so as to relieve the Supreme Court of the burden of reviewing these cases which present no important issues involved beyond the particular fact and the parties involved, so that the Supreme Court may wholly devote its time to cases of public interest in the discharge of its mandated task as the guardian of the Constitution and the guarantor of the peoples basic rights and additional task expressly vested on it now to determine whether or not there has been a grave abuse of discretion amounting to lack of jurisdiction on the part of any branch or instrumentality of the Government. We used to have 500,000 cases pending all over the land, Mr. President. It has been cut down to 300,000 cases some five years ago. I understand we are now back to 400,000 cases. Unless we distribute the work of the appellate courts, we shall continue to mount and add to the number of cases pending. In view of the foregoing, Mr. President, and by virtue of all the reasons we have submitted, the Committee on Justice and Human Rights requests the support and collegial approval of our Chamber. xxx Surprisingly, however, in a subsequent session, the following Committee Amendment was introduced by the said sponsor and the following proceedings transpired: [20] Senator Roco. On page 2, line 5, after the line Supreme Court in accordance with the Constitution, add the phrase THE LABOR CODE OF THE PHILIPPINES UNDER P.D. 442, AS AMENDED. So that it becomes clear, Mr. President, that issues arising from the Labor Code will still be appealable to the Supreme Court. The President. Is there any objection? (Silence) Hearing none, the amendment is approved. Senator Roco. On the same page, we move that lines 25 to 30 be deleted. This was also discussed with our Colleagues in the House of Representatives and as we understand it, as approved in the House, this was also deleted, Mr. President. The President. Is there any objection? (Silence) Hearing none, the amendment is approved. Senator Roco. There are no further Committee amendments, Mr. President. Senator Romulo. Mr. President, I move that we close the period of Committee amendments. The President. Is there any objection? (Silence) Hearing none, the amendment is approved. (Italics supplied)

xxx Thereafter, since there were no individual amendments, Senate Bill No. 1495 was passed on second reading and being a certified bill, its unanimous approval on third reading followed. [21]; Record of the Senate, Vol. V, No. 63, pp. 180-181.21 The Conference Committee Report on Senate Bill No. 1495 and House Bill No. 10452, having theretofore been approved by the House of Representatives, the same was likewise approved by the Senate on February 20, 1995,[22] inclusive of the dubious formulation on appeals to the Supreme Court earlier discussed. The Court is, therefore, of the considered opinion that ever since appeals from the NLRC to the Supreme Court were eliminated, the legislative intendment was that the special civil action of certiorari was and still is the proper vehicle for judicial review of decisions of the NLRC. The use of the word appeal in relation thereto and in the instances we have noted could have been a lapsus plumae because appeals by certiorari and the original action for certiorari are both modes of judicial review addressed to the appellate courts. The important distinction between them, however, and with which the Court is particularly concerned here is that the special civil action of certiorari is within the concurrent original jurisdiction of this Court and the Court of Appeals;[23] whereas to indulge in the assumption that appeals by certiorari to the Supreme Court are allowed would not subserve, but would subvert, the intention of Congress as expressed in the sponsorship speech on Senate Bill No. 1495. Incidentally, it was noted by the sponsor therein that some quarters were of the opinion that recourse from the NLRC to the Court of Appeals as an initial step in the process of judicial review would be circuitous and would prolong the proceedings. On the contrary, as he commendably and realistically emphasized, that procedure would be advantageous to the aggrieved party on this reasoning: On the other hand, Mr. President, to allow these cases to be appealed to the Court of Appeals would give litigants the advantage to have all the evidence on record be reexamined and reweighed after which the findings of facts and conclusions of said bodies are correspondingly affirmed, modified or reversed. Under such guarantee, the Supreme Court can then apply strictly the axiom that factual findings of the Court of Appeals are final and may not be reversed on appeal to the Supreme Court. A perusal of the records will reveal appeals which are factual in nature and may, therefore, be dismissed outright by minute resolutions.[24] While we do not wish to intrude into the Congressional sphere on the matter of the wisdom of a law, on this score we add the further observations that there is a growing number of labor cases being elevated to this Court which, not being a trier of fact, has at times been constrained to remand the case to the NLRC for resolution of unclear or ambiguous factual findings; that the Court of Appeals is procedurally equipped for that purpose, aside from the increased number of its component divisions; and that there is undeniably an imperative need for expeditious action on labor cases as a major aspect of constitutional protection to labor. Therefore, all references in the amended Section 9 of B.P. No. 129 to supposed appeals from the NLRC to the Supreme Court are interpreted and hereby declared to mean and refer to petitions for certiorari under Rule 65. Consequently, all such petitions should henceforth be

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initially filed in the Court of Appeals in strict observance of the doctrine on the hierarchy of courts as the appropriate forum for the relief desired. Apropos to this directive that resort to the higher courts should be made in accordance with their hierarchical order, this pronouncement in Santiago vs. Vasquez, et al.[25] should be taken into account: One final observation. We discern in the proceedings in this case a propensity on the part of petitioner, and, for that matter, the same may be said of a number of litigants who initiate recourses before us, to disregard the hierarchy of courts in our judicial system by seeking relief directly from this Court despite the fact that the same is available in the lower courts in the exercise of their original or concurrent jurisdiction, or is even mandated by law to be sought therein. This practice must be stopped, not only because of the imposition upon the precious time of this Court but also because of the inevitable and resultant delay, intended or otherwise, in the adjudication of the case which often has to be remanded or referred to the lower court as the proper forum under the rules of procedure, or as better equipped to resolve the issues since this Court is not a trier of facts. We, therefore, reiterate the judicial policy that this Court will not entertain direct resort to it unless the redress desired cannot be obtained in the appropriate courts or where exceptional and compelling circumstances justify availment of a remedy within and calling for the exercise of our primary jurisdiction. WHEREFORE, under the foregoing premises, the instant petition for certiorari is hereby REMANDED, and all pertinent records thereof ordered to be FORWARDED, to the Court of Appeals for appropriate action and disposition consistent with the views and ruling herein set forth, without pronouncement as to costs. SO ORDERED. Narvasa, C.J., Davide, Jr., Romero, Bellosillo, Melo, Puno, Vitug, Kapunan, Mendoza, Panganiban, Martinez, Quisumbing, and Purisima, JJ., concur.

[1]

[2]

Rollo, 17. Ibid., 18-19.

[3]

Ibid., 19.

[4]

Ibid., 16.

[5]

Ibid., 21.

[6]

Ibid., 23-24.

[7]

Ibid., 6.

[8]

Article 2.

[9]

Article 213.

[10]

While Art. 223 bears the epigraph of Appeal, it actually refers only to decisions, awards, or orders of the labor arbiter which shall be final and executory unless appealed to the NLRC by any or both parties within ten calendar days from receipt thereof. [11]

San Miguel Corporation vs. Secretary of Labor, et al., G.R. No. L-39195, May 15, 1975, 64 SCRA 56; Scott vs. Inciong, et al. G.R. No. L-38868, December 29, 1975, 68 SCRA 473; Bordeos, et al., vs. NLRC, et al., G.R. Nos. 115314-23, September 26, 1996, 262 SCRA 424. [12]

Zapata vs. NLRC, et al., G.R. No. 77827, July 5, 1989, 175 SCRA 56.

[13]

See, for instance, Pure Foods Corporation vs. NLRC, et al., G.R. No. 78591, March 21, 1989, 171 SCRA 415. [14]

Mantrade, etc. vs. Bacungan, et al., G.R. No. L-48437, September 30, 1986, 144 SCRA 511.

[15]

75 O.G. 4781, August 29, 1983.

[16]

Executive Order No. 33 restored the name of the Court of Appeals, in lieu of the Intermediate Appellate Court, effective July 28, 1986. [17]

The different modes of appeal, that is, by writ of error (Rule 41), petition for review (Rules 42 and 43), and petition for review on certiorari (Rule 45) obviously cannot be availed of because there is no provision for appellate review of NLRC decisions in P.D. No. 442, as amended. [18]

An Act Expanding the Jurisdiction of the Court of Appeals, Amending for the Purpose Section 9 of Batas Pambansa Blg. 129, known as the Judiciary Reorganization Act of 1980. [19]

Transcript of Session Proceedings (TSP), S. No. 1495, February 8, 1995, 31-36.

[20]

TSP, id., February 15, 1995, 18-19.

[21]

TSP, id., id., 19-

[22]

TSP, id., February 20, 1995, pp. 42-43.

[23]

The Regional Trial Court also shares that concurrent jurisdiction but that cannot be considered with regard to the NLRC since they are of the same rank. [24]

TSP, S. No. 1495, February 8, 1995, pp. 32-33.

[25]

G.R. Nos. 99289-90, January 27, 1993, 217 SCRA 633. See also Tano, et al. vs. Socrates, et al., G.R. No. 110249, August 21, 1997, 278 SCRA 155.

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FIRST DIVISION

PUBLICATION REQUIREMENTS OF BOTH THE ADMINISTRATIVE CODE AND B.P. NO. 325.

[G.R. No. 113357. February 1, 1996] III BENJAMIN PAREDES, LUZ BUENSUCESO, AUGUSTO SEVERINO, RODRIGO TABANERA, STEPHEN SOLIVEN and ROBERTO SANCHEZ; petitioners, vs. COURT OF APPEALS, RIZALINO S. NAVARRO, as Secretary of Trade and Industry, and IGNACIO S. SAPAL, Director of the Bureau of Patents, Trademarks and Technology Transfer, respondents.

THE RESPONDENT COURT ERRED IN NOT DECLARING NULL AND VOID RULE 59 OF ADMINISTRATIVE ORDER NO. 1 ON THE GROUND THAT THE PUBLIC RESPONDENTS DO NOT HAVE THE POWER TO AMEND THE TRADEMARK LAW.[4] Petitioners do not dispute that public respondents are expressly authorized to revise their fees and charges under B.P. Blg. 325, entitled An Act Authorizing Heads of Ministries, Offices, Agencies and Commissions of the National Government, including the Supreme Court and Constitutional Bodies, to Revise the Rates of Fees and Charges, which took effect on 1 January 1983.[5]

RESOLUTION KAPUNAN, J.: This is an appeal by certiorari under Rule 45 of the Revised Rules of Court from the Decision dated 27 October 1993 of the Court of Appeals in CA-G.R. SP No. 30388 which dismissed petitioners Special Civil Action for Prohibition and said courts Resolution dated 10 January 1994 which denied petitioners motion for reconsideration of the said decision. On 9 November 1992, public respondents promulgated Administrative Order Nos. 1 and 2, Series of 1992, revising the rules of practice before the Bureau of Patents, Trademarks and Technology Transfer (BPTTT) in patent and trademark cases, to take effect on 15 March 1993. Among the provisions of said administrative orders are Rule 16 of A.O. No. 1 and Rule 15 of A.O. No. 2, which increased the fees payable to the BPTTT for registration of patents and trademarks and Rule 59 of A.O. No. 2 which prohibited the filing of multi-class applications, that is, one application covering several classes of goods.[1] On 11 March 1993, petitioners, who are registered patent agents, filed with the Court of Appeals a Petition for Prohibition with prayer for the issuance of a Writ of Preliminary Injunction to stop public respondents from enforcing the aforementioned administrative orders [2] and to declare Rule 16 of A.O. No. 1 and Rules 15 and 59 of A.O. No. 2, series of 1992 of the BPTTT null and void. On 27 October 1993, the Court of Appeals dismissed the petition for prohibition and on 10 January 1994, denied the motion for reconsideration filed by petitioners on 18 November 1993.[3]

Petitioners, however, claim that the aforementioned administrative orders, particularly Rule 16 of A.O. No. I and Rules 15 and 59 of A.O. No. 2, series of 1992, are null and void for failure of public respondents to comply with the requirements of Cabinet approval and publication as specifically provided in Sections 2 and 5 of B.P. BIg. 325.[6] We deny the petition. Prohibition is not the proper remedy. The enabling law itself, which is B.P. Blg. 325, has specifically tasked the Cabinet to review and approve any proposed revisions of rates of fees and charges. Petitioners should have availed of this easy and accessible remedy instead of immediately resorting to the judicial process. Our legislature in delegating to administrative officers the authority to revise fees and charges expressly required cabinet approval for the proper exercise of said power. Petitioners should not have wasted the opportunity to utilize this built-in remedy. The grant (or denial) of a writ of prohibition is ordinarily within the sound discretion of the court to be exercised with caution and forbearance, according to the circumstances of the particular case, and only where the right to seek relief is clear.[7]

In the present appeal, petitioners assign the following errors:

Prohibition is granted only in cases where no other remedy is available which is sufficient to afford redress. That the petitioners have another and complete remedy at law either by appeal or otherwise, is generally a sufficient reason for dismissing the writ. [8]

I

Hence, in Chua Huat v. CA,[9] we ruled that:

THE RESPONDENT COURT ERRED IN DISMISSING THE PETITION ON THE GROUND OF NON-EXHAUSTION OF ADMINISTRATIVE REMEDIES.

Where the enabling statute indicates a procedure for administrative review, and provides a system of administrative appeal, or reconsideration, the courts, for reasons of law, comity and convenience, will not entertain a case unless the available administrative remedies have been resorted to and the appropriate authorities have been given opportunity to act and correct the errors committed in the administrative forum.

II THE RESPONDENT COURT ERRED IN NOT HOLDING THAT THE QUESTIONED ADMINISTRATIVE ORDERS ARE NULL AND VOID FOR FAILURE TO COMPLY WITH THE

And in Philnabank Employees v. Estanislao,[10] we declared:

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Secondly, although not inflexible, we have repeatedly declined on grounds of prematurity, as well as in the interest of good order, a hasty recourse to the courts when administrative avenues are still open. In the instant case, we concur with the ruling of the Court of Appeals that: . . . herein petitioners have still another available recourse under the law being relied upon. Section 2 of B.P. 325 reads in part: Sec. 2. Determination of Ratio.- xxx. The revision of rates shall be determined by the respective ministry heads or equivalent functionaries conformably with the rules and regulations of the Ministry of Finance issued pursuant to Section 4 hereof, upon recommendation of the imposing and collecting authorities concerned, subject to the approval of the Cabinet. xx x (Italics supplied) The above provision envisions a three-step process involving a hierarchy of authority before the rate increases and charges can be imposed and collected. First, the BPTTT, which is the imposing and collecting agency, makes a recommendation of the fee increases and charges. Those recommended rates and charges are submitted to the Secretary of the DTI for his evaluation and approval. Second, if the Secretary of the DTI finds that the rate increases and charges conform with the rules and regulations of the Ministry of Finance, then the same are approved and in turn become the rates of the department. The determination of the supposed rates and charges does not end here. As mentioned in Section 2 above; the rates as determined by the department head are subject to the approval of the Cabinet. The phrase subject to is one qualification. It means under the control, power or dominion of or subordinated to, a higher authority (cf. PNB vs. Deputy, G.R. No. 35515-R, December 12, 1970). Meaning, that the proposed rates and charges still have to obtain the imprimatur of the Cabinet, and prior to which, they have to undergo Cabinet scrutiny. Thus, there is the contingency that the same may not obtain the approval of the Cabinet. [11] Petitioners are not unaware of this remedy provided by law. They have, in fact, raised the lack of Cabinet approval as one of the reasons for seeking the nullification of the aforementioned administrative orders.[12] Petitioners claim that public respondents should have brought the revised schedule of fees to the Cabinet for the latters approval[13] is trivial considering that prior to the filing of the petition for prohibition, petitioners admittedly requested public respondents to reconsider or defer implementation of the subject administrative orders.[14] They were already in the process of availing themselves of the administrative process when they suddenly abandoned the recourse and went to court. Petitioners further contend that there was no appeal or other plain, speedy and adequate remedy available to them considering the alleged absence of any mechanism or procedure in the administrative branch of the government to stop public respondents from enforcing the questioned fee increases. They insist that the Cabinet is not an appellate body with the authority to pass upon the legality of the acts of department heads.[15]

We do not agree. The provisions of Section 2 of B.P. 325 cannot be any clearer. The recommended rates and charges are submitted to the Secretary of the DTI for his evaluation and approval. The rate increases should be in conformity with the rules and regulations of the Secretary of Finance and are subject to the approval of the Cabinet. Since according to petitioners the rate increases and charges have not been submitted to the Cabinet for approval, judicial review thereof is certainly premature. The need for Cabinet approval can further be gleaned from Sec. 5 of B.P. Blg. 325, which provides: Sec. 5. Publication requirement. - Upon review and approval by the Cabinet of the adjusted rates of fees or charges, the heads of ministries, offices, agencies or commissions concerned, including the courts and constitutional bodies, shall each cause the revised schedule of fees and charges to be published once a week for two consecutive weeks in two newspapers of general circulation in the Philippines in lieu of publication in the Official Gazette and the same shall be effective fifteen days after the last publication. (Italics ours.) However, we reject the claim of public respondents that the required Cabinet approval was deemed to have been fulfilled with the issuance of Executive Order (E.O.) No. 159, dated 23 February 1994, the pertinent portions of which provide: xxx xxx xxx Section 1. All departments, bureaus, offices, units, and agencies, including government-owned or controlled corporations, are hereby directed to revise their fees and charges to recover at least the full cost of services rendered. The full cost of services for the year rendered by a government department, bureau, office, unit, or agency, including government-owned or controlled corporation, shall be equivalent to the appropriation of said department, bureau, office, unit, or agency for the year under the relevant General Appropriations Act or under the Corporate Operating Budget submitted by the government-owned or controlled corporation as approved by the Department of Budget and Management. The revised rates shall, wherever practicable, be uniform for similar or comparable services and functions and shall be determined by the respective department heads, governing boards, or equivalent functionaries; Provided that, this Executive Order shall not apply to fees charged by departments, bureaus, offices, units. and agencies, including government-owned or controlled corporations, related to constitutionally mandated free or subsidized services, such as in education and health, as well as to those exempted by international agreements, as shall be determined by the President. Section 2. The heads of departments shall be responsible for the implementation of this Executive Order by the bureaus, offices, units, and agencies, including government-owned or controlled corporations, within their respective jurisdictions. xxx xxx xxx

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It is private respondents thesis that E.O. No. 159 explicitly eliminated the requisite Cabinet approval. It is a general rule that laws shall have prospective effect.[16] E.O. No. 159 was promulgated on 23 February 1994 or two years after the subject administrative orders were issued and, therefore, has no application in the case at bench. Anent the second assigned error, it is petitioners submission that the questioned administrative orders are null and void for failure to comply with the publication requirement of B.P. Blg. 325 and of the Administrative Code. We do not agree.

[1]

Rollo, p. 3.

[2]

Id., at 69.

B.P. BIg. 325 requires Cabinet review and approval of the impugned administrative orders before their publication. However, since the Cabinet has yet to review and approve the proposed revised rates of fees and charges, there can be no proper publication. The letter sent by the Office of the National Administrative Register dated 30 September 1993acknowledging in general the filing of the administrative orders issued by the BPTTT can hardly stand as proof of the due publication and filing of the particular administrative orders assailed in the present case, said letter not having specified what administrative orders were thus filed.

[3]

Id., 17-l5; 36.

[4]

Id., at 5-6.

[5]

Sec. 1(a) of B.P. Blg. 325 states that:

Finally, as to the third issue, we concur with the findings of the Court of Appeals as follows: At this point in time, since the challenged administrative orders have not yet been submitted to the Cabinet for its consideration and approval, this Court finds it untimely to discuss and resolve the merits of the questions of whether or not the rate increases and charges are just and reasonable sufficient to cover administrative costs, and/or that the same are practicable and uniform for similar or comparable services and functions, and/or that those rates conform with the rules and regulations of the Ministry of Finance. Certainly, the questions raised in this petition are not yet ripe for judicial determination, in the light of Matienzo vs. Abellera, (162 SCRA 1,9), that courts should be reluctant to interfere with administrative action prior to its completion or finality, the reason being that absence of a final order or decision, the power of the administrative agency concerned has not been fully exercised and there can be no irreparable harm. The rule of finality of administrative action for purposes of judicial review also finds substance in Rochester Telephone Co. vs. U.S. (307 U.S. 125) and Federal Power Commission vs. Metropolitan Edison Co. (304 U.S. 375). The principle of exhaustion of administrative remedies which mandates that relief should first be sought from the highest or most superior admistrative agency, the likes of the Cabinet, may prove that a resort to the courts would be unnecessary (Wee Poco vs. Posadas, 65 Phil. 648), prevent the courts from being swamped by a resort to them in the first instance (U.S. vs. Sing Tuck, 194 U.S. 161), strengthened by the rule on comity and convenience which requires Us to raise our hands until the administrative process has been finally completed (Matienzo vs. Abellana, supra; Railroad and Warehouse Commission vs. Duluth, St. R. Co., 273 US 625), and thus it is after judicial review is no longer premature that the courts may ascertain, in process cases, whether the administrative action or findings are not in violation of law, whether they are free from fraud or imposition and whether they find substantial support from the evidence. [17] WHEREFORE, PREMISES CONSIDERED, the petition is hereby DENIED.

SECTION 1. Coverage. - (a) Any provision of existing laws to the contrary notwithstanding, heads of all ministries, offices and agencies, and the commissions of the national government, the Supreme Court and Constitutional Bodies, are hereby authorized to revise their fees and charges as hereinafter provided. [6]

SEC. 2 Determination of rates. - The fees and charges shall be revised at just and reasonable rates sufficient to cover administrative costs and, wherever practicable, be uniform for similar or comparable services and functions. The revision of rates shall be determined by the respective ministry heads or equivalent functionaries conformably with the rules and regulations of the Ministry of Finance issued pursuant to Section 4 hereof upon recommendation of the imposing and collecting authorities concerned, subject to the approval of the Cabinet. Fees and charges imposed and collected by the Court and constitutional bodies shall be determined respectively by the Supreme Court and the constitutional body concerned. (Italics ours.) xxx xxx xxx SEC. 5 Publication requirement. - Upon review and approval by the Cabinet of the adjusted rates of fees or charges, the heads of ministries, offices, agencies or commissions concerned, including the courts and constitutional bodies, shall each cause the revised schedules of fees and charges to be published once a week for two consecutive weeks in two newspapers of general circulation in the Philippines in lieu of publication in the Official Gazette and the same shall be effective 15 days after the last publication. [7]

73 C.J.S. 18; See Ex-parte Republic of Peru, La., 63 S. Ct. 793, 318 U.S. 578,87 L. ed 101-4 and De Jesus v. Domingo, 34 SCRA 647 (1970). [8]

Manuel Moran, Comments on the Rules of Court, Vol. III, 1980 ed., p. 187, citing Almarza v. Salas, 47 Phil. 724; Asinas v. CFI of Romblon, 51 Phil. 665; Tong & Coo Teng Hee v. Santamaria, 54 Phil. 371. [9]

SO ORDERED.

199 SCRA 1 (1991).

[10]

Padilla (Chairman), Bellosillo, Vitug, and Hermosisima, Jr., JJ., concur.

227 SCRA 804 (1993).

Page 145 of 192

[11]

Rollo, pp. 21-22.

TINGA, J.:

[12]

Rollo, pp. 5-7, 95.

[13]

Rollo, p. 7.

[14]

Rollo, p. 4.

[15]

Rollo, p. 7.

This petition for review under Rule 45 of the 1997 Rules of Civil Procedure seeks to nullify the Decision,[1] dated May 16, 2000, of the Court of Appeals in CA-G.R. SP No. 37283. The appellate court affirmed the judgment[2] dated December 19, 1994, of the Regional Trial Court (RTC) of Manila, Branch 52, in Civil Case No. 93-66530. The trial court allowed the respondents to take their physicians oath and to register as duly licensed physicians. Equally challenged is the Resolution[3] promulgated on August 25, 2000 of the Court of Appeals, denying petitioners Motion for Reconsideration.

[16]

Art. 4, Civil Code of the Philippines; Jose Vitug, Compendium of Civil Law & Jurisprudence 1993, p. 7, citing DBP v. CA, 116 SCRA 636(1982). [17]

The facts of this case are as follows: The respondents are all graduates of the Fatima College of Medicine, Valenzuela City, Metro Manila. They passed the Physician Licensure Examination conducted in February 1993 by the Board of Medicine (Board). Petitioner Professional Regulation Commission (PRC) then released their names as successful examinees in the medical licensure examination.

Rollo, p. 24.

SECOND DIVISION [G.R. No. 144681. June 21, 2004] PROFESSIONAL REGULATION COMMISSION (PRC), CHAIRMAN HERMOGENES P. POBRE, ASSOCIATE COMMISSIONER ARMANDO PASCUAL, BOARD OF MEDICINE, CHAIRMAN RODOLFO P. DE GUZMAN, JOSE S. RAMIREZ, JUANITO B. BILLOTE, RUBEN R. POLICARPIO, EDGARDO T. FERNANDO and RICARDO D. FULGENCIO II, petitioners, vs. ARLENE V. DE GUZMAN, VIOLETA V. MENESES, CELERINA S. NAVARRO, JOSE RAMONCITO P. NAVARRO, ARNEL V. HERRERA and GERALDINE ELIZABETH M. PAGILAGAN, ELNORA R. RAQUENO, MARISSA A. REGODON, LAURA M. SANTOS, KARANGALAN D. SERRANO, DANILO A. VILLAVER, MARIA ROSARIO L. LEONOR, ALICIA S. LIZANO, MARITEL M. ECHIVERRI, BERNADETTE T. MENDOZA, FERNANDO F. MANDAPAT, ALELI A. GOLLAYAN, ELCIN C. ARRIOLA, HERMINIGILDA E. CONEJOS, SALLY B. BUNAGAN, ROGELIO B. ANCHETA, OSCAR H. PADUA, JR., EVELYN D. GRAJO, EVELYN S. ACOSTA, MARGARITA BELINDA L. VICENCIO, VALENTINO P. ARBOLEDA, EVELYN O. RAMOS, ACHILLES J. PERALTA, CORAZON M. CRUZ, LEUVINA P. CHICO, JOSEPH A. JAO, MA. LUISA S. GUTIERREZ, LYDIA C. CHAN, OPHELIA C. HIDALGO, FERNANDO T. CRUZ, MELVIN M. USITA, RAFAEL I. TOLENTINO, GRACE E. UY, CHERYL R. TRIGUERO, MICHAEL L. SERRANO, FEDERICO L. CASTILLO, MELITA J. CAEDO, SAMUEL B. BANGOY, BERNARDITA B. SY, GLORIA T. JULARBAL, FREDERICK D. FRANCISCO, CARLOS M. BERNARDO, JR., HUBERT S. NAZARENO, CLARISSA B. BACLIG, DAYMINDA G. BONTUYAN, BERNADETTE H. CABUHAT, NANCY J. CHAVEZ, MARIO D. CUARESMA, ERNESTO L. CUE, EVELYN C. CUNDANGAN, RHONEIL R. DEVERATURDA, DERILEEN D. DORADO, SAIBZUR N. EDDING, VIOLETA C. FELIPE, HERMINIO V. FERNANDEZ, JR., MARIA VICTORIA M. LACSAMANA, NORMA G. LAFAVILLA, RUBY B. LANTIN, MA. ELOISA Q. MALLARI, CLARISA SJ. NICOLAS, PERCIVAL H. PANGILINAN, ARNULFO A. SALVADOR, ROBERT B. SANCHEZ, MERLY D. STA. ANA and YOLANDA P. UNICA, respondents.

Shortly thereafter, the Board observed that the grades of the seventy-nine successful examinees from Fatima College in the two most difficult subjects in the medical licensure exam, Biochemistry (Bio-Chem) and Obstetrics and Gynecology (OB-Gyne), were unusually and exceptionally high. Eleven Fatima examinees scored 100% in Bio-Chem and ten got 100% in OB-Gyne, another eleven got 99% in Bio-Chem, and twenty-one scored 99% in OB-Gyne. The Board also observed that many of those who passed from Fatima got marks of 95% or better in both subjects, and no one got a mark lower than 90%. A comparison of the performances of the candidates from other schools was made. The Board observed that strangely, the unusually high ratings were true only for Fatima College examinees. It was a record-breaking phenomenon in the history of the Physician Licensure Examination. On June 7, 1993, the Board issued Resolution No. 19, withholding the registration as physicians of all the examinees from the Fatima College of Medicine.[4] The PRC asked the National Bureau of Investigation (NBI) to investigate whether any anomaly or irregularity marred the February 1993 Physician Licensure Examination. Prior to the NBI investigation, the Board requested Fr. Bienvenido F. Nebres, S.J., an expert mathematician and authority in statistics, and later president of the Ateneo de Manila University, to conduct a statistical analysis of the results in Bio-Chem and Ob-Gyne of the said examination. On June 10, 1993, Fr. Nebres submitted his report. He reported that a comparison of the scores in Bio-Chem and Ob-Gyne, of the Fatima College examinees with those of examinees from De La Salle University and Perpetual Help College of Medicine showed that the scores of Fatima College examinees were not only incredibly high but unusually clustered close to each other. He concluded that there must be some unusual reason creating the clustering of scores in the two subjects. It must be a cause strong enough to eliminate the normal variations that one should expect from the examinees [of Fatima College] in terms of talent, effort, energy, etc.[5]

DECISION

Page 146 of 192

For its part, the NBI found that the questionable passing rate of Fatima examinees in the [1993] Physician Examination leads to the conclusion that the Fatima examinees gained early access to the test questions.[6]

Meanwhile, to prevent the PRC and the Board from proceeding with Adm. Case No. 1687, the respondents herein moved for the issuance of a restraining order, which the lower court granted in its Order dated April 4, 1994.

On July 5, 1993, respondents Arlene V. De Guzman, Violeta V. Meneses, Celerina S. Navarro, Jose Ramoncito P. Navarro, Arnel V. Herrera, and Geraldine Elizabeth M. Pagilagan (Arlene V. De Guzman et al., for brevity) filed a special civil action for mandamus, with prayer for preliminary mandatory injunction docketed as Civil Case No. 93-66530 with the Regional Trial Court (RTC) of Manila, Branch 52. Their petition was adopted by the other respondents as intervenors.

The petitioners then filed with this Court a petition for certiorari docketed as G.R. No. 115704, to annul the Orders of the trial court dated November 13, 1993, February 28, 1994, and April 4, 1994. We referred the petition to the Court of Appeals where it was docketed as CA-G.R. SP No. 34506.

Meanwhile, the Board issued Resolution No. 26, dated July 21, 1993, charging respondents with immorality, dishonest conduct, fraud, and deceit in connection with the Bio-Chem and ObGyne examinations. It recommended that the test results of the Fatima examinees be nullified. The case was docketed as Adm. Case No. 1687 by the PRC.

WHEREFORE, the present petition for certiorari with prayer for temporary restraining order/preliminary injunction is GRANTED and the Orders of December 13, 1993, February 7, 1994, February 28, 1994, and April 4, 1994 of the RTC-Manila, Branch 52, and all further proceedings taken by it in Special Civil Action No. 93-66530 are hereby DECLARED NULL and VOID. The said RTC-Manila is ordered to allow petitioners counsel to cross-examine the respondents witnesses, to allow petitioners to present their evidence in due course of trial, and thereafter to decide the case on the merits on the basis of the evidence of the parties. Costs against respondents.

On July 28, 1993, the RTC issued an Order in Civil Case No. 93-66530 granting the preliminary mandatory injunction sought by the respondents. It ordered the petitioners to administer the physicians oath to Arlene V. De Guzman et al., and enter their names in the rolls of the PRC. The petitioners then filed a special civil action for certiorari with the Court of Appeals to set aside the mandatory injunctive writ, docketed as CA-G.R. SP No. 31701.

On August 31, 1994, the appellate court decided CA-G.R. SP No. 34506 as follows:

IT IS SO ORDERED.[8] The trial was then set and notices were sent to the parties.

On October 21, 1993, the appellate court decided CA-G.R. SP No. 31701, with the dispositive portion of the Decision ordaining as follows: WHEREFORE, this petition is GRANTED. Accordingly, the writ of preliminary mandatory injunction issued by the lower court against petitioners is hereby nullified and set aside. SO ORDERED.[7]

A day before the first hearing, on September 22, 1994, the petitioners filed an Urgent Ex-Parte Manifestation and Motion praying for the partial reconsideration of the appellate courts decision in CA-G.R. SP No. 34506, and for the outright dismissal of Civil Case No. 93-66530. The petitioners asked for the suspension of the proceedings. In its Order dated September 23, 1994, the trial court granted the aforesaid motion, cancelled the scheduled hearing dates, and reset the proceedings to October 21 and 28, 1994.

Arlene V. de Guzman, et al., then elevated the foregoing Decision to this Court in G.R. No. 112315. In our Resolution dated May 23, 1994, we denied the petition for failure to show reversible error on the part of the appellate court. Meanwhile, on November 22, 1993, during the pendency of the instant petition, the pre-trial conference in Civil Case No. 93-66530 was held. Then, the parties, agreed to reduce the testimonies of their respective witnesses to sworn questions-and-answers. This was without prejudice to cross-examination by the opposing counsel. On December 13, 1993, petitioners counsel failed to appear at the trial in the mistaken belief that the trial was set for December 15. The trial court then ruled that petitioners waived their right to cross-examine the witnesses. On January 27, 1994, counsel for petitioners filed a Manifestation and Motion stating the reasons for her non-appearance and praying that the cross-examination of the witnesses for the opposing parties be reset. The trial court denied the motion for lack of notice to adverse counsel. It also denied the Motion for Reconsideration that followed on the ground that adverse counsel was notified less than three (3) days prior to the hearing.

Meanwhile, on October 25, 1994, the Court of Appeals denied the partial motion for reconsideration in CA-G.R. SP No. 34506. Thus, petitioners filed with the Supreme Court a petition for review docketed as G.R. No. 117817, entitled Professional Regulation Commission, et al. v. Court of Appeals, et al. On November 11, 1994, counsel for the petitioners failed to appear at the trial of Civil Case No. 93-66530. Upon motion of the respondents herein, the trial court ruled that herein petitioners waived their right to cross-examine the herein respondents. Trial was reset to November 28, 1994. On November 25, 1994, petitioners counsel moved for the inhibition of the trial court judge for alleged partiality. On November 28, 1994, the day the Motion to Inhibit was to be heard, petitioners failed to appear. Thus, the trial court denied the Motion to Inhibit and declared Civil Case No. 93-66530 deemed submitted for decision. On December 19, 1994, the trial court handed down its judgment in Civil Case No. 93-66530, the fallo of which reads:

Page 147 of 192

WHEREFORE, judgment is rendered ordering the respondents to allow the petitioners and intervenors (except those with asterisks and footnotes in pages 1 & 2 of this decision) [sic], [9] to take the physicians oath and to register them as physicians. It should be made clear that this decision is without prejudice to any administrative disciplinary action which may be taken against any of the petitioners for such causes and in the manner provided by law and consistent with the requirements of the Constitution as any other professionals. No costs.

Salvador, Belinda C. Rabara, Yolanda P. Unica, Dayminda G. Bontuyan, Clarissa B. Baclig, Ma. Luisa S. Gutierrez, Rhoneil R. Deveraturda, Aleli A. Gollayan, Evelyn C. Cundangan, Frederick D. Francisco, Violeta V. Meneses, Melita J. Caedo, Clarisa SJ. Nicolas, Federico L. Castillo, Karangalan D. Serrano, Danilo A. Villaver, Grace E. Uy, Lydia C. Chan, and Melvin M. Usita. The Court of Appeals ruled that its decision in CA-G.R. SP No. 37283 would not apply to them. On May 16, 2000, the Court of Appeals decided CA-G.R. SP No. 37283, with the following fallo, to wit: WHEREFORE, finding no reversible error in the decision appealed from, We hereby AFFIRM the same and DISMISS the instant appeal.

SO ORDERED.[10] No pronouncement as to costs. As a result of these developments, petitioners filed with this Court a petition for review on certiorari docketed as G.R. No. 118437, entitled Professional Regulation Commission v. Hon. David G. Nitafan, praying inter alia, that (1) G.R. No. 118437 be consolidated with G.R. No. 117817; (2) the decision of the Court of Appeals dated August 31, 1994 in CA-G.R. SP No. 34506 be nullified for its failure to decree the dismissal of Civil Case No. 93-66530, and in the alternative, to set aside the decision of the trial court in Civil Case No. 93-66530, order the trial court judge to inhibit himself, and Civil Case No. 93-66530 be re-raffled to another branch. On December 26, 1994, the petitioners herein filed their Notice of Appeal[11] in Civil Case No. 93-66530, thereby elevating the case to the Court of Appeals, where it was docketed as CAG.R. SP No. 37283.

SO ORDERED.[13] In sustaining the trial courts decision, the appellate court ratiocinated that the respondents complied with all the statutory requirements for admission into the licensure examination for physicians in February 1993. They all passed the said examination. Having fulfilled the requirements of Republic Act No. 2382,[14] they should be allowed to take their oaths as physicians and be registered in the rolls of the PRC. Hence, this petition raising the following issues: I

In our Resolution of June 7, 1995, G.R. No. 118437 was consolidated with G.R. No. 117817. On July 9, 1998, we disposed of G.R. Nos. 117817 and 118437 in this wise: WHEREFORE, the petition in G.R. No. 117817 is DISMISSED for being moot. The petition in G.R. No. 118437 is likewise DISMISSED on the ground that there is a pending appeal before the Court of Appeals. Assistant Solicitor General Amparo M. Cabotaje-Tang is advised to be more circumspect in her dealings with the courts as a repetition of the same or similar acts will be dealt with accordingly. SO ORDERED.[12] While CA-G.R. SP No. 37283 was awaiting disposition by the appellate court, Arnel V. Herrera, one of the original petitioners in Civil Case No. 93-66530, joined by twenty-seven intervenors, to wit: Fernando F. Mandapat, Ophelia C. Hidalgo, Bernadette T. Mendoza, Ruby B. Lantin-Tan, Fernando T. Cruz, Marissa A. Regodon, Ma. Eloisa Q. Mallari-Largoza, Cheryl R. Triguero, Joseph A. Jao, Bernadette H. Cabuhat, Evelyn S. Acosta-Cabanes, Laura M. Santos, Maritel M. Echiverri, Bernadette C. Escusa, Carlosito C. Domingo, Alicia S. Lizano, Elnora R. RaquenoRabaino, Saibzur N. Edding, Derileen D. Dorado-Edding, Robert B. Sanchez, Maria Rosario L. Leonor-Lacandula, Geraldine Elizabeth M. Pagilagan-Palma, Margarita Belinda L. VicencioGamilla, Herminigilda E. Conejos, Leuvina P. Chico-Paguio, Elcin C. Arriola-Ocampo, and Jose Ramoncito P. Navarro, manifested that they were no longer interested in proceeding with the case and moved for its dismissal. A similar manifestation and motion was later filed by intervenors Mary Jean I. Yeban-Merlan, Michael L. Serrano, Norma G. Lafavilla, Arnulfo A.

WHETHER OR NOT RESPONDENTS HAVE A VALID CAUSE OF ACTION FOR MANDAMUS AGAINST PETITIONERS IN THE LIGHT OF THE RESOLUTION OF THIS HONORABLE COURT IN G.R. NO. 112315 AFFIRMING THE COURT OF APPEALS DECISION DECLARING THAT IF EVER THERE IS SOME DOUBT AS TO THE MORAL FITNESS OF EXAMINEES, THE ISSUANCE OF LICENSE TO PRACTICE MEDICINE IS NOT AUTOMATICALLY GRANTED TO THE SUCCESSFUL EXAMINEES. II WHETHER OR NOT THE PETITION FOR MANDAMUS COULD PROCEED DESPITE THE PENDENCY OF ADMINISTRATIVE CASE NO. 1687, WHICH WAS PRECISELY LODGED TO DETERMINE THE MORAL FITNESS OF RESPONDENTS TO BECOME DOCTORS.[15] To our mind, the only issue is: Did the Court of Appeals commit a reversible error of law in sustaining the judgment of the trial court that respondents are entitled to a writ of mandamus? The petitioners submit that a writ of mandamus will not lie in this case. They point out that for a writ of mandamus to issue, the applicant must have a well-defined, clear and certain legal right to the thing demanded and it is the duty of the respondent to perform the act required. Thus, mandamus may be availed of only when the duty sought to be performed is a ministerial and not a discretionary one. The petitioners argue that the appellate courts decision in CA-G.R. SP No. 37283 upholding the decision of the trial court in Civil Case No. 93-66530 overlooked its own pronouncement in CA-G.R. SP No. 31701. The Court of Appeals held in CA-G.R. SP No.

Page 148 of 192

31701 that the issuance of a license to engage in the practice of medicine becomes discretionary on the PRC if there exists some doubt that the successful examinee has not fully met the requirements of the law. The petitioners stress that this Courts Resolution dated May 24, 1994 in G.R. No. 112315 held that there was no showing that the Court of Appeals had committed any reversible error in rendering the questioned judgment in CA-G.R. SP No. 31701. The petitioners point out that our Resolution in G.R. No. 112315 has long become final and executory. Respondents counter that having passed the 1993 licensure examinations for physicians, the petitioners have the obligation to administer to them the oath as physicians and to issue their certificates of registration as physicians pursuant to Section 20[16] of Rep. Act No. 2382. The Court of Appeals in CA-G.R. SP No. 37283, found that respondents complied with all the requirements of Rep. Act No. 2382. Furthermore, respondents were admitted by the Medical Board to the licensure examinations and had passed the same. Hence, pursuant to Section 20 of Rep. Act No. 2382, the petitioners had the obligation to administer their oaths as physicians and register them. Mandamus is a command issuing from a court of competent jurisdiction, in the name of the state or the sovereign, directed to some inferior court, tribunal, or board, or to some corporation or person requiring the performance of a particular duty therein specified, which duty results from the official station of the party to whom the writ is directed, or from operation of law.[17] Section 3 of Rule 65[18] of the 1997 Rules of Civil Procedure outlines two situations when a writ of mandamus may issue, when any tribunal, corporation, board, officer or person unlawfully (1) neglects the performance of an act which the law specifically enjoins as a duty resulting from an office, trust, or station; or (2) excludes another from the use and enjoyment of a right or office to which the other is entitled.

would enable respondents to practice the medical profession[23] pursuant to Section 20 of the Medical Act of 1959? The appellate court relied on a single provision, Section 20 of Rep. Act No. 2382, in concluding that the petitioners had the ministerial obligation to administer the Hippocratic Oath to respondents and register them as physicians. But it is a basic rule in statutory construction that each part of a statute should be construed in connection with every other part to produce a harmonious whole, not confining construction to only one section. [24] The intent or meaning of the statute should be ascertained from the statute taken as a whole, not from an isolated part of the provision. Accordingly, Section 20 of Rep. Act No. 2382, as amended should be read in conjunction with the other provisions of the Act. Thus, to determine whether the petitioners had the ministerial obligation to administer the Hippocratic Oath to respondents and register them as physicians, recourse must be had to the entirety of the Medical Act of 1959. A careful reading of Section 20 of the Medical Act of 1959 discloses that the law uses the word shall with respect to the issuance of certificates of registration. Thus, the petitioners shallsign and issue certificates of registration to those who have satisfactorily complied with the requirements of the Board. In statutory construction the term shall is a word of command. It is given imperative meaning. Thus, when an examinee satisfies the requirements for the grant of his physicians license, the Board is obliged to administer to him his oath and register him as a physician, pursuant to Section 20 and par. (1) of Section 22[25] of the Medical Act of 1959. However, the surrounding circumstances in this case call for serious inquiry concerning the satisfactory compliance with the Board requirements by the respondents. The unusually high scores in the two most difficult subjects was phenomenal, according to Fr. Nebres, the consultant of PRC on the matter, and raised grave doubts about the integrity, if not validity, of the tests. These doubts have to be appropriately resolved.

We shall discuss the issues successively. 1. On The Existence of a Duty of the Board of Medicine To Issue Certificates of Registration as Physicians under Rep. Act No. 2382. For mandamus to prosper, there must be a showing that the officer, board, or official concerned, has a clear legal duty, not involving discretion.[19] Moreover, there must be statutory authority for the performance of the act,[20] and the performance of the duty has been refused.[21] Thus, it must be pertinently asked now: Did petitioners have the duty to administer the Hippocratic Oath and register respondents as physicians under the Medical Act of 1959? As found by the Court of Appeals, on which we agree on the basis of the records: It bears emphasizing herein that petitioner-appellees and intervenor-appellees have fully complied with all the statutory requirements for admission into the licensure examinations for physicians conducted and administered by the respondent-appellants on February 12, 14, 20 and 21, 1993. Stress, too, must be made of the fact that all of them successfully passed the same examinations.[22] The crucial query now is whether the Court of Appeals erred in concluding that petitioners should allow the respondents to take their oaths as physicians and register them, steps which

Under the second paragraph of Section 22, the Board is vested with the power to conduct administrative investigations and disapprove applications for examination or registration, pursuant to the objectives of Rep. Act No. 2382 as outlined in Section 1[26] thereof. In this case, after the investigation, the Board filed before the PRC, Adm. Case No. 1687 against the respondents to ascertain their moral and mental fitness to practice medicine, as required by Section 9[27] of Rep. Act No. 2382. In its Decision dated July 1, 1997, the Board ruled: WHEREFORE, the BOARD hereby CANCELS the respondents[] examination papers in the Physician Licensure Examinations given in February 1993 and further DEBARS them from taking any licensure examination for a period of ONE (1) YEAR from the date of the promulgation of this DECISION. They may, if they so desire, apply for the scheduled examinations for physicians after the lapse of the period imposed by the BOARD. SO ORDERED.[28] Until the moral and mental fitness of the respondents could be ascertained, according to petitioners, the Board has discretion to hold in abeyance the administration of the Hippocratic Oath and the issuance of the certificates to them. The writ of mandamus does not lie to compel performance of an act which is not duly authorized.

Page 149 of 192

The respondents nevertheless argue that under Section 20, the Board shall not issue a certificate of registration only in the following instances: (1) to any candidate who has been convicted by a court of competent jurisdiction of any criminal offense involving moral turpitude; (2) or has been found guilty of immoral or dishonorable conduct after the investigation by the Board; or (3) has been declared to be of unsound mind. They aver that none of these circumstances are present in their case. Petitioners reject respondents argument. We are informed that in Board Resolution No. 26,[29] dated July 21, 1993, the Board resolved to file charges against the examinees from Fatima College of Medicine for immorality, dishonesty, fraud, and deceit in the ObstetricsGynecology and Biochemistry examinations. It likewise sought to cancel the examination results obtained by the examinees from the Fatima College. Section 8[30] of Rep. Act No. 2382 prescribes, among others, that a person who aspires to practice medicine in the Philippines, must have satisfactorily passed the corresponding Board Examination. Section 22, in turn, provides that the oath may only be administered to physicians who qualified in the examinations. The operative word here is satisfactorily, defined as sufficient to meet a condition or obligation or capable of dispelling doubt or ignorance. [31] Gleaned from Board Resolution No. 26, the licensing authority apparently did not find that the respondents satisfactorily passed the licensure examinations. The Board instead sought to nullify the examination results obtained by the respondents.

or oppressive manner. A political body that regulates the exercise of a particular privilege has the authority to both forbid and grant such privilege in accordance with certain conditions. Such conditions may not, however, require giving up ones constitutional rights as a condition to acquiring the license.[40] Under the view that the legislature cannot validly bestow an arbitrary power to grant or refuse a license on a public agency or officer, courts will generally strike down license legislation that vests in public officials discretion to grant or refuse a license to carry on some ordinarily lawful business, profession, or activity without prescribing definite rules and conditions for the guidance of said officials in the exercise of their power. [41] In the present case, the aforementioned guidelines are provided for in Rep. Act No. 2382, as amended, which prescribes the requirements for admission to the practice of medicine, the qualifications of candidates for the board examinations, the scope and conduct of the examinations, the grounds for denying the issuance of a physicians license, or revoking a license that has been issued. Verily, to be granted the privilege to practice medicine, the applicant must show that he possesses all the qualifications and none of the disqualifications. Furthermore, it must appear that he has fully complied with all the conditions and requirements imposed by the law and the licensing authority. Should doubt taint or mar the compliance as being less than satisfactory, then the privilege will not issue. For said privilege is distinguishable from a matter of right, which may be demanded if denied. Thus, without a definite showing that the aforesaid requirements and conditions have been satisfactorily met, the courts may not grant the writ of mandamus to secure said privilege without thwarting the legislative will.

2. On the Right Of The Respondents To Be Registered As Physicians 3. On the Ripeness of the Petition for Mandamus The function of mandamus is not to establish a right but to enforce one that has been established by law. If no legal right has been violated, there can be no application of a legal remedy, and the writ of mandamus is a legal remedy for a legal right.[32] There must be a welldefined, clear and certain legal right to the thing demanded. [33] It is long established rule that a license to practice medicine is a privilege or franchise granted by the government.[34] It is true that this Court has upheld the constitutional right[35] of every citizen to select a profession or course of study subject to a fair, reasonable, and equitable admission and academic requirements.[36] But like all rights and freedoms guaranteed by the Charter, their exercise may be so regulated pursuant to the police power of the State to safeguard health, morals, peace, education, order, safety, and general welfare of the people. [37] Thus, persons who desire to engage in the learned professions requiring scientific or technical knowledge may be required to take an examination as a prerequisite to engaging in their chosen careers. This regulation takes particular pertinence in the field of medicine, to protect the public from the potentially deadly effects of incompetence and ignorance among those who would practice medicine. In a previous case, it may be recalled, this Court has ordered the Board of Medical Examiners to annul both its resolution and certificate authorizing a Spanish subject, with the degree of Licentiate in Medicine and Surgery from the University of Barcelona, Spain, to practice medicine in the Philippines, without first passing the examination required by the Philippine Medical Act.[38] In another case worth noting, we upheld the power of the State to upgrade the selection of applicants into medical schools through admission tests. [39] It must be stressed, nevertheless, that the power to regulate the exercise of a profession or pursuit of an occupation cannot be exercised by the State or its agents in an arbitrary, despotic,

Lastly, the petitioners herein contend that the Court of Appeals should have dismissed the petition for mandamus below for being premature. They argue that the administrative remedies had not been exhausted. The records show that this is not the first time that petitioners have sought the dismissal of Civil Case No. 93-66530. This issue was raised in G.R. No. 115704, which petition we referred to the Court of Appeals, where it was docketed as CA-G.R. SP No. 34506. On motion for reconsideration in CA-G.R. SP No. 34506, the appellate court denied the motion to dismiss on the ground that the prayers for the nullification of the order of the trial court and the dismissal of Civil Case No. 93-66530 were inconsistent reliefs. In G.R. No. 118437, the petitioners sought to nullify the decision of the Court of Appeals in CA-G.R. SP No. 34506 insofar as it did not order the dismissal of Civil Case No. 93-66530. In our consolidated decision, dated July 9, 1998, in G.R. Nos. 117817 & 118437, this Court speaking through Justice Bellosillo opined that: Indeed, the issue as to whether the Court of Appeals erred in not ordering the dismissal of Civil Case No. 93-66530 sought to be resolved in the instant petition has been rendered meaningless by an event taking place prior to the filing of this petition and denial thereof should follow as a logical consequence.[42] There is no longer any justiciable controversy so that any declaration thereon would be of no practical use or value.[43] It should be recalled that in its decision of 19 December 1994 the trial court granted the writ of mandamus prayed for by private respondents, which decision was received by petitioners on 20 December 1994. Three (3) days after, or on 23 December 1994, petitioners filed the instant petition. By then, the remedy available to them was to appeal the decision to the Court of Appeals, which they in fact did, by filing a notice of appeal on 26 December 1994.[44]

Page 150 of 192

The petitioners have shown no cogent reason for us to reverse the aforecited ruling. Nor will their reliance upon the doctrine of the exhaustion of administrative remedies in the instant case advance their cause any. Section 26[45] of the Medical Act of 1959 provides for the administrative and judicial remedies that respondents herein can avail to question Resolution No. 26 of the Board of Medicine, namely: (a) appeal the unfavorable judgment to the PRC; (b) should the PRC ruling still be unfavorable, to elevate the matter on appeal to the Office of the President; and (c) should they still be unsatisfied, to ask for a review of the case or to bring the case to court via a special civil action of certiorari. Thus, as a rule, mandamus will not lie when administrative remedies are still available.[46] However, the doctrine of exhaustion of administrative remedies does not apply where, as in this case, a pure question of law is raised.[47] On this issue, no reversible error may, thus, be laid at the door of the appellate court in CA-G.R. SP No. 37283, when it refused to dismiss Civil Case No. 93-66530. As we earlier pointed out, herein respondents Arnel V. Herrera, Fernando F. Mandapat, Ophelia C. Hidalgo, Bernadette T. Mendoza, Ruby B. Lantin-Tan, Fernando T. Cruz, Marissa A. Regodon, Ma. Eloisa Q. Mallari-Largoza, Cheryl R. Triguero, Joseph A. Jao, Bernadette H. Cabuhat, Evelyn S. Acosta-Cabanes, Laura M. Santos, Maritel M. Echiverri, Bernadette C. Escusa, Carlosito C. Domingo, Alicia S. Lizano, Elnora R. Raqueno-Rabaino, Saibzur N. Edding, Derileen D. Dorado-Edding, Robert B. Sanchez, Maria Rosario Leonor-Lacandula, Geraldine Elizabeth M. Pagilagan-Palma, Margarita Belinda L. Vicencio-Gamilla, Herminigilda E. Conejos, Leuvina P. Chico-Paguio, Elcin C. Arriola-Ocampo, and Jose Ramoncito P. Navarro manifested to the Court of Appeals during the pendency of CA-G.R. SP No. 37283, that they were no longer interested in proceeding with the case and moved for its dismissal insofar as they were concerned. A similar manifestation and motion were later filed by intervenors Mary Jean I. Yeban-Merlan, Michael L. Serrano, Norma G. Lafavilla, Arnulfo A. Salvador, Belinda C. Rabarra, Yolanda P. Unica, Dayminda G. Bontuyan, Clarissa B. Baclig, Ma. Luisa S. Gutierrez, Rhoneil R. Deveraturda, Aleli A. Gollayan, Evelyn C. Cundangan, Frederick D. Francisco, Violeta V. Meneses, Melita J. Caedo, Clarisa SJ. Nicolas, Federico L. Castillo, Karangalan D. Serrano, Danilo A. Villaver, Grace E. Uy, Lydia C. Chan, and Melvin M. Usita. Following these manifestations and motions, the appellate court in CA-G.R. SP No. 37283 decreed that its ruling would not apply to them. Thus, inasmuch as the instant case is a petition for review of the appellate courts ruling in CA-G.R. SP No. 37283, a decision which is inapplicable to the aforementioned respondents will similarly not apply to them.

WHEREFORE, the instant petition is GRANTED. Accordingly, (1) the assailed decision dated May 16, 2000, of the Court of Appeals, in CA-G.R. SP No. 37283, which affirmed the judgment dated December 19, 1994, of the Regional Trial Court of Manila, Branch 52, in Civil Case No. 93-66530, ordering petitioners to administer the physicians oath to herein respondents as well as the resolution dated August 25, 2000, of the appellate court, denying the petitioners motion for reconsideration, are REVERSED and SET ASIDE; and (2) the writ of mandamus, issued in Civil Case No. 93-66530, and affirmed by the appellate court in CA-G.R. SP No. 37283 is NULLIFIED AND SET ASIDE. SO ORDERED. Puno, (Chairman), and Callejo, Sr., JJ., concur. Quisumbing, J., no part. Austria-Martinez, J., no part - on leave.

[1]

Rollo, pp. 44-67. Penned by Associate Justice Cancio C. Garcia, with Associate Justices B.A. Adefuin-De la Cruz, and Renato C. Dacudao concurring. [2]

CA Rollo, pp. 140-175.

[3]

Supra, note 1 at 408. Penned by Associate Justice Cancio C. Garcia, with Associate Justices B.A. Adefuin-De la Cruz, and Renato C. Dacudao, concurring. [4]

Id. at 69.

[5]

Id. at 96.

[6]

Id. at 92.

[7]

As to Achilles J. Peralta, Evelyn O. Ramos, Sally B. Bunagan, Rogelio B. Ancheta, Oscar H. Padua, Jr., Evelyn D. Grajo, Valentino P. Arboleda, Carlos M. Bernardo, Jr., Mario D. Cuaresma, Violeta C. Felipe, Percival H. Pangilinan, Corazon M. Cruz and Samuel B. Bangoy, herein decision shall not apply pursuant to the Orders of the trial court in Civil Case No. 9366530, dropping their names from the suit. Consequently, this Decision is binding only on the remaining respondents, namely: Arlene V. de Guzman, Celerina S. Navarro, Rafael I. Tolentino, Bernardita B. Sy, Gloria T. Jularbal, Hubert S. Nazareno, Nancy J. Chavez, Ernesto L. Cue, Herminio V. Fernandez, Jr., Maria Victoria M. Lacsamana and Merly D. Sta. Ana, as well as the petitioners.

Id. at 175. Penned by Associate Justice Alfredo L. Benipayo and concurred in by Presiding Justice Santiago M. Kapunan (later a member of the Supreme Court and now retired) and Associate Justice Ma. Alicia Austria-Martinez (now a member of the Second Division of the Supreme Court). [8]

Rollo, pp. 199-200. Penned by Associate Justice Jaime M. Lantin, with Associate Justices Angelina S. Gutierrez (now a member of the Supreme Court), and Conchita Carpio Morales (likewise a present member of the Supreme Court) concurring. [9]

Of the intervenors in Civil Case No. 93-66530, Achilles Peralta and Evelyn Ramos were dropped as parties per Order of the trial court dated August 24, 1993. The case was dismissed as to Sally Bunagan, Reogelio Ancheta, Oscar Padua, Evelyn Grajo, Valentino Arboleda, Carlos Bernardo, Jr., Mario Cuaresma, Violeta Felipe, and Percival Pangilinan as per Order

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dated November 25, 1994. Corazon Cruz and Samuel Bangoy were deemed by the trial court no longer entitled to the avails of the suit for seeking extrajudicial relief from the Board of Medicine, as per its Order dated November 25, 1994. See CA Rollo, pp. 140-141. [10]

CA Rollo, pp. 174-175.

[11]

Id. at 205.

[12]

G.R. Nos. 117817 and 118437, 9 July 1998, 292 SCRA 155, 167. Penned by Associate Justice Josue N. Bellosillo, with Associate Justices Hilario G. Davide, Jr., Jose C. Vitug, Artemio V. Panganiban, and Leonardo A. Quisumbing concurring. [13]

[20]

See State ex rel Jester v. Paige, supra; Pedroso v. De Walt, et al., 340 S.W. 2d 566.

[21]

See State Board of Barber Examiners v. Walker, 192 P. 2d 723; State ex rel Sharp v. Cross, supra; State ex rel Hacharedi v. Baxter, 74 N.E. 2d 242, 332 US 827, 92 L. Ed 402, 68 S. Ct 209. [22]

Rollo, p. 58.

[23]

Id. at 59.

[24]

Sotto v. Sotto, No. 17768, 1 September 1922, 43 Phil. 688, 694. See also Araneta v. Concepcion and Araneta, No. L-9667, 31 July 1956, 99 Phil. 709, 712.

Rollo, p. 67. [25]

[14]

The Medical Act of 1959.

[15]

Rollo, pp. 28-29.

[16]

SEC. 20. Issuance of Certificates of Registration, grounds for refusal of [the] same. The Commissioner of Civil Service (now Professional Regulation Commission) the chairman, the members and the Secretary of the Board of Medical Examiners (now Medical Board) shall sign and issue certificates of registration to those who have satisfactorily complied with the requirements of the Board. They shall not issue a certificate of registration to any candidate who has been convicted by a court of competent jurisdiction of any criminal offense involving moral turpitude, or has been found guilty of immoral or dishonorable conduct after the investigation by the Board of Medical Examiners (now Medical Board), or has been declared to be of unsound mind. (As amended by Rep. Act No. 4224, which took effect June 19, 1965). [17]

See United States v. Boutwell, 17 Wall (US) 604, 21 L. Ed 721; Laizure v. Baker, 11 P. 2d 560; State ex rel Lyons v. McDowell, 57 A. 2d 94; Rader v. Burton, 122 N.E. 2d 856; Board of Managers v. City of Wilmington, 70 S.E. 2d 833.

SEC. 22. Administrative investigations. In addition to the functions provided for in the preceding sections, the Board of Medical Examiners (now Medical Board) shall perform the following duties: (1) to administer oath to physicians who qualified in the examinations (stress supplied); (2) to study the conditions affecting the practice of medicine in all parts of the Philippines; (3) to exercise the powers conferred upon it by this article with the view of maintaining the ethical and professional standards of the medical profession; (4) to subpoena or subpoena duces tecum witnesses for all purposes required in the discharge of its duties; and (5) to promulgate, with the approval of the Commissioner of Civil Service (now Professional Regulation Commission), such rules and regulations as it may deem necessary for the performance of its duties in harmony with the provisions of this Act and necessary for the proper practice of medicine in the Philippines. Administrative investigations shall be conducted by at least two members of the Medical Board with one legal officer sitting during the investigation, otherwise the proceedings shall be considered void. The existing rules of evidence shall be observed during all administrative investigations. The Board may disapprove applications for examination or registration, reprimand erring physicians, or suspend or revoke registration certificates, if the respondents are found guilty after due investigation. (As amended by Rep. Act No. 4224, effective June 19, 1965.)

[18]

SEC. 3. Petition for mandamus. When any tribunal, corporation, board, officer or person unlawfully neglects the performance of an act which the law specifically enjoins as a duty resulting from an office, trust, or station, or unlawfully excludes another from the use and enjoyment of a right or office to which such other is entitled, and there is no other plain, speedy and adequate remedy in the ordinary course of law, the person aggrieved thereby may file a verified petition in the proper court, alleging the facts with certainty and praying that judgment be rendered commanding the respondent, immediately or at some other time to be specified by the court, to do the act required to be done to protect the rights of the petitioner, and to pay the damages sustained by the petitioner by reason of the wrongful acts of the respondent. The petition shall also contain a sworn certification of non-forum shopping as provided in the third paragraph of section 3, Rule 46. [19]

See Potter v. Anderson, 392 P. 2d 650; State ex rel Jester v. Paige, 213 P. 2d 441; State ex rel. Sharp v. Cross, 211 P. 2d 760; St. George v. Hanson, et al., 78 S.E. 2d 885; State ex rel Vander v. Board of County Comrs. et al., 135 N.E. 2d 701.

[26]

SEC. 1. Objectives. This Act provides for and shall govern (a) the standardization and regulation of medical education; (b) the examination for registration of physicians; and (c) the supervision, control, and regulation of the practice of medicine in the Philippines. [27]

SEC. 9. Candidates for board examinations. Candidates for Board examinations shall have the following qualifications: (1) He shall be a citizen of the Philippines or a citizen of any foreign country who has submitted competent and conclusive documentary evidence, confirmed by the Department of Foreign Affairs, showing that his countrys existing laws permit citizens of the Philippines to practice medicine under the same rules and regulations governing citizens thereof; (2) He shall be of good moral character; (3) He shall be of sound mind;

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(4) He shall not have been convicted by a court of competent jurisdiction of any offense involving moral turpitude;

[43]

(5) He shall be a holder of the Degree of Doctor of Medicine or its equivalent conferred by a college of medicine duly recognized by the Government; and

[44]

Citing Gancho-on v. Secretary of Labor and Employment, G.R. No. 108033, 14 April 1997, 271 SCRA 204, 208. Rollo, pp. 340-341.

[45]

(6) He must have completed a calendar year of technical training known as internship the nature of which shall be prescribed by the Board of Medical Education undertaken in hospitals and health centers approved by the Board. (As amended by Rep. Act No. 5946, approved June 21, 1969). [28]

Rollo, p. 419.

[29]

Id. at 99.

SEC. 26. Appeal from judgment. The decision of the Board of Medical Examiners (now Medical Board) shall automatically become final thirty days after the date of its promulgation unless the respondent, during the same period, has appealed to the Commissioner of the Civil Service (now Professional Regulation Commission) and later to the Office of the President of the Philippines. If the final decision is not satisfactory, the respondent may ask for a review of the case, or may file in court a petition for certiorari. [46]

Ang Tuan Kai & Co. v. Import Control Commission, No. L-4427, 21 April 1952, 91 Phil. 143, 145; Peralta v. Salcedo, etc., No. L-10771, 30 April 1957, 101 Phil. 452, 454.

[30]

SEC. 8. Prerequisite to the practice of medicine. No person shall engage in the practice of medicine in the Philippines unless he is at least twenty-one years of age, has satisfactorily passed the corresponding Board Examination, and is a holder of a valid Certificate of Registration duly issued to him by the Board of Medical Examiners (now Medical Board).

[47]

See Madrigal v. Lecaroz, G.R. No. 46218, 23 October 1990, 191 SCRA 20, 26.

THIRD DIVISION [G.R. No. 141314. November 15, 2002]

[31]

WEBSTERS NEW INTERNATIONAL DICTIONARY 2017 (1993 ed.).

[32]

See Fosdick v. Terry, 117 So. 2d 397, 398; Puritan Coal Corp. v. Davis, 42 S.E. 2d 807, 813.

[33]

Lemi v. Valencia, No. L-20768, 29 November 1968, 26 SCRA 203, 210; Ocampo v. Subido, No. L-28344, 27 August 1976, 72 SCRA 443, 452-453. [34]

See Morse v. State Board of Medical Examiners, 122 S.W. 446, 448 (1909).

[35]

CONST. Art. XIV, Sec. 5 (3).

[36]

Reyes v. Court of Appeals, G.R. Nos. 94961 and 96491, 25 February 1991, 194 SCRA 402, 409-410. [37]

Primicias v. Fugoso, No. L-1800, 27 January 1948, 80 Phil. 71, 75.

[38]

Philippine Medical Association v. Board of Medical Examiners, No. L-25135, 21 September 1968, 25 SCRA 29.

REPUBLIC OF THE PHILIPPINES, REPRESENTED BY ENERGY REGULATORY BOARD petitioner, vs. MANILA ELECTRIC COMPANY, respondent. [G.R. No. 141369. November 15, 2002] LAWYERS AGAINST MONOPOLY AND POVERTY (LAMP) consisting of CEFERINO PADUA, Chairman, G. FULTON ACOSTA,GALILEO BRION, ANATALIA BUENAVENTURA, PEDRO CASTILLO, NAPOLEON CORONADO, ROMEO ECHAUZ, FERNANDO GAITE, ALFREDO DE GUZMAN, ROGELIO KARAGDAG, JR., MA. LUZ ARZAGA-MENDOZA, ANSBERTO PAREDES, AQUILINO PIMENTEL III, MARIO REYES, EMMANUEL SANTOS, RUDEGELIO TACORDA, members, and ROLANDO ARZAGA, Secretary-General, JUSTICE ABRAHAM SARMIENTO, SENATOR AQUILINO PIMENTEL, JR. and COMMISSIONER BARTOLOME FERNANDEZ, JR., Board of Consultants, and Lawyer GENARO LUALHATI, petitioners, vs. MANILA ELECTRIC COMPANY (MERALCO), respondent. DECISION PUNO, J.:

[39]

Tablarin v. Judge Angelina S. Gutierrez, No. L-78164, 31 July 1987, 152 SCRA 730, 743.

[40]

See Manchester Press Club v. State Liquor Commission, 200 A. 407, 116 ALR 1093.

[41]

See Yick Wo v. Hopkins, 118 US 356, 30 L.Ed. 220, 6 S. Ct. 1064; City Council of Montgomery v. West, 42 So. 1000; In Re Porterfield, 168 P. 2d 706, 167 ALR 675; Anderson v. City of Wellington, 19 P. 719; State v. Harris, 6 S.E. 2d 854. [42]

In third world countries like the Philippines, equal justice will have a synthetic ring unless the economic rights of the people, especially the poor, are protected with the same resoluteness as their right to liberty. The cases at bar are of utmost significance for they concern the right of our people to electricity and to be reasonably charged for their consumption. In configuring the contours of this economic right to a basic necessity of life, the Court shall define the limits of the power of respondent MERALCO, a giant public utility and a monopoly, to charge our people for their electric consumption. The question is: should public interest prevail over private profits?

Citing Bautista v. Board of Energy, G.R. No. 75016, 13 January 1989, 169 SCRA 167.

Page 153 of 192

The facts are brief and undisputed. On December 23, 1993, MERALCO filed with the ERB an application for the revision of its rate schedules. The application reflected an average increase of 21 centavos per kilowatthour (kwh) in its distribution charge. The application also included a prayer for provisional approval of the increase pursuant to Section 16(c) of the Public Service Act and Section 8 of Executive Order No. 172. On January 28, 1994, the ERB issued an Order granting a provisional increase of P0.184 per kwh, subject to the following condition: In the event, however, that the Board finds, after hearing and submission by the Commission on Audit of an audit report on the books and records of the applicant that the latter is entitled to a lesser increase in rates, all excess amounts collected from the applicants customers as a result of this Order shall either be refunded to them or correspondingly credited in their favor for application to electric bills covering future consumptions. [1] In the same Order, the ERB requested the Commission on Audit (COA) to conduct an audit and examination of the books and other records of account of the applicant for such period of time, which in no case shall be less than 12 consecutive months, as it may deem appropriate and to submit a copy thereof to the ERB immediately upon completion. [2] On February 11, 1997, the COA submitted its Audit Report SAO No. 95-07 (the COA Report) which contained, among others, the recommendation not to include income taxes paid by MERALCO as part of its operating expenses for purposes of rate determination and the use of the net average investment method for the computation of the proportionate value of the properties used by MERALCO during the test year for the determination of the rate base. [3]

Petitioners are now before the Court seeking a reversal of the decision of the Court of Appeals by arguing primarily that the Court of Appeals erred: a) in ruling that income tax paid by MERALCO should be treated as part of its operating expenses and thus considered in determining the amount of increase in rates imposed by MERALCO and b) in rejecting the net average investment method used by the COA and the ERB and instead adopted the average investment method used by MERALCO. We grant the petition. The regulation of rates to be charged by public utilities is founded upon the police powers of the State and statutes prescribing rules for the control and regulation of public utilities are a valid exercise thereof. When private property is used for a public purpose and is affected with public interest, it ceases to be juris privati only and becomes subject to regulation. The regulation is to promote the common good. Submission to regulation may be withdrawn by the owner by discontinuing use; but as long as use of the property is continued, the same is subject to public regulation.[9] In regulating rates charged by public utilities, the State protects the public against arbitrary and excessive rates while maintaining the efficiency and quality of services rendered. However, the power to regulate rates does not give the State the right to prescribe rates which are so low as to deprive the public utility of a reasonable return on investment. Thus, the rates prescribed by the State must be one that yields a fair return on the public utility upon the value of the property performing the service and one that is reasonable to the public for the services rendered. [10] The fixing of just and reasonable rates involves a balancing of the investor and the consumer interests.[11]

Subsequently, the ERB rendered its decision adopting the above recommendations and authorized MERALCO to implement a rate adjustment in the average amount of P0.017 per kwh, effective with respect to MERALCOs billing cycles beginning February 1994. The ERB further ordered that the provisional relief in the amount of P0.184 per kilowatthour granted under the Boards Order dated January 28, 1994 is hereby superseded and modified and the excess average amount of P0.167 per kilowatthour starting with [MERALCOs] billing cycles beginning February 1994 until its billing cycles beginning February 1998, be refunded to [MERALCOs] customers or correspondingly credited in their favor for future consumption. [4]

In his famous dissenting opinion in the 1923 case of Southwestern Bell Tel. Co. v. Public Service Commission,[12] Mr. Justice Brandeis wrote:

The ERB held that income tax should not be treated as operating expense as this should be borne by the stockholders who are recipients of the income or profits realized from the operation of their business hence, should not be passed on to the consumers.[5] Further, in applying the net average investment method, the ERB adopted the recommendation of COA that in computing the rate base, only the proportionate value of the property should be included, determined in accordance with the number of months the same was actually used in service during the test year.[6]

.

On appeal, the Court of Appeals set aside the ERB decision insofar as it directed the reduction of the MERALCO rates by an average of P0.167 per kwh and the refund of such amount to MERALCOs customers beginning February 1994 and until its billing cycle beginning February 1998.[7] Separate Motions for Reconsideration filed by the petitioners were denied by the Court of Appeals.[8]

The thing devoted by the investor to the public use is not specific property, tangible and intangible, but capital embarked in an enterprise. Upon the capital so invested, the Federal Constitution guarantees to the utility the opportunity to earn a fair return The Constitution does not guarantee to the utility the opportunity to earn a return on the value of all items of property used by the utility, or of any of them.

The investor agrees, by embarking capital in a utility, that its charges to the public shall be reasonable. His company is the substitute for the State in the performance of the public service, thus becoming a public servant. The compensation which the Constitution guarantees an opportunity to earn is the reasonable cost of conducting the business. While the power to fix rates is a legislative function, whether exercised by the legislature itself or delegated through an administrative agency, a determination of whether the rates so fixed are reasonable and just is a purely judicial question and is subject to the review of the courts.[13] The ERB was created under Executive Order No. 172 to regulate, among others, the distribution of energy resources and to fix rates to be charged by public utilities involved in the distribution of electricity. In the fixing of rates, the only standard which the legislature is

Page 154 of 192

required to prescribe for the guidance of the administrative authority is that the rate be reasonable and just. It has been held that even in the absence of an express requirement as to reasonableness, this standard may be implied.[14] What is a just and reasonable rate is a question of fact calling for the exercise of discretion, good sense, and a fair, enlightened and independent judgment. The requirement of reasonableness comprehends such rates which must not be so low as to be confiscatory, or too high as to be oppressive. In determining whether a rate is confiscatory, it is essential also to consider the given situation, requirements and opportunities of the utility.[15] Settled jurisprudence holds that factual findings of administrative bodies on technical matters within their area of expertise should be accorded not only respect but even finality if they are supported by substantial evidence even if not overwhelming or preponderant. [16] In one case, [17] we cautioned that courts should "refrain from substituting their discretion on the weight of the evidence for the discretion of the Public Service Commission on questions of fact and will only reverse or modify such orders of the Public Service Commission when it really appears that the evidence is insufficient to support their conclusions."[18] In the cases at bar, findings and conclusions of the ERB on the rate that can be charged by MERALCO to the public should be respected.[19] The function of the court, in exercising its power of judicial review, is to determine whether under the facts and circumstances, the final order entered by the administrative agency is unlawful or unreasonable. [20] Thus, to the extent that the administrative agency has not been arbitrary or capricious in the exercise of its power, the time-honored principle is that courts should not interfere. The principle of separation of powers dictates that courts should hesitate to review the acts of administrative officers except in clear cases of grave abuse of discretion.[21] In determining the just and reasonable rates to be charged by a public utility, three major factors are considered by the regulating agency: a) rate of return; b) rate base and c) the return itself or the computed revenue to be earned by the public utility based on the rate of return and rate base.[22] The rate of return is a judgment percentage which, if multiplied with the rate base, provides a fair return on the public utility for the use of its property for service to the public.[23] The rate of return of a public utility is not prescribed by statute but by administrative and judicial pronouncements. This Court has consistently adopted a 12% rate of return for public utilities.[24] The rate base, on the other hand, is an evaluation of the property devoted by the utility to the public service or the value of invested capital or property which the utility is entitled to a return.[25] In the cases at bar, the resolution of the issues involved hinges on the determination of the kind and the amount of operating expenses that should be allowed to a public utility to generate a fair return and the proper valuation of the rate base or the value of the property entitled to a return. I Income Tax as Operating Expense Cannot be Allowed For Rate-Determination Purposes In determining whether or not a rate yields a fair return to the utility, the operating expenses of the utility must be considered. The return allowed to a public utility in accordance with the prescribed rate must be sufficient to provide for the payment of such reasonable operating

expenses incurred by the public utility in the provision of its services to the public. Thus, the public utility is allowed a return on capital over and above operating expenses. However, only such expenses and in such amounts as are reasonable for the efficient operation of the utility should be allowed for determination of the rates to be charged by a public utility. The ERB correctly ruled that income tax should not be included in the computation of operating expenses of a public utility. Income tax paid by a public utility is inconsistent with the nature of operating expenses. In general, operating expenses are those which are reasonably incurred in connection with business operations to yield revenue or income. They are items of expenses which contribute or are attributable to the production of income or revenue. As correctly put by the ERB, operating expenses should be a requisite of or necessary in the operation of a utility, recurring, and that it redounds to the service or benefit of customers.[26] Income tax, it should be stressed, is imposed on an individual or entity as a form of excise tax or a tax on the privilege of earning income.[27] In exchange for the protection extended by the State to the taxpayer, the government collects taxes as a source of revenue to finance its activities. Clearly, by its nature, income tax payments of a public utility are not expenses which contribute to or are incurred in connection with the production of profit of a public utility. Income tax should be borne by the taxpayer alone as they are payments made in exchange for benefits received by the taxpayer from the State. No benefit is derived by the customers of a public utility for the taxes paid by such entity and no direct contribution is made by the payment of income tax to the operation of a public utility for purposes of generating revenue or profit. Accordingly, the burden of paying income tax should be Meralcos alone and should not be shifted to the consumers by including the same in the computation of its operating expenses. The principle behind the inclusion of operating expenses in the determination of a just and reasonable rate is to allow the public utility to recoup the reasonable amount of expenses it has incurred in connection with the services it provides. It does not give the public utility the license to indiscriminately charge any and all types of expenses incurred without regard to the nature thereof, i.e., whether or not the expense is attributable to the production of services by the public utility. To charge consumers for expenses incurred by a public utility which are not related to the service or benefit derived by the customers from the public utility is unjustified and inequitable. While the public utility is entitled to a reasonable return on the fair value of the property being used for the service of the public, no less than the Federal Supreme Court of the United States emphasized: [t]he public cannot properly be subjected to unreasonable rates in order simply that stockholders may earn dividends If a corporation cannot maintain such a [facility] and earn dividends for stockholders, it is a misfortune for it and them which the Constitution does not require to be remedied by imposing unjust burdens on the public.[28] We are not impressed by the reliance by MERALCO on some American case law allowing the treatment of income tax paid by a public utility as operating expense for rate-making purposes. Suffice to state that with regard to rate-determination, the government is not hidebound to apply any particular method or formula.[29] The question of what constitutes a reasonable return for the public utility is necessarily determined and controlled by its peculiar environmental milieu. Aside from the financial condition of the public utility, there are other critical factors to consider for

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purposes of rate regulation. Among others, they are: particular reasons involved for the request of the rate increase, the quality of services rendered by the public utility, the existence of competition, the element of risk or hazard involved in the investment, the capacity of consumers, etc.[30] Rate regulation is the art of reaching a result that is good for the public utility and is best for the public. For these reasons, the Court cannot give in to the importunings of MERALCO that we blindly apply the rulings of American courts on the treatment of income tax as operating expenses in rate regulation cases. An approach allowing the indiscriminate inclusion of income tax payments as operating expenses may create an undesirable precedent and serve as a blanket authority for public utilities to charge their income tax payments to operating expenses and unjustly shift the tax burden to the customer. To be sure, public utility taxation in the United States is going through the eye of criticism. Some commentators are of the view that by allowing the public utility to collect its income tax payment from its customers, a form of sales tax is, in effect, imposed on the public for consumption of public utility services. By charging their income tax payments to their customers, public utilities virtually become tax collectors rather than taxpayers.[31] In the cases at bar, MERALCO has not justified why its income tax should be treated as an operating expense to enable it to derive a fair return for its services. It is also noteworthy that under American laws, public utilities are taxed differently from other types of corporations and thus carry a heavier tax burden. Moreover, different types of taxes, charges, tolls or fees are assessed on a public utility depending on the state or locality where it operates. At a federal level, public utilities are subject to corporate income taxes and Social Security taxesin the same manner as other business corporations. At the state and local levels, public utilities are subject to a wide variety of taxes, not all of which are imposed on each state. Thus, it is not unusual to find different taxes or combinations of taxes applicable to respective utility industries within a particular state.[32] A significant aspect of state and local taxation of public utilities in the United States is that they have been singled out for special taxation, i.e., they are required to pay one or more taxes that are not levied upon other industries. In contrast, in this jurisdiction, public utilities are subject to the same tax treatment as any other corporation and local taxes paid by it to various local government units are substantially the same. The reason for this is that the power to tax resides in our legislature which may prescribe the limits of both national and local taxation, unlike in the federal system of the United States where state legislature may prescribe taxes to be levied in their respective jurisdictions. MERALCO likewise cites decisions of the ERB[33] allowing the application of a tax recovery clause for the imposition of an additional charge on consumers for taxes paid by the public utility. A close look at these decisions will show they are inappropos. In the said cases, the ERB approved the adoption of a formula which will allow the public utility to recover from its customers taxes already paid by it. However, in the cases at bar, the income tax component added to the operating expenses of a public utility is based on an estimate or approximate figure of income tax to be paid by the public utility. It is this estimated amount of income tax to be paid by MERALCO which is included in the amount of operating expenses and used as basis in determining the reasonable rate to be charged to the customers. Accordingly, the varying factual circumstances in the said cases prohibit a square application of the rule under the previous ERB decisions. II

Use of Net Average Investment Method is Not Unreasonable In the determination of the rate base, property used in the operation of the public utility must be subject to appraisal and evaluation to determine the fair value thereof entitled to a fair return. With respect to those properties which have not been used by the public utility for the entire duration of the test year, i.e., the year subject to audit examination for rate-making purposes, a valuation method must be adopted to determine the proportionate value of the property. Petitioners maintain that the net average investment method (also known as actual number of months use method) recommended by COA and adopted by the ERB should be used, while MERALCO argues that the average investment method (also known as the trending method) to determine the proportionate value of properties should be applied. Under the net average investment method, properties and equipment used in the operation of a public utility are entitled to a return only on the actual number of months they are in service during the period.[34] In contrast, the average investment method computes the proportionate value of the property by adding the value of the property at the beginning and at the end of the test year with the resulting sum divided by two.[35] The ERB did not abuse its discretion when it applied the net average investment method. The reasonableness of net average investment method is borne by the records of the case. In its report, the COA explained that the computation of the proportionate value of the property and equipment in accordance with the actual number of months such property or equipment is in service for purposes of determining the rate base is favored, as against the trending method employed by MERALCO, to reflect the real status of the property. [36] By using the net average investment method, the ERB and the COA considered for determination of the rate base the value of properties and equipment used by MERALCO in proportion to the period that the same were actually used during the period in question. This treatment is consistent with the settled rule in rate regulation that the determination of the rate base of a public utility entitled to a return must be based on properties and equipment actually being used or are useful to the operations of the public utility.[37] MERALCO does not seriously contest this treatment of actual usage of property but opposes the method of computation or valuation thereof adopted by the ERB and the COA on the ground that the net average investment method assumes an ideal situation where a utility, like MERALCO, is able to record in its books within any given month the value of all the properties actually placed in service during that month.[38] MERALCO contends that immediate recordal in its books of the property or equipment is not possible as MERALCOs franchise covers a wide area and that due to the volume of properties and equipment put into service and the amount of paper work required to be accomplished for recording in the books of the company, it takes three to six months (often longer) before an asset placed in service is recorded in the books of MERALCO.[39] Hence, MERALCO adopted the average investment method or the trending method which computes the average value of the property at the beginning and at the end of the test year to compensate for the irregular recording in its books. MERALCOS stance is belied by the COA Report which states that the verification of the records, as confirmed by the Management Staff, disclosed that properties are recorded in the books as these are actually placed in service.[40] Moreover, while the case was pending trial before the ERB, the ERB conducted an ocular inspection to examine the assets in service,

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records and books of accounts of MERALCO to ascertain the physical existence, ownership, valuation and usefulness of the assets contained in the COA Report.[41] Thus, MERALCOs contention that the date of recordal in the books does not reflect the date when the asset is placed in service is baseless. Further, computing the proportionate value of assets used in service in accordance with the actual number of months the same is used during the test year is a more accurate method of determining the value of the properties of a public utility entitled to a return. If, as determined by COA, the date of recordal in the books of MERALCO reflects the actual date the equipment or property is used in service, there is no reason for the ERB to adopt the trending method applied by MERALCO if a more precise method is available for determining the proportionate value of the assets placed in service. If we were to sustain the application of the trending method, the public utility may easily manipulate the valuation of its property entitled to a return (rate base) by simply including a highly capitalized asset in the computation of the rate base even if the same was used for a limited period of time during the test year. With the inexactness of the trending method and the possibility that the valuation of certain properties may be subject to the control of and abuse by the public utility, the Court finds no reasonable basis to overturn the recommendation of COA and the decision of the ERB. MERALCO further insists that the Court should sustain the trending method in view of previous decisions by the Public Service Commission and of this Court which upheld the use of this method. By refusing to adopt the trending method, MERALCO argues that the ERB violated the rule on stare decisis. Again, we are not impressed. It is a settled rule that the goal of rate-making is to arrive at a just and reasonable rate for both the public utility and the public which avails of the formers products and services.[42] However, what is a just and reasonable rate cannot be fixed by any immutable method or formula. Hence, it has been held that no public utility has a vested right to any particular method of valuation.[43] Accordingly, with respect to a determination of the proper method to be used in the valuation of property and equipment used by a public utility for ratemaking purposes, the administrative agency is not bound to apply any one particular formula or method simply because the same method has been previously used and applied. In fact, nowhere in the previous decisions cited by MERALCO which applied the trending method did the Court rule that the same should be the only method to be applied in all instances. At any rate, MERALCO has not adequately shown that the rates prescribed by the ERB are unjust or confiscatory as to deprive its stockholders a reasonable return on investment. In the early case of Ynchausti S.S. Co. v. Public Utility Commissioner, this Court held: [t]here is a legal presumption that the rates fixed by an administrative agency are reasonable, and it must be conceded that the fixing of rates by the Government, through its authorized agents, involves the exercise of reasonable discretion and, unless there is an abuse of that discretion, the courts will not interfere.[44] Thus, the burden is upon the oppositor, MERALCO, to prove that the rates fixed by the ERB are unreasonable or otherwise confiscatory as to merit the reversal of the ERB. In the instant cases, MERALCO was unable to discharge this burden.

WHEREFORE, in view of the foregoing, the instant petitions are GRANTED and the decision of the Court of Appeals in C.A. G.R. SP No. 46888 is REVERSED. RespondentMERALCO is authorized to adopt a rate adjustment in the amount of P0.017 per kilowatthour, effective with respect to MERALCOs billing cycles beginning February 1994. Further, in accordance with the decision of the ERB dated February 16, 1998, the excess average amount of P0.167 per kilwatthour starting with the applicants billing cycles beginning February 1998 is ordered to be refunded to MERALCOs customers or correspondingly credited in their favor for future consumption. SO ORDERED. Panganiban, Sandoval-Gutierrez, Corona, and Carpio-Morales, JJ., concur.

[1]

Rollo, G.R. No. 141314, p.116.

[2]

Id.

[3]

Id. at 164-166 and 168.

[4]

Id. at 589.

[5]

Id. at 587.

[6]

Id. at 569-570.

[7]

Id. at 88.

[8]

Id. at 90-95.

[9]

Munn v. People of the State of Illinois, 94 U.S.113, 126 (1877).

[10]

IV A. F. Agbayani, Commentaries and Jurisprudence on the Commercial Laws of the Philippines 500 (1993). [11]

Federal Power Commission v. Hope Natural Gas Co., 320 U.S. 591.

[12]

262 U.S. 290-91, 43 S.Ct. 544, 547 (1923).

[13]

IV A. F. Agbayani, Commentaries and Jurisprudence on the Commercial Laws of the Philippines 500 (1993), citing Ynchausti SS Co. v. Public Utility Commission, 42 Phil 624 and Manila Electric Co. v. De Vera, et al., 66 Phil 161. [14]

Philippine Communications Satellite Corporation v. Alcuaz, et al., 180 SCRA 218, 226 (1989).

Page 157 of 192

[15]

Id. at 232.

[36]

Id. at 168.

[16]

Casa Filipina Realty Corporation v. Office of the President, 241 SCRA 165 (1995).

[37]

II O. Pond, Public Utilities 1154 (1932).

Substantial evidence is more than a mere scintilla. It means such relevant evidence which a reasonable mind might accept as adequate to form a conclusion. (Ang Tibay v. Court of Industrial Relations, 69 Phil. 635 (1940).

[38]

Petition for Review, p. 22; Rollo, C.A.-G.R. No. 46888, p. 23.

[39]

Id.

[17]

[40]

Rollo, G.R. No. 141314, p. 168 (emphasis supplied).

[41]

Id. at 560.

[42]

Rate-Making for Public Utilities, 169 SCRA 175, 192 (1989).

[43]

64 Am Jur 2d 666-667.

[44]

42 Phil. 621 (1922).

Batangas Transportation Company, et al. v. Laguna Transportation Company, 104 Phil. 992 (1958). [18]

Id., citing Manila Yellow Taxicab Co. and Acro Taxicab Co. vs. Danon, 58 Phil. 75 (1933).

[19]

Province of Zamboanga del Norte v. Court of Appeals, 342 SCRA 549, 560 (2000).

[20]

City of Cincinnati v. Public Utilities Commission, 90 N.E.2d 681 (1950).

[21]

A. Sibal, Administrative Law 145 (1999).

[22]

P. Garfield and W. Lovejoy, Public Utility, p. 116. Republic of the Philippines SUPREME COURT Manila

[23]

Nichols and Welch, Ruling Principles of Utility Regulations, Rate of Return, Supp. A, 1 (1964). [24]

Manila Electric Company v. Public Service Commission, 18 SCRA 651, 665-666 (1966).

[25]

Susan F. Fendell, Public Ownership of Public Utilities: Have Stockholders Outlived Their Useful Economic Lives?, 43 Ohio St. L. J. 821 (1982); 64 Am Jur 2d 138. [26]

Rollo, G.R. No. 141314, p. 581.

[27]

H. De Leon, The Fundamentals of Taxation 79 (1993).

[28]

Smyth v. Ames, 169 U.S. 466, 545 (1898).

[29]

Republic v. Medina, 41 SCRA 643, 662 (1971); 64 Am Jur 2d 666.

[30]

II O. Pond, Public Utilities 1037-1038 (1932).

[31]

P. Garfield and W. Lovejoy, Public Utility Economics 386, 393 (1964).

[32]

Id. at 385-386.

EN BANC G.R. No. L-9185

December 27, 1958

BATANGAS TRANSPORTATION COMPANY, ET AL., petitioner, vs. LAGUNA TRANSPORTATION COMPANY, respondent. Graciano C. Regala for petitioners. Evaristo R. Sandoval for respondent.

BAUTISTA ANGELO, J.: This is a petition for review of a decision of the Public Service Commission granting to Laguna Transportation Company three additional round trips from Pagsanjan, Laguna to Manila and another three additional round trips from Batangas Piers to Manila.

[33]

Cotabato Light & Power Plant (ERB Case No. 91-70); Davao Light and Power Co., Inc. (ERB Case No. 92-105); and San Fernando Electric Light and Power Co. Inc. (ERB Case No. 97-11). [34]

Section 608 (7), Article IX of the National Accounting and Auditing Manual.

[35]

Rollo of G.R. No. 141314, p. 59.

The application for increase was opposed by Laguna Tayabas Bus Company and Batangas Transportation Company on the ground that they have already a bus service from Pagsanjan to Manila with buses starting from Pagsanjan as well as coming from the municipalities of Paete and Sta. Maria, and vice-versa, which is more than sufficient to satisfy the needs of the residents of Pagsanjan as well as of intermediate municipalities; and that the Batangas

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Transportation Company has likewise a bus service from Batangas Piers to Manila and viceversa, which is also sufficient to take care of the present volume of traffic. Both parties presented testimonial as well as documentary evidence, and after considering the same, the Commission granted the increase prayed for in the application. Hence the present petition for review. The evidence presented by the applicant, according to the Commission, shows "that passengers at Pagsanjan have a hard time in getting accommodation at Pagsanjan as the buses coming from Sta. Maria, Paete or other points farther south, are already filled up upon reaching Pagsanjan; that the residents of Pagsanjan desire to start at Pagsanjan very early in the morning so that they can arrive at Manila and transact their business early, and then return on the same day to Pagsanjan; that the buses of the applicant are already full of passengers and freight upon starting from Pagsanjan, so that the passengers are forced to wait for other trips for one hour or more; that the buses of Lazaro Limjuco only go as far as Sta. Cruz, Laguna, while the other operator M. Ruiz Highway Transit Inc. has very few trucks left, so much so that it makes very few trips passing Pagsanjan; that the Biñan Transportation Company has abandoned its trips on the line Lumbang-Manila, thus lessening the number of trips, passing Pagsanjan; that there are numerous passengers disembarking at the Batangas Pier coming from the different boats plying between Mindoro and Batangas who can not be accommodated by the buses waiting at the Batangas-Pier; that residents of Lobo (Batangas) in order to go to Manila have to ride on sailboats as far as Batangas Pier, but upon arriving at the Pier, there are no available trucks so they ride on jitneys or autocalesas up to the poblacion of Batangas and then transfer to other buses going to Manila; that residents of Lipa City, Malvar and San Jose (Batangas) have a hard time riding in buses as those coming from Batangas and other municipalities farther than Batangas are already full of passengers when passing their respective municipalities; that on their return trip to Batangas, passengers go to the station of oppositors at Azcarraga, but can not easily get accommodation as the buses are already full, and if they are successful in getting a ride, it is only after forcing themselves through and crowding with other passengers." "On the other hand, — the Commission continued,-the oppositors presented its evidence showing that they are already rendering an adequate service on the lines Pagsanjan-Manila and Batangas Pier-Manila; that there is not much traffic on said lines to warrant the increase of trips applied for by applicant as shown by the reports of the checkers who have been assigned to establish check points along the lines; that oppositors have suffered losses in the operation of its auto-trucks on the lines Pagsanjan-Manila, Paete-Manila and Batangas Piers-Manila; and that applicant has not been making trips from the Batangas Pier but are cutting its trips up to the poblacion of Batangas only."lawphil.net After a careful consideration of the evidence submitted by both applicant and oppositors, the Commission made the following conclusion: After a careful consideration of the evidence presented by both parties, we believe that applicant has presented enough evidence to show the need for the additional trips applied for by it. The records of the Commission show that in July, 1953, the Biñan Transportation Company asked for the cancellation of its Lumban-Manila line to enable said company to utilize the two auto trucks authorized for this line on its Lemery-Manila line. And Maria Ruiz who was

authorized to operate twenty-two (22) units in different municipalities in that part of Laguna, requested the reduction of her units to only ten. This, of course, has considerably reduced the number of trips in the region. The records of this Commission also show that oppositor Batangas Transportation Company has filed application for certificates of public convenience on the lines Mataas Na Kahoy-Manila and Lobo-Manila as well as for increase of trips on its line San Juan de Bolbok-Manila, the greater portion of which lines are concurrent to the line Batangas Pier-Manila. As to the contention of oppositor Batangas Transportation Company that the applicant Laguna Transportation Company is cutting its Manila-Batangas Pier line only up to the Batangas poblacion, the evidence of record show that the buses of applicant proceed up to the pier. And this is also admitted by one of oppositor's witnesses. It is a matter of record in this Commission that on the line Batangas Pier-Manila, there are only three operators: the applicant Laguna Transportation Company with five round trips, the Biñan Transportation Company with four round trips, and the oppositor Batangas Transportation Company with another four round trips. On this line, the average interval of trips is fifty (50) minutes, while at Pagsanjan, the interval of trips is at an average of more than ten (10) minutes. We, therefore, believe that there is still room for authorizing the additional trips applied for. Besides, the three additional trips applied for by applicant on the line Pagsanjan-Manila, will in a way take the place of the trips abandoned by the Biñan Transportation Company and Maria Ruiz. Petitioners now contend that the Commission erred among others, (a) in disregarding the report of its own agents regarding the volume of traffic that their buses usually carry which is less than fifty percent of their passenger capacity; (b) in disregarding the financial loses of petitioners;(c) in disregarding the cut-throat competition existing on the lines applied from among the different existing operators; and (d) in not giving credit to the testimony of the agents of the Public Service Commission that respondent has been cutting most of its trips from Batangas Piers to Manila. In connection with the first contention, petitioners argue that applicant merely presented two witnesses in support of its claim that there is need for the three additional round trips it now seeks from the Commission whose testimony is not sufficient to warrant the granting of said additional trips. This is contrary to the record for same shows that besides witnesses Nicomedes Nicolas and Feliciano Amadin who testified that they had to wait long in order to be able to ride in the buses operating between Pagsanjan and Manila, applicant also presented Antonio Liwanag, its supervising-inspector, who testified that as early as 3:00 o'clock in the morning passengers already wait at the parking place in order to take the first trip that starts at 4:00 o'clock a.m. going to Manila but that the buses cannot accommodate all the passengers, and that the trucks starting from Pagsanjan or from other places when they pass Pagsanjan are already loaded which makes it impossible for them to accommodate those that go to the parking place. And this testimonial evidence is supported by Exhibits E and F, the first being a resolution adopted by the Municipal Council of Pagsanjan, and the latter a petition of the people of Pagsanjan supporting the petition for additional trips in the line Pagsanjan-Manila. It is well-settled that "Where after a full hearing the Public Utility Commissioner makes finding of fact, and there is a material conflict in the evidence, such findings will not be disturbed where they are reasonably supported by testimony" (Inchausti Steamship Co. vs. Public Utility Commissioner, 44 Phil., 363). It was also held that "Whether public necessity and convenience

Page 159 of 192

warrant the putting up of additional services on the part of the appellee, is a question of fact which the Public Service Commission has found in the affirmative. This finding, being supported by sufficient evidence, should not be disturbed" (Raymundo Transportation Co. vs. Cervo, 91 Phil., 313). This Court even went to the extent of holding that it "will refrain from substituting their discretion on the weight of the evidence for the discretion of the Public Service Commission on questions of fact and will only reverse or modify such orders of the Public Service Commission when it really appears that the evidence is insufficient to support their conclusions" (Manila Yellow Taxicab Co. and Acro Taxicab Co. vs. Danon, 58 Phil., 75; See also Padua vs. Ocampo, et al., G. R. No. L-7579, September 17, 1955). The claim of petitioners that the reports of the checkers submitted by them were disregarded by the Commission may be true, but such is partly due to the fact that the trips authorized to respondent were at 3:00 a.m., 5:47 a.m., and 7:23 a.m., whereas the checkers' reports refer to checking made at 8:00 or 8:30 a.m., which certainly cannot cover the authorized trips (Exhibits 2). Moreover, those reports may not entirely disprove the fact that there are more passengers than what the buses can accommodate for they only show that the load of the buses at the starting point was fifty percent and no one can tell how many more passengers they can pick up on the way in their trip to Manila.

number of passengers specified in their checkers' reports. They likewise, admit, further, that the trips made by TPU operators before the opening of their check point, as well as the trips made after the closing of the check point, are also not recorded in their checkers' report."lawphil.net The foregoing makes it unnecessary to discuss the other points raised by petitioners in their brief. Wherefore, the decision appealed from is affirmed, with costs against petitioners. Paras, C. J., Bengzon, Padilla, Labrador, Concepcion, Reyes, J. B. L. and Endencia, JJ., concur. Republic of the Philippines SUPREME COURT Manila EN BANC G.R. No. L-46570

It is true that there is evidence showing that the present operators of buses on the lines Pagsanjan-Manila and Sta. Cruz-Manila agreed to cut the rates of P0.01 and P0.05 per passenger per kilometer to a flat rate of P0.80 per passenger from Sta. Cruz and P0.85 from Pagsanjan to Manila, but this does not necessarily reflect the existence of a cut-throat competition among said operators for precisely because of that reduction a substantial increase in the volume of passengers was registered induced by such reduction for which reason the additional round trips were found necessary by respondent. The claim of petitioners that they are losing in the operation of their Paete-Manila via Pagsanjan line and Pagsanjan-Manila line is belied by their own witness Hinagpis who said that the net profit realized by them in their joint operation of their lines for the year 1954 is over P700,000 and by Exhibit 18 of petitioners covering the period from January to June 30, 1954 showing that their net profit was P370,080.34. This fact runs counter to their claim that there is a dearth of passengers on the lines they operate and which now serves as basis of their opposition to the petition of respondent. Petitioners' contention that the Commission in granting the additional trips from Batangas Piers to Manila to respondent did not take into account the checkers' report Exhibits 11, 12, and 13, is sufficiently answered by respondent's counsel in this wise: "The report of the checkers themselves show precisely that from the starting point where they check at either the poblacion of Batangas or at San Jose, the TPU buses still carry a load of about 50 percent. This load is already a good load for TPU operation from starting points, for those buses could still pick passengers on the way up to Manila, which has a distance of about 100 kilometers from the poblacion of Batangas to Manila, about 85 kilometers from San Jose where another checking point was made by the agent, to Manila, and approximately over 70 kilometers from Lipa City to Manila. This fact, alone, refutes the contention of petitioners, that the checkers' reports prove the contrary, for even the agents of the Commission who were placed at the witness stand, Messrs. Atienza and Dantayana, admitted on cross-examination that the passengers dropped before their check point, as well as the passengers after the check point, are not reflected in the

April 21, 1939

JOSE D. VILLENA, petitioner, vs. THE SECRETARY OF THE INTERIOR, respondent. Vicente del Rosario for petitioner. Office of the Solicitor-General Ozaeta for respondent. LAUREL, J.: This is an original action of prohibition with prayer for preliminary injunction against the Secretary of the Interior to restrain him and his agents from proceeding with the investigation of the herein petitioner, Jose D. Villena, mayor of Makati, Rizal, which was scheduled to take place on March 28, 1939, until this case is finally determined by this court. The respondent was required to answer, but the petition for preliminary injunction was denied. It appears that the Division of Investigation of the Department of Justice, upon the request of the Secretary of the Interior, conducted an inquiry into the conduct of the petitioner, as a result of which the latter was found to have committed bribery, extortion, malicious abuse of authority and unauthorized practice of the law profession. The respondent, therefore, on February 8, 1939, recommended to the President of the Philippines the suspension of the petitioner to prevent possible coercion of witnesses, which recommendation was granted, according to the answer of the Solicitor-General of March 20, 1939, verbally by the President on the same day. The Secretary of the Interior suspended the petitioner from office on February 9, 1939, and then and thereafter wired the Provincial Governor of Rizal with instruction that the petitioner be advised accordingly. On February 13, 1939, the respondent wrote the petitioner a letter, specifying the many charges against him and notifying him of the designation of Emiliano Anonas as special investigator to investigate the charges. The special investigator forthwith notified the petitioner that the formal investigation would be commenced on February 17, 1939, at 9 a. m., but due to several incidents and postponements, the same had to be set definitely for

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March 28, 1939. Hence, the petition for preliminary injunction referred to in the beginning of this opinion.

(c) To declare that the respondent has no authority to prefer charges against the petitioner and to investigate those charges for the grant him that power the respondent would be acting as prosecutor and judge of the case of his own creation.

The petitioner contends in his petition: Upon the other hand, the Solicitor-General contends in his answer: (1) That the Secretary of the Interior has no jurisdiction or authority to suspend and much less to prefer by himself administrative charges against the petitioner and decide also by himself the merits of the charges as the power to suspend municipal elective officials and to try and punish them for misconduct in office or dereliction of duty is lodged in some other agencies of the government; (2) That the acts of the respondent in suspending the petitioner from office and in preferring by himself charges against him and in designating a special investigator to hear the charges specified in Exhibit A are null and void for the following reasons: (a) Because the Secretary of the Interior, by suspending the petitioner, has exercised control over local governments when that power has been taken away from the President of the Philippines by the Constitution for the to abrogate and the power to abrogate means the power to power to control has been interpreted to include the power usurp and the power to usurp necessarily includes the power to destroy; (b) Because even if the respondent Secretary of the Interior has power of supervision over local governments, that power, according to the constitution, must be exercised in accordance with the provisions of law and the provisions of law governing trials of charges against elective municipal officials are those contained in section 2188 of the Administrative Code as amended. In other words, the Secretary of the Interior must exercise his supervision over local governments, if he has that power under existing law, in accordance with section 2188 of the Administrative Code, as amended, as the latter provision govern the procedure to be followed in suspending and punishing elective local officials while section 79 (C) of the Administrative Code is the general law which must yield to the special law; (c) Because the respondent Secretary of the Interior is exercising an arbitrary power by converting himself into a complainant and at the same time judge of the charges he has preferred against the petitioner;

2. That although section 2188 of the Revised Administrative Code, invoked by the petitioner, empowers the provincial governor to `receive and investigate complaints made under oath against municipal officers for neglect of duty, oppression, corruption or other form of maladministration of office', said section does not preclude the respondent as Secretary of the Interior from exercising the power vested in him by section 79 (C) in relation with section 86 of the Revised Administrative Code; and that, moreover, said section 2188 must be read in relation with section 37 of Act No. 4007, known as the Reorganization Law of 1932; (Par. 4 [b].) 3. That at the commencement of the investigation the petitioner did not question the power or jurisdiction of the Department of the Interior to investigate the administrative charges against him but merely contended that the filing of said charges was not in accordance with law for the reason that they did not bear the oaths of the complainants; (Par. 5.) 4. That the authority of a department head order the investigation of any act or conduct of any person under his department necessarily carries with it by implication the authority to take such measures as he may deem necessary to accomplish the purpose of the investigation, such as by suspending the officer under investigation to prevent coercion of witnesses; and that, furthermore, the suspension from office of the herein petitioner by the respondent was authorized by the Chief Executive, who is empowered by section 64 (B) of the Administrative Code to remove officials from office; (Par. 7.) 5. That the petition does not allege facts and circumstances that would warrant the granting of the writ of preliminary injunction under section 164 of the Code of Civil Procedure; (Par. 8.)

(d) Because the action of the respondent Secretary of the Interior is not based on any sworn statement of any private person or citizen of this government when section 2188 of the Administrative Code requires the complaint against elective municipal officials to be under oath in order to merit consideration by the authorities. Petitioner prays this Honorable Court: (a) To issue a writ of preliminary injunction against the respondent restraining him, his agents, attorneys and all persons acting by virtue of his authority from further proceeding against the petitioner until this case is finally determined by this court; (b) To declare, after the hearing of this petition, that the respondent is without authority or jurisdiction to suspend the petitioner from the office of mayor of Makati and to order his immediate reinstatement in office;

1. That section 79 (C) in relation with section 86 of the Revised Administrative Code expressly empowers the respondent as Secretary of the Interior to "order the investigation of any act or conduct of any person in the service of any bureau or office under his department" and in connection therewith to "designate an official or person who shall conduct such investigation"; (Par. 4.)

6. That it is a well-settled rule "that courts of equity have no power to restrain public officers by injunction from performing any official act which they are by law required to perform, or acts which are not in excess of the authority and discretion reposed in them." (Par. 9) The issues presented in this case may be reduced to an inquiry into the legal authority of the Secretary of the Interior (a) to order an investigation, by a special investigation appointed by him, of the charges of corruption and irregularity brought to his attention against the mayor of the municipality of Makati, Province of Rizal, who is the petitioner herein, and (b) to decree the suspension of the said mayor pending the investigation of the charges. Section 79 (C) of the Administrative Code provides as follows:

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The Department Head shall have direct control, direction, and supervision over all bureaus and offices under his jurisdiction and may, any provision of existing law to the contrary notwithstanding, repeal or modify the decisions of the chiefs of said bureaus of offices when advisable in the public interest. The Department Head may order the investigation of any act conduct of any person in the service of any bureau of office under his department and in connection therewith may appoint a committee or designate an official or person who shall conduct such investigations, and such committee, official, or person may summon, witness by subpoena and subpoena duces tecum, administer oath and take testimony relevant to the investigation. The above section speaks, it is true, of direct control, direction, and supervision over bureaus and offices under the jurisdiction of the Secretary of the Interior, but this section should be interpreted in relation to section 86 of the same Code which grants to the Department of the Interior "executive supervision over the administration of provinces, municipalities, chartered cities and other local political subdivisions." In the case of Planas vs. Gil (37 Off. Gaz., 1228), we observed that "Supervision is not a meaningless thing. It is an active power. It is certainly not without limitation, but it at least implies authority to inquire into facts and conditions in order to render the power real and effective. If supervision is to be conscientious and rational, and not automatic and brutal, it must be founded upon a knowledge of actual facts and conditions disclosed after careful study and investigation." The principle there enunciated is applicable with equal force to the present case. We hold, therefore, that the Secretary of the Interior is invested with authority to order the investigation of the charges against the petitioner and to appoint a special investigator for that purpose. As regards the challenged power of the Secretary of the Interior to decree the suspension of the herein petitioner pending an administrative investigation of the charges against him, the question, it may be admitted, is not free from difficulties. There is no clear and express grant of power to the secretary to suspend a mayor of a municipality who is under investigation. On the contrary, the power appears lodged in the provincial governor by section 2188 of the Administrative Code which provides that "The provincial governor shall receive and investigate complaints made under oath against municipal officers for neglect of duty, oppression, corruption or other form of maladministration of office, and conviction by final judgment of any crime involving moral turpitude. For minor delinquency he may reprimand the offender; and if a more severe punishment seems to be desirable he shall submit written charges touching the matter to the provincial board, furnishing a copy of such charges to the accused either personally or by registered mail, and he may in such case suspend the officer (not being the municipal treasurer) pending action by the board, if in his opinion the charge be one affecting the official integrity of the officer in question. Where suspension is thus effected, the written charges against the officer shall be filed with the board within five days." The fact, however, that the power of suspension is expressly granted by section 2188 of the Administrative Code to the provincial governor does not mean that the grant is necessarily exclusive and precludes the Secretary of the Interior from exercising a similar power. For instance, counsel for the petitioner admitted in the oral argument that the President of the Philippines may himself suspend the petitioner from office in virtue of his greater power of removal (sec. 2191, as amended, Administrative Code) to be exercised conformably to law. Indeed, if the President could, in the

manner prescribed by law, remove a municipal official, it would be a legal incongruity if he were to be devoid of the lesser power of suspension. And the incongruity would be more patent if, possessed of the power both to suspend and to remove a provincial official (sec. 2078, Administrative Code), the President were to be without the power to suspend a municipal official. Here is, parenthetically, an instance where, as counsel for petitioner admitted, the power to suspend a municipal official is not exclusive. Upon the other hand, it may be argued with some degree of plausibility that, if the Secretary of the Interior is, as we have hereinabove concluded, empowered to investigate the charges against the petitioner and to appoint a special investigator for that purpose, preventive suspension may be a means by which to carry into effect a fair and impartial investigation. This is a point, however, which, for the reason hereinafter indicated, we do not have to decide. The Solicitor-General argues that section 37 of Act No. 4007, known as the Reorganization Law of 1932, by providing, "the provisions of the existing law to the contrary notwithstanding," that "whenever a specific power, authority, duty, function, or activity is entrusted to a chief of bureau, office, division or service, the same shall be understood as also conferred upon the proper Department Head who shall have authority to act directly in pursuance thereof, or to review, modify or revoke any decision or action of said chief of bureau, office, division or service", should be interpreted to concede to the Secretary of the Interior the power to suspend a mayor of a municipality. The argument is so generally sweeping that, unless distinctions are made, the effect would be the complete abrogation at will of the powers of provincial and municipal officials even in corporate affairs of local governments. Under the theory suggested by the SolicitorGeneral, the Secretary of the Interior could, as observed by able counsel for the petitioner, enter into a contract and sign a deed of conveyance of real property in behalf of a municipality against the opposition of the mayor thereof who is the local official authorized by law to do so (sec. 2196, Revised Administrative Code), or in behalf of a province in lieu of the provincial governor thereof (sec 2068, Ibid.), and otherwise exercise powers of corporate character mentioned in sections 2067 and 2175 of the Revised Administrative Code and which are lodged in the corresponding provincial and municipal officials. And if the power of suspension of the Secretary of the Interior is to be justified on the plea that the pretended power is governmental and not corporate, the result would be more disastrous. Then and thereunder, the Secretary of the Interior, in lieu of the mayor of the municipality, could directly veto municipal ordinances and resolutions under section 2229 of the Revised Administrative Code; he could, without any formality, elbow aside the municipal mayor and himself make appointments to all non-elective positions in the municipal service, under section 2199 of the Revised Administrative Code; he could, instead of the provincial governor, fill a temporary vacancy in any municipal office under subsection (a), section 2188, as amended, of the said Code; he-could even directly appoint lieutenants of barrios and wrest the authority given by section 2218 of the Revised Administrative Code to a municipal councilor. Instances may be multiplied but it is unnecessary to go any further. Prudence, then, dictates that we should hesitate to accept the suggestion urged upon us by the Solicitor-General, especially where we find the path indicated by him neither illuminated by the light of our own experience nor cemented by the virtuality of legal principles but is, on the contrary, dimmed by the recognition however limited in our own Constitution of the right of local self-government and by the actual operation and enforcement of the laws governing provinces, chartered cities, municipalities and other political subdivisions. It is not any question of wisdom of legislation but the existence of any such destructive authority in the law invoked by the Government that we are called upon to pass and determine here.

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In the deliberation of this case it has also been suggested that, admitting that the President of the Philippines is invested with the authority to suspend the petitioner, and it appearing that he had verbally approved or at least acquiesced in the action taken by the Secretary of the Interior, the suspension of the petitioner should be sustained on the principle of approval or ratification of the act of the Secretary of the Interior by the President of the Philippines. There is, to be sure, more weight in this argument than in the suggested generalization of section 37 of Act No. 4007. Withal, at first blush, the argument of ratification may seem plausible under the circumstances, it should be observed that there are certain prerogative acts which, by their very nature, cannot be validated by subsequent approval or ratification by the President. There are certain constitutional power and prerogatives of the Chief Executive of the Nation which must be exercised by him in person and no amount of approval or ratification will validate the exercise of any of those powers by any other person. Such, for instance, is his power to suspend the writ of habeas corpus and proclaim martial law (par. 3, sec. 11, Art. VII) and the exercise by him of the benign prerogative of mercy (par. 6, sec. 11, idem). Upon the other hand, doubt is entertained by some members of the court whether the statement made by the Secretary to the President in the latter's behalf and by his authority that the President had no objection to the suspension of the petitioner could be accepted as an affirmative exercise of the power of suspension in this case, or that the verbal approval by the President of the suspension alleged in a pleading presented in this case by the Solicitor-General could be considered as a sufficient ratification in law. After serious reflection, we have decided to sustain the contention of the government in this case on the board proposition, albeit not suggested, that under the presidential type of government which we have adopted and considering the departmental organization established and continued in force by paragraph 1, section 12, Article VII, of our Constitution, all executive and administrative organizations are adjuncts of the Executive Department, the heads of the various executive departments are assistants and agents of the Chief Executive, and except in cases where the Chief Executive is required by the Constitution or the law to act in person or the exigencies of the situation demand that he act personally, the multifarious executive and administrative functions of the Chief Executive are performed by and through the executive departments, and the acts of the secretaries of such departments, performed and promulgated in the regular course of business, are, unless disapproved or reprobated by the Chief Executive, presumptively the acts of the Chief Executive. (Runkle vs. United States [1887], 122 U. S., 543; 30 Law. ed., 1167: 7 Sup. Ct. Rep., 1141; see also U. S. vs. Eliason [1839], 16 Pet., 291; 10 Law. ed., 968; Jones vs. U. S. [1890], 137 U. S., 202; 34 Law. ed., 691; 11 Sup. Ct., Rep., 80; Wolsey vs. Chapman [1880], 101 U. S., 755; 25 Law. ed., 915: Wilcox vs. Jackson [1836], 13 Pet., 498; 10 Law. ed., 264.) Fear is expressed by more than one member of this court that the acceptance of the principle of qualified political agency in this and similar cases would result in the assumption of responsibility by the President of the Philippines for acts of any member of his cabinet, however illegal, irregular or improper may be these acts. The implications, it is said, are serious. Fear, however, is no valid argument against the system once adopted, established and operated. Familiarity with the essential background of the type of government established under our Constitution, in the light of certain well-known principles and practices that go with the system, should offer the necessary explanation. With reference to the Executive Department of the government, there is one purpose which is crystal-clear and is readily visible without the projection of judicial searchlight, and that is, the establishment of a single, not plural, Executive.

The first section of Article VII of the Constitution, dealing with the Executive Department, begins with the enunciation of the principles that "The executive power shall be vested in a President of the Philippines." This means that the President of the Philippines is the Executive of the Government of the Philippines, and no other. The heads of the executive departments occupy political positions and hold office in an advisory capacity, and, in the language of Thomas Jefferson, "should be of the President's bosom confidence" (7 Writings, Ford ed., 498), and, in the language of Attorney-General Cushing (7 Op., Attorney-General, 453), "are subject to the direction of the President." Without minimizing the importance of the heads of the various departments, their personality is in reality but the projection of that of the President. Stated otherwise, and as forcibly characterized by Chief Justice Taft of the Supreme Court of the United States, "each head of a department is, and must be, the President's alter ego in the matters of that department where the President is required by law to exercise authority" (Myers vs. United States, 47 Sup. Ct. Rep., 21 at 30; 272 U. S., 52 at 133; 71 Law. ed., 160). Secretaries of departments, of course, exercise certain powers under the law but the law cannot impair or in any way affect the constitutional power of control and direction of the President. As a matter of executive policy, they may be granted departmental autonomy as to certain matters but this is by mere concession of the executive, in the absence of valid legislation in the particular field. If the President, then, is the authority in the Executive Department, he assumes the corresponding responsibility. The head of a department is a man of his confidence; he controls and directs his acts; he appoints him and can remove him at pleasure; he is the executive, not any of his secretaries. It is therefore logical that he, the President, should be answerable for the acts of administration of the entire Executive Department before his own conscience no less than before that undefined power of public opinion which, in the language of Daniel Webster, is the last repository of popular government. These are the necessary corollaries of the American presidential type of government, and if there is any defect, it is attributable to the system itself. We cannot modify the system unless we modify the Constitution, and we cannot modify the Constitution by any subtle process of judicial interpretation or constitution. The petition is hereby dismissed, with costs against the petitioner. So ordered. Avanceña, C. J., Diaz, and Concepcion, JJ., concur.

Separate Opinions VILLA-REAL, J., concurring in the result: I concur in the result. The Secretary of the Interior is nowhere given the power to suspend a municipal elective officer pending charges, and in the absence of such power he may not suspend him. The power to suspend cannot be implied even from an arbitrary power to remove, except where the power to remove is limited to cause; in such case, the power to suspend, made use of as a disciplinary power pending charges, is regarded as included within the power of removal (46 Corpus Juris, sec. 142, page 982). Provincial governors alone are expressly empowered to suspend municipal officers under certain conditions by section 2188 of the Revised Administrative Code, and the President of the Philippines by section 2191, as

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amended, of the same Code. Though the suspension of the petitioner by the Secretary of the Interior was unauthorized, the implied approval by the President of the Philippines validated such suspension. IMPERIAL, J., concurring and dissenting: I concur in the result because in my opinion (1) the President of the Philippines, under sections 64 (b), and 2191 of the Revised Administrative Code, as the latter has been amended, and section 11 (1), Article VII, of the Constitution, is vested with the power to expel and suspend municipal officials for grave misconduct, and it appears that the suspension was ordered by virtue of that authority; and (2) the Secretary of the Interior acted within the powers conferred upon him by section 79 (C), in connection with section 86, of the Revised Administrative Code, as amended, in ordering an administrative investigation of the charges against the petitioner, in his capacity as mayor of the municipality of Makati, Province of Rizal. It is a fact that, as a result of the investigation conducted by the Division of Investigation of the Department of Justice, the respondent, in turn, ordered the administrative investigation of the petitioner and recommend his temporary suspension to the President of the Philippines to preclude him from exerting pressure upon the witnesses who would testify in the investigation, and that the President of the Philippines, through Secretary Jorge B. Vargas, stated that he had no objection to the suspension. The act of the President of the Philippines, in my opinion, was an exercise of his power to suspend the petitioner and the statement that he had no objection was, at bottom, an order of suspension. The circumstance that in the communication which the respondent addressed to the petitioner it appeared as though the suspension had been ordered by him, is immaterial and does not alter the merits of the case, as the facts disclose that the order of suspension came directly from the President of the Philippines. However, I dissent from the conclusion of the majority that, under the existing presidential system of government and in view of the fact that the department secretaries are, in the last analysis, agents of the executive, the acts of the said officials are presumptively deemed the acts of the executive and that, consequently, the suspension of the petitioner directed by the respondent should be considered, under the same theory, as the suspension decreed by the President of the Philippines. I believe that the principle thus enunciated is at once dangerous and without legal sanction. Under the law each of these officials has his own powers and duties and I doubt seriously if it has ever been the intention of the legislative to confuse their duties and prerogatives, for otherwise it would be difficult, if not impossible, to limit and fix responsibility. The respondent himself could not have so understood the law when, under the facts, in order to suspend the petitioner he found it necessary to obtain the express authority of the President of the Philippines. MORAN, J., concurring and dissenting: I concur in the result. The ratio dicidendi of the case is contained in the following paragraph of the majority decision:

Executive Department, the heads of the various executive departments are assistants and agents of the Chief Executive, and, except in cases where the Chief Executive is required by the Constitution or the law to act in person or the exigencies of the situation demand that he act personally, the multifarious executive and administrative functions of the Chief Executive are performed by and through the executive departments, and the acts of the secretaries of such departments, performed and promulgated in the regular course of business, are, unless disapproved or reprobated by the Chief Executive, presumptively the acts of the Chief Executive. . . . If by this proposition it is meant that the power of suspension residing in the President may validly be exercised by the Secretary of the Interior in his own name, and his act, unless disapproved or reprobated by the President, is presumptively the act of the President, I disagree. The implications involved in the proposition are serious. Suppose the Secretary of Justice, pending proceedings against a judge of first instance, suspends him temporarily, a power vested in the President (section 173, Adm. Code), is the suspension valid in the silence of the President? Suppose the Secretary of Public Works and Communications removes the Director of Posts , is the removal the act of the President if not disapproved by the latter? Suppose the Secretary of the Interior grants conditional pardon to a prisoner, is the pardon valid unless reprobated by the President? The answer are self-evident. It is true that the majority decision makes exception of the powers which the Chief Executive, by Constitution, by law, or by the exigencies of the situation, should exercise in person. The distinction, however, thus sought to be established between the powers which the President should exercise in person and those which he may exercise thru the department secretaries, if it exists at all, is extremely shadowy and in fact can nowhere be found in the Constitution, in the law or practices of administration. On the contrary, the weight of wisdom and authority is that powers committed or intrusted by the Constitution or by law to the President must be exercised by him positively and in person. The only functions of the President which, in my opinion, may be performed by the department secretaries are those which are preliminary or preparatory to the exercise of his powers, such as, in investigation, research and other inquiries which may be necessary for a wise and judicious exercise of his judgment or discretion. This opinion finds corroboration in section 79-A of the Administrative Code. The proposition contained in the majority decision is even of much wider scope than is above stated, for it conveys the idea that all the functions of the executive branch of the government are in the President, with the executive departments as mere adjuncts to him and the department secretaries his mere assistants or agents with no authority, function or responsibility of their own, except those emanating from the President, and that, therefore, as they cannot act but at the will of the President, all their acts, unless disapproved or reprobated by the President, are presumptively the acts of the Presidents. This sweeping statement is undoubtedly inspired by section 1, Article VII, of the Constitution, which provides that "the executive power shall be vested in a President of the Philippines." It disregards, however, the true meaning of other provisions of the Constitution, such as paragraph 1 of section 12 of the same article, which provides that "executive departments of the present Government of the Philippine Islands shall continue as now authorized by law until the National Assembly shall provide otherwise." (Emphasis supplied.)

. . ., that under the presidential type of government which we have adopted and considering the departmental organization established and continued in force by paragraph 1, section 12, Article VII, of our Constitution, all executive and administrative organizations are adjuncts of the

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According to section 74 of the Administrative Code ". . . the departments are established for the proper distribution of the work of the executive, for the performance of the functions expressly assigned to them by law, and in order that each branch of the administration may have a chief responsible for its direction and policy." (Emphasis supplied.) To give effect to this provision, each department head is expressly vested with broad as well as specific powers commensurate with his responsibility, such as the powers to ". . . promulgate, whenever he may see fit to do so, all rules, regulations, orders, circulars, . . . necessary to regulate the proper working and harmonious and efficient administration of each and all of the offices and dependencies of his department, and for the strict enforcement and proper execution of the laws relative to matters under the jurisdiction of said department" (section 79-B, Adm. Code); the power of direction and supervision over such bureaus and offices under his jurisdiction, and to repeal or modify the decisions of the chief of said bureaus or offices when advisable in the public interest (section 79-C, Adm. Code; section 37, Act No. 4007); the power to appoint subordinate officers and employees whose appointment is not expressly vested by law in the President, and to remove and punish them except as specially provided otherwise in accordance with the Civil Service Law (section 79-D, Adm. Code), etc. All these powers are continued in force by the Constitution. Thus, while in one provision the Constitution vests in the President of the Philippines the executive power of the government, in another the same Constitution recognizes the powers of the department secretaries conferred upon them by law. The apparent conflict between the two provisions is reconciled by the Constitution itself by means of the power of control vested in the President over the executive departments. That power of control could not have been intended to wipe out or supersede all the powers of the department secretaries, for, otherwise, those powers would not have been continued in force by the Constitution. It would certainly be an absurdity in the Constitution to recognize and at the same time abrogate those powers. On the contrary, the creation of the power of control implies the preservation, not the destruction, of all the powers conferred by law upon the department secretaries. In fact, the majority admits the existence of those powers, subject, of course, to the powers of control of the President. Now, the power of control may or may not be exercised. If not exercised, the acts of the department secretaries in pursuance of their powers would remain in full force and effect, and are their own acts and not the President's. If exercised, by way of disapproval or reprobation of the acts of the department secretaries, the acts so reprobated are still their acts and not the President's. There is more theory than law in the statement that the personally of the department secretaries is but the projection of that of the President. There is more truth in the language used by Chief Justice Taft, as quoted in the majority opinion, to the effect that "each head of a department is, and must be, the President's alter ego in the matters of that department where the President is required by law to exercise authority" (emphasis supplied.). For it is only when the President exercises his authority and powers that the department secretaries act merely as his assistants, agents or advisers, and, in such cases, their acts are his. But when they act in accordance with the powers vested in them by law, they act with a personality separate from and no less distinct than that of the President himself, if the recognition accorded to their powers by the Constitution is to mean anything at all. And the fact that the government we have instituted is a presidential one in no wise destroys what the law has created and the Constitution has recognized. The presidential system of government could not have been intended to supersede a government of laws for a government of men.

If, as stated by the majority, all the official acts of the secretaries of the departments are presumptively the acts of the President, it must follow that the President is presumptively responsible therefor. That this corrollary proposition cannot be maintained is obvious. At every instance, he would be called upon to accountability for acts of which he might not have any knowledge at all and for which he could in no wise be held responsible. In the complicated activities of each department, multifarious official acts have to be performed from time to time. Very often these acts are performed in pursuance of powers and duties expressly lodged in them by law; and, occasionally, upon authority and direction of the President in the latter's exercise of his power of control. In the performance of such acts, executive and administrative discretion had to be exercised for which responsibility must accordingly be exclusive and purely personal. To hold the President presumptively responsible for such acts would suggest, in effect, the necessity on the part of the President to exercise constant and unrelaxing vigilance over all the official acts of the secretaries of the departments, under hazard of being involved in endless difficulties. The manifold exigencies of government render such a suggestion inconceivable. My view, therefore, is that the department secretaries may act in a purely advisory capacity or under the direction and authority of the President in the latter's exercise of his constitutional power of control, and, in such cases, the proposition contained in the majority decision applies, because then, the department secretaries act purely for the Chief Executive. However, they may also act in pursuance of the powers and duties conferred upon them by law and continued in force by the Constitution, and, unless the President desires to intervene, in appropriate cases, by interposing his constitutional power of control, the acts of the department secretaries are exclusively their own, and they are likewise exclusively responsible therefor. It follows that when a department secretary acts in his own name and not by order or authority of the President, he is presumed to be so acting in pursuance of a power conferred upon him by law, and when the power is not thus conferred, his act is null and void. And if the power is conferred expressly upon the President, he must exercise it positively and in person with such assistance, advice and recommendation of the corresponding department head, as he himself may choose to demand. Accordingly, the bare statement made by the President of his non-objection to the action taken by the Secretary of the Interior in the present case is not a sufficient exercise of his power to suspend, for it may mean neither approval nor disapproval. The President probably believed, and indeed rightly as I shall hereafter show, that the power to suspend the petitioner also resided in the Secretary of the Interior, and called upon to exercise his power of supervision, he confined himself to making a mere statement of non-objection to the latter's exercise of his power. This, in my opinion, is the most rational explanation of the passive attitude thus observed by the President. I am almost sure that had he intended to exercise his own power to suspend, he would have done so, as usually, in a manner that would not admit of any possibility of doubt. Moreover, besides the written statement of non-objection made by the President, it is claimed by the Solicitor-General that the President expressly and orally approved the order of suspension issued by the Secretary of the Interior. Such supposed oral approval alleged in the respondent's answer is, however, deemed controverted by the petitioner, according to section 104 of Act No. 190, and, not being supported by proof, it cannot be considered as true fact in the disposition of this case.

Page 165 of 192

If I agree with the result, it is not therefore on the broad proposition relied upon by the majority, but from what is necessary implied from express provisions of law. Section 37 of Act No. 4007 provides: The provisions of the existing law to the contrary notwithstanding, whenever a specific power, authority, duty, function or activity is entrusted to a chief of bureau, office, division or service, the same shall be understood as also conferred upon the proper Department Head who shall have authority to act directly in pursuance thereof, or to review, modify or revoke any decision or action of said chief of bureau, office, division or service. There can be no question that the word "division" in the above provision has no other reference than to provinces and municipalities (Chapter 2 and section 86, Adm. Code). It is then evident that this provision confers upon the Secretary of the Interior the power residing in the provincial governor (section 2188, Adm. Code) to decree the suspension of the petitioner pending an administrative investigation of the charges against him. That this is the true meaning of the law, the majority does not question. Fear, however, has been expresses in the majority opinion that this view may result in the complete abrogation of the powers of provincial and municipal officials even in corporate affairs of local governments. Instances are cited in which the Secretary of the Interior may exercise for himself the powers vested by law in provincial governors and municipal mayors as to matters of both governmental and corporate functions of provinces and municipalities, such as, the power to veto, the power to appoint, and the power to enter into contracts. Whether or not the Secretary of the Interior can thus exercise the powers vested by law in provincial and municipal executives in the instances cited, to the complete abrogation of provincial and municipal autonomy, is a question which I need not discuss now. Other provisions of law and a number of collateral questions may have to be inquired into if any safe conclusion is to be formed. But even if, as feared, the law has the effect of nullifying the powers conferred upon provincial and municipal executives, can there be any doubt that the law can do so? The same authority that creates those powers may withdraw or qualify them at will or provide effective measures of supervision over their exercise. The extent or even the existence of local autonomy is a matter which lies within the exclusive prerogative of the Legislature to define. If the law is clear, or duty to apply it is just as clear, irrespective of how destructive it may be of the autonomy of local governments. To refuse to apply a law, which is otherwise applicable and is valid and constitutional, simply because it does violence to our theory of government, would, in effect, be imposing ourselves upon the legislature department of the government and an intrusion into its own sphere of constitutional authority. Moreover, the law is not of such "destructive authority" as the majority has pictured it to be. The philosophy behind this provision is apparent. It is intended to supply possible omissions or inactions on the part of the subordinate officers concerned by reason of the entanglement arising from partisan activities. The power which the law confers upon the department head is undoubtedly susceptible of abuses. But what power is not susceptible of abuse? In the enactment of the law, the legislature undoubtedly relied much on the sense of patriotism and sound judgment of the department head. It is perhaps the intention of the law that the department head should exercise his power in a manner compatible with the autonomy given the local governments, and that he should act directly only when the exigencies of the situation require him to act in the interest of the Nation. Thus, the department head is given ample

discretion. The possibility of a mischievous or disastrous abuse of power on his part is not entirely without any remedy at all. The presidential power of control over executive departments and the existence of judicial remedies may afford effective check or redress. In the instant case, there is no showing that the Secretary of the Interior has abused, or even intended to abuse the power of suspension. If a capricious and whimsical use of such power presents itself to us for determination in some future time, then and there must we declare where one power begins and the other ends. As the law, therefore, is not unconstitutional, we would be ignoring it clear provision if not applied in this case.

Republic of the Philippines SUPREME COURT Manila EN BANC G.R. No. L-20368

February 28, 1964

CRISPIN BONGCAWIL, petitioner, vs. THE PROVINCIAL BOARD OF LANAO DEL NORTE, ET AL., respondents. Antonio Barredo and Francisco Ma. Garcia for petitioner. Office of the Solicitor General and Lanao del Norte Provincial Fiscal for respondents. BAUTISTA ANGELO, J.: This is a petition for certiorari seeking to set aside the resolution approved by respondents on September 7, 1962 adopting the decision prepared on the same date by former Vice-Governor Valerio V. Rovira by virtue of the authority given him to do so in a resolution adopted by the Provincial Board of Lanao del Norte which recommends the dismissal from office of petitioner as Mayor of Maigo, of the same province, as well as to restrain respondents from carrying out the import of said resolution. The facts, as alleged in the petition, are: On March 7, 1960, one Victorio Dy filed a complaint with the Provincial Board of Lanao del Norte charging petitioner with commission of certain irregularities in his capacity as Mayor of Maigo of the same province. Because of the filing of said complaint, petitioner was suspended from office for 30 days by Governor Mohamad Ali Dimaporo. Meanwhile, the complaint was given due course and was set for hearing after petitioner had filed his answer. After case was submitted for decision, the individual member of the provincial board prepared their respective opinion two of which for exoneration while the

Page 166 of 192

third for conviction. Petitioner received copies of these opinions, which became final for lack of appeal on the part of the complainant. However, on September 7, 1962, after the lapse of almost two years since the filing of the complaint, the provincial board acting thru its new members, in gross violation of law and with grave abuse of discretion, rendered a new decision on the same complaint which was embodied in resolution adopted on the same date wherein it made its own the decision prepared by former Vice-Governor Valerio Rovira which recommends petitioner's dismissal. As a result, the suspension of petitioner was ordered pending the finality of the decision. And considering that the decision rendered by the new provincial board, although headed by the same governor, is null and void for having been render in violation of law and with grave abuse of discretion, petitioner has interposed the present petition for certiorari. On the other hand, the version given by respondents is follows: When Victorio Dy filed his complaint against petitioner on March 7, 1960 with the Provincial Board of Lanao del Norte, copy thereof was served on petitioner who was given 48 hours from receipt within which to file his answer. After petitioner had filed his answer, the complaint was set for hearing, at which complainant and petition submitted evidence both oral and documentary. Thereafter, the case was submitted to the provincial board decision. Then the provincial board passed a resolution designating Vice-Governor Valerio V. Rovira to draft the decision in the case having in view the evidence submitted and, accordingly, Rovira submitted said draft sometime in August, 1961 for deliberation and study by the provincial board. But before a final decision could be adopted even if the provincial board had begun its study and deliberation on the matter, Vice-Governor Rovira and Board Member Bienvenido L. Padilla both launched their candidacies for the office of congressman of the province in the elections held in 1961 thereby vacating their positions in the board in accordance with the Revised Election Code, and to fill their vacancies, Arsenio A. Quibranza and Sheik Cosain Ali Usman were appointed by the President as Vice-Governor and board member, respectively. On September 7, 1962, the provincial board as newly constituted was convened at a special meeting to deliberate on the decision of the case of petitioner as prepared by former Vice-Governor Rovira, including the opinion submitted by Member Felixberto Avellanosa, and after a study made on the case, together with the evidence extent on the record, the board unanimously resolved to adopt the decision prepared by former ViceGovernor Rovira wherein the latter found petitioner guilty of the charges preferred against him and recommended his dismissal from office. 1äwphï1.ñët It further appears that notwithstanding the fact that petitioner received copy of the decision of September 7, 1962, he failed to take any step to appeal to the Office of the President as provided in Section 2190 of the Revised Administrative Code, but instead filed the present petition for certiorari.

prepared and submitted for the reason that by a virtue of a resolution unanimously approved by said board action on the case was suspended because two of its members launched their candidacies for the office of congressman of the province in the elections held in 1961 thereby vacating the respective positions, and that only after they were duly substituted when the newly constituted provincial board formally and finally acted upon the case and rendered its decision on September 7, 1962. The contention of petitioner that after the case was submitted for decision to the formed provincial board its member had written their individual decisions two of which were for exoneration and the third for conviction and that of said individual decisions he was duly informed and, as a consequence, said decision should be given binding force and effect, cannot be entertained, for the most that can be said is that said decisions were merely drafts prepared by the individual members of the board but that the same had not yet been finally acted upon by the board itself. At least, petitioner has not been able to show any resolution of the former provincial board adopting any of said decisions as its own as is the usual procedure on matters that are acted upon by a deliberative body like the Provincial Board of Lanao del Norte. The truth is that the only formal resolution adopted by the said board on the case of petitioner is that dated September 7, 1962 which, as already stated, reiterates the decision prepared by former Vice-Governor Rovira recommending the dismissal of petitioner from his office as Mayor of Maigo, Lanao del Norte. In the circumstances, we have no other alternative than to hold that respondents acted in the proper exercise of their functions as Members of the Provincial Board of Lanao del Norte, and that if petitioner was not satisfied with such decision, his remedy was to appeal to the Office of the President is provided for by law. This he failed to do. WHEREFORE, petition is denied. No costs. Bengzon, C.J., Padilla, Labrador, Concepcion, Reyes, J.B.L., Barrera, Paredes, Dizon, Ragala and Makalintal, JJ., concur. Republic of the Philippines SUPREME COURT Manila SECOND DIVISION G.R. No. L-25373

July 1, 1976

IRENEO ROQUE, petitioner-appellant, There are several reasons why the present petition cannot be sustained, one of them being petitioner's failure to appeal from the decision of the Provincial Board of Lanao del Norte to the Office of the President as provided in Section 2190 of the Revised Administrative Code which shows that he failed to exhaust his administrative remedies as required by the law before he may be given the right to interpose the present special civil action. Another reason is the fact that, as the facts clearly show, the case of petitioner has not been actually acted upon by the provincial board that had actually conducted the examination and received the evidence even if the individual written opinions of its members had been actually

vs. THE HONORABLE, THE DIRECTOR OF LANDS; THE HONORABLE, THE ASSISTANT EXECUTIVE SECRETARY TO THE PRESIDENT and JOSE FACUN, respondents appellees. Antonio M. Orara for petitioner-appellant.

Page 167 of 192

Solicitor General Antonio P. Barredo and Solicitor Dominador L. Quiroz for respondentsappellees The Director of Lands, et al., etc.

Assistant Executive Secretary is perfectly valid." 5 The contention of petitioner was then set forth: "Petitioner's counsel maintains that the order of the District Land Officer had already become final and executory, hence, the order of the Director of Lands reversing the order of the District Land Officer is in violation of Lands Administrative Order No. 6 ." 6

Cipriano A. Tan for respondent-appellee Jose Facun. FERNANDO, J.: The appealed decision of the lower court, 1 dismissing a certiorari petition against the Assistant Executive Secretary of the President for sustaining the award by the Director of Lands of a homestead application and thus overruling the Secretary of Agriculture and Natural Resources, has in its favor conformity with the policy of the law as reiterated in a host of cases. Petitioner, himself a previous beneficiary of the statute, would seek to add to his holding by a sales application. The prevailing party, private respondent Jose Facun, on the other hand, had applied for the disputed lot as a homesteader as far back as 1935, and had submitted his final proof in 1948. To put the matter thus is to indicate the fate in store for this appeal. There would be no justification both in law and in conscience for a reversal. To contend that the Office of the President, through respondent Assistant Executive Secretary, lacks the power to overrule the Department of Agriculture and Natural Resources is to betray lack of awareness of the implications of what Justice Laurel referred to in Villena v. Secretary of the Interior as 2 the establishment [in the Philippines] of a single, not plural, Executive." 3 As was further stressed by him: "Without minimizing the importance of the heads of the various departments, their personality is in reality but the projection of that of the President. 4 What was asserted then by petitioner, now appellant, is, to put it at its mildest, highly unorthodox We affirm. The nature of the case was set forth in the decision thus: "This is a special civil action for certiorari filed by Ireneo Roque, as petitioner, v. the Honorable Director of Lands, the Honorable Assistant Executive Secretary to the President and Jose Facun, as respondents, praying that, after due hearing, the order of the respondent Honorable Director of Lands ... and the decision of the respondent Honorable Assistant Executive Secretary, ... be set aside on the alleged ground that the said order of the Director of Lands was issued with grave abuse of discretion, consisting of unqualified reliance and the biased report and recommendation of the Assistant Public Land Inspector Andres V. Arias, ... and on the factual allegation that the said decision of the Honorable Executive Secretary exceeded his jurisdiction and committed a grave abuse of discretion, arbitrarily disregarding the sales award of the land in question in favor of the herein petitioner having already paid is for the price of the same, and praying further that the decision of the Honorable Secretary of Agriculture and Natural Resources be sustained. ... Respondent Jose Facun, through Atty. Cipriano A. Tan, filed an answer to the petition denying specifically the allegation of paragraph 6 of the petition, and specifically denying petitioner's aforequoted allegations Re: abuse of discretion, arbitrariness and excess of jurisdiction. The Honorable Director of Lands, through his counsel Atty. Ernesto B. Llaguno submitted an answer specifically denying paragraphs 3 and 12 of the petition and its averments concerning abuse of discretion, arbitrariness, and excess of jurisdiction. The Honorable Assistant Executive Secretary to the President, through Assistant Solicitor General Pacifica P. de Castro, and then Solicitor Isidro C. Borromeo, recently promoted as Assistant Solicitor General, filed an answer denying specifically the alleged paragraphs 3, 10, 12 and 13 of the petition, and likewise denying emphatically and specifically petitioner's assertion of abuse of discretion, arbitrariness and lack of . jurisdiction. They alleged the following affirmative defenses: (1) Petition states no cause of action; and (2) Assuming arguendo that it states a cause of action, the decision of the

The appealed decision, after taking note of the conclusion arrived at by respondent Director of Lands, quoted from the order of respondent Assistant Executive Secretary This is the relevant portion: "It is noteworthy that Lands Inspector Cruz who investigated the case in 1948 was the same investigator, who inspected appellant's entire homestead a year earlier and recommended the issuance of a patent herefore. If it is true that the appellee [Petitioner Roque] had been in occupation of the disputed portion since 1937, then the investigated would not have recommended the issuance of a patent to the appellant for the whole of Lot No. 4507. Likewise, it is significant to note that the appellant [Respondent Facun] filed his homestead application in 1935 and submitted the final proof therefore in 1939. On the other hand, the appellee [Roque] submitted his sales application for the disputed portion in 1948, only during the course of the investigation of his protest. If it were true that he had occupied the disputed portion since 1937, he could have filed his application earlier, it appearing that he is also the applicant of another lot adjoining Lot No. 4507. Moreover, it was verified during the reinvestigation of this case that the appellee [Roque] entered upon the disputed portion in 1951 only. " 7 There should then be conclusiveness of such finding, according to the appealed decision, "when approved by the Office of the President, through his Executive Secretary, or Assistant Executive Secretary, [representing] the Highest Magistracy of the Land, and the personification of the sovereignty of the Republic of the Philippines." 8 As set forth at the outset, there is no justification for a reversal. The facts argue against it and the law, in accordance with the mandate of the Constitution no less, is on the side of private respondent Facun. 1. It would be a plain defiance of the settled policy of the law if the homestead application of private respondent Facun would not be honored and the sales application of petitioner Roque sustained. Justice Malcolm, as ponente, in Aquino v. Director of Lands, 9 decided in 1919, stressed that homestead applicants, 44 poor men with a legitimate ambition to acquire homes are [not to be discouraged." 10 If it were otherwise, the result would be agrarian troubles and internal strife 11 because of the natural discontent of the masses. "The object and purpose of the homestead law," according to him, "is to encourage residence upon and the cultivation and improvement of the public domain."12 That "paramount public purpose 13 should not be nullified by the courts. That approach has commended itself to this Tribunal in all subsequent cases." 14 This Court has even gone so far as to rule in Government of the Philippine Islands v. Franco, 15 speaking through Justice Street: 'There is indeed some authority for this point of view, but the better doctrine, revealing the drift of the later cases is to the contrary; and it is now held, by the better considered decisions, that a person who takes possession of land in the erroneous belief that it is public land, with the intention of holding and claiming it under the homestead law, may acquire title thereto by adverse position as against the true owner." 16 Earlier, in Balboa v. Farrales, 17 it was held: "A perfected valid appropriation of public lands operates as a withdrawal of the tract from the body of the public domain and, so long as such appropriation remains valid and subsisting, the land covered thereby is deemed private property. A perfected homestead, under the law, is property in the highest sense, which may be sold and conveyed and will pass by descent. It has the effect of a grant of the right to

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present and exclusive possession of said land. A valid and subsisting perfected homestead, made and kept up in accordance with the provisions of the statute, has the effect of a grant of the present and exclusive possession of the land. Even without a patent, a perfected homestead is a property right in the fullest sense, unaffected by the fact that the paramount title to the land is in the Government. Such land may be conveyed or inherited." 18 The strength of the claim of private respondent Facun is thus quite obvious if deference be paid to previous authoritative pronouncements of this Court. That was all that the lower court did. 2. With such formidable, not to say insurmountable, obstacle confronting petitioner Roque, it is understandable why he would seize on what could be a legal loophole, however tenuous as an avenue of escape Unfortunately for him, he came out with the theory that can only be characterized as a constitutional heresy. It is his contention that respondent Assistant Executive Secretary, acting for the President, could not reverse a derision of the Secretary of Agriculture and Natural Resources. The doctrine so clearly and emphatically announced by Justice Laurel in the aforecited Villena decision 19 is precisely the opposite. Thus: "After serious reflection, we have decided to sustain the contention of the government in this case on the broad proposition, albeit not suggested, that under the presidential type of government which we have adopted and considering the departmental organization established and continued in force by paragraph 1, section 12, Article VII, of our Constitution, all executive and administrative organizations are adjuncts of the Executive Department, the heads of the various executive departments are assistants and agents of the Chief Executive, and, except in cases where the Chief Executive is required by the Constitution or the law to act in person or the exigencies of the situation demand that he act personally, the multifarious executive and administrative functions of the Chief Executive are performed by and through the executive departments, and the acts of the secretaries of such departments, performed and Promulgated in the regular course of business, are, unless disapproved or reprobated by the Chief Executive, presumptively the acts of the Chief Executive." 20 Clearly then, there is nothing to prevent the President to disapprove or reprobate the act of a department head. That was what happened in this case. What was said in a 1970 decision, Tecson v. Salas, 21 concerning the broad executive authority is still good law; "the Villena ruling applies with undiminished force." 22 It cannot be otherwise, considering the plain and explicit command of the 1935 Constitution that the President has "control of all the executive departments, bureaus or offices, ...." 23 What is signifies was enunciated in categorical language by former Chief Justice Concepcion in Pelaez v. Auditor General: 24 "The power of control under this provision implies the right of the President to interfere in the exercise of such discretion as may be vested by law in the officers of the executive departments, bureaus, or offices of the national government, as well as to act in lieu of such officers." 25 This is not to dabble in generalities. Neither is it to rely merely on logical inferences to a constitutional concept of major dimension. There is quite a number of cases where precisely from a decision of the Secretary of Agriculture and Natural Resources, an appeal was taken to the Office of the President. 26 To argue as petitioner Roque did then is to indulge in a futile endeavor. 3. That is all there is then to his case, if it may be called that. There is, in addition, one other error assigned. It can also be disposed of quite easily. He would impress finality on the decision of the Secretary of Agriculture and Natural Resources reversing the award made in respondent Facun's favor by the Director of Lands. No such error could possibly be imputed to the lower court as no such question was therein raised As noted in the opening paragraph of the appealed decision herein cited, petitioner Roque objected to the order of the Director of

Lands, asserting that it was issued with grave abuse of discretion, characterizing it as the result of an "unqualified reliance [on the] report and recommendation" of a certain public lands inspector. 27 Apparently, during the trial, he raised as one of the legal questions the finality of the order of a district land officer, which was reversed by the Director of Lands, who made the award in favor of respondent Facun: 'Petitioner's counsel maintains that the order of the District Land- Officer had already become final and executory, hence, the order of the Director of Lands reversing the order of the District Land Officer is in violation of Lands Administrative Order No. 6." 28 The lower court, after considering the matter, found against him: "All the exhibits of the petitioner do not show when Jose Facun and Ines Yarcia received copies of the said order. Hence, they do not show that the said order has become final." 29 How then could it be plausibly contended that the lower court was in error in not according finality to the decision of the Secretary of Agriculture and Natural Resources when that was never an issue before it? There can be no relevance therefore to that portion of petitioner's brief making reference to the dates as to when such decision was all received by respondent Facun. Even if such were not the case, however, what he cited was Section 14 of Lands Administrative Order No. 6, which would allow the Secretary of Agriculture and Natural Resources to relieve the party or his legal representative from a decision, order, or other proceeding if there be a mistake, inadvertence, surprise, default, or executive neglect, with the proviso that the application for that purpose should be made within a reasonable time, but in no case exceeding one year. From his own computation, only two months elapsed from the date the appeal was taken to the Office of the President. He still had then a period of ten months within which to k a reconsideration of the decision of the Secretary of Agriculture and Natural Resources. Thus, when matters are seen in their true light, it becomes apparent why, as was made clear at the start, a reversal of the appealed decision cannot in law or in conscience be justified. WHEREFORE, the appealed decision is affirmed. This decision is immediately executory. Costs against petitioner Ireneo Roque. Antonio, Muñoz Palma, Aquino and Martin, JJ., concur. Barredo, J., took no part. Concepcion Jr., J., is on leave Footnotes 1 The direct appeal was taken on a question of law before the effectivity of Republic Act No. 5440 (1968) which has conferred on this Court certiorari jurisdiction. 2

67 Phil. 451 (1939).

3

Ibid, 464.

4

Ibid.

5

Decision, Appendix A, Brief for Petitioner-Appellant, 37-39.

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IN; Lim, Sr. v. Secretary of Agriculture and Natural Resources L-26990, Aug. 31, 1970, 34 SCRA 751; Lacuesta v. H , Jan. 28, 1975, 62 SCRA 115. 13

lbid. Cf. Director of Lands v. Absolo, 46 Phil. 282

14 (1924). Cf. Ruiz v. Dalio, 45 Phil. 523 (1923); Manalo v. Lukban, 48 Phil. 973 (1924); Julian v. Apostol, 52 Phil. 422 (1928); Government of the Phil. Islands v. Abran, 56 Phil. 397 (1931); El Hogar Filipino v. Olviga, 60 Phil. 17 (1934); W. F. Stevenson and Co. v. Rodriguez, 6.3 Phil. s77 (1936); Ramoso v. Obligado, 70 Phil. 86 (1940); Balela v. Aquino, 71 Phil. 69 (1940). Mariano v. Director of Lands, 72 Phil. 101 (1941).

27

Decision, Appendix A to the Brief for the Petitioner-Appellant, 38.

28

Ibid 46-47.

29

Ibid, 48-49.

Republic of the Philippines 15 57 Phil. 780 (1933). SUPREME COURT 16

Ibid, 783. The title involved arose from a possessory information.

17

Phil. 498.

18

Ibid, 503.

19

67 Phil. 451 (1939).

Manila SECOND DIVISION G.R. No. L-29534

February 28, 1977

BENGUET EXPLORATION, INC., petitioner, 20 Ibid, 463. vs. 21

L-27524, July 31, 1970, 34 SCRA 275.

22 Ibid, 283. The following cases were cited: Marc Donnelly and Associates v. Agregado, 95 Phil. 142 (1954); Cabansag v. Fernandez, 102 Phil. 151 (1957); Acting Collector of Customs v. Court of Tax Appeals, 102 Phil. 244 (1957); Commissioner of Customs v. Auyong Hian 105 Phil. 561 (1959); People v. Jolliffe 105 Phil. 677 (1959); Demaisip v. Court of Appeals, 106 Phil. 237 (1959); Juat v. Tenure Administration, L-17080, Jan. 28, 1961, 1 SCRA 361; Tulawie v. Provincial Agriculturist of Sulu, L-18945, July 31, 1964, 11 SCRA 611; Lacson Magallanes Co. v. Pao L-27811, Nov. 17, 1967, 21 SCRA 895. Since then, three other decisions were rendered: Lim, Sr. v. Secretary of Agriculture and Natural Resources, L-26990, Aug. 31, 1970, 34 SCRA 751; Barte v. Dichoso, L-28715, Sept. 28, 1972, 47 SCRA 77, Philippine American Management Company v. Philippine American Management Employees Aswiation L-35254, May 25, 1973, 51 SCRA 98." 23 Art. VII, Section 10, par. I of the 1935 Constitution provides: "The President shall have control of all the executive departments, bureaus, or offices, exercise general supervision over all local governments as may be provided by law, and take care that the laws be faithfully executed." 24

L-23825, December 2, 4, 1965, 15 SCRA 569.

25

Ibid, 582.

26 C. Heirs of B.A. Crumb v. Rodriguez, 105 Phil. 391 (1959); Pajo v. Ago, 108 Phil., 905 (1960); Ham v. Bachrach Motor Co., Inc., 109 Phil. 949 (1960); Extensive Enterprises Corp. v. Sanbro & Co., Inc., L-22383, May 16, 1966, 17 SCRA 41; Desiata v. Executive Secretary, L21894, Feb. 28, 1967, 19 SCRA 487; Macailing v. Andrada, L-21607, Jan. 30, 1970, 31 SCRA

DEPARTMENT OF AGRICULTURE & NATURAL RESOURCES and SOFIA V. REYES, respondents. William H. Quasha & Associates for petitioner. Office of the Solicitor General, for respondent DANR S. Fangonil & Associates for private respondent. FERNANDO, J: A more extensive appraisal of the controlling doctrine on the status of a department head as an alter ego of the President, with particular reference to the broad competence enjoyed by the Secretary of Agriculture and Natural Resources in the disposition of the public lands and the wealth it contains, and a more careful reading of the specific provisions of the Mining Act, 1 not to mention the explicit recital in the order challenge that the purpose thereof is to accord a party the "formal hearing" thereby complying with the procedural due process requisite, ought to have cautioned against the filing of this certiorari petition against the Department of Agriculture and Natural Resources. Petitioner is, a domestic mining corporation engaged in the exploration and development of certain mineral claims. The records show that private respondent Sofia V. Reyes filed with the Bureau of Mines an adverse claim against petitioner's Lode Lease Application covering three mining claims in Benguet, Mountain Province. 2 That was countered by a motion to dismiss, alleging as one of three legal objections the failure of such adverse claim to comply with the mandatory requirements of Section 73 of the Mining Act. 3 The private respondent then submitted an opposition with the Bureau of Mines thereafter dismissing the adverse claim. 4 The matter was taken up on appeal to the Department of Agriculture and

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Natural Resources, private respondent maintaining the sufficiency of its adverse claim under the law, a point disputed by petitioner, as could have been expected. 5 At first, the action taken by respondent Department was the dismissal of such appeal, but on a second motion for reconsideration, an order was issued with its dispositive portion reading thus: "Order of the Director of Mines dated September 15, 1966, and the Decision and Order of this Office dated July 21, 1967 and December 11, 1967, respectively, should be, as hereby they are, set aside; and to abbreviate proceedings, Atty. [Romulo A. Redula] of this Office is hereby directed to conduct a formal hearing of this case. 6 Hence this certiorari petition. As intimated at the outset, this petition lacks merit. It mast be dismissed. 1. Petitioner lost sight of the fundamental doctrine set forth in Villena v. Secretary of Interior, 7 decided in 1939, where Justice Laurel categorically declared that acts of a department head and the challenged order in this case came from the then Acting Secretary of Agriculture and Natural Resources, Isosceles Pascual, "performed and promulgated in the regular course of business, are, unless disapproved or reprobated by the Chief Executive presumably the acts of the Chief Executive. 8 Not so long ago in Tecson v. Salas, 9 it was affirmed that as far as the power of control over all executive departments, bureaus and offices are concerned, "the Villena doctrine applies with undiminished force."10 Since then, two other decisions did reiterate such a principle. 11 Moreover, petitioner likewise did not take into account the doctrine announced by the leading case of Ortua v. Singson Encarnacion. 12 As stated by Justice Malcolm: "Accordingly, to paraphrase the authorities and decisions coming principally from the United States Supreme Court, we deduce the rule on the subject to be, that a decision rendered by the Director of Lands and approved by the Secretary of Agriculture and Commerce, upon a question of fact is conclusive and not subject to be reviewed by the courts, in the absence of a showing that such decision was rendered in consequence of fraud, imposition, or mistake, other than error of judgment in estimating the value or effect of evidence, regardless of whether or not it is consistent with the preponderance of the evidence, so long as there is some evidence upon which the finding in question could be made. 13 Here such a stage has not been reached. Precisely, the assailed order spoke of no "hearing on the merits, [therefore] it is but right and proper in the interest of justice that a formal hearing on the merits be conducted. 14 There is, therefore, an element of prematurity. That alone would have sufficed for the dismissal of this petition. 2. What appears to be the motivation behind this move of petitioner is to preclude the Secretary of Agriculture and Natural Resources from conducting his own inquiry. He would thus be denied the power accorded a bureau director. In Pinero Jr. v. Director of Lands 15 this Court, in an opinion by Justice Barredo, expressly referring to the Regalian doctrine, Pointed out that even a Torrens title is not a bar to the power of the Director of Lands to investigate an allegation of fraud that could have led to the issuance of a free patent. As stated by him "It is to the public interest that one who succeeds in fraudulently acquiring a title to a public land Should not be allowed to benefit therefrom, and the State should, therefore, have an ever-existing authority, thru its duly authorized officers, to inquire into the circumstances surrounding the issuance of any such title, to the end that the Republic, thru the Solicitor General or any other officer who may be authorized by law, may file the corresponding action for the reversion of the land involved to the public domain, subject thereafter to disposal to other qualified persons in accordance with law. In other words, the indefeasibility of a title over land previously public is not a bar to an investigation by the Director of Lands as to how such title has been acquired, if

the purpose of such investigation is to determine whether or not fraud had been committed in securing such title in order that the appropriate action for reversion may be filed by the Government." 16 If petitioner would prevail, such power of inquiry vested in a subordinate would be denied a department head. That is to disregard a well-settled concept in public law. What is more, that is to be insensible to another facet the jura regalia concept by virtue of which the Republic of the Philippines possessed of the attributes of imperium and dominium, acting through the Secretary of Agriculture and Natural Resources, is given the utmost latitude in ascertaining which party shall enjoy the privilege of exploiting the wealth that is found in its natural resources.17 If petitioner were to prevail, there would be an undue diminution of the broad competence conferred on the Secretary of Agriculture and Natural Resources, as recognized in a host of cases notable for their number and unanimity. 18 3. Petitioner would seek to weaken the force of the above authoritative doctrines as applied to it by the allegation that there is a failure to abide by the statutory requirements in the Mining Act, as amended by Republic Act No. 4388. Reference is made to Sections 61 and 73 as amended by Republic Act No. 4388. 19 The proviso in the former section which is relevant to the present controversy reads thus: "Provided, That the decision or order of the Director of Mines may be appealed to the Secretary of Agriculture and Natural Resources within thirty days from receipt of such decision or order. In case any one of the parties should disagree from the decision or order of the Secretary of Agriculture and Natural Resources, the matter may be taken to the Court of Appeals or the Supreme Court, as the case may be, within thirty days from the receipt of such decision or order, otherwise the said decision or order shall be final and binding upon the parties concerned. Findings of facts in the decision or order of the Director of Mines when affirmed by the Secretary of Agriculture and Natural Resources shall be final and conclusive, and the aggrieved party or parties desiring to appeal from such decision or order shall file in the Supreme Court a petition for review wherein only questions of law may be raised." What cannot be sufficiently stressed is that only upon the affirmance of the Secretary of Agriculture and Natural Resources does the findings of fact become conclusive, leaving only questions of law for this Court to decide. In the order complained of, the Acting Secretary of Agriculture and Natural Resources commendably sought to have a rational basis for the acceptance or rejection of the conclusion reached by the Director of Mines. What was objected to was that it could no longer be done as the matter had reached the stage of finality, such order coming only after a second motion for reconsideration. Petitioner would thus ignore the basic principle that unless the administrative procedure followed conforms with the requirement of procedural due process the actuation could be stigmatized as void, a hearing being deemed of the essence of such proceeding. As a matter of fact its absence would result in the loss of jurisdiction. As was state by Chief Justice Concepcion in' Vda. de Cuaycong v. Vda de Sengbenco, 20 acts whether of Congress or of the Executive, can deny due process only under pain of nullity, ... 21 As a matter of law, to accept petitioner's claim that in thus issuing such an order the Acting Secretary of Agriculture and Natural Resources failed to abide by the requirements of the law would be precisely to cast doubt on the validity of such sections of the Mining Act when all that was required by him was compliance with the requisite of a formal hearing. That would be to incur the vice of the construction given such sections being repugnant to the due process clause. Certainly, between two lines of interpretation, one of which would give it life and the other which would be fatal to its validity, the former should prevail. Thus petitioner's first two errors assigned, which could be summed up in the proposition that Secretary Pascual should not have passed upon the second motion for reconsideration are clearly without merit.

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4. It is thus apparent that the third error assigned to the effect that the Department of Agriculture and Natural Resources acted in excess of its jurisdiction when it arrogated the function of hearing the adverse claims is even more bereft of support in law. The very provision of the Mining Act upon, as previously set forth, speaks of the findings of facts of the Director of Mines "when affirmed by the Secretary of Agriculture and Natural Resources being final and conclusive," in which case the aggrieved party may file a petition for review with this Court where only questions of law may be raised. 22 To sustain the contention of petitioner would be to run counter to what was held in the leading case of Ang Tibay v. Court of Industrial Relations. 23 Justice Laurel specifically spoke of "cardinal primary rights" embraced in "the fundamental and essential requirements of due process in trials and investigations of an administrative character. 24 Here precisely, vital and essential facts remained at issue. It was the considered judgment of the Acting Secretary of Agriculture and Natural Resources that a hearing should be held to ascertain the truth of the matter. As set forth in the challenged order: "It is but right and proper in the interest of justice that a formal hearing on the merits of this case be conducted.25 In a subsequent paragraph, such point of view was reiterated: "The reason for this ruling is that the proceedings before this Office is administrative in character, and, therefore, the parties to the case must be given all the opportunity to be heard. 26 Hence, the dispositive portion directing a certain Romulo A. Redula presumably of the staff of the Department of Agriculture and Natural Resources, "to conduct a formal hearing of this case and to submit his report relative thereto within thirty (30) days from the termination thereof. 27 Clearly, to repeat, the allegation in the last assignment of error that there was an arrogation of the Power on the part of respondent department is devoid of any legal justification. Moreover had Petitioner taken into consideration the aforesaid landmark opinion of Justice Laurel in Ang Tibay v. Court of Industrial Relations on the indispensability of complying with the due process requirement in an administrative proceeding, it would have noted that one of the doctrines relied upon by this Court in that case is an opinion of Chief Justice Hughes in Morgan v. United States. 28 It ought to be affirmed that in the two subsequent Morgan cases, the stress became even more emphatic on the indispensability of complying with the due process mandate, characterized as "the rudimentary requirements of fair play." 29 The relevance of the Morgan decisions should be evident, dealing as they do with the exercise of powers granted the Secretary of Agriculture of the United States. WHEREFORE, the petition is dismissed for lack of merit. Barredo, Antonio, Aquino and Concepcion Jr., JJ., concur. Footnotes 1

Commonwealth Act No. 137, as amended (10361).

2

Petition, pars. 1 and 2.

3

Ibid, par. 3.

4

Ibid, pars. 4 and 5.

5

Ibid 6 and 7.

6

Ibid, pars. 8 and 9, Annex A.

7

67 Phil. 451.

8

Ibid, 463.

9

L-27524, July 31, 1970, 34 SCRA 275.

10 Ibid 283. Nine cases were cited beginning from Marc Donnelly and Associates v. Agregado, 95 Phil. 1452 (1954) to Lacson Magallanes Co., Inc. v. Pano, L-27811, Nov. 17, 1967, 21 SCRA 895. 11 Philippine American Management Company, Inc. v. Philippine American Management Employees Association (PAMEA-FFW L35254, May 25, 1973, 51 SCRA 98 and Roque v. Director of Lands, L25373, July 1, 1976, 72 SCRA 1. 12

59 Phil. 440 (1934).

13 Ibid, 443-444. It was followed subsequently in the following cases: Ortua v. Rodriguez, 63 Phil. 809 (1936); Koppel (Phil.), Inc. v. Yatco, 77 Phil. 496 (1946)-l Alejo v. Garchitorena, 83 Phil. 924 (1949); De Guzman .-. De Guzman, 104 Phil. 24 (1958); Denopol v. Director of Lands, 106 Phil. 666 (1959); Ingaran v. Ramelo 107 Phil. 498 (1960); Sanchez v. Vda. de Tamsi 112 Phil. 668 (1961); Galvez v. Vda. de Kangleon, 116 Phil. 464 (1962)-, Dajunos v. Tandayag, L-32651, Aug. 31, 1971, 40 SCRA 449; San Miguel Corporation v. Secretary of Labor, L-39195, May 16, 1975, 64 SCRA 56; Mauleon v. Court of Appeals, L27762, Aug. 7, 1975, 66 SCRA 92. 14

Petition, Annex A, 4.

15 L-36507, June 14, 1974, 57 SCRA 386. 16 Ibid, 392. 17 Cf. Lee Hong Hok v. David, L-30389, December 27, 1972, 48 SCRA 372, citing Justice Holmes' opinion in Carino v. Insular Government, 212 US 449 (1909,) and 3 Pound on Jurisprudence, 108-109 (1959). 18 Cf. Alejandrino v. Aquino, 70 Phil. 113 (1940); Director of Lands v. Abordo 74 Phil. 44 (1942); Espinosa v. Makalintal, 79 Phil. 134 (1947); Alejo v. Garchitorena, 83 Phil. 924 .(1949); Aureus v. Secretary of Agriculture and Commerce, 85 Phil. 1 (1949); Azajar v. Ardales 97 Phil. 851 (1955); Hernandez v. Clapis, 98 Phil. 684 (1956); Heirs of Lachica v. Ducusin, 102 Phil. 551 (1957); De Guzman v. De Guzman, 104 Phil. 24 (1958); Heirs of B.A. Crumb v. Rodriguez, 105 Phil. 391 (1959); Songahid v. Cinco, 106 Phil. 946 (1960); Ladrera v. Secretary of Agriculture and Natural Resources, 107 Phil. 794 (1960); Pajo v. Ago, 1o8 Phil. 905 (1960); Pascual v. Director of Lands, L-15816, Feb. 29, 1964, 10 SCRA 354; Vda. de Calibo v. Ballesteros, L-

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17466, Sept. 18, 1965, 15 SCRA 37; Dauan v. Secretary of Agriculture and Natural Resources, L-19547, Jan. 31, 1967, 19 SCRA 223; Bonilla v. Secretary of Agriculture and Natural Resources, L-20083, April 27, 1967, 19 SCRA 836; Rallon v. Ruiz, Jr., L-23315, May 26, 1969, 28 SCRA 331; Ramirez v. Court of Appeals, L-28591, Oct. 31, 1969, 30 SCRA 297; Dajunos v. Tandayag, I,32651, Aug. 31, 1971, 40 SCRA 449; Ramos v. Secretary of Agriculture and Natural Resources, L-29097, Jan. 28, 1974, 55 SCRA 330; Lacuesta v. Herrera, L-33646, Jan. 28, 1975, 62 SCRA 115; Mauleon v. Court of Appeals, L-27762, Aug. 7, 1975, 66 SCRA 92; Roque v. Director of Lands, L-25373, July 1, 1976, 72 SCRA 1.

Republic of the Philippines SUPREME COURT Manila FIRST DIVISION G.R. No. 166197

19 Republic Act No. 4388 took effect on June 19, 1965. The main provision of the former section reads: "Conflicts and disputes arising out of mining locations shall be submitted to the Director of Mines for decision." There is no change in the Amendatory Act. As to Section 73, as amended, which is controlling, the main provision reads: "At any time during the period of publication, any adverse claim may be filed under oath with the Director of Mines, and shall state in full details the nature, boundaries, and extent of the adverse claim, and shall be accompanied by all plans, documents, and agreements upon which such adverse claim is based." The proviso deals with adverse claims already decided by the administrative authority no longer being subject to further inquiry. The last sentence of such proviso reads: "Upon the filing of the adverse claim all proceedings except the publication of notice of application for patent or lease and the making and filing of the affidavit in connection therewith, as herein prescribed shall be stayed until the controversy shall have been settled or decided in accordance with Section sixty-one of this Act or the adverse claim waived."

February 27, 2007

METROPOLITAN BANK & TRUST COMPANY, Petitioner vs. ASB HOLDINGS, INC., ASB REALTY CORPORATION, ASB DEVELOPMENT CORPORATION, ASB LAND, INC., ASB FINANCE, INC., MAKATI HOPE CHRISTIAN SCHOOL, INC., BEL-AIR HOLDINGS CORPORATION, WINCHESTER TRADING, INC., VYL DEVELOPMENT CORPORATION, GERICK HOLDINGS CORPORATION, NEIGHBORHOOD HOLDINGS, INC., and ROSARIO S. BERNALDO, Respondents. CAMERON GRANVILLE 3 ASSET MANAGEMENT, INC., Intervenor. DECISION SANDOVAL-GUTIERREZ, J.:

20

110 Phil. 113(1960).

21

Ibid 118.

22

Section 61 of Commonwealth Act No. 137 as amended by Republic Act No. 4388.

For our resolution is the instant Petition for Review on Certiorari1 assailing the Decision dated August 16, 20042 of the Court of Appeals in CA-G.R. SP No. 77260 and its Resolution dated December 1, 2004.

23

69 Phil. 635 (1940).

The facts borne by the records are:

24

Ibid, 641-642.

25

Petition, Annex A, 4.

26

Ibid.

The Metropolitan Bank and Trust Company, petitioner, is a creditor bank of respondent corporations, collectively known as the ASB Group of Companies, owner and developer of condominium and real estate projects. Specifically, the loans extended by petitioner bank to respondents ASB Realty Corporation and ASB Development Corporation amounted to ₱523.5 million and ₱1.073 billion, respectively. These loans were secured by real estate mortgages.

27

Ibid.

28

298 US 468 (1936).

On May 2, 2000, the ASB Group of Companies filed with the Securities and Exchange Commission (SEC) a Petition For Rehabilitation With Prayer For Suspension Of Actions And Proceedings Against Petitioners,3 pursuant to Presidential Decree (P.D.) No. 902-A, as amended, docketed as SEC Case No. 05-00-6609. The pertinent portions of the petition allege:

29 Morgan v. United States, 304 US 1, 15 (1938). The third Morgan decision is United States of America v. F.O. Morgan, 307 US 183 (1939). Page 295

6. The total assets of petitioner ASB Group of Companies, together with petitioner ASB Allied Companies, amount to Nineteen Billion Four Hundred Ten Million Pesos (₱19,410,000,000.00).

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7. The Projects were financed with loans or borrowings from bank and individual creditors which resulted in petitioner Group of Companies having a total liability in the amount of Twelve Billion Seven Hundred Million Pesos (₱12,700,000,000.00). 8. On account of the sudden non-renewal and/or the massive withdrawal by creditors of their loans to petitioner ASB Holdings, Inc., coupled with the recent developments in the country, like, among others, (i) the glut in the real estate market; (ii) the severe drop in the sale of real properties; (iii) the depreciation of the peso vis-a-vis the dollar; and (iv) the decreased investor confidence in the economy, petitioner Group of Companies was unable to complete and sell some of its projects on schedule and, hence, was unable to service its obligations as they fell due.

comprehensive rehabilitation proposal will be presented for the approval of this Honorable Commission, with the foregoing salient features: a. Servicing and eventual full repayment of all debts and liabilities, focusing on debt restructure and possible liquidation through dacion en pago, transfer and assignment, or outright sale of assets, in order to lighten the debt burden of petitioner Group of Companies; b. Forming of strategic alliances with third party investors, including joint ventures and similar arrangements; c. Contributing specified properties from petitioner ASB Allied Companies;

9. Petitioner Group of Companies possesses sufficient property to cover its obligations. However, petitioner Group of Companies foresees its inability to pay its obligations within a period of one (1) year.

d. Streamlining the operations of petitioner ASB Group of Companies, and the effective management of its revenues and funds towards the strengthening of its financial and business positions; and

10. Because of the inability of the Group of Companies to pay its obligations as they respectively fall due, its secured and non-secured creditors pressed for payments of due and maturing obligations and threatened to initiate separate actions against it, which will adversely affect its operations and shatter its hope in rehabilitating itself for the benefit of its investors and creditors and the general public.

e. Stabilizing the operations of petitioner Group of Companies, and preparing it to take advantage of future opportunities for growth and development.

11. There is a clear, present and imminent danger that the creditors of petitioner Group of Companies will institute extrajudicial and judicial foreclosure proceedings and file court actions unless restrained by this Honorable Commission. 12. The institution of extrajudicial and judicial foreclosure proceedings and the filing of court actions against petitioner Group of Companies will necessarily result in the paralization of its business operation and its assets being lost, dissipated or wasted. 13. There is, therefore, a need for the suspension of payment of all claims against petitioner Group of Companies, in the separate and combined capacities of its member companies, while it is working for its rehabilitation. 14. Petitioner Group of Companies has at least seven hundred twelve (712) creditors, three hundred seventeen (317) contractors/suppliers and four hundred ninety-two (492) condominium unit buyers, who will certainly be prejudiced by the disruption of the operations of petitioner ASB Group of Companies which seeks to protect the interest of the parties from any precipitate action of any person who may only have his individual interest in mind.

On May 4, 2000, the Hearing Panel of the SEC Securities Investigation and Clearing Department, finding the petition for rehabilitation sufficient in form and substance, issued a sixty-day Suspension Order (a) suspending all actions for claims against the ASB Group of Companies pending or still to be filed with any court, office, board, body, or tribunal; (b) enjoining the ASB Group of Companies from disposing of their properties in any manner, except in the ordinary course of business, and from paying their liabilities outstanding as of the date of the filing of the petition; and (c) appointing Atty. Monico V. Jacob as interim receiver of the ASB Group of Companies. On May 22, 2000, the SEC Hearing Panel issued an Order appointing Mr. Fortunato Cruz as interim receiver of the ASB Group of Companies, replacing Atty. Monico Jacob. On August 18, 2000, the ASB Group of Companies submitted to the SEC for its approval a Rehabilitation Plan,4 thus: Metropolitan Bank and Trust Co. Principal Amount – Principal (amount) plus any interest due and unpaid as of April 30, 2000, less any prepaid interest, without any penalties and charges. Form of Agreement – Dacion en Pago Agreement

15. The business of petitioner ASB Group of Companies is feasible and profitable. Petitioner Group of Companies will eventually be able to pay all its obligations given some changes in its management, organization, policies, strategies, operations, or finances.

Purpose – To retire existing loans.

16. With the support of this Honorable Commission, petitioner Group of Companies is confident that it will be able to embark on a sound and viable rehabilitation plan, with a built-in debt repayment schedule through the optimal use of their present facilities, assets and resources. Although a proposed rehabilitation plan is attached to this petition, a detailed and

Effective Date – September 1, 2000, subject to the approval of the SEC.

Tenor – Immediate Dacion en Pago of related properties, subject to the approval of the Securities and Exchange Commission (SEC).

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Dacion En Pago Arrangement – ASB will dacion the bank’s equity in St. Francis Square and apply the excess dacion value on its BSA Twin Tower loan. Further, Makati Hope, Buendia cor. Malugay, 21 Annapolis (which is expected to be released by PNB) and # 28 & 23 Eisenhower St., will be dacioned to Metrobank, the excess of which will also be applied to Metrobank’s exposure on BSA Twin Towers. In return, State Condominium will be freed up and placed in the ASB creditors’ asset pool. Further, Metrobank shall also undertake the completion of BSA Twin Towers.

Petitioner bank then filed with the Court of Appeals a Petition for Review.12 On August 16, 2004, the appellate court rendered its Decision13 denying due course to the petition, thus:

Outstanding Loan Balance

Petitioner bank’s Motion for Reconsideration was likewise denied in a Resolution dated December 1, 2004.14

WHEREFORE, finding the instant petition not impressed with merit, the same is DENIED DUE COURSE. No pronouncement as to costs. SO ORDERED.

After Dacion En Pago – None51awphi1.net Hence, this petition for review on certiorari. Petitioner bank, in its Comment/Opposition to the Rehabilitation Plan,6 objected to the above Plan, specifically the arrangement concerning the mode of payment by respondents ASB Realty Corporation and ASB Development Corporation of their loan obligations. Petitioner bank claimed that the above arrangement "is not acceptable" because: (1) it does not agree with the valuation of the properties offered for dacion; (2) the waiver of interests, penalties and charges after April 30, 2000 is not feasible considering that the bank continues to incur costs on the funds owed by ASB Realty Corporation and ASB Development Corporation; and (3) since the proposed dacion is not acceptable to the bank, there is no basis to release the properties which serve as collateral for the loans. Petitioner thus prayed that the Rehabilitation Plan be disapproved. On April 26, 2001, the SEC Hearing Panel, finding petitioner bank’s objections unreasonable, issued an Order7 approving the Rehabilitation Plan and appointing Mr. Fortunato Cruz as rehabilitation receiver, thus:

In the meantime, or on June 1, 2006, Cameron Granville 3 Asset Management, Inc. (Cameron Granville) filed a Motion For Intervention15 alleging that in September of 2003, petitioner bank assigned the loans and mortgages of ASB Realty Corporation and ASB Development Corporation to Asset Recovery Corporation (ARC). However, pursuant to its Service Agreement with ARC, petitioner continued to pursue its action before the Court of Appeals in CA-G.R. SP No. 77260 and before this Court in the instant case. On March 31, 2006, ARC in turn assigned the loans and mortgages of the said two respondent corporations to herein intervenor, Cameron Granville. In a Resolution dated June 5, 2006,16 the Court granted the motion for intervention. Accordingly, on August 28, 2006, the intervenor filed its Petition For Intervention17 and manifested therein that it adopts as its own petitioner bank’s petition and all its other pleadings. Thereafter, respondent ASB Group of Companies filed their Comment.18 Now to the resolution of the instant petition. Petitioner bank contends that the Court of Appeals erred:

PREMISES CONSIDERED, the objections to the rehabilitation plan raised by the creditors are hereby considered unreasonable. Accordingly, the Rehabilitation Plan submitted by petitioners is hereby APPROVED, except those pertaining to Mr. Roxas’ advances, and the ASB-Malayan Towers. Finally, Interim Receiver Mr. Fortunato Cruz is appointed as Rehabilitation Receiver.

1. In not nullifying the SEC Resolution dated April 15, 2003 approving the Rehabilitation Plan. Such approval illegally compels petitioner bank to accept, through a dacion en pago arrangement, the mortgaged properties based on ASB Group of Companies’ transfer values and to release part of the collateral. This forced transfer of properties and diminution of the bank’s right to enforce its lien on the mortgaged properties violate its constitutional right against impairment of contracts and right to due process.

SO ORDERED. On July 10, 2001, petitioner bank filed with the SEC En Banc a Petition for Certiorari,8 docketed as EB-725, alleging that the SEC Hearing Panel, in approving the Rehabilitation Plan, committed grave abuse of discretion amounting to lack or excess of jurisdiction; and praying for the issuance of a temporary restraining order and/or a writ of preliminary injunction to enjoin its implementation. Subsequently, the ASB Group of Companies filed their Opposition9 to the petition, to which petitioner bank filed its Reply.10

2. In not finding that the Rehabilitation Plan compels petitioner bank to waive the interests, penalties and other charges that accrued after the SEC issued its Stay Order. Again, this is in violation of the constitutional mandate on non-impairment of contracts and due process. 3. In not finding that only respondent ASB Holdings, Inc. suffered financial distress as stated in the Rehabilitation Plan and, as such, the coercive reach of the SEC’s Stay Order under P.D. 902-A can extend only to the enforcement of claims against this distressed corporation. It cannot suspend the claims and actions against its affiliate corporations.

In a Resolution11 dated April 15, 2003, the SEC En Banc denied petitioner bank’s Petition for Certiorari and affirmed the SEC Hearing Panel’s Order of April 26, 2001.

Page 175 of 192

In their Comment, respondent corporations comprising the ASB Group of Companies prayed for the dismissal of the instant petition for being unmeritorious.

3. Invite unsecured creditors to purchase real estate parcels and other assets and set-off the amount of their outstanding claim against the purchase price.

The first two (2) assigned errors lack merit. We shall discuss them jointly as they are closely interrelated.

The assets included in the above program include all real estate assets.

We are not convinced that the approval of the Rehabilitation Plan impairs petitioner bank’s lien over the mortgaged properties. Section 6 [c] of P.D. No. 902-A provides that "upon appointment of a management committee, rehabilitation receiver, board or body, pursuant to this Decree, all actions for claims against corporations, partnerships or associations under management or receivership pending before any court, tribunal, board or body shall be suspended." By that statutory provision, it is clear that the approval of the Rehabilitation Plan and the appointment of a rehabilitation receiver merely suspend the actions for claims against respondent corporations. Petitioner bank’s preferred status over the unsecured creditors relative to the mortgage liens is retained, but the enforcement of such preference is suspended. The loan agreements between the parties have not been set aside and petitioner bank may still enforce its preference when the assets of ASB Group of Companies will be liquidated. Considering that the provisions of the loan agreements are merely suspended, there is no impairment of contracts, specifically its lien in the mortgaged properties.

In order to determine the feasibility of the above, representatives of our financial advisors met with or had discussions with most of the secured creditors. Preliminary discussions indicate support from the secured creditors towards the concepts of the program associated with them. The majority of these secured creditors appear to want to complete dacion en pago transactions based on MUTUALLY AGREED UPON TERMS. x x x. We continue to pursue discussions with secured creditors. Based on the program, secured creditors’ claims amounting to PhP5.192 billion will be paid in full including interest up to April 30, 2000. Secured creditors have been asked to waive all penalties and other charges. This dacion en pago program is essential to eventually pay all creditors and rehabilitate the ASB Group of Companies. If the dacion en pago herein contemplated does not materialize for failure of the secured creditors to agree thereto, this rehabilitation plan contemplates to settle the obligations (without interest, penalties, and other related charges accruing after the date of the initial suspension order) to secured creditors with mortgaged properties at ASB selling prices for the general interest on the employees, creditors, unit buyers, government, general public and the economy. x x x.20 (Underscoring supplied)

As we stressed in Rizal Commercial Banking Corporation v. Intermediate Appellate Court,19 such suspension "shall not prejudice or render ineffective the status of a secured creditor as compared to a totally unsecured creditor," for what P.D. No. 902-A merely provides is that all actions for claims against the distressed corporation, partnership or association shall be suspended. This arrangement provided by law is intended to give the receiver a chance to rehabilitate the corporation if there should still be a possibility for doing so, without being unnecessarily disturbed by the creditors’ actions against the distressed corporation. However, in the event that rehabilitation is no longer feasible and the claims against the distressed corporation would eventually have to be settled, the secured creditors, like petitioner bank, shall enjoy preference over the unsecured creditors. Likewise, there is no compulsion on the part of petitioner bank to accept a dacion en pago arrangement of the mortgaged properties based on ASB Group of Companies’ transfer values and to condone interests and penalties. The Rehabilitation Plan itself, under item IV-A, explains the dacion en pago proposal, thus: IV. THE REVISED REHABILITATION PLAN A. The Total Approach It is apparent that ASB’s corporate indebtedness needs to be reduced as quickly as possible in order to prevent rapid deterioration in equity. x x x. In order to reduce debt quickly, we must do the following: 1. Complete or sell on-going projects; 2. Invite secured creditors to complete dacion en pago transactions, waiving all penalties; and

Indeed, based on the above explanation in the Rehabilitation Plan, the dacion en pago program and the intent of respondent ASB Group of Companies to ask creditors to waive the interests, penalties and related charges are not compulsory in nature. They are merely proposals for the creditors to accept. In fact, as explained, there was already an initial discussion on these proposals and the majority of the secured creditors showed their desire to complete dacion en pago transactions, but they must be "based on MUTUALLY AGREED UPON TERMS." The SEC En Banc in its Resolution dated April 15, 2003, affirming the SEC Hearing Panel’s Order of April 26, 2001 approving the Rehabilitation Plan, aptly declared: x x x, petitioner asserts that the Rehabilitation Plan is not legally feasible because respondents cannot dictate the terms of dacion. We do not agree. A cursory reading of the Rehabilitation Plan debunks this assertion. The Plan provides that dacion en pago transaction will be effected only if the secured creditors, like petitioner, agree thereto and under terms and conditions mutually agreeable to private respondents and the secured creditor concerned. The dacion en pago program is essential to eventually pay all creditors and rehabilitate private respondents. If the dacion en pago does not materialize in case secured creditors refuse to agree thereto, the Rehabilitation Plan contemplates to settle the obligations to secured creditors with mortgaged properties at selling prices. This is for the general interest of the employees, creditors, unit buyers, government, general public, and the economy.21 (Underscoring supplied) With respect to the third assigned error, we note that the same was not raised by petitioner bank in its Comment/Opposition to the Rehabilitation Plan filed with the SEC Hearing Panel. Such belated issue cannot be considered, especially because it involves a question of fact, the resolution of which is normally beyond the authority of this Court as it is not a trier of facts.22

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At any rate, the SEC En Banc found that the SEC Hearing Panel "acted within its legal authority in resolving this case. Neither it overstepped its lawful authority nor acted whimsically in approving the Rehabilitation Plan. Hence, it cannot be faulted of grave abuse of discretion."23 We find no reason to disturb such finding, it being a fundamental rule that factual findings of quasi-judicial agencies, like the SEC, which have acquired expertise as their jurisdiction is confined to special matters such as the subject of this case, are generally accorded great respect and even finality, absent any showing that they arbitrarily disregarded evidence or misapprehended evidence to such an extent as to compel a contrary conclusion if such evidence had been properly appreciated.24

RENATO C. CORONA

Petitioner bank also argues that "ASB Group of Companies" is merely a generic name used to describe collectively various companies and as such, it is not a legal entity with juridical personality and cannot be a party to a suit. True, "ASB Group of Companies" is merely used in this case as a generic name, for brevity, to collectively describe the various companies/corporations that filed a Petition For Rehabilitation with the SEC. However, in their petition, all the respondent corporations are individually named as petitioners, not "ASB Group of Companies."

Associate Justice

One last word. The purpose of rehabilitation proceedings is to enable the company to gain new lease on life and thereby allows creditors to be paid their claims from its earnings.25 Rehabilitation contemplates a continuance of corporate life and activities in an effort to restore and reinstate the financially distressed corporation to its former position of successful operation and solvency.26 This is in consonance with the State’s objective to promote a wider and more meaningful equitable distribution of wealth to protect investments and the public.27 The approval of the Rehabilitation Plan by the SEC Hearing Panel, affirmed by both the SEC En Banc and the Court of Appeals, is precisely in furtherance of the rationale behind P.D. No. 902A, as amended, which is "to effect a feasible and viable rehabilitation"28 of ailing corporations which affect the public welfare.

REYNATO S. PUNO

WHEREFORE, we DENY the instant petition for review on certiorari. The assailed Decision and Resolution of the Court of Appeals in CA-G.R. SP No. 77260 are AFFIRMED. Costs against intervenor Cameron Granville. SO ORDERED. ANGELINA SANDOVAL-GUTIERREZ

Associate Justice

(On official leave)

ADOLFO S. AZCUNA Asscociate Justice CANCIO C. GARCIA

CERTIFICATION Pursuant to Article VIII, Section 13 of the Constitution, it is hereby certified that the conclusions in the above Decision were reached in consultation before the case was assigned to the writer of the opinion of the Court’s Division.

Chief Justice Footnotes 1 Filed under Rule 45 of the 1997 Rules of Civil Procedure, as amended. 2 Penned by Associate Justice Mariano C. Del Castillo and concurred in by Associate Justice Edgardo P. Cruz and Associate Justice Magdangal M. De Leon. 3 In their petition for rehabilitation, the corporations comprising the ASB Group of Companies alleged that their allied companies (ASB Holdings, Inc., ASB Land, Inc., ASB Finance, Inc., Makati Hope Christian School, Inc., Bel-Air Holdings Corporation, Winchester Trading, Inc., VYL Development Corporation, Gerick Holdings Corporation, and Neighborhood Holdings, Inc.) have joined in the said petition "because they executed mortgages and/or pledges over their real and personal properties to secure the obligations of petitioner ASB Group of Companies. Further, (they) agreed to contribute, to the extent allowed by law, some of their specified properties and assets to help rehabilitate petitioner ASB Group of Companies." Rollo, pp. 119-120.

Associate Justice WE CONCUR: REYNATO S. PUNO Chief Justice Chairperson

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G.R. NO. 166197, February 27, 2007

The court also emphasized that the purpose of rehabilitating proceedings is to enable the company to gain new lease on life thereby allows creditors to be paid their claims from its earnings. rehabilitation contemplates a continuance of corporate life and activities in an effort to restore ad reinstate the financially distressed corporation to its former position of successful operation and solvency. this is in consonance with the state's equitable distribution of wealth to protect investments and the public. The approval of the rehabilitation plan by the SEC hearing panel, affirmed by both the SEC en banc and the court of appeals, is precisely in furtherance if the rationale behind P.D. No. 902-A, as amended which is "to effect a feasible and viable rehabilitation" of ailing corporations which affect the public welfare.

Metropolitan Bank & Trust Company, petitioner vs ASB Holdings, Inc., respondents FACTS: Metropolitan Bank and Trust company is a creditor bank of respondents corporation collectively known as the ASB Group of Companies. ASB group of companies is owner and developer of condominium and real estate projects which contracted loans to the petitioner which were secured by real estate mortgages. Later, ASB group of companies filed with the Securities and Exchange Commission a petition for rehabilitation with prayer for suspension of actions and proceedings against petitioners. However, despite the objection of Metropolitan bank and trust company for the rehabilitation plan, SEC granted the same. Meanwhile, the contention of the petitioner in their objection was that, the approval on the rehabilitation plan will impair the contract entered into by the ASB group of companies with the petitioner.

Posted 9th April 2014 by fallenrhainnes Labels: 517 SCRA 1 case digest corporation law G.R. No. 166197 Metrobank vs ASB Group of Companies SECOND DIVISION G.R. No. 166116

March 31, 2006

OFFICE OF THE OMBUDSMAN, Petitioner, vs. FLORENTINA SANTOS, Respondent.

ISSUE: DECISION Whether or not the approval of rehabilitation plan impairs contract entered into and prejudiced creditors. HELD:

The Supreme Court were not convinced that the approval of the rehabilitation plan impair petitioner bank's lien over the mortgaged properties. Section 6 (c) of P.D. no. 902-A provides that "upon appointment of a management committee, rehabilitation receiver, board or body, pursuant to this Decree, all actions for claims against corporations, partnership or associations under management or receivership pending before any curt, tribunal, board or body shall be suspended." By that statutory provision, it is clear that the approval of the rehabilitation plan and the appointment of a rehabilitation reciever merely suspend the action for claims against respondent corporations. Petitioners banks preferred status over the unsecured creditors relative to the mortgage liens is retained, but the enforcement of such preference is suspended. the loan agreement between the parties have not been set aside and petitioner bank may still enforce its preference when the assets of ASB Group of companies will be liquidated. considering that the provisions of the loan agreements and merely suspends, there is no impairment of contracts, specifically its lien on the mortgaged properties.

PUNO, J: This is a petition for review of the decision dated June 22, 2004 and resolution dated November 23, 2004 of the Court of Appeals, which reversed the decision of the Ombudsman finding respondent guilty of dishonesty, violation of Sec. 4 (c) of Republic Act No. (R.A.) 67131 and grave misconduct, and penalizing her with dismissal from the service with forfeiture of benefits equivalent to twelve (12) months salary and temporary disqualification for re-employment in the government service for one (1) year. This case arose from a complaint filed by Estrelita L. Gumabon, Teacher III, Lagro Elementary School, against the school Principal, respondent Florentina A. Santos, before the Office of the Ombudsman on September 29, 1997. The complaint alleged that respondent falsified her daily time record as her entries therein did not match the entries of the school’s security guard in their logbook. In particular, on August 20, 1997, respondent indicated in her daily time record that she reported for work at Lagro Elementary School the whole day, but she actually went to Golden Child Montessori Dela Costa III Annex at 9:00 a.m., and later at 11:30 a.m. to its Carissa II Annex. She left the premises of said school around one in the afternoon. The complaint also pointed out that respondent was one of the owners/incorporators of Golden Child Montessori and held the position of President/Chairman of the Board. It was further alleged that respondent exhibited rude and oppressive behavior not only to the teachers and personnel of Lagro Elementary School, but also to the parents of their pupils.2 In a supplemental complaint

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dated April 1, 1998, Gumabon also charged respondent with taking several pieces of galvanized iron sheets used in the construction and repair of some rooms and toilets at Lagro Elementary School. Respondent allegedly ordered one Jose Sabalilag to take the galvanized iron sheets and deliver them to her house, and even asked school janitress Pia Amparo to accompany Sabalilag to show him the direction to respondent’s house.3 Answering the charges, respondent explained that it was her daily routine upon arrival at the school to inspect its outer premises before entering the school grounds, to see if the school fence is clean and garbage-free. The security guard only logs in the time of respondent’s entry into the school grounds as her arrival time. As regards the incident on August 20, 1997, respondent stated that she sought permission from Mrs. Paz T. Quejada, District Supervisor, School District X, to attend an activity at Golden Child Montessori. She said that Mrs. Quejada did not object to her request. Respondent also admitted being an owner/incorporator of Golden Child Montessori, but argued that it did not violate any existing law. She denied all the other allegations in the complaint. With respect to the taking of the galvanized iron sheets, respondent explained that they were excess materials from the construction projects in the school and they were sold to her by the project contractor at cost.4 Hearings were conducted before Graft Investigation Officer Joselito P. Fangon at the Administrative Adjudication Bureau, Office of the Ombudsman. Gumabon appeared to identify her affidavit, as well as the affidavits of her witnesses, and the documentary evidence consisting of the photocopy of respondent’s daily time record for the months of February, March and August 1997,5 copy of the logbook of security guard Willy Casauay,6 copy of the memo issued by respondent to the Principals of the various annexes of Golden Child Montessori,7 the letters of several parents of Lagro Elementary School pupils complaining about the attitude of respondent towards them, and the copy of the police receipt showing that the police recovered several galvanized iron sheets from Jose Sabalilag. Hermelina de Vera, former Principal of Golden Child Montessori Dela Costa III Annex, testified that respondent attended the Linggo ng Wika celebration at their campus in San Jose Del Monte, Bulacan on August 20, 1997. Respondent arrived at said campus around nine in the morning.8 Zaida Zayde, Corporate Secretary and Principal of Golden Child Montessori Dela Costa II Annex, testified that respondent is also one of the incorporators of said school, and that respondent handles its finances, signs checks, keeps bank accounts, and issues and signs memoranda for and in behalf of the school. She also stated that she and respondent visited the Dela Costa III Annex of Golden Child Montessori during the Linggo ng Wika celebration.9 Juan S. Gambol, Police Inspector, Lagro Police Station, stated that on February 13, 1998, Gumabon reported the alleged missing pieces of galvanized iron at Lagro Elementary School. They recovered around 40 pieces of galvanized iron sheets from Jose Sabalilag on February 23, 1998 and issued a receipt therefor.10

Fructuosa C. Gavilan, Grade School Teacher, Lagro Elementary School, testified that respondent has the habit of scolding her even in front of other people. She also testified to an incident where she was marked absent despite being present, albeit late on the particular date.12 Sophia Amparo, Janitress at Lagro Elementary School, testified that on February 10, 1998, she was instructed by respondent to bring to the latter’s house several pieces of galvanized iron sheets.13 Didith Sacueza testified that she used to sell food to the teachers at the Lagro Elementary School. She said that she had an agreement with respondent that she would be allowed to sell food in the school but she was required to give a certain amount to the school. Then, one day, without any notice, Sacueza was refused entry into the school. The guard informed her that it was the Principal’s order. She wrote respondent asking why she was no longer allowed to sell food in the school, but she did not get any response.14 Vicente Cue, Security Guard at Lagro Elementary School, testified that on September 5, 1999, his wife made an emergency call at the school but respondent refused to give the call to him.15 Willy Casauay, also a Security Guard at Lagro Elementary School, testified that a certain Jose Sabalilag went to the Lagro Elementary School and, upon instruction of respondent, took several pieces of galvanized iron sheets. Accompanied by Pia Amparo, Sabalilag brought the same to respondent’s residence. The incident was noted in his logbook.16 Jose Sabalilag, Benedict Guantero and Erlinda Dela Rosa, on the other hand, testified for [email protected] Jose Sabalilag stated that sometime in February 1998, he was tasked to renovate a comfort room at Lagro Elementary School. He used about forty (40) pieces of galvanized iron sheets for the construction. There was an excess of about eight (8) pieces of galvanized iron sheets which respondent ordered to be taken to her house. He also said that he removed around forty-one (41) pieces of used galvanized iron sheets which he took to their storage (bodega), but which he also returned to the school the next day upon instruction of a Commission on Audit (COA) personnel. While they were unloading the returned materials, Gumabon arrived, took some pictures, and reported the incident to the police. Gumabon also made him sign an affidavit stating that respondent was the one who ordered the taking of the galvanized iron sheets.17 Benedict Guantero, an employee of the COA, testified that respondent sought his advice concerning the salvageable materials taken from two (2) school toilets which underwent renovation.18 Erlinda Dela Rosa, former Officer-in-Charge of Golden Child Montessori, testified that Golden Child Montessori and its branches were being managed by their respective Principals. She also testified that the payment of rentals for the school, the payment of salaries of teachers and financial management of the school were undertaken by the respective administrators.19

Jeorgia Loperez, one of the incorporators of Golden Child Montessori, testified that respondent is the President and Chairman of the Golden Child Montessori, and that she handles the finances, keeps the bank account, signs checks and issues memoranda for and in behalf of the school.11

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On July 23, 2001, the Office of the Ombudsman rendered a decision finding respondent guilty of dishonesty, violation of Sec. 4 (c) of R.A. 6713 and grave misconduct. It imposed upon respondent the penalty of dismissal from service with forfeiture of benefits equivalent to twelve (12) months salary and temporary disqualification for re-employment in the government for one (1) year from the finality of said decision.20

respondent’s act of punching her Daily Time Record constitutes Dishonesty for making it appear that she was present for work when in fact she was absent therefrom.

The Court of Appeals, however, reversed and set aside the decision of the Ombudsman and ordered the dismissal of the complaint. It held that the findings of the Office of the Ombudsman were not supported by substantial evidence.21

As to the charge against respondent of being an Owner/Incorporator of the Golden Child Montessori School, we find the evidence to be inadequate to establish any administrative liability.

Hence, this petition. Petitioner raised the following arguments:

Although the evidence tend to prove that the respondent is an Owner/Incorporator of the said school, still, the complainant failed to show any conflict of interest on the part of the respondent. Moreover, no evidence was presented to show that being an Owner/Incorporator of a private school amounts to a violation of any law. Verily, the charge against respondent on this score should be dismissed.

1. Contrary to the appellate court a quo’s [sic] ruling, the extant evidence on record constitutes more than substantial evidence to establish the administrative guilt of respondent. 2. Findings of fact of an administrative agency are generally accorded not only respect but at times finality.22 The petition is impressed with merit. Administrative proceedings are governed by the "substantial evidence rule." A finding of guilt in an administrative case would have to be sustained for as long as it is supported by substantial evidence that the respondent has committed acts stated in the complaint or formal charge. As defined, substantial evidence is such relevant evidence as a reasonable mind may accept as adequate to support a conclusion.23 A reading of the decision of the Office of the Ombudsman and a thorough examination of the records of this case show sufficient evidence to prove respondent’s administrative liability. In its decision, the Office of the Ombudsman, through Graft Investigation Officer Joselito P. Fangon, cites the pieces of evidence that support its ruling. It discussed its findings thus: Respondent FLORENTINA A. SANTOS stands administratively charged with, among others, the falsification of her Form 48; of being one of the Owners/Incorporators of a private school; of having oppressed and harassed school teachers and employees; and of theft of school property. With respect to the first charge, the complainant adduced as evidence the Daily Time Record (Civil Service Form No. 48) of respondent SANTOS for the month of August 1997 (Exhibit B, p. 0191, Records). Marked as Exhibit "B-1" (supra.) is the entry for August 20, 1997 showing that respondent SANTOS reported for work at Lagro Elementary School, Quezon City, at 6:45 in the morning and departed at 7:15 in the evening. Likewise adduced as evidence is the testimony of Hermelina de Vera x x x x On the basis of the foregoing, it has been substantially established that respondent SANTOS actually reported for work at the Lagro Elementary School in Quezon City. However, evidence shows that said respondent, instead of rendering the required number of hours of work, went to a private school (to attend a school function) in San Jose Del Monte, Bulacan. It is therefore clear that the respondent deliberately made it appear that she reported for work on 20 August 1997, when in truth, she attended a private function and was physically absent from school. The

As against these, the respondent failed to present any evidence to counter the same, and as such, her guilt has been adequately shown.

On the charge of Oppression/Harassment, witness VICENTE CUE testified that on 8 September 1997, his wife made an emergency call at Lagro Elementary School where he works as a Security Guard. However, despite his presence thereat, respondent SANTOS refused to give the call to him. On cross-examination, the testimony of witness CUE was not rebutted by any evidence. Hence, it has been fairly established that the respondent committed an oppressive act against Vicente Cue. Her actuations definitely runs [sic] counter to the established norms of conduct and ethical standards for public officials who, "must act with justice and shall not discriminate against anyone". Moreover, her action violates the standard of personal conduct, which mandates all civil servants to "respect the rights of others, and to refrain from doing acts contrary to good morals and customs". Accordingly, respondent SANTOS appears to be liable for violation of Republic Act No. 6713. The respondent was also accused of having misappropriated government property. On this point, Sophia Amparo, janitress, Lagro Elementary School, testified x x x x It is clear from the foregoing that at the instance of the respondent, several galvanized iron sheets which appear to be the property of the government were taken out of Lagro Elementary School and delivered to the residence of the respondent. The respondent then presented her witnesses, namely: JOSE SABALILAG and BENEDICT GUANTERO, to rebut the allegation of theft, however, the same proved insufficient to counter the evidence against her. xxx It is therefore clear from the testimony of JOSE SABALILAG that at least eight (8) galvanized iron sheets (which were purportedly new) were taken by the respondent and which remain unaccounted for. This bolsters the finding that the respondent was responsible for having taken several galvanized iron sheets which were government property.

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With respect to BENEDICT GUANTERO, a witness for the respondent, the basis for his testimony, which is a purported Affidavit was not formally offered as evidence in the present case. Hence, the allegations therein can not be possibly considered in the resolution of the instant case.

interest over and above personal interest. By actively participating in the management of Golden Child Montessori, a private school, while serving as Principal of Lagro Elementary School, a government school, respondent has transgressed the provisions of Section 7 (b) (2) of R.A. 6713.

All told, it has been substantially established that the respondent took government property for her own personal benefit which constitutes Grave Misconduct, and for which the respondent may be held liable. (citations omitted)24

We affirm all the other findings of the Office of the Ombudsman. The testimonial and documentary evidence contained in the records constitutes substantial evidence to prove the administrative liability of respondent, as discussed by the Ombudsman.

As a general rule, factual findings of administrative bodies are accorded great respect by this Court. We do not see any reason to depart from this policy, except as regards respondent’s liability for holding the position of President/Chairman of the Board of Golden Child Montessori and managing the affairs of said school. Contrary to the Ombudsman’s ruling that such act does not violate any provision of law, Section 7 (b) (2) of R.A. 6713 prohibits all public officials and employees from engaging in the private practice of their profession, thus:

We now go to the penalty. Section 11 of R.A. 6713 provides that violations of Section 7 of said law shall be punishable with imprisonment not exceeding five (5) years, or a fine not exceeding five thousand pesos (P5,000), or both, and, in the discretion of the court, disqualification to hold public office. Hence, we deem it appropriate to impose a fine of five thousand pesos (P5,000) upon respondent in addition to the penalty imposed upon her by the Office of the Ombudsman.

SECTION 7. Prohibited Acts and Transactions. – In addition to acts and omissions of public officials and employees now prescribed in the Constitution and existing laws, the following shall constitute prohibited acts and transactions of any public official and employee and are hereby declared to be unlawful:

IN VIEW WHEREOF, the petition is GRANTED. The assailed decision and resolution of the Court of Appeals are SET ASIDE. The decision of the Office of the Ombudsman in OMB-ADM0-98-0307 dated July 23, 2001 is REINSTATED with MODIFICATION that an additional FINE of FIVE THOUSAND PESOS (P5,000.00) is imposed upon respondent. SO ORDERED.

xxx REYNATO S. PUNO (b) Outside employment and other activities related thereto. – Public officials and employees during their incumbency shall not:

Associate Justice

(1) Own, control, manage or accept employment as officer, employee, consultant, counsel, broker, agent, trustee or nominee in any private enterprise regulated, supervised or licensed by their office unless expressly allowed by law;

WE CONCUR:

(2) Engage in the private practice of their profession unless authorized by the Constitution or law, provided, that such practice will not conflict or tend to conflict with their official functions; or

Associate Justice

ANGELINA SANDOVAL-GUTIERREZ

RENATO C. CORONA (3) Recommend any person to any position in a private enterprise which has a regular or pending official transaction with their office.

Associate Justice

These prohibitions shall continue to apply for a period of one (1) year after resignation, retirement, or separation from public office, except in the case of subparagraph (b) (2) above, but the professional concerned cannot practice his profession in connection with any matter before the office he used to be with, in which case the one-year prohibition shall likewise apply.

ADOLFO S. AZCUNA

Asscociate Justice CANCIO C. GARCIA Associate Justice

The rule is that all public officers and employees are prohibited from engaging in the private practice of their profession. The exception is when such private practice is authorized by the Constitution or law. However, even if it is allowed by law or the Constitution, private practice of profession is still proscribed when such practice will conflict or tends to conflict with the official functions of the employee concerned. Indeed, public servants are expected to devote their undivided attention to their public duties, to give the tax payers the competent and excellent service that they deserve. In fact, Section 4 of the Code of Conduct and Ethical Standards for Public Officials and Employees enjoins said officials and employees to always uphold public

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ATTESTATION I attest that the conclusions in the above Decision were reached in consultation before the case was assigned to the writer of the opinion of the Court’s Division.

LAND CAR, INC., petitioner, vs. BACHELOR EXPRESS, INC. AND VALLACAR TRANSIT, INC., respondents.

REYNATO S. PUNO

DECISION

Associate Justice

VITUG, J.:

Chairman

On 21 May 1999, petitioner filed with the Regional Office of the Land Transportation Franchising and Regulatory Board (LTFRB), Region XII, a verified application to operate a public utility bus service from Davao City to Cagayan de Oro City via Butuan City.

CERTIFICATION Pursuant to Section 13, Article VIII of the Constitution, and the Division Chairman’s Attestation, it is hereby certified that the conclusions in the above Decision were reached in consultation before the case was assigned to the writer of the opinion of the Court’s Division.

Respondents, themselves grantees of certificates of public convenience, opposed petitioners application alleging that the route applied for was sufficiently being served by them, and that cutthroat competition would only result if petitioners application were to be favorably acted upon.

ARTEMIO V. PANGANIBAN On 29 October 1999, the LTFRB rendered its decision granting petitioners application and directing the issuance of the corresponding Certificate of Public Convenience. Respondents motion for reconsideration was denied in the boards resolution of 27 January 2000. Respondents then appealed to the Office of the Secretary of the Department of Transportation and Communication (DOTC). On 05 June 2000, the DOTC Secretary reversed the decision of the LTFRB. This time, it was petitioners turn to move for reconsideration of the DOTC Secretarys resolution. The motion, however, was denied by the DOTC Secretary in his order of 30 August 2000. Respondents thereupon moved for the immediate implementation by the LTFRB of the decision of the DOTC Secretary. On 03 October 2000, the LTFRB granted respondents motion and directed petitioner to cease and desist from operating its buses along the contested route.

Chief Justice Footnotes 1 Code of Conduct and Ethical Standards for Public Officials and Employees. 2 Original Records, pp. 2-5. 3 Original Records, pp. 39-41. 4 Original Records, pp. 33-35. 5 Exh. "B." 6 Exh. "C." 7 Exh. "F." 8 TSN, December 11, 1997, pp. 8-29; Exh. "Z," Original Records, pp. 214-215. 9 TSN, December 11, 1997, pp. 31-50; Exh. "Y-1," Original Records, p. 216; Exh. "Y-2," Original Records, p. 217; Exh. "E," Original Records, p. 218; Exh. "AA," Original Records, p. 219; Exh. "F," Original Records, pp. 220-223. 10 TSN, March 24, 1999, pp. 3-12; Exh. "T," Original Records, p. 187; Exh. "T-1," Original Records, p. 188; Exh. "S," Original Records, p. 189. 11 TSN, April 21, 1999, pp. 5-8; Exh. "Y-2," Original Records, p. 217.

On 07 October 2000, petitioner filed a letter-appeal to the Office of the President seeking to set aside the resolution and order, dated 05 June 2000 and 30 August 2000, respectively, of the DOTC Secretary. Petitioner then likewise filed before the Court of Appeals a petition for certiorari, docketed C.A.-G.R. SP No. 61159, questioning the same resolution and order of the DOTC Secretary subject of the letter-appeal addressed to the Office of the President. Upon advice of its new counsel, however, petitioner filed a notice of withdrawal of its petition for certiorari (C.A.-G.R. SP No. 61159) pending with the appellate court. The appellate court did not act upon the notice of withdrawal of the petition (C.A. G.R. SP No. 61159) but, instead, dismissed, in its resolution of 09 November 2000, the petition for failure of compliance with Section 1, Rule 42, of the 1997 Rules of Civil Procedure on non-forum shopping. On 20 October 2000, the Office of the President issued a memorandum directing that the execution of the resolution and order of the DOTC Secretary, dated 05 June 2000 and 30 August 2000, respectively, be meanwhile stayed. On 15 January 2001, respondents filed with the Court of Appeals a petition for certiorari under Rule 65 of the 1997 Rules of Civil Procedure, docketed C.A.-G.R. SP No. 62619, assailing the Memorandum Order of the Office of the President. Respondents argued that the Office of the President had no jurisdiction to issue the assailed order in the absence of any law providing for

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an appeal from the DOTC to the Office of the President, adding that petitioner was guilty of forum shopping in addressing a letter-appeal to the Office of the President. On 18 June 2001, the Court of Appeals granted respondents petition for certiorari basically on the ground that petitioner was guilty of forum shopping. It ordered the dismissal of the appeal filed by petitioner before the Office of the President and reinstated the resolution and order of the DOTC Secretary enjoining petitioner from operating its buses along the contested route. In the instant appeal, petitioner contends that the appellate court has decided a question in a way not in accord with applicable jurisprudence. There is merit in the petition. Forum shopping refers to the act of availing oneself of several judicial remedies in different courts, either simultaneously or successively, substantially founded on the same transaction and identical material facts and circumstances, raising basically like issues either pending in, or already resolved by, some other court.[1] The principle applies not only with respect to suits filed before courts but also in connection with a litigation commenced in court while an administrative proceeding is pending in order to defeat administrative processes in anticipation of an unfavorable administrative ruling and possibly a favorable court ruling.[2] Forum shopping is said to exist where the elements of litis pendentia are present or where a final judgment in one case would amount to res judicata in the other;[3] or where, in the two or more cases pending, there is identity of (a) parties, (b) rights or causes of action, and (c) reliefs sought.[4]

departments, bureaus and offices.[7] The Office of the President validly acquired jurisdiction over the case upon the filing therewith of the appeal by herein petitioner, and said jurisdiction is not lost by the subsequent recourse by the petitioner of the certiorari proceedings before the Court of Appeals. Jurisdiction which has attached in the first instance continues until the final resolution of the case. Incongruently, the appellate court, while recognizing to be valid the exercise of jurisdiction by the Office of the President, ordered the dismissal of the appeal pending with the said office based on forum shopping. The decision of the appellate court ordering the dismissal of the appeal taken to the Office of the President is clearly flawed. It is the latter, not the appellate court, which could dismiss the case pending before that office. It also behooves courts of justice, if only for reasons of comity and convenience, to shy away from a dispute until the system of administrative redress is completed so as to give the administrative office every opportunity to correct its error and to properly dispose of the case. In fact, the appellate courts order to dismiss the appeal pending with the Office of the President could well constitute an undue intrusion into a valid exercise of jurisdiction by the President over acts of subordinates within that office. WHEREFORE, the petition is GRANTED, and the assailed decision is SET ASIDE. No costs. SO ORDERED. Sandoval-Gutierrez, Corona, and Carpio-Morales, JJ., concur.

In order to deter the evils of forum shopping, Circular 28-91, dated 08 February 1994, issued by the Supreme Court requires that every petition filed with the Supreme Court or the Court of Appeals must be accompanied by a certification of non-forum shopping. Administrative Circular 04-94, made effective on 01 April 1994, expands the certification requirement to include cases filed in court and quasi-judicial agencies below the Supreme Court and the Court of Appeals. Ultimately, the Court adopted paragraphs (1) and (2) of Administrative Circular No. 04-94 to become Section 5, Rule 7, of the 1997 Rules of Civil Procedure. Significantly, to curb the malpractice of forum shopping, the rule ordains that a violation thereof would constitute contempt of court and be a cause for the summary dismissal of both petitions without prejudice to the taking of appropriate action against the counsel of the party concerned.[5] Undeniably, there is identity of cause of action and reliefs sought between the petitioners letterappeal filed with the Office of the President and the petition for certiorari filed with the Court of Appeals (C.A. G.R. SP No. 61159). The DOTC resolution and order, dated 05 June 2000 and 30 August 2000, respectively, were sought to be set aside in both appeals filed by petitioner.

[1] Gatmaytan vs. Court of Appeals, 267 SCRA 487. [2] First Philippine International Bank vs. Court of Appeals, 252 SCRA 259. [3] Buan vs. Lopez, Jr., 145 SCRA 34. [4] Employees Compensation Commission vs. Court of Appeals, 257 SCRA 717. [5] Administrative Circular No. 04-94, April 1, 1994; Fil-Estate Golf and Development, Inc. vs. Court of Appeals, 265 SCRA 614; Prubankers Association vs. Prudential Bank & Trust Company, 302 SCRA 74. [6] Paat vs. Court of Appeals, 266 SCRA 167. [7] Section 17, Article VI, 1987 Constitution.

The doctrine of exhaustion of administrative remedies empowers the Office of the President to review any determination or disposition of a department head. The doctrine allows, indeed requires, an administrative decision to first be appealed to the administrative superiors up to the highest level before it may be elevated to a court of justice for review. Thus, if a remedy within the administrative machinery can still be had by giving the administrative officer concerned every opportunity to decide on the matter that comes within his jurisdiction, then such remedy should be priorly exhausted before the courts judicial power is invoked.[6] The appellate court correctly ruled that the action of a department head bears only the implied approval of the President, and the latter is not precluded from exercising the power to review the decision of the former pursuant to the Presidents power of control over all executive

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Republic of the Philippines

The DAR also declared that as of June 15, 1988, the date R.A. No. 6657 took effect, the following rules shall apply in determining the "areas qualified for exclusion":

SUPREME COURT A. Private Agricultural lands or portions thereof exclusively, directly and actually used for livestock, poultry and swine raising as of 15 June 1998 shall be excluded from the coverage of CARP.

Manila THIRD DIVISION G.R. No. 169277

B. In determining the areas qualified for exclusion under this Administrative Order, the following ratios of land, livestock, poultry and swine raising shall be adopted:

February 9, 2007

DEPARTMENT OF AGRARIAN REFORM,1 represented by OIC-Secretary Nasser C. Pangandaman, Petitioner,

1.0 Grazing 1.1 Cattle, Carabao11 and Horse Raising

vs. VICENTE K. UY, Respondent.

- cattle, carabao and horse (regardless of age) – the maximum ratio is one (1) head to one (1) hectare

DECISION

xxxx

CALLEJO, SR., J.:

2.0 Infrastructure

Before the Court is a Petition for Review on Certiorari under Rule 45 of the Revised Rules of Court of the Amended Decision2 of the Court of Appeals (CA) in CA-G.R. SP No. 70541 and the Resolution3 of the appellate court denying the motion for reconsideration thereof. The CA reversed and set aside the Decision4 of the Office of the President (OP) which had affirmed the Order5 of the Department of Agrarian Reform (DAR) exempting only a portion (219.50 hectares) of respondent Vicente K. Uy’s 349.9996-ha landholding from the coverage of the Comprehensive Agrarian Reform Program (CARP).

2.1 Cattle, Horses and Carabao Raising – a ratio of 21 heads

On December 4, 1990, this Court promulgated its decision in Luz Farms v. Secretary of the Department of Agrarian Reform6 where it declared unconstitutional Sections 3(b), 11, 13 and 32 of Republic Act (R.A.) No. 6657.7 The nullified provisions pertain to the inclusion of land used in raising livestock, poultry, and swine in the coverage of the law. The Court likewise nullified the Implementing Rules and Guidelines promulgated in accordance therewith.8 On December 27, 1993, the DAR issued Administrative Order (A.O.) No. 9, Series of 19939 primarily to curb the pernicious practice of landowners who convert their lands from agricultural to livestock and poultry in order to circumvent the law. The prefatory statement reads: x x x, the Supreme Court held that lands devoted to the raising of livestock, poultry and swine are excluded from the coverage of R.A. No. 6657. Following the said decision, numerous reports have been received that some landowners had taken steps to convert their agricultural lands to livestock, poultry and swine raising. In order to prevent circumvention of the Comprehensive Agrarian Reform Program and to protect the rights of the [a]grarian reform beneficiaries, specifically against their possible unlawful ejectment due to the unauthorized change or conversion or fraudulent declaration of areas actually, directly, and exclusively used for livestock, poultry and swine raising purposes, the following rules and regulations are hereby prescribed for the guidance of all concerned.10

for every 1.7815 hectares of infrastructure x x x.12 Dr. Vicente K. Uy, Wellington K. Ong, Jaime Chua, and Daniel Sy, among others, are owners of a 349.9996-ha parcel of land located in Barangay Camaflora, Barrio of San Andres, Municipality of San Narciso, Province of Quezon. The property is covered by Transfer Certificate of Title (TCT) No. 160988. Sometime in 1993, some 44 farmers who occupied portions of the property filed petitions in the DAR, seeking to be declared as owners- beneficiaries. On December 20, 1994, the DAR issued a Notice of Coverage under the CARP over the property. For his part, respondent, in behalf of the co-owners, filed an Application for Exclusion13 in the form of a letter dated May 10, 1995, through Provincial Agrarian Reform Officer (PARO) Durante L. Ubeda. To substantiate his request to exclude their landholding from CARP coverage under the Luz Farms ruling, respondent declared that their property had been exclusively used for livestock-raising for several years prior to June 15, 1988. According to the applicants, they had 400 heads of cattle, 5 horses, and 25 carabaos in the landholding and – Our private landholding has been devoted and actually used for cattle and/or livestock raising, together with raising of carabaos, and horses continuously from the time it was owned by our predecessors-in-interest, Emiterio Florido, and even when we acquired title over the property in 1979, we continually devoted and actually used the said landholding for cattle raising from 1979 up to the present.14 On May 10, 1995, the Provincial Task Force on Exclusion led by Municipal Agrarian Reform Officer (MARO) Belen T. Babalcon conducted an ocular inspection of the property and an actual "headcount" was conducted. The following were present to witness the inspection: the Mayor of

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San Andres, the Barangay Agrarian Reform Committee Chairman, Legal Officer III James Carigo, and representatives of the applicants, farmers-beneficiaries, the Provincial Agrarian Reform Office, and the Philippine National Police. The findings of the Task Force are contained in the Investigation Report:

undulating 2.

Goat Sheep

3.

Swine

4.

Poultry

allegedly owned by FBs and overseer

none

Registered Owner/s: (If deceased, indicate name of heirs) OWNER 4.1 layers 1. Dr. Vicente K. Uy 4.2 broilers

none

2. Wellington K. Ong, mrd. to So Ngo Grace Ong F.

Other Land Uses

3. Jaime Chua, mrd. to Letty Ong Chua Agriculture 4. Daniel Sy, mrd. to Carolyn T. Ngo Crops Planted

No. of Has.

No. of Tenants

No. of FWs & employees

5. Nancy Ong Uy 6. Emily Ong Uy

1. Coconut and auxillary crops 346.00 more or less and presently utilized for pasture and grazing of livestock. more than 44 29

7. Lucy Ong

Others (specify)

8. Wilson Ong

20 hectares more or less are sporadically planted to coconut with "aroma shrubs" also utilized for pasture at sitio Ipil.

9. John Ong Uy E.

Actual Land Use

heads/birds infrastructure 1.

G. Improvements and Infrastructures. Describe the kind of improvements and infrastructures whether constructed with strong or light materials and indicate the date constructed.

No. of Animal

Actual Area (has.) used for grazing Topography

Livestock

Approximate Area used for

2 corral made of coco lumber. The old one have constructed in 1980 and the other one constructed sometime on February 1995. Barb wire and fences on the perimeter of the area, wooden primary and secondary gate, feed storage, embankments. Cayab and potot creek are utilized for drinking purposes of the livestock.

1.1 cattle

H. Finishing.

1.2 horse

The landholding are entirely planted to bearing coconut trees "tenanted by more or less 44 FBs with sharing arrangement of 60:40 in favor of the landowner. The tenanted coconut land are presently used as pasture and grazing of the livestock." Landowner alleged that they are engaged in livestock raising prior to June 15, 1988. FBs are now petitioning for the acquisition and distribution of their occupied area under CARP coverage.15

1.3 carabao

401 )

20 ) 8)

346.00

The Task Force made the following declaration:

hectares

I. Comments/Remarks/Recommendations:

more or less or less

Flat to

3.00 more

The density required on commercial farming as far as the number of livestock is concerned have been met; however, the necessary infrastructure and facilities like paddocks, dike, water trough and others were not present much more per information revealed by farmers in the area

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majority of the cattles were only brought in the early part of this year. Therefore, it is recommended that the areas actually cultivated and occupied by the tenants be covered by CARP and only areas not affected be excluded from CARP coverage.16 Thus, on the basis of the aforesaid findings, MARO Belen Babalcon made a Final Report, declaring that 346.000 ha, more or less, is devoted to coconut and livestock farming; the registered owner is Dr. Vicente K. Uy; 346 ha is used for grazing and 3 ha for infrastructure. She declared that while a total of 429 livestock heads (401 cows, 20 horses, 8 carabaos) are being raised in the property, "the total area for exclusion is undetermined because there are portions occupied by tenants which should not be excluded from CARP coverage."17 Meanwhile, PARO Durante L. Ubeda submitted a separate Report18 dated July 4, 1995 where he declared: 1) THAT the total number of Certificate[s] of Ownership is 434 which is more than the actual headcount of 401;

On October 7, 1996, the DAR issued an Order25 partially granting the application for exclusion. It held that, in accordance with the Luz Farms ruling and A.O. No. 9, private agricultural lands are considered excluded from the CARP if already devoted to livestock, poultry, and swineraising as of June 15, 1988. According to the DAR, this means that the livestock must have been in the area at the time the law took effect. Since the Certificates of Ownership of Large Cattle were issued only on May 12 to 29, 1995, only those livestock which are seven years of age or more can be presumed to be within the area as of June 15, 1988. Consequently, following the animal to land ratio provided in A.O. No. 9 for 134 cattle and 28 horses and carabaos, only 162 ha should be exempted from CARP coverage. The DAR also ruled that additional exemptions include 12.50 ha for infrastructure (following the ratio 21 heads for every 1.7815 ha) and 45 ha for retention of nine landowners, for a total of 219.50 ha. The dispositive portion of the Order reads: WHEREFORE, premises considered, Order is hereby issued:

2) THAT the number of cattle 7 years old and above totaled 134 heads with 13 males and 121 females as of date of certification; 3) THAT 300 cattles were of ages 6 years old and below with 76 males and 234 females, [also as of the date of certification.]19 Ubeda’s basis for exclusion is the Certificate of Ownership of Large Cattle issued by the Municipal Treasurer of San Andres on May 12-29, 1995, submitted by the landowner, which, according to Ubeda is "more conclusive" (although issued fairly recently). He recommended the exclusion from CARP coverage a total of 219.50 has: 134 has. for cattle-grazing, 28 has. for horse and carabao grazing, 12.5 has. for infrastructure and 45 has. for retention of nine landowners. The applicants, through Uy, wrote a letter20 to DAR Region IV Director Percival C. Dalugdug dated July 18, 1995, requesting for a reinvestigation of the Report of PARO Ubeda. This request was reiterated in an August 11, 1995 letter21 where the applicants requested, for the first time, the exclusion of another parcel of land – 22.2639 ha and covered by TCT No. T11948 – which is contiguous to the 349.9996-ha lot covered by their earlier application. On August 14, 1995, the Regional Director issued an Order affirming the findings and recommendation of PARO Ubeda. Respondent and his co-owners appealed the order to the DAR Secretary on August 28, 1995. They argued that the properties have been devoted to livestock-raising even prior to 1977. Thus, the landholdings should be excluded from CARP coverage.22 They further argued that for purposes of determining the area for exclusion under A.O. No. 9, the entire number of livestock should be credited in applying the ratio of one head to one hectare. Considering that the landholdings totaled only 370 ha and there are 429 heads of livestock, they have more than complied with A.O. No. 9, Series of 1993.23 On March 15, 1996, the DAR issued an Order suspending the processing and issuance of Certificates of Land Ownership Awards to the farmers-beneficiaries of the landholding covered by TCT No. 160988 pending the resolution of the appeal.24

1. GRANTING the instant application for exclusion/exemption from CARP coverage pursuant to Administrative Order No. 09 Series [o]f 1993 but only with respect to a total of TWO HUNDRED NINETEEN POINT FIFTY (219.50) hectares. The remainder of ONE HUNDRED THIRTY POINT FOUR NINE NINE SIX (130.4996) hectares are hereby placed under CARP coverage; 2. Directing the MARO/PARO concerned to cause the survey of the entire area for purposes of segregating the areas which are covered from those which are excluded. SO ORDERED.26 On October 15, 1996, the applicants appealed the order to the OP via an Appeal with Prayer for Status Quo/Stay of Execution. The case was docketed as OP Case No. 98-D-8316. On April 13, 1998, the President, through then Deputy Executive Secretary Renato C. Corona (now a member of the Court), rendered a decision dismissing the appeal for lack of merit, as follows The language of DAR Administrative Order No. 09 appears to be quite explicit: "Private agricultural lands or portions thereof exclusively, directly and actually used for livestock, poultry and swine raising as of 15 June 1988 shall be excluded from the coverage of CARP." By simple reading, it is obvious that the livestock, poultry and swine, in order to be included in the computation of the area to be exempted from CARP coverage, should have been existing in the area sought to be exempted at the time of the effectivity of RA 6657, which is June 15, 1988. Thus, in ascertaining the animal/land ratio, the age of the cattle should be reckoned with. From the certification of the Municipal Treasurer of San Andres, Quezon, it appears that only 134 of the 434 cattles are found to be at least seven years of age. Accordingly, only 162 hectares (134 for the cattle and 28 for the horses and carabaos) are exempted from CARP coverage following the one hectare per one head of cattle ratio provided under the same administrative order. This, of course, does not include the retention area of the appellants-landowners and the area reserved for the infrastructures.27

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Respondent and his co-owners filed a Motion for Reconsideration dated May 21, 1998 of the decision. In an Order dated September 15, 1998 signed by the then Executive Secretary Ronaldo Zamora, by authority of the President, the appeal was denied for being devoid of substantial merit.28

Respondent for himself and in behalf of other owners then filed a "Petition for Review with Application/Prayer for Status Quo and/or Stay of Execution"34 before the CA, docketed as CAG.R. SP. No. 70541. They alleged that the OP committed the following errors: I

However, on October 5, 1998, then Chief Presidential Legal Adviser Harriet Demetriou submitted the following Memorandum to the President:

IT UNILATERALLY RE-ASSUMED JURISDICTION OVER THE CASE AND ISSUED THE ORDER OF APRIL 16, 2002, DENYING THE SECOND MOTION FOR RECONSIDERATION AND FOR RULING THAT IT WAS NOT "EXCEPTIONALLY MERITORIOUS ENOUGH," EITHER OF WHICH CONSTITUTES GRAVE ABUSE OF DISCRETION AND/OR EXCESS OF JURISDICTION, AND THEREFORE, REVERSIBLE.35

1. For total exemption: Administrative Order No. 9 provides that the maximum ratio in determining areas to be exempted is one head to one hectare "regardless of age."

II Hence, if Administrative Order No. 9 does not distinguish, neither should we. The use of age as a reference when not so required is arbitrary and very dangerous because it would then variably depend on the arbitrary decision of the DAR on when to conduct an inspection, and this is no fault of the landowner. Thus, the more recent the inspection is made, the higher the age requirement will be just to reckon the animals’ existence from 15 June 1988. The ultimate result is that an owner will never be able to augment his herd, or replace lost or deceased livestock, after 1988, which is absurd and an undue limitation of property rights.

IT DECLINED TO PASS UPON A JURISDICTIONAL ISSUE RAISED; THAT IS THE ASSUMPTION OF JURISDICTION BY DAR OVER SUBJECT LANDHOLDING/S, POPULARLY KNOWN AND ACCEPTED AS DEVOTED TO LIVESTOCK RAISING DESPITE JURISPRUDENCE EXPLICITLY DECLARING IT, TOGETHER WITH POULTRY AND SWINE RAISING, AS NOT COVERED BY THE AGRARIAN REFORM PROGRAM OF THE GOVERNMENT, THEREFORE, BEYOND THE OFFICIAL COMPETENCE OF DAR.36 III

The arbitrary use of age to determine the number of head of livestock as of 15 June 1988 is based on an unwieldy theory that the business of raising livestock involves a fixed number of head of livestock. At any rate, Mr. Uy’s land admittedly has always been devoted to livestock. Therefore, there should be no apprehension that the land was merely converted to circumvent the application of the CARL. Hence, in the absence of collusion or intent to circumvent the law, the number of heads of livestock should be counted as of the date of inspection. Finally, we would like to inform the following that the dispute is pending resolution before the Office of the President to which the case was elevated. Hence, the case also merits the opinion of Hon. Secretary Ronaldo B. Zamora as the final reviewing authority.29 On October 19, 1998, the respondent and his co-owners filed a Second Motion for Reconsideration of the decision of the OP. On April 16, 2002, the President, through Deputy Executive Secretary Arthur P. Autea, issued an Order denying the October 19, 1998 second motion for reconsideration for being a prohibited pleading and for lack of merit.30 Citing Ortigas and Company Limited Partnership v. Velasco,31 the OP also declared that the Second Motion for Reconsideration was a prohibited pleading. Furthermore, Section 7 of A.O. No. 18 dated February 12, 1987 allows only one motion for reconsideration save for exceptionally meritorious cases. On December 22, 2002, the OP, through Executive Secretary Ronaldo B. Zamora, issued a Memorandum32 for DAR Secretary Horacio Morales referring the case for the Secretary’s final disposition, on the matter of exemption from CARP coverage the subject landholding, as indicated in the aforesaid Memorandum of the Chief Presidential Legal Adviser to the President.33

IT UPHELD DAR ADMINISTRATIVE ORDER NO. 9, SERIES OF 1993, BUT, IN EFFECT, ONLY AS TO THE GENERAL RULE PRESCRIBED, FOR IT DISREGARDED THE CONDITIONS AND/OR QUALIFICATIONS ATTACHED THERETO [AND] THEREBY CONSTITU[TING] AN ARBITRARY AND DISCRIMINATORY APPLICATION OF THE RULE, A GRAVE ABUSE OF DISCRETION.37 The appellate court rendered judgment affirming the decision of the OP and, consequently, the October 7, 1996 DAR Order. According to the appellate court – The DAR has the power to establish and promulgate operational policies, rules and regulations and priorities for agrarian reform implementation (Executive Order 129-A, Section 5(c), July 26, 1987). The Comprehensive Agrarian Reform Law (R.A. 6657) itself mandates that: "SECTION 49. Rules and Regulations. – The PARC and the DAR shall have the power to issue rules and regulations, whether substantive or procedural, to carry out the objects and purposes of this Act. Said rules shall take effect ten (10) days after publication in two (2) national newspapers of general circulation." Thus, applying DAR Administrative Order No. 9, Series of 1993, and based on the ocular inspection and Certificate of Ownership of Large Cattle issued by the Municipal Treasurer, the DAR exempted 219.50 hectares of the subject landholding from CARP coverage. It was found that of the 434 heads of cattle, only 134 were over seven years of age. Added to this number of cattle were the 28 heads of horses and carabaos, totaling 162 heads. Accordingly, pursuant to the one hectare per one head ratio, 162 hectares were exempted. The retention areas of the

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landowners amounting to 45 hectares and the 12.50 hectares allotted for infrastructure was also exempted. Such application by the DAR is in accordance with the spirit of the law and its aim of preventing unlawful conversion of agricultural lands to escape coverage under the CARP. It is well-settled that factual findings of administrative agencies, which have acquired expertise in their field, are generally binding and conclusive upon the Court. (Cagayan Robina Sugar Milling Co. v. Court of Appeals, 342 SCRA 663)38 Respondent and his co-owners filed a motion for reconsideration of the decision, praying that the entire 349.9996 ha be exempted from CARP coverage. On May 24, 2004, the CA rendered an Amended Decision39 reversing and setting aside its previous decision. The fallo reads: WHEREFORE, based on the foregoing premises, the instant motion for reconsideration is hereby GRANTED. The Decision of this Court promulgated on February 18, 2003 is accordingly RECONSIDERED and SET ASIDE. Consequently, the April 13, 1998 Decision of the Office of the President is REVERSED and the areas under TCT No. T-160988 and T-111948 are declared EXEMPTED from CARP coverage.

those heads of cattle existing as of June 15, 1988. Accordingly, the ratio of land to livestock should be based on those livestock found existing in the landholding at the time R.A. No. 6657 took effect on June 15, 1988. This is consistent with the intent of the law to prevent fraudulent declaration of areas actually, directly and exclusively used for livestock as well as to protect the rights of agrarian beneficiaries therein. It was not proven that the entire landholding was exclusively used for livestock as of June 15, 1988. In fact, the ocular inspection of the property conducted by the Provincial Task Force on Exclusion reported that about 20 ha were planted with coconuts. It also revealed that the topography is flat and undulated, and that 44 farmers-beneficiaries occupied portions of the said landholding. On these bases alone, it is hard to imagine how the said landholding could have been "exclusively, directly and actually used for livestock as of June 15, 1988." Moreover, out of the 434 heads of cattle found in the subject landholding as of May 1995, only 134 heads of cattle and 28 horses and carabaos could have been present in the subject landholding. This is based on the finding that only 134 heads of cattle were 7 years and older, and, consequently, were the only ones that could have existed as of June 15, 1988. Hence, they could not be made as basis for the computation of the areas qualified for exclusion, for to do so would clearly violate the first condition that the heads of cattle must be in existence as of June 15, 1988.43 The appellate court was not persuaded and resolved to deny, for lack of merit, the motion for the reconsideration of its amended decision.44

SO ORDERED.40 This time the CA declared that A.O. No. 9, Series of 1993, requires that the landholding be devoted to cattle-raising when R.A. No. 6657 took effect. It also pointed out that Section III-B of the A.O. provides that in determining the areas qualified for exclusion, the ratio shall be one head of livestock to one hectare of land, regardless of age. Neither the law nor the A.O. requires that the livestock during inspection should be those that already existed on the landholding on or before June 15, 1988. Consequently, the appellate court declared that in order to determine the area for exclusion, the counting of livestock should be, as stated in the administrative order, "regardless of age" during actual inspection. The appellate court concluded that all 434 heads of cattle present in the subject property should have been considered in determining the exempt area used for livestock raising. On June 21, 2004, the DAR, represented by the Secretary of Agrarian Reform, filed a motion for reconsideration41 of the appellate court’s amended decision. It reiterated that the pronouncement by this Court that "the law only requires that for exemption of CARP to apply, the subject landholding should be devoted to cattle-raising as of June 15, 1988" is not entirely correct, for the law requires that it be exclusively, directly and actually used for livestock as of June 15, 1988. Under A.O. No. 9, Series of 1993, two conditions must be established: 1) It must be shown that the subject landholding was EXCLUSIVELY, DIRECTLY AND ACTUALLY used for livestock, poultry or swine on or before June 15, 1988; and 2) The farm must satisfy the ratios of land to livestock.42 It must be shown that the entire landholding, and not just portions of it, should be devoted to livestock raising. The words "regardless of age" in the order should be interpreted to mean only

The DAR, now the petitioner, filed the instant petition for review, alleging that the appellate court erred as follows: I IT GAVE DUE COURSE AND GRANTED RESPONDENT’S [DR. UY] PETITION DESPITE BEING FILED OUT OF TIME.45 II IT DECLARED THE ENTIRE 349.9996 HECTARE-PROPERTY OF RESPONDENT AS EXEMPT FROM COVERAGE OF THE COMPREHENSIVE AGRARIAN REFORM PROGRAM.46 Thus, the pivotal issues to be resolved here are (1) whether or not the second motion for reconsideration filed by respondent tolled the reglementary period to appeal; and (2) whether or not the phrase "regardless of age" in Section III-B of DAR A.O. No. 9, Series of 1993 should be reckoned from June 15, 1988, or from the date of inspection. On the first issue, petitioner claims that, under the OP Rules of Procedure, specifically the second paragraph of Section 7, A.O. No. 18, Series of 1987, only one motion for reconsideration is allowed except in meritorious cases. Hence, the period to file the petition for review had already expired 15 days after the denial of the first motion for reconsideration. Petitioner insists that the filing of the second motion for reconsideration is of no consequence

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since the OP had already concluded that the case was "not exceptionally meritorious to justify additional motions for reconsiderations." On the second issue, petitioner contends that in the Luz Farms case, the entire property therein was devoted to livestock and poultry prior to June 15, 1988; in the present case, only a minimal portion of the property involved is so devoted. It further insists that the report of the Task Force on Exclusion revealed that 20 ha are planted with coconut trees while undetermined portions are occupied by 44 farmers-beneficiaries. Thus, the 20 ha planted with coconuts were not intended for cattle grazing, neither do they serve the purpose of shade and fodder for the bovines. The presence of farmers-beneficiaries who tend to the trees indicates that respondent is also engaged in the coconut industry, belying the fact that the entire 349.9996 ha is exclusively devoted to livestock-raising. Petitioner further claims that Luz Farms was a corporation engaged in the livestock and poultry business even before 1988. On the other hand, respondent did not present any business permit or articles of incorporation to prove that the entire 349.9996 ha is devoted to the livestock business. Petitioner further avers that it had received reports that A.O. No. 9 was issued to prescribe the rules for exclusion of the land used for livestock production. Petitioner posits that the order is curative in nature and retroactive in application; and the phrase "regardless of age" refers to heads of cattle in the year 1988 and not during actual inspection. Petitioner argues that if the phrase were to be given any other meaning, landowners could easily fill their land with livestock and apply for exemption, defeating the purpose of agrarian reform. Thus, during actual inspection, the headcount should be based on the existence of the animals in 1988 through available records; if there be none, then the tallying must be done according to the age of the animals alive at that time. By way of Comment,47 respondent maintains that Section 7 of A.O. No. 18, Series of 1987 does not totally rule out a second motion for reconsideration; the governing principle in the resolution of the case is its merits. Citing a plethora of cases, he avers that substantial justice should overrule rules of procedure. Respondent further points out that even his predecessor-ininterest was engaged in the business of livestock raising on the landholding. This livestock business was evident during the ocular inspection of the Task Force on Exclusion. Contrary to petitioner’s claim, he does have a business permit, and the absence of the articles of incorporation is irrelevant because no corporate personality is involved here. Respondent further asserts that the 20 ha planted with coconut trees is a minimal part of the 349.9996 ha. The diminutive size of the area is in keeping with the purpose of providing shade to the animals and the young leaves used as fodder when grasses are scarce during dry weather. Respondent also asserts that the DAR interpretation of the phrase "regardless of age" referring to the year 1988 is an "amendment under the guise of interpretation." He emphasized that since the law does not distinguish, petitioner should not distinguish. He argues that the DAR interpretation falls short of acceptability even on practical considerations, because in the business of raising livestock, the inventory is never fixed at any given time especially for long periods, i.e., seven years. It constantly changes either due to natural causes prevalent in the business or the interplay of market forces or the peace and order condition within the area.

The petition is partially granted. In Land Car, Inc. v. Bachelor Express Inc. and Vallacar Transit, Inc.,48 the Court ruled that the doctrine of exhaustion of administrative remedies empowers the OP to review any determination or disposition of a department head. In fact, the doctrine requires an administrative decision to first be appealed to the administrative superiors up to the highest level before it may be elevated to a court of justice for review. Thus, if a remedy within the administrative machinery can still be had by giving the administrative officer concerned every opportunity to decide on the matter that comes within his jurisdiction, then such remedy should be priorly exhausted before the court's judicial power is invoked.49 Appeals to the OP are governed by A.O. No. 18, Series of 1987. Section 7 thereof, provides the rule on filing a motion for reconsideration: Sec. 7 Decisions/resolutions/orders of the Office of the President shall, except as otherwise provided for by special laws, become final after the lapse of fifteen (15) days from receipt of a copy thereof by the parties, unless a motion for reconsideration thereof is filed within such period. Only one motion for reconsideration by any one party shall be allowed and entertained, save in exceptionally meritorious cases. It is clear then that only one motion for reconsideration is allowed to be filed from a decision, resolution or order of the OP. However, the filing of a second motion for reconsideration is not absolutely prohibited. A second motion for reconsideration is allowed in exceptionally meritorious cases.50 Furthermore, the explanation of the OP that the second motion for reconsideration deserves scant merit because the "grounds therein are not substantially different from the same ones discussed in the first motion for reconsideration" is untenable. A rehash of arguments may not necessarily be pro forma per se. In Security Bank and Trust Company, Inc. v. Cuenca,51 the Court declared that a motion for reconsideration is not pro forma just because it reiterated the arguments earlier passed upon and rejected by the appellate court; a movant may raise the same arguments precisely to convince the court that its ruling was erroneous.52 The Court also held that the pro forma rule will not be applicable if the arguments were not sufficiently passed upon and answered in the decision sought to be reconsidered, and elucidated the raison d’ etre of the pro forma principle as follows: x x x a pro forma motion had no other purpose than to gain time and to delay or impede the proceedings. Hence, "where the circumstances of a case do not show an intent on the part of the movant merely to delay the proceedings, our Court has refused to characterize the motion as simply pro forma." x x x We note finally that because the doctrine relating to pro forma motions for reconsideration impacts upon the reality and substance of the statutory right of appeal, that doctrine should be applied reasonably, rather than literally. The right to appeal, where it exists, is an important and valuable right. Public policy would be better served by according the appellate court an effective opportunity to review the decision of the trial court on the merits, rather than by aborting the

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right to appeal by a literal application of the procedural rules relating to pro forma motions for reconsideration. Respondent certainly did not intend to delay the proceedings here; in fact, it would adversely affect his cause if he were to delay his appeal to the regular courts because he would certainly lose vast tracts of land which are integral elements of his trade. In this case, not only was a second motion for reconsideration allowed by the OP rules, more importantly, the OP decision and the order denying the first motion for reconsideration failed to provide its basis in law. The ends of justice would have been served if the OP decision did more than copy the DAR order and turned toward the important issues presented before it. In any event, even if we considered the second motion for reconsideration as pro forma or not "exceptionally meritorious," the argument of petitioner would still be untenable. It is settled that rules of procedure are, as a matter of course, construed liberally in proceedings before administrative bodies. Thus, technical rules of procedure imposed in judicial proceedings are unavailing in cases before administrative bodies. Administrative bodies are not bound by the technical niceties of law and procedure and the rules obtaining in the courts of law. Rules of procedure are not to be applied in a very rigid and technical manner, as they are used only to help secure and not to override substantial justice.53 It bears stressing that the threshold substantive issue is the validity and implementation of DAR Administrative Order No. 9, Series of 1993 on the respondent’s landholding of more or less 472 ha in light of the ruling of this Court in Department of Agrarian Reform v. Sutton,54 where DAR Administrative Order No. 9, Series of 1993 was declared unconstitutional. The fundamental rule in administrative law is that, to be valid, administrative rules and regulations must be issued by authority of law and must not contravene the provisions of the Constitution. The rule-making power of an administrative agency may not be used to abridge the authority given to it by Congress or by the Constitution. Nor can it be used to enlarge the power of the administrative agency beyond the scope intended. Constitutional and statutory provisions control with respect to what rules and regulations may be promulgated by administrative agencies and the scope of their regulations. In the case at bar, we find that the impugned A.O. is invalid as it contravenes the Constitution. The A.O. sought to regulate livestock farms by including them in the coverage of agrarian reform and prescribing a maximum retention limit for their ownership. However, the deliberations of the 1987 Constitutional Commission show a clear intent to exclude, inter alia, all lands exclusively devoted to livestock, swine and poultry-raising. The Court clarified in the Luz Farms case that livestock, swine and poultry-raising are industrial activities and do not fall within the definition of "agriculture" or "agricultural activity." The raising of livestock, swine and poultry is different from crop or tree farming. It is an industrial, not an agricultural, activity. A great portion of the investment in this enterprise is in the form of industrial fixed assets, such as: animal housing structures and facilities, drainage, waterers and blowers, feedmill with grinders, mixers, conveyors, exhausts and generators, extensive warehousing facilities for feeds and other supplies, anti-pollution equipment like bio-gas and digester plants augmented by lagoons and concrete ponds, deepwells, elevated water tanks, pumphouses, sprayers, and other technological appurtenances.

Clearly, petitioner DAR has no power to regulate livestock farms which have been exempted by the Constitution from the coverage of agrarian reform. It has exceeded its power in issuing the assailed A.O. The subsequent case of Natalia Realty, Inc. v. DAR reiterated our ruling in the Luz Farms case. In Natalia Realty, the Court held that industrial, commercial and residential lands are not covered by the CARL. We stressed anew that while Section 4 of R.A. No. 6657 provides that the CARL shall cover all public and private agricultural lands, the term "agricultural land" does not include lands classified as mineral, forest, residential, commercial or industrial. Thus, in Natalia Realty, even portions of the Antipolo Hills Subdivision, which are arable yet still undeveloped, could not be considered as agricultural lands subject to agrarian reform as these lots were already classified as residential lands. A similar logical deduction should be followed in the case at bar.1awphi1.net Lands devoted to raising of livestock, poultry and swine have been classified as industrial, not agricultural, lands and thus exempt from agrarian reform. Petitioner DAR argues that, in issuing the impugned A.O. it was seeking to address the reports it has received that some unscrupulous landowners have been converting their agricultural lands to livestock farms to avoid their coverage by the agrarian reform. Again, we find neither merit nor logic in this contention. The undesirable scenario which petitioner seeks to prevent with the issuance of the A.O. clearly does not apply in this case. Respondents’ family acquired their landholdings as early as 1948. They have long been in the business of breeding cattle in Masbate which is popularly known as the cattlebreeding capital of the Philippines. Petitioner DAR does not dispute this fact. Indeed, there is no evidence on record that respondents have just recently engaged in or converted to the business of breeding cattle after the enactment of the CARL that may lead one to suspect that respondents intended to evade its coverage. It must be stressed that what the CARL prohibits is the conversion of agricultural lands for non-agricultural purposes after the effectivity of the CARL. There has been no change of business interest in the case of respondents. Moreover, it is a fundamental rule of statutory construction that the reenactment of a statute by Congress without substantial change is an implied legislative approval and adoption of the previous law. On the other hand, by making a new law, Congress seeks to supersede an earlier one. In the case at bar, after the passage of the 1988 CARL, Congress enacted R.A. No. 7881 which amended certain provisions of the CARL. Specifically, the new law changed the definition of the terms "agricultural activity" and "commercial farming" by dropping from its coverage lands that are devoted to commercial livestock, poultry and swine-raising. With this significant modification, Congress clearly sought to align the provisions of our agrarian laws with the intent of the 1987 Constitutional Commission to exclude livestock farms from the coverage of agrarian reform. In sum, it is doctrinal that rules of administrative bodies must be in harmony with the provisions of the Constitution. They cannot amend or extend the Constitution. To be valid, they must conform to and be consistent with the Constitution. In case of conflict between an administrative order and the provisions of the Constitution, the latter prevails. The assailed A.O. of petitioner DAR was properly stricken down as unconstitutional as it enlarges the coverage of agrarian reform beyond the scope intended by the 1987 Constitution.55

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The Report56 of MARO Babalcon clearly declared that 346 ha are used for grazing of the 429 heads of livestock; and indicated that the density required on commercial farming as far as the number of livestock is concerned was satisfied. This was confirmed in the DAR Order stating that the land has been devoted to livestock-raising since its acquisition in 1979, and that the 20 ha planted with coconut trees are simultaneously used as pasture land. These facts are borne by the records and undisputed by the parties. The courts generally accord great respect, if not finality, to factual findings of administrative agencies because of their special knowledge and expertise over matters falling under their jurisdiction.57

hectare landholding covered by TCT No. 11948 from the coverage of the CARP is REVERSED and SET ASIDE.

It is not uncommon for an enormous landholding to be intermittently planted with trees, and this would not necessarily detract it from the purpose of livestock farming and be immediately considered as an agricultural land. It would be surprising if there were no trees on the land. Also, petitioner did not adduce any proof to show that the coconut trees were planted by respondent and used for agricultural business or were already existing when the land was purchased in 1979. In the present case, the area planted with coconut trees bears an insignificant value to the area used for the cattle and other livestock-raising, including the infrastructure needed for the business. There can be no presumption, other than that the "coconut area" is indeed used for shade and to augment the supply of fodder during the warm months; any other use would be only be incidental to livestock farming. The substantial quantity of livestock heads could only mean that respondent is engaged in farming for this purpose. The single conclusion gathered here is that the land is entirely devoted to livestock farming and exempted from the CARP.

Associate Justice

This Court’s ruling in the Luz Farms case and Natalia Realty, Inc. v. DAR58 was emphatic on the exemption from CARP of land devoted to residential, commercial and industrial purposes without any other qualifications. Moreover, after the passage of the 1988 CARL, Congress enacted R.A. No. 7881, amending certain provisions of the CARL. Specifically, the new law changed the definition of the terms "agricultural activity" and "commercial farming" by dropping from its coverage lands that are devoted to commercial livestock, poultry and swine-raising. With this significant modification, Congress clearly sought to align the provisions of our agrarian laws with the intent of the 1987 Constitutional Commission to exclude livestock farms from the coverage of agrarian reform.59

ATTESTATION

Notably, however, a careful review of the records of the case reveal that the Notice of Coverage, the Investigation Report by MARO Babalcon and Report of PARO Ubeda, the DAR Order, and the OP Decision referred only to the 349.9996-ha landholding covered by TCT No. 160988. There is no showing in the records that the landholding covered by TCT No. 11948 had been included for CARP coverage; or that any investigation had been conducted by the MARO or PARO on whether such landholding is exempt from CARP coverage. The Court notes that respondent sought exemption of their property covered by TCT No. 11948 only in their letter dated August 11, 1995 when they appealed from the Report of the PARO. Absent any evidence showing that this land was investigated by the DAR, there can be no basis as to whether the said landholding is exempt from CARP coverage or not.

CERTIFICATION

No pronouncement as to costs. SO ORDERED. ROMEO J. CALLEJO, SR.

WE CONCUR: CONSUELO YNARES-SANTIAGO Associate Justice MA. ALICIA AUSTRIA-MARTINEZ Associate Justice

MINITA V. CHICO-NAZARIO

Asscociate Justice

I attest that the conclusions in the above Decision had been reached in consultation before the case was assigned to the writer of the opinion of the Court’s Division. CONSUELO YNARES-SANTIAGO Associate Justice Chairperson

Pursuant to Section 13, Article VIII of the Constitution and the Division Chairperson’s Attestation, it is hereby certified that the conclusions in the above Decision were reached in consultation before the case was assigned to the writer of the opinion of the Court’s Division. REYNATO S. PUNO Chief Justice Footnotes

IN LIGHT OF THE FOREGOING, the instant petition is PARTIALLY GRANTED. The Amended Decision of the Court of Appeals in CA-G.R. SP No. 70541 exempting the parcel of land under TCT No. T-160988 with an area of 349.9996 hectares from coverage of the Comprehensive Agrarian Reform Law is AFFIRMED. However, the Amended Decision exempting the 22.2639-

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1 On September 27, 2004, President Gloria Macapagal Arroyo signed Executive Order No. 364, and the Department of Agrarian Reform was renamed to Department of Land Reform. This EO also broadened the scope of the department, making it responsible for all land reform in the country. On August 23, 2005, President Arroyo signed Executive Order No. 456 and renamed the agency "Department of Agrarian Reform," since the Comprehensive Agrarian Reform Law "goes beyond just land reform and includes the totality of all factors and support services designed to lift the economic status of the beneficiaries." 2 Penned by Associate Justice Elvi John S. Asuncion, with Associate Justices Conrado M. Vasquez, Jr. and Rosalinda Asuncion-Vicente, concurring; rollo, pp. 31-34. 3 Rollo, p. 35 4 By Renato C. Corona, in his capacity as Chief Presidential Legal Counsel/Deputy Executive Secretary, id. at 45-50. 5 By Ernesto D. Garilao, in his capacity as Secretary; id. at 40-44. 6 G.R. No. 86889, December 4, 1990, 192 SCRA 51. 7 Otherwise known as Comprehensive Agrarian Reform Law of 1988. 8 Supra note 6, at 59. 9 Entitled "Rules and Regulations Governing the Exclusion of Agricultural Lands Used for Livestock, Poultry and Swine-Raising From the Coverage of the Comprehensive Agrarian Reform Program (CARP)"; CA rollo, pp. 141-147.

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