COMMISSIONER OF INTERNAL REVENUE, petitioner, vs. S.C. JOHNSON AND SON, INC.

, and COURT OF
APPEALS, respondents. G.R. No. 127105, June 25, 1999
This is a petition for review on certiorari under Rule 45 of the Rules of Court seeking to set aside the decision
of the Court of Appeals dated November 7, 1996 in CA-GR SP No. 40802 affirming the decision of the Court of Tax
Appeals in CTA Case No. 5136.
The antecedent facts as found by the Court of Tax Appeals are not disputed, to wit:
[Respondent], a domestic corporation organized and operating under the Philippine laws, entered into a license
agreement with SC Johnson and Son, United States of America (USA), a non-resident foreign corporation based in
the U.S.A. pursuant to which the [respondent] was granted the right to use the trademark, patents and technology
owned by the latter including the right to manufacture, package and distribute the products covered by the
Agreement and secure assistance in management, marketing and production from SC Johnson and Son, U. S. A.
The said License Agreement was duly registered with the Technology Transfer Board of the Bureau of Patents,
Trade Marks and Technology Transfer under Certificate of Registration No. 8064 (Exh. A).
For the use of the trademark or technology, [respondent] was obliged to pay SC Johnson and Son, USA royalties
based on a percentage of net sales and subjected the same to 25% withholding tax on royalty payments which
[respondent] paid for the period covering July 1992 to May 1993 in the total amount of P1,603,443.00 (Exhs. B to
L and submarkings).
On October 29, 1993, [respondent] filed with the International Tax Affairs Division (ITAD) of the BIR a claim for
refund of overpaid withholding tax on royalties arguing that, the antecedent facts attending [respondents] case
fall squarely within the same circumstances under which said MacGeorge and Gillete rulings were issued. Since the
agreement was approved by the Technology Transfer Board, the preferential tax rate of 10% should apply to the
[respondent]. We therefore submit that royalties paid by the [respondent] to SC Johnson and Son, USA is only
subject to 10% withholding tax pursuant to the most-favored nation clause of the RP-US Tax Treaty [Article 13
Paragraph 2 (b) (iii)] in relation to the RP-West Germany Tax Treaty [Article 12 (2) (b)] (Petition for Review [filed
with the Court of Appeals], par. 12). [Respondents] claim for the refund of P963,266.00 was computed as follows:
Gross
Month/

Royalty

Year

Fee

______

_______

July 1992

Withholding
Tax Paid

567,935

September

10%

Withholding
Tax

Balance

__________ __________ ______

559,878

August

25%

595,956

139,970
141,984
148,989

55,988

83,982

56,794

85,190

59,596

89,393

October

634,405

158,601

63,441

95,161

November

620,885

155,221

62,089

93,133

December

383,276

95,819

36,328

57,491

Jan 1993

602,451

170,630

68,245

102,368

February

565,845

141,461

56,585

84,877

March

547,253

136,813

54,725

82,088

April

660,810

165,203

66,081

99,122

May

603,076

150,769

60,308

90,461

P642,177

P963,266[1]

P6,421,770
========

P1,605,443
========

=======

=======

The Commissioner did not act on said claim for refund. Private respondent S.C. Johnson & Son, Inc. (S.C.
Johnson) then filed a petition for review before the Court of Tax Appeals (CTA) where the case was docketed as
CTA Case No. 5136, to claim a refund of the overpaid withholding tax on royalty payments from July 1992 to May
1993.
On May 7, 1996, the Court of Tax Appeals rendered its decision in favor of S.C. Johnson and ordered the
Commissioner of Internal Revenue to issue a tax credit certificate in the amount of P963,266.00 representing
overpaid withholding tax on royalty payments beginning July, 1992 to May, 1993.[2]
The Commissioner of Internal Revenue thus filed a petition for review with the Court of Appeals which
rendered the decision subject of this appeal on November 7, 1996 finding no merit in the petition and affirming in
toto the CTA ruling.[3]
This petition for review was filed by the Commissioner of Internal Revenue raising the following issue:
THE COURT OF APPEALS ERRED IN RULING THAT SC JOHNSON AND SON, USA IS ENTITLED TO THE MOST
FAVORED NATION TAX RATE OF 10% ON ROYALTIES AS PROVIDED IN THE RP-US TAX TREATY IN RELATION
TO THE RP-WEST GERMANY TAX TREATY.
Petitioner contends that under Article 13(2) (b) (iii) of the RP-US Tax Treaty, which is known as the most
favored nation clause, the lowest rate of the Philippine tax at 10% may be imposed on royalties derived by a
resident of the United States from sources within the Philippines only if the circumstances of the resident of the
United States are similar to those of the resident of West Germany. Since the RP-US Tax Treaty contains no
matching credit provision as that provided under Article 24 of the RP-West Germany Tax Treaty, the tax on
royalties under the RP-US Tax Treaty is not paid under similar circumstances as those obtaining in the RP-West
Germany Tax Treaty. Even assuming that the phrase paid under similar circumstances refers to the payment of
royalties, and not taxes, as held by the Court of Appeals, still, the most favored nation clause cannot be invoked
for the reason that when a tax treaty contemplates circumstances attendant to the payment of a tax, or royalty
remittances for that matter, these must necessarily refer to circumstances that are tax-related. Finally, petitioner
argues that since S.C. Johnsons invocation of the most favored nation clause is in the nature of a claim for
exemption from the application of the regular tax rate of 25% for royalties, the provisions of the treaty must be
construed strictly against it.
In its Comment, private respondent S.C. Johnson avers that the instant petition should be denied (1) because it
contains a defective certification against forum shopping as required under SC Circular No. 28-91, that is, the
certification was not executed by the petitioner herself but by her counsel; and (2) that the most favored nation
clause under the RP-US Tax Treaty refers to royalties paid under similar circumstances as those royalties subject to
tax in other treaties; that the phrase paid under similar circumstances does not refer to payment of the tax but to
the subject matter of the tax, that is, royalties, because the most favored nation clause is intended to allow the
taxpayer in one state to avail of more liberal provisions contained in another tax treaty wherein the country of
residence of such taxpayer is also a party thereto, subject to the basic condition that the subject matter of taxation
in that other tax treaty is the same as that in the original tax treaty under which the taxpayer is liable; thus, the RPUS Tax Treaty speaks of royalties of the same kind paid under similar circumstances. S.C. Johnson also contends
that the Commissioner is estopped from insisting on her interpretation that the phrase paid under similar
circumstances refers to the manner in which the tax is paid, for the reason that said interpretation is embodied in
Revenue Memorandum Circular (RMC) 39-92 which was already abandoned by the Commissioners predecessor
in 1993; and was expressly revoked in BIR Ruling No. 052-95 which stated that royalties paid to an American
licensor are subject only to 10% withholding tax pursuant to Art 13(2)(b)(iii) of the RP-US Tax Treaty in relation to
the RP-West Germany Tax Treaty. Said ruling should be given retroactive effect except if such is prejudicial to the
taxpayer pursuant to Section 246 of the National Internal Revenue Code.
Petitioner filed Reply alleging that the fact that the certification against forum shopping was signed by
petitioners counsel is not a fatal defect as to warrant the dismissal of this petition since Circular No. 28-91 applies
only to original actions and not to appeals, as in the instant case. Moreover, the requirement that the certification
should be signed by petitioner and not by counsel does not apply to petitioner who has only the Office of the
Solicitor General as statutory counsel. Petitioner reiterates that even if the phrase paid under similar
circumstances embodied in the most favored nation clause of the RP-US Tax Treaty refers to the payment of
royalties and not taxes, still the presence or absence of a matching credit provision in the said RP-US Tax Treaty
would constitute a material circumstance to such payment and would be determinative of the said clauses
application.
We address first the objection raised by private respondent that the certification against forum shopping was
not executed by the petitioner herself but by her counsel, the Office of the Solicitor General (O.S.G.) through one of
its Solicitors, Atty. Tomas M. Navarro.
SC Circular No. 28-91 provides:
SUBJECT: ADDITIONAL REQUISITES FOR PETITIONS FILED WITH THE SUPREME COURT AND THE COURT OF
APPEALS TO PREVENT FORUM SHOPPING OR MULTIPLE FILING OF PETITIONS AND COMPLAINTS

TO :

xxx

xxx

xxx

The attention of the Court has been called to the filing of multiple petitions and complaints involving the same
issues in the Supreme Court, the Court of Appeals or other tribunals or agencies, with the result that said courts,
tribunals or agencies have to resolve the same issues.
(1) To avoid the foregoing, in every petition filed with the Supreme Court or the Court of Appeals, the petitioner
aside from complying with pertinent provisions of the Rules of Court and existing circulars, must certify under oath
to all of the following facts or undertakings: (a) he has not theretofore commenced any other action or proceeding
involving the same issues in the Supreme Court, the Court of Appeals, or any tribunal or agency; xxx
(2) Any violation of this revised Circular will entail the following sanctions: (a) it shall be a cause for the summary
dismissal of the multiple petitions or complaints; xxx
The circular expressly requires that a certificate of non-forum shopping should be attached to petitions filed
before this Court and the Court of Appeals. Petitioners allegation that Circular No. 28-91 applies only to original
actions and not to appeals as in the instant case is not supported by the text nor by the obvious intent of the
Circular which is to prevent multiple petitions that will result in the same issue being resolved by different courts.
Anent the requirement that the party, not counsel, must certify under oath that he has not commenced any
other action involving the same issues in this Court or the Court of Appeals or any other tribunal or agency, we are
inclined to accept petitioners submission that since the OSG is the only lawyer for the petitioner, which is a
government agency mandated under Section 35, Chapter 12, title III, Book IV of the 1987 Administrative Code [4] to
be represented only by the Solicitor General, the certification executed by the OSG in this case constitutes
substantial compliance with Circular No. 28-91.
With respect to the merits of this petition, the main point of contention in this appeal is the interpretation of
Article 13 (2) (b) (iii) of the RP-US Tax Treaty regarding the rate of tax to be imposed by the Philippines upon
royalties received by a non-resident foreign corporation. The provision states insofar as pertinent that1) Royalties derived by a resident of one of the Contracting States from sources within the other
Contracting State may be taxed by both Contracting States.
2) However, the tax imposed by that Contracting State shall not exceed.
a) In the case of the United States, 15 percent of the gross amount of the royalties, and
b) In the case of the Philippines, the least of:
(i) 25 percent of the gross amount of the royalties;
(ii) 15 percent of the gross amount of the royalties, where the royalties are paid by a corporation registered with
the Philippine Board of Investments and engaged in preferred areas of activities; and
(iii) the lowest rate of Philippine tax that may be imposed on royalties of the same kind paid under similar
circumstances to a resident of a third State.
xxx xxx

xxx

(italics supplied)
Respondent S. C. Johnson and Son, Inc. claims that on the basis of the quoted provision, it is entitled to the
concessional tax rate of 10 percent on royalties based on Article 12 (2) (b) of the RP-Germany Tax Treaty which
provides:
(2) However, such royalties may also be taxed in the Contracting State in which they arise, and according
to the law of that State, but the tax so charged shall not exceed:
xxx
b) 10 percent of the gross amount of royalties arising from the use of, or the right to use, any patent,
trademark, design or model, plan, secret formula or process, or from the use of or the right to use,
industrial, commercial, or scientific equipment, or for information concerning industrial, commercial
or scientific experience.
For as long as the transfer of technology, under Philippine law, is subject to approval, the limitation of the tax rate
mentioned under b) shall, in the case of royalties arising in the Republic of the Philippines, only apply if the
contract giving rise to such royalties has been approved by the Philippine competent authorities.

Unlike the RP-US Tax Treaty, the RP-Germany Tax Treaty allows a tax credit of 20 percent of the gross amount
of such royalties against German income and corporation tax for the taxes payable in the Philippines on such
royalties where the tax rate is reduced to 10 or 15 percent under such treaty. Article 24 of the RP-Germany Tax
Treaty states1) Tax shall be determined in the case of a resident of the Federal Republic of Germany as follows:
xxx

xxx

xxx

b) Subject to the provisions of German tax law regarding credit for foreign tax, there shall be allowed as a credit
against German income and corporation tax payable in respect of the following items of income arising in the
Republic of the Philippines, the tax paid under the laws of the Philippines in accordance with this Agreement on:
xxx

xxx

xxx

xxx

xxx

dd) royalties, as defined in paragraph 3 of Article 12;

xxx

c) For the purpose of the credit referred in subparagraph b) the Philippine tax shall be deemed to be
xxx

xxx

xxx

cc) in the case of royalties for which the tax is reduced to 10 or 15 per cent according to paragraph 2 of Article 12,
20 percent of the gross amount of such royalties.
xxx

xxx

xxx

According to petitioner, the taxes upon royalties under the RP-US Tax Treaty are not paid under
circumstances similar to those in the RP-West Germany Tax Treaty since there is no provision for a 20 percent
matching credit in the former convention and private respondent cannot invoke the concessional tax rate on the
strength of the most favored nation clause in the RP-US Tax Treaty. Petitioners position is explained thus:
Under the foregoing provision of the RP-West Germany Tax Treaty, the Philippine tax paid on income from
sources within the Philippines is allowed as a credit against German income and corporation tax on the same
income. In the case of royalties for which the tax is reduced to 10 or 15 percent according to paragraph 2 of Article
12 of the RP-West Germany Tax Treaty, the credit shall be 20% of the gross amount of such royalty. To illustrate,
the royalty income of a German resident from sources within the Philippines arising from the use of, or the right to
use, any patent, trade mark, design or model, plan, secret formula or process, is taxed at 10% of the gross amount
of said royalty under certain conditions. The rate of 10% is imposed if credit against the German income and
corporation tax on said royalty is allowed in favor of the German resident. That means the rate of 10% is granted
to the German taxpayer if he is similarly granted a credit against the income and corporation tax of West
Germany. The clear intent of the matching credit is to soften the impact of double taxation by different
jurisdictions.
The RP-US Tax Treaty contains no similar matching credit as that provided under the RP-West Germany Tax
Treaty. Hence, the tax on royalties under the RP-US Tax Treaty is not paid under similar circumstances as those
obtaining in the RP-West Germany Tax Treaty. Therefore, the most favored nation clause in the RP-West
Germany Tax Treaty cannot be availed of in interpreting the provisions of the RP-US Tax Treaty.[5]
The petition is meritorious.
We are unable to sustain the position of the Court of Tax Appeals, which was upheld by the Court of Appeals,
that the phrase paid under similar circumstances in Article 13 (2) (b), (iii) of the RP-US Tax Treaty should be
interpreted to refer to payment of royalty, and not to the payment of the tax, for the reason that the phrase paid
under similar circumstances is followed by the phrase to a resident of a third state. The respondent court held
that Words are to be understood in the context in which they are used, and since what is paid to a resident of a
third state is not a tax but a royalty logic instructs that the treaty provision in question should refer to royalties of
the same kind paid under similar circumstances.
The above construction is based principally on syntax or sentence structure but fails to take into account the
purpose animating the treaty provisions in point. To begin with, we are not aware of any law or rule pertinent to
the payment of royalties, and none has been brought to our attention, which provides for the payment of royalties
under dissimilar circumstances. The tax rates on royalties and the circumstances of payment thereof are the same
for all the recipients of such royalties and there is no disparity based on nationality in the circumstances of such
payment.[6] On the other hand, a cursory reading of the various tax treaties will show that there is no similarity in
the provisions on relief from or avoidance of double taxation[7] as this is a matter of negotiation between the

contracting parties.[8] As will be shown later, this dissimilarity is true particularly in the treaties between the
Philippines and the United States and between the Philippines and West Germany.
The RP-US Tax Treaty is just one of a number of bilateral treaties which the Philippines has entered into for
the avoidance of double taxation.[9] The purpose of these international agreements is to reconcile the national fiscal
legislations of the contracting parties in order to help the taxpayer avoid simultaneous taxation in two different
jurisdictions.[10] More precisely, the tax conventions are drafted with a view towards the elimination
of international juridical double taxation, which is defined as the imposition of comparable taxes in two or more
states on the same taxpayer in respect of the same subject matter and for identical periods. [11], citing the
Committee on Fiscal Affairs of the Organization for Economic Co-operation and Development (OECD).11 The
apparent rationale for doing away with double taxation is to encourage the free flow of goods and services and the
movement of capital, technology and persons between countries, conditions deemed vital in creating robust and
dynamic economies.[12] Foreign investments will only thrive in a fairly predictable and reasonable international
investment climate and the protection against double taxation is crucial in creating such a climate.[13]
Double taxation usually takes place when a person is resident of a contracting state and derives income from,
or owns capital in, the other contracting state and both states impose tax on that income or capital. In order to
eliminate double taxation, a tax treaty resorts to several methods. First, it sets out the respective rights to tax of
the state of source or situs and of the state of residence with regard to certain classes of income or capital. In some
cases, an exclusive right to tax is conferred on one of the contracting states; however, for other items of income or
capital, both states are given the right to tax, although the amount of tax that may be imposed by the state of source
is limited.[14]
The second method for the elimination of double taxation applies whenever the state of source is given a full
or limited right to tax together with the state of residence. In this case, the treaties make it incumbent upon the
state of residence to allow relief in order to avoid double taxation. There are two methods of relief- the exemption
method and the credit method. In the exemption method, the income or capital which is taxable in the state of
source or situs is exempted in the state of residence, although in some instances it may be taken into account in
determining the rate of tax applicable to the taxpayers remaining income or capital. On the other hand, in the
credit method, although the income or capital which is taxed in the state of source is still taxable in the state of
residence, the tax paid in the former is credited against the tax levied in the latter. The basic difference between
the two methods is that in the exemption method, the focus is on the income or capital itself, whereas the credit
method focuses upon the tax.[15]
In negotiating tax treaties, the underlying rationale for reducing the tax rate is that the Philippines will give up
a part of the tax in the expectation that the tax given up for this particular investment is not taxed by the other
country.[16] Thus the petitioner correctly opined that the phrase royalties paid under similar circumstances in the
most favored nation clause of the US-RP Tax Treaty necessarily contemplated circumstances that are tax-related.
In the case at bar, the state of source is the Philippines because the royalties are paid for the right to use
property or rights, i.e. trademarks, patents and technology, located within the Philippines. [17] The United States is
the state of residence since the taxpayer, S. C. Johnson and Son, U. S. A., is based there. Under the RP-US Tax Treaty,
the state of residence and the state of source are both permitted to tax the royalties, with a restraint on the tax that
may be collected by the state of source.[18] Furthermore, the method employed to give relief from double taxation is
the allowance of a tax credit to citizens or residents of the United States (in an appropriate amount based upon the
taxes paid or accrued to the Philippines) against the United States tax, but such amount shall not exceed the
limitations provided by United States law for the taxable year.[19] Under Article 13 thereof, the Philippines may
impose one of three rates- 25 percent of the gross amount of the royalties; 15 percent when the royalties are paid
by a corporation registered with the Philippine Board of Investments and engaged in preferred areas of activities;
or the lowest rate of Philippine tax that may be imposed on royalties of the same kind paid under similar
circumstances to a resident of a third state.
Given the purpose underlying tax treaties and the rationale for the most favored nation clause, the
concessional tax rate of 10 percent provided for in the RP-Germany Tax Treaty should apply only if the taxes
imposed upon royalties in the RP-US Tax Treaty and in the RP-Germany Tax Treaty are paid under similar
circumstances. This would mean that private respondent must prove that the RP-US Tax Treaty grants similar tax
reliefs to residents of the United States in respect of the taxes imposable upon royalties earned from sources within
the Philippines as those allowed to their German counterparts under the RP-Germany Tax Treaty.
The RP-US and the RP-West Germany Tax Treaties do not contain similar provisions on tax crediting. Article
24 of the RP-Germany Tax Treaty, supra, expressly allows crediting against German income and corporation tax of
20% of the gross amount of royalties paid under the law of the Philippines. On the other hand, Article 23 of the RPUS Tax Treaty, which is the counterpart provision with respect to relief for double taxation, does not provide for
similar crediting of 20% of the gross amount of royalties paid. Said Article 23 reads:
Article 23
Relief from double taxation

Double taxation of income shall be avoided in the following manner:

1) In accordance with the provisions and subject to the limitations of the law of the United States (as it
may be amended from time to time without changing the general principle thereof), the United States
shall allow to a citizen or resident of the United States as a credit against the United States tax the
appropriate amount of taxes paid or accrued to the Philippines and, in the case of a United States
corporation owning at least 10 percent of the voting stock of a Philippine corporation from which it
receives dividends in any taxable year, shall allow credit for the appropriate amount of taxes paid or
accrued to the Philippines by the Philippine corporation paying such dividends with respect to the
profits out of which such dividends are paid. Such appropriate amount shall be based upon the
amount of tax paid or accrued to the Philippines, but the credit shall not exceed the limitations (for the
purpose of limiting the credit to the United States tax on income from sources within the Philippines or
on income from sources outside the United States) provided by United States law for the taxable
year. xxx.
The reason for construing the phrase paid under similar circumstances as used in Article 13 (2) (b) (iii) of
the RP-US Tax Treaty as referring to taxes is anchored upon a logical reading of the text in the light of the
fundamental purpose of such treaty which is to grant an incentive to the foreign investor by lowering the tax and at
the same time crediting against the domestic tax abroad a figure higher than what was collected in the Philippines.
In one case, the Supreme Court pointed out that laws are not just mere compositions, but have ends to be
achieved and that the general purpose is a more important aid to the meaning of a law than any rule which
grammar may lay down.[20] It is the duty of the courts to look to the object to be accomplished, the evils to be
remedied, or the purpose to be subserved, and should give the law a reasonable or liberal construction which will
best effectuate its purpose.[21] The Vienna Convention on the Law of Treaties states that a treaty shall be
interpreted in good faith in accordance with the ordinary meaning to be given to the terms of the treaty in their
context and in the light of its object and purpose.[22]
As stated earlier, the ultimate reason for avoiding double taxation is to encourage foreign investors to invest in
the Philippines - a crucial economic goal for developing countries.[23] The goal of double taxation conventions
would be thwarted if such treaties did not provide for effective measures to minimize, if not completely eliminate,
the tax burden laid upon the income or capital of the investor. Thus, if the rates of tax are lowered by the state of
source, in this case, by the Philippines, there should be a concomitant commitment on the part of the state of
residence to grant some form of tax relief, whether this be in the form of a tax credit or exemption. [24] Otherwise,
the tax which could have been collected by the Philippine government will simply be collected by another state,
defeating the object of the tax treaty since the tax burden imposed upon the investor would remain unrelieved. If
the state of residence does not grant some form of tax relief to the investor, no benefit would redound to the
Philippines, i.e., increased investment resulting from a favorable tax regime, should it impose a lower tax rate on
the royalty earnings of the investor, and it would be better to impose the regular rate rather than lose muchneeded revenues to another country.
At the same time, the intention behind the adoption of the provision on relief from double taxation in the
two tax treaties in question should be considered in light of the purpose behind the most favored nation clause.
The purpose of a most favored nation clause is to grant to the contracting party treatment not less favorable than that
which has been or may be granted to the most favored among other countries.[25]The most favored nation clause is intended
to establish the principle of equality of international treatment by providing that the citizens or subjects of the contracting
nations may enjoy the privileges accorded by either party to those of the most favored nation. [26] The essence of the principle
is to allow the taxpayer in one state to avail of more liberal provisions granted in another tax treaty to which the country of
residence of such taxpayer is also a party provided that the subject matter of taxation, in this case royalty income, is the same
as that in the tax treaty under which the taxpayer is liable. Both Article 13 of the RP-US Tax Treaty and Article 12 (2) (b) of the
RP-West Germany Tax Treaty, above-quoted, speaks of tax on royalties for the use of trademark, patent, and technology. The
entitlement of the 10% rate by U.S. firms despite the absence of a matching credit (20% for royalties) would derogate from the
design behind the most favored nation clause to grant equality of international treatment since the tax burden laid upon the
income of the investor is not the same in the two countries. The similarity in the circumstances of payment of taxes is a
condition for the enjoyment of most favored nation treatment precisely to underscore the need for equality of treatment.
We accordingly agree with petitioner that since the RP-US Tax Treaty does not give a matching tax credit of 20 percent
for the taxes paid to the Philippines on royalties as allowed under the RP-West Germany Tax Treaty, private respondent
cannot be deemed entitled to the 10 percent rate granted under the latter treaty for the reason that there is no payment of
taxes on royalties under similar circumstances.
It bears stress that tax refunds are in the nature of tax exemptions. As such they are regarded as in derogation of
sovereign authority and to be construed strictissimi juris against the person or entity claiming the exemption.[27] The burden of
proof is upon him who claims the exemption in his favor and he must be able to justify his claim by the clearest grant of
organic or statute law.[28] Private respondent is claiming for a refund of the alleged overpayment of tax on royalties; however,
there is nothing on record to support a claim that the tax on royalties under the RP-US Tax Treaty is paid under similar
circumstances as the tax on royalties under the RP-West Germany Tax Treaty.
WHEREFORE, for all the foregoing, the instant petition is GRANTED. The decision dated May 7, 1996 of the Court of Tax
Appeals and the decision dated November 7, 1996 of the Court of Appeals are hereby SET ASIDE.
SO ORDERED.

CIR vs. SC Johnson

Facts: Respondent is a domestic corporation organized and operating under the Philippine Laws, entered into a
licensed agreement with the SC Johnson and Son, USA, a non-resident foreign corporation based in the USA
pursuant to which the respondent was granted the right to use the trademark, patents and technology owned by
the later including the right to manufacture, package and distribute the products covered by the Agreement and
secure assistance in management, marketing and production from SC Johnson and Son USA.
For the use of trademark or technology, respondent was obliged to pay SC Johnson and Son, USA royalties based on
a percentage of net sales and subjected the same to 25% withholding tax on royalty payments which respondent
paid for the period covering July 1992 to May 1993 in the total amount of P1,603,443.00.
On October 29, 1993, respondent filed with the International Tax Affairs Division (ITAD) of the BIR a claim for
refund of overpaid withholding tax on royalties arguing that, the antecedent facts attending respondents case fall
squarely within the same circumstances under which said MacGeorge and Gillette rulings were issued. Since the
agreement was approved by the Technology Transfer Board, the preferential tax rate of 10% should apply to the
respondent. So, royalties paid by the respondent to SC Johnson and Son, USA is only subject to 10% withholding
tax.
The Commissioner did not act on said claim for refund. Private respondent SC Johnson & Son, Inc. then filed a
petition for review before the CTA, to claim a refund of the overpaid withholding tax on royalty payments from July
1992 to May 1993.
On May 7, 1996, the CTA rendered its decision in favor of SC Johnson and ordered the CIR to issue a tax credit
certificate in the amount of P163,266.00 representing overpaid withholding tax on royalty payments beginning
July 1992 to May 1993.
The CIR thus filed a petition for review with the CA which rendered the decision subject of this appeal on
November 7, 1996 finding no merit in the petition and affirming in toto the CTA ruling.
Issue: Whether or not tax refunds are considered as tax exemptions.
Held: It bears stress that tax refunds are in the nature of tax exemptions. As such they are registered as in
derogation of sovereign authority and to be construed strictissimi juris against the person or entity claiming the
exemption. The burden of proof is upon him who claims the exemption in his favor and he must be able to justify
his claim by the clearest grant of organic or statute law. Private respondent is claiming for a refund of the alleged
overpayment of tax on royalties; however there is nothing on record to support a claim that the tax on royalties
under the RP-US Treaty is paid under similar circumstances as the tax on royalties under the RP-West Germany
Tax Treaty.

Abra Valley College v. Aquino, G.R. No. L-39086 June 15, 1988
Facts:
Petitioner, an educational corporation and institution of higher learning duly incorporated with the
Securities and Exchange Commission in 1948, filed a complaint to annul and declare void the Notice of Seizure
and the Notice of Sale of its lot and building located at Bangued, Abra, for non-payment of real estate taxes and
penalties amounting to P5,140.31. Said Notice of Seizure by respondents Municipal Treasurer and Provincial
Treasurer, defendants below, was issued for the satisfaction of the said taxes thereon.
The parties entered into a stipulation of facts adopted and embodied by the trial court in its questioned decision.
The trial court ruled for the government, holding that the second floor of the building is being used by the director
for residential purposes and that the ground floor used and rented by Northern Marketing Corporation, a
commercial establishment, and thus the property is not being used exclusively for educational purposes. Instead of
perfecting an appeal, petitioner availed of the instant petition for review on certiorari with prayer for preliminary
injunction before the Supreme Court, by filing said petition on 17 August 1974.
Issue:
whether or not the lot and building are used exclusively for educational purposes
Held:
Section 22, paragraph 3, Article VI, of the then 1935 Philippine Constitution, expressly grants exemption
from realty taxes for cemeteries, churches and parsonages or convents appurtenant thereto, and all lands,
buildings, and improvements used exclusively for religious, charitable or educational purposes. Reasonable
emphasis has always been made that the exemption extends to facilities which are incidental to and reasonably
necessary for the accomplishment of the main purposes. The use of the school building or lot for commercial
purposes is neither contemplated by law, nor by jurisprudence. In the case at bar, the lease of the first floor of the
building to the Northern Marketing Corporation cannot by any stretch of the imagination be considered incidental
to the purpose of education. The test of exemption from taxation is the use of the property for purposes mentioned
in the Constitution.
The decision of the CFI Abra (Branch I) is affirmed subject to the modification that half of the assessed tax
be returned to the petitioner. The modification is derived from the fact that the ground floor is being used for
commercial purposes (leased) and the second floor being used as incidental to education (residence of the
director).

G.R. No. L-39086 June 15, 1988

ABRA VALLEY COLLEGE, INC., represented by PEDRO V. BORGONIA, petitioner, vs.
HON. JUAN P. AQUINO, Judge, Court of First Instance, Abra; ARMIN M. CARIAGA, Provincial Treasurer, Abra;
GASPAR V. BOSQUE, Municipal Treasurer, Bangued, Abra; HEIRS OF PATERNO MILLARE,respondents.
This is a petition for review on certiorari of the decision * of the defunct Court of First Instance of Abra, Branch I,
dated June 14, 1974, rendered in Civil Case No. 656, entitled "Abra Valley Junior College, Inc., represented by Pedro
V. Borgonia, plaintiff vs. Armin M. Cariaga as Provincial Treasurer of Abra, Gaspar V. Bosque as Municipal
Treasurer of Bangued, Abra and Paterno Millare, defendants," the decretal portion of which reads:
IN VIEW OF ALL THE FOREGOING, the Court hereby declares:
That the distraint seizure and sale by the Municipal Treasurer of Bangued, Abra, the Provincial Treasurer of said
province against the lot and building of the Abra Valley Junior College, Inc., represented by Director Pedro
Borgonia located at Bangued, Abra, is valid;
That since the school is not exempt from paying taxes, it should therefore pay all back taxes in the amount of
P5,140.31 and back taxes and penalties from the promulgation of this decision;
That the amount deposited by the plaintaff him the sum of P60,000.00 before the trial, be confiscated to apply for
the payment of the back taxes and for the redemption of the property in question, if the amount is less than
P6,000.00, the remainder must be returned to the Director of Pedro Borgonia, who represents the plaintiff herein;
That the deposit of the Municipal Treasurer in the amount of P6,000.00 also before the trial must be returned to
said Municipal Treasurer of Bangued, Abra;
And finally the case is hereby ordered dismissed with costs against the plaintiff.
SO ORDERED. (Rollo, pp. 22-23)
Petitioner, an educational corporation and institution of higher learning duly incorporated with the Securities and
Exchange Commission in 1948, filed a complaint (Annex "1" of Answer by the respondents Heirs of Paterno
Millare; Rollo, pp. 95-97) on July 10, 1972 in the court a quo to annul and declare void the "Notice of Seizure' and
the "Notice of Sale" of its lot and building located at Bangued, Abra, for non-payment of real estate taxes and
penalties amounting to P5,140.31. Said "Notice of Seizure" of the college lot and building covered by Original
Certificate of Title No. Q-83 duly registered in the name of petitioner, plaintiff below, on July 6, 1972, by
respondents Municipal Treasurer and Provincial Treasurer, defendants below, was issued for the satisfaction of
the said taxes thereon. The "Notice of Sale" was caused to be served upon the petitioner by the respondent
treasurers on July 8, 1972 for the sale at public auction of said college lot and building, which sale was held on the
same date. Dr. Paterno Millare, then Municipal Mayor of Bangued, Abra, offered the highest bid of P6,000.00 which
was duly accepted. The certificate of sale was correspondingly issued to him.
On August 10, 1972, the respondent Paterno Millare (now deceased) filed through counstel a motion to dismiss the
complaint.
On August 23, 1972, the respondent Provincial Treasurer and Municipal Treasurer, through then Provincial Fiscal
Loreto C. Roldan, filed their answer (Annex "2" of Answer by the respondents Heirs of Patemo Millare; Rollo, pp.
98-100) to the complaint. This was followed by an amended answer (Annex "3," ibid, Rollo, pp. 101-103) on August
31, 1972.
On September 1, 1972 the respondent Paterno Millare filed his answer (Annex "5," ibid; Rollo, pp. 106-108).
On October 12, 1972, with the aforesaid sale of the school premises at public auction, the respondent Judge, Hon.
Juan P. Aquino of the Court of First Instance of Abra, Branch I, ordered (Annex "6," ibid; Rollo, pp. 109-110) the
respondents provincial and municipal treasurers to deliver to the Clerk of Court the proceeds of the auction sale.
Hence, on December 14, 1972, petitioner, through Director Borgonia, deposited with the trial court the sum of
P6,000.00 evidenced by PNB Check No. 904369.
On April 12, 1973, the parties entered into a stipulation of facts adopted and embodied by the trial court in its
questioned decision. Said Stipulations reads:
STIPULATION OF FACTS

COME NOW the parties, assisted by counsels, and to this Honorable Court respectfully enter into the following
agreed stipulation of facts:
1. That the personal circumstances of the parties as stated in paragraph 1 of the complaint is admitted; but the
particular person of Mr. Armin M. Cariaga is to be substituted, however, by anyone who is actually holding the
position of Provincial Treasurer of the Province of Abra;
2. That the plaintiff Abra Valley Junior College, Inc. is the owner of the lot and buildings thereon located in
Bangued, Abra under Original Certificate of Title No. 0-83;
3. That the defendant Gaspar V. Bosque, as Municipal treasurer of Bangued, Abra caused to be served upon the
Abra Valley Junior College, Inc. a Notice of Seizure on the property of said school under Original Certificate of Title
No. 0-83 for the satisfaction of real property taxes thereon, amounting to P5,140.31; the Notice of Seizure being the
one attached to the complaint as Exhibit A;
4. That on June 8, 1972 the above properties of the Abra Valley Junior College, Inc. was sold at public auction for
the satisfaction of the unpaid real property taxes thereon and the same was sold to defendant Paterno Millare who
offered the highest bid of P6,000.00 and a Certificate of Sale in his favor was issued by the defendant Municipal
Treasurer.
5. That all other matters not particularly and specially covered by this stipulation of facts will be the subject of
evidence by the parties.
WHEREFORE, it is respectfully prayed of the Honorable Court to consider and admit this stipulation of facts on the
point agreed upon by the parties.
Aside from the Stipulation of Facts, the trial court among others, found the following: (a) that the school is
recognized by the government and is offering Primary, High School and College Courses, and has a school
population of more than one thousand students all in all; (b) that it is located right in the heart of the town of
Bangued, a few meters from the plaza and about 120 meters from the Court of First Instance building; (c) that the
elementary pupils are housed in a two-storey building across the street; (d) that the high school and college
students are housed in the main building; (e) that the Director with his family is in the second floor of the main
building; and (f) that the annual gross income of the school reaches more than one hundred thousand pesos.
From all the foregoing, the only issue left for the Court to determine and as agreed by the parties, is whether or not
the lot and building in question are used exclusively for educational purposes. (Rollo, p. 20)
The succeeding Provincial Fiscal, Hon. Jose A. Solomon and his Assistant, Hon. Eustaquio Z. Montero, filed a
Memorandum for the Government on March 25, 1974, and a Supplemental Memorandum on May 7, 1974, wherein
they opined "that based on the evidence, the laws applicable, court decisions and jurisprudence, the school
building and school lot used for educational purposes of the Abra Valley College, Inc., are exempted from the
payment of taxes." (Annexes "B," "B-1" of Petition; Rollo, pp. 24-49; 44 and 49).
Nonetheless, the trial court disagreed because of the use of the second floor by the Director of petitioner school for
residential purposes. He thus ruled for the government and rendered the assailed decision.
After having been granted by the trial court ten (10) days from August 6, 1974 within which to perfect its appeal
(Per Order dated August 6, 1974; Annex "G" of Petition; Rollo, p. 57) petitioner instead availed of the instant
petition for review on certiorari with prayer for preliminary injunction before this Court, which petition was filed
on August 17, 1974 (Rollo, p.2).
In the resolution dated August 16, 1974, this Court resolved to give DUE COURSE to the petition (Rollo, p. 58).
Respondents were required to answer said petition (Rollo, p. 74).
Petitioner raised the following assignments of error:
I. THE COURT A QUO ERRED IN SUSTAINING AS VALID THE SEIZURE AND SALE OF THE COLLEGE LOT AND
BUILDING USED FOR EDUCATIONAL PURPOSES OF THE PETITIONER.
II.THE COURT A QUO ERRED IN DECLARING THAT THE COLLEGE LOT AND BUILDING OF THE PETITIONER ARE
NOT USED EXCLUSIVELY FOR EDUCATIONAL PURPOSES MERELY BECAUSE THE COLLEGE PRESIDENT RESIDES
IN ONE ROOM OF THE COLLEGE BUILDING.
III.THE COURT A QUO ERRED IN DECLARING THAT THE COLLEGE LOT AND BUILDING OF THE PETITIONER ARE
NOT EXEMPT FROM PROPERTY TAXES AND IN ORDERING PETITIONER TO PAY P5,140.31 AS REALTY TAXES.

IV.THE COURT A QUO ERRED IN ORDERING THE CONFISCATION OF THE P6,000.00 DEPOSIT MADE IN THE
COURT BY PETITIONER AS PAYMENT OF THE P5,140.31 REALTY TAXES. (See Brief for the Petitioner, pp. 1-2)
The main issue in this case is the proper interpretation of the phrase "used exclusively for educational purposes."
Petitioner contends that the primary use of the lot and building for educational purposes, and not the incidental
use thereof, determines and exemption from property taxes under Section 22 (3), Article VI of the 1935
Constitution. Hence, the seizure and sale of subject college lot and building, which are contrary thereto as well as to
the provision of Commonwealth Act No. 470, otherwise known as the Assessment Law, are without legal basis and
therefore void.
On the other hand, private respondents maintain that the college lot and building in question which were subjected
to seizure and sale to answer for the unpaid tax are used: (1) for the educational purposes of the college; (2) as the
permanent residence of the President and Director thereof, Mr. Pedro V. Borgonia, and his family including the inlaws and grandchildren; and (3) for commercial purposes because the ground floor of the college building is being
used and rented by a commercial establishment, the Northern Marketing Corporation (See photograph attached as
Annex "8" (Comment; Rollo, p. 90]).
Due to its time frame, the constitutional provision which finds application in the case at bar is Section 22,
paragraph 3, Article VI, of the then 1935 Philippine Constitution, which expressly grants exemption from realty
taxes for "Cemeteries, churches and parsonages or convents appurtenant thereto, and all lands, buildings, and
improvements used exclusively for religious, charitable or educational purposes ...
Relative thereto, Section 54, paragraph c, Commonwealth Act No. 470 as amended by Republic Act No. 409,
otherwise known as the Assessment Law, provides:
The following are exempted from real property tax under the Assessment Law:
(c) churches and parsonages or convents appurtenant thereto, and all lands, buildings, and improvements used
exclusively for religious, charitable, scientific or educational purposes.
In this regard petitioner argues that the primary use of the school lot and building is the basic and controlling
guide, norm and standard to determine tax exemption, and not the mere incidental use thereof.
As early as 1916 in YMCA of Manila vs. Collector of lnternal Revenue, 33 Phil. 217 [1916], this Court ruled that while
it may be true that the YMCA keeps a lodging and a boarding house and maintains a restaurant for its members,
still these do not constitute business in the ordinary acceptance of the word, but an institution used exclusively for
religious, charitable and educational purposes, and as such, it is entitled to be exempted from taxation.
In the case of Bishop of Nueva Segovia v. Provincial Board of Ilocos Norte, 51 Phil. 352 [1972], this Court included in
the exemption a vegetable garden in an adjacent lot and another lot formerly used as a cemetery. It was clarified
that the term "used exclusively" considers incidental use also. Thus, the exemption from payment of land tax in
favor of the convent includes, not only the land actually occupied by the building but also the adjacent garden
devoted to the incidental use of the parish priest. The lot which is not used for commercial purposes but serves
solely as a sort of lodging place, also qualifies for exemption because this constitutes incidental use in religious
functions.
The phrase "exclusively used for educational purposes" was further clarified by this Court in the cases of Herrera
vs. Quezon City Board of assessment Appeals, 3 SCRA 186 [1961] and Commissioner of Internal Revenue vs. Bishop of
the Missionary District, 14 SCRA 991 [1965], thus
Moreover, the exemption in favor of property used exclusively for charitable or educational purposes is 'not
limited to property actually indispensable' therefor (Cooley on Taxation, Vol. 2, p. 1430), but extends to facilities
which are incidental to and reasonably necessary for the accomplishment of said purposes, such as in the case of
hospitals, "a school for training nurses, a nurses' home, property use to provide housing facilities for interns,
resident doctors, superintendents, and other members of the hospital staff, and recreational facilities for student
nurses, interns, and residents' (84 CJS 6621), such as "Athletic fields" including "a firm used for the inmates of the
institution. (Cooley on Taxation, Vol. 2, p. 1430).
The test of exemption from taxation is the use of the property for purposes mentioned in the Constitution
(Apostolic Prefect v. City Treasurer of Baguio, 71 Phil, 547 [1941]).
It must be stressed however, that while this Court allows a more liberal and non-restrictive interpretation of the
phrase "exclusively used for educational purposes" as provided for in Article VI, Section 22, paragraph 3 of the
1935 Philippine Constitution, reasonable emphasis has always been made that exemption extends to facilities

which are incidental to and reasonably necessary for the accomplishment of the main purposes. Otherwise stated,
the use of the school building or lot for commercial purposes is neither contemplated by law, nor by jurisprudence.
Thus, while the use of the second floor of the main building in the case at bar for residential purposes of the
Director and his family, may find justification under the concept of incidental use, which is complimentary to the
main or primary purposeeducational, the lease of the first floor thereof to the Northern Marketing Corporation
cannot by any stretch of the imagination be considered incidental to the purpose of education.
It will be noted however that the aforementioned lease appears to have been raised for the first time in this Court.
That the matter was not taken up in the to court is really apparent in the decision of respondent Judge. No mention
thereof was made in the stipulation of facts, not even in the description of the school building by the trial judge,
both embodied in the decision nor as one of the issues to resolve in order to determine whether or not said
properly may be exempted from payment of real estate taxes (Rollo, pp. 17-23). On the other hand, it is noteworthy
that such fact was not disputed even after it was raised in this Court.
Indeed, it is axiomatic that facts not raised in the lower court cannot be taken up for the first time on appeal.
Nonetheless, as an exception to the rule, this Court has held that although a factual issue is not squarely raised
below, still in the interest of substantial justice, this Court is not prevented from considering a pivotal factual
matter. "The Supreme Court is clothed with ample authority to review palpable errors not assigned as such if it
finds that their consideration is necessary in arriving at a just decision." (Perez vs. Court of Appeals, 127 SCRA 645
[1984]).
Under the 1935 Constitution, the trial court correctly arrived at the conclusion that the school building as well as
the lot where it is built, should be taxed, not because the second floor of the same is being used by the Director and
his family for residential purposes, but because the first floor thereof is being used for commercial purposes.
However, since only a portion is used for purposes of commerce, it is only fair that half of the assessed tax be
returned to the school involved.
PREMISES CONSIDERED, the decision of the Court of First Instance of Abra, Branch I, is hereby AFFIRMED subject
to the modification that half of the assessed tax be returned to the petitioner.
SO ORDERED.

JOSE U. ONG and

G.R. No. 126858
NELLY M. ONG, vs. Sandiganbayan, September 16, 2005
This Petition for Certiorari,[1] dated December 13, 1996 seeks the nullification of the Resolutions of the
Sandiganbayan dated August 18, 1994[2] and October 22, 1996.[3] The first assailed Resolution denied petitioners
motion to dismiss the petition for forfeiture filed against them, while the second questioned Resolution denied their
motion for reconsideration.
The antecedents are as follows:
Congressman Bonifacio H. Gillego executed a Complaint-Affidavit[4] on February 4, 1992, claiming that
petitioner Jose U. Ong, then Commissioner of the Bureau of Internal Revenue (BIR), has amassed properties worth
disproportionately more than his lawful income. The complaint pertinently states:
In his Statement of Assets and Liabilities as of December 31, 1989 (Annex A), Commissioner Jose
U. Ong declared P750,000.00 as his cash on hand and in banks. Within a short period thereafter, he was
able to acquire prime real estate properties mostly in the millionaires choice areas in Alabang,
Muntinglupa, Metro Manila costing millions of pesos as follows:
1.

A house and lot in Alabang bought on October 9, 1990 for P5,500,000.00, now titled in the
name of Jose U. Ong under Transfer Certificate of Title No. 172168, Registry of Deeds for Makati
(Annexes B & C);

2.

Another lot in Alabang bought for P5,700,000.00, now titled in the name of Jose U. Ong and
Nelly M. Ong under Transfer Certificate of Title No. 173901. Registered on January 25, 1991 in
the Registry of Deeds for Makati (Annex D);

3.

Still another lot in Alabang bought for P4,675,000.00 on January 16, 1991, now titled in the
name of spouses Jose U. Ong and Nelly Mercado Ong under Transfer Certificate of Title No.
173760 in the Registry of Deeds for Makati (Annexes E and F);

4.

Again, another lot in Alabang bought on December 3, 1990 for P5,055,000.00, now titled in the
name of the Children of Commissioner Ong and his son-in-law under transfer Certificate of Title
No. 173386 in the Registry of Deeds for Makati (Annex G and H);

5.

Again, a lot in Makati bought for P832,000.00 on July 1, 1990, now titled in the name of the
Daughter of Commissioner Ong and his son-in-law under transfer certificate of title No. 171210
in the Registry of Deeds of Makati (Annex I & J).

The above documented purchases of Commissioner Ong alone which are worth millions of
pesos are obviously disproportionate to his income of just a little more than P200,000.00 per
annum.[5]
Ong submitted an explanation and analysis of fund sourcing, reporting his net worth covering the calendar
years 1989 to 1991 and showing his sources and uses of funds, the sources of the increase in his net worth and his
net worth as of December 13, 1991.[6]
The Director* of the Fact-Finding and Intelligence Bureau of the Office of the Ombudsman (Ombudsman)
ordered the conduct of a pre-charge investigation on the matter. A Fact-Finding Report[7] was promptly
submitted* with the following recommendation:
1. Forfeiture Proceedings be instituted against the properties of Jose U. Ong which he
illegitimately acquired in just a span of two (2) years as Commissioner of the Bureau of Internal
Revenue. Such properties are briefly specified as follows:
a)

House and lot in Ayala Alabang bought on October 9, 1990 for P5.5 million under TCT
No. 172168 of the Registry of Deeds for Makati, Metro Manila;

b)

Lot in Ayala Alabang bought on January 23, 1991 for P5.5 million under TCT No.
173901;

c)

Lot in Ayala Alabang bought on January 16, 1991 for P4,675,000.00 under TCT No.
173760;

d)

Lot in Ayala Alabang bought on December 3, 1990 for P5,055,000.00 under TCT No.
173386; and

e)

Condominium Unit 804, located at the eight floor of the Asian Mansion, bought
for P744,585.00 under CCT No. 20735 of the Registry of Deeds for Makati, Metro
Manila.[8]

Finding that a preliminary inquiry under Sec. 2 of Republic Act No. 1379 (RA 1379) should be conducted,
Ong was directed to submit his counter-affidavit and other controverting evidence in the Order[9] dated November
18, 1992. For this purpose, Ong was furnished copies of Gillegos Complaint-Affidavit and the Fact-Finding
Report, with annexes and supporting documents.
Ong filed a Counter-Affidavit[10] dated December 21, 1992, submitting his Statement of Assets and Liabilities
for the years 1988-1990, income tax return for 1988, bank certificate showing that he obtained a loan from Allied
Banking Corporation (Allied Bank), certificate from SGV & Co. (SGV) showing that he received retirement benefits
from the latter, a document entitled Acknowledgement of Trust showing that he acquired one of the questioned
assets for his brother-in-law, and other documents explaining the sources of funds with which he acquired the
questioned assets.
In view of Ongs arguments, the Ombudsman issued another Order[11] dated February 11, 1993, the
pertinent portions of which state:
Results of the subpoena duces tecum ad testificandum issued to Allied Banking Corporation, Sycip,
Gorres, Velayo & Co., including the BIR insofar as it pertains to the production of the documents that
respondents claimed in justification of the sources of his funding/income, proved negative since Allied
Bank could not produce documents that would show availment of the loan, nor could SGV itemize the
documents/vouchers that would, indeed signify the grant and receipt of the claimed retirement benefits, as
well as the BIR insofar as it pertains on respondents filed income tax returns for the years 1987, 1988,
1989, 1990 and 1991.
Such being the case, and in line with respondents defense as claimed in his counter-affidavit that all
his acquisitions were from legitimate and valid sources based from his (respondents) salary and other
sources of income, and he being the recipient thereof, copies of which he is entitled as a matter of right and
party recipient on the claimed loan and retirement benefits, respondent Jose U. Ong, is hereby directed to
submit in writing within a period of fifteen (15) days from receipt of this ORDER, the following, namely:-a) all documents in his possession relevant to the approval by the Allied Banking Corporation on
the P6.5 million term loan including documents in availment of the loan such as the execution of
promissory note/s, execution of real/chattel mortgage/s and the fact of its registration with the Register of
Deeds, credit agreements, receipt of payment on amortization of the loan, if any, and such other pertinent
documents that will show existence and availment of the loan granted;
b) All documents in his possession that he was indeed granted by SGV and Co. P7.8 million as
retirement benefits including such additional benefits as claimed as evidenced by vouchers, accounting
records, computation of benefits, that would signify fact of receipt of the claimed retirement benefits;
c) All documents showing the money market placements such as but not limited to the (a)
confirmation sale on the placements and (b) confirmation of the purchase on the placements;
d) Income tax returns as filed in the Bureau of Internal Revenue for the years, 1987, 1988, 1989,
1990 and 1991.
Failure of the respondent to comply with this ORDER within the period hereinabove prescribed
shall be deemed a waiver on his part to submit the required controverting evidence and that he has no
evidence on hand to show proof on the existence of the claimed defenses as above set forth and that this
case shall be considered for resolution without further notice.[12]
Instead of complying with the Order, Ong filed a Motion,[13] dated February 17, 1993 for its recall, the
voluntary inhibition of the handling investigators, and reassignment of the case. Ong objected to the proceedings
taken thus far, claiming that he was not notified of the subpoenas issued to SGV and Allied Bank requiring them to
substantiate Ongs claims. The Order allegedly violates his right to due process and to be presumed innocent
because it requires him to produce evidence to exculpate himself.
A Resolution[14] dated May 31, 1993 was thereafter issued finding that Ong miserably failed to substantiate
his claim that the sources of financing his said acquisition came from his other lawful income, taking into account
his annual salary of P200,000.00 more or less and his cash standing at the time, even without considering his

normal expenses befitting his stature and position in the Government, as well as his acquisition of movable
properties for the calendar year[s] 1989 to 1991, totaling P930,000.00, and concluding that the properties
acquired by him in a matter of ELEVEN (11) MONTHS from October, 1990 to September, 1991, during his
incumbency as Commissioner of the Bureau of Internal Revenue, are manifestly and grossly disproportionate to his
salary as a public official and his other lawful income.[15]
The Resolution directed the filing by the Ombudsman, in collaboration with the Office of the Solicitor
General (OSG), of a petition for recovery of ill-gotten/unexplained wealth under RA 1379, in relation to RAs 3019
and 6770, against Ong and all other persons concerned.
The Resolution was reviewed by the Office of the Special Prosecutor (Special Prosecutor) which concurred
with the findings and recommendation of the Ombudsman.[16]
A Petition[17] dated November 15, 1993 for forfeiture of unlawfully acquired property was accordingly filed
before the Sandiganbayan by the Republic, through the Special Prosecutor and the Deputy Ombudsman for
Luzon,[18] against Ong and his wife, petitioner Nelly Ong, and docketed as Civil Case No. 0160.
The Petition alleged that the total value of the questioned assets is P21,474,585.00 which is grossly
disproportionate to Ongs lawful income from his public employment and other sources amounting
to P1,060,412.50, considering that Nelly Ong has no visible means of income. This circumstance allegedly gave rise
to the presumption under Sec. 2 of RA 1379 that the questioned properties were unlawfully acquired.
In its Order[19] dated November 17, 1993, the Sandiganbayan directed the issuance of a writ of preliminary
attachment against the properties of petitioners. The writ, issued on November 18, 1993, was duly served and
implemented as shown in the Sheriffs Return dated December 1, 1993.[20]
Petitioners Jose and Nelly Ong filed an Answer[21] dated January 27, 1994, denying that their lawful income
is grossly disproportionate to the cost of the real properties they acquired during the incumbency of Ong as BIR
Commissioner. According to them, the Special Prosecutor and the Ombudsman intentionally failed to consider the
retirement and separation pay Ong received from SGV and other lawful sources of funds used in the acquisition of
the questioned properties.
They presented several affirmative defenses, such as the alleged deprivation of their right to due process
considering that no preliminary investigation was conducted as regards Nelly Ong, and the nullity of the
proceedings before the Ombudsman because the latter, who acted both as investigator and adjudicator in the
determination of the existence of probable cause for the filing of the case, will also prosecute the same. Moreover,
the Petition also allegedly failed to state a cause of action because RA 1379 is unconstitutional as it is vague and
does not sufficiently define ill-gotten wealth and how it can be determined in violation of the non-delegation of
legislative power provision, and insofar as it disregards the presumption of innocence by requiring them to show
cause why the properties in question should not be declared property of the state. They also objected to the fact
that they were not notified of the Resolution directing the filing of the case and were thereby prevented from filing
a motion for reconsideration.
A hearing of petitioners affirmative defenses was conducted as in a motion to dismiss, after which the
Sandiganbayan issued the assailedResolution dated August 18, 1994. The Sandiganbayan ruled that a petition for
forfeiture is an action in rem, civil in character. As such, the participation of Nelly Ong in the inquiry to determine
whether the properties acquired by her husband are manifestly disproportionate to his salary and other lawful
income is not a mandatory requirement. Neither is the conduct of a preliminary investigation as regards Nelly Ong
required. Further, Nelly Ong was only impleaded in the petition as a formal party.
The court held that the power of the Ombudsman to investigate and prosecute unexplained wealth cases is
founded on RAs 1379, 3019 and 6770. The Sandiganbayan, moreover, declared that the Petition sufficiently states a
cause of action.
Petitioners filed a Motion for Reconsideration[22] dated September 11, 1994, averring that although a
forfeiture proceeding is technically a civil action, it is in substance a criminal proceeding as forfeiture is deemed a
penalty for the violation of RA 1379. Hence, Nelly Ong is entitled to a preliminary investigation. To proceed against
her conjugal share of the questioned assets without giving her the opportunity to present her side in a preliminary
investigation violates her right to due process.
Petitioners reiterated their argument that they were not notified of the Resolution directing the filing of the
petition for forfeiture and were consequently deprived of their right to file a motion for reconsideration under RA
6770 and pertinent rules.
The Sandiganbayan issued the second assailed Resolution dated October 22, 1996, directing the
Ombudsman to furnish petitioners with a copy of the Resolution to file the forfeiture case and giving them a period

of five (5) days from receipt of the Resolution within which to file a motion for reconsideration. The Ombudsman
was given a period of sixty (60) days to resolve the motion for reconsideration and to report to the court the action
it has taken thereon.
Instead of awaiting the Ombudsmans compliance with the Resolution, petitioners filed the instant Petition
for Certiorari contending that the Sandiganbayan gravely abused its discretion in ruling that Nelly Ong is not
entitled to preliminary investigation; failing to annul the proceedings taken before the Ombudsman despite the
alleged bias and prejudice exhibited by the latter and the disqualification of the Ombudsman from acting both as
prosecutor and judge in the determination of probable cause against petitioners; and failing to declare RA 1379
unconstitutional.
The OSG filed a Comment[23] dated December 10, 1997, averring that the reason why Nelly Ong was not
made a party to the proceedings before the Ombudsman is because her husband never mentioned any specific
property acquired solely and exclusively by her. What he stated was that all the acquisitions were through his own
efforts. Hence, the Sandiganbayan correctly held that Nelly Ong is a mere formal party.
Furthermore, the presumption of innocence clause of the Constitution refers to criminal prosecutions and
not to forfeiture proceedings which are civil actions in rem. The Constitution is likewise not violated by RA 1379
because statutes which declare that as a matter of law a particular inference follows from the proof of a particular
fact, one fact becoming prima facie evidence of another, are not necessarily invalid, the effect of the presumption
being merely to shift the burden of proof upon the adverse party.
Neither is the constitutional authority of the Supreme Court to promulgate rules concerning the protection
and enforcement of constitutional rights, pleading, practice and procedure in all courts violated by RA 1379
merely by authorizing the OSG to grant immunity from criminal prosecution to any person who testifies to the
unlawful manner in which a respondent has acquired any property. There is no showing that the OSG or the
Ombudsman is about to grant immunity to anybody under RA 1379. At any rate, the power to grant immunity in
exchange for testimony has allegedly been upheld by the Court.
The OSG further argued that the Ombudsman did not exhibit any bias and partiality against Ong. It
considered his claim that he received retirement benefits from SGV, obtained a loan from Allied Bank, and had high
yielding money market placements, although it found that these claims were unsubstantiated based on its
investigation. Moreover, the sending of subpoenas to SGV and Allied Bank was in accordance with the powers of
the Ombudsman under RA 6770.
The OSG likewise alleged that RA 1379 is not vague as it defines legitimately acquired property and
specifies that the acquisition of property out of proportion to the legitimate income of a public officer is proscribed.
Petitioners filed a Reply to Comment[24] dated April 1, 1998, reiterating their arguments.
In the Resolution[25] dated April 14, 1999, the Court gave due course to the petition and required the parties
to submit their respective memoranda. Accordingly, petitioners filed their Memorandum[26] dated June 29, 1999,
while the OSG submitted its Memorandum[27] dated September 27, 1999. The Special Prosecutor submitted its
own Memorandum[28] dated June 20, 1999.
We deny the petition.
Petitioners contend that Nelly Ong was denied due process inasmuch as no separate notices or subpoena
were sent to her during the preliminary investigation conducted by the Ombudsman. They aver that Nelly Ong is
entitled to a preliminary investigation because a forfeiture proceeding is criminal in nature.
On the other hand, the OSG and the Ombudsman contend that Nelly Ong is not entitled to preliminary
investigation, first, because forfeiture proceedings under RA 1379 are in the nature of civil actions in rem and
preliminary investigation is not required; second, because even assuming that the proceeding is penal in character,
the right to a preliminary investigation is a mere statutory privilege which may be, and was in this case, withheld
by law; and third, because a preliminary investigation would serve no useful purpose considering that none of the
questioned assets are claimed to have been acquired through Nelly Ongs funds.
In Republic v. Sandiganbayan,[29] we ruled that forfeiture proceedings under RA 1379 are civil in nature and
not penal or criminal in character, as they do not terminate in the imposition of a penalty but merely in the
forfeiture of the properties illegally acquired in favor of the State. Moreover, the procedure outlined in the law is
that provided for in a civil action, viz:
Sec. 3. The petition.The petition shall contain the following information:
(a) The name and address of the respondent.

(b) The public office or employment he holds and such other public officer or employment which
he has previously held.
(c) The approximate amount of property he has acquired during his incumbency in his past and
present offices and employments.
(d) A description of said property, or such thereof as has been identified by the Solicitor General.
(e) The total amount of his government salary and other proper earnings and incomes from
legitimately acquired property, and
(f)

Such other information as may enable the court to determine whether or not the respondent
has unlawfully acquired property during his incumbency.

Sec. 4. Period for the answer.The respondent shall have a period of fifteen days within which
to present his answer.
Sec. 5. Hearing.The court shall set a date for a hearing which may be open to the public, and
during which the respondent shall be given ample opportunity to explain, to the satisfaction of the
court, how he has acquired the property in question.
Sec. 6. Judgment.If the respondent is unable to show to the satisfaction of the court that he has
lawfully acquired the property in question, then the court shall declare such property, forfeited in
favor of the State, and by virtue of such judgment the property aforesaid shall become property of
the State:Provided, that no judgment shall be rendered within six months before any general
election or within three months before any special election. The court may, in addition, refer this
case to the corresponding Executive Department for administrative or criminal action, or
both. [Emphasis supplied.]
Hence, unlike in a criminal proceeding, there is to be no reading of the information, arraignment, trial and reading
of the judgment in the presence of the accused.[30]
In the earlier case of Cabal v. Kapunan,[31] however, we declared that forfeiture to the State of property of a
public official or employee partakes of the nature of a penalty and proceedings for forfeiture of property, although
technically civil in form, are deemed criminal or penal. We clarified therein that the doctrine laid down in Almeda
v. Perez[32] that forfeiture proceedings are civil in nature applies purely to the procedural aspect of such
proceedings and has no bearing on the substantial rights of the respondents therein. This ruling was reiterated
in Katigbak v. Solicitor General,[33] where we held that the forfeiture of property provided for in RA 1379 is in the
nature of a penalty.
It is in recognition of the fact that forfeiture partakes the nature of a penalty that RA 1379 affords the
respondent therein the right to a previous inquiry similar to a preliminary investigation in criminal cases.
Preliminary investigation is an inquiry or proceeding to determine whether there is sufficient ground to
engender a well-founded belief that a crime has been committed and the respondent is probably guilty thereof, and
should be held for trial. Although the right to a preliminary investigation is not a fundamental right guaranteed by
the Constitution but a mere statutory privilege, it is nonetheless considered a component part of due process in
criminal justice.[34]
It is argued, however, that even if RA 1379 is considered a criminal proceeding, Nelly Ong is still not
entitled to a preliminary investigation because the law itself withholds such right from a respondent who is not
himself or herself a public officer or employee, such as Nelly Ong.
RA 1379, entitled An Act Declaring Forfeiture in Favor of the State of Any Property Found to Have Been
Unlawfully Acquired by Any Public Officer or Employee and Providing for the Procedure Therefor, expressly affords a
respondent public officer or employee the right to a previous inquiry similar to preliminary investigation in
criminal cases, but is silent as to whether the same right is enjoyed by a co-respondent who is not a public officer
or employee. Sec. 2 thereof provides:
Sec. 2. Filing of petition.Whenever any public officer or employee has acquired during
his incumbency an amount of property which is manifestly out of proportion to his salary as such
public officer or employee and to his other lawful income and the income from legitimately
acquired property, said property shall be presumed prima facie to have been unlawfully acquired.
The Solicitor General, upon complaint by any taxpayer to the city or provincial fiscal who
shall conduct a previous inquiry similar to preliminary investigations in criminal cases and

shall certify to the Solicitor General that there is reasonable ground to believe that there has been
committed a violation of this Act and the respondent is probably guilty thereof, shall file, in the
name and on behalf of the Republic of the Philippines, in the Court of First Instance of the city or
province where said public officer or employee resides or holds office, a petition for a writ
commanding said officer or employee to show cause why the property aforesaid, or any part
thereof, should not be declared property of the State: Provided, That no such petition shall be filed
within one year before any general election or within three months before any special
election.[Emphasis supplied.]
Is this silence to be construed to mean that the right to a preliminary investigation is withheld by RA 1379
from a co-respondent, such as Nelly Ong, who is not herself a public officer or employee?
The answer is no.
It is a significant fact in this case that the questioned assets are invariably registered under the names of
both Jose and Nelly Ong owing to their conjugal partnership. Thus, even as RA 1379 appears to be directed only
against the public officer or employee who has acquired during his incumbency an amount of property which is
manifestly out of proportion to his salary as such public officer or employee and his other lawful income and the
income from legitimately acquired property, the reality that the application of the law is such that the conjugal
share of Nelly Ong stands to be subjected to the penalty of forfeiture grants her the right, in line with the due
process clause of the Constitution, to a preliminary investigation.
There is in this case, however, another legal complexion which we have to deal with. As the OSG noted,
there is nothing in the affidavits and pleadings filed by petitioners which attributes the acquisition of any of the
questioned assets to Nelly Ong.
In his Counter-Affidavit, Ong explained that the questioned assets were purchased using his retirement
benefits from SGV amounting toP7.8 Million, various money market placements, and loan from Allied Bank in the
amount of P6.5 Million. He averred:
6. To fully explain the valid and legal acquisition of the foregoing listed property pointing
out the sources of funding, circumstances and details of acquisition, the following information is
related:
A.

As to the acquisition of the lot covered by TCT No. 172168, located at Ayala
Alabang, Muntinlupa, Metro Manila, for P5,500,000.00 on October 9, 1990.

Respondents sources for the P5,500,000.00 were:

a.

Interest from his money market placements up to September 30, 1990 -------------P2,404,643
b. Partial liquidation of money market placements ------------------------------------------------P3,095,357
Total -----------------------------------------P5,500,000
A brief historical narration of the money placements made by Respondent is included in the
Report on the Statement of Net Worth of Com. Jose U. Ong Calendar Year 1989 to 1991, submitted
by him to the Office of the Ombudsman, on or about March 24, 1992.
After the acquisition of the above property, Respondents money market placements were
reduced to P4,365,834 (inclusive of interest which was not used to finance the above acquisition,
and which remaining balance was rolled over as part of the placements.
B. As to the acquisition of the lot covered by TCT No. 173386, located at Ayala
Alabang, Muntinlupa, Metro Manila, on December 3, 1990, forP5,055,000.00.
Respondent was offered this lot, and finding the same to be a good investment, he obtained
a loan from the Allied Banking Corporation forP6,500,000.00. P5,500,000 was used by him in the
purchase of the above property. Respondents credit worthiness is self evident from his Statement
of Assets and Liabilities as of end of December, 1989 where his net worth is duly reflected to
be P10.9 Million.
Xerox copy of the Certification executed by the Corporate Secretary of Allied Banking
Corporation attesting to the grant of a five (5) year Term Loan of P6.5 Million pesos to Respondent
on October 24, 1990, is attached and incorporated as Annex 3.

C. As to the acquisition of the lot covered by TCT No. 173760, located at Ayala
Alabang, Muntinlupa, Metro Manila, on January 16, 1991, forP4,675,000.00.
After the acquisition of the property described in the next preceding sub-paragraph B,
Respondent had available investible funds, money market placements, in the total sum
of P5,894,815.00, the details of which are as follows:
Balance of Money Market placements after acquisition of the property covered by TCT No. 173386 ----------- 4,365,834.00
Interest earned in the above money market placements up to December 31, 1990 ----------------------- 83,981.00
Unused portion of the loan of P6.5 Million ---- .P1,445,000.00
Total --------------------------- ..P5,894,815.00
From the foregoing balance of P5,894,815.00, came the P4,375,000.00 with which Respondent
purchased the real property covered by TCT No. 173760. There remained a balance
of P1,219,815.00.
D. As to the acquisition in Respondents name of the lot at Ayala Alabang,
Muntinlupa, Metro Manila, covered by TCT No. 173901, on July 1, 1990.
This is an acquisition that had to be made in Respondents name for the benefit of Hamplish
D. Mercado (respondents brother-in-law) and Florentina S. Mercado, Filipino/Americans, both
residents of Persippany, New Jersey, U.S.A. The funding of this purchase came from Hamplish D.
Mercado who previously left funds with Respondent for the purpose of acquiring suitable property
where the Mercado spouses could stay when they return to the Philippines upon retirement. Due to
circumstances prevailing at the time when the sale was executed, it was done in the name of
Respondent and his wife. Respondent immediately thereafter executed an Acknowledgment of
Trust stating the aforementioned fact, duly notarized under date of 5 February 1991. Respondent
has likewise executed and signed a Deed of Absolute Sale, confirming the truth of all the foregoing.
Xerox copy of the said Acknowledgment of Trust dated February 5, 1991, and the duly signed Deed
of Absolute Sale still undated, are hereto attached as Annexes 4 and 4-A, respectively.
E.

As to the alleged acquisition of the lot at Makati, Metro Manila, covered by TCT No. 171210 on July 1,
1990 for P832,000.00.

Regarding the aforementioned alleged acquisition, there was even an acknowledgment of

error in the very making of the charge. Suffice it just to say that the Fact-Finding Report itself
stated, Hence, the accusation that it was Com. Ong who provided funds for such acquisition is
DEVOID of merit.
F.

As to the acquisition of Condominium Unit covered by CCT No. 20785.

Though not included in the Complaint-Affidavit, this was added by Investigator Soguilon,
and who unilaterally and arbitrarily declared its acquisition by Respondent as coming from illegal
means without affording Respondent his constitutional right to due process. Had respondent been
afforded the opportunity to comment on the acquisition of subject Condominium Unit, he could
have readily explained the purchase price of P744,585.00. Under No. 6-C of this statement, it
appears that there still remained an unused balance of P1,219,815.60. Thus, even Respondents
remaining investible funds easily covered the purchase price.
He acknowledges the unintentional omission of the Condominium Unit in the listing of the
same in his Statements of Assets and Liabilities. However, as explained in the preceding paragraph
the acquisition cost of P744,585.00 is well within his readily available balance for investment after
the acquisition of the property covered by TCT No. 173760, which is P1,219,815.60.[35]
Even as petitioners denied the allegation in the petition for forfeiture that Nelly Ong has no visible means of
income with which she could have purchased the questioned assets, there is neither indication nor pretense that
Nelly Ong had a hand in the acquisition of the properties. Jose Ong clearly declared that he purchased the
properties with his retirement funds, money market placements, and proceeds from a bank loan. Whatever
defenses which Nelly Ong could have raised relative to the sources of funds used in the purchase of the questioned
assets are deemed waived owing to the fact that they are subsumed in the submissions of her husband. Hence,
even if she is entitled to a preliminary investigation, such an inquiry would be an empty ceremony.

We now consider Ongs allegations of bias and prejudice exhibited by the Ombudsman during the
preliminary investigation.
A perusal of the records reveals that the Graft Investigation Officer duly considered Ongs explanation as to
the sources of funds with which he acquired the questioned assets. His averment that he received retirement
benefits from the SGV was understandably disregarded because the only supporting document he presented then
was the certification of the controller of SGV to the effect that he received such benefits. Ong was likewise unable to
substantiate his claim that he had money market placements as he did not present any document evidencing such
placements. Further, apart from a certification from the corporate secretary of Allied Bank to the effect that he
obtained a loan from the said bank, no other document, e.g., loan application, credit investigation report, loan
approval, schedule of loan releases, real estate mortgage document, promissory notes, cancelled checks, receipts
for amortization payments, and statement of account, was presented to support the claim.
Ong was even given the opportunity to present the documents in his possession relevant to the approval of
the Allied Bank loan, his receipt of retirement benefits from SGV, and money market placements which would have
validated his assertion that all the questioned acquisitions were from legitimate sources. [36] Up to this point,
therefore, we find that the Ombudsman did not make any unwarranted conclusions or proceed with arbitrariness
in the conduct of the preliminary inquiry.
However, Ong calls the Courts attention to the fact that he was not notified of the subpoenas duces tecum ad
testificandum apparently issued to SGV, Allied Bank and the BIR and the proceedings taken thereon. This objection
was raised in his Motion[37] dated February 17, 1993, which was, unfortunately, perfunctorily denied.
The Rules of Procedure of the Office of the Ombudsman[38] provides that the preliminary investigation of
cases falling under the jurisdiction of the Sandiganbayan and Regional Trial Court shall be conducted in the manner
prescribed in Section 3, Rule 112 of the Rules of Court, subject to the following provisions:

(f) If, after the filing of the requisite affidavits and their supporting evidences, there are facts
material to the case which the investigating officer may need to be clarified on, he may conduct a
clarificatory hearing during which the parties shall be afforded the opportunity to be present but
without the right to examine or cross-examine the witness being questioned. Where the appearance
of the parties or witness is impracticable, the clarificatory questioning may be conducted in writing,
whereby the questions desired to be asked by the investigating officer or a party shall be reduced
into writing and served on the witness concerned who shall be required to answer the same in
writing and under oath.
Ong, therefore, should have been notified of the subpoenas duces tecum ad testificandum issued to SGV,
Allied Bank and the BIR. Although there is no indication on record that clarificatory hearings were conducted
pursuant to the subpoenas, Ong is entitled to be notified of the proceedings and to be present thereat. The fact that
he was not so notified is a denial of fundamental fairness which taints the preliminary investigation.
So, too, did the fact that Ong was not served a copy of the Resolution directing the filing of a petition for
forfeiture deprive him of his statutory right to be furnished with a copy of the Resolution to file a petition for
forfeiture and to file a motion for reconsideration therefrom with the Ombudsman within five (5) days from
receipt of such Resolution pursuant to Sec. 27 of RA 6770. The law provides:
Sec. 27. Effectivity and Finality of Decisions.(1) All provisionary orders of the Office of the
Ombudsman are immediately effective and executory.
A motion for reconsideration of any order, directive or decision of the Office of the
Ombudsman must be filed within five (5) days after receipt of written notice . . . .
For these reasons, we find that the Sandiganbayan, in its second assailed Resolution, correctly ordered the
Ombudsman to immediately furnish petitioners a copy of the Resolution to file the petition for forfeiture, and gave
petitioners a period of five (5) days from receipt of suchResolution within which to file a motion for
reconsideration. Although the second Sandiganbayan Resolution was only intended to remedy the Ombudsmans
failure to give petitioners a copy of the Resolution to file the petition for forfeiture, it would also have served to cure
the Ombudsmans failure to notify petitioners of the issuance of subpoenas duces tecum ad testificandum to SGV,
Allied Bank and the BIR.
Instead of awaiting the Ombudsmans compliance with the Resolution and filing their motion for
reconsideration therefrom, however, petitioners opted to go directly to this Court. With this maneuver, petitioners
effectively deprived themselves of an avenue of redress with the Sandiganbayan. They are deemed to have waived
their right to avail of the remedy afforded by the second Resolution.

The next question is whether we should direct the Ombudsman to rectify the errors committed during the
preliminary investigation, i.e., the failure to give Ong notice of the subpoenas issued to SGV, Allied Bank and the BIR
and notice of the Resolution directing the filing of the petition for forfeiture.
To so order the Ombudsman at this point would no longer serve any useful purpose and would only further
delay the proceedings in this case. Verily, petitioners have been allowed to fully plead their arguments before this
Court. After all has been said, this case should now be allowed to proceed in its course.
Nonetheless, we find this an opportune time to admonish the Ombudsman to be more circumspect in its
conduct of preliminary investigation to the end that participants therein are accorded the full measure of their
rights under the Constitution and our laws.
The other issues raised by petitioners concern the alleged disqualification of the Ombudsman to file a
petition for forfeiture considering that it also conducted the preliminary investigation to determine probable
cause. According to petitioners, the duality of the functions of the Ombudsman, as investigator and prosecutor,
impairs its ability to act as a fair and impartial magistrate in the determination of probable cause.
Petitioners are the first to agree that the Ombudsman is vested with jurisdiction to investigate and
prosecute any act or omission of a public officer or employee when such act or omission appears to be illegal,
unjust, improper or inefficient. They recognize that the Ombudsman has primary jurisdiction over cases, such as
the present one, cognizable by the Sandiganbayan.
The problem with petitioners contention is their assumption that the Ombudsman, a constitutionallycreated body, will not perform its functions faithfully. The duality of roles which the Ombudsman exercises does
not necessarily warrant a conclusion that it will be given to making a finding of probable cause in every case.
At any rate, [I]n the debates on this matter in the Constitutional Commission, it was stressed by the
sponsors of the Office of the Ombudsman that, whereas the original Tanodbayan was supposed to be limited to the
function of prosecution of cases against public functionaries, generally for graft and corruption, the former would
be considered the champion of the citizen, to entertain complaints addressed to him and to take all necessary
action thereon.[39] This should leave no doubt as regards the constitutionality and propriety of the functions
exercised by the Ombudsman in this case.
Verily, the Court in Republic v. Sandiganbayan,[40] reviewed the powers of the Ombudsman and held:
At present, the powers of the Ombudsman, as defined by Republic Act No. 6770 corollary to
Section 13, Article XI of the 1987 Constitution, include,inter alia, the authority to: (1) investigate
and prosecute on its own or on complaint by any person, any act or omission of any public officer or
employee, office or agency, when such act or omission appears to be illegal, unjust, improper or
inefficient. It has primary jurisdiction over cases cognizable by the Sandiganbayan and, in the
exercise of this primary jurisdiction, it may take over, at any stage, from any investigatory agency of
Government, the investigation of such cases; and (2) investigate and intiate the proper action for
the recovery of ill-gotten wealth and/or unexplained wealth amassed after February 25, 1986 and
the prosecution of the parties involved there.[41]
In the same case, we declared that the Ombudsman has the correlative powers to investigate and initiate
the proper action for the recovery of ill-gotten and/or unexplained wealth which were amassed after February 25,
1986. There is therefore no merit in petitioners contention that the absence of participation of the OSG taints the
petition for forfeiture with nullity.
Finally, the attacks against the constitutionality of RA 1379 because it is vague, violates the presumption of
innocence and the right against self incrimination, and breaches the authority and prerogative of the Supreme
Court to promulgate rules concerning the protection and enforcement of constitutional rights, are unmeritorious.
The law is not vague as it defines with sufficient particularity unlawfully acquired property of a public
officer or employee as that which is manifestly out of proportion to his salary as such public officer or employee
and to his other lawful income and the income from legitimately acquired property. It also provides a definition of
what is legitimately acquired property. Based on these parameters, the public is given fair notice of what acts are
proscribed. The law, therefore, does not offend the basic concept of fairness and the due process clause of the
Constitution.
Neither is the presumption of innocence clause violated by Sec. 2 of RA 1379 which states that property
acquired by a public officer or employee during his incumbency in an amount which is manifestly out of proportion
to his salary as such public officer or employee and to his other lawful income and the income from legitimately
acquired property shall be presumed prima facie to have been unlawfully acquired. As elaborated by Fr. Joaquin

Bernas, under the principle of presumption of innocence, it is merely required of the State to establish a prima
faciecase, after which the burden of proof shifts to the accused.[42] In People v. Alicante,[43] the Court held:
No rule has been better established in criminal law than that every man is presumed to be
innocent until his guilt is proved beyond a reasonable doubt. In a criminal prosecution, therefore,
the burden is upon the State to prove every fact and circumstance constituting the crime charged,
for the purpose of showing the guilt of the accused.
While that is the rule, many of the States have established a different rule and have
provided that certain facts only shall constitute prima facieevidence, and that then the burden is put
upon the defendant to show or to explain that such facts or acts are not criminal.
It has been frequently decided, in case of statutory crimes, that no constitutional provision is
violated by a statute providing that proof by the State ofsome material fact or facts shall
constitute prima facie evidence of guilt, and that then the burden is shifted to the defendant for the
purpose of showing that such act or acts are innocent and are committed without unlawful
intention.
. . . The State having the right to declare what acts are criminal, within certain well defined
limitations, has a right to specify what act or acts shall constitute a crime, as well as what proof
shall constitute prima facie evidence of guilt, and then to put upon the defendant the burden of
showing that such act or acts are innocent and are not committed with any criminal intent or
intention.[44]
The constitutional assurance of the right against self incrimination likewise cannot be invoked by
petitioners. The right is a prohibition against the use of physical or moral compulsion to extort communications
from the accused. It is simply a prohibition against legal process to extract from the accuseds own lips, against his
will, admission of his guilt.[45] In this case, petitioners are not compelled to present themselves as witnesses in
rebutting the presumption established by law. They may present documents evidencing the purported bank loans,
money market placements and other fund sources in their defense.
As regards the alleged infringement of the Courts authority to promulgate rules concerning the protection
and enforcement of constitutional rights, suffice it to state that there is no showing that the Ombudsman or the
OSG is about to grant immunity to anyone under RA 1379. The question, therefore, is not ripe for adjudication.
WHEREFORE, the petition is hereby DISMISSED. Costs against petitioners.
SO ORDERED.

VIRGILIO O. GARCILLANO, vs. THE HOUSE

OF REPRESENTATIVES COMMITTEES ON
PUBLIC INFORMATION,

G.R. No. 170338

December 23, 2008

More than three years ago, tapes ostensibly containing a wiretapped conversation purportedly between the
President of the Philippines and a high-ranking official of the Commission on Elections (COMELEC) surfaced. They
captured unprecedented public attention and thrust the country into a controversy that placed the legitimacy of
the present administration on the line, and resulted in the near-collapse of the Arroyo government. The tapes,
notoriously referred to as the Hello Garci tapes, allegedly contained the Presidents instructions to COMELEC
Commissioner Virgilio Garcillano to manipulate in her favor results of the 2004 presidential elections. These
recordings were to become the subject of heated legislative hearings conducted separately by committees of both
Houses of Congress.[1]
In the House of Representatives (House), on June 8, 2005, then Minority Floor Leader Francis G. Escudero
delivered a privilege speech, Tale of Two Tapes, and set in motion a congressional investigation jointly conducted
by the Committees on Public Information, Public Order and Safety, National Defense and Security, Information and
Communications Technology, and Suffrage and Electoral Reforms (respondent House Committees). During the
inquiry, several versions of the wiretapped conversation emerged. But on July 5, 2005, National Bureau of
Investigation (NBI) Director Reynaldo Wycoco, Atty. Alan Paguia and the lawyer of former NBI Deputy Director
Samuel Ong submitted to the respondent House Committees seven alleged original tape recordings of the
supposed three-hour taped conversation. After prolonged and impassioned debate by the committee members on
the admissibility and authenticity of the recordings, the tapes were eventually played in the chambers of the
House.[2]
On August 3, 2005, the respondent House Committees decided to suspend the hearings indefinitely.
Nevertheless, they decided to prepare committee reports based on the said recordings and the testimonies of the
resource persons.[3]
Alarmed by these developments, petitioner Virgilio O. Garcillano (Garcillano) filed with this Court a Petition
for Prohibition and Injunction, with Prayer for Temporary Restraining Order and/or Writ of Preliminary
Injunction[4] docketed as G.R. No. 170338. He prayed that the respondent House Committees be restrained from
using these tape recordings of the illegally obtained wiretapped conversations in their committee reports and for
any other purpose. He further implored that the said recordings and any reference thereto be ordered stricken off
the records of the inquiry, and the respondent House Committees directed to desist from further using the
recordings in any of the House proceedings.[5]
Without reaching its denouement, the House discussion and debates on the Garci tapes abruptly
stopped.
After more than two years of quiescence, Senator Panfilo Lacson roused the slumbering issue with a
privilege speech, The Lighthouse That Brought Darkness. In his discourse, Senator Lacson promised to provide
the public the whole unvarnished truth the whats, whens, wheres, whos and whys of the alleged wiretap,
and sought an inquiry into the perceived willingness of telecommunications providers to participate in nefarious
wiretapping activities.
On motion of Senator Francis Pangilinan, Senator Lacsons speech was referred to the Senate Committee on
National Defense and Security, chaired by Senator Rodolfo Biazon, who had previously filed two bills[6] seeking to
regulate the sale, purchase and use of wiretapping equipment and to prohibit the Armed Forces of the Philippines
(AFP) from performing electoral duties.[7]
In the Senates plenary session the following day, a lengthy debate ensued when Senator Richard Gordon
aired his concern on the possible transgression of Republic Act (R.A.) No. 4200[8] if the body were to conduct a
legislative inquiry on the matter. On August 28, 2007, Senator Miriam Defensor-Santiago delivered a privilege
speech, articulating her considered view that the Constitution absolutely bans the use, possession, replay or
communication of the contents of the Hello Garci tapes. However, she recommended a legislative investigation
into the role of the Intelligence Service of the AFP (ISAFP), the Philippine National Police or other government
entities in the alleged illegal wiretapping of public officials.[9]
On September 6, 2007, petitioners Santiago Ranada and Oswaldo Agcaoili, retired justices of the Court of
Appeals, filed before this Court a Petition for Prohibition with Prayer for the Issuance of a Temporary Restraining
Order and/or Writ of Preliminary Injunction,[10] docketed as G.R. No. 179275, seeking to bar the Senate from
conducting its scheduled legislative inquiry. They argued in the main that the intended legislative inquiry violates
R.A. No. 4200 and Section 3, Article III of the Constitution.[11]
As the Court did not issue an injunctive writ, the Senate proceeded with its public hearings on the Hello
Garci tapes on September 7,[12] 17[13] and October 1,[14]2007.

Intervening as respondents,[15] Senators Aquilino Q. Pimentel, Jr., Benigno Noynoy C. Aquino, Rodolfo G.
Biazon, Panfilo M. Lacson, Loren B. Legarda, M.A. Jamby A.S. Madrigal and Antonio F. Trillanes filed their
Comment[16] on the petition on September 25, 2007.
The Court subsequently heard the case on oral argument.[17]
On October 26, 2007, Maj. Lindsay Rex Sagge, a member of the ISAFP and one of the resource persons
summoned by the Senate to appear and testify at its hearings, moved to intervene as petitioner in G.R. No.
179275.[18]
On November 20, 2007, the Court resolved to consolidate G.R. Nos. 170338 and 179275.[19]
It may be noted that while both petitions involve the Hello Garci recordings, they have different
objectivesthe first is poised at preventing the playing of the tapes in the House and their subsequent inclusion in
the committee reports, and the second seeks to prohibit and stop the conduct of the Senate inquiry on the
wiretapped conversation.
The Court dismisses the first petition, G.R. No. 170338, and grants the second, G.R. No. 179275.
-IBefore delving into the merits of the case, the Court shall first resolve the issue on the parties standing,
argued at length in their pleadings.
In Tolentino v. COMELEC,[20] we explained that [l]egal standing or locus standi refers to a personal and
substantial interest in a case such that the party has sustained or will sustain direct injury because of the
challenged governmental act x x x, thus, generally, a party will be allowed to litigate only when (1) he can show
that he has personally suffered some actual or threatened injury because of the allegedly illegal conduct of the
government; (2) the injury is fairly traceable to the challenged action; and (3) the injury is likely to be redressed by
a favorable action.[21]
The gist of the question of standing is whether a party has alleged such a personal stake in the outcome of the
controversy as to assure that concrete adverseness which sharpens the presentation of issues upon which the
court so largely depends for illumination of difficult constitutional questions.[22]
However, considering that locus standi is a mere procedural technicality, the Court, in recent cases, has
relaxed the stringent direct injury test. David v. Macapagal-Arroyo[23] articulates that a liberal policy has been
observed, allowing ordinary citizens, members of Congress, and civic organizations to prosecute actions involving
the constitutionality or validity of laws, regulations and rulings.[24] The fairly recent Chavez v. Gonzales[25] even
permitted a non-member of the broadcast media, who failed to allege a personal stake in the outcome of the
controversy, to challenge the acts of the Secretary of Justice and the National Telecommunications Commission.
The majority, in the said case, echoed the current policy that this Court has repeatedly and consistently refused to
wield procedural barriers as impediments to its addressing and resolving serious legal questions that greatly
impact on public interest, in keeping with the Courts duty under the 1987 Constitution to determine whether or
not other branches of government have kept themselves within the limits of the Constitution and the laws, and that
they have not abused the discretion given to them.[26]
In G.R. No. 170338, petitioner Garcillano justifies his standing to initiate the petition by alleging that he is
the person alluded to in the Hello Garci tapes. Further, his was publicly identified by the members of the
respondent committees as one of the voices in the recordings.[27] Obviously, therefore, petitioner Garcillano stands
to be directly injured by the House committees actions and charges of electoral fraud. The Court recognizes his
standing to institute the petition for prohibition.
In G.R. No. 179275, petitioners Ranada and Agcaoili justify their standing by alleging that they are
concerned citizens, taxpayers, and members of the IBP. They are of the firm conviction that any attempt to use the
Hello Garci tapes will further divide the country. They wish to see the legal and proper use of public funds that
will necessarily be defrayed in the ensuing public hearings. They are worried by the continuous violation of the
laws and individual rights, and the blatant attempt to abuse constitutional processes through the conduct of
legislative inquiries purportedly in aid of legislation.[28]
Intervenor Sagge alleges violation of his right to due process considering that he is summoned to attend the
Senate hearings without being apprised not only of his rights therein through the publication of the Senate Rules of
Procedure Governing Inquiries in Aid of Legislation, but also of the intended legislation which underpins the
investigation. He further intervenes as a taxpayer bewailing the useless and wasteful expenditure of public funds
involved in the conduct of the questioned hearings.[29]
Given that petitioners Ranada and Agcaoili allege an interest in the execution of the laws and that
intervenor Sagge asserts his constitutional right to due process,[30] they satisfy the requisite personal stake in the
outcome of the controversy by merely being citizens of the Republic.

Following the Courts ruling in Francisco, Jr. v. The House of Representatives,[31] we find sufficient petitioners
Ranadas and Agcaoilis and intervenor Sagges allegation that the continuous conduct by the Senate of the
questioned legislative inquiry will necessarily involve the expenditure of public funds.[32] It should be noted that
inFrancisco, rights personal to then Chief Justice Hilario G. Davide, Jr. had been injured by the alleged
unconstitutional acts of the House of Representatives, yet the Court granted standing to the petitioners therein for,
as in this case, they invariably invoked the vindication of their own rightsas taxpayers, members of Congress,
citizens, individually or in a class suit, and members of the bar and of the legal professionwhich were also
supposedly violated by the therein assailed unconstitutional acts.[33]
Likewise, a reading of the petition in G.R. No. 179275 shows that the petitioners and intervenor Sagge
advance constitutional issues which deserve the attention of this Court in view of their seriousness, novelty and
weight as precedents. The issues are of transcendental and paramount importance not only to the public but also
to the Bench and the Bar, and should be resolved for the guidance of all.[34]
Thus, in the exercise of its sound discretion and given the liberal attitude it has shown in prior cases
climaxing in the more recent case of Chavez, the Court recognizes the legal standing of petitioners Ranada and
Agcaoili and intervenor Sagge.
- II The Court, however, dismisses G.R. No. 170338 for being moot and academic. Repeatedly stressed in our
prior decisions is the principle that the exercise by this Court of judicial power is limited to the determination and
resolution of actual cases and controversies.[35] By actual cases, we mean existing conflicts appropriate or ripe for
judicial determination, not conjectural or anticipatory, for otherwise the decision of the Court will amount to an
advisory opinion. The power of judicial inquiry does not extend to hypothetical questions because any attempt at
abstraction could only lead to dialectics and barren legal questions and to sterile conclusions unrelated to
actualities.[36] Neither will the Court determine a moot question in a case in which no practical relief can be
granted. A case becomes moot when its purpose has become stale.[37] It is unnecessary to indulge in academic
discussion of a case presenting a moot question as a judgment thereon cannot have any practical legal effect or, in
the nature of things, cannot be enforced.[38]
In G.R. No. 170338, petitioner Garcillano implores from the Court, as aforementioned, the issuance of an
injunctive writ to prohibit the respondent House Committees from playing the tape recordings and from including
the same in their committee report. He likewise prays that the said tapes be stricken off the records of the House
proceedings. But the Court notes that the recordings were already played in the House and heard by its
members.[39] There is also the widely publicized fact that the committee reports on the Hello Garci inquiry were
completed and submitted to the House in plenary by the respondent committees.[40] Having been overtaken by
these events, the Garcillano petition has to be dismissed for being moot and academic. After all, prohibition is a
preventive remedy to restrain the doing of an act about to be done, and not intended to provide a remedy for an act
already accomplished.[41]
- III As to the petition in G.R. No. 179275, the Court grants the same. The Senate cannot be allowed to continue
with the conduct of the questioned legislative inquiry without duly published rules of procedure, in clear
derogation of the constitutional requirement.
Section 21, Article VI of the 1987 Constitution explicitly provides that [t]he Senate or the House of
Representatives, or any of its respective committees may conduct inquiries in aid of legislation in accordance with
its duly published rules of procedure. The requisite of publication of the rules is intended to satisfy the basic
requirements of due process.[42] Publication is indeed imperative, for it will be the height of injustice to punish or
otherwise burden a citizen for the transgression of a law or rule of which he had no notice whatsoever, not even a
constructive one.[43] What constitutes publication is set forth in Article 2 of the Civil Code, which provides that
[l]aws shall take effect after 15 days following the completion of their publication either in the Official Gazette, or
in a newspaper of general circulation in the Philippines.[44]
The respondents in G.R. No. 179275 admit in their pleadings and even on oral argument that the Senate
Rules of Procedure Governing Inquiries in Aid of Legislation had been published in newspapers of general
circulation only in 1995 and in 2006.[45] With respect to the present Senate of the 14th Congress, however, of which
the term of half of its members commenced on June 30, 2007, no effort was undertaken for the publication of these
rules when they first opened their session.
Recently, the Court had occasion to rule on this very same question. In Neri v. Senate Committee on
Accountability of Public Officers and Investigations,[46] we said:
Fourth, we find merit in the argument of the OSG that respondent Committees likewise
violated Section 21 of Article VI of the Constitution, requiring that the inquiry be in accordance with
the duly published rules of procedure. We quote the OSGs explanation:

The phrase duly published rules of procedure requires the Senate of every Congress to
publish its rules of procedure governing inquiries in aid of legislation because every Senate is
distinct from the one before it or after it. Since Senatorial elections are held every three (3) years
for one-half of the Senates membership, the composition of the Senate also changes by the end of
each term. Each Senate may thus enact a different set of rules as it may deem fit. Not having
published its Rules of Procedure, the subject hearings in aid of legislation conducted by the
14th Senate, are therefore, procedurally infirm.
Justice Antonio T. Carpio, in his Dissenting and Concurring Opinion, reinforces this ruling with the
following rationalization:
The present Senate under the 1987 Constitution is no longer a continuing legislative
body. The present Senate has twenty-four members, twelve of whom are elected every three years
for a term of six years each. Thus, the term of twelve Senators expires every three years,
leaving less than a majority of Senators to continue into the next Congress. The 1987
Constitution, like the 1935 Constitution, requires a majority of Senators to constitute a quorum to
do business. Applying the same reasoning in Arnault v. Nazareno, the Senate under the 1987
Constitution is not a continuing body because less than majority of the Senators continue into the
next Congress. The consequence is that the Rules of Procedure must be republished by the Senate
after every expiry of the term of twelve Senators.[47]
The subject was explained with greater lucidity in our Resolution[48] (On the Motion for Reconsideration) in the
same case, viz.:
On the nature of the Senate as a continuing body, this Court sees fit to issue a
clarification. Certainly, there is no debate that the Senate as an institution is continuing, as it is not
dissolved as an entity with each national election or change in the composition of its members. However, in
the conduct of its day-to-day business the Senate of each Congress acts separately and independently of the
Senate of the Congress before it. The Rules of the Senate itself confirms this when it states:
RULE XLIV
UNFINISHED BUSINESS
SEC. 123. Unfinished business at the end of the session shall be taken up at the next
session in the same status.
All pending matters and proceedings shall terminate upon the expiration of
one (1) Congress, but may be taken by the succeeding Congress as if present for the
first time.
Undeniably from the foregoing, all pending matters and proceedings, i.e., unpassed bills and even legislative
investigations, of the Senate of a particular Congress are considered terminatedupon the expiration of that
Congress and it is merely optional on the Senate of the succeeding Congress to take up such unfinished
matters, not in the same status, but as if presented for the first time. The logic and practicality of such a
rule is readily apparent considering that the Senate of the succeeding Congress (which will typically have a
different composition as that of the previous Congress) should not be bound by the acts and deliberations
of the Senate of which they had no part. If the Senate is a continuing body even with respect to the conduct
of its business, then pending matters will not be deemed terminated with the expiration of one Congress
but will, as a matter of course, continue into the next Congress with the same status.
This dichotomy of the continuity of the Senate as an institution and of the opposite nature of the conduct of
its business is reflected in its Rules. The Rules of the Senate (i.e. the Senates main rules of procedure)
states:
RULE LI AMENDMENTS TO, OR REVISIONS OF, THE RULES
SEC. 136. At the start of each session in which the Senators elected in the preceding elections shall
begin their term of office, the President may endorse the Rules to the appropriate committee for
amendment or revision.

The Rules may also be amended by means of a motion which should be presented at least
one day before its consideration, and the vote of the majority of the Senators present in the session
shall be required for its approval.
RULE LII
DATE OF TAKING EFFECT
SEC. 137. These Rules shall take effect on the date of their adoption and shall
remain in force until they are amended or repealed.
Section 136 of the Senate Rules quoted above takes into account the new composition of the Senate
after an election and the possibility of the amendment or revision of the Rules at the start
ofeach session in which the newly elected Senators shall begin their term.
However, it is evident that the Senate has determined that its main rules are intended to be valid
from the date of their adoption until they are amended or repealed. Such language is conspicuously
absent from the Rules. The Rules simply state (t)hese Rules shall take effect seven (7) days after
publication in two (2) newspapers of general circulation. The latter does not explicitly provide for
the continued effectivity of such rules until they are amended or repealed. In view of the difference
in the language of the two sets of Senate rules, it cannot be presumed that the Rules (on legislative
inquiries) would continue into the next Congress. The Senate of the next Congress may easily adopt
different rules for its legislative inquiries which come within the rule on unfinished business.
The language of Section 21, Article VI of the Constitution requiring that the inquiry be conducted in
accordance with the duly published rules of procedure is categorical. It is incumbent upon the
Senate to publish the rules for its legislative inquiries in each Congress or otherwise make the
published rules clearly state that the same shall be effective in subsequent Congresses or until they
are amended or repealed to sufficiently put public on notice.
If it was the intention of the Senate for its present rules on legislative inquiries to be effective even in the
next Congress, it could have easily adopted the same language it had used in its main rules regarding
effectivity.
Respondents justify their non-observance of the constitutionally mandated publication by arguing that the
rules have never been amended since 1995 and, despite that, they are published in booklet form available to
anyone for free, and accessible to the public at the Senates internet web page.[49]
The Court does not agree. The absence of any amendment to the rules cannot justify the Senates defiance
of the clear and unambiguous language of Section 21, Article VI of the Constitution. The organic law instructs,
without more, that the Senate or its committees may conduct inquiries in aid of legislation only in accordance with
duly published rules of procedure, and does not make any distinction whether or not these rules have undergone
amendments or revision. The constitutional mandate to publish the said rules prevails over any custom, practice or
tradition followed by the Senate.
Justice Carpios response to the same argument raised by the respondents is illuminating:
The publication of the Rules of Procedure in the website of the Senate, or in pamphlet form
available at the Senate, is not sufficient under the Taada v. Tuvera ruling which requires
publication either in the Official Gazette or in a newspaper of general circulation. The Rules of
Procedure even provide that the rules shall take effect seven (7) days after publication in two (2)
newspapers of general circulation, precluding any other form of publication. Publication in
accordance with Taada is mandatory to comply with the due process requirement because
theRules of Procedure put a persons liberty at risk. A person who violates the Rules of
Procedure could be arrested and detained by the Senate.
The invocation by the respondents of the provisions of R.A. No. 8792, [50] otherwise known as the Electronic
Commerce Act of 2000, to support their claim of valid publication through the internet is all the more incorrect.
R.A. 8792 considers an electronic data message or an electronic document as the functional equivalent of a written
document only for evidentiary purposes.[51] In other words, the law merely recognizes the admissibility in evidence
(for their being the original) of electronic data messages and/or electronic documents. [52] It does not make the
internet a medium for publishing laws, rules and regulations.

Given this discussion, the respondent Senate Committees, therefore, could not, in violation of the
Constitution, use its unpublished rules in the legislative inquiry subject of these consolidated cases. The conduct of
inquiries in aid of legislation by the Senate has to be deferred until it shall have caused the publication of the rules,
because it can do so only in accordance with its duly published rules of procedure.
Very recently, the Senate caused the publication of the Senate Rules of Procedure Governing Inquiries in
Aid of Legislation in the October 31, 2008 issues of Manila Bulletin and Malaya. While we take judicial notice of this
fact, the recent publication does not cure the infirmity of the inquiry sought to be prohibited by the instant
petitions. Insofar as the consolidated cases are concerned, the legislative investigation subject thereof still could
not be undertaken by the respondent Senate Committees, because no published rules governed it, in clear
contravention of the Constitution.
With the foregoing disquisition, the Court finds it unnecessary to discuss the other issues raised in the
consolidated petitions.
WHEREFORE, the petition in G.R. No. 170338 is DISMISSED, and the petition in G.R. No. 179275
is GRANTED. Let a writ of prohibition be issued enjoining the Senate of the Republic of the Philippines and/or any
of its committees from conducting any inquiry in aid of legislation centered on the Hello Garci tapes.
SO ORDERED.

Garcillano
Facts: This case involves the infamous Garci Tapes which allegedly contained the conversation of PGMA and
COMELEC Commissioner Garcillano where the former instructed the latter to manipulate the election results in
favor of PGMA. The speech of Cong. Escudero inthe House of Reps jumpstarted the congressional investigation over
these tapes. During the inquiry, several versions of the wiretapped conversation emerged. But on July 5, 2005,
National Bureau ofInvestigation (NBI) Director Reynaldo Wycoco, Atty. Alan Paguia and the lawyer of former NBI
Deputy Director Samuel Ong submitted to the respondent House Committees seven alleged "original" tape
recordings of the supposed three-hour taped conversation. After prolonged and impassioned debate by the
committee members on the admissibility and authenticity of the recordings, the tapes were eventually played in
the chambers of the House. The House Committee also decided to prepare committee reports based on the
recordings and the testimonies of the resource persons in the hearings.
In the Senate, Senator Lacson also delivered a speech regarding the Garci Tapes. On motion of Sen. Pangilinan,
these tapes should be the subject of a legislative investigation by the Senate. However, Senator Richard Gordon
aired his concern on the possible transgression of Republic Act (R.A.) No. 4200 if the body were to conduct a
legislative inquiry on the matter. Sen. Defensor-Santiago also delivered a privilege speech, articulating her
considered view that the Constitution absolutely bans the use, possession, replay or communication of the contents
of the "Hello Garci" tapes.
Because of these developments, Garcillano, and retired CA Justices Ranada and Agcaoili filed separate petitions
before the Supreme Court to for Prohibition with Prayer for the Issuance of a Temporary Restraining Order and/or
Writ of Preliminary Injunction. Garcillano prayed that the respondent House Committees be restrained from using
these tape recordings of the "illegally obtained" wiretapped conversations in their committee reports and for any
other purpose. He further implored that the said recordings and any reference thereto be ordered stricken off the
records of the inquiry, and the respondent House Committees directed to desist from further using the recordings
in any of the House proceedings. On the other hand, petitioners Ranada and Agcaoili prayed that the Senate be
barred from conducting its scheduled legislative inquiry. They argued in the main that the intended legislative
inquiry violates R.A. No. 4200 and Section 3, Article III of the Constitution.
Issue: Whether or not the House Committee hearings and the Senate legislative should be prohibited for violation
of RA No. 4200 (Anti-wiretapping Law) and sec. 3, Art. III of the Constitution (privacy of communications)
Held: The petition of Garcillano praying that the House Committee hearings on the Garci tapes be stopped must be
dismissed for being moot and academic. The Court noted that the recordings were already played in the House and
heard by its members. There is also the widely publicized fact that the committee reports on the "Hello Garci"
inquiry were completed and submitted to the House in plenary by the respondent committees.
However, the petition for prohibition of petitioners Ranada and Agcaoili must be granted. (However, the ponente
did not touch upon the issue of the admissibility of the Garci Tapes. The granting of the second petition was based
on the non-compliance of the legislativeinvestigation with sec. 21, art. VI of the Constitution which requires that
inquiries in aid of legislation in accordance must be conducted in accordance with the Senates duly published rules
of procedure. Since the Senate did not publish its rules of procedure, then no inquiry must be allowed lest violate
the given constitutional requirement. The phrase "duly published rules of procedure" requires the Senate of every
Congress to publish its rules of procedure governing inquiries in aid of legislation because every Senate is distinct
from the one before it or after it. Since Senatorial elections are held every three (3) years for one-half of the
Senates membership, the composition of the Senate also changes by the end of each term. Each Senate may thus
enact a different set of rules as it may deem fit. Not having published its Rules of Procedure, the subject hearings in
aid of legislation to be conducted by the Senate, are therefore, procedurally infirm.

RE: PETITION FOR RADIO AND

TELEVISION COVERAGE OF THE
MULTIPLE MURDER CASES AGAINST
MAGUINDANAO GOVERNOR ZALDY
AMPATUAN, ET AL.,

A.M. No. 10-11-5-SC

June 14, 2011

On November 23, 2009, 57 people including 32 journalists and media practitioners were killed while on their
way to Shariff Aguak in Maguindanao. Touted as the worst election-related violence and the most brutal killing of
journalists in recent history, the tragic incident which came to be known as the Maguindanao Massacre spawned
charges for 57 counts of murder and an additional charge of rebellion against 197 accused, docketed as Criminal
Case Nos. Q-09-162148-72, Q-09-162216-31, Q-10-162652-66, and Q-10-163766, commonly entitled People v.
Datu Andal Ampatuan, Jr., et al. Following the transfer of venue and the reraffling of the cases, the cases are being
tried by Presiding Judge Jocelyn Solis-Reyes of Branch 221 of the Regional Trial Court (RTC) of Quezon City inside
Camp Bagong Diwa in Taguig City.
Almost a year later or on November 19, 2010, the National Union of Journalists of the Philippines (NUJP),
ABS-CBN Broadcasting Corporation, GMA Network, Inc., relatives of the victims,[1] individual journalists[2] from
various media entities, and members of the academe[3] filed a petition before this Court praying that live television
and radio coverage of the trial in these criminal cases be allowed, recording devices (e.g., still cameras, tape
recorders) be permitted inside the courtroom to assist the working journalists, and reasonable guidelines be
formulated to govern the broadcast coverage and the use of devices.[4] The Court docketed the petition as A.M. No.
10-11-5-SC.
In a related move, the National Press Club of the Philippines[5] (NPC) and Alyansa ng Filipinong
Mamamahayag[6] (AFIMA) filed on November 22, 2010 a petition praying that the Court constitute Branch 221 of
RTC-Quezon City as a special court to focus only on the Maguindanao Massacre trial to relieve it of all other
pending cases and assigned duties, and allow the installation inside the courtroom of a sufficient number of video
cameras that shall beam the audio and video signals to the television monitors outside the court. [7] The Court
docketed the petition as A.M. No. 10-11-6-SC.
President Benigno S. Aquino III, by letter of November 22, 2010[8] addressed to Chief Justice Renato Corona,
came out in support of those who have petitioned [this Court] to permit television and radio broadcast of the
trial." The President expressed earnest hope that [this Court] will, within the many considerations that enter into
such a historic deliberation, attend to this petition with the dispatch, dispassion and humaneness, such a petition
merits.[9] The Court docketed the matter as A.M. No. 10-11-7-SC.
By separate Resolutions of November 23, 2010,[10] the Court consolidated A.M. No. 10-11-7-SC with A.M. No.
10-11-5-SC. The Court shall treat in a separate Resolution A.M. No. 10-11-6-SC.
Meanwhile, various groups[11] also sent to the Chief Justice their respective resolutions and statements
bearing on these matters.
The principal accused in the cases, Andal Ampatuan, Jr. (Ampatuan), filed a Consolidated Comment of
December 6, 2010 in A.M. No. 10-11-5-SC and A.M. No. 10-11-7-SC. The President, through the Office of the
Solicitor General (OSG), and NUJP, et al. filed their respective Reply of January 18, 2011 and January 20,
2011. Ampatuan also filed a Rejoinder of March 9, 2011.
On Broadcasting the Trial of the Maguindanao Massacre Cases
Petitioners seek the lifting of the absolute ban on live television and radio coverage of court
proceedings. They principally urge the Court to revisit the 1991 ruling in Re: Live TV and Radio Coverage of the
Hearing of President Corazon C. Aquinos Libel Case[12] and the 2001 ruling in Re: Request Radio-TV Coverage of the
Trial in the Sandiganbayan of the Plunder Cases Against the Former President Joseph E. Estrada[13] which rulings,
they contend, violate the doctrine that proposed restrictions on constitutional rights are to be narrowly construed
and outright prohibition cannot stand when regulation is a viable alternative.
Petitioners state that the trial of the Maguindanao Massacre cases has attracted intense media coverage due
to the gruesomeness of the crime, prominence of the accused, and the number of media personnel killed. They
inform that reporters are being frisked and searched for cameras, recorders, and cellular devices upon entry, and
that under strict orders of the trial court against live broadcast coverage, the number of media practitioners
allowed inside the courtroom has been limited to one reporter for each media institution.
The record shows that NUJP Vice-Chairperson Jose Jaime Espina, by January 12, 2010 letter[14] to Judge SolisReyes, requested a dialogue to discuss concerns over media coverage of the proceedings of the Maguindanao
Massacre cases. Judge Solis-Reyes replied, however, that matters concerning media coverage should be brought
to the Courts attention through appropriate motion.[15] Hence, the present petitions which assert the exercise of

the freedom of the press, right to information, right to a fair and public trial, right to assembly and to petition the
government for redress of grievances, right of free access to courts, and freedom of association, subject to
regulations to be issued by the Court.
The Court partially GRANTS pro hac vice petitioners prayer for a live broadcast of the trial court
proceedings, subject to the guidelines which shall be enumerated shortly.
Putts Law[16] states that technology is dominated by two types of people: those who understand what they
do not manage, and those who manage what they do not understand. Indeed, members of this Court cannot strip
their judicial robe and don the experts gown, so to speak, in a pretense to foresee and fathom all serious prejudices
or risks from the use of technology inside the courtroom.
A decade after Estrada and a score after Aquino, the Court is once again faced with the same task of striking
that delicate balance between seemingly competing yet certainly complementary rights.
The indication of serious risks posed by live media coverage to the accuseds right to due process, left
unexplained and unexplored in the era obtaining in Aquino andEstrada, has left a blow to the exercise of press
freedom and the right to public information.
The rationale for an outright total prohibition was shrouded, as it is now, inside the comfortable
cocoon of a feared speculation which no scientific study in the Philippine setting confirms, and which fear,
if any, may be dealt with by safeguards and safety nets under existing rules and exacting regulations.
In this day and age, it is about time to craft a win-win situation that shall not compromise rights in the
criminal administration of justice, sacrifice press freedom and allied rights, and interfere with the integrity, dignity
and solemnity of judicial proceedings. Compliance with regulations, not curtailment of a right, provides a workable
solution to the concerns raised in these administrative matters, while, at the same time, maintaining the same
underlying principles upheld in the two previous cases.
The basic principle upheld in Aquino is firm [a] trial of any kind or in any court is a matter of serious
importance to all concerned and should not be treated as a means of entertainment[, and t]o so treat it deprives the
court of the dignity which pertains to it and departs from the orderly and serious quest for truth for which our
judicial proceedings are formulated. The observation that [m]assive intrusion of representatives of the news
media into the trial itself can so alter and destroy the constitutionally necessary atmosphere and decorum stands.
The Court concluded in Aquino:
Considering the prejudice it poses to the defendant's right to due process as well as to the fair
and orderly administration of justice, and considering further that the freedom of the press and the
right of the people to information may be served and satisfied by less distracting, degrading and
prejudicial means, live radio and television coverage of court proceedings shall not be allowed.
Video footages of court hearings for news purposes shall be restricted and limited to shots of the
courtroom, the judicial officers, the parties and their counsel taken prior to the commencement of
official proceedings. No video shots or photographs shall be permitted during the trial proper.
Accordingly, in order to protect the parties' right to due process, to prevent the distraction of
the participants in the proceedings and in the last analysis, to avoid miscarriage of justice, the Court
resolved to PROHlBIT live radio and television coverage of court proceedings. Video footage of court
hearings for news purposes shall be limited and restricted as above indicated.[17]

The Court had another unique opportunity in Estrada to revisit the question of live radio and television
coverage of court proceedings in a criminal case. It held that [t]he propriety of granting or denying the instant
petition involve[s] the weighing out of the constitutional guarantees of freedom of the press and the right to public
information, on the one hand, and the fundamental rights of the accused, on the other hand, along with the
constitutional power of a court to control its proceedings in ensuring a fair and impartial trial. The Court
disposed:
The Court is not all that unmindful of recent technological and scientific advances but to
chance forthwith the life or liberty of any person in a hasty bid to use and apply them, even before
ample safety nets are provided and the concerns heretofore expressed are aptly addressed, is a price
too high to pay.
WHEREFORE, the petition is DENIED.
SO ORDERED.[18]

In resolving the motion for reconsideration, the Court in Estrada, by Resolution of September 13, 2001,
provided a glimmer of hope when it ordered the audio-visual recording of the trial for documentary purposes,
under the following conditions:
x x x (a) the trial shall be recorded in its entirety, excepting such portions thereof as the
Sandiganbayan may determine should not be held public under Rule 119, 21 of the Rules of
Criminal Procedure; (b) cameras shall be installed inconspicuously inside the courtroom and the
movement of TV crews shall be regulated consistent with the dignity and solemnity of the
proceedings; (c) the audio-visual recordings shall be made for documentary purposes only and shall
be made without comment except such annotations of scenes depicted therein as may be necessary
to explain them; (d) the live broadcast of the recordings before the Sandiganbayan shall have
rendered its decision in all the cases against the former President shall be prohibited under pain of
contempt of court and other sanctions in case of violations of the prohibition; (e) to ensure that the
conditions are observed, the audio-visual recording of the proceedings shall be made under the
supervision and control of the Sandiganbayan or its Division concerned and shall be made pursuant
to rules promulgated by it; and (f) simultaneously with the release of the audio-visual recordings for
public broadcast, the original thereof shall be deposited in the National Museum and the Records
Management and Archives Office for preservation and exhibition in accordance with law.[19]
Petitioners note that the 1965 case of Estes v. Texas[20] which Aquino and Estrada heavily cited, was borne out
of the dynamics of a jury system, where the considerations for the possible infringement of the impartiality of a
jury, whose members are not necessarily schooled in the law, are different from that of a judge who is versed with
the rules of evidence. To petitioners, Estes also does not represent the most contemporary position of the United
States in the wake of latest jurisprudence[21] and statistical figures revealing that as of 2007 all 50 states, except
the District of Columbia, allow television coverage with varying degrees of openness.
Other jurisdictions welcome the idea of media coverage. Almost all the proceedings of United Kingdoms
Supreme Court are filmed, and sometimes broadcast.[22] The International Criminal Court broadcasts its
proceedings via video streaming in the internet.[23]
On the media coverages influence on judges, counsels and witnesses, petitioners point out
that Aquino and Estrada, like Estes, lack empirical evidence to support the sustained conclusion. They point out
errors of generalization where the conclusion has been mostly supported by studies on American attitudes, as
there has been no authoritative study on the particular matter dealing with Filipinos.
Respecting the possible influence of media coverage on the impartiality of trial court judges, petitioners
correctly explain that prejudicial publicity insofar as it undermines the right to a fair trial must pass the totality of
circumstances test, applied in People v. Teehankee, Jr.[24] and Estrada v. Desierto,[25] that the right of an accused to
a fair trial is not incompatible to a free press, that pervasive publicity is not per se prejudicial to the right of an
accused to a fair trial, and that there must be allegation and proof of the impaired capacity of a judge to render a
bias-free decision. Mere fear of possible undue influence is not tantamount to actual prejudice resulting in the
deprivation of the right to a fair trial.
Moreover, an aggrieved party has ample legal remedies. He may challenge the validity of an adverse
judgment arising from a proceeding that transgressed a constitutional right. As pointed out by petitioners, an
aggrieved party may early on move for a change of venue, for continuance until the prejudice from publicity is
abated, for disqualification of the judge, and for closure of portions of the trial when necessary. The trial court may
likewise exercise its power of contempt and issue gag orders.
One apparent circumstance that sets the Maguindanao Massacre cases apart from the earlier cases is the
impossibility of accommodating even the parties to the cases the private complainants/families of the victims
and other witnesses inside the courtroom. On public trial, Estrada basically discusses:
An accused has a right to a public trial but it is a right that belongs to him, more than anyone
else, where his life or liberty can be held critically in balance. A public trial aims to ensure that he is
fairly dealt with and would not be unjustly condemned and that his rights are not compromised in
secrete conclaves of long ago. A public trial is not synonymous with publicized trial; it only implies
that the court doors must be open to those who wish to come, sit in the available seats, conduct
themselves with decorum and observe the trial process. In the constitutional sense,a courtroom
should have enough facilities for a reasonable number of the public to observe the proceedings, not
too small as to render the openness negligible and not too large as to distract the trial participants
from their proper functions, who shall then be totally free to report what they have observed during
the proceedings.[26] (underscoring supplied)

Even before considering what is a reasonable number of the public who may observe the proceedings, the
peculiarity of the subject criminal cases is that the proceedings already necessarily entail the presence of hundreds
of families. It cannot be gainsaid that the families of the 57 victims and of the 197 accused have as much interest,
beyond mere curiosity, to attend or monitor the proceedings as those of the impleaded parties or trial
participants. It bears noting at this juncture that the prosecution and the defense have listed more than 200
witnesses each.
The impossibility of holding such judicial proceedings in a courtroom that will accommodate all the interested
parties, whether private complainants or accused, is unfortunate enough. What more if the right itself commands
that a reasonable number of the general public be allowed to witness the proceeding as it takes place inside the
courtroom. Technology tends to provide the only solution to break the inherent limitations of the courtroom, to
satisfy the imperative of a transparent, open and public trial.
In so allowing pro hac vice the live broadcasting by radio and television of the Maguindanao Massacre cases,
the Court lays down the following guidelines toward addressing the concerns mentioned in Aquino and Estrada:
(a) An audio-visual recording of the Maguindanao massacre cases may be made both for
documentary purposes and for transmittal to live radio and television broadcasting.
(b) Media entities must file with the trial court a letter of application, manifesting that they intend to
broadcast the audio-visual recording of the proceedings and that they have the necessary
technological equipment and technical plan to carry out the same, with an undertaking that they
will faithfully comply with the guidelines and regulations and cover the entire remaining
proceedings until promulgation of judgment.
No selective or partial coverage shall be allowed. No media entity shall be allowed to
broadcast the proceedings without an application duly approved by the trial court.
(c) A single fixed compact camera shall be installed inconspicuously inside the courtroom to provide
a single wide-angle full-view of the sala of the trial court. No panning and zooming shall be allowed
to avoid unduly highlighting or downplaying incidents in the proceedings. The camera and the
necessary equipment shall be operated and controlled only by a duly designated official or employee
of the Supreme Court. The camera equipment should not produce or beam any distracting sound or
light rays. Signal lights or signs showing the equipment is operating should not be visible. A limited
number of microphones and the least installation of wiring, if not wireless technology, must be
unobtrusively located in places indicated by the trial court.
The Public Information Office and the Office of the Court Administrator shall coordinate and
assist the trial court on the physical set-up of the camera and equipment.
(d) The transmittal of the audio-visual recording from inside the courtroom to the media entities
shall be conducted in such a way that the least physical disturbance shall be ensured in keeping with
the dignity and solemnity of the proceedings and the exclusivity of the access to the media entities.
The hardware for establishing an interconnection or link with the camera equipment
monitoring the proceedings shall be for the account of the media entities, which should employ
technology that can (i) avoid the cumbersome snaking cables inside the courtroom, (ii) minimize the
unnecessary ingress or egress of technicians, and (iii) preclude undue commotion in case of
technical glitches.
If the premises outside the courtroom lack space for the set-up of the media entities
facilities, the media entities shall access the audio-visual recording either via wireless technology
accessible even from outside the court premises or from one common web broadcasting platform
from which streaming can be accessed or derived to feed the images and sounds.
At all times, exclusive access by the media entities to the real-time audio-visual recording
should be protected or encrypted.
(e) The broadcasting of the proceedings for a particular day must be continuous and in its entirety,
excepting such portions thereof where Sec. 21 of Rule 119 of the Rules of Court[27] applies, and
where the trial court excludes, upon motion, prospective witnesses from the courtroom, in instances
where, inter alia, there are unresolved identification issues or there are issues which involve the
security of the witnesses and the integrity of their testimony (e.g., the dovetailing of corroborative
testimonies is material, minority of the witness).

The trial court may, with the consent of the parties, order only the pixelization of the image
of the witness or mute the audio output, or both.
(f) To provide a faithful and complete broadcast of the proceedings, no commercial break or any
other gap shall be allowed until the days proceedings are adjourned, except during the period of
recess called by the trial court and during portions of the proceedings wherein the public is ordered
excluded.
(g) To avoid overriding or superimposing the audio output from the on-going proceedings, the
proceedings shall be broadcast without any voice-overs, except brief annotations of scenes depicted
therein as may be necessary to explain them at the start or at the end of the scene. Any commentary
shall observe the sub judice rule and be subject to the contempt power of the court;
(h) No repeat airing of the audio-visual recording shall be allowed until after the finality of
judgment, except brief footages and still images derived from or cartographic sketches of scenes
based on the recording, only for news purposes, which shall likewise observe the sub judice rule and
be subject to the contempt power of the court;
(i) The original audio-recording shall be deposited in the National Museum and the Records
Management and Archives Office for preservation and exhibition in accordance with law.
(j) The audio-visual recording of the proceedings shall be made under the supervision and control
of the trial court which may issue supplementary directives, as the exigency requires, including the
suspension or revocation of the grant of application by the media entities.
(k) The Court shall create a special committee which shall forthwith study, design and recommend
appropriate arrangements, implementing regulations, and administrative matters referred to it by
the Court concerning the live broadcast of the proceedings pro hac vice, in accordance with the
above-outlined guidelines. The Special Committee shall also report and recommend on the
feasibility, availability and affordability of the latest technology that would meet the herein
requirements. It may conduct consultations with resource persons and experts in the field of
information and communication technology.
(l) All other present directives in the conduct of the proceedings of the trial court (i.e., prohibition
on recording devices such as still cameras, tape recorders; and allowable number of media
practitioners inside the courtroom) shall be observed in addition to these guidelines.
Indeed, the Court cannot gloss over what advances technology has to offer in distilling the abstract discussion
of key constitutional precepts into the workable context. Technology per se has always been neutral. It is the use
and regulation thereof that need fine-tuning. Law and technology can work to the advantage and furtherance of
the various rights herein involved, within the contours of defined guidelines.
WHEREFORE, in light of the foregoing disquisition, the Court PARTIALLY GRANTS PRO HAC VICE the
request for live broadcast by television and radio of the trial court proceedings of the Maguindanao Massacre
cases, subject to the guidelines herein outlined.
SO ORDERED.

G.R. No. 170288

September 22, 2006

PEDRO E. BUDIONGAN, JR., Municipal Mayor; JOSIL E. TRABAJO, Municipal Vice Mayor and Presiding Officer
of the Sangguniang Bayan; FULGENCIO V. PAA, Municipal Treasurer; TACIANA B. ESPEJO, Municipal
Budget Officer; and SB Members: RUFINO G. ADLAON, TITO R. MONTAJES, MARIO M. SORIA, ALFONSO L.
UNAJAN, CARLITO B. TORREFRANCA, VICENTE A. TORREFRANCA, JR., etitioners,
vs.
HON. JACINTO M. DELA CRUZ, JR., Asst. Special Prosecutor I; HON. CORNELIO L. SONIDO, Acting Director,
Prosecution Bureau IV; HON. ROBERT E. KALLOS, Deputy Special Prosecutor; HON. DENNIS M. VILLA
IGNACIO, The Special Prosecutor; HON. WENDELL E. BARRERAS-SULIT, Acting Director, Case Assessment,
Review and Re-investigation Bureau; and OFFICE OF THE SPECIAL PROSECUTOR, public respondents.
VALERIANO U. NADALA, ARLENE PAINAGAN-PALGAN, private respondents.
This Petition for Certiorari under Rule 65 of the Rules of Court assails the Memorandum1 dated April 28, 2004 of
the Office of the Special Prosecutor, Office of the Ombudsman, recommending that petitioners be charged with
violation of Section 3(e) of Republic Act (R.A.) No. 3019 and petitioner Pedro E. Budiongan with violation of Section
3(h) of R.A. No. 3019. Also assailed is the Resolution2 dated October 19, 2005 denying petitioners' motion for
reconsideration.
The antecedent facts are as follows:
By virtue of Municipal Ordinance No. 2, series of 2001, the Municipality of Carmen, Bohol appropriated the amount
of P450,000.00 for the purchase of a road roller for the municipality. However, on November 16, 2001, the
Municipal Development Council through Resolution No. 3 recommended that the amount of P450,000.00 be
realigned and used for the asphalt laying of a portion of the Tan Modesto Bernaldez Street.3 The proposed
realignment was included in the December 21, 2001 agenda of the Sangguniang Bayan of Carmen but discussion
thereon was deferred.
On February 6, 2002, petitioner Municipal Treasurer, Fulgencio V. Paa, issued a Certificate of Availability of Funds
for the project. Thereafter, the Office of the Municipal Engineer prepared a Program of Works and Cost Estimates
duly noted/approved by Municipal Budget Officer Taciana B. Espejo and Mayor Budiongan.
Bidding was conducted on March 5, 2002. The next day, March 6, 2002, Mayor Budiongan issued the Notice of
Award and Notice to Commence Work in favor of Herbert Malmis General Merchandise and Contractor, Inc. who
emerged as the lowest complying bidder. On March 22, 2002, the Sangguniang Bayan passed Resolution No.
60,4series of 2002, authorizing Mayor Budiongan to sign and enter into contract with Malmis relative to the above
project in the amount of P339,808.00. With such authority, Malmis commenced with the project.
Thereafter, it was discovered that there was yet no ordinance approving the realignment of the funds. Thus, on
May 17, 2002, the Sangguniang Bayan passed Ordinance No. 8,5 series of 2002, approving the realignment of the
fund. On June 14, 2002, Malmis was paid the contract price.
On July 3, 2002, private respondents Arlene P. Palgan and Valeriano U. Nadala filed a complaint6 against the
petitioners before the Office of the Deputy Ombudsman for Visayas alleging illegality in the conduct of the bidding,
award and notice to commence work since there was no fund appropriated for the purpose.
On July 31, 2003, the Office of the Deputy Ombudsman for Visayas found probable cause and recommended the
filing of an information for violation of Article 2207 of the Revised Penal Code against the petitioners. However, the
complaint against Hermosila Logrono, Desiderio Gudia, Jr. and Herbert Malmis was dismissed for lack of merit.8
Upon review, the Case Assessment, Review and Reinvestigation Bureau of the Office of the Special Prosecutor,
issued the assailed Memorandum dated April 28, 2004, modifying the charge from violation of Article 220 of the
Revised Penal Code to (1) violation of Section 3(e) of R.A. No. 3019 against petitioners for allegedly giving
unwarranted benefit to Malmis and (2) violation of Section 3(h) of R.A. No. 3019 against petitioner Budiongan for
allegedly "directly or indirectly having financial or pecuniary interest in a contract or transaction in connection
with which he intervenes or takes part in his official capacity."
Thus, two separate Informations were filed before the Sandiganbayan (1) for violation of Section 3(e) of R.A. No.
3019 against the petitioners docketed as Criminal Case No. 28075 and (2) for violation of Section 3(h) of R.A. No.
3019 against petitioner Budiongan docketed as Criminal Case No. 28076.
Thereafter, petitioners filed a Motion to Quash9 the information charging them with violation of Sec. 3(e) of R.A. No.
3019. In a Resolution10 dated June 10, 2005, the Sandiganbayan granted the motion to quash and remanded
Criminal Case No. 28075 to the Office of the Ombudsman for amendment of the Information. It held that although

Malmis benefited from the contract, the same is not unwarranted considering that the project was implemented,
executed and completed.
On June 27, 2005, an Amended Information11 was filed charging petitioners with violation of Sec. 3(e) of R.A. No.
3019, alleging that petitioners, by prematurely awarding to Malmis the project despite the absence of funds
specifically appropriated for such purpose, and thereafter paying the contract price from the Municipal Treasury
which was originally appropriated for the purchase of a road roller, caused damage and undue injury to the
government.
Finding that the Amended Information contains all the material averments necessary to make out a case for the
first mode of violating Section 3(e) of R.A. No. 3019, i.e., causing any undue injury to any party, including the
government, the Sandiganbayan admitted the Amended Information in its Resolution dated August 18, 2005.12
On even date, petitioners filed with the Sandiganbayan a Motion for Leave of Court to File Motion for
Reinvestigation13 arguing that the above Informations were filed without affording them the opportunity to file
counter-affidavits to answer/rebut the modified charges. On September 20, 2005, the Sandiganbayan issued a
Resolution14 denying the motion insofar as Criminal Case No. 28076 is concerned. It held that it is too late in the
day to remand the case for reinvestigation considering that Budiongan had already been arraigned and the case
had long been set for pre-trial proceedings, with both parties having filed their respective briefs. As regards
Criminal Case No. 28075, the Sandiganbayan noted that although the conduct of the preliminary investigation was
regular, petitioners however were not given the opportunity to seek reconsideration of the modified charges. Thus,
it granted leave to the petitioners to file with the Office of the Special Prosecutor a motion for reconsideration (not
a motion for reinvestigation) of the said office's Memorandum dated April 28, 2004.
Petitioners filed a Motion for Reconsideration with the Office of the Special Prosecutor which was denied for lack of
merit in the Resolution dated October 19, 2005.
Hence, this petition raising the following issues:
I. WHETHER PUBLIC RESPONDENTS ACTED WITH GRAVE ABUSE OF DISCRETION AMOUNTING TO LACK
OR IN EXCESS OF JURISDICTION IN REJECTING THE FINDINGS AND AMENDING/MODIFYING THE
RESOLUTION OF THE GRAFT INVESTIGATING OFFICER, OMBUDSMAN VISAYAS, AND IN FILING THE
INFORMATION FOR VIOLATION OF SEC. 3(e) OF RA 3019 WITHOUT AFFORDING PETITIONERS THE
OPPORTUNITY TO PRESENT THEIR COUNTER EVIDENCE IN A RE-INVESTIGATION;
II. WHETHER THE REFUSAL OR FAILURE TO CONDUCT A RE-INVESTIGATION HAS VIOLATED
PETITIONERS' RIGHT TO DUE PROCESS;
III. WHETHER PUBLIC RESPONDENTS ACTED WITH GRAVE ABUSE OF DISCRETION AMOUNTING TO LACK
OR IN EXCESS OF JURISDICTION IN ISSUING RESOLUTIONS DATED APRIL 28, 2004 AND OCTOBER 19,
2005 FINDING PROBABLE CAUSE FOR VIOLATION OF SEC. 3(e) OF RA 3019 AGAINST HEREIN
PETITIONERS; and
IV. WHETHER PUBLIC RESPONDENTS ACTED WITH GRAVE ABUSE OF DISCRETION AMOUNTING TO LACK
OR IN EXCESS OF JURISDICTION IN FILING THE INFORMATION FOR VIOLATION OF SEC.3(e) OF RA 3019
AGAINST PETITIONERS IN THE SANDIGANBAYAN DOCKETED AS CRIMINAL CASE NO. 28075.
Petitioners maintain that the modification of the charge from violation of Article 220 of the Revised Penal Code to
violation of Sections 3(e) and 3(h) of R.A. No. 3019 denied their rights to due process since they were not given the
opportunity to answer and present evidence on the new charge in a preliminary investigation. Furthermore, the
petitioners argue that public respondents committed grave abuse of discretion amounting to lack or excess of
jurisdiction in issuing the challenged resolutions finding probable cause for violation of R.A. No. 3019.
The petition lacks merit.
The right to a preliminary investigation is not a constitutional right, but is merely a right conferred by statute. The
absence of a preliminary investigation does not impair the validity of the Information or otherwise render the
same defective. It does not affect the jurisdiction of the court over the case or constitute a ground for quashing the
Information.15 If absence of a preliminary investigation does not render the Information invalid nor affect the
jurisdiction of the court over the case, then the denial of a motion for reinvestigation cannot likewise invalidate the
Information or oust the court of its jurisdiction over the case.
Petitioners were not deprived of due process because they were afforded the opportunity to refute the charges by
filing their counter-affidavits. The modification of the offense charged did not come as a surprise to the petitioners
because it was based on the same set of facts and the same alleged illegal acts. Moreover, petitioners failed to aver

newly discovered evidence nor impute commission of grave errors or serious irregularities prejudicial to their
interest to warrant a reconsideration or reinvestigation of the case as required under Section 8, Rule III of the
Rules of Procedure of the Office of the Ombudsman.16 Thus, the modification of the offense charged, even without
affording the petitioners a new preliminary investigation, did not amount to a violation of their rights.
Furthermore, the right to preliminary investigation is deemed waived when the accused fails to invoke it before or
at the time of entering a plea at arraignment.17 Petitioner Budiongan was arraigned in Criminal Case No. 28076 on
March 28, 2005. He was also arraigned together with the rest of the petitioners under the Amended Information in
Criminal Case No. 28075 on December 2, 2005.
The purpose of a preliminary investigation is merely to determine whether a crime has been committed and
whether there is probable cause to believe that the person accused of the crime is probably guilty thereof and
should be held for trial.18 A finding of probable cause needs only to rest on evidence showing that more likely than
not a crime has been committed and was committed by the suspect. Probable cause need not be based on clear and
convincing evidence of guilt, neither on evidence establishing guilt beyond reasonable doubt and definitely, not on
evidence establishing absolute certainty of guilt." 19
The Office of the Special Prosecutor is an integral component of the Ombudsman and is under the latter's
supervision and control. Thus, whatever course of action that the Ombudsman may take, whether to approve or to
disapprove the recommendation of the investigating prosecutor, is but an exercise of his discretionary powers
based upon constitutional mandate. Generally, courts should not interfere in such exercise. It is beyond the ambit
of this Court to review the exercise of discretion of the Ombudsman in prosecuting or dismissing a complaint filed
before it, save in cases where there is clear showing of grave abuse of discretion amounting to lack or excess of
jurisdiction on the part of the Ombudsman.20 Absent any showing of arbitrariness on the part of the prosecutor or
any other officer authorized to conduct preliminary investigation, as in the instant case, courts as a rule must defer
to said officer's finding and determination of probable cause, since the determination of the existence of probable
cause is the function of the prosecutor.21
In fine, certiorari will not lie to invalidate the Office of the Special Prosecutor's resolution denying petitioners'
motion for reconsideration since there is nothing to substantiate petitioners' claim that it gravely abused its
discretion in ruling that there was no need to conduct a reinvestigation of the case.22
WHEREFORE, in view of the foregoing, the instant petition is DISMISSED. The assailed Memorandum of the Office
of the Special Prosecutor, Office of the Ombudsman, dated April 28, 2004 finding probable cause that petitioners
violated Sections 3(e) and 3(h) of Republic Act No. 3019 and the Resolution dated October 19, 2005 denying
petitioners' Motion for Reconsideration, are hereby AFFIRMED.
SO ORDERED.

[A.M. No. RTJ-02-1674. January 22, 2004]

BAILINANG P. MAROHOMBSAR, complainant, vs. JUDGE SANTOS B. ADIONG, respondent.

This is a complaint filed against Judge Santos B. Adiong of the Regional Trial Court, Branch 8, Marawi City,
Lanao del Sur, charging him with gross ignorance of law, abuse of discretion and conduct unbecoming of a judge in
connection with his issuance of a temporary restraining order (TRO) and a preliminary restraining order in Civil
Case No. 1670-99, entitledMs. Yasmira N. Pangadapun vs. Ms. Bailinang P. Marohombsar.
After respondent filed his comment, we issued a resolution on February 6, 2000 referring the case to Associate
Justice Eugenio S. Labitoria of the Court of Appeals for investigation, report and recommendation.
Complainant Marohombsar was the defendant in Civil Case No. 1670-99 for injunction with prayer for
preliminary injunction. The case was filed on March 17, 1999 by Yasmira Pangadapun, daughter of Judge Yusoph
Pangadapun of RTC Branch 10, Marawi City. In the said complaint, Pangadapun questioned the legality of
Marohombsars appointment by DSWD Regional Secretary Salic-Malna as provincial social welfare officer V of the
Department of Social Welfare and Development Autonomous Region for Muslim Mindanao (DSWD-ARMM). Prior
to Marohombsars appointment, Pangadapun used to occupy said position as officer-in-charge.
Upon the filing of the said complaint, respondent judge issued a TRO and set the hearing on the application for
the issuance of a writ of preliminary injunction on April 6, 1999. Summons, together with a copy of the complaint
and a notice indicating that a preliminary conference would be held on March 22, 1999, was also served on both
parties.
On March 18, 1999, Marohombsar filed an ex parte urgent motion to dissolve the TRO. Pangadapun was given
until March 26, 1999 to comment and, pending the filing of the same, the TRO was extended up to said date.
On March 22, 1999, respondent issued an order stating that a preliminary conference had been held and that
both parties had waived the raffle of the case. He reset the hearing on the application for the issuance of a writ of
preliminary injunction from April 6, 1999 to April 5, 1999 at 2:00 p.m.
On March 29, 1999, respondent gave Pangadapun up to April 5, 1999 to file her comment and again, the TRO
was extended to that date.
During the hearing on the application for the issuance of a writ of preliminary injunction on April 5, 1999,
none of the lawyers appeared. Hence, respondent considered it submitted for resolution and issued the
preliminary injunction the following day.
In his partial Comment dated November 13, 2000, respondent denied that: (1) he issued the TRO in favor of
Pangadapun without benefit of a hearing; (2) in his order dated March 22, 1999, he made it appear that a
preliminary conference was held where the parties agreed to waive the raffle of the case, when in fact there was
none; (3) he falsified the records of the case and (4) he granted the preliminary injunction without a hearing. He
alleged that the complaint was purely a harassment case filed by a disgruntled party because of the latters failure
to obtain a favorable resolution from him. Although respondent judge admitted that Judge Yusoph Pangadapun and
Judge Abdulhakim Ibrahim were his distant relatives and townmates, he stressed that never in our careers in the
judiciary have we interfered nor influenced one another on any pending case before our courts.
During the preliminary hearing of the complaint on April 18, 2002 before Justice Labitoria, the parties agreed
to have the case decided based on the pleadings presented.
Respondent submitted the following additional evidence and exhibits to strengthen his case:
a) partial Comment on the Complainants Affidavit-Complaint;
b) 2nd Indorsement dated December 11, 2000 in OCA IPI No. 00-929-RTJ executed by Judge Abdulhakim
A.R. Ibrahim showing that the complainant likewise filed an administrative case against him involving
the same parties and cause of action, and
c) Supreme Court resolution dated September 11, 2001 dismissing the administrative case against Judge
Ibrahim.
On the other hand, complainant filed her comment/objection to respondents formal offer of exhibits on the
ground that all the documents were irrelevant and immaterial to the instant case.
In his final report and recommendation, Justice Labitoria recommended that respondent judge be absolved of
all the charges against him.
We find the recommendation of Justice Labitoria to be supported by the evidence and we approve the same.
A TRO is generally granted without notice to the opposite party and is intended only as a restraint on him until
the propriety of granting a temporary injunction can be determined. It goes no further than to preserve the status
quo until that determination.[1]

Respondent judge was justified in issuing the TRO ex parte due to his assessment of the urgency of the relief
sought. Rule 58, Section 5 of the 1997 Rules of Civil Procedure provides:
Preliminary injunction not granted without notice; exception. No preliminary injunction shall be granted without
hearing and prior notice to the party or person sought to be enjoined. If it shall appear from facts shown by
affidavits or by the verified application that great or irreparable injury would result to the applicant before the
matter can be heard on notice, the court to which the application for preliminary injunction was made, may issue a
temporary restraining order to be effective only for a period of twenty (20) days from service on the party or
person sought to be enjoined, except as herein provided. Within the said twenty-day period, the court must order
said party or person to show cause, at a specified time and place, why the injunction should not be granted,
determine within the same period whether or not the preliminary injunction shall be granted, and accordingly
issue the corresponding order.
However, and subject to the provisions of the preceding sections, if the matter is of extreme urgency and the
applicant will suffer grave injustice and irreparable injury, the executive judge of a multiple-sala court or the
presiding judge of a single-sala court may issue ex parte a temporary restraining order effective for only seventytwo (72) hours from issuance but he shall immediately comply with provisions of the next preceding section as to
service of summons and the documents to be served therewith. Thereafter, within the aforesaid seventy-two (72)
hours, the judge before whom the case is pending shall conduct a summary hearing to determine whether the
temporary restraining order shall be extended until the application for preliminary injunction can be heard. In no
case shall the total period of effectivity of the temporary restraining order exceed twenty (20) days, including the
original seventy-two (72) hours provided therein.
Complainant also contends that respondent issued an order dated March 22, 1999 making it appear that a
preliminary conference was held and the parties agreed to waive the raffle of the case when, in truth and in fact, no
conference was held.
We are not persuaded. The order of March 22, 1999 stated in part:
In the preliminary conference scheduled this morning, counsels of both parties jointly agreed to waive the raffling
of the case and for this court to continue further proceedings considering that the plaintiff is the daughter of Hon.
Yusoph Pangadapun, Presiding Judge of RTC-Branch 10 and per manifestation of Atty. Tingcap Mortaba, counsel
for the plaintiff, should the case be raffled to Branch 9, the Presiding Judge, Hon. Amer R. Ibrahim will voluntarily
inhibit himself from hearing the case.
In the summary hearing that followed for the purpose of determining whether the TRO previously issued on March
17, 1999 shall be extended or not, the counsels is (sic) submitting the same for resolution on the basis of the
pleading.
We note that complainant did not dispute the order of respondent judge immediately after its
issuance. Hence, the presumption was that the order in question was proper and well taken.
Complainant likewise insists that respondent judge tampered with the records of the case, as shown by its
inconsistent pagination.
We agree with the finding of Justice Labitoria who accepted respondent judges explanation that:
Resolutions or orders are dictated either in open Court or inside the chamber. The attending stenographers type
the same in a draft form and then presented to me for proper correction or modification before finally typing them
for my signature.
Because of the many number of cases calendared daily and other related works being attended to, all this paper
works take a little time to finish until finally attach (sic) to the records of the cases. This explains the little delay
sometimes in sewing or attaching some orders or other Court processes to the records. All of this is always under
the strict and direct supervision of the Branch Clerk of Court.
In the same investigation report, Justice Labitoria went on to say:
Besides, complainant merely assumes that respondent judge doctored the records to favor plaintiff. Her mind was
already set that it would be impossible for the staff or respondent judge not to commit any error in sewing the
records. However, as human beings all of us are prone to commit some mistakes. As what happened in the instant
case. Thus, a mere suspicion that a judge was partial to party is not enough as there should be adequate evidence to
prove the charge.
Finally, complainants assertion that she was denied due process because the preliminary injunction was
issued without hearing is likewise untenable.

In applications for preliminary injunction, the dual requirement of prior notice and hearing before injunction
may issue has been relaxed to the point that not all petitions for preliminary injunction need undergo a trial-type
hearing, it being doctrinal that a formal or trial-type hearing is not, at all times and in all instances, essential to due
process.[2] The essence of due process is that a party is afforded a reasonable opportunity to be heard and to
present any evidence he may have in support of his defense. In the present case, complainant was able to move for
a reconsideration of the order in question, hence her right to due process was not in anyway transgressed. We have
ruled that a party cannot claim that he has been denied due process when he has availed of the opportunity to
present his position.[3]
Even assuming for the sake of argument that respondent judge erred in ordering the issuance of the writ of
preliminary injunction, we ruled in Equatorial Realty vs. Anunciacion, Jr.[4]that, as a matter of public policy, the acts
of a judge in his official capacity are not subject to disciplinary action even though such acts are erroneous,
provided he acts in good faith and without malice. Respondent judge, or any other member of the bench for that
matter, is presumed to have acted regularly and in the manner that preserves the ideal of the cold neutrality of an
impartial judge implicit in the guarantee of due process.[5]
WHEREFORE, the administrative complaint against Judge Santos B. Adiong is hereby DISMISSED for lack of
merit.
SO ORDERED.

[G.R. No. 142030. April 21, 2005]

ARTURO GALLARDO, PETER MELCHOR J. ARCHES, ALLAN B. AMPOLOQUIO, CIRILO N. BACQUIANO, JOSUE M.
RODAJE, BENJAMIN R. MACASAET, JR., VICTORINA DELOS CIENTOS-MIRAL, RODOLFO M. CARTIN,
QUIRINA T. SARTE, NORBERTO E. GOMEZ, GENEFREDO P. ESPINA, NOEL GUINITA, AND OFELIA
NACIONAL, petitioners, vs. PEOPLE OF THE PHILIPPINES, SANDIGANBAYAN, HONORABLE ANIANO
DESIERTO in his official capacity as OMBUDSMAN, AND OFFICE OF THE SPECIAL PROSECUTOR,
respondents.
This is an appeal by certiorari under Rule 45 of the Rules of Court assailing the Resolution of the
Sandiganbayan[1] (Second Division) in Criminal Case No. 25092 denying petitioners Motion To Quash.
The records show that the above-numbered case originated from a sworn letter-complaint filed with the Office
of the Ombudsman-Mindanao by Atty. Victor dela Serna, for and in behalf of the Public Health Workers (PHWs) of
Bansalan, Davao del Sur, charging herein petitioners Mayor Arturo A. Gallardo, Vice-Mayor Peter Melchor J. Arches,
Sangguniang Bayan members Allan B. Ampoloquio, Cirilo N. Bacquiano, Josue M. Rodaje, Benjamin R. Macasaet, Jr.,
Victorina delos Cientos-Miral, Rodolfo M. Cartin, Quirina T. Sarte, Norberto E. Gomez, Genefredo P. Espina, Noel
Guinita and Budget Officer Ofelia Nacional, all public officers of the Municipality of Bansalan, Davao del Sur, with
violation of Section 3(e) of Republic Act No. 3019 for their alleged refusal to appropriate in the municipal budget
the amount representing payment of the mandatory statutory obligations of the Municipality of Bansalan accruing
to the complaining PHWs in the nature of unpaid salary differential and magna carta benefits.[2]
On 08 January 1999, herein public respondent Ombudsman Aniano A. Desierto approved the Resolution dated
26 November 1998 of Graft Investigation Officer II Jovito A. Coresis, Jr., of the Office of the Ombudsman-Mindanao,
finding probable cause to indict petitioners of the crime alleged.[3]
On 13 January 1999, the Information was filed with the Sandiganbayan which reads:
That sometime in or about January, 1998, or shortly prior or subsequent thereto, in Davao del Sur, Philippines and
within the jurisdiction of this Honorable Court, the accused Mayor Arturo A. Gallardo with salary grade 27, Vicemayor Peter Melchor J. Arches with salary grade 25, Sangguniang Bayan Members with salary grade 24 Allan B.
Ampoloquio, Cirilo N. Bacquiano, Josue M. Rodaje, Benjamin R. Macasaet, Jr., Victorina delos Cientos-Miral, Rodolfo
M. Cartin, Quirina T. Sarte, Norberto E. Gomez, Genefredo P. Espina, Noel Guinita and Budget Officer Ofelia Nacional
all public officers of the Local Government Unit of Bansalan, Davao del Sur, committing the offense while in the
performance of their official duties and taking advantage of their public position, conspiring, confederating and
mutually aiding each other, did there and then, willfully, unlawfully, and criminally, cause undue injury to the
Public Health Workers (PHWs) of the Municipality of Bansalan, to wit: by illegally and unjustifiably refusing to
perform their duties to include an appropriation in the municipal budget for the payment of the mandatory
statutory obligations of the Municipality of Bansalan due to the complaining PHWs in the nature of unpaid salary
differential and magna carta benefits in the aggregate amount of P3,833,798.10 Philippine currency, thus causing
undue damage and injury to the complaining PHWs thru evident bad faith in the performance of their official
duties.[4]
On 24 February 1999, petitioners filed a Motion for Reinvestigation.[5] The Sandiganbayan granted the motion
in a resolution dated 27 April 1999 and ordered the prosecution to conduct a reinvestigation.[6] In a resolution
dated 26 July 1999, Special Prosecutor II Jose O. Montero, Jr., recommended the dismissal of the case, which
recommendation was approved by Prosecution Bureau Director Victorio U. Tabanguil, Deputy Special Prosecutor
Robert E. Kallos and concurred in by Special Prosecutor Leonardo P. Tamayo. [7] This recommendation, however,
was disapproved by Ombudsman Aniano A. Desierto who stated in his own handwriting [l]et the court determine
if indeed the evidence cannot stand the judicial scrutiny.[8]
On 15 November 1999, petitioners filed a motion to quash the information anchored on the following grounds:
1) the facts charged do not constitute an offense; 2) the accused are denied due process; and 3) the accused are not
accorded the equal protection of laws.[9]
On 06 January 2000, the Sandiganbayan denied petitioners motion. It ruled that the averments in the
Information sufficiently charged the offense, and that the mere fact that cases similar to this case were dismissed
by the Ombudsman does not mean due process or equal protection of the law clause was denied the petitioners.
Hence, this petition.
Petitioners contend that the reinvestigation conducted by Ombudsman Special Prosecutor II Jose O. Montero,
Jr., showed that insufficient funds were the reason for petitioners failure to appropriate the money to meet
the magna carta benefits of PHWs and that petitioners acted in good faith when they failed to enact the required
appropriation ordinance. The Sandiganbayan should have duly considered such findings and the evidence
adduced supporting the same, irrespective of the opinion of Ombudsman Aniano A. Desierto. They conclude that
the Sandiganbayan erred when it totally failed to consider the findings and recommendations of the Office of the
Special Prosecutor.

Petitioners likewise argue that the one-sentence disapproval by Ombudsman Aniano A. Desierto of the
recommendations of the Office of the Special Prosecutor was arbitrary, whimsical and capricious for he failed to
explain how such action was arrived at, thereby depriving petitioners of their rights to be informed of the facts and
the law on which the denial was based.
At the outset, it must be emphasized that petitioners choice of remedy is clearly erroneous.
It is basic that Rule 45 of the Rules of Court governs appeals from judgment or final orders. [10] A final order is
one which disposes of the whole subject matter or terminates a particular proceeding or action, leaving nothing to
be done but to enforce by execution what has been determined.[11] The resolution of the Sandiganbayan sought to
be reviewed or set aside is not in any sense judgment or a final order, but an interlocutory order.[12] An order is
interlocutory if it does not dispose of a case completely, but leaves something more to be done on its merits. [13] The
order of the Sandiganbayan denying the motion to quash filed by petitioners is interlocutory in nature because it
leaves something more to be done by the Sandiganbayan, by way of resolving the case on the merits. The denial of
petitioners motion to quash allows the same petitioners to enter a plea, go to trial without prejudice on their part
to present the special defenses they invoked in their motion and if, after trial on the merits, an adverse decision is
rendered, to appeal therefrom via appeal by certiorari.[14]
Even if we consider the petition as one for certiorari under Rule 65 of the Rules of Court, we find that the
Sandiganbayan did not commit grave abuse of discretion in denying the petitioners motion to quash.
Petitioners fault the Sandiganbayan for not taking into account the findings and recommendations of the Office
of the Special Prosecutor which found no probable cause to charge them. Allied to this assignment of error is
petitioners allegation that the Ombudsman failed to accord them due process of law and equal protection of the
law. They claimed they were denied due process because Ombudsman Aniano A. Desierto disapproved the
recommendation of Special Prosecutor II Jose O. Montero, Jr., by simply writing a one-line note. The disapproval
allegedly deprived them of their right to be informed of the facts and law on which the said disapproval was based.
It is further asseverated that they were deprived the equal protection of law since the Ombudsman, in sixteen (16)
previous cases which were similar to the case at bar, dismissed the same.
These arguments are specious. Petitioners submission that they were deprived of due process hinges on the
erroneous assumption that respondent Ombudsman failed to assess and consider the evidence presented by
petitioners when he disapproved the recommendation by the investigating prosecutor to dismiss the case, and that
his ruling was not supported by evidence on record.
The truth of the matter is that petitioners were not denied due process of law. The order of the Ombudsman
for the filing of the necessary information is not a case of a total absence of factual and legal bases nor a failure to
appreciate the evidence presented. It may appear that the Ombudsmans one-line note lacks any factual or
evidentiary grounds as it did not set forth the same. The state of affairs, however, is that the Ombudsmans note
stems from his review of the findings of fact reached by the investigating prosecutor. [15] The Ombudsman, contrary
to the investigating prosecutors conclusion, was of the conviction that petitioners are probably guilty of the
offense charged, and for this, he is not required to conduct an investigation anew. [16] He is merely determining the
propriety and correctness of the recommendation by the investigating prosecutor, i.e., whether probable cause
actually exists or not, on the basis of the findings of fact of the latter. He may agree, fully or partly, or disagree
completely with the investigating prosecutor. Whatever course of action that the Ombudsman may take, whether
to approve or to disapprove the recommendation of the investigating prosecutor, is but an exercise of his
discretionary powers based upon constitutional mandate.[17] Generally, courts should not interfere in such
exercise. It is beyond the ambit of this Court to review the exercise of discretion of the Ombudsman in prosecuting
or dismissing a complaint filed before it, save in cases where there is clear showing of grave abuse of discretion
amounting to lack or excess of jurisdiction on the part of the Ombudsman which is absent in the case at
hand.[18] Such initiative and independence are inherent in the Ombudsman who, beholden to no one, acts as the
champion of the people and preserver of the integrity of the public service.[19]
The fact that the Ombudsman merely wrote his recommendation for the filing of the information against
petitioners in a one-line note is not a sufficient basis for this Court to attribute arbitrariness or caprice on the part
of respondent. As held in Olivarez v. Sandiganbayan:[20]
The mere fact that the order to file the information against petitioner was contained in a marginal note is not
sufficient to impute arbitrariness or caprice on the part of the respondent special prosecutors, absent a clear
showing that they gravely abused their discretion in disapproving the recommendation of the investigating
prosecutors to dismiss or withdraw the case against petitioner. Neither are these notes tainted with or indicative
of vindictiveness or arbitrariness as imputed by petitioner. Public respondents disapproved the recommendation
of the investigating prosecutors because they sincerely believed that there is sufficient evidence to indict the
accused.
The contention that petitioners right to equal protection of the law has been transgressed is equally
untenable. The equal protection clause requires that the law operates uniformly on all persons under similar
circumstances or that all persons are treated in the same manner, the conditions not being different, both in
privileges conferred and the liabilities imposed.[21] It allows reasonable classification. If the classification is

characterized by real and substantial differences, one class may be treated differently from another.[22] Simply
because the respondent Ombudsman dismissed some cases allegedly similar to the case at bar is not sufficient to
impute arbitrariness or caprice on his part, absent a clear showing that he gravely abused his discretion in
pursuing the instant case. The Ombudsman dismissed those cases because he believed there were no sufficient
grounds for the accused therein to undergo trial. On the other hand, he recommended the filing of appropriate
information against petitioners because there are ample grounds to hold them for trial. He was only exercising his
power and discharging his duty based upon the constitutional mandate of his office. Stated otherwise, the
circumstances obtaining in the numerous cases previously dismissed by the Ombudsman are entirely divergent
from those here existing.
In the same vein, respondent Sandiganbayan could not be blamed for not considering the findings of the
special prosecutor because the rule is that in case of conflict in the conclusions of the Ombudsman and the special
prosecutor, it is the formers decision that shall prevail since the Office of the Special Prosecutor is under the
supervision and control of the Ombudsman.[23] Moreover, once a case has been filed with the court, it is that court,
no longer the prosecution, which has full control of the case, so much so that the information may grant or deny it,
in the faithful exercise of judicial discretion.[24] The court is the best and sole judge on what to do with the case
before it.[25] In the instant case, respondent court is convinced that there is adequate evidence against the
petitioners. Absence of proof that it gravely abused its discretion, the conclusion arrived at by the Sandiganbayan
in its assailed resolution, will not be disturbed.
Besides, petitioners argument that they could not be indicted for violation of Section 3(e) of Rep. Act No. 3019
as they acted in good faith when they failed to appropriate funds for the unpaid salary differential and magna
carta benefits due the private complainants, is evidentiary in nature and is a matter of defense, which could be
raised in a full-blown trial on the merits.[26] As aptly held in Deloso v. Desierto:[27]
Public prosecutors do not decide whether there is evidence beyond reasonable doubt of the guilt of the person
charged. They merely determine whether there is sufficient ground to engender a well-founded belief that a crime
has been committed and that the accused is probably guilty thereof, and should be held for trial. A finding of
probable cause does not require an inquiry as to whether there is sufficient evidence to secure a conviction. It is
enough that prosecutors believe that the act or omission complained of constitutes the offense charged. Precisely,
there is a trial for the reception of evidence of the prosecution in support of the charges.
WHEREFORE, premises considered, the petition is DISMISSED for lack of merit.
SO ORDERED.

Beltran vs. Secretary of Health

Facts: In January of 1994, the New Tropical Medicine Foundation, with the assistance of the U.S. Agency for
International Development (USAID) released its final report of a study on the Philippine blood banking system
entitled Project to Evaluate the Safety of the Philippine Blood Banking System. It was revealed that of the blood
units collected in 1992, 64.4 % were supplied by commercial blood banks, 14.5% by the PNRC, 13.7% by
government hospital-based blood banks, and 7.4% by private hospital-based blood banks ; showing that the
Philippines heavily relied on commercial sources of blood. It was further found, among other things, that blood
sold by persons to blood commercial banks are three times more likely to have any of the four (4) tested infections
or blood transfusion transmissible diseases, namely, malaria, syphilis, Hepatitis B and Acquired Immune Deficiency
Syndrome (AIDS) than those donated to PNRC.
Republic Act No. 7719 or the National Blood Services Act of 1994 was then enacted into law on April 2, 1994. The
Act seeks to provide an adequate supply of safe blood by promoting voluntary blood donation and by regulating
blood banks in the country. One of the provisions of the said act was the phasing out of commercial blood banks
within 2 years from its effectivity.
Petitioners, comprising the majority of the Board of Directors of the Philippine Association of Blood Banks assail
the constitutionality of RA 7719 on the ground among others that it is an improper and unwarranted delegation of
legislative power. According to petitioners, the Act was incomplete when it was passed by the Legislature, and the
latter failed to fix a standard to which the Secretary of Health must conform in the performance of his functions.
Petitioners also contend that the two-year extension period that may be granted by the Secretary of Health for the
phasing out of commercial blood banks pursuant to Section 7 of the Act constrained the Secretary to legislate, thus
constituting undue delegation of legislative power.
Issue: WHETHER OR NOT SECTION 7 OF R.A. 7719 CONSTITUTES UNDUE DELEGATION OF LEGISLATIVE POWER
Held: In testing whether a statute constitutes an undue delegation of legislative power or not, it is usual to inquire
whether the statute was complete in all its terms and provisions when it left the hands of the Legislature so that
nothing was left to the judgment of the administrative body or any other appointee or delegate of the Legislature.
Except as to matters of detail that may be left to be filled in by rules and regulations to be adopted or promulgated
by executive officers and administrative boards, an act of the Legislature, as a general rule, is incomplete and hence
invalid if it does not lay down any rule or definite standard by which the administrative board may be guided in the
exercise of the discretionary powers delegated to it.
Republic Act No. 7719 or the National Blood Services Act of 1994 is complete in itself. It is clear from the
provisions of the Act that the Legislature intended primarily to safeguard the health of the people and has
mandated several measures to attain this objective. One of these is the phase out of commercial blood banks in the
country. The law has sufficiently provided a definite standard for the guidance of the Secretary of Health in
carrying out its provisions, that is, the promotion of public health by providing a safe and adequate supply of blood
through voluntary blood donation. By its provisions, it has conferred the power and authority to the Secretary of
Health as to its execution, to be exercised under and in pursuance of the law.
The Secretary of Health has been given, under Republic Act No. 7719, broad powers to execute the provisions of
said Act. Specifically, Section 23 of Administrative Order No. 9 provides that the phase-out period for commercial
blood banks shall be extended for another two years until May 28, 1998 based on the result of a careful study and
review of the blood supply and demand and public safety. This power to ascertain the existence of facts and
conditions upon which the Secretary may effect a period of extension for said phase-out can be delegated by
Congress. The true distinction between the power to make laws and discretion as to its execution is illustrated by
the fact that the delegation of power to make the law, which necessarily involves a discretion as to what it shall be,
and conferring an authority or discretion as to its execution, to be exercised under and in pursuance of the law. The
first cannot be done; to the latter no valid objection can be made.
Facts: Petitioners comprise the majority of the Board of Directors of the Philippine Association of Blood Banks, a
duly registered non-stock and non-profit association composed of free standing blood banks. Public respondent
Secretary of Health is being sued in his capacity as the public official directly involved and charged with the
enforcement and implementation of RA 7719 or the National Blood Service Act. Section 7 of RA 7719 provides
phase-out of Commercial Blood Banks. Petitioners assail the constitutionality of the said provision on the ground,
among others, that such represents undue delegation if not outright abdication of the police power of the state.
Issue: Whether or not RA 7719 is a valid exercise of police power
Held: Petitions dismissed. The court upholds the validity of RA 7719.
The promotion of public health is a fundamental obligation of the State. The health of the people is a primordial
governmental concern. RA 7719 was enacted in the exercise of the States police power in order to promote and
preserve public health and safety.

Police power of the state is validly exercised if (a) the interest of the public generally, as distinguished from those
of a particular class, requires the interference of the State; and (b) the means employed are reasonably necessary
to the attainment of the objective sought to be accomplished and not unduly oppressive upon individuals
Police power is the State authority to enact legislation that may interfere with personal liberty or property in order
to promote the general welfare.
Thus, persons may be subject to certain kinds of restraints and burdens in order to secure the general welfare of
the State and to its fundamental aim of government, the rights of the individual may be subordinated.
Beltran Full Case
Before this Court are petitions assailing primarily the constitutionality of Section 7 of Republic Act No. 7719,
otherwise known as the National Blood Services Act of 1994, and the validity of Administrative Order (A.O.) No.
9, series of 1995 or the Rules and Regulations Implementing Republic Act No. 7719.
G.R. No. 133640,[1] entitled Rodolfo S. Beltran, doing business under the name and style, Our Lady of Fatima
Blood Bank, et al., vs. The Secretary of Health and G.R. No. 133661,[2] entitled Doctors Blood Bank Center vs.
Department of Health are petitions for certiorari and mandamus, respectively, seeking the annulment of the
following: (1) Section 7 of Republic Act No. 7719; and, (2) Administrative Order (A.O.) No. 9, series of 1995. Both
petitions likewise pray for the issuance of a writ of prohibitory injunction enjoining the Secretary of Health from
implementing and enforcing the aforementioned law and its Implementing Rules and Regulations; and,
for a
mandatory injunction ordering and commanding the Secretary of Health to grant, issue or renew petitioners
license to operate free standing blood banks (FSBB).
The above cases were consolidated in a resolution of the Court En Banc dated June 2, 1998.[3]
G.R. No. 139147,[4] entitled Rodolfo S. Beltran, doing business under the name and style, Our Lady of Fatima
Blood Bank, et al., vs. The Secretary of Health, on the other hand, is a petition to show cause why respondent
Secretary of Health should not be held in contempt of court.
This case was originally assigned to the Third Division of this Court and later consolidated with G.R. Nos.
133640 and 133661 in a resolution dated August 4, 1999.[5]
Petitioners comprise the majority of the Board of Directors of the Philippine Association of Blood Banks, a
duly registered non-stock and non-profit association composed of free standing blood banks.
Public respondent Secretary of Health is being sued in his capacity as the public official directly involved and
charged with the enforcement and implementation of the law in question.
The facts of the case are as follows:
Act

Republic Act No. 7719 or the National Blood Services Act of 1994 was enacted into law on April 2, 1994. The
seeks
to
provide

an adequate supply of safe blood by promoting voluntary blood donation and by regulating blood banks in the
country. It was approved by then President Fidel V. Ramos on May 15, 1994 and was subsequently published in the
Official Gazette on August 18, 1994. The law took effect on August 23, 1994.
On April 28, 1995, Administrative Order No. 9, Series of 1995, constituting the Implementing Rules and
Regulations of said law was promulgated by respondent Secretary of the Department of Health (DOH).[6]
Section 7 of R.A. 7719 [7] provides:
Section 7. Phase-out of Commercial Blood Banks - All commercial blood banks shall be
phased-out over a period of two (2) years after the effectivity of this Act, extendable to a maximum
period of two (2) years by the Secretary.
Section 23 of Administrative Order No. 9 provides:
Section 23. Process of Phasing Out. -- The Department shall effect the phasing-out of all
commercial blood banks over a period of two (2) years, extendible for a maximum period of two (2)
years after the effectivity of R.A. 7719. The decision to extend shall be based on the result of a
careful study and review of the blood supply and demand and public safety.[8]

Blood banking and blood transfusion services in the country have been arranged in four (4) categories:
blood centers run by the Philippine National Red Cross (PNRC), government-run blood services, private hospital
blood banks, and commercial blood services.
Years prior to the passage of the National Blood Services Act of 1994, petitioners have already been
operating commercial blood banks under Republic Act No. 1517, entitled An Act Regulating the Collection,
Processing and Sale of Human Blood, and the Establishment and Operation of Blood Banks and Blood Processing
Laboratories. The law, which was enacted on June 16, 1956, allowed the establishment and operation by licensed
physicians of blood banks and blood processing laboratories. The Bureau of Research and Laboratories (BRL) was
created in 1958 and was given the power to regulate clinical laboratories in 1966 under Republic Act No. 4688. In
1971, the Licensure Section was created within the BRL. It was given the duty to enforce the licensure
requirements for blood banks as well as clinical laboratories. Due to this development, Administrative Order No.
156, Series of 1971, was issued. The new rules and regulations triggered a stricter enforcement of the Blood
Banking Law, which was characterized by frequent spot checks, immediate suspension and communication of such
suspensions to hospitals, a more systematic record-keeping and frequent communication with blood banks
through monthly information bulletins. Unfortunately, by the 1980s, financial difficulties constrained the BRL to
reduce the frequency of its supervisory visits to the blood banks.[9]
Meanwhile, in the international scene, concern for the safety of blood and blood products intensified when the
dreaded disease Acute Immune Deficiency Syndrome (AIDS) was first described in 1979. In 1980, the International
Society of Blood Transfusion (ISBT) formulated the Code of Ethics for Blood Donation and Transfusion. In 1982,
the first case of transfusion-associated AIDS was described in an infant. Hence, the ISBT drafted in 1984, a model
for a national blood policy outlining certain principles that should be taken into consideration. By 1985, the ISBT
had disseminated guidelines requiring AIDS testing of blood and blood products for transfusion.[10]
In 1989, another revision of the Blood Banking Guidelines was made. The DOH issued Administrative Order
No. 57, Series of 1989, which classified banks into primary, secondary and tertiary depending on the services they
provided. The standards were adjusted according to this classification. For instance, floor area requirements varied
according to classification level. The new guidelines likewise required Hepatitis B and HIV testing, and that the
blood bank be headed by a pathologist or a hematologist.[11]
In 1992, the DOH issued Administrative Order No. 118-A institutionalizing the National Blood Services
Program (NBSP). The BRL was designated as the central office primarily responsible for the NBSP. The program
paved the way for the creation of a committee that will implement the policies of the program and the formation of
the Regional Blood Councils.
In August 1992, Senate Bill No. 1011, entitled An Act Promoting Voluntary Blood Donation, Providing for an
Adequate Supply of Safe Blood, Regulating Blood Banks and Providing Penalties for Violations Thereof, and for
other Purposes was introduced in the Senate.[12]
Meanwhile, in the House of Representatives, House Bills No. 384, 546, 780 and 1978 were being
deliberated to address the issue of safety of the Philippine blood bank system. Subsequently, the Senate and House
Bills were referred to the appropriate committees and subsequently consolidated.[13]
In January of 1994, the New Tropical Medicine Foundation, with the assistance of the U.S. Agency for
International Development (USAID) released its final report of a study on the Philippine blood banking system
entitled Project to Evaluate the Safety of the Philippine Blood Banking System. It was revealed that of the blood
units collected in 1992, 64.4 % were supplied by commercial blood banks, 14.5% by the PNRC, 13.7% by
government hospital-based blood banks, and 7.4% by private hospital-based blood banks. During the time the
study was made, there were only twenty-four (24) registered or licensed free-standing or commercial blood banks
in the country. Hence, with these numbers in mind, the study deduced that each commercial blood bank produces
five times more blood than the Red Cross and fifteen times more than the government-run blood banks. The study,
therefore, showed that the Philippines heavily relied on commercial sources of blood. The study likewise revealed
that 99.6% of the donors of commercial blood banks and 77.0% of the donors of private-hospital based blood
banks are paid donors. Paid donors are those who receive remuneration for donating their blood. Blood donors of
the PNRC and government-run hospitals, on the other hand, are mostly voluntary.[14]
It was further found, among other things, that blood sold by persons to blood commercial banks are three
times more likely to have any of the four (4) tested infections or blood transfusion transmissible diseases, namely,
malaria, syphilis, Hepatitis B and Acquired Immune Deficiency Syndrome (AIDS) than those donated to PNRC.[15]
Commercial blood banks give paid donors varying rates around P50 to P150, and because of this
arrangement, many of these donors are poor, and often they are students, who need cash immediately. Since they
need the money, these donors are not usually honest about their medical or social history. Thus, blood from

healthy, voluntary donors who give their true medical and social history are about three times much safer than
blood from paid donors.[16]
What the study also found alarming is that many Filipino doctors are not yet fully trained on the specific
indications for blood component transfusion. They are not aware of the lack of blood supply and do not feel the
need to adjust their practices and use of blood and blood products. It also does not matter to them where the blood
comes from.[17]
On August 23, 1994, the National Blood Services Act providing for the phase out of commercial blood banks
took effect. On April 28, 1995, Administrative Order No. 9, Series of 1995, constituting the Implementing Rules and
Regulations of said law was promulgated by DOH.
The phase-out period was extended for two years by the DOH pursuant to Section 7 of Republic Act No. 7719
and Section 23 of its Implementing Rules and Regulations. Pursuant to said Act, all commercial blood banks should
have been phased out by May 28, 1998. Hence, petitioners were granted by the Secretary of Health their licenses to
open and operate a blood bank only until May 27, 1998.
On May 20, 1998, prior to the expiration of the licenses granted to petitioners, they filed a petition
for certiorari with application for the issuance of a writ of preliminary injunction or temporary restraining order
under Rule 65 of the Rules of Court assailing the constitutionality and validity of the aforementioned Act and its
Implementing Rules and Regulations. The case was entitled Rodolfo S. Beltran, doing business under the name and
style, Our Lady of Fatima Blood Bank, docketed as G.R. No. 133640.
On June 1, 1998, petitioners filed an Amended Petition for Certiorari with Prayer for Issuance of a
Temporary Restraining Order, writ of preliminary mandatory injunction and/or status quo ante order.[18]
In the aforementioned petition, petitioners assail the constitutionality of the questioned legal provisions,
namely, Section 7 of Republic Act No. 7719 and Section 23 of Administrative Order No. 9, Series of 1995, on the
following grounds: [19]
1.

The questioned legal provisions of the National Blood Services Act and its Implementing
Rules violate the equal protection clause for irrationally discriminating against free standing
blood banks in a manner which is not germane to the purpose of the law;

2.

The questioned provisions of the National Blood Services Act and its Implementing
Rules represent undue delegation if not outright abdication of the police power of the state;
and,

3.

The questioned provisions of the National Blood Services Act and its Implementing
Rules are unwarranted deprivation of personal liberty.

On May 22, 1998, the Doctors Blood Center filed a similar petition for mandamus with a prayer for the
issuance of a temporary restraining order, preliminary prohibitory and mandatory injunction before this Court
entitled Doctors Blood Center vs. Department of Health, docketed as G.R. No. 133661. [20]This was consolidated
with G.R. No. 133640.[21]
Similarly, the petition attacked the constitutionality of Republic Act No. 7719 and its implementing rules
and regulations, thus, praying for the issuance of a license to operate commercial blood banks beyond May 27,
1998. Specifically, with regard to Republic Act No. 7719, the petition submitted the following questions [22] for
resolution:
1.

such power?

Was it passed in the exercise of police power, and was it a valid exercise of

2.

Does it not amount to deprivation of property without due process?

3.

Does it not unlawfully impair the obligation of contracts?

4.

With the commercial blood banks being abolished and with no ready machinery to deliver
the same supply and services, does R.A. 7719 truly serve the public welfare?

On June 2, 1998, this Court issued a Resolution directing respondent DOH to file a consolidated comment. In
the same Resolution, the Court issued a temporary restraining order (TRO) for respondent to cease and desist from
implementing and enforcing Section 7 of Republic Act No. 7719 and its implementing rules and regulations until
further orders from the Court.[23]

On August 26, 1998, respondent Secretary of Health filed a Consolidated Comment on the petitions
for certiorari and mandamus in G.R. Nos. 133640 and 133661, with opposition to the issuance of a temporary
restraining order.[24]
In the Consolidated Comment, respondent Secretary of Health submitted that blood from commercial blood
banks is unsafe and therefore the State, in the exercise of its police power, can close down commercial blood banks
to protect the public. He cited the record of deliberations on Senate Bill No. 1101 which later became Republic Act
No. 7719, and the sponsorship speech of Senator Orlando Mercado.
The rationale for the closure of these commercial blood banks can be found in the deliberations of Senate Bill
No. 1011, excerpts of which are quoted below:
Senator Mercado: I am providing over a period of two years to phase out all commercial
blood banks. So that in the end, the new section would have a provision that states:
ALL COMMERCIAL BLOOD BANKS SHALL BE PHASED OUT OVER A PERIOD OF TWO
YEARS AFTER THE EFFECTIVITY OF THIS ACT. BLOOD SHALL BE COLLECTED FROM VOLUNTARY
DONORS ONLY AND THE SERVICE FEE TO BE CHARGED FOR EVERY BLOOD PRODUCT ISSUED
SHALL BE LIMITED TO THE NECESSARY EXPENSES ENTAILED IN COLLECTING AND PROCESSING
OF BLOOD. THE SERVICE FEE SHALL BE MADE UNIFORM THROUGH GUIDELINES TO BE SET BY
THE DEPARTMENTOF HEALTH.
I am supporting Mr. President, the finding of a study called Project to Evaluate the Safety of
the Philippine Blood Banking System. This has been taken note of. This is a study done with the
assistance of the USAID by doctors under the New Tropical Medicine Foundation in Alabang.
Part of the long-term measures proposed by this particular study is to improve laws, outlaw
buying and selling of blood and legally define good manufacturing processes for blood. This goes to
the very heart of my amendment which seeks to put into law the principle that blood should not be
subject of commerce of man.

The Presiding Officer [Senator Aquino]: What does the sponsor say?
Senator Webb: Mr. President, just for clarity, I would like to find out how the Gentleman
defines a commercial blood bank. I am at a loss at times what a commercial blood bank really is.
Senator Mercado: We have a definition, I believe, in the measure, Mr. President.
The Presiding Officer [Senator Aquino]: It is a business where profit is considered.
Senator Mercado: If the Chairman of the Committee would accept it, we can put a
provision on Section 3, a definition of a commercial blood bank, which, as defined in this law, exists
for profit and engages in the buying and selling of blood or its components.
Senator Webb: That is a good description, Mr. President.

Senator Mercado: I refer, Mr. President, to a letter written by Dr. Jaime Galvez-Tan, the
Chief of Staff, Undersecretary of Health, to the good Chairperson of the Committee on Health.
In recommendation No. 4, he says:
The need to phase out all commercial blood banks within a two-year period will give the
Department of Health enough time to build up governments capability to provide an adequate
supply of blood for the needs of the nation...the use of blood for transfusion is a medical service and
not a sale of commodity.
Taking into consideration the experience of the National Kidney Institute, which has
succeeded in making the hospital 100 percent dependent on voluntary blood donation, here is a
success story of a hospital that does not buy blood. All those who are operated on and need blood
have to convince their relatives or have to get volunteers who would donate blood
If we give the responsibility of the testing of blood to those commercial blood banks, they
will cut corners because it will protect their profit.

In the first place, the people who sell their blood are the people who are normally in the
high-risk category. So we should stop the system of selling and buying blood so that we can go into
a national voluntary blood program.
It has been said here in this report, and I quote:
Why is buying and selling of blood not safe? This is not safe because a donor who expects
payment for his blood will not tell the truth about his illnesses and will deny any risky social
behavior such as sexual promiscuity which increases the risk of having syphilis or AIDS or abuse of
intravenous addictive drugs. Laboratory tests are of limited value and will not detect early
infections. Laboratory tests are required only for four diseases in the Philippines. There are other
blood transmissible diseases we do not yet screen for and there could be others where there are no
tests available yet.
A blood bank owner expecting to gain profit from selling blood will also try his best to limit
his expenses. Usually he tries to increase his profit by buying cheaper reagents or test kits, hiring
cheaper manpower or skipping some tests altogether. He may also try to sell blood even though
these have infections in them. Because there is no existing system of counterchecking these, the
blood bank owner can usually get away with many unethical practices.
The experience of Germany, Mr. President is illustrative of this issue. The reason why
contaminated blood was sold was that there were corners cut by commercial blood banks in the
testing process. They were protecting their profits.[25]
The sponsorship speech of Senator Mercado further elucidated his stand on the issue:

Senator Mercado: Today, across the country, hundreds of poverty-stricken, sickly and weak
Filipinos, who, unemployed, without hope and without money to buy the next meal, will walk into a
commercial blood bank, extend their arms and plead that their blood be bought. They will lie about
their age, their medical history. They will lie about when they last sold their blood. For doing this,
they will receive close to a hundred pesos. This may tide them over for the next few days. Of course,
until the next bloodletting.
This same blood will travel to the posh city hospitals and urbane medical centers. This same
blood will now be bought by the rich at a price over 500% of the value for which it was sold.
Between this buying and selling, obviously, someone has made a very fast buck.
Every doctor has handled at least one transfusion-related disease in an otherwise normal
patient. Patients come in for minor surgery of the hand or whatever and they leave with hepatitis B.
A patient comes in for an appendectomy and he leaves with malaria. The worst nightmare: A
patient comes in for a Caesarian section and leaves with AIDS.
We do not expect good blood from donors who sell their blood because of poverty. The
humane dimension of blood transfusion is not in the act of receiving blood, but in the act of giving
it
For years, our people have been at the mercy of commercial blood banks that lobby their
interests among medical technologists, hospital administrators and sometimes even physicians so
that a proactive system for collection of blood from healthy donors becomes difficult, tedious and
unrewarding.
The Department of Health has never institutionalized a comprehensive national program for
safe blood and for voluntary blood donation even if this is a serious public health concern and has
fallen for the linen of commercial blood bankers, hook, line and sinker because it is more
convenient to tell the patient to buy blood.
Commercial blood banks hold us hostage to their threat that if we are to close them down,
there will be no blood supply. This is true if the Government does not step in to ensure that safe
supply of blood. We cannot allow commercial interest groups to dictate policy on what is and what
should be a humanitarian effort. This cannot and will never work because their interest in blood
donation is merely monetary. We cannot expect commercial blood banks to take the lead in
voluntary blood donation. Only the Government can do it, and the Government must do it.[26]

On May 5, 1999, petitioners filed a Motion for Issuance of Expanded Temporary Restraining Order for the
Court to order respondent Secretary of Health to cease and desist from announcing the closure of commercial
blood banks, compelling the public to source the needed blood from voluntary donors only, and committing similar
acts that will ultimately cause the shutdown of petitioners blood banks.[27]
On July 8, 1999, respondent Secretary filed his Comment and/or Opposition to the above motion stating
that he has not ordered the closure of commercial blood banks on account of the Temporary Restraining Order
(TRO) issued on June 2, 1998 by the Court. In compliance with the TRO, DOH had likewise ceased to distribute the
health advisory leaflets, posters and flyers to the public which state that blood banks are closed or will be closed.
According to respondent Secretary, the same were printed and circulated in anticipation of the closure of the
commercial blood banks in accordance with R.A. No. 7719, and were printed and circulated prior to the issuance of
the TRO.[28]
On July 15, 1999, petitioners in G.R. No. 133640 filed a Petition to Show Cause Why Public Respondent
Should Not be Held in Contempt of Court, docketed as G.R. No. 139147, citing public respondents willful
disobedience of or resistance to the restraining order issued by the Court in the said case. Petitioners alleged that
respondents act constitutes circumvention of the temporary restraining order and a mockery of the authority of
the Court and the orderly administration of justice.[29] Petitioners added that despite the issuance of the temporary
restraining order in G.R. No. 133640, respondent, in his effort to strike down the existence of commercial blood
banks, disseminated misleading information under the guise of health advisories, press releases, leaflets, brochures
and flyers stating, among others, that this year [1998] all commercial blood banks will be closed by 27 May. Those
who need blood will have to rely on government blood banks. [30] Petitioners further claimed that respondent
Secretary of Health announced in a press conference during the Blood Donors Week that commercial blood banks
are illegal and dangerous and that they are at the moment protected by a restraining order on the basis that
their commercial interest is more important than the lives of the people. These were all posted in bulletin boards
and other conspicuous places in all government hospitals as well as other medical and health centers.[31]
In respondent Secretarys Comment to the Petition to Show Cause Why Public Respondent Should Not Be
Held in Contempt of Court, dated January 3, 2000, it was explained that nothing was issued by the department
ordering the closure of commercial blood banks. The subject health advisory leaflets pertaining to said closure
pursuant to Republic Act No. 7719 were printed and circulated prior to the Courts issuance of a temporary
restraining order on June 21, 1998.[32]
Public respondent further claimed that the primary purpose of the information campaign was to promote
the importance and safety of voluntary blood donation and to educate the public about the hazards of patronizing
blood supplies from commercial blood banks.[33] In doing so, he was merely performing his regular functions and
duties as the Secretary of Health to protect the health and welfare of the public. Moreover, the DOH is the main
proponent of the voluntary blood donation program espoused by Republic Act No. 7719, particularly Section 4
thereof which provides that, in order to ensure the adequate supply of human blood, voluntary blood donation
shall be promoted through public education, promotion in schools, professional education, establishment of blood
services network, and walking blood donors.
Hence, by authority of the law, respondent Secretary contends that he has the duty to promote the program
of voluntary blood donation. Certainly, his act of encouraging the public to donate blood voluntarily and educating
the people on the risks associated with blood coming from a paid donor promotes general health and welfare and
which should be given more importance than the commercial businesses of petitioners.[34]
On July 29, 1999, interposing personal and substantial interest in the case as taxpayers and citizens, a
Petition-in-Intervention was filed interjecting the same arguments and issues as laid down by petitioners in G.R.
No. 133640 and 133661, namely, the unconstitutionality of the Acts, and, the issuance of a writ of prohibitory
injunction. The intervenors are the immediate relatives of individuals who had died allegedly because of shortage
of blood supply at a critical time.[35]
The intervenors contended that Republic Act No. 7719 constitutes undue delegation of legislative powers
and unwarranted deprivation of personal liberty.[36]
In a resolution, dated September 7, 1999, and without giving due course to the aforementioned petition, the
Court granted the Motion for Intervention that was filed by the above intervenors on August 9, 1999.
In his Comment to the petition-in-intervention, respondent Secretary of Health stated that the sale of blood
is contrary to the spirit and letter of the Act that blood donation is a humanitarian act and blood transfusion is a
professional medical service and not a sale of commodity (Section 2[a] and [b] of Republic Act No. 7719). The act
of selling blood or charging fees other than those allowed by law is even penalized under Section 12.[37]
Thus, in view of these, the Court is now tasked to pass upon the constitutionality of Section 7 of Republic Act
No. 7719 or the National Blood Services Act of 1994 and its Implementing Rules and Regulations.

In resolving the controversy, this Court deems it necessary to address the issues and/or questions raised
by petitioners concerning the constitutionality of the aforesaid Act in G.R. No. 133640 and 133661 as summarized
hereunder:
I
WHETHER OR NOT SECTION 7 OF R.A. 7719 CONSTITUTES UNDUE DELEGATION OF
LEGISLATIVE POWER;
II
WHETHER OR NOT SECTION 7 OF R.A. 7719 AND ITS IMPLEMENTING RULES AND
REGULATIONS VIOLATE THE EQUAL PROTECTION CLAUSE;
III
WHETHER OR NOT SECTION 7 OF R.A. 7719 AND ITS IMPLEMENTING RULES AND
REGULATIONS VIOLATE THE NON-IMPAIRMENT CLAUSE;

IV
WHETHER OR NOT SECTION 7 OF R.A. 7719 AND ITS IMPLEMENTING RULES AND
REGULATIONS CONSTITUTE DEPRIVATION OF PERSONAL LIBERTYAND PROPERTY;
V
WHETHER OR NOT R.A. 7719 IS A VALID EXERCISE OF POLICE POWER; and,
VI
WHETHER OR NOT SECTION 7 OF R.A. 7719 AND ITS IMPLEMENTING RULES AND
REGULATIONS TRULY SERVE PUBLIC WELFARE.
As to the first ground upon which the constitutionality of the Act is being challenged, it is the contention of
petitioners that the phase out of commercial or free standing blood banks is unconstitutional because it is an
improper and unwarranted delegation of legislative power. According to petitioners, the Act was incomplete when
it was passed by the Legislature, and the latter failed to fix a standard to which the Secretary of Health must
conform in the performance of his functions. Petitioners also contend that the two-year extension period that may
be granted by the Secretary of Health for the phasing out of commercial blood banks pursuant to Section 7 of the
Act constrained the Secretary to legislate, thus constituting undue delegation of legislative power.
In testing whether a statute constitutes an undue delegation of legislative power or not, it is usual to
inquire whether the statute was complete in all its terms and provisions when it left the hands of the Legislature so
that nothing was left to the judgment of the administrative body or any other appointee or delegate of the
Legislature.[38] Except as to matters of detail that may be left to be filled in by rules and regulations to be adopted
or promulgated by executive officers and administrative boards, an act of the Legislature, as a general rule, is
incomplete and hence invalid if it does not lay down any rule or definite standard by which the administrative
board may be guided in the exercise of the discretionary powers delegated to it.[39]
Republic Act No. 7719 or the National Blood Services Act of 1994 is complete in itself. It is clear from the
provisions of the Act that the Legislature intended primarily to safeguard the health of the people and has
mandated several measures to attain this objective. One of these is the phase out of commercial blood banks in the
country. The law has sufficiently provided a definite standard for the guidance of the Secretary of Health in
carrying out its provisions, that is, the promotion of public health by providing a safe and adequate supply of blood
through voluntary blood donation. By its provisions, it has conferred the power and authority to the Secretary of
Health as to its execution, to be exercised under and in pursuance of the law.
Congress may validly delegate to administrative agencies the authority to promulgate rules and regulations
to implement a given legislation and effectuate its policies.[40] The Secretary of Health has been given, under
Republic Act No. 7719, broad powers to execute the provisions of said Act. Section 11 of the Act states:
SEC. 11.
Rules and Regulations. The implementation of the provisions of the Act shall be
in accordance with the rules and regulations to be promulgated by the Secretary, within sixty (60)
days from the approval hereof
This is what respondent Secretary exactly did when DOH, by virtue of the administrative bodys authority
and expertise in the matter, came out with Administrative Order No.9, series of 1995 or the Rules and Regulations
Implementing Republic Act No. 7719. Administrative Order. No. 9 effectively filled in the details of the law for its
proper implementation.
Specifically, Section 23 of Administrative Order No. 9 provides that the phase-out period for commercial
blood banks shall be extended for another two years until May 28, 1998 based on the result of a careful study and
review of the blood supply and demand and public safety. This power to ascertain the existence of facts and
conditions upon which the Secretary may effect a period of extension for said phase-out can be delegated by
Congress. The true distinction between the power to make laws and discretion as to its execution is illustrated by
the fact that the delegation of power to make the law, which necessarily involves a discretion as to what it shall be,
and conferring an authority or discretion as to its execution, to be exercised under and in pursuance of the law. The
first cannot be done; to the latter no valid objection can be made.[41]
In this regard, the Secretary did not go beyond the powers granted to him by the Act when said phase-out
period was extended in accordance with the Act as laid out in Section 2 thereof:
SECTION 2. Declaration of Policy In order to promote public health, it is hereby declared
the policy of the state:
a)

to promote and encourage voluntary blood donation by the citizenry and to instill
public consciousness of the principle that blood donation is a humanitarian act;

b)
c)

to lay down the legal principle that the provision of blood for transfusion is a
medical service and not a sale of commodity;
to provide for adequate, safe, affordable and equitable distribution of blood supply
and blood products;

d)

to inform the public of the need for voluntary blood donation to curb the hazards
caused by the commercial sale of blood;

e)

to teach the benefits and rationale of voluntary blood donation in the existing health
subjects of the formal education system in all public and private schools as well as the
non-formal system;

f)

to mobilize all sectors of the community to participate in mechanisms for voluntary

and non-profit collection of blood;

g)

to mandate the Department of Health to establish and organize a National Blood

Transfusion Service Network in order to rationalize and improve the provision of
adequate and safe supply of blood;

h)

to provide for adequate assistance to institutions promoting voluntary blood

donation and providing non-profit blood services, either through a system of
reimbursement for costs from patients who can afford to pay, or donations from
governmental and non-governmental entities;

i)

to require all blood collection units and blood banks/centers to operate on a nonprofit basis;

j)

to establish scientific and professional standards for the operation of blood

collection units and blood banks/centers in the Philippines;

k)

to regulate and ensure the safety of all activities related to the collection, storage
and banking of blood; and,

l)

to require upgrading of blood banks/centers to include preventive services and

education to control spread of blood transfusion transmissible diseases.

Petitioners also assert that the law and its implementing rules and regulations violate the equal protection
clause enshrined in the Constitution because it unduly discriminates against commercial or free standing blood
banks in a manner that is not germane to the purpose of the law.[42]
What may be regarded as a denial of the equal protection of the laws is a question not always easily
determined. No rule that will cover every case can be formulated. Class legislation, discriminating against some and
favoring others is prohibited but classification on a reasonable basis and not made arbitrarily or capriciously is
permitted. The classification, however, to be reasonable: (a) must be based on substantial distinctions which make
real differences; (b) must be germane to the purpose of the law; (c) must not be limited to existing conditions only;
and, (d) must apply equally to each member of the class.[43]
Republic Act No. 7719 or The National Blood Services Act of 1994, was enacted for the promotion of public
health and welfare. In the aforementioned study conducted by the New Tropical Medicine Foundation, it was
revealed that the Philippine blood banking system is disturbingly primitive and unsafe, and with its current
condition, the spread of infectious diseases such as malaria, AIDS, Hepatitis B and syphilis chiefly from blood
transfusion is unavoidable. The situation becomes more distressing as the study showed that almost 70% of the
blood supply in the country is sourced from paid blood donors who are three times riskier than voluntary blood
donors because they are unlikely to disclose their medical or social history during the blood screening.[44]
The above study led to the passage of Republic Act No. 7719, to instill public consciousness of the
importance and benefits of voluntary blood donation, safe blood supply and proper blood collection from healthy
donors. To do this, the Legislature decided to order the phase out of commercial blood banks to improve the
Philippine blood banking system, to regulate the supply and proper collection of safe blood, and so as not to derail
the implementation of the voluntary blood donation program of the government. In lieu of commercial blood
banks, non-profit blood banks or blood centers, in strict adherence to professional and scientific standards to be
established by the DOH, shall be set in place.[45]
Based on the foregoing, the Legislature never intended for the law to create a situation in which
unjustifiable discrimination and inequality shall be allowed. To effectuate its policy, a classification was made
between nonprofit blood banks/centers and commercial blood banks.

We deem the classification to be valid and reasonable for the following reasons:
One, it was based on substantial distinctions. The former operates for purely humanitarian reasons and as a
medical service while the latter is motivated by profit. Also, while the former wholly encourages voluntary blood
donation, the latter treats blood as a sale of commodity.
Two, the classification, and the consequent phase out of commercial blood banks is germane to the purpose
of the law, that is, to provide the nation with an adequate supply of safe blood by promoting voluntary blood
donation and treating blood transfusion as a humanitarian or medical service rather than a commodity. This
necessarily involves the phase out of commercial blood banks based on the fact that they operate as a business
enterprise, and they source their blood supply from paid blood donors who are considered unsafe compared to
voluntary blood donors as shown by the USAID-sponsored study on the Philippine blood banking system.
Three, the Legislature intended for the general application of the law. Its enactment was not solely to
address the peculiar circumstances of the situation nor was it intended to apply only to the existing conditions.
Lastly, the law applies equally to all commercial blood banks without exception.
Having said that, this Court comes to the inquiry as to whether or not Republic Act No. 7719 constitutes a
valid exercise of police power.
The promotion of public health is a fundamental obligation of the State. The health of the people is a
primordial governmental concern. Basically, the National Blood Services Act was enacted in the exercise of the
States police power in order to promote and preserve public health and safety.
Police power of the state is validly exercised if (a) the interest of the public generally, as distinguished from
those of a particular class, requires the interference of the State; and, (b) the means employed are reasonably
necessary to the attainment of the objective sought to be accomplished and not unduly oppressive upon
individuals.[46]
In the earlier discussion, the Court has mentioned of the avowed policy of the law for the protection of
public health by ensuring an adequate supply of safe blood in the country through voluntary blood donation.
Attaining this objective requires the interference of the State given the disturbing condition of the Philippine blood
banking system.
In serving the interest of the public, and to give meaning to the purpose of the law, the Legislature deemed
it necessary to phase out commercial blood banks. This action may seriously affect the owners and operators, as
well as the employees, of commercial blood banks but their interests must give way to serve a higher end for the
interest of the public.
The Court finds that the National Blood Services Act is a valid exercise of the States police power.
Therefore, the Legislature, under the circumstances, adopted a course of action that is both necessary and
reasonable for the common good. Police power is the State authority to enact legislation that may interfere with
personal liberty or property in order to promote the general welfare.[47]
It is in this regard that the Court finds the related grounds and/or issues raised by petitioners, namely,
deprivation of personal liberty and property, and violation of the non-impairment clause, to be unmeritorious.
Petitioners are of the opinion that the Act is unconstitutional and void because it infringes on the freedom
of choice of an individual in connection to what he wants to do with his blood which should be outside the domain
of State intervention. Additionally, and in relation to the issue of classification, petitioners asseverate that, indeed,
under the Civil Code, the human body and its organs like the heart, the kidney and the liver are outside the
commerce of man but this cannot be made to apply to human blood because the latter can be replenished by the
body. To treat human blood equally as the human organs would constitute invalid classification. [48]
Petitioners likewise claim that the phase out of the commercial blood banks will be disadvantageous to
them as it will affect their businesses and existing contracts with hospitals and other health institutions, hence
Section 7 of the Act should be struck down because it violates the non-impairment clause provided by the
Constitution.
As stated above, the State, in order to promote the general welfare, may interfere with personal liberty,
with property, and with business and occupations. Thus, persons may be subjected to certain kinds of restraints
and burdens in order to secure the general welfare of the State and to this fundamental aim of government, the
rights of the individual may be subordinated.[49]
Moreover, in the case of Philippine Association of Service Exporters, Inc. v. Drilon,[50] settled is the rule that the
non-impairment clause of the Constitution must yield to the loftier purposes targeted by the government. The right

granted by this provision must submit to the demands and necessities of the States power of regulation. While the
Court understands the grave implications of Section 7 of the law in question, the concern of the Government in this
case, however, is not necessarily to maintain profits of business firms. In the ordinary sequence of events, it is
profits that suffer as a result of government regulation.
Furthermore, the freedom to contract is not absolute; all contracts and all rights are subject to the police
power of the State and not only may regulations which affect them be established by the State, but all such
regulations must be subject to change from time to time, as the general well-being of the community may require,
or as the circumstances may change, or as experience may demonstrate the necessity. [51] This doctrine was
reiterated in the case of Vda. de Genuino v. Court of Agrarian Relations[52] where the Court held that individual
rights to contract and to property have to give way to police power exercised for public welfare.
As for determining whether or not the shutdown of commercial blood banks will truly serve the general
public considering the shortage of blood supply in the country as proffered by petitioners, we maintain that the
wisdom of the Legislature in the lawful exercise of its power to enact laws cannot be inquired into by the Court.
Doing so would be in derogation of the principle of separation of powers.[53]
That, under the circumstances, proper regulation of all blood banks without distinction in order to achieve the
objective of the law as contended by petitioners is, of course, possible; but, this would be arguing on what the
law may be or should be and not what the law is. Between is and ought there is a far cry. The wisdom and propriety
of legislation is not for this Court to pass upon.[54]
Finally, with regard to the petition for contempt in G.R. No. 139147, on the other hand, the Court finds
respondent Secretary of Healths explanation satisfactory. The statements in the flyers and posters were not aimed
at influencing or threatening the Court in deciding in favor of the constitutionality of the law.
Contempt of court presupposes a contumacious attitude, a flouting or arrogant belligerence in defiance of
the court.[55] There is nothing contemptuous about the statements and information contained in the health
advisory that were distributed by DOH before the TRO was issued by this Court ordering the former to cease and
desist from distributing the same.
In sum, the Court has been unable to find any constitutional infirmity in the questioned provisions of the
National Blood Services Act of 1994 and its Implementing Rules and Regulations.
The fundamental criterion is that all reasonable doubts should be resolved in favor of the constitutionality
of a statute. Every law has in its favor the presumption of constitutionality. For a law to be nullified, it must be
shown that there is a clear and unequivocal breach of the Constitution. The ground for nullity must be clear and
beyond reasonable doubt.[56] Those who petition this Court to declare a law, or parts thereof, unconstitutional must
clearly establish the basis therefor. Otherwise, the petition must fail.
Based on the grounds raised by petitioners to challenge the constitutionality of the National Blood Services
Act of 1994 and its Implementing Rules and Regulations, the Court finds that petitioners have failed to overcome
the presumption of constitutionality of the law. As to whether the Act constitutes a wise legislation, considering the
issues being raised by petitioners, is for Congress to determine.[57]
WHEREFORE, premises considered, the Court renders judgment as follows:
1.

In G.R. Nos. 133640 and 133661, the Court UPHOLDS THE VALIDITY of Section 7 of
Republic Act No. 7719, otherwise known as the National Blood Services Act of 1994, and
Administrative Order No. 9, Series of 1995 or the Rules and Regulations Implementing Republic Act
No. 7719. The petitions are DISMISSED. Consequently, the Temporary Restraining Order issued by
this Court on June 2, 1998, is LIFTED.

2.

In G.R. No. 139147, the petition seeking to cite the Secretary of Health in contempt
of court is DENIED for lack of merit.

No costs.
SO ORDERED.

PHILIPPINE
JOURNALISTS,
INC.
(PEOPLES
JOURNAL),
ZACARIAS
NUGUID, JR. and CRISTINA LEE,
P e t i t i o n e r s,

G.R. No. 143372

December 13, 2005

FRANCIS THOENEN,
R e s p o n d e n t.
For almost a century, this Court has sought that elusive equilibrium between the law on defamation on one
hand, and the constitutionally guaranteed freedoms of speech and press on the other. This case revisits that
search.
On 30 September 1990, the following news item appeared in the Peoples Journal, a tabloid of general
circulation:
Swiss Shoots Neighbors Pets
RESIDENTS of a subdivision in Paraaque have asked the Bureau of Immigration to deport a Swiss
who allegedly shoots wayward neighbors pets that he finds in his domain.
The BF Homes residents through lawyer Atty. Efren Angara complained that the deportation of
Francis Thoenen, of 10 Calcutta BF Homes Phase III, could help prevent the recurrence of such
incident in the future.
Angara explained that house owners could not control their dogs and cats when they slip out of
their dwellings unnoticed.
An alleged confrontation between Thoenen and the owner of a pet he shot recently threatens to
exacerbate the problem, Angara said.
Cristina Lee[1]
The subject of this article, Francis Thoenen, is a retired engineer permanently residing in this country with his
Filipina wife and their children. Claiming that the report was false and defamatory, and that the petitioners acted
irresponsibly in failing to verify the truth of the same prior to publication, he filed a civil case for damages against
herein petitioners Philippine Journalists, Inc., Zacarias Nuguid, Jr., its publisher, and reporter Cristina Lee.
Thoenen claimed that the article destroyed the respect and admiration he enjoyed in the community, and that
since it had been published, he and his wife received several queries and angry calls from friends, neighbors and
relatives. For the impairment of his reputation and standing in the community, and his mental anguish, Thoenen
soughtP200,000.00 in moral damages, P100,000.00 in exemplary damages, and P50,000.00 in attorneys fees.
The petitioners admitted publication of the news item, ostensibly out of a social and moral duty to inform the
public on matters of general interest, promote the public good and protect the moral public (sic) of the people, and
that the story was published in good faith and without malice.[2]
The principal source of the article was a letter[3] by a certain Atty. Efren Angara addressed to Commissioner
Andrea Domingo of the Commission on Immigration and Deportation (CID, now Bureau of Immigration), which
states:
Dear Madame:
We would like to request your office to verify the true status/authenticity of the residency
in the Philippines of a foreign national (a Swiss) by the name of Francis Thoenen who is
presently residing at No. 10 Calcuta cor. Beirut Street, BF Homes (PH. III), Paraaque, Metro
Manila. I received (sic) complaint from my clients residing around his vicinity that this
foreigner had (sic) been causing troubles ever since he showed up. He is too meticulous and
had (sic) been shooting dogs and cats passing his house wall everytime.
Such act which (sic) is unacceptable to the owners especially if inspite (sic) of control their
pets slips (sic) out unnoticed. A confrontation between him and the owner of the dog he shoot,
(sic) already occurred last time. In some instances this guy had been always driving his car
barbarously inside the subdivision with children playing around (sic) the street. Before my

clients petitioned themselves with the endorsement of the Homeowners Association and filed to
your office for deportation were respectfully seeking your assistance to investigate this alien to
prevent further incident occurrence (sic) in the future. He should not be allowed to dominate
the citizens of this country.
Atty. Efren B. Angara
The petitioners claim that Lee, as the reporter assigned to cover news events in the CID, acquired a copy of
the above letter from a trusted source in the CIDs Intelligence Division. They claimed to have reasonable grounds
to believe in the truth and veracity of the information derived (from their) sources. [4]
It was proven at trial that the news article contained several inaccuracies. The headline, which categorically
stated that the subject of the article engaged in the practice of shooting pets, was untrue.[5] Moreover, it is
immediately apparent from a comparison between the above letter and the news item in question that while the
letter is a mere request for verification of Thoenens status, Lee wrote that residents of BF Homes had asked the
Bureau of Immigration to deport a Swiss who allegedly shoots neighbors pets. No complaints had in fact been
lodged against him by any of the BF Homeowners,[6] nor had any pending deportation proceedings been initiated
against him in the Bureau of Immigration.[7]
Thoenen also submitted a Certification[8] from the Office of the Bar Confidant that there was no lawyer in its
rolls by the name of Efren Angara, earlier cited by petitioner Lee as the author of the letter on which she based her
article. Finally, the trial also showed that despite the fact that respondents address was indicated in the letter,
Cristina Lee made no efforts to contact either him or the purported letter-writer, Atty. Angara.[9]
The petitioners claim that Lee sought confirmation of the story from the newspapers correspondent in
Paraaque, who told her that a woman who refused to identify herself confirmed that there had indeed been an
incident of pet-shooting in the neighborhood involving the respondent.[10] However, the correspondent in question
was never presented in court to verify the truth of this allegation. Neither was the alleged CID source presented to
verify that the above letter had indeed come from the Department, nor even that the same was a certified true copy
of a letter on file in their office.
On 31 August 1994, the Regional Trial Court, Branch 62, Makati City, rendered a Decision[11] in favor of the
petitioners, which reads in part:
There is no malice on the part of the defendants in publishing the news item done in the
exercise of their profession as journalists reporting to the people on matters of public interest. The
news report was based on an official communication filed with the Bureau of Immigration and
Deportation.
As noted by the Court of Appeals in Marti(r)ez vs. Alanao, CA-G.R No. 27086, September 30,
1991, which is similar to the present case:
While indeed, the news item subject of the present case might have ruffled the sensitivities
of plaintiff, this Court however believes that the alleged defamatory articles falls within the purview
of a qualifiedly privileged matter, and that therefore, it cannot be presumed to be malicious. The
onus of proving malice is accordingly shifted to the plaintiff, that is, that he must prove that the
defendants were actuated by ill-will in what they caused to be printed and published, with a design
to carelessly or wantonly injure the plaintiff. (US vs. Bustos, et al., 37 Phil. 731)
This, plaintiff failed to do, consequently, his case must fall.
The publication in question is a privileged communication protected by the freedom of the
press.
WHEREFORE, the Complaint is hereby ordered DISMISSED WITHOUT PRONOUNCEMENT
AS TO COSTS.[12]
On appeal, the court a quo reversed[13] the trial court. It held that although freedom of expression and the
right of speech and of the press are among the most zealously guarded in the Constitution, still, in the exercise of
these rights, Article 19 of the Civil Code requires everyone to act with justice, give everyone his due, and observe

honesty and good faith. The appellate court emphasized that Thoenen was neither a public official nor a public
figure, and thus,
. . . [E]ven without malice on the part of defendants-appellees, the news item published in the
30 September 1990 edition of Peoples Journal had been done in violation of the principle of abuse
of right under Article 19 of the Civil Code, in the absence of a bona fide effort to ascertain the truth
thereof, i.e., to observe honesty and good faith, which makes their act a wrongful omission.
Neither did they act with justice and give everyone his due, because without ascertaining the
veracity of the information given them by the Intelligence Bureau of the Bureau of Immigration,
they published a news article which they were aware would bring the person specifically named
therein, viz, Francis Thoenen, the plaintiff-appellant in this case, into disrepute.
WHEREFORE, the foregoing considered, the Decision appealed from is hereby REVERSED
and SET ASIDE. In its stead, We find for the appellant and award him moral damages
of P200,000.00; exemplary damages of P50,000.00, and legal fees to P30,000.00; all of which shall
be borne jointly and severally by appellees.[14]
Petitioners motion for reconsideration having been denied,[15] this petition for certiorari under Rule 45 of
the 1997 Rules of Civil Procedure was filed on the following grounds:
1.

The Court of Appeals erred in finding the petitioners Cristina Lee, Nuguid and PJI liable under
Article 19 of the Civil Code.

2.

The Court of Appeals erred in finding the petitioners liable for libel even if the article was
based on a letter released by the Bureau of Immigration, hence a qualified privilege
communication.

3.

The Court of Appeals erred in concluding that petitioners did not ascertain the truth of the
subject news item.

4.

The Court of Appeals erred in awarding damages notwithstanding that the same was
excessive unconscionable and devoid of any basis.

The petitioners argue that this case is one for damages arising from libel, and not one for abuse of rights
under the New Civil Code. They further claim the constitutional protections extended by the freedom of speech
and of the press clause of the 1987 Constitution against liability for libel, claiming that the article was published in
fulfillment of its social and moral duty to inform the public on matters of general interest, promote the public good
and protect the moral [fabric] of the people.[16] They insist that the news article was based on a letter released by
the Bureau of Immigration, and is thus a qualifiedly privileged communication. To recover damages, the
respondent must prove its publication was attended by actual malice - that is, with knowledge that it was false or
with reckless disregard of whether it was false or not.[17]
For the reasons stated below, we hold that the constitutional privilege granted under the freedom of speech
and the press against liability for damages does not extend to the petitioners in this case.
The freedom of speech and of the press is not absolute. The freedom of speech and press and assembly, first
laid down by President McKinley in the Instruction to the Second Philippine Commission of 07 April 1900, is an
almost verbatim restatement of the first amendment of the Constitution of the United States. [18] Enshrined in
Section 4, Article III of the Bill of Rights of the 1987 Constitution, it states, No law shall be passed abridging the
freedom of speech, of expression, or of the press, or the right of the people peaceably to assemble and petition the
government for redress of grievances.
But not all speech is protected. The right of free speech is not absolute at all times and under all
circumstances. There are certain well-defined and narrowly limited classes of speech, the prevention and
punishment of which has never been thought to raise any Constitutional problem. These include the lewd and
obscene, the profane, the libelous, and the insulting or fighting words - those which by their very utterance inflict
injury or tend to incite an immediate breach of the peace. It has been well observed that such utterances are no
essential part of any exposition of ideas, and are of such slight social value as a step to truth that any benefit that
may be derived from them is clearly outweighed by the social interest in order and morality. [19]
Libel is not protected speech. Article 353 of the Revised Penal Code defines libel as a public and malicious
imputation of a crime, or of a vice or defect, real or imaginary, or any act, omission, condition, status, or

circumstance tending to cause the dishonor, discredit, or contempt of a natural or juridical person, or to blacken
the memory of one who is dead.
For an imputation to be libelous, the following requisites must be met: (a) the allegation of a discreditable
act or condition concerning another; (b) publication of the charge; (c) identity of the person defamed; and (d)
existence of malice.[20] In Vasquez v. Court of Appeals,[21] we had occasion to further explain. Thus:
An allegation is considered defamatory if it ascribes to a person the commission of a crime, the
possession of a vice or defect, real or imaginary, or any act, omission, condition, status or
circumstance which tends to dishonor or discredit or put him in contempt, or which tends to
blacken the memory of one who is dead.
There is publication if the material is communicated to a third person. It is not required that
the person defamed has read or heard about the libelous remark. What is material is that a third
person has read or heard the libelous statement, for a mans reputation is the estimate in which
others hold him, not the good opinion which he has of himself.
On the other hand, to satisfy the element of identifiability, it must be shown that at least a third
person or a stranger was able to identify him as the object of the defamatory statement.
Finally, malice or ill will must be present. Art. 354 of the Revised Penal Code provides:
Every defamatory imputation is presumed to be malicious, even if it be true, if no
good intention and justifiable motive for making it is shown, except in the following
cases:
1.

A private communication made by any person to another in the

performance of any legal, moral or security duty; and

2. A fair and true report, made in good faith, without any comments or
remarks, of any judicial, legislative or other official proceedings which are
not of confidential nature, or of any statement, report or speech delivered
in said proceedings, or of any other act performed by public officers in the
exercise of their functions. (citations omitted, emphasis supplied)
In this case, there is no controversy as to the existence of the three elements. The respondents name and
address were clearly indicated in the article ascribing to him the questionable practice of shooting the wayward
pets of his neighbors. The backlash caused by the publication of the article was in fact such that stones had been
thrown at their house, breaking several flower pots, and daily and nightly calls compelled him to request a change
of their telephone number.[22] These facts are not contested by the petitioners. What the petitioners claim is the
absence of proof of the fourth element - malice.
As a general rule, malice is presumed. Article 354 of the Revised Penal Code states:
ART. 354. Requirement of Publicity. - Every defamatory imputation is presumed to be malicious,
even if it be true, if no good intention and justifiable motive for making it is shown, except in the
following cases:
1.

A private communication made by any person to another in the performance of any legal,
moral or social duty; and
2. A fair and true report, made in good faith, without any comments or remarks, of any
judicial, legislative or other official proceedings which are not of confidential nature, or of
any statement, report or speech delivered in said proceedings, or of any other act performed
by public officers in the exercise of their functions.
The article is not a privileged communication. We first discussed the freedom of speech and press and
assembly vis-a-vis the laws on libel and slander in the groundbreaking case of US v. Bustos,[23] where we applied the
prevailing English and American jurisprudence to the effect that:
The interest of society and the maintenance of good government demand a full discussion of public affairs.
Complete liberty to comment on the conduct of public men is a scalpel in the case of free speech. The sharp incision
of its probe relieves the abscesses of officialdom. Men in public life may suffer under a hostile and an unjust
accusation; the wound can be assuaged with the balm of a clear conscience. A public officer must not be too thinskinned with reference to comment upon his official acts. Only thus can the intelligence and dignity of the
individual be exalted. Of course, criticism does not authorize defamation. Nevertheless, as the individual is less
than the State, so must expected criticism be born for the common good? Rising superior to any official, or set of

officials, to the Chief Executive, to the Legislature, to the Judiciary - to any or all the agencies of Government public opinion should be the constant source of liberty and democracy. (citations omitted)
The demand to protect public opinion for the welfare of society and the orderly administration of
government inevitably lead to the adoption of the doctrine of privileged communication. A privileged
communication may be either absolutely privileged or qualifiedly privileged. Absolutely privileged
communications are those which are not actionable even if the author has acted in bad faith. An example is found
in Sec. 11, Art. VI of the 1987 Constitution which exempts a member of Congress from liability for any speech or
debate in the Congress or in any Committee thereof. Upon the other hand, qualifiedly privileged communications
containing defamatory imputations are not actionable unless found to have been made without good intention or
justifiable motive. To this genre belong private communications and fair and true report without any comments
or remarks.[24]
The appellate court correctly ruled that the petitioners story is not privileged in character, for it is neither
private communication nor a fair and true report without any comments or remarks.
US v. Bustos defined the concept of private communication thus: A communication made bona fide upon
any subject-matter in which the party communicating has an interest, or in reference to which he has a duty, is
privileged, if made to a person having a corresponding interest or duty, although it contained criminatory matter
which without this privilege would be slanderous and actionable. A pertinent illustration of the application of
qualified privilege is a complaint made in good faith and without malice in regard to the character or conduct of
a public official when addressed to an officer or a board having some interest or duty in the matter.[25]
This defense is unavailing to petitioners. In Daez v. Court of Appeals[26] we held that:
As a rule, it is the right and duty of a citizen to make a complaint of any misconduct on the
part of public officials, which comes to his notice, to those charged with supervision over them.
Such a communication is qualifiedly privileged and the author is not guilty of libel. The rule on
privilege, however, imposes an additional requirement. Such complaints should be addressed solely
to some official having jurisdiction to inquire into the charges, or power to redress the grievance or
has some duty to perform or interest in connection therewith. (emphasis supplied)
In the instant case, even if we assume that the letter written by the spurious Atty. Angara is privileged
communication, it lost its character as such when the matter was published in the newspaper and circulated
among the general population. A written letter containing libelous matter cannot be classified as privileged when it
is published and circulated in public,[27] which was what the petitioners did in this case.
Neither is the news item a fair and true report without any comments or remarks of any judicial, legislative
or other official proceedings; there is in fact no proceeding to speak of. Nor is the article related to any act
performed by public officers in the exercise of their functions, for it concerns only false imputations against
Thoenen, a private individual seeking a quiet life.
The petitioners also claim to have made the report out of a social and moral duty to inform the public on
matters of general interest.
In Borjal v. Court of Appeals, we stated that the enumeration under Art. 354 is not an exclusive list of
qualifiedly privileged communications since fair commentaries on matters of public interest are likewise
privileged. We stated that the doctrine of fair commentaries means that while in general every discreditable
imputation publicly made is deemed false, because every man is presumed innocent until his guilt is judicially
proved, and every false imputation is deemed malicious, nevertheless, when the discreditable imputation is
directed against a public person in his public capacity, it is not necessarily actionable. In order that such
discreditable imputation to a public official may be actionable, it must either be a false allegation of fact or a
comment based on a false supposition.[28]
Again, this argument is unavailing to the petitioners. As we said, the respondent is a private individual, and
not a public official or public figure. We are persuaded by the reasoning of the United States Supreme Court
in Gertz v. Robert Welch, Inc.,[29] that a newspaper or broadcaster publishing defamatory falsehoods about
an individual who is neither a public official nor a public figure may not claim a constitutional privilege against
liability, for injury inflicted, even if the falsehood arose in a discussion of public interest.[30]
Having established that the article cannot be considered as privileged communication, malice is therefore
presumed, and the fourth requisite for the imputation of libel to attach to the petitioners in this case is met. The

news article is therefore defamatory and is not within the realm of protected speech. There is no longer a need to
discuss the other assignment of errors, save for the amount of damages to which respondent is entitled.
In Policarpio v. Manila Times Publishing Co., Inc.,[31] we awarded damages where the defendants deliberately
presented a private individual in a worse light that what she actually was, and where other factual errors were not
prevented although defendants had the means to ascertain the veracity of their report. Such are the facts obtaining
here.
We must point out that Lees brief news item contained falsehoods on two levels. On its face, her statement
that residents of BF Homes had asked the Bureau of Immigration to deport a Swiss who allegedly shoots
neighbors pets is patently untrue since the letter of the spurious Atty. Angara was a mere request for verification
of Thoenens status as a foreign resident. Lees article, moreover, is also untrue, in that the events she reported
never happened. The respondent had never shot any of his neighbors pets, no complaints had been lodged against
him by his neighbors, and no deportation proceedings had been initiated against him. Worse, the author of Lees
main source of information, Atty. Efren Angara, apparently either does not exist, or is not a lawyer. Petitioner Lee
would have been enlightened on substantially all these matters had she but tried to contact either Angara or
Thoenen.
Although it has been stressed that a newspaper should not be held to account to a point of suppression
for honest mistakes, or imperfection in the choice of words,[32]even the most liberal view of free speech has never
countenanced the publication of falsehoods, especially the persistent and unmitigated dissemination of patent
lies.[33] There is no constitutional value in false statements of fact. Neither the intentional lie nor the careless
error materially advances societys interest in uninhibited, robust, and wide-open debate.[34] The use of the
known lie as a tool is at once at odds with the premises of democratic government and with the orderly manner in
which economic, social, or political change is to be effected. Calculated falsehood falls into that class of utterances
which are no essential part of any exposition of ideas, and are of such slight social value as a step to truth that any
benefit that may be derived from them is clearly outweighed by the social interest in order and morality The
knowingly false statement and the false statement made with reckless disregard of the truth, do not enjoy
constitutional protection (citations omitted).[35]
The legitimate state interest underlying the law of libel is the compensation of the individuals for the harm
inflicted upon them by defamatory falsehood. After all, the individuals right to protection of his own good name
reflects no more than our basic concept of the essential dignity and worth of every human being a concept at the
root of any decent system of ordered liberty.[36]
The appellate court awarded Thoenen moral damages of P200,000.00, exemplary damages of P50,000.00
and legal fees of P30,000.00, to be borne jointly and severally by the herein petitioners. In Guevarra v.
Almario,[37] we noted that the damages in a libel case must depend upon the facts of the particular case and the
sound discretion of the court, although appellate courts were more likely to reduce damages for libel than to
increase them.[38] So it is in this case.
WHEREFORE, the Decision of the Court of Appeals of 17 January 2000 reversing the Decision of the
Regional Trial Court, Branch 62, Makati City, of 31 August 1994 is hereby AFFIRMED, subject to the modification
that petitioners are ordered to pay, jointly and severally, moral damages in the sum of P100,000.00, exemplary
damages ofP30,000.00, and legal fees of P20,000.00. No costs. SO ORDERED.
Defamation and Freedom of the Press (Phil. Journalists, Inc. et al. vs. Francis Thoenen, December 13, 2005).
Ordinarily, the relief indicated by the material facts would be the remand of the reconstitution case (LRC No. Q5405) to the Court of origin with instructions that Ortigas and the Solicitor Generals appeals from the judgment
rendered therein, which were wrongly disallowed, be given due course and the records forthwith transmitted to
the appellate tribunal.
This, in fact, is a relief alternatively prayed for by petitioner Ortigas. Considering however the fatal infirmities
afflicting Molinas theory or cause of action, evident from the records before this Court, such a remand and
subsequent appeal proceedings would be pointless and unduly circuitous. Upon the facts, it is not possible for
Molinas cause to prosper. To defer adjudication thereon would be unwarranted and unjust.
The same rationale should apply in the instant case. As already discussed, the validity of respondents and
petitioners title have been squarely passed upon by the LRA and reviewed and affirmed by the Court of Appeals,
which factual findings are no longer reviewable by this Court.

A careful examination of the case of Spouses Cayetano, et al. v. CA, et al.,

40 where this Court, as claimed by petitioners, have affirmed their title over the disputed property, would reveal
that the sole issue resolved therein is whether or not a tenancy relationship exists between the parties.
41 There was no adjudication on ownership. In fact, it cannot even be discerned if the property subject of the
Spouses Cayetano case refers to the property subject of the instant controversy.
There is no basis in the allegation that petitioners were deprived of "their property" without due process of law
when the Court of Appeals ordered the cancellation of their Torrens title, even without a direct proceeding in the
RTC.
As already discussed, there is no need to remand the case to the RTC for a re-determination on the validity of the
titles of respondents and petitioners as the same has been squarely passed upon by the LRA and affirmed by the
appellate court. By opposing the petition for reconstitution and submitting their administratively reconstituted
title, petitioners acquiesced to the authority and jurisdiction of the reconstituting officer, the LRA and the Court of
Appeals, and recognized their authority to pass judgment on their title.
All the evidence presented was duly considered by these tribunals. There is thus no basis to petitioners claim that
they were deprived of their right to be heard and present evidence, which is the essence of due process. As held in
Yusingco v. Ong Hing Lian:
42 Therefore, it appearing from the records that in the previous petition for reconstitution of certificates of title,
the parties acquiesced in submitting the issue of ownership for determination in the said petition, and they were
given the full opportunity to present their respective sides of the issues and evidence in support thereof, and that
the evidence presented was sufficient and adequate for rendering a proper decision upon the issue, the
adjudication of the issue of ownership was valid and binding.
The reconstitution would not constitute a collateral attack on petitioners title which was irregularly and illegally
issued in the first place.
43 As pertinently held in Dolfo v. Register of Deeds for the Province of Cavite:
44 The rule that a title issued under the Torrens System is presumed valid and, hence, is the best proof of
ownership of a piece of land does not apply where the certificate itself is faulty as to its purported origin.
In this case, petitioner anchors her arguments on the premise that her title to the subject property is indefeasible
because of the presumption that her certificate of title is authentic. However, this presumption is overcome by the
evidence presented, consisting of the LRA report that TCT No. T-320601 was issued without legal basis .
Thus, petitioner cannot invoke the indefeasibility of her certificate of title. It bears emphasis that the Torrens
system does not create or vest title but only confirms and records one already existing and vested. Thus, while it
may be true, as petitioner argues, that a land registration court has no jurisdiction over parcels of land already
covered by a certificate of title, it is equally true that this rule applies only where there exists no serious
controversy as to the authenticity of the certificate.
Under similar circumstances, this Court has ruled that wrongly reconstituted certificates of title secured through
fraud and misrepresentation cannot be the source of legitimate rights and benefits.
45 WHEREFORE, the petitions are DENIED. In G.R. No. 162335, the February 24, 2004 Amended Decision of the
Third Division of the Court of Appeals in CA-G.R. SP No. 66642, ordering the Register of Deeds of Quezon City to
cancel petitioners TCT No. RT-22481 and directing the Land Registration Authority to reconstitute respondents
TCT No. 210177; and in G.R. No. 162605, the November 7, 2003 Amended Decision of the Special Division of Five of
the Former Second Division in CA-G.R. SP No. 66700 directing the Register of Deeds of Quezon City to cancel
petitioners TCT No. RT-22481, and the Land Registration Authority to reconstitute respondents TCT No. T210177 and the March 12, 2004 Resolution denying the motion for reconsideration, are AFFIRMED.
SO ORDERED.

G.R. No. 143372

PHILIPPINE JOURNALISTS, INC. (PEOPLES JOURNAL), ZACARIAS NUGUID, JR. and CRISTINA LEE,
Petitioners,
- versus FRANCIS THOENEN,
Respondent.
Promulgated:
December 13, 2005
DECISION
CHICO-NAZARIO, J.:
For almost a century, this Court has sought that elusive equilibrium between the law on defamation on one hand,
and the constitutionally guaranteed freedoms of speech and press on the other. This case revisits that search.
On 30 September 1990, the following news item appeared in the Peoples Journal, a tabloid of general circulation:
Swiss Shoots Neighbors Pets
RESIDENTS of a subdivision in Paraaque have asked the Bureau of Immigration to deport a Swiss who allegedly
shoots wayward neighbors pets that he finds in his domain.
The BF Homes residents through lawyer Atty. Efren Angara complained that the deportation of Francis Thoenen, of
10 Calcutta BF Homes Phase III, could help "prevent the recurrence of such incident in the future."
Angara explained that house owners could not control their dogs and cats when they slip out of their dwellings
unnoticed.
An alleged confrontation between Thoenen and the owner of a pet he shot recently threatens to exacerbate the
problem, Angara said.
Cristina Lee
1 The subject of this article, Francis Thoenen, is a retired engineer permanently residing in this country with his
Filipina wife and their children.
Claiming that the report was false and defamatory, and that the petitioners acted irresponsibly in failing to verify
the truth of the same prior to publication, he filed a civil case for damages against herein petitioners Philippine
Journalists, Inc., Zacarias Nuguid, Jr., its publisher, and reporter Cristina Lee.
Thoenen claimed that the article destroyed the respect and admiration he enjoyed in the community, and that
since it had been published, he and his wife received several queries and angry calls from friends, neighbors and
relatives.
For the impairment of his reputation and standing in the community, and his mental anguish, Thoenen sought
P200,000.00 in moral damages, P100,000.00 in exemplary damages, and P50,000.00 in attorneys fees.
The petitioners admitted publication of the news item, ostensibly out of a "social and moral duty to inform the
public on matters of general interest, promote the public good and protect the moral public (sic) of the people,"
and that the story was published in good faith and without malice.
2 The principal source of the article was a letter3 by a certain Atty. Efren Angara addressed to Commissioner
Andrea Domingo of the Commission on Immigration and Deportation (CID, now Bureau of Immigration), which
states:
Dear Madame:

We would like to request your office to verify the true status/authenticity of the residency in the Philippines of a
foreign national (a Swiss) by the name of Francis Thoenen who is presently residing at No. 10 Calcuta cor. Beirut
Street, BF Homes (PH. III), Paraaque, Metro Manila. I received (sic) complaint from my clients residing around his
vicinity that this foreigner had (sic) been causing troubles ever since he showed up.
He is too meticulous and had (sic) been shooting dogs and cats passing his house wall everytime.
Such act which (sic) is unacceptable to the owners especially if inspite (sic) of control their pets slips (sic) out
unnoticed.
A confrontation between him and the owner of the dog he shoot, (sic) already occurred last time. In some instances
this guy had been always driving his car barbarously inside the subdivision with children playing around (sic) the
street.
Before my clients petitioned themselves with the endorsement of the Homeowners Association and filed to your
office for deportation were respectfully seeking your assistance to investigate this alien to prevent further incident
occurrence (sic) in the future. He should not be allowed to dominate the citizens of this country.
Very truly yours,
Atty. Efren B. Angara
The petitioners claim that Lee, as the reporter assigned to cover news events in the CID, acquired a copy of the
above letter from a trusted source in the CIDs Intelligence Division. They claimed to "have reasonable grounds to
believe in the truth and veracity of the information derived (from their) sources."
4 It was proven at trial that the news article contained several inaccuracies. The headline, which categorically
stated that the subject of the article engaged in the practice of shooting pets, was untrue.
5 Moreover, it is immediately apparent from a comparison between the above letter and the news item in question
that while the letter is a mere request for verification of Thoenens status, Lee wrote that residents of BF Homes
had "asked the Bureau of Immigration to deport a Swiss who allegedly shoots neighbors pets." No complaints had
in fact been lodged against him by any of the BF Home-owners,
6 nor had any pending deportation proceedings been initiated against him in the Bureau of Immigration.

G.R. No. 167304 August 25, 2009

PEOPLE OF THE PHILIPPINES, PETITIONER, VS. SANDIGANBAYAN (THIRD DIVISION) AND VICTORIA
AMANTE, RESPONDENTS.
[PERALTA]
Facts:

Victoria Amante was a member of the Sangguniang Panlungsod of Toledo City, Province of Cebu at the time
pertinent to this case. On January 14, 1994, she was able to get hold of a cash advance in the amount of P71,095.00
in order to defray seminar expenses of the Committee on Health and Environmental Protection, which she headed.
No liquidation was made after almost two years and so on December 22, 1995, a demand letter was issued by the
City Auditor asking respondent to settle her unliquidated cash advance within 72 hours from receipt of the
demand. Upon the recommendation of the Commission on Audit (COA), the Office of the Deputy Ombudsman for
Visayas (OMB-Visayas) resolved to file an Information for Malversation of Public Funds. The Office of the Special
Prosecutor (OSP) found probable cause to indict respondent Amante and thus on May 21, 2004, the Office of the
Special Prosecutor(OSP) filed an Information with the Sandiganbayan accusing Victoria Amante of violating Section
89 of P.D. No. 1445 (The Auditing Code of the Philippines).
Respondent Amante in her MOTION TO DEFER ARRAIGNMENT AND MOTION FOR REINVESTIGATION
dated November 18, 2004 stated that the Sandiganbayan had no jurisdiction over the said criminal case because
respondent Amante was then a local official who was occupying a position of salary grade 26, whereas Section 4 of
Republic Act (R.A.) No. 8249 provides that the Sandiganbayan shall have original jurisdiction only in cases where
the accused holds a position otherwise classified as Grade 27 and higher, of the Compensation and Position
Classification Act of 1989, R.A. No. 6758.
The Sandiganbayan, in its Resolution dated February 28, 2005, dismissed the case against Amante for lack
of jurisdiction. The dismissal, however, is without prejudice to the filing of this case to the proper court.
Issue/s:
Whether or not a member of the Sangguniang Panlungsod under Salary Grade 26 who was charged with
violation of The Auditing Code of the Philippines falls within the jurisdiction of the Sandiganbayan.
Ruling:
The present case falls under P.D. No. 1606 as amended by R.A. No. 8249. Under Section 4(a) of said law, the
following offenses are specifically enumerated: violations of R.A. No. 3019, as amended, R.A. No. 1379, and Chapter
II, Section 2, Title VII of the Revised Penal Code. In order for the Sandiganbayan to acquire jurisdiction over the
said offenses, the latter must be committed by, among others, officials of the executive branch occupying positions
of regional director and higher, otherwise classified as Grade 27 and higher, of the Compensation and Position
Classification Act of 1989. However, the law is not devoid of exceptions. Those that are classified as Grade 26 and
below may still fall within the jurisdiction of the Sandiganbayan provided that they hold the positions thus
enumerated by the same law. Particularly and exclusively enumerated are provincial governors, vice-governors,
members of the Sangguniang Panlalawigan, and provincial treasurers, assessors, engineers, and other provincial
department heads; city mayors, vice-mayors, members of the Sangguniang Panlungsod, city treasurers,
assessors, engineers , and other city department heads; officials of the diplomatic service occupying the position as
consul and higher; Philippine army and air force colonels, naval captains, and all officers of higher rank; PNP chief
superintendent and PNP officers of higher rank; City and provincial prosecutors and their assistants, and officials
and prosecutors in the Office of the Ombudsman and special prosecutor; and presidents, directors or trustees, or
managers of government-owned or controlled corporations, state universities or educational institutions or
foundations. In connection therewith, Section 4(b) of the same law provides that other offenses or felonies
committed by public officials and employees mentioned in subsection (a) in relation to their office also fall under
the jurisdiction of the Sandiganbayan.
By simple analogy, applying the provisions of the pertinent law, respondent Amante, being a member of the
Sangguniang Panlungsod at the time of the alleged commission of an offense in relation to her office, falls within
the original jurisdiction of the Sandiganbayan. The provision of the law shows that those public officials
enumerated in Section 4(a) of P.D. No. 1606, as amended, may not only be charged in the Sandiganbayan with
violations of R.A. No. 3019, R.A. No. 1379 or Chapter II, Section 2, Title VII of the Revised Penal Code, but also with
other offenses or felonies in relation to their office. The said other offenses and felonies are broad in scope but are
limited only to those that are committed in relation to the public official or employee's office.
In the offenses involved in Section 4(a), public office is essential as an element of the said offenses
themselves, while in those offenses and felonies involved in Section 4(b), it is enough that the said offenses and
felonies were committed in relation to the public officials or employees' office. Moreover, Section 4(b) does not

mention any qualification as to the public officials involved. It simply stated, public officials and employees
mentioned in subsection (a) of the same section. Therefore, it refers to those public officials with Salary Grade 27
and above, except those specifically enumerated. It is a well-settled principle of legal hermeneutics that words of a
statute will be interpreted in their natural, plain and ordinary acceptation and signification, unless it is evident that
the legislature intended a technical or special legal meaning to those words.
The Petition was GRANTED and the Resolution of the Sandiganbayan (Third Division) NULLIFIED and SET
ASIDE. Consequently, case was REMANDED to the Sandiganbayan for further proceedings.

G.R. NO. 152574, NOVEMBER 17, 2004

FRANCISCO ABELLA JR., PETITIONER, VS. CIVIL SERVICE COMMISSION, RESPONDENT.
[PANGANIBAN.]
Facts:
Petitioner Francisco A. Abella, Jr., a lawyer, retired from the Export Processing Zone Authority (EPZA), now
the Philippine Economic Zone Authority (PEZA), on July 1, 1996 as Department Manager of the Legal Services
Department. He held a civil service eligibility for the position of Department Manager, having completed the
training program for Executive Leadership and Management in 1982 under the Civil Service Academy, pursuant to
CSC Resolution No. 850 dated April 16, 1979, which was then the required eligibility for said position.
On May 31, 1994, the Civil Service Commission issued Memorandum Circular No. 21, series of 1994 with
Section 4 enumerating the positions covered by the Career Executive Service (CES). These positions require Career
Service Executive Eligibility (CSEE) as a requirement for permanent appointment. But, this provides that
incumbents to CES shall retain their permanent appointment but upon promotion or transfer to other CES
positions, they shall be under temporary status until they qualify.
Two years after his retirement, petitioner was hired by the Subic Bay Metropolitan Authority (SBMA) on a
contractual basis. On January 1, 1999, petitioner was issued by SBMA a permanent employment as Department
Manager III, Labor and EmploymentCenter. However, when said appointment was submitted to respondent Civil
Service Commission Regional Office No. III, it was disapproved on the ground that petitioners eligibility was not
appropriate. Petitioner was advised by SBMA of the disapproval of his appointment. In view thereof, petitioner was
issued a temporary appointment as Department Manager III, Labor and Employment Center, SBMA on July 9, 1999.
Petitioner appealed the disapproval of his permanent appointment by respondent to the Civil Service Commission,
which issued Resolution No. 000059, dated January 10, 2000, affirming the action taken by respondent.
Petitioners motion for reconsideration thereof was denied by the CSC in Resolution No. 001143 dated May 11,
2000.
Petitioner appealed to the Court of Appeals but it ruled that he did not have legal standing to question the
disapproval and was not the real party in interest.
Issue/s:
1. Whether the petitioner has the personality and the real party in interest to question the disapproval of his
appointment.
2. Whether the issuance of Section 4 of CSC Memorandum Circular No. 21, s. 1994, which deprived petitioner his
property right without due process of law, is constitutional.
3. Whether the CSC correctly denied his appointment.
A.

Ruling:
Personality and real party in interest.
The CSCs disapproval of an appointment is a challenge to the exercise of the appointing authoritys discretion.
The appointing authority must have the right to contest the disapproval. While there is justification to allow the
appointing authority to challenge the CSC disapproval, there is none to preclude the appointee from taking the
same course of action. Aggrieved parties, including the CSC, should be given the right to file motions for
reconsideration or to appeal. On this point, the concepts of legal standing and real party in interest become
relevant.
The question in legal standing is whether such parties have alleged such a personal stake in the outcome of the
controversy to assure that concrete adverseness which sharpens the presentation of issues upon which the court
so largely depends for illumination of difficult constitutional questions. If legal standing is granted to challenge the
constitutionality or validity of a law or governmental act despite the lack of personal injury on the challengers
part, then more so should petitioner be allowed to contest the CSC Order disapproving his appointment. Clearly,
the petitioner was prejudiced by the disapproval, since he could not continue his office. Although petitioner had no
vested right to the position, it was his eligibility that was being questioned. Corollary to this point, he should be
granted the opportunity to prove his eligibility. He had a personal stake in the outcome of the case, which justifies
his challenge to the CSC act that denied his permanent appointment.
A real party in interest is one who would be benefited or injured by the judgment, or one entitled to the avails
of the suit. Interest within the meaning of the rule means material interest or an interest in issue and to be
affected by the decree, as distinguished from mere interest in the question involved or a mere incidental interest.
Otherwise stated, the rule refers to a real or present substantial interest as distinguished from a mere expectancy;
or from a future, contingent, subordinate, or consequential interest. As a general rule, one who has no right or
interest to protect cannot invoke the jurisdiction of the court as a party-plaintiff in an action.

Although the earlier discussion demonstrates that the appointing authority is adversely affected by the CSCs
Order and is a real party in interest, the appointee is rightly a real party in interest too. He is also injured by the
CSC disapproval, because he is prevented from assuming the office in a permanent capacity. Moreover, he would
necessarily benefit if a favorable judgment is obtained, as an approved appointment would confer on him all the
rights and privileges of a permanent appointee.
B.

Due Process
Civil Service laws have expressly empowered the CSC to issue and enforce rules and regulations to carry out its
mandate. In the exercise of its authority, the CSC deemed it appropriate to clearly define and identify positions
covered by the Career Executive Service. Logically, the CSC had to issue guidelines to meet this objective,
specifically through the issuance of the challenged Circular.
The challenged Circular did not revoke petitioners ELM eligibility. He was appointed to a CES position;
however, his eligibility was inadequate. Eligibility must necessarily conform to the requirements of the position,
which in petitioners case was a Career Service Executive Eligibility (CSEE). The challenged Circular protects the
rights of incumbents as long as they remain in the positions to which they were previously appointed. They are
allowed to retain their positions in a permanent capacity, notwithstanding the lack of CSEE. Clearly, the Circular
recognizes the rule of prospectivity of regulations; hence, it is not an post facto law or a bill of attainder.
In the present case, the government service of petitioner ended when he retired in 1996; thus, his right to
remain in a CES position, notwithstanding his lack of eligibility, also ceased. Upon his reemployment years later as
department manager III at SBMA in 2001, it was necessary for him to comply with the eligibility prescribed at the
time for that position.
On petitioners averment that he was not afforded due process for CSCs alleged failure to notify him of a
hearing relating to the issuance of the challenged Circular, is not convincing. The issuance of the circular was an
exercise of a quasi-legislative function as such, prior notice to and hearing of every affected party, as elements of
due process, are not required since there is no determination of past events or facts that have to be established or
ascertained. As a general rule, prior notice and hearing are not essential to the validity of rules or regulations
promulgated to govern future conduct.

C.

Whether CSC correctly denied his appointment

Since petitioner had no CES eligibility, the CSC correctly denied his permanent appointment. The appointee
need not have been previously heard, because the nature of the action did not involve the imposition of an
administrative disciplinary measure. The CSC, in approving or disapproving an appointment, merely examines the
conformity of the appointment with the law and the appointees possession of all the minimum qualifications and
none of the disqualification. In sum, while petitioner was able to demonstrate his standing to appeal the CSC
Resolutions to the courts, he failed to prove his eligibility to the position he was appointed to.
The Petition was GRANTED insofar as it seeks legal standing for petitioner, but DENIED insofar as it prays for the
reversal of the CSC Resolutions disapproving his appointment as department manager III of the Labor
and Employment Center, Subic Bay Metropolitan Authority.

G.R. NOS. 174730-37, FEBRUARY 09, 2011

ROSALIO S. GALEOS, PETITIONER, VS. PEOPLE OF THE PHILIPPINES, RESPONDENT.
[G.R. NOS. 174845-52]
PAULINO S. ONG, PETITIONER, VS. PEOPLE OF THE PHILIPPINES, RESPONDENT.
[VILLARAMA, JR.]
Facts:
The consolidated petitions seek to reverse the seek to reverse the decision of the Sandiganbayan convicting
the petitioners of falsification of public documents under Article 171 paragraph 4 of the Revised Penal Code, as
amended.
Ong was appointed Officer-in-Charge (OIC)-Mayor of the Municipality of Naga, Cebu on April 16, 1986. He
was elected Mayor of the same municipality in 1988 and served as such until 1998. On June 1, 1994, Ong extended
permanent appointments to Galeos and Federico T. Rivera (Rivera) for the positions of Construction and
Maintenance Man and Plumber I, respectively, in the Office of the Municipal Engineer. In their individual Statement
of Assets, Liabilities and Net Worth (SALN) for the year 1993, Galeos answered "No" to the question: "To the best of
your knowledge, are you related within the fourth degree of consanguinity or of affinity to anyone working in the
government?" while Rivera indicated "n/a" on the space for the list of the names of relatives referred to in the said
query. In the subsequents SALNs the said query was either marked No or left blank by Galeos and Rivera. Ong's
signature appears in all the foregoing documents as the person who administered the oath when Galeos and Rivera
executed the foregoing documents.
Ong and HR Officer-Designate Editha C. Garcia signed a certification addressed to the CSC Region 7 that
pursuant to the provisions of R.A. 7160, otherwise known as the Local Government Code of 1991, all
restrictions/requirements relative to creation of positions, hiring and issuance of appointments, Section 325 on the
limitations for personal services in the total/supplemental appropriation of a local government unit; salary rates;
abolition and creation of positions, etc.; Section 76, organizational structure and staffing pattern; Section 79 on
nepotism; Section 80, posting of vacancy and personnel selection board; Section 81 on compensation, etc. have
been duly complied with in the issuance of this appointment. The certification also states that faithful observance
of these restrictions/requirements was made in accordance with the requirements of the Civil Service Commission
before the appointment was submitted for review and action.
Acting upon a complaint filed by the members of the Sangguniang Bayan of Naga, the OIC-Deputy
Ombudsman for the Visayas filed criminal charges against petitioners for falsification of public documents
consisting of the SALN filed by accused Rosalio S. Galeos and subscribed and sworn to before accused Paulino S.
Ong, wherein accused made it appear therein that they are not related within the fourth degree of consanguinity or
affinity thereby making untruthful statements in a narration of facts, when in truth and in fact, accused very well
knew that they are related with each other, since accused Rosalio S. Galeos is related to accused Paulino S. Ong
within the fourth degree of consanguinity, the mother of accused Rosalio S. Galeos being the sister of the mother of
accused Paulino S. Ong. Both petitioners said that they were not aware that they were relatives within the fourth
degree of consanguinity.
On August 18, 2005, the Sandiganbayan convicted the petitioners guilty of the crime charged.
Issue/s:
Whether the petitioners lack of knowledge of their relationship at the time of the execution of the public
document could exempt them from the criminal liability of falsification of public documents.
Ruling:
Article 171, paragraph 4 of the Revised Penal Code, as amended, states that falsification of public
documents by a public officer includes making untruthful statements in a narration of facts. The elements of
falsification are: (a) the offender makes in a public document untruthful statements in a narration of facts; (b) he
has a legal obligation to disclose the truth of the facts narrated by him; and (c) the facts narrated by him are
absolutely false. In addition to the afore-cited elements, it must also be proven that the public officer or employee
had taken advantage of his official position in making the falsification. In falsification of public document, the
offender is considered to have taken advantage of his official position when (1) he has the duty to make or prepare
or otherwise to intervene in the preparation of a document; or (2) he has the official custody of the document
which he falsifies.
The prosecution was able to establish all the elements of falsification in the case at bar. The required
disclosure or identification of relatives "within the fourth civil degree of consanguinity or affinity" in the SALN
involves merely a description of such relationship. When a government employee is required to disclose his
relatives in the government service, such information elicited therefore qualifies as a narration of
facts contemplated under Article 171 (4) of the Revised Penal Code, as amended. Since petitioner Galeos answered
"No" to the question in his 1993 SALN and left it blank in other years if he has relatives in the government service

within the fourth degree of consanguinity, he made an untruthful statement therein as in fact he was related to
Ong, who was then the municipal mayor, within the fourth degree of consanguinity, he and Ong being first cousins
(their mothers are sisters). By withholding information on his relative/s in the government service as required in
the SALN, Galeos was guilty of falsification considering that the disclosure of such relationship with then Municipal
Mayor Ong would have resulted in the disapproval of his permanent appointment pursuant to Article 168 (j)
(Appointments), Rule XXII of the Rules and Regulations Implementing the Local Government Code of 1991 (R.A.
No. 7160) which specifically provides that no person shall be appointed in the local government career service if he
is related within the fourth civil degree of consanguinity or affinity to the appointing power or recommending
authority.
The second element of legal obligation to disclose the truth is also present as there is a law requiring it.
Permanent employees employed by local government units are required to file the following: (a) sworn statement
of assets, liabilities and net worth (SALN); (b) lists of relatives within the fourth civil degree of consanguinity or
affinity in government service; (c) financial and business interests; and (d) personal data sheets as required by law.
A similar requirement is imposed by Section 8 (B) of Republic Act No. 6713 otherwise known as the Code of
Conduct and Ethical Standards for Public Officials and Employees.
The evidence on record clearly showed that Galeos' negative answer reflected in his SALN is absolutely
false. During the trial, both Ong and Galeos admitted the fact that they are first cousins but denied having
knowledge of such relationship at the time the subject documents were executed. The Sandiganbayan correctly
rejected their defense of being unaware that they are related within the fourth degree of consanguinity. Given the
Filipino cultural trait of valuing strong kinship and extended family ties, it was unlikely for Galeos who had been
working for several years in the municipal government, not to have known of his close blood relation to Ong who
was a prominent public figure having ran and won in the local elections four times (three terms as Mayor and as
Vice-Mayor in the 1998 elections), after serving as OIC Mayor of the same municipality in 1986 until 1988.
The same thing can be said of Ong whose statement of having no knowledge of their relationship as cousins
is unthinkable being a resident of Naga, Cebu since birth. Despite his knowledge of the falsity of the statement in
the subject SALN, Ong still administered the oath to Galeos and Rivera who made the false statement under oath.
The Sandiganbayan thus did not err in finding that Ong connived with Galeos and Rivera in making it appear in
their SALN that they have no relative within the fourth degree of consanguinity/affinity in the government service.
By Ongs issuance of the certification that the appointee is not related to him despite the fact that they are,
he was also guilty of falsification of public document by making untruthful statement in a narration of facts. He also
took advantage of his official position as the appointing authority who, under the Civil Service rules, is required to
issue such certification.
The petitions were DENIED. The Decision of the Sandiganbayan AFFIRMED.

G.R. NO. 155784, OCTOBER 13, 2005

CIVIL SERVICE COMMISSION, NATIONAL CAPITAL REGION, PETITIONER, VS.
RANULFO P. ALBAO, RESPONDENT.
[AZCUNA]
Facts:

On September 1, 1998, the Office of the Vice President of the Republic of the Philippines issued an original
and permanent appointment for the position of Executive Assistant IV to respondent Ranulfo P. Albao. Respondent
was then a contractual employee at said Office. In a letter dated September 28, 1998 addressed to the Director of
the Civil Service Commission Field Office, Manila, the Office of the Vice President requested the retrieval of the said
appointment paper. Instead of heeding the request, petitioner CSC-NCR disapproved the appointment.
On October 5, 1998, petitioner issued an order that a prima facie case against respondent for Dishonesty
and Falsification of Official Documents by declaring in his Personal Datasheet (PDS) to support his appointment
that he passed the Assistant Electrical Engineer Examination with a rating of 71.64% and attaching thereto a
Report of Rating purportedly issued by the Professional Regulation Commission (PRC). Upon validation with the
PRC, petitioner found that his name does not appear in their list and the examinee number as appearing in the
report belongs to one Bienvenido Anio, Jr.
In his answer on February 18, 1999, respondent contended that the CSC has no jurisdiction over the matter
since his appointment was disapproved, and he has already resigned from government service since the closing
hours of October 30, 1998. As he is no longer with the civil service, the Commission has no disciplinary jurisdiction
over him as a private person.
The Court of Appeals decided in favor of the respondent.
Issue/s:
Whether the CSC has jurisdiction to institute administrative proceedings over respondent and whether the
power of the CSC to hear and decide administrative cases includes the power to initiate and prosecute said cases.
Ruling:
In the case at bar, the following are the relevant provisions of the law which will give light to the resolution of
the issue:
1.
Title A, Book V of Executive Order No. 292
i. Section 12, paragraph 11 on the Powers and Functions of the commission states that it has the power to
hear and decide administrative cases instituted by or brought before it directly or on appeal, including contested
appointments, and review decisions and actions of its offices and of the agencies attached to it. . . .
ii. Section 47, on the disciplinary jurisdiction of the CSC provides that The Commission shall decide upon
appeal all administrative disciplinary cases involving the imposition of a penalty of suspension for more than thirty
days, or fine in an amount exceeding thirty days' salary, demotion in rank or salary or transfer, removal or
dismissal from office. . . (par. 1). Paragraph 2 of the same section states that the Secretaries and heads of agencies
and instrumentalities, provinces, cities and municipalities shall have jurisdiction to investigate and decide matters
involving disciplinary action against officers and employees under their jurisdiction.
iii. Section 48 provides the procedure in administrative cases against non-presidential appointees which may
be commenced by the Secretary or head of office of equivalent rank, or head of local government, or chiefs of
agencies, or regional directors, or upon sworn, written complaint of any other person.
2.
Article IX-B, Section 3 of the Constitution also provides that The Civil Service Commission, as the central
personnel agency of the Government, shall establish a career service and adopt measures to promote morale,
efficiency, integrity, responsiveness, progressiveness, and courtesy in the civil service. It shall strengthen the merit
and rewards system, integrate all human resources development programs for all levels and ranks, and
institutionalize a management climate conducive to public accountability.
From the foregoing provisions of the law, it is the Vice-President who is vested with jurisdiction to commence
disciplinary action against respondent. However, the court ruled that petitioner can act directly and motu proprio,
on the alleged acts of dishonesty and falsification of official document committed by respondent in connection with
his appointment to a permanent position in the Office of the Vice President.
The present case partakes of an act by petitioner to protect the integrity of the civil service system, and does
not fall under the provision on disciplinary actions under Sec. 47. It falls under the provisions of Sec. 12, par. 11, on
administrative cases instituted by it directly. This is an integral part of its duty, authority and power to administer
the civil service system and protect its integrity, as provided in Article IX-B, Sec. 3 of the Constitution, by removing
from its list of eligibles those who falsified their qualifications. This is to be distinguished from ordinary
proceedings intended to discipline a bona fide member of the system, for acts or omissions that constitute
violations of the law or the rules of the service.

The petition was GRANTED and the assailed decision of the Court of Appeals, REVERSED and SET ASIDE.

G.R. NO. 191771, MAY 06, 2010

LIBERAL PARTY, REPRESENTED BY ITS PRESIDENT MANUEL A. ROXAS II AND SECRETARY GENERAL
JOSEPH EMILIO A. ABAYA, PETITIONER, VS. COMMISSION ON ELECTIONS, NACIONALISTA PARTY,
REPRESENTED BY ITS PRESIDENT MANUEL B. VILLAR AND NATIONALIST PEOPLE'S COALITION,
ALLEGEDLY REPRESENTED BY ITS CHAIRMAN FAUSTINO S. DY, JR., RESPONDENTS.
[BRION]
Facts:
For the first ever automated election system in the country, the COMELEC set the following deadlines:
1.
August 17, 2009 as the last day for the filing of petitions for registration of political partiesl; and
2.
February 12, 2010 as the deadline for filing of petitions for accreditation for the determination of the dominant
majority party, the dominant minority party, ten major national parties, and two major local parties for the May 10,
2010 elections.
On February 12, 2010, the Liberal Party (LP) filed with the COMELEC its petition for accreditation as dominant
minority party. On the same date, the Nacionalista Party (NP) and the Nationalist People's Coalition (NPC) filed a
petition for registration as a coalition (NP-NPC) and asked that "it be recognized and accredited as the dominant
minority party for purposes of the May 10, 2010 elections."
LP filed its opposition to the petition of on the grounds that NP-NPC is not a duly registered coalition, the
petition for registration should have been brought to the proper Division and not the COMELEC en banc, the
petition for registration as a coalition was filed with the Clerk of the Commission instead of the Law Department in
violation of the COMELEC Rules of Procedure, the petition for registration was filed beyond the August 17, 2009
deadline; and the respective chapters, incumbents and candidates of the NP and the NPC separately cannot be
taken into account for purposes of accreditation as dominant minority party because the NP-NPC as a coalition is
an entirely different entity
On April 12, 2010, the en banc granted the NP-NPC's petition for registration as a coalition through the
Resolution assailed in the present case. In the same Resolution, the en banc deferred the resolution of the NP-NPC's
application for accreditation as dominant minority party.
1.
1.
2.
3.
2.
3.
1.
2.

Issue/s:
Preliminary issues
Whether petition has to be dismissed outright for technical infirmities.
Whether present petition premature since its object is to foreclose a ruling on the unsettled NP-NPC issue.
Whether the NP-NPC petition for registration is time-barred.
Whether the COMELEC en banc has jurisdiction at first instance to entertain the petition.
If with jurisdiction, whether it gravely abused its jurisdiction when it allowed the registration.
Was due process observed?
Did the coalition take place as required by law.
Ruling:
On the preliminary issues on technical infirmities, the court ruled to be liberal in the present case in view of
interests involved which are indisputably important to the coming electoral exercise. The registration of political
parties, their accreditation as dominant parties, and the benefits these recognitions provide. To the public, the
proper registration and the accreditation of dominant parties are evidence of equitable party representation at the
scene of electoral action, and translate in no small measure to transparency and to the election's credibility.
While the respondents placed in issue defects in the attachments to the petition, their objection is a formal
one as they do not deny the existence and basic correctness of these attachments. The court sees no resulting harm
or prejudice therefore if we overrule the objection raised, given the weight of the counterbalancing factors
considered above. The court further found that the failure to formally implead the NP-NPC a sufficient reason to
dismiss the petition outright. Without any finally confirmed registration in the coalition's favor, NPNPC does not
legally exist as a coalition with a personality separate and distinct from the component NP and NPC parties. The
court found it sufficient that the NP and the NPC have separately been impleaded; as of the moment, they are the
real parties-in-interest as they are the parties truly interested in legally establishing the existence of their coalition.
The court also ruled that the petition passed the facial objection test.
On the issue of prematurity, the court ruled that there is absolutely no prematurity as its avowed intent is
in fact to forestall an event - the accreditation - that according to the assailed Resolution shall soon take place.
From the point of view of the petition for certiorari questioning the registration made, no prematurity issue is
involved as the nullification of a past and accomplished act is prayed for. From these perspectives, the OSG
objection based on prematurity is shown to be completely groundless.

As to the timeliness of the registration, the court ruled that the NP-NPC's petition for registration as a
coalition is time-barred. Thus, the en banc was wrong in ordering the out-of-time registration of the NP-NPC
coalition. Given the mandatory nature of the deadline, the en banc acted in excess of its jurisdiction when it granted
the registration of NP-NPC as a coalition beyond the deadline the COMELEC itself had set; the authority to register
political parties under mandatory terms is only up to the deadline.
Political coalitions need to register in accordance with the established norms and procedures, if they are to
be recognized as such and be given the benefits accorded by law to registered coalitions. Registered political
parties carry a different legal personality from that of the coalition they may wish to establish with other similarly
registered parties. If they want to coalesce with one another without the formal registration of their coalition, they
can do so on their own in the exercise of their and their members' democratic freedom of choice, but they cannot
receive official recognition for their coalition. Or they can choose to secure the registration of their coalition in
order to be accorded the privileges accruing to registered coalitions, including the right to be accredited as a
dominant majority or minority party. There are no ifs and buts about these constitutional terms.
The court ruled that COMELEC the en banc gravely abused its discretion when it disregarded its own
deadline in ruling on the registration of the NP-NPC as a coalition. In so ruling, we emphasize that the matter of
party registration raises critical election concerns that should be handled with discretion commensurate with the
importance of elections to our democratic system. The COMELEC should be at its most strict in implementing and
complying with the standards and procedures the Constitution and our laws impose.
Petition GRANTED and, accordingly, assailed resolution of the COMELEC NULLIFIED.