G.R. No.

156995, January 12, 2015

RUBEN MANALANG, CARLOS MANALANG, CONCEPCION

GONZALES AND LUIS
MANALANG, Petitioners, v. BIENVENIDO AND MERCEDES
BACANI, Respondents.

DECISION

BERSAMIN, J.:

In the exercise of its appellate jurisdiction, the Regional Trial

Court (RTC) shall decide the appeal of the judgment of the
Municipal Trial Court (MTC) in unlawful detainer or forcible entry
cases on the basis of the entire record of the proceedings had in
the court of origin and such memoranda and/or briefs as may be
required by the RTC. There is no trial de novo of the
case.cralawred

The Case

The petitioners assail the decision promulgated on October 18,

2002 in CA-G.R. SP No. 68419,1 whereby the Court of Appeals
(CA) reversed and set aside the decision of the RTC, Branch 49,
in Guagua, Pampanga, and reinstated the judgment rendered on
August 31, 2000 by the MTC of Guagua, Pampanga dismissing
their complaint for unlawful detainer and the respondents’
counterclaim. They also hereby assail the resolution promulgated
on January 24, 2003 denying their motion for
reconsideration.2chanRoblesvirtualLawlibrary

Antecedents

Petitioners Ruben Manalang, Amado Manalang, Carlos Manalang,

Concepcion M. Gonzales, Ladislao Manalang and Luis Manalang
were the co-owners of Lot No 4236 with an area of 914 square
meters of the Guagua Cadastre, and declared for taxation
purposes in the name of Tomasa B. Garcia. The land was covered
by approved survey plan Ap-03-004154. Adjacent to Lot 4236
was the respondents’ Lot No. 4235 covered by Original Certificate
of Title (OCT) No. N-216701. In 1997, the petitioners caused the
relocation and verification survey of Lot 4236 and the adjoining
lots, and the result showed that the respondents had encroached
on Lot No. 4236 to the extent of 405 square meters. A
preliminary relocation survey conducted by the Lands
Management Section of the Department of Environment and
Natural Resources (DENR) confirmed the result on the
encroachment. When the respondents refused to vacate the
encroached portion and to surrender peaceful possession thereof
despite demands, the petitioners commenced this action for
unlawful detainer on April 21, 1997 in the MTC of Guagua (Civil
Case No. 3309), and the case was assigned to Branch 2 of that
court.3chanRoblesvirtualLawlibrary

On September 17, 1998, the MTC (Branch 2) dismissed Civil Case

No. 3309 for lack of jurisdiction based on its finding that the
action involved an essentially boundary dispute that should be
properly resolved in an accion reivindicatoria.4 It stated that the
complaint did not aver any contract, whether express or implied,
between the petitioners and the respondents that qualified the
case as one for unlawful detainer; and that there was also no
showing that the respondents were in possession of the disputed
area by the mere tolerance of the petitioners due to the latter
having become aware of the encroachment only after the
relocation survey held in 1997.

On appeal, however, the RTC reversed the MTC (Branch 2), and
remanded the case for further proceedings,5 holding that because
there was an apparent withholding of possession of the property
and the action was brought within one year from such
withholding of possession the proper action was ejectment which
was within the jurisdiction of the MTC; and that the case was not
a boundary dispute that could be resolved in an accion
reinvidicatoria, considering that it involved a sizeable area of
property and not a mere transferring of
boundary.6chanRoblesvirtualLawlibrary
Upon remand, the MTC, Branch 1,7 ultimately dismissed the
complaint and counterclaim for lack of merit through the decision
rendered on August 31, 2000,8 ruling that the petitioners failed to
adduce clear and convincing evidence showing that the
respondents had encroached on their property and had been
occupying and possessing property outside the metes and bounds
described in Bienvenido Bacani’s OCT No. N-216701; that the
preponderance of evidence was in favor of the respondents’ right
of possession; and that the respondent’s counterclaim for
damages should also be dismissed, there being no showing that
the complaint had been filed in gross and evident bad
faith.9chanRoblesvirtualLawlibrary

Once more, the petitioners appealed to the RTC.

At that point, the RTC ordered the petitioners to conduct a

relocation survey to determine their allegation of encroachment,
and also heard the testimony of the surveyor, Engr. Emmanuel
Limpin, then Acting Chief of the Survey Section of the CENR-
DENR.

On September 19, 2001,10 the RTC rendered its judgment

whereby it reversed and set aside the MTC’s decision of August
31, 2000, observing that the respondents had encroached on the
petitioners’ property based on the court-ordered relocation
survey, the reports by Engr. Limpin, and his testimony;11 that the
respondents could not rely on their OCT No. N-216701,
considering that although their title covered only 481 square
meters, the relocation survey revealed that they had occupied
also 560 square meters of the petitioners’ Lot No. 4236;12 that
the petitioners did not substantiate their claims for reasonable
compensation, attorney’s fees and litigation expenses; and that,
nevertheless, after it had been established that the respondents
had encroached upon and used a portion of the petitioners’
property, the latter were entitled to P1,000.00/month as
reasonable compensation from the filing of the complaint up to
time that the respondents actually vacated the encroached
property, plus P20,000.00 attorney’s
fees.13chanRoblesvirtualLawlibrary

The respondents moved for reconsideration, but the RTC denied

their motion for its lack of merit.14chanRoblesvirtualLawlibrary

The respondents appealed.

On October 18, 2002, the CA promulgated its assailed

decision,15viz:chanroblesvirtuallawlibrary

WHEREFORE, the appealed RTC decision is hereby REVERSED and

SET ASIDE, and the decisions of the MTC of Guagua, Pampanga,
Branches 1 and 2, are REINSTATED.

No pronouncement as to costs.

SO ORDERED.

The CA concluded that the RTC, by ordering the relocation and

verification survey “in aid of its appellate jurisdiction” upon
motion of the petitioners and over the objection of the
respondents, and making a determination of whether there was
an encroachment based on such survey and testimony of the
surveyor, had acted as a trial court in complete disregard of the
second paragraph of Section 18, Rule 70 of the Rules of Court. It
declared such action by the RTC as unwarranted because it
amounted to the reopening of the trial, which was not allowed
under Section 13(3) Rule 70 of the Rules of Court. It observed
that the relocation and verification survey was inconclusive
inasmuch as the surveyor had himself admitted that he could not
determine which of the three survey plans he had used was
correct without a full-blown trial.

The CA held that considering that the petitioners’ complaint for

unlawful detainer did not set forth when and how the respondents
had entered the land in question and constructed their houses
thereon, jurisdiction did not vest in the MTC to try and decide the
case; that the complaint, if at all, made out a case for
either accion reivindicatoria or accion publiciana, either of which
fell within the original jurisdiction of the RTC; and that the RTC’s
reliance on Benitez v. Court of Appeals16 and Calubayan v.
Ferrer17 was misplaced, because the controlling ruling was that
in Sarmiento v. Court of Appeals,18 in which the complaint was
markedly similar to that filed in the case.

The petitioners sought reconsideration, but the CA denied their

motion for its lack of merit in the resolution of January 24,
2003.19chanRoblesvirtualLawlibrary

Issues

Hence, this appeal.

The petitioners contend that the RTC had authority to receive

additional evidence on appeal in an ejectment case because it
was not absolutely confined to the records of the trial in resolving
the appeal; that the respondents were estopped from assailing
the relocation and verification survey ordered by the RTC because
they had actively participated in the survey and had even cross-
examined Engr. Limpin, the surveyor tasked to conduct the
survey;20 that Engr. Limpin’s testimony must be given credence,
honoring the well-entrenched principle of regularity in the
performance of official functions;21 that the RTC did not conduct a
trial de novo by ordering the relocation and verification survey
and hearing the testimony of the surveyor; that the desirability of
the relocation and verification survey had always been part of the
proceedings even before the case was appealed to the
RTC;22 that, in any case, the peculiar events that transpired
justified the RTC’s order to conduct a relocation and verification
survey;23 that the case, because it involved encroachment into
another’s property, qualified as an ejectment case that was within
the jurisdiction of the MTC; and that the respondents were barred
by laches for never questioning the RTC’s February 11, 1999
ruling on the issue of jurisdiction.24chanRoblesvirtualLawlibrary

In contrast, the respondents assail the relocation and verification

survey ordered by the RTC as immaterial, because (a) it could not
vest a right of possession or ownership; (b) the petitioners were
mere claimants, not the owners of the property; (c) the petitioner
had never been in possession of the area in question; and (d)
cadastral surveys were not reliable. Hence, they maintain that
whether or not the relocation and verification survey was
considered would not alter the outcome of the
case.25chanRoblesvirtualLawlibrary

Ruling of the Court

The appeal has no merit.

To start with, the RTC, in an appeal of the judgment in an

ejectment case, shall not conduct a rehearing or trial de
novo.26 In this connection, Section 18, Rule 70 of the Rules of
Court clearly provides:chanroblesvirtuallawlibrary

Sec. 18. Judgment conclusive only on possession; not conclusive

in actions involving title or ownership. — x x x.

xxxx

The judgment or final order shall be appealable to the

appropriate Regional Trial Court which shall decide the
same on the basis of the entire record of the proceedings
had in the court of origin and such memoranda and/or
briefs as may be submitted by the parties or required by
the Regional Trial Court. (7a)

Hence, the RTC violated the foregoing rule by ordering the

conduct of the relocation and verification survey “in aid of its
appellate jurisdiction” and by hearing the testimony of the
surveyor, for its doing so was tantamount to its holding of a trial
de novo. The violation was accented by the fact that the RTC
ultimately decided the appeal based on the survey and the
surveyor’s testimony instead of the record of the proceedings had
in the court of origin.
Secondly, on whether or not Civil Case No. 3309 was an
ejectment case within the original and exclusive jurisdiction of the
MTC, decisive are the allegations of the complaint. Accordingly,
the pertinent allegations of the petitioners’ complaint
follow:chanroblesvirtuallawlibrary

2. Plaintiffs are co-owners of land known as Lot no. 4236 of the

Guagua cadastre. Plaintiffs inherited the said parcel of residential
land from Tomasa B. Garcia-Manalang who is the absolute owner
of the said property and the same is declared for taxation
purposes in her name under Tax Declaration No. 07014906, a
copy of which is hereto attached as Annex “A”;

3. Lot No. 4236 is covered by an approved plan, Plan Ap-03-

004154 (a copy made Annex ‘B”) and it consists of 914 square
meters;

4. Adjacent to plaintiff’s [p]roperty is Lot No. 4235 of the Guagua

Cadastre and covered by approved plan As-03-00533 (copy made
Annex “C”) which is being claimed by defendants and is the
subject matter of Cadastral Case No. N-229 of the Regional Trial
Court of Guagua, Branch 53 where a decision (copy made Annex
“D”) was rendered by said court on August 28, 1996 confirming
the title over said lot in favor of defendant Bienvenido Bacani.
The said decision is now final and executory …

5. On February 23, 1997, plaintiffs caused the relocation and

verification survey of cadastral Not No. 4236 of the Guagua
Cadastre belonging to plaintiff and the adjoining lots, particularly
Lot No. 4235 being claimed by defendants;

6. The relocation and verification survey conducted by Engr. Rufo

R. Rivera, a duly licensed Geodetic Engineer per plan (copy made
Annex “F”) revealed that defendants had encroached an area of
405 square meters of the parcel of land belonging to plaintiffs. In
fact, the whole or part of the houses of the said defendants have
been erected in said encroached portion;
7. Sometime in June of 1997, plaintiffs through plaintiff
Concepcion Gonzales lodged a complaint before the Barangay
Council of San Juan, Guagua, Pampanga against defendants
regarding the encroached portion. A preliminary relocation survey
was conducted by the Lands Management Sector of the DENR and
it was found that indeed, defendants encroached into the parcel
of land belonging to plaintiffs. This finding was confirmed by the
approved plan Ap-03-004154;

8. Since defendants refused to vacate the premises and surrender

the peaceful possession thereof to plaintiff, the Barangay Captain
of San Juan, Guagua, Pampanga issued a certification to file
action (copy made Annex “G’) dated March 4, 1997 to enable the
plaintiff to file the appropriate action in court;

9. On March 10, 1997, plaintiffs sent a formal demand letter

(copy made Annex ‘H”) to defendants to vacate the premises and
to pay reasonable compensation for the use of the said
encroached portion;

10. Despite receipt of said demand letter per registry return cards
attached to the letter, defendants failed and refused to vacate the
encroached portion and surrender the peaceful possession thereof
to plaintiffs;

11. Plaintiffs are entitled to a reasonable compensation in the

amount of P 3,000.00 from defendants for the illegal use and
occupation of their property by defendants;

12. By reason of the unjust refusal of defendants to vacate the

premises and pay reasonable compensation to plaintiffs, the
latter were constrained to engage the services of counsel for
P30,00.00 plus P1,000.00 per appearance and incur litigation
expenses in the amount of P10,000.00.27

Given the foregoing allegations, the case should be dismissed

without prejudice to the filing of a non-summary action
like accion reivindicatoria. In our view, the CA correctly held that
a boundary dispute must be resolved in the context of accion
reivindicatoria, not an ejectment case. The boundary dispute is
not about possession, but encroachment, that is, whether the
property claimed by the defendant formed part of the plaintiff’s
property. A boundary dispute cannot be settled summarily under
Rule 70 of the Rules of Court, the proceedings under which are
limited to unlawful detainer and forcible entry. In unlawful
detainer, the defendant unlawfully withholds the possession of
the premises upon the expiration or termination of his right to
hold such possession under any contract, express or implied. The
defendant’s possession was lawful at the beginning, becoming
unlawful only because of the expiration or termination of his right
of possession. In forcible entry, the possession of the defendant
is illegal from the very beginning, and the issue centers on which
between the plaintiff and the defendant had the prior
possession de facto.

Thirdly, the MTC dismissed the action because it did not have
jurisdiction over the case. The dismissal was correct. It is
fundamental that the allegations of the complaint and the
character of the relief sought by the complaint determine the
nature of the action and the court that has jurisdiction over the
action.28To be clear, unlawful detainer is an action filed by a
lessor, vendor, vendee, or other person against whom the
possession of any land or building is unlawfully withheld after the
expiration or termination of the right to hold possession by virtue
of any contract, express or implied.29 To vest in the MTC the
jurisdiction to effect the ejectment from the land of the
respondents as the occupants in unlawful detainer, therefore, the
complaint should embody such a statement of facts clearly
showing the attributes of unlawful detainer.30 However, the
allegations of the petitioners’ complaint did not show that they
had permitted or tolerated the occupation of the portion of their
property by the respondents; or how the respondents’ entry had
been effected, or how and when the dispossession by the
respondents had started. All that the petitioners alleged was the
respondents’ “illegal use and occupation” of the property. As
such, the action was not unlawful detainer.

Lastly, the conclusion by the MTC that the petitioners failed to

show by clear and convincing evidence that the respondents had
encroached on the petitioners’ property was also warranted. In
contrast, the only basis for the RTC’s decision was the result of
the relocation and verification survey as attested to by the
surveyor, but that basis should be disallowed for the reasons
earlier mentioned. Under the circumstances, the reinstatement of
the ruling of the MTC by the CA was in accord with the
evidence.chanrobleslaw

WHEREFORE, the Court AFFIRMS the decision promulgated on

October 18, 2002; and ORDERS the petitioners to pay the costs
of suit.

SO ORDERED.

Sereno, C.J., Leonardo-De Castro, Perez, and Perlas-Bernabe,

JJ., concur.

Digest

GR 156995: Manalang vs Bacani

Full Case Title: RUBEN MANALANG, CARLOS MANALANG,

CONCEPCION GONZALES AND LUIS MANALANG, Petitioners,
vs. BIENVENIDO AND MERCEDES BACANI, Respondents.
G.R. No.: G.R. No. 156995

Date: 12 January 2015

Ponente: Bersamin, J.
Facts: Petitioners were co-owners for lot in question and caused a relocation and
verification survey which showed that respondents had encroached on a portion of
said lot. When the respondents refused to vacate the encroached portion and to
surrender peaceful possession thereof despite demands, the petitioners commenced
this action for unlawful detainer.
MTC dismissed on the ground of lack of jurisdiction. RTC reversed the decision of
the MTC and remanded case on appeal. MTC ultimately dismissed case. Another
appeal to RTC was made. RTC ordered the petitioners to conduct a relocation
survey to determine their allegation of encroachment, and also heard the testimony
of the surveyor. The RTC then reversed the MTC’s decision.

Issue (1) Can RTC in the exercise of its appellate jurisdiction conduct a relocation
and verification survey of lot in question? (2) Was an action for unlawful detainer
proper?
Ruling: The RTC, in an appeal of the judgment in an ejectment case, shall not
conduct a rehearing or trial de novo. In this connection, Section 18, Rule 70 of the
Rules of Courtclearly provides:
Sec. 18. Judgment conclusive only on possession; not conclusive in actions
involving title or ownership.

xxxx

The judgment or final order shall be appealable to the appropriate Regional Trial
Court which shall decide the same on the basis of the entire record of the
proceedings had in the court of origin and such memoranda and/or briefs as may be
submitted by the parties or required by the Regional Trial Court. (7a)

Hence, the RTC violated the foregoing rule by ordering the conduct of the
relocation and verification survey “in aid of its appellate jurisdiction” and by
hearing the testimony of the surveyor, for its doing so was tantamount to its
holding of a trial de novo. The violation was accented by the fact that the RTC
ultimately decided the appeal based on the survey and the surveyor’s testimony
instead of the record of the proceedings had in the court of origin.

(2) CA correctly held that a boundary dispute must be resolved in the context of
accion reivindicatoria, not an ejectment case. The boundary dispute is not about
possession, but encroachment, that is, whether the property claimed by the
defendant formed part of the plaintiff’s property. A boundary dispute cannot be
settled summarily under Rule 70 of the Rules of Court, the proceedings under
which are limited to unlawful detainer and forcible entry. In unlawful detainer, the
defendant unlawfully withholds the possession of the premises upon the expiration
or termination of his right to hold such possession under any contract, express or
implied. The defendant’s possession was lawful at the beginning, becoming
unlawful only because of the expiration or termination of his right of possession. In
forcible entry, the possession of the defendant is illegal from the very beginning,
and the issue centers on which between the plaintiff and the defendant had the
prior possession de facto.

The MTC dismissed the action because it did not have jurisdiction over the case.
The dismissal was correct. It is fundamental that the allegations of the complaint
and the character of the relief sought by the complaint determine the nature of the
action and the court that has jurisdiction over the action. To be clear, unlawful
detainer is an action filed by a lessor, vendor, vendee, or other person against
whom the possession of any land or building is unlawfully withheld after the
expiration or termination of the right to hold possession by virtue of any contract,
express or implied.

However, the allegations of the petitioners’ complaint did not show that they had
permitted or tolerated the occupation of the portion of their property by the
respondents; or how the respondents’ entry had been effected, or how and when
the dispossession by the respondents had started. All that the petitioners alleged
was the respondents’ “illegal use and occupation” of the property. As such, the
action was not unlawful detainer.

Share this:

G.R. No. 197492

CHATEAU ROYALE SPORTS and COUNTRY CLUB, INC., Petitioner,

vs.
RACHELLE G. BALBA and MARINEL N. CONSTANTE, Respondents.

DECISION

BERSAMIN, J.:
The petitioner appeals the decision promulgated on January 10,
2011, 1 whereby the Court of Appeals (CA) annulled and set aside the
December 14, 2009 decision2 and February 26, 2010 resolution3 of the
National Labor Relations Commission (NLRC) dismissing the respondents'
complaint for constructive dismissal.

Antecedents

On August 28, 2004, the petitioner, a domestic corporation operating a

resort complex in Nasugbu, Batangas, hired the respondents as Account
Executives on probationary status.4 On June 28, 2005, the respondents
were promoted to Account Managers effective July 1, 2005, with the
monthly salary rate of ₱9,000.00 plus allowances totaling to ₱5,500.5 As
part of their duties as Account Managers, they were instructed by the
Director of Sales and Marketing to forward all proposals, event orders and
contracts for an orderly and systematic bookings in the operation of the
petitioner' s business. However, they failed to comply with the directive.
Accordingly, a notice to explain was served on them,6 to which they
promptly responded. 7

On October 4, 2005, the management served notices of administrative

hearing8 on the respondents. Thereupon, they sent a letter of said date
asking for a postponement of the hearing.9 Their request was, however,
denied by the letter dated October 7, 2005, and at the same time informed
them that the petitioner's Corporate Infractions Committee had found them
to have committed acts of insubordination, and that they were being
suspended for seven days from October 10 to 17, 2005, inclusive. 10

The suspension order was lifted even before its implementation on October
10, 2005.11

On October 10, 2005, the respondents filed a complaint for illegal

suspension and non-payment of allowances and commissions. 12

On December 1, 2005, the respondents amended their complaint to include

constructive dismissal as one of their causes of action based on their
information from the Chief Financial Officer of the petitioner on the latter's
plan to transfer them to the Manila Office. 13 The proposed transfer was
prompted by the shortage of personnel at the Manila Office as a result of
the resignation of three account managers and the director of sales and
marketing. Despite attempts to convince them to accept the transfer to
Manila, they declined because their families were living in Nasugbu,
Batangas.

The respondents received the notice of transfer14 dated December 13,

2005 on December 28, 2005 15 directing them to report to work at the
Manila Office effective January 9, 2006. They responded by letter
addressed to Mr. Rowell David, the Human Resource Consultant of the
petitioner, 16 explaining their reasons for declining the order of transfer.
Consequently, another request for incident report17 was served on them
regarding their failure to comply with the directive to report at the Manila
office. Following respondents' respective responses, 18 the petitioner sent a
notice imposing on them the sanction of written reprimand for their failure to
abide by the order of transfer. 19

Ruling of the Labor Arbiter

On February 14, 2008, Labor Arbiter Arthur L. Amansec rendered his

decision declaring that the respondents had been constructively dismissed,
and disposing thusly:20

WHEREFORE, judgment is hereby made finding respondent Chateau

Royale Sports and Country Club, Inc. to have constructively dismissed the
complainants Rachelle G. Balba and Marinel N. Constante from
employment. Concomitantly, the respondent company is hereby ordered to
pay each complainant one (1) year backwages plus a separation pay,
computed at a full month's pay for every year of service.

The respondent company is also ordered to pay each complainant

₱50,000.00 moral damages and ₱10,000.00 exemplary damages.

Ten (10%) attorney's fees are also awarded.

Other claims are dismissed for lack of merit.

SO ORDERED.21

Labor Arbiter Amansec opined that the respondents' transfer to Manila

would not only be physically and financially inconvenient, but would also
deprive them of the psychological comfort that their families provided; that
being the top sales performers in Nasugbu, they should not be punished
with the transfer; and that their earnings would considerably diminish
inasmuch as sales in Manila were not as lively as those in Nasugbu.22

Ruling of the NLRC

On appeal,23 the NLRC reversed the ruling of the Labor Arbiter, and
dismissed the complaint for lack of merit, to wit:

WHEREFORE, the appeal of respondents Chateau Royale Sports and

Country Club, Inc. is Granted. Accordingly, the assailed February 14, 2008
decision is Set-Aside dismissing the complaint for lack of merit.

SO ORDERED.24

The NLRC found that the respondents had been informed through their
respective letters of appointment of the possibility of transfer in the
exigency of the service; that the transfer was justified due to the shortage
of personnel at the Manila office; that the transfer of the respondents, being
bereft of improper motive, was a valid exercise of management prerogative;
and that they could not as employees validly decline a lawful transfer order
on the ground of parental obligations, additional expenses, and the anxiety
of being away from his family.

The respondents filed their motion for reconsideration,25 but the NLRC
denied their motion on February 26, 2010.26

Decision of the CA

On January 10, 2011, the CA promulgated its decision granting the

respondents' petition for certiorari, and setting aside the decision of the
NLRC, viz.:

WHEREFORE, premises considered, the assailed Decision dated

December 14, 2009 and Resolution dated February 26, 2010 of the NLRC,
Second Division in NLRC LAC No. 07-002551-08 (NLRC-RAB-IV Case No.
10-21558-058) (NLRC-RAB-IV Case No. 02-22153-068) are
hereby REVERSED and SET ASIDE. Private respondent Chateau Royale
is hereby ordered to REINSTATE petitioners Balba and Constante to their
former positions without loss of seniority rights and other privileges, and to
pay said petitioners full BACKWAGES inclusive of allowances and other
benefits from the time their employment was severed up to the time of
actual reinstatement.

SO ORDERED.27

The CA ruled that the transfer of the respondents from the office in
Nasugbu, Batangas to the Manila office was not a legitimate exercise of
management prerogative and constituted constructive dismissal; that the
transfer to the Manila office was not crucial as to cause serious disruption
in the operation of the business if the respondents were not transferred
thereat; that the directive failed to indicate that the transfer was merely
temporary; that the directive did not mention the shortage of personnel that
would necessitate such transfer; and that the transfer would be
inconvenient and prejudicial to the respondents.28

On June 22, 2011,29 the CA denied the petitioner's motion for

reconsideration.

Issues

Hence, this appeal by the petitioner via petition for review

on certiorari,30citing the following grounds:

THE HONORABLE COURT OF APPEALS GRIEVOUSLY ERRED IN

CONCLUDING THAT TI-IE SHORTAGE OF PERSONNEL IN THE
MANILA OFFICE IS A MERE SUBTERFUGE RATHER THAN AN
EXIGENCY JN THE BUSINESS THEREBY TREATING THE TRANSFER
OF RESPONDENTS AS UNREASONABLE

THE HONORABLE COURT OF APPEALS GRIEVOUSLY ERRED IN

CONCLUDING THAT THE INTENDED TRANSFER OF THE
RESPONDENTS FROM NASUGBU, BATANGAS TO MANILA OFFICE
CONSTITUTES CONSTRUCTIVE DISMISSAL.31

The petitioner argues that the resignations of the Account Managers and
the Director of Sales and Marketing caused serious disruptions in the
operations of the Manila office, thereby making the immediate transfer of
the respondents crucial and indispensable; that through their respective
letters of appointment, the possibility of their transfer to the Manila office
had been made known to them even prior to their regularization; that if its
intention had been to expel them from the company, it would not have
rehired them as regular employees after the expiration of their probationary
contract and even promoted them as Account Managers; that there was no
diminution of income and benefits as a result of the transfer; and that their
immediate rejection of the transfer directive prevented the parties from
negotiating for additional allowances beyond their regular salaries.

The respondents counter that there was no valid cause for their transfer;
that they were forced to transfer to the Manila office without consideration
of the proximity of the place and without improvements in the employment
package; that the alleged shortage of personnel in the Manila office due to
the resignation of the account managers was merely used to conceal the
petitioner's illegal acts; and that notwithstanding their negative response
upon being informed of their impending transfer to Manila by Chief Finance
Officer Marquez, the petitioner still issued the transfer order directing them
to report to the Manila office effective January 9, 2006.

The sole issue for resolution is whether or not the respondents were
constructively dismissed.

Ruling of the Court

We find merit in the appeal.

In the resolution of whether the transfer of the respondents from one area
of operation to another was valid, finding a balance between the scope and
limitation of the exercise of management prerogative and the employees'
right to security of tenure is necessary.32 We have to weigh and consider,
on the one hand, that management has a wide discretion to regulate all
aspects of employment, including the transfer and re-assignment of
employees according to the exigencies of the business; 33 and, on the
other, that the transfer constitutes constructive dismissal when it is
unreasonable, inconvenient or prejudicial to the employee, or involves a
demotion in rank or diminution of salaries, benefits and other privileges, or
when the acts of discrimination, insensibility or disdain on the part of the
employer become unbearable for the employee, forcing him to forego her
employment. 34
In this case of constructive dismissal, the burden of proof lies in the
petitioner as the employer to prove that the transfer of the employee from
one area of operation to another was for a valid and legitimate ground, like
genuine business necessity.35 We are satisfied that the petitioner duly
discharged its burden, and thus established that, contrary to the claim of
the respondents that they had been constructively dismissed, their transfer
had been an exercise of the petitioner's legitimate management
prerogative.

To start with, the resignations of the account managers and the director of
sales and marketing in the Manila office brought about the immediate need
for their replacements with personnel having commensurate experiences
and skills. With the positions held by the resigned sales personnel being
undoubtedly crucial to the operations and business of the petitioner, the
resignations gave rise to an urgent and genuine business necessity that
fully warranted the transfer from the Nasugbu, Batangas office to the main
office in Manila of the respondents, undoubtedly the best suited to perform
the tasks assigned to the resigned employees because of their being
themselves account managers who had recently attended seminars and
trainings as such. The transfer could not be validly assailed as a form of
constructive dismissal, for, as held in Benguet Electric Cooperative
v.Fianza,36management had the prerogative to determine the place where
the employee is best qualified to serve the interests of the business given
the qualifications, training and performance of the affected employee.

Secondly, although the respondents' transfer to Manila might be potentially

inconvenient for them because it would entail additional expenses on their
part aside from their being forced to be away from their families, it was
neither unreasonable nor oppressive. The petitioner rightly points out that
the transfer would be without demotion in rank, or without diminution of
benefits and salaries. Instead, the transfer would open the way for their
eventual career growth, with the corresponding increases in pay. It is noted
that their prompt and repeated opposition to the transfer effectively stalled
the possibility of any agreement between the parties regarding benefits or
salary adjustments.

Thirdly, the respondents did not show by substantial evidence that the
petitioner was acting in bad faith or had ill-motive in ordering their
transfer.1avvphi1 In contrast, the urgency and genuine business necessity
justifying the transfer negated bad faith on the part of the petitioner.
Lastly, the respondents, by having voluntarily affixed their signatures on
their respective letters of appointment, acceded to the terms and conditions
of employment incorporated therein. One of the terms and conditions thus
incorporated was the prerogative of management to transfer and re-assign
its employees from one job to another "as it may deem necessary or
advisable," to wit:

The company reserves the right to transfer you to any assignment from one
job to another, or from one department/section to another, as it may deem
necessary or advisable.

Having expressly consented to the foregoing, the respondents had no basis

for objecting to their transfer. According to Abbot Laboratories(Phils.), Inc.
v. National Labor Relations Commission,37the employee who has
consented to the company's policy of hiring sales staff willing to be
assigned anywhere in the Philippines as demanded by the employer's
business has no reason to disobey the transfer order of management.
Verily, the right of the employee to security of tenure does not give her a
vested right to her position as to deprive management of its authority to
transfer or re-assign her where she will be most useful. 38

In view of the foregoing, the NLRC properly appreciated the evidence and
merits of the case in reversing the decision of the Labor Arbiter. As such,
the CA gravely erred in declaring that the NLRC had gravely abused its
discretion amounting to lack or excess of jurisdiction.

WHEREFORE, the Court REVERSES AND SETS ASIDE the decision of

the Court of Appeals promulgated on January 10, 2011; REINSTATES the
decision issued on December 14, 2009 by the National Labor Relations
Commission; and ORDERS the respondents to pay the costs of suit.

SO ORDERED.

LUCAS P. BERSAMIN
Associate Justice

WE CONCUR:

G.R. No. 188165 December 11, 2013

PEOPLE OF THE PHILIPPINES, Petitioner,
vs.
HON. SANDIGANBAYAN, FIRST DIVISION & THIRD DIVISION,
HERNANDO BENITO PEREZ, ROSARIO PEREZ, RAMON ARCEO and
ERNEST ESCALER, Respondents.

x-------------------------------------------x

G.R. No. 189063

PEOPLE OF THE PHILIPPINES, Petitioner,

vs.
HON. SANDIGANBAYAN, SECOND DIVISION, HERNANDO BENITO
PEREZ, ROSARIO SALVADOR PEREZ, ERNEST DE LEON ESCALER
and RAMON CASTILLO ARCEO, JR., Respondents.

DECISION

BERSAMIN, J.:

The guarantee of the speedy disposition of cases under Section 16 of

Article III of the Constitution applies to all cases pending before all judicial,
quasi-judicial or administrative bodies. Thus, the fact-finding investigation
should not be deemed separate from the preliminary investigation
conducted by the Office of the Ombudsman if the aggregate time spent for
both constitutes inordinate and oppressive delay in the disposition of any
case.

The Case

The Court resolves the petitions for certiorari the State instituted to assail
and nullify, in G.R. No. 188165, the Sandiganbayan’s dismissal of Criminal
Case SB-08-CRM-0265 entitled People of the Philippine v. Hernando
Benito Perez, Rosario S. Perez, Ernest Escaler, and Ramon A. Arceo, for
violation of Section 3 (b) of Republic Act No. 3019, as amended; and, in
G.R. No. 189063, the Sandiganbayan’s dismissal of SB-08-CRM- 0266
entitled People of the Philippine v. Hernando Benito Perez, Rosario S.
Perez, Ernest Escaler, and Ramon A. Arceo, for robbery under Article 293,
in relation to Article 294, of the Revised Penal Code.

Common Factual and Procedural Antecedents

On November 12, 2002, Congressman Wilfrido B. Villarama of Bulacan
(Cong. Villarama) delivered a privilege speech in the House of
Representatives denouncing acts of bribery allegedly committed by a high
ranking government official whom he then called the "2 Million Dollar
Man."1 In reaction, the Office of the President directed the Presidential Anti-
Graft and Commission (PAGC) to conduct an inquiry on the exposé of
Cong. Villarama. PAGC sent written communications to Cong. Villarama,
Cong. Mark Jimenez, Senator Panfilo Lacson and respondent Secretary of
Justice Hernando B. Perez inviting them to provide information and
documents on the alleged bribery subject of the exposé.2 On November 18,
2002, Cong. Villarama responded by letter to PAGC’s invitation by
confirming that Secretary Perez was the government official who "ha[d]
knowledge or connection with the bribery subject of his expose."3 In his
own letter of November 18, 2002, however, Secretary Perez denied being
the Million-Dollar Man referred to in Cong. Villarama’s privilege
speech.4 On November 25, 2002, Cong. Jimenez delivered a privilege
speech in the House of Representatives confirming Cong. Villarama’s
exposé, and accusing Secretary Perez of extorting US$2 Million from him
in February 2001.5

On November 25, 2002, then Ombudsman Simeon Marcelo requested

PAGC to submit documents relevant to the exposé.6 On November 26,
2002, Ombudsman Marcelo formally requested Cong. Jimenez to submit a
sworn statement on his exposé.7 Cong. Jimenez complied on December
23, 2002 by submitting his complaint-affidavit to the Office of the
Ombudsman. The complaint-affidavit was initially docketed as CPL-C-02-
1992. On the same day, the Special Action Team of the Fact Finding and
Intelligence Research Office (FIRO) of the Office of the Ombudsman
referred Cong. Jimenez’s complaint-affidavit to the Evaluation and
Preliminary Investigation Bureau and to the Administrative Adjudication
Board, both of the Office of the Ombudsman, for preliminary investigation
and administrative adjudication, respectively.8

The complaint-affidavit of Jimenez was re-docketed as OMB-C-C-02-

0857L, for the criminal case in which the respondents were Secretary
Perez, Ernest L. Escaler and Ramon C. Arceo, Jr.; and as OMB-C-A-02-
0631L, for the administrative case involving only Secretary Perez as
respondent.9
On January 2, 2003, a Special Panel composed of Atty. Evelyn Baliton,
Atty. Mary Susan Guillermo and Atty. Jose de Jesus was created to
evaluate and conduct an investigation of CPL-C-02-1992.

On even date, Secretary Perez, through counsel, requested Ombudsman

Marcelo that the Office of the Ombudsman itself directly verify from the
Coutt’s Bank whether he (Secretary Perez) had ever held any account in
that bank to which the sum of US$2 Million had been remitted by Cong.
Jimenez.10

On January 15, 2003, Ombudsman Marcelo approved the recommendation

of the Special Panel to refer the complaint of Cong. Jimenez to FIRO for a
full-blown fact-finding investigation.11

On June 4, 2003, the Office of the Ombudsman received the letter dated
May 30, 2003 from the counsel of Cong. Jimenez, submitting the
supplemental complaint-affidavit dated April 4, 2003 of Cong. Jimenez.

In his letter dated July 3, 2003, Secretary Perez, through counsel, sought
the dismissal of the complaint for lack of probable cause.12

On July 17, 2003, Assistant Ombudsman Pelagio S. Apostol informed

Secretary Perez about the letter from Coutts Bank stating that "Hernando
B. Perez" had no account with it, and assured that the letter would be
considered in the final resolution of the case.13

On August 22, 2005, Ombudsman Marcelo created a new Special Panel to

evaluate CPL-C-02-1992, and, if warranted, to conduct administrative and
preliminary investigations, thereby superseding the creation of the Special
Panel formed on January 2, 2003.14

On November 14, 2005, the Field Investigation Office (FIO) completed its
fact-finding investigation and filed complaints against the following
individuals, namely:

A. Former Justice Secretary Hernando B. Perez, Rosario S. Perez,

Ernesto L. Escaler, Ramon C. Arceo and John Does for violation of
Section 3(b) of R.A. No. 3019;

B. Former Justice Secretary Hernando B. Perez for violation of the

following: Section 8 in relation to Section 11 of R.A. No. 6713, Article
 183 (Perjury) of the Revised Penal Code, and Article 171, par. 4
(Falsification) of the RPC; and

C. Former Justice Secretary Hernando B. Perez, Rosario S. Perez,

Ernest L. Escaler, Ramon C. Arceo and John Does for violation of the
provisions of R.A. 1379.15

On November 23, 2005, the Special Panel directed Secretary Perez (who
had meanwhile resigned from office), his wife Rosario S. Perez (Mrs.
Perez), Escaler and Arceo to submit their counter-affidavits in OMB-C-C-
02-0857-L, OMB-C-C-05-0633-K, OMB-C-C-05-0634-K and OMB-C-C-05-
0635-K (criminal cases). In another order of the same date, the Special
Panel directed former Secretary Perez to file his counter-affidavit in OMBC-
A-02-0631-L (administrative case).16

On November 29, 2005, the respondents filed an urgent motion for

extension of time to file their counter-affidavits.

On December 2, 2005, the counsel for Escaler entered his appearance and
sought the extension of the time to file Escaler’s counter-affidavit.17

On December 5, 2005, the Special Panel ordered the respondents to file

their counter-affidavits within ten days from December 4, 2005, or until
December 14, 2005.18

On December 7, 2005, Asst. Ombudsman Apostol issued PAMO Office

Order No. 22, Series of 2005, creating a new team of investigators to assist
in the preliminary investigation and administrative adjudication of OMB-C-
C-02-0857L, OMB-C-A-02-0631L (administrative case), OMB-CC-05-
0633K to OMB-C-C-0635K (forfeiture proceedings under Republic Act No.
1379). The office order cancelled and superseded PAMO Office Order No.
01-2003, Series of 2003.19

On December 12, 2005, former Secretary Perez, Mrs. Perez and Arceo
filed an urgent motion to be furnished copies of the complaints.20 On
December 13, 2005, they submitted a consolidated joint counter-affidavit
dated December 12, 2005.21

On December 15, 2005, the respondents filed a manifestation to which they

attached the affidavit of Atty. Chona Dimayuga.22
On December 20, 2005, Escaler, instead of filing his counter-affidavit,
moved to disqualify the Office of the Ombudsman from conducting the
preliminary investigation, and to require the Special Panel to turn over the
investigation to the Department of Justice (DOJ).23

On December 22, 2005, the respondents submitted the affidavit of Chief

State Prosecutor Jovencito Zuño.24

On December 29, 2005, the Special Panel denied the motion to disqualify
the Office of the Ombudsman from conducting the preliminary investigation,
and ordered Escaler to submit his counter-affidavit within five days from
notice.25

On January 4, 2006, Cong. Jimenez filed an urgent motion for extension of

the period to file his opposition to the motion earlier filed by Escaler, and to
be granted a new period to reply to the consolidated joint counter-affidavit
of the Perezes and Arceo.26

Between January 9, 2006 and February 10, 2006, Cong. Jimenez filed
urgent motions for time to file his opposition, the last of them seeking an
extension until February 10, 2006.27

On February 21, 2006, the Perezes and Arceo reiterated their urgent
motion to be furnished copies of the complaints.28

On February 22, 2006, Cong. Jimenez opposed Escaler’s motion to

disqualify the Office of the Ombudsman.29 On the same date, Escaler
asked for at least 20 days from February 17, 2006 (or until March 9, 2006)
within which to reply to Cong. Jimenez’s opposition to his motion.30 On
March 9, 2006, Escaler replied to Cong. Jimenez’s opposition.31 On March
28, 2006, Cong. Jimenez sought leave to file a rejoinder to Escaler’s
reply.32

On May 15, 2006, Escaler moved for the reconsideration of the order of
December 29, 2005.33

On May 25, 2006, the Special Panel denied Escaler’s motion for
reconsideration; directed the FIO "to let respondent Escaler examine,
compare, copy and obtain any and all documentary evidence described,
attached to and forming part of the complaints" of the cases; and granted
Escaler an extension of five days within which to submit his counter-
affidavit.34

After Escaler failed to submit his counter-affidavit despite the lapse of the
five day period given to him, the preliminary investigation was terminated.35

On August 23, 2006, Escaler commenced in this Court a special civil action
for certiorari with application for a temporary restraining order (TRO)
docketed as G.R. No. 173967-71.36 On September 4, 2006, the Court
required the Office of the Ombudsman to comment on the petition of
Escaler.37

On November 6, 2006, the Special Panel issued a joint resolution, finding

probable cause and recommending that criminal informations be filed
against the respondents, as follows:

1) Former Secretary Hernando B. Perez, Rosario S. Perez, Ernest L.

Escaler and Ramon S. Arceo, Jr. for Extortion (Robbery) under par. 5
of Article 294 in relation to Article 293 of the Revised Penal Code;

2) Former Secretary Hernando B. Perez, Rosario S. Perez, Ernest L.

Escaler and Ramon S. Arceo, Jr. for violation of Section 3 (b) of Rep.
Act. 3019.

3) Former Secretary Hernando B. Perez for Falsification of Public

Documents under Article 171 par. 4 of the Revised Penal Code.

4) Former Secretary Hernando B. Perez for violation of Sec. 7, R.A.

3019 in relation to Section 8 of R.A. 6713.38

On January 5, 2007, Ombudsman Ma. Merceditas Gutierrez (Ombudsman

Gutierrez), who had meanwhile replaced the resigned Ombudsman
Marcelo, approved the joint resolution of the Special Panel.39

On January 11, 2007, the Perezes and Arceo sought the reconsideration of
the joint resolution,40 and supplemented their motion for that purpose with
additional arguments on January 15, 2007.41

On January 17, 2007, Arceo filed an ex parte motion for leave to admit
attached supplemental motion for reconsideration.42
On January 24, 2007, the Perezes and Arceo filed an urgent motion to
suspend proceedings. On February 6, 2007, Escaler also filed a motion to
suspend proceedings ex abundanti ad cautelam.43

On March 15, 2007, Cong. Jimenez asked for time to comment on the
respondents’ motion for reconsideration. He filed another motion for
extension of the time to comment on April 27, 2007.44

On September 18, 2007, the Perezes prayed that the proceedings be held
in abeyance to await the ruling on their application for intervention in
Escaler’s action in the Court. On October 1, 2007, they filed a motion to
dismiss.45

On October 2, 2007, Cong. Jimenez submitted his affidavit of

desistance.46 Thus, on October 4, 2007, the Perezes filed an ex
parte motion for resolution on the basis of the desistance by Cong.
Jimenez.47

On January 25, 2008, the Special Panel issued an omnibus resolution

denying the original and supplemental motions for reconsideration of the
Perezes and Arceo; their motion to suspend the proceedings; Escaler’s
motion to suspend proceedings ex abundanti ad cautelam; and the
Perezes’ motion to dismiss.48

On April 18, 2008, the Perezes brought a petition for certiorari with an
application for a writ of preliminary injunction in this Court (G.R. No.
182360-63).49 In due time, the Court required the respondents in G.R. No.
182360-63 to file their comments on the petition.50

On April 18, 2008, the Office of the Ombudsman filed in the

Sandiganbayan four informations against respondents, namely:

1. for violation of Sec. 3 (b) of Rep. Act 3019, as amended;

2. for Robbery (Art. 293, in relation to Art. 294, Revised Penal Code;

3. for Falsification of Public/Official Document under Art. 171 of the

Revised Penal Code; and

4. for violation of Section 7, Rep. Act 3019, as amended, in relation to

Section 8, Rep. Act 6713.51
Criminal Case No. SB-08-CRM-0265

[Violation of Section 3(b) of Republic Act No. 3019]

The information alleging the violation of Section 3(b) of Republic Act No.
3019, which was docketed as Criminal Case No. SB-08-CRM-0265
entitled People v. Hernando Benito Perez, et. al., and was raffled to the
First Division of the Sandiganbayan,52 averred:

That during the month of February, 2001 and sometime prior or subsequent
thereto in the City of Makati, Philippines, and within the jurisdiction of this
Honorable Court, accused Hernando B. Perez, a high ranking public officer,
being then the Secretary of the Department of Justice, while in the
performance of his official function, committing the offense in relation to his
office and taking advantage thereof, conspiring, confabulating and
confederating with accused Ernest L. Escaler, Rosario S. Perez and
Ramon C. Arceo, all private individuals, did then and there wilfully,
unlawfully and criminally request and demand the amount of US TWO
MILLION DOLLARS ($2,000,000.00) for himself and/or other persons from
Mark Jimenez a.k.a. Mario B. Crespo, and thereafter succeeded in
receiving from the latter the sum of US$1,999,965.00 in consideration of
accused Hernando S. Perez’s desisting from pressuring Mark Jimenez to
execute affidavits implicating target personalities involved in the plunder
case against former President Joseph ‘Erap’ Estrada and in connection
with the pending application of Mark Jimenez for admission into the
Witness Protection Program of the government, over which transaction
accused Hernando S. Perez had to intervene in his official capacity under
the law, to the damage and prejudice of Mark Jimenez.

CONTRARY TO LAW.53

On May 8, 2008, the Perezes moved to quash the information.54 Escaler

presented a similar motion to quash ex abundanti ad cautelam on May 12,
2008,55 while Arceo adopted the motions of the Perezes and Escaler on
May 13, 2008.56 On June 4, 2008, the Office of the Ombudsman countered
with a consolidated opposition.57

On July 17, 2008, the First Division of the Sandiganbayan promulgated its
resolution denying the motions to quash,58 disposing thusly:
WHEREFORE, in view of the foregoing, the Motion to Quash of accused
Hernando B. Perez and Rosario S. Perez and the urgent Ex- Abudanti Ad
Cautelam Motion to Quash of accused Ernest Escaler are
hereby DENIED for lack of merit.

Accordingly, let the arraignment of the accused herein proceed on July 18,
2008 at 8:30 in the morning as previously set by the Court.

SO ORDERED.

Respondents separately sought the reconsideration of the resolution of

denial of their motions to quash.

On November 13, 2008, the Sandiganbayan First Division granted the

motions for reconsideration,59 rendering the following ratiocination, to wit:

xxxx

After a second hard look on the respective contentions of the parties, the
Court is inclined to grant the Motions for Reconsideration of the accused
and perforce grant their motion to quash the Information filed against them
in this case.

It is axiomatic that as a general rule prerequisite, a motion to quash on the

ground that the Information does not constitute the offense charged, or any
offense for that matter, should be resolved on the basis of the factual
allegations therein whose truth and veracity are hypothetically admitted;
and on additional facts admitted or not denied by the prosecution. If the
facts in the Information do not constitute an offense, the complaint or
information should be quashed by the court.

xxxx

It is clear that the ambit of Section 3 (b) of RA 3019 is specific. It is limited

only to contracts or transaction involving monetary consideration where the
public officer has authority to intervene under the law. Thus, the requesting
or demanding of any gift, present, share, percentage, or benefit covered by
said Section 3(b) must be in connection with a "contract or transaction"
involving "monetary consideration" with the government wherein the public
officer in his official capacity has to intervene under the law. In this regard,
the Supreme Court in Soriano, Jr. vs. Sandiganbayan construed the term
"contract" or "transaction" covered by Section 3(b) of RA 3019, as follows –

"It is obvious that the investigation conducted by the petitioner was not
a contract. Neither was it a transaction because this term must be
construed as analogous to the terms which precedes it. A transaction like
a contract, is one which involves some consideration as in credit
transactions and this element (consideration) is absent in the
investigation conducted by the petitioner." (Emphasis supplied)

Thus, applying the above construction of the Supreme Court in the case at
bench, the Court believes and so holds that the alleged desistance of
accused Hernando B. Perez "from pressuring Mark Jimenez to execute
affidavits implicating target personalities involved in the plunder case
against former President Joseph ‘Erap’ Estrada and in connection with the
pending application of Mark Jimenez for admission into the WPP of the
government", cannot, by any stretch of the imagination, be considered
as"contract" or "transaction" as defined within the ambit of the fourth
element of the offense under Section 3(b) of RA 3019 because
no "monetary consideration" as in credit transaction is involved.

The Court finds untenable the prosecution’s contention that the execution
by Mark Jimenez of the affidavits in connection with his pending application
for admission in the WPP (and not the alleged desistance of accused
Hernando B. Perez from pressuring Mark Jimenez to execute affidavits
implicating target personalities involved in the plunder case against
President Estrada) is the very contract or transaction required by the
offense charged in this case; and that all the elements of a contract
contemplated therein are present as there is allegedly consent between the
government and Mark Jimenez, object or subject matter which is the
execution of affidavits in connection with his application for admission in the
WPP, and a cause or consideration which consists of security and
monetary benefits to be given by the government to Mark Jimenez in
exchange for his participation as a witness under the WPP.

For even assuming for the sake of argument that the pending application of
Mark Jimenez for admission in the WPP can be considered as a contract or
transaction, it bears stressing that the principal consideration for the said
application of Mark Jimenez is the latter’s obligation to testify as a witness
under the WPP on one hand and his entitlement to the protection granted
to a witness in the WPP on the other hand and as such, does not entail any
money consideration. Certainly, this is not the (monetary) consideration
which is essential or involved in credit transactions. Any pecuniary or
monetary expense that may be incurred by the Government as a result of
the implementation of the program in favour of Mark Jimenez is purely
incidental. Such alleged monetary benefit is definitely not the reason that
impelled Mark Jimenez to allegedly avail of the WPP of the government.

More precisely, however, what appears as the main consideration of the

alleged demand or receipt of accused Hernando B. Perez of the sum of
US$2,000,000.00 from Mark Jimenez is the former’s alleged desistance
from pressuring the latter to execute affidavits implicating targeted
personalities in the plunder case against former President Estrada. In the
light of the ruling of the Supreme Court in Soriano vs. Sandiganbayan,
supra, such alleged desistance of accused Hernando B. Perez (and even
the application of Mark Jimenez for admission into the WPP as argued by
the prosecution) can hardly be considered as a "contract" or "transaction"
that is contemplated in Section 3(b) of RA 3019, as amended.

Moreover, the Court takes note of the admission made by the prosecution
in its Memorandum that the transaction involving Mark Jimenez’s execution
of affidavits for his admission to the WPP is not yet a perfected contract
between the Government and Mark Jimenez since it is still in its
"negotiation phase" because of the refusal of Mark Jimenez to execute the
affidavits against certain individuals. This admission is another indication
that there is indeed no contract or transaction to speak of that is covered
under the fourth element of the offense of violation of Section 3(b) of RA
3019.

Finally, it may be argued that while the material allegations in the subject
information may not constitute the offense of violation of Section 3(b) of RA
3019, as amended, the same material/factual allegations nevertheless
constitute Direct Bribery or another felony which is necessarily included in
the offense charged herein so that the subject information in this case
should not be quashed. It is believed, however, that the filing of the
Information charging the accused with Robbery in SB-08-CRM-00266
pending before the Second Division of this Court on the basis of the same
acts complained of in this case, constitutes a bar against the information for
said lesser felony as it would result into two differently charged felonies
from a single act and thus, would unnecessarily or unjustifiably expose the
accused to the danger of suffering two penalties for a single offense if the
subject information is not quashed. If a single act results into two or more
offenses, they should not be charged and/or punished separately unless
the other offense with different elements is penalized under a special law.
To do so would violate, if not the principle of double jeopardy, the rule
against splitting a single act into various charges. It is settled that a
defendant should not be harassed with various prosecutions upon the
same act by splitting the same into various charges, all emanating from the
same law violated, when the prosecution could easily and well embody
them in a single information because such splitting of the action would work
unnecessary inconvenience to the administration of justice in general and
to the accused in particular, for it would require the presentation of
substantially the same evidence before different courts.

All told, with the absence of the fourth element, the Court finds that the
factual/material allegations in the subject Information do not constitute the
offense of violation of Section 3(b) of RA 3019, as amended, and therefore,
It is constrained to quash the said Information. In this regard, the Court
deems it unnecessary to discuss/resolve the other issues raised in the
subject motions for reconsideration of the herein accused and/or disturb the
other findings contained in the Resolution sought to be reconsidered.

WHEREFORE, the instant Motions for Reconsideration of the herein

accused are resolved accordingly and the subject Information for violation
of Section 3(b) of R.A. 3019, as amended, is hereby QUASHED.

SO ORDERED.

The State moved for the reconsideration of the resolution quashing the
information in Criminal Case No. SB-08-CRM-0265.

During the pendency of the State’s motion for reconsideration, Criminal

Case No. SB-08-CRM-0265 was re-raffled to the Third Division of the
Sandiganbayan.

On April 21, 2009, the Third Division denied the Ombudsman’s motion for
reconsideration,60 holding thusly:

xxxx
The core issue raised in the submission of the parties relates to the
meaning of the word "transaction" as it is used in Sec. 3 (b) of RA 3019 to
constitute an element of the offense. More particularly, has the meaning of
the term "transaction" as enunciated in the Soriano case been modified by
subsequent rulings of the Supreme Court?

The meaning of "transaction" in Sec. 3 (b) of RA 3019 was enunciated in

the Soriano case when the Supreme Court stated:

As stated above, the principal issue is whether or not the investigation

conducted by the petitioner can be regarded as a "contract or transaction"
within the purview of Sec. 3 (b) of R.A. No. 3019. On this issue the petition
is highly impressed with merit.

The afore-mentioned provision reads as follows:

SEC. 3. Corrupt practices of public officers. In addition to acts or omissions

of public officers already penalized by existing law, the following shall
constitute corrupt practices of any public officer and are hereby declared to
be unlawful:

(a) …

(b) Directly or indirectly requesting or receiving any gift, present,

share, percentage, or benefit, for himself or for any other person, in
connection with any contract or transaction between the Government
and any other party, wherein the public officer in his official capacity
has to intervene under the law.

The petitioner states:

Assuming in gratia argumenti, petitioner’s guilt, the facts make out a case
of Direct Bribery defined and penalized under the provision of Article 210 of
the Revised Penal Code and not a violation of Section 3, subparagraph (b)
of Rep. Act 3019, as amended.

The evidence for the prosecution clearly and undoubtedly support, if at all
the offense of Direct Bribery, which is not the offense charged and is not
likewise included in or is necessarily included in the offense charged, which
is for violation of Section 3, subparagraph (b) of Rep. Act 3019, as
amended. The prosecution showed that: the accused is a public officer; in
consideration of P4,000.00 which was allegedly solicited, P2,000.00 of
which was allegedly received, the petitioner undertook or promised to
dismiss a criminal complaint pending preliminary investigation before him,
which may or may not constitute a crime; that the act of dismissing the
criminal complaint pending before petitioner was related to the exercise of
the function of his office. Therefore, it is with pristine clarity that the offense
proved, if at all is Direct Bribery. (Petition, p. 5.)

Upon the other hand, the respondents claim:

A reading of the above-quoted provision would show that the term

‘transaction’ as used thereof is not limited in its scope or meaning to a
commercial or business transaction but includes all kinds of transaction,
whether commercial, civil or administrative in nature, pending with the
government. This must be so, otherwise, the Act would have so stated in
the "Definition of Terms", Section 2 thereof. But it did not, perforce leaving
no other interpretation than that the expressed purpose and object is to
embrace all kinds of transaction between the government and other party
wherein the public officer would intervene under the law. (Comment, p. 8.)

It is obvious that the investigation conducted by the petitioner was

not a contract. Neither was it a transaction because this term must be
construed as analogous to the term which precedes it. A transaction,
like a contract, is one which involves some consideration as in credit
transactions and this element (consideration) is absent in the
investigation conducted by the petitioner. (Emphasis Supplied)

The argument of the Prosecution that the interpretation of the term

"transaction" defined in the Soriano case has been modified by the Mejia,
Pelegrino and Chang cases does not persuade.

A review of the Mejia, Peligrino and Chang cases reveals that the main
issue adjudicated in those cases involved an interpretation of the element
of Sec. 3 (b) of RA 3019, namely: the right to intervene of the public officer
in the contract or transaction and not the element of what is a contract or
transaction with the government.

Thus, in the Mejia case, the Supreme Court ruled:

Under the sixth assigned error petitioner alleges that she does not
intervene in the setting of the hearing of cases and she does not formulate
resolutions thereof. The branch clerk of court is the administrative assistant
of the presiding judge whose duty is to assist in the management of the
calendar of the court and in all other matters not involving the exercise of
discretion or judgment of the judge. It is this special relation of the petitioner
with the judge who presumably has reposed confidence in her which
appears to have been taken advantage of by the petitioner in persuading
the complainants to give her money in consideration of a promise to get a
favorable resolution of their cases.

In the Peligrino case, the Supreme Court ruled:

Petitioner is a BIR Examiner assigned to the Special

Project Committee tasked "xxx to undertake verification of tax liabilities of

various professionals particularly doctors within the jurisdiction of Revenue
Region 4-A, Manila xxx" Since the subject transaction involved the
reassessment of taxes due from private complainant, the right of
petitioner to intervene in his official capacity is undisputed. Therefore,
elements (1), (4) and (5) of the offense are present. (Emphasis Supplied)

In the Chang case, the Supreme Court ruled:

San Mateo’s justification behind such refusal- that he had no authority to

accept an amount less than the assessment amount- is too shallow to merit
belief, he being the Chief Operations, Business Revenue Examination,
Audit Division of the Treasurer’s Office, who had, on those various
meetings, gone out of his way to negotiate the settlement of the assessed
deficiency tax.

In the recent case of Merencillo vs. People, the Supreme Court identified
the issues raised in the Petition as follows: (1) the Sandiganbayan’s refusal
to believe petitioner’s evidence over that of the prosecution and (2) the
Sandiganbayan’s failure to recognize that Petitioner was placed in double
jeopardy.

In addressing the second issue, the Supreme Court ruled:

Clearly, the violation of Section 3(b) of RA 3019 is neither identical nor

necessarily inclusive of direct bribery. While they have common elements,
not all the essential elements of one offense are included among or form
part of those enumerated in the other. Whereas the mere request or
demand of a gift, present, share, percentage or benefit is enough to
constitute a violation of Section 3(b) of RA 3019, acceptance of a promise
or offer or receipt of a gift or present is required in direct bribery. Moreover,
the ambit of Section 3(b) of RA 3019 is specific. It is limited only to
contracts or transactions involving monetary consideration where the
public officer has the authority to intervene under the law. Direct
bribery, on the other hand, has a wider and more general scope: (a)
performance of an act constituting a crime; (b) execution of an unjust act
which does not constitute a crime and (c) agreeing to refrain or refraining
from doing an act which is his official duty to do. Although the two charges
against petitioner stemmed from the same transaction, the same act gave
rise to two separate and distinct offenses. No double jeopardy attached
since there was a variance between the elements of the offenses charged.
The constitutional protection against double jeopardy proceeds from a
second prosecution for the same offense, not for a different one. (Emphasis
Supplied)

Prosecution’s argument that the statement of the Supreme Court above-

quoted is an obiter dictum is specious.

An obiter dictum is a "judicial comment made while delivering a judicial

opinion, but one that is unnecessary to the decision in the case and
therefore not precedential (although it may be considered persuasive)." In
the Merencillo case, one issue raised by Petitioner was precisely the issue
of double jeopardy which the Supreme Court resolved by distinguishing the
elements of violation of Sec. 3 (b) of RA 3019 and Direct Bribery. As one of
the elements of the offense of violation of Sec. 3 (b) of RA 3019, the Court
adopted the meaning given to the term "transaction" in the Soriano case.
The above-quoted resolution was not a mere obiter dictum but the ratio
decidendi which is defined as:

"1. the principle or rule of law on which a court’s decision is founded; 2. The
rule of law on which a later court thinks that a previous court founded its
decision xx"

The Prosecution argued that it is a maxim in statutory construction that a

law must be read in its entirety and no single provision should be
interpreted in isolation with respect to the other provisions of the law. The
Prosecution further argued that a close examination of RA 3019 in its
entirety would show that the term "transaction" appears several times and
was never confined to transactions involving monetary consideration.
Suffice it to say that a maxim in statutory construction cannot be superior to
an express interpretation of the law made by the Supreme Court.
Furthermore, the provisions in RA 3019 cited by Prosecution constitute
different offenses with their own different elements, with their own different
modalities of commission.

The reference to the Congressional record by the Prosecution does not

disprove the fact that for violation of Sec. 3 (b) of RA 3019, the transaction
must involve monetary consideration. As pointed out earlier, no less than
the Supreme Court has interpreted the meaning of the term "transaction"
as an element of violation of the said section. Likewise, as admitted by the
Prosecution, the reference to the deliberations of Congress which it cited
involved deliberations on Sec. 5 of RA 3019 and not on Sec. 3 (b) of RA
3019. The two sections, i.e. Sec. 5 and Sec. 3 (b) of RA 3019 are different
offenses with their own different elements.

Having resolved the core issue in the Motion For Reconsideration of the
Prosecution, there is no further need to discuss the other arguments of the
Prosecution in its Motion.

WHEREFORE, Prosecution’s Motion for Reconsideration of the Resolution

of the First Division dated November 13, 2008 is DENIED.

SO ORDERED.

On June 22, 2009, the Office of the Special Prosecutor (OSP) assailed in
this Court via petition for certiorari the resolution of the Sandiganbayan
promulgated on July 17, 2008 quashing the information in Criminal Case
No. SB-08-CRM-0265 and the resolution promulgated on April 21, 2009
denying the State’s motion for reconsideration.

On November 18, 2009, the Court denied the Perezes’ urgent motion for
leave to file a motion to dismiss for being a prohibited pleading, and instead
required the respondents to comment on the petition, among other things.61

Criminal Case SB-08-CRM-0266

[Robbery under Art. 293, in relation to
Art. 294, Revised Penal Code]
The information charging robbery under Article 293, in relation to Article
294, Revised Penal Code was raffled to the Second Division (Criminal
Case No. SB-08-CRM-0266).62

On May 6, 2008, Escaler filed a motion to quash ex abundanti ad cautelam,

alleging that the facts charged did not constitute an offense.63 On May 2,
2008, the Perezes filed their own motion to quash the information.64 On
May 6, 2008, Arceo filed an ex parte motion to adopt the Perezes motion
as well as Escaler’s motion to quash.65

On June 26, 2008, the Second Division of the Sandiganbayan denied the
respective motions to quash of respondents.66

On June 30, 2008, Escaler moved to reconsider the denial.67 On July 10,
2008, Arceo also moved to reconsider the denial.68 The Perezes filed their
own motion for reconsideration on July 11, 2008.69

On November 20, 2008, the Second Division of the Sandiganbayan

granted the motions for reconsideration, quashed the information charging
respondents with robbery, and dismissed Criminal Case No. SB-08-CRM-
0266,70holding as follows:

xxxx

The Court after a careful perusal of the issue and the record on hand, is
persuaded. Extant in the record and which the prosecution admits or at
least does not deny are the following:

1. The alleged Robbery (extortion) was committed on February 13,

2001 (Joint Resolution signed by members of the Special Panel
composed of Orlando Ines, Adoracion Agbada, Mary Susan
Geronimo, Jose de Jesus Jr., signed by Asst. Ombudsman Pelagio
Apostol, and approved by Ombudsman Mr. (sic) Merceditas N.
Gutierrez.) (pp. 4-69, Vol. 1, Records; pp. 70-88, Complaint-Affidavit
of Mark Jimenez, Vol. 1, Records)

2. On February 23, 2001 the amount of US $1,999,965.00 was

transferred to Coutts Bank Hongkong in favour of the beneficiary of
Account No. HO 13706, from Trade and Commerce Bank, Cayman
Island through the Chase Manhattan Bank in New York.
Subsequently from March 6, 2001 to May 23, 2001 funds were
 transferred from Coutts Bank to other accounts, among them a
$250,000.00 bank draft/cheque issued to Ramon C. Arceo (pp. 10-11
Records).

3. On December 23, 2002 Congressman Mark Jimenez filed his

complaint with the Ombudsman charging Hernando Perez, Ernest
Escaler, Ramon Arceo and several John Does (Mrs. Rosario Perez
was not among those charged) with criminal offenses of Plunder,
Extortion, Graft and Corruption, Obstruction of Justice, Violation of
the Penal Provision of the Code of Conduct and Ethical Standards
R.A. 6713, and Administrative Offenses of Dishonesty, Grave
Misconduct, Oppression, Committing acts Punishable under the Anti-
Graft Law, Conduct Prejudicial to the Best Interest of the service, and
Violation of Section 5 (2) of R.A. 6713. It was subscribed and sworn
to on (the ) 23rd day of December 2002 (Complaint-Affidavit of Mario
Mark (MJ) Jimenez B. Crespo – pp. 70-88 Records).

4. On December 23, 2002, the FIRO (Fact Finding and Intelligence

Research Office) recommended that the case be referred to the
Evaluation and Preliminary Investigation Bureau and the
Administrative Adjudication Bureau (p. 6 of the Records)

5. The information was filed with this Court only on April 18, 2008.

Having established, or at least as claimed by Complainant Mark Jimenez,

that the Robbery (extortion) took place on February 13, 2001, the
Ombudsman should have demanded a reasonable explanation from the
complainant who was then a Congressman, wealthy and influential and in
whose house the alleged intimidation took place, why he was filing the
complaint only on December 23, 2002 a matter of more than eighteen (18)
months. This should have cautioned the Ombudsman as to the possible
motive in filing the complaint.

At any rate, the Field Investigation Office (FIO) of the office of the
Ombudsman as nominal complainant filed a complaint with the
Ombudsman on November 14, 2005 charging Hernando Benito Perez,
Rosario Salvador Perez, Ernest L. Escaler, Ramon Antonio C. Arceo Jr.
and John Does with Violation of Sec. 3(b) R.A. 3019, Sec. 8 in relation to
Sec. 11 of R.A. 6713, Perjury (Art. 183 RPC) and Art. 171 par. 4
Falsification, RPC and violation of R.A. 1379. (Pp. 132 to 170 of Records)
Robbery is NOT one of the charges.

With the Ombudsman’s finding that the extortion (intimidation) was

perpetrated on February 13, 2001 and that there was transfer of Mark
Jimenez US $1,999,965.00 to Coutts Bank Account HO 133706 on
February 23, 2001 in favour of the accused, there is no reason why within a
reasonable period from these dates, the complaint should not be resolved.
The act of intimidation was there, the asportation was complete as of
February 23, 2001 why was the information filed only on April 18, 2008. For
such a simple charge of Robbery there is nothing more to consider and all
the facts and circumstances upon which to anchor a resolution whether to
give due course to the complaint or to dismiss it are on hand. The case is
more than ripe for resolution. Failure to act on the same is a clear
transgression of the constitutional rights of the accused. A healthy respect
for the constitutional prerogative of the accused should have prodded the
Ombudsman to act within a reasonable time.

The long wait of the accused is without valid cause or justifiable motive and
has unnecessarily trampled upon their constitutional prerogatives to a
speedy disposition of the case. This is an impermissible course of action
that our fundamental law loathes.

As Justice Laurel said, the government should be the last to set an

example of delay and oppression in the administration of justice. It is the
moral and legal obligation of the Court to see that criminal proceedings
come to an end (People vs. Calamba 63 Phil 496).

The Constitution of the Philippines provides:

Art. 3 Sec. 16: All persons shall have a right to a speedy disposition of their
cases before all judicial(,) quasijudicial or administrative bodies.

Thus under our present fundamental law, all persons are entitled to a
speedy resolution of their cases be it civil, administrative or criminal cases.
It is, in criminal cases however where the need to a speedy disposition of
their cases is more pronounced. It is so, because in criminal cases, it is not
only the honor and reputation but even the liberty of the accused (even life
itself before the enactment of R.A. 9346) is at stake.
The charge is a simple case for Robbery. Certainly it does not involve
complicated and factual issues that would necessitate painstaking and
gruelling scrutiny and perusal on the part of the Ombudsman. It may have
its novel, and to it, valid reason for departing from the established
procedure and rules, but virtually in doing so, it has failed to discharge its
duty as mandated by the Constitution to promptly act on complaints filed in
any form or manner against public officers and employees.

The totality of the facts and the surrounding circumstances bears

unmistakably the earmarks of inordinate delay, making the applicability of
the doctrine enunciated in Anchangco Jr. and Duterte cases cited in the
parties’ pleadings irrefragable.

Accordingly, there being a clear violation of the constitutional right of the

accused, the prosecution is ousted of any authority to file the information
and we hereby order the quashing of the information and the consequent
dismissal of this case.

While the ground upon which the Court banked and relied this dismissal
order was not invoked in the motions for reconsideration of accused
Escaler and Arceo, since they are similarly situated with their coaccused
spouses Perez, this resolution applies to them with equal force and effect.

On the basis of the foregoing disquisition, We hereby consider the Motion

for Reconsideration of our resolution denying the motion for consolidation
moot and academic; even as, We rule that the said motion lacks
persuasiveness considering that, per Manifestation of accused Escaler he
is not in any way a party to all the cases pending, the accused in each of
the cases were charged with different offenses, and the different cases are
already at different stages of the proceedings, and considering the
argument of the prosecution that the different offenses in the four (4) cases
consist of different elements necessitating presentation of different proofs
and evidence for each case.

Accused’(s) bonds are ordered cancelled and the Hold-Departure Order

issued against them in this case is lifted and set aside.

So ordered.
The State moved to reconsider the resolution of November 20, 2008,71 but
the Second Division of the Sandiganbayan denied the motion for
reconsideration on June 19, 2009,72 stating thusly:

This resolves the Motion for Reconsideration of the People of the

Philippines dated December 8, 2008 seeking to reconsider the Resolution
of this Court promulgated on November 20, 2008 dismissing the case, as
well as accused-spouses Perez Opposition dated December 22, 2008,
accused Arceo’s Comment/Opposition of even date, and the Opposition
dated January 5, 2009 of accused Ernest L. Escaler.

On record too, are the Plaintiff’s Consolidated Reply dated January 19,
2009 to the three (3) Opposition/Comment of the accused, the three (3)
Rejoinders of the accused of different dates, the plaintiff’s sub-rejoinder
dated February 9, 2009, accused Perezes(‘) Manifestation and Plaintiff’s
Comment dated February 16, 2009 to Perezes(‘) Manifestation.

All these shall be considered and taken up by the Court in seriatim.

The first issue brought up by the accused is a supposed procedural lapse

of the plaintiff’s motion for reconsideration in that the same was filed in
violation of Sec. 4 Rule 15 of the Rules of Court which provides in
substance that in every written motion required to be heard, the notice of
hearing thereof shall be served in such a manner as to ensure its receipt by
the other party at least three (3) days before the date of hearing.

Of course, it is not disputed that the accused-spouses received through

registered mail their copy of plaintiff’s motion only on December 16, 2008
while it set the date of hearing on December 12, 2007 thus the motion was
set for hearing before the other party received it. Accused Ramon Arceo
received his copy of the motion only on December 17, 2008 while accused
Ernest Escaler received his copy after December 18, 2008 giving the same
situation as accused Perezes. It must be taken note of that the Court set
the hearing of the plaintiff’s motion on December 18, 2008, as on
December 12, 2008 the date specified on plaintiff’s motion, no accused has
received his copy of the said motion.

Considering thus, the situation, there seems plausibility for the accused
claim of transgression of the aforecited provision of the Rules of Court.
Nonetheless, considering the transfer of the date of hearing, and that all the
parties were given ample time to file and submit their respective pleadings
which at the time the issue was to be resolved had grown voluminous, the
Court is not inclined to give due consideration for this procedural
impropriety.

The Court takes note however that the plaintiff’s motion for reconsideration
was filed only on December 8, 2008 beyond the fifteenth day period within
which it should be filed, since it received a copy of the Resolution of this
Court on November 21, 2008. Thus, the fifteenth day fell on December 6,
2008 after which the said Resolution has become final and executory. The
Resolution in question therefore which finally disposes of the case is not
only final but executory as well which is virtually beyond the reach of the
motion for reconsideration belatedly filed.

We will now tackle the merits of the grounds invoked by the People.

The first ground cited in the People’s motion was that the filing of complaint
against former secretary Hernando B. Perez was not attended by ill motive
since it reasoned out that it was the intimation of the Court when it stated in
its Resolution the Ombudsman xxx "should have demanded a reasonable
explanation from the complainant who was then a congressman, wealthy
and influential and in whose house the alleged intimidation took place, why
he was filing the complaint only on December 23, 2002 a matter of more
than eighteen (18) months. This should have cautioned the Ombudsman as
to the possible motive in filing the complaint. xxx "We take note of the
response of the prosecution "Jimenez thought that after the pay-off,
Secretary Perez would stop threatening him and would leave him in peace
for good. This was the reason why Jimenez did not immediately file a
complaint against Secretary Perez and his co-accused."

The first and foremost impression We can gather is that the alleged about
two million dollars which supposedly was the result of accused Perez’
alleged extortion was delivered already to the accused. All along therefore,
if the claim of the prosecution is to be believed, Robbery has long been
committed that was on or about February 2001 as alleged in the
information. With or without ill-motive, the Ombudsman should have acted
within a reasonable time. Certainly eighteen (18) long months from the
filing of the complaint can not be considered within a reasonable time.
The movant then argued that the filing of the information only on April 18,
2008 were due to legal impediments which were beyond the control of the
office of the Ombudsman.

The Court can not understand those alleged "legal impediments" in the
prosecution for Robbery. Here is the prosecution claiming strongly that the
filing of the complaint was not attended by ill-motive and that after the pay-
off even if a crime has been committed against complaint Congressman
Mark Jimenez, the latter delayed his filing of the complaint because he
thought the accused would leave him in peace. This is the only impediment
we can think of, and this definitely is not a legal impediment; certainly too
this is not beyond the control of the Office of the Ombudsman.

But the Court shall keep track of the movant’s argument about this
supposed legal impediment. Admitting that the asportation was complete
on February 23, 2001, the prosecution reasoned out that the case can not
be filed in Court at that time due to insufficiency of evidence. As averred in
the Opposition of accused Ernest Escaler, "xxx the plaintiff’s duty is to
determine whether there exists probable cause to hold the accused for trial
for simple robbery", and those documents which the prosecution so
capitalized it exerted so much offer to obtain, are mere evidentiary matters.
This is even admitted in the prosecution’s motion for reconsideration.

Consider these facts all explicitly admitted by the prosecution:

On February 13, 2001 accused former Justice Secretary Hernando Perez

accompanied by accused Ernest Escaler supposedly threatened
complainant Congressman Mark Jimenez to send him to jail where he will
die of boil (Putang ina mo, sinasalsal mo lang ako. Hindot ka. Ipakukulong
kita sa Quezon City Jail. Doon mamamatay ka sa pigsa). On February 23,
2001 the amount of US $1,999,965 owned by Congressman Mark Jimenez
was transferred to Coutts Bank, Hongkong in favour of Account Number
13706 in the name of Ernest Escaler (confirmed by Trade and Commerce
Bank Payment Detail Report dated February 23, 2001)

Congressman Mark Jimenez did not file my complaint against the accused
in any Court or prosecutor office. This, despite his claim in his counter-
affidavit that:

"12. Meanwhile, Pres. Estrada stepped down as President after the Armed
Forces of the Philippines withdrew its support to him, and the Arroyo
Administration was installed on January 19, 2001. The new Secretary of
Justice, Hernando B. Perez, was appointed by Pres. Arroyo. Soon after his
appointment. Sec. Perez sent feelers that I am his first target for inclusion
in the criminal cases that he will file against Pres. Estrada. He also
threatened and intimidated me and my family with bodily harm and
incarceration in a city jail with hardened criminals and drug addicts unless I
execute damaging affidavits against Pres. Estrada and his cronies and
associates. Because of the intense pressure upon me and my family, I was
forced to come across with US $2.0 Million. (Page 73 of the Records)

It was only on December 23, 2002 as stated in our Resolution that

Congressman Mark Jimenez filed his complaint with the Ombudsman, even
if the said offense was alleged to have been committed on Feb. 13, 2001
and it was only on April 18, 2008 that the Ombudsman presented the
information with this Court.

The complainant had hesitated into filing his complaint for about eighteen
(18) months while the Ombudsman with double hesitation dillydallied for
about six (6) years. All in all, the delay from the supposed commission of
such a simple offense of Robbery took more than seven years – that is
from February 13, 2001 to April 18, 2008. It is clear the socalled legal
impediments are but empty assertion to belatedly justify an impermissible
action.

Taking exception to our ruling that the totality of facts and surrounding
circumstances bear unmistakably the earmarks of inordinate delay, the
movant made a comparison of those cases dismissed by the Supreme
Court for violation of the Constitutional right of the accused to speedy
disposition of cases, and this case, and wrongfully conclude there was no
delay in their handling of the case at bar.

We have already resolved and passed upon rather adequately this issue in
our Resolution with the observation that not anyone of the cases cited
involved the charge of Robbery. The movant’s discussion asserted no new
and substantial reason and argument to persuade us to reverse or modify
our considered opinion. We however pose this question to the prosecution.
If Asst. Ombudsman Pelagio Apostol recommended the filing of the
information against the accused on November 7, 2006 why did it take the
Ombudsman only on January 5, 2007 to approve the recommendation. And
if, on January 11, 2007 the accused submitted their Motion for
Reconsideration, why did it take the Ombudsman up to April 15, 2008 – a
matter of about fifteen (15) months to resolve the same when there was NO
OPPOSITION nor comment from the other party?

The argument that "the authority of the Ombudsman is not divested by the
claimed delay in filing the information as this authority is vested by law" is a
reckless reasoning that only shows that while admitting there was undue
delay in the disposition of the case, it could still proceed with its information
to charge the accused.

The prosecution need not be reminded of the uniform ruling of the

Honorable Supreme Court dismissing the cases of Tatad, Angchangco,
Duterte and other cases for transgressing the constitutional rights of the
accused to a speedy disposition of cases. To argue "that the authority of
the Ombudsman is not divested by the claimed delay in filing the
information xxx" is to limit the power of the Court to act on blatant
transgression of the constitution.

As to fact-finding investigation, the Court finds it so baseless for the movant

to capitalize on what it supposedly did in the process of the fact-finding
stance; and then reasoning out as if clutching on straws that the sequences
of events should excuse it from lately filing the information. But it took the
movant six (6) years to conduct the said fact-finding investigation, and then
unabashedly it argues that is not part of the preliminary investigation.

Determining probable cause should usually take no more than ninety (90)
days precisely because it only involves finding out whether there are
reasonable grounds to believe that the persons charged could be held for
trial or not. It does not require sifting through and meticulously examining
every piece of evidence to ascertain that they are enough to convict the
persons involved beyond reasonable doubt. That is already the function of
the Courts.

As argued by accused Ramon Arceo, the claim of the movant that the
preliminary investigation of the instant case commenced only on November
14, 2005 when the Field Investigation Office (FIO) filed its complaint, and
not on December 23, 2002 when Mark Jimenez filed his complaint-affidavit,
is rather specious and does not hold water as Robbery was not among the
offenses included in the charge of the FIO. As such, it is not correct to say
that the counting of the period for delay should commence only in
November 2005.

The conclusion thus, that the long waiting of six (6) years for the Office of
the Ombudsman to resolve the simple case of Robbery is clearly an
inordinate delay, blatantly intolerable, and grossly prejudicial to the
constitutional right of speedy disposition of cases, easily commands
assent. This Court, it must be made clear, is not making nor indulging in
mere mathematical reckoning of the time involved.

In its sixth ground the movant argued that the First, Third and Fourth
Divisions all junked the claimed inordinate delay of the accused and asked
that the Second Division should "xxx co-exist not work on cross-purposes
with the other Court’s Division xxx". The argument begs the question!
Suppose if and when the incident reaches the Supreme Court, the highest
Court of the land ruled that it is the Second Division which is correct, and
the other Divisions in error, what would happen now to the argument of the
movant that "xxx there is rhyme or reason for the Sandiganbayan, Second
Division to co-exist xxx with the other Court’s Division xxx".

Moreover, the information in the first division charges the accused of

Violation of Sec. 3 (b) of R.A. 3019, in the third division the accusation was
for Falsification of Public Document under Art. 171 of the Revised Penal
Code, while the accused have been indicted for violating Sec. 7 R.A. 3019
in relation to Sec. 8 of R.A. 6713 before the Fourth Division. The Court can
not say whether there is need for paper trail or monitoring of documents in
those cases, as the Divisions concerned can competently resolve and pass
upon it but certainly in this instant case of Robbery, to indulge in a
prolonged fact-finding process is not a boon but a bane on the part of the
prosecution

In a distasteful exhibition of unsavoury language, bordering on derision and

contempt, the prosecution argued that "xxx the assailed resolution is a
wanton display of arrogance, contemptuous and outright illegal for it
mooted the same issue of inordinate delay pending with the Honorable
Supreme Court xxx". This only goes to show that the prosecution is totally
ignorant of the hierarchy of Courts in our judicial system.

xxx It must be remembered that delay in instituting prosecutions is not only

productive of expense to the State, but of peril to public justice in the
attenuation and distortion, even by mere natural lapse of memory, of
testimony. It is the policy of the law that prosecutions should be prompt,
and that statutes, enforcing such promptitude should be vigorously
maintained. They are not merely acts of grace, but checks imposed by the
State upon itself, to exact vigilant activity from its subalterns, and to secure
for criminal trials the best evidence that can be obtained.

WHEREFORE, premises considered, the prosecution’s Motion for

Reconsideration dated December 8, 2008 is denied for lack of merit.

So ordered.

On August 24, 2009, the State assailed the resolutions of the Second
Division of the Sandiganbayan in this Court (G.R. No. 189063).73

Consolidation of the petitions

On October 26, 2009, the Court directed that G.R. No. 189063 be
consolidated with G.R. No. 182360-63 (entitled Hernando B. Perez and
Rosario S. Perez v. The Ombudsman, Field Investigation Officer of the
Ombudsman and Mario B. Crespo a.k.a. Mark Jimenez) and G.R. No.
173967-71 (Ernest B. Escaler v. The Office of the Ombudsman, et al.).74

On April 7, 2010, the Court consolidated G.R. No. 188165 with G.R. Nos.
173967-71, G.R. Nos. 182360-63 and G.R. No. 189063 (People of the
Philippines v. Hon. Sandiganbayan, 2nd Division, et al.).75

G.R. No. 173967-71 and G.R. No. 182360-63 were special civil actions
for certiorari to prevent the filing of the criminal informations against the
respondents.

Deconsolidation and dismissal of

G.R. No. 173967-71 and G.R. No. 182360-63

on the ground of their intervening mootness

On February 11, 2013, the Court deconsolidated G.R. No. 173967-71 and
G.R. No. 182360-63 from G.R. No. 188165 and G.R. No. 189063 on the
ground that the intervening filing of the informations in Criminal Case No.
SB-08-CRM-0265 and Criminal Case No. SB-08-CRM-0266 had rendered
the petitions in G.R. No. 173967-71 and G.R. No. 182360-63 moot.76

Issues

In G.R. No. 188165, the State raises the following issues:

I.

WHETHER RESPONDENT COURT ACTED WITH GRAVE ABUSE

OF DISCRETION AMOUNTING TO LACK OR EXCESS OF
JURISDICTION IN QUASHING THE INFORMATION IN CRIMINAL
CASE SB-08-CRM-265, BY CONFINING THE DEFINITION OF THE
WORD "TRANSACTION" IN SECTION 3(B) OF R.A. 3019 AS
TRANSACTIONS INVOLVING MONETARY CONSIDERATION.

II.

WHETHER RESPONDENT COURT ACTED WITH GRAVE ABUSE

OF DISCRETION AMOUNTING TO LACK OR EXCESS OF
JURISDICTION IN RELYING SOLELY ON THE CASE OF
SORIANO, JR. VS. SANDIGANBAYAN AND DISREGARDED
JURISPRUDENCE THAT SHOWS SECTION 3 (B) OF RA 3019
EXTENDS TO ANY DEALING WITH THE GOVERNMENT.

III.

WHETHER RESPONDENT COURT ACTED WTH GRAVE ABUSE

OF DISCRETION WHEN IT RESOLVED THE MOTIONS TO QUASH
(ON THE GROUND THAT THE ALLEGATIONS IN THE
INFORMATION DO NOT CONSTITUTE AN OFFENSE) BY GOING
BEYOND THE ALLEGATIONS IN THE INFORMATION AND
CONSIDERING SUPPOSED FACTS WITHOUT ANY BASIS.77

In G.R. No. 189063, the State submits the following issues:

A. WHETHER OR NOT PUBLIC RESPONDENT SANDIGANBAYAN

ACTED WITH GRAVE ABUSE OF DISCRETION AMOUNTING TO
LACK OR EXCESS OF JURISDICTION IN QUASHING THE
INFORMATION IN CRIMINAL CASE SB-08-CRM-0266 BY
HOLDING THAT "THERE BEING A CLEAR VIOLATION OF THE
 CONSTITUTIONAL RIGHT OF THE ACCUSED, THE
PROSECUTION IS OUSTED OF ANY AUTHORITY TO FILE THE
INFORMATION."

B. WHETHER OR NOT PUBLIC RESPONDENT SANDIGANBAYAN

ACTED WITH GRAVE ABUSE OF DISCRETION AMOUNTING TO
LACK OR EXCESS OF JURISDICTION IN FINDING THE TOTALITY
OF THE FACTS AND THE SURROUNDING CIRCUMSTANCES
BEARS UNMISTAKABLY THE EARMARKS OF INORDINATE
DELAY, MAKING THE APPLICABILITY OF THE DOCTRINE
ENUNCIATED IN ANGCHONGCO JR. AND DUTERTE CASES
CITED IN THE PARTIES’ PLEADINGS IRREFRAGABLE.78

The foregoing issues are restated thuswise:

I.

Whether or not it was the Office of the Solicitor General, not the
Office of the Ombudsman, that had the authority to file the petitions to
assail the Sandiganbayan resolutions.

II.

Whether the State, as the petitioner in G.R. No. 188165 and G.R. No.
189063, resorted to the wrong remedy in assailing the resolutions of the
Sandiganbayan dismissing the criminal charges against the respondents
through petitions for certiorari instead of petitions for review on certiorari.

Specific Issue in G.R. No. 188165

Whether or not the Sandiganbayan committed grave abuse of discretion

amounting to lack or in excess of jurisdiction in quashing the information by
applying the definition of transaction in Soriano, Jr. v Sandiganbayan, 131
SCRA 188.

Specific Issue in G.R. No. 189063

Whether or not the Sandiganabayan committed grave abuse of discretion

amounting to lack or in excess of jurisdiction when it dismissed the criminal
case due to the inordinate delay of the Office of the Ombudsman in
bringing the criminal action against respondents as to violate their
constitutional right to the speedy disposition of cases.

Ruling

The petitions for certiorari are devoid of merit.

I.

The Office of the Ombudsman is empowered to

file an appeal or certiorari from the
Sandiganbayan to the Supreme Court.

Respondents contend that the Office of the Ombudsman has no authority

to file the petitions for certiorari because only the Solicitor General could file
the petitions in this Court pursuant to Section 35, Chapter 12, Title III, Book
IV of the Administrative Code as amended by E.O. No. 292 ,which
pertinently states:

Section 35. Powers and Functions.—The Office of the Solicitor General

shall represent the Government of the Philippines, its agencies and
instrumentalities and its officials and agents in any litigation, proceedings,
investigation or matter requiring the services of a lawyer. When authorized
by the President or head of the office concerned, it shall also represent
government-owned or controlled corporations. The Office of the Solicitor
General shall constitute the law office of the Government and, as such,
shall discharge duties requiring the services of a lawyer. It shall have the
following specific powers and functions:

(1) Represent the Government in the Supreme Court and the Court of
Appeals in all criminal proceedings; represent the Government and its
officers in the Supreme Court, the Court of Appeals, and all other courts or
tribunals in all civil actions and special proceedings in which the
Government or any officer thereof in his official capacity is a party.

xxxx

The contention of the respondents is grossly erroneous.

That only the Solicitor General may represent the People on appeal
or certiorari in the Supreme Court and the Court of Appeals in all criminal
proceedings is the general rule,79 but the rule admits the exception
concerning "all cases elevated to the Sandiganbayan and from the
Sandiganbayan to the Supreme Court, the Office of the Ombudsman,
through its special prosecutor, shall represent the People of the Philippines,
except in cases filed pursuant to Executive Order Nos. 1, 2, 14 and 14-A,
issued in 1986." More specifically, Section 4(c) of Republic Act No. 8249
authorizes the exception, viz:

xxxx

c. Civil and criminal cases filed pursuant to and in connection with

Executive Order Nos. 1, 2, 14 and 14-A, issued in 1986.

xxxx

The procedure prescribed in Batas Pambansa Blg. 129, as well as the

implementing rules that the Supreme Court has promulgated and may
hereafter promulgate, relative to appeals/petitions for review to the Court of
Appeals, shall apply to appeals and petitions for review filed with the
Sandiganbayan. In all cases elevated to the Sandiganbayan and from
the Sandiganbayan to the Supreme Court, the Office of the
Ombudsman, through its special prosecutor, shall represent the
People of the Philippines, except in cases filed pursuant to Executive
Order Nos. 1, 2, 14 and 14-A, issued in 1986. (Bold emphasis provided)

xxxx

Consequently, the filing of the petitions in these cases by the Office of the
Ombudsman, through the OSP, was authorized by law.

II.

Petitioner did not establish grave abuse of discretion on the part of

the Sandiganbayan

The petitions for certiorari brought by the State must nonetheless be

dismissed for failure to show any grave abuse of discretion on the part of
Sandiganbayan in issuing the assailed resolutions.

A special civil action for certiorari is an independent action based on the

specific grounds provided in Section 1, Rule 65 of the Rules of Court, and
can prosper only the jurisdictional error, or the grave abuse of discretion
amounting to lack or excess of jurisdiction committed by the inferior court or
judge is alleged and proved to exist.

In De los Santos v. Metropolitan Bank and Trust Company,80 the Court has
expounded on the nature and reach of the extraordinary remedy
of certiorari, to wit:

We remind that the writ of certiorari – being a remedy narrow in scope and
inflexible in character, whose purpose is to keep an inferior court within the
bounds of its jurisdiction, or to prevent an inferior court from committing
such grave abuse of discretion amounting to excess of jurisdiction, or to
relieve parties from arbitrary acts of courts (i.e., acts that courts have no
power or authority in law to perform) – is not a general utility tool in the
legal workshop, and cannot be issued to correct every error committed by a
lower court.

In the common law, from which the remedy of certiorari evolved, the
writ certiorari was issued out of Chancery, or the King’s Bench,
commanding agents or officers of the inferior courts to return the record of
a cause pending before them, so as to give the party more sure and
speedy justice, for the writ would enable the superior court to determine
from an inspection of the record whether the inferior court’s judgment was
rendered without authority. The errors were of such a nature that, if allowed
to stand, they would result in a substantial injury to the petitioner to whom
no other remedy was available. If the inferior court acted without authority,
the record was then revised and corrected in matters of law. The writ
of certiorari was limited to cases in which the inferior court was said to be
exceeding its jurisdiction or was not proceeding according to essential
requirements of law and would lie only to review judicial or quasi-judicial
acts.1âwphi1

The concept of the remedy of certiorari in our judicial system remains much
the same as it has been in the common law. In this jurisdiction, however,
the exercise of the power to issue the writ of certiorari is largely regulated
by laying down the instances or situations in the Rules of Court in which a
superior court may issue the writ of certiorari to an inferior court or officer.
Section 1, Rule 65 of the Rules of Court compellingly provides the
requirements for that purpose, viz:
Section 1. Petition for certiorari. — When any tribunal, board or officer
exercising judicial or quasi-judicial functions has acted without or in excess
of its or his jurisdiction, or with grave abuse of discretion amounting to lack
or excess of jurisdiction, and there is no appeal, or any plain, speedy, and
adequate remedy in the ordinary course of law, a person aggrieved thereby
may file a verified petition in the proper court, alleging the facts with
certainty and praying that judgment be rendered annulling or modifying the
proceedings of such tribunal, board or officer, and granting such incidental
reliefs as law and justice may require.

The petition shall be accompanied by a certified true copy of the judgment,

order or resolution subject thereof, copies of all pleadings and documents
relevant and pertinent thereto, and a sworn certification of non-forum
shopping as provided in the third paragraph of section 3, Rule 46. (1a)

Pursuant to Section 1, supra, the petitioner must show that, one, the
tribunal, board or officer exercising judicial or quasi-judicial functions acted
without or in excess of jurisdiction or with grave abuse of discretion
amounting to lack or excess of jurisdiction, and, two, there is neither an
appeal nor any plain, speedy and adequate remedy in the ordinary course
of law for the purpose of amending or nullifying the proceeding.

Considering that the requisites must concurrently be attendant, the herein

petitioners’ stance that a writ of certiorari should have been issued even if
the CA found no showing of grave abuse of discretion is absurd. The
commission of grave abuse of discretion was a fundamental requisite for
the writ of certiorari to issue against the RTC. Without their strong showing
either of the RTC’s lack or excess of jurisdiction, or of grave abuse of
discretion by the RTC amounting to lack or excess of jurisdiction, the writ
of certiorari would not issue for being bereft of legal and factual bases. We
need to emphasize, too, that with certiorari being an extraordinary remedy,
they must strictly observe the rules laid down by law for granting the relief
sought.

The sole office of the writ of certiorari is the correction of errors of

jurisdiction, which includes the commission of grave abuse of discretion
amounting to lack of jurisdiction. In this regard, mere abuse of discretion is
not enough to warrant the issuance of the writ. The abuse of discretion
must be grave, which means either that the judicial or quasi-judicial power
was exercised in an arbitrary or despotic manner by reason of passion or
personal hostility, or that the respondent judge, tribunal or board evaded a
positive duty, or virtually refused to perform the duty enjoined or to act in
contemplation of law, such as when such judge, tribunal or board
exercising judicial or quasi-judicial powers acted in a capricious or
whimsical manner as to be equivalent to lack of jurisdiction. (citations
omitted)

Did the petitioner show grave abuse of discretion that would warrant the
issuance of the writ of certiorari prayed for?

A.

G.R. No. 188165

The Sandiganbayan correctly applied the

restrictive meaning of the term transaction as
used in Section 3 (b) of Republic Act No. 3019
adopted in Soriano, Jr. v. Sandiganbayan

In its questioned resolution dismissing Criminal Case No. SB-08-CRM-

0265, the Sandiganbayan relied on the ruling in Soriano, Jr. v.
Sandiganbayan,81 in which the principal issue was whether or not the
preliminary investigation of a criminal complaint conducted by petitioner
Soriano, Jr., then a Fiscal, was a "contract or transaction" as to bring the
complaint within the ambit of Section 3 (b) of Republic Act No. 3019, which
punished any public officer for "[d]irectly or indirectly requesting or receiving
any gift, present, share, percentage, or benefit, for himself or for any other
person, in connection with any contract or transaction between the
Government and any other party, wherein the public officer in his official
capacity has to intervene under the law." The Soriano, Jr. Court ruled in the
negative, and pronounced:

It is obvious that the investigation conducted by the petitioner was not

a contract. Neither was it a transaction because this term must be
construed as analogous to the term which precedes it. A transaction,
like a contract, is one which involves some consideration as in credit
transactions and this element (consideration) is absent in the investigation
conducted by the petitioner.
In the light of the foregoing, We agree with the petitioner that it was error
for the Sandiganbayan to have convicted him of violating Sec. 3 (b) of R.A.
No. 3019. (Emphasis supplied)

The State now argues, however, that the Sandiganbayan thereby

committed grave abuse of discretion resulting to lack or in excess of
jurisdiction for applying the interpretation of the term transaction in Soriano,
Jr. considering that the term transaction should be construed more liberally,
and positing that Soriano, Jr. was already abandoned by the Court, citing
for that purpose the rulings in Mejia v. Pamaran,82 Peligrino v.
People,83 and Chang v. People.84

We disagree with the petitioner, and find for the respondents.

First of all, the interpretation in Soriano, Jr. of the term transaction as used
in Section 3(b) of Republic Act No. 3019 has not been overturned by the
Court.

In Mejia v. Pamaran, decided en banc on April 15, 1988, Mejia had

demanded and received money from some persons involved in certain
cases in a trial court where Mejia was then serving as the branch clerk of
court in consideration of a promise that she would help in getting a
favorable judgment for them. The issue was whether or not Mejia could be
convicted under the information that alleged that she had demanded a
certain amount, although the Sandiganbayan found that the amount was
different from that charged in the information. The Court dismissed her
petition, and ruled that "[i]n a prosecution under the foregoing provision of
the Anti-Graft Law the value of the gift, money or present, etc. is immaterial
xxx [w]hat is penalized is the receipt of any gift, present, share, percentage,
or benefit by a public officer in connection with a contract or transaction
with the Government, wherein the public officer has to intervene in his
official capacity." The Court nowhere ruled on the proper interpretation of
the term transaction.

In Peligrino v. People, decided on August 13, 2001, Peligrino, an examiner

of the Bureau of Internal Revenue, was convicted of violating Section 3(b)
of Republic Act No. 3019 for demanding the amount of P200,000.00 from
the complainant in connection with the latter’s tax liabilities. Peligrino’s
defense was that he did not "demand" the money, but the money was just
given to him. He argued that he had only informed the complainant of his
tax deficiencies, and that the complainant had then requested the reduction
of the amount claimed as his tax deficiencies. The Court found no merit in
Peligrino’s argument. The ruling had nothing to do with the interpretation of
the term transaction.

Chang v. People, decided on July 21, 2006, was a case in which two
persons – Chang and San Mateo – were convicted of violating Section 3(b)
of Republic Act No. 3019 after being found to have received P125,000.00
in consideration of their issuance of a Certificate of Examination to the
effect that the complainant had "no tax liability" in favour of the municipality,
notwithstanding that it had not settled with them on their assessed
deficiency tax of P494,000.00. Chang and San Mateo contended that the
charge had resulted from an involuntary contact whereby complainant
Magat had simply tossed to them the brown envelope; that there had been
no conspiracy between them; and that what had transpired had been an
instigation, not an entrapment. In affirming their conviction, the Court did
not touch on the proper interpretation of the term transaction as used in
Section 3(b) of Republic Act No. 3019.

The three rulings the State has cited here did not overturn the interpretation
made in Soriano, Jr. of the term transaction as used in Section 3(b) of
Republic Act No. 3019 because the proper interpretation of the term was
clearly not decisive in those cases. On the contrary, in the later ruling
in Merencillo v. People,85 promulgated in 2007, the Court reiterated the
restrictive interpretation given in Soriano, Jr. to the term transaction as
used in Section 3(b) of Republic Act No. 3019 in connection with a
differentiation between bribery under the Revised Penal Code and the
violation of Section 3(b) of Republic Act No. 3019 by holding that the latter
is "limited only to contracts or transactions involving monetary
consideration where the public officer has the authority to intervene under
the law."

And, secondly, it does not help the State any that the term transaction as
used in Section 3(b) of Republic Act No. 3019 is susceptible of being
interpreted both restrictively and liberally, considering that laws creating,
defining or punishing crimes and laws imposing penalties and forfeitures
are to be construed strictly against the State or against the party seeking to
enforce them, and liberally against the party sought to be charged.86
Clearly, the Sandiganbayan did not arbitrarily, or whimsically, or
capriciously quash the information for failing to properly state the fourth
element of the violation of Section 3(b) of Republic Act No. 3019.

B.

G.R. No. 189063

The Sandiganbayan did not commit any grave

abuse of discretion in finding that there had
been an inordinate delay in the resolution
against respondents of the charge in
Criminal Case No. SB-08-CRM-0266

Upon its finding that the Office of the Ombudsman had incurred inordinate
delay in resolving the complaint Cong. Jimenez had brought against the
respondents, the Sandiganbayan dismissed Criminal Case No. SB-08-
CRM-0266 mainly to uphold their constitutional right to the speedy
disposition of their case.

But now comes the State contending that the delay in the resolution of the
case against the respondents was neither inordinate nor solely attributable
to the Office of the Ombudsman. Citing Mendoza-Ong v.
Sandiganbayan,87 in which the Court held that speedy disposition of cases
was also consistent with reasonable delays, the State supported its
contention by listing the various incidents that had caused the delay in the
investigation, and then laying part of the blame on the respondents
themselves.

The right to the speedy disposition of cases is enshrined in Article III of the
Constitution, which declares:

Section 16. All persons shall have the right to a speedy disposition of their
cases before all judicial, quasi-judicial, or administrative bodies.

The constitutional right to a speedy disposition of cases is not limited to the

accused in criminal proceedings but extends to all parties in all cases,
including civil and administrative cases, and in all proceedings, including
judicial and quasi-judicial hearings.88 While the concept of speedy
disposition is relative or flexible, such that a mere mathematical reckoning
of the time involved is not sufficient,89 the right to the speedy disposition of
a case, like the right to speedy trial, is deemed violated when the
proceedings are attended by vexatious, capricious, and oppressive delays;
or when unjustified postponements of the trial are asked for and secured;
or when without cause or justifiable motive a long period of time is allowed
to elapse without the party having his case tried.90

According to Angchonco, Jr. v. Ombudsman,91 inordinate delay in resolving

a criminal complaint, being violative of the constitutionally guaranteed right
to due process and to the speedy disposition of cases, warrants the
dismissal of the criminal case.92

Was the delay on the part of the Office of the Ombudsman vexatious,
capricious, and oppressive?

We answer in the affirmative.

The acts of the respondents that the Office of the Ombudsman investigated
had supposedly occurred in the period from February 13, 2001 to February
23, 2001. Yet, the criminal complaint came to be initiated only on
November 25, 2002 when Ombudsman Marcelo requested PAGC to
provide his office with the documents relevant to the exposé of Cong.
Villarama. Subsequently, on December 23, 2002, Cong. Jimenez submitted
his complaint-affidavit to the Office of the Ombudsman. It was only on
November 6, 2006, however, when the Special Panel created to investigate
Cong. Jimenez’s criminal complaint issued the Joint Resolution
recommending that the criminal informations be filed against the
respondents. Ombudsman Gutierrez approved the Joint Resolution only on
January 5, 2007.93 The Special Panel issued the second Joint Resolution
denying the respondents’ motion for reconsideration on January 25, 2008,
and Ombudsman Gutierrez approved this resolution only on April 15, 2008.
Ultimately, the informations charging the respondents with four different
crimes based on the complaint of Cong. Jimenez were all filed on April 15,
2008, thereby leading to the commencement of Criminal Case No. SB-08-
CRM-0265 and Criminal Case No. SB-08-CRM-0266. In sum, the fact-
finding investigation and preliminary investigation by the Office of the
Ombudsman lasted nearly five years and five months.

It is clear from the foregoing that the Office of the Ombudsman had taken
an unusually long period of time just to investigate the criminal complaint
and to determine whether to criminally charge the respondents in the
Sandiganbayan. Such long delay was inordinate and oppressive, and
constituted under the peculiar circumstances of the case an outright
violation of the respondents’ right under the Constitution to the speedy
disposition of their cases. If, in Tatad v. Sandiganbayan,94 the Court ruled
that a delay of almost three years in the conduct of the preliminary
investigation constituted a violation of the constitutional rights of the
accused to due process and to the speedy disposition of his case, taking
into account the following, namely: (a) the complaint had been resurrected
only after the accused had a falling out with former President Marcos,
indicating that political motivations had played a vital role in activating and
propelling the prosecutorial process; (b) the Tanodbayan had blatantly
departed from the established procedure prescribed by law for the conduct
of preliminary investigation; and (c) the simple factual and legal issues
involved did not justify the delay, there is a greater reason for us to hold so
in the respondents’ case.

To emphasize, it is incumbent for the State to prove that the delay was
reasonable, or that the delay was not attributable to it. In both regards, the
State miserably failed.

For one, the State explains that the criminal cases could not be
immediately filed in court primarily because of the insufficiency of the
evidence to establish probable cause, like not having a document showing
that the funds (worth US$1,999,965.00 as averred in the complaint of
Cong. Jimenez) had reached Secretary Perez;95 and that it could not obtain
the document, and to enable it to obtain the document and other evidence
it needed to await the ratification of the Agreement Concerning Mutual
Legal Assistance in Criminal Matters with the Hongkong Special
Administrative Region (RP-HKSAR Agreement),96 and the Treaty on Mutual
Legal Assistance in Criminal Matters between the Republic of the
Philippines and the Swiss Confederation (RP-Swiss MLAT).97

To us, however, the State’s dependence on the ratification of the two

treaties was not a sufficient justification for the delay. The fact-finding
investigation had extended from January 15, 2003, when Ombudsman
Marcelo approved the recommendation of the Special Panel and referred
the complaint of Cong. Jimenez for fact-finding investigation, until
November 14, 2005, when the FIO completed its fact-finding investigation.
That period accounted for a total of two years and 10 months. In addition,
the FIO submitted its report only on November 14, 2005, which was after
the Department of Justice had received on September 8, 2005 the letter
from Wayne Walsh, the Deputy Government Counsel of the Hongkong
Special Administrative Region in response to the request for assistance
dated June 23, 2005,98 and the reply of the Office of Justice of Switzerland
dated February 10, 2005 and a subsequent letter dated February 21, 2005
from Liza Favre, the Ambassador of Switzerland, to Atty. Melchor Arthur
Carandang, Acting Assistant Ombudsman, FIO, together with documents
pertaining to the bank accounts relevant to the investigation.99For the Office
of the Ombudsman to mark time until the HKSAR Agreement and the
Swiss-RP MLAT were ratified by the Senate before it would proceed with
the preliminary investigation was oppressive, capricious and vexatious,
because the respondents were thereby subjected to a long and unfair
delay.

We should frown on the reason for the inordinate delay because the State
would thereby deliberately gain an advantage over the respondents during
the preliminary investigation. At no time should the progress and success
of the preliminary investigation of a criminal case be made dependent upon
the ratification of a treaty by the Senate that would provide to the
prosecutorial arm of the State, already powerful and overwhelming in terms
of its resources, an undue advantage unavailable at the time of the
investigation. To allow the delay under those terms would definitely violate
fair play and nullify due process of law – fair play, because the field of
contest between the accuser and the accused should at all times be level;
and due process of law, because no less that our Constitution guarantees
the speedy disposition of the case.

The State further argues that the fact-finding investigation should not be
considered a part of the preliminary investigation because the former was
only preparatory in relation to the latter;100 and that the period spent in the
former should not be factored in the computation of the period devoted to
the preliminary investigation.

The argument cannot pass fair scrutiny.

The guarantee of speedy disposition under Section 16 of Article III of the

Constitution applies to all cases pending before all judicial, quasijudicial or
administrative bodies. The guarantee would be defeated or rendered inutile
if the hair-splitting distinction by the State is accepted. Whether or not the
fact-finding investigation was separate from the preliminary investigation
conducted by the Office of the Ombudsman should not matter for purposes
of determining if the respondents’ right to the speedy disposition of their
cases had been violated.

There was really no sufficient justification tendered by the State for the long
delay of more than five years in bringing the charges against the
respondents before the proper court. On the charge of robbery under
Article 293 in relation to Article 294 of the Revised Penal Code, the
preliminary investigation would not require more than five years to
ascertain the relevant factual and legal matters. The basic elements of the
offense, that is, the intimidation or pressure allegedly exerted on Cong.
Jimenez, the manner by which the money extorted had been delivered, and
the respondents had been identified as the perpetrators, had been
adequately bared before the Office of the Ombudsman. The obtention of
the bank documents was not indispensable to establish probable cause to
charge them with the offense. We thus agree with the following observation
of the Sandiganbayan, viz:

With the Ombudsman’s finding that the extortion (intimidation) was

perpetrated on February 13, 2001 and that there was transfer of Mark
Jimenez US $1,999,965.00 to Coutts Bank Account HO 133706 on
February 23, 2001 in favor of the accused, there is no reason why within a
reasonable period from these dates, the complaint should not be resolved.
The act of intimidation was there, the asportation was complete as of
February 23, 2001 why was the information filed only on April 18, 2008. For
such a simple charge of Robbery there is nothing more to consider and all
the facts and circumstances upon which to anchor a resolution whether to
give due course to the complaint or dismiss it are on hand. The case is
more than ripe for resolution. Failure to act on the same is a clear
transgression of the constitutional rights of the accused. A healthy respect
for the constitutional prerogative of the accused should have prodded the
Ombudsman to act within reasonable time. 101

In fine, the Office of the Ombudsman transgressed the respondents' right to

due process as well as their right to the speedy disposition of their case.

WHEREFORE, the Court DISMISSES the petitions for certiorari for their
lack of merit.

No pronouncement on costs of suit.

SO ORDERED.

LUCAS P. BERSAMIN
Associate Justice

WE CONCUR:

MARIA LOURDES P.A. SERENO

Chief Justice

TERESITA J. LEONARDO-DE
MARTIN S. VILLARAMA, JR.
CASTRO
Associate Justice
Associate Justice

BIENVENIDO L. REYES
Associate Justice

CERTIFICATION

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

MARIA LOURDES P.A. SERENO

Chief Justice

Digest

People v Sandiganbayan (Perez)

Facts: The Court resolves the petitions for certiorari the State instituted to
assail and nullify, in G.R. No. 188165, the Sandiganbayan’s dismissal of
Criminal Case SB-08-CRM-0265 entitled People of the Philippine v. Hernando
Benito Perez, Rosario S. Perez, Ernest Escaler, and Ramon A. Arceo, for violation
of Section 3 (b) of Republic Act No. 3019, as amended; and, in G.R. No. 189063,
the Sandiganbayan’s dismissal of SB-08-CRM- 0266 entitled People of the
Philippine v. Hernando Benito Perez, Rosario S. Perez, Ernest Escaler, and
Ramon A. Arceo, for robbery under Article 293, in relation to Article 294, of the
Revised Penal Code.

The relevant case for this topic is G.R. No. 189063. Where upon
Sandiganbayan’s finding that the Office of the Ombudsman had incurred
inordinate delay in resolving the complaint Cong. Jimenez had brought against
the respondents, it dismissed Criminal Case No. SB-08-CRM-0266 (involves
robbery) mainly to uphold their constitutional right to the speedy disposition
of their case. The State contended that the delay in the resolution of the case
against the respondents was neither inordinate nor solely attributable to the
Office of the Ombudsman. Citing Mendoza-Ong v .Sandiganbayan, wherein the
Court held that the speedy disposition of cases was also consistent with
reasonable delays, the State supported its contention by listing the various
incidents that had caused the delay in the investigation, and then laying part
of the blame on the respondents themselves.

Issue: WoN Sandiganbayan gravely abused its discretion when it dismissed

the case due to the violation of the respondents’ constitutional right to speedy
disposition of their cases

Held: No. Sandiganbayan was right in dismissing the case upon finding that
there had been an inordinate delay in the resolution against respondents of
the charge in Criminal Case No. SB-08-CRM-0266.

The right to the speedy disposition of cases is enshrined in Article III of the
Constitution. It is not limited to the accused in criminal proceedings but
extends to all parties in all cases, including civil and administrative cases, and
in all proceedings, including judicial and quasi-judicial hearings.

The fact-finding investigation and preliminary investigation by the Office of

the Ombudsman lasted nearly five years and five months. The Office of the
Ombudsman had taken an unusually long period of time just to investigate the
criminal complaint and to determine whether to criminally charge the
respondents in the Sandiganbayan. Such long delay was inordinate and
oppressive, and constituted under the peculiar circumstances of the case an
outright violation of the respondents’ right under the Constitution to the
speedy disposition of their cases.

The guarantee of speedy disposition under Section 16 of Article III of the

Constitution would be defeated is the State’s argument that the fact-finding
investigation should not be considered a part of the preliminary investigation
(because the former was only preparatory in relation to the latter; and that
the period spent in the former should not be factored in the computation of
the period devoted to the preliminary investigation) is accepted.

It is incumbent for the State to prove that the delay was reasonable, or that
the delay was not attributable to it. In both regards, the State failed. There was
really no sufficient justification tendered by the State for the long delay of
more than five years in bringing the charges against the respondents before
the proper court.

G.R. No. 205972, November 09, 2016

CATERPILLAR, INC., Petitioner, v. MANOLO P.

SAMSON, Respondent.

G.R. NO. 164352, November 09, 2016

 CATERPILLAR, INC., Petitioner, v. MANOLO P.
SAMSON, Respondent.

DECISION

BERSAMIN, J.:

The determination of probable cause to charge a person in court

for a criminal offense is exclusively lodged in the Executive
Branch of the Government, through the Department of Justice.
Initially, the determination is done by the investigating public
prosecutor, and on review by the Secretary of Justice or his duly
authorized subordinate. The courts will respect the determination,
unless the same shall be shown to have been made in grave
abuse of discretion amounting to lack or excess of jurisdiction.

The Cases

Before us are the consolidated cases of G.R. No. 2059721 and

G.R. No. 164352.2

G.R. No. 164352 involves the appeal by petition for review

on certiorari of Caterpillar, Inc. (Caterpillar) to reverse the
decision promulgated on January 21, 20043 by the Court of
Appeals (CA) in CA-G.R. SP No. 75526, and the resolution
promulgated on June 30, 2004 denying the motion for
reconsideration thereof.4

G.R. No. 205972 relates to the appeal brought by Caterpillar to

assail the decision and resolution promulgated in CA-G.R. SP No.
102316 respectively on May 8, 20125 and February 12,
2013,6 whereby the CA affirmed the resolutions of the
Department of Justice (DOJ) finding that there was no probable
cause to indict Manolo P. Samson (Samson) for unfair
competition.

Antecedents
Caterpillar is a foreign corporation engaged in the manufacture
and distribution of footwear, clothing and related items, among
others. Its products are known for six core trademarks, namely,
"CATERPILLAR", "CAT", "CATERPILLAR & DESIGN", "CAT AND
DESIGN", "WALKING MACHINES" and "TRACK-TYPE TRACTOR &
DESIGN (Core Marks)7 all of which are alleged as internationally
known. On the other hand, Samson, doing business under the
names and styles of Itti Shoes Corporation, Kolm's Manufacturing
Corporation and Caterpillar Boutique and General Merchandise, is
the proprietor of various retail outlets in the Philippines selling
footwear, bags, clothing, and related items under the trademark
"CATERPILLAR", registered in 1997 under Trademark Registration
No. 64705 issued by the Intellectual Property Office (IP0).8

G.R. No. 164352

On July 26, 2000, upon application of the National Bureau

of Investigation (NBI), the Regional Trial Court (RTC), Branch
56, in Makati City issued Search Warrants Nos. 00-022 to 00-032,
inclusive, all for unfair competition,9 to search the establishments
owned, controlled and operated by Samson. The implementation
of the search warrants on July 27, 2000 led to the seizure of
various products bearing Caterpillar's Core Marks.

Caterpillar filed against Samson several criminal complaints for

unfair competition in the Department of Justice (DOJ), docketed
as I.S. Nos. 2000-1354 to 2000-1364, inclusive.

Additionally, on July 31, 2000, Caterpillar commenced a civil

action against Samson and his business entities, with the IPO as
a nominal party10 – for Unfair Competition, Damages and
Cancellation of Trademark with Application for Temporary
Restraining Order (TRO) and/or Writ of Preliminary Injunction –
docketed as Civil Case No. Q-00-41446 of the RTC in Quezon
City. In said civil action, the RTC denied Caterpillar's application
for the issuance of the TRO on August 17, 2000.

The DOJ, through Senior State Prosecutor Jude R. Romano,

issued a joint resolution dated November 15,
200111 recommending that Samson be criminally charged with
unfair competition under Section 168.3 (a),12 in relation to
Section 123.1(e),13 Section 131.114 and Section 170,15 all of
Republic Act No. 8293, or the Intellectual Property Code of the
Philippines (IP Code).

However, because Samson and his affiliate companies allegedly

continued to sell and distribute products clothed with the general
appearance of its own products, Caterpillar again applied for
another set of search warrants against Samson and his
businesses. The RTC, Branch 172, in Valenzuela City issued
Search Warrants Nos. 12-V-00,16 13-V-00,17 20-V-0018 and 29-V-
0019 upon application of the NBI, by virtue of the implementation
of which several goods were seized and confiscated by the NBI
agents.

As a consequence, Caterpillar filed 26 criminal complaints for

unfair competition on January 31, 2001, docketed as I.S. Nos.
2001-42 to 2001-67, against Samson and/or the occupants of his
affiliate entities before the DOJ.20 In due course, the DOJ,
through State Prosecutor Zenaida M. Lim, issued a joint
resolution dated September 28, 200121 recommending the filing
of criminal complaints for unfair competition under Section
168.3(a), in relation to Section 123.1, Section 131.1 and Section
170 of the IP Code. Accordingly, six criminal complaints were filed
in the RTC, Branch 256, in Muntinlupa City, presided by Judge
Alberto L. Lerma, docketed as Criminal Cases Nos. 02-238 to 02-
243.

On January 17 and 22, 2002, Samson filed a petitions for review

with the Office of the Secretary of Justice to appeal the joint
resolutions in I.S. Nos. 2000-1354 to 2000-136422 and I.S. Nos.
2001-042 to 2001-067.23
On May 30, 2002, Samson filed a Motion to Suspend
Arraignment in Criminal Cases Nos. 02-238 to 243,24 citing the
following as grounds:25cralawred

I.
THERE EXISTS PREJUDICIAL QUESTIONS PENDING LITIGATION
BEFORE THE REGIONAL TRIAL COURT OF QUEZON CITY, BRANCH
90, IN CIVIL CASE NO. Q-00-41446 ENTITLED: "CATERPILLAR,
INC., ET AL. VS. ITTI SHOES CORPORATION, ET AL.," THE FINAL
RESOLUTIONS OF WHICH WILL DETERMINE THE OUTCOME OF
THE INSTANT CRIMINAL CASES.

II.
ACCUSED HAS FILED PETITIONS FOR REVIEW WITH THE
DEPARTMENT OF JUSTICE ASSAILING THE RESOLUTIONS OF THE
CHIEF STATE PROSECUTOR WHO CAUSED THE FILING OF THE
INSTANT CASES AND ARE STILL PENDING THEREIN UP TO THE
PRESENT.
chanroblesvirtuallawlibrary

In the meanwhile, on July 10, 2002, the DOJ, through Secretary

Hernando B. Perez, issued a resolution26 denying Samson's
petition for review in I.S. Nos. 2000-1354 to 2000-1364.
Samson's motion for reconsideration was likewise denied on May
26, 2003.

On September 23, 2002, Presiding Judge Lerma of the RTC

granted Samson's Motion to Suspend Arraignment, and
suspended the arraignment and all other proceedings in Criminal
Cases Nos. 02-240 to 02-243 until Civil Case No. Q-00-41446
was finally resolved,27 holding:

After a careful scrutiny of the case, this Court finds that private
complainant, in Civil Case No. Q-00-41446, seeks for the
cancellation of the trademark "CATERPILLAR" which is registered
in the name of the accused and to prevent the latter from using
the said trademark ("CATERPILLAR"), while the issue in the
instant case is the alleged unlawful use by the accused of the
trademark "CATERPILLAR" which is claimed to be owned by the
private complainant. From the foregoing, this Court believes that
there exists a prejudicial question since the determination of who
is really the lawful or registered user of the trademark
"CATERPILLAR" will ultimately determine whether or not the
instant criminal action shall proceed. Clearly, the issues raised in
Civil Case No. Q-00-41446 is similar or intimately related to the
issue in the case at bar for if the civil case will be resolved
sustaining the trademark registration of the accused for the
trademark CATERPILLAR, then the latter would have all the
authority to continue the use of the said trademark as a
consequence of a valid registration, and by reason of which there
may be no more basis to proceed with the instant criminal
action.28
chanroblesvirtuallawlibrary

After the RTC denied its motion for reconsideration29 on

December 5, 2002,30 Caterpillar elevated the matter to the CA by
petition for certiorari on February 14, 2003,31 docketed as C.A.-
G.R. SP No. 75526 entitled Caterpillar, Inc. v. Hon. Alberto L.
Lerma, in his capacity as Presiding Judge of Branch 256 of the
Regional Trial Court, Muntinlupa City, and Manalo P.
Samson, alleging grave abuse of discretion amounting to lack or
excess of jurisdiction on the part of the RTC in suspending the
arraignment and other proceedings in Criminal Cases Nos. 02-238
to 02-243 on the ground of the existence of an alleged prejudicial
question in Civil Case No. Q-00-41446 then pending in the RTC in
Quezon City whose resolution would determine the outcome of
the criminal cases.

Meanwhile, on January 13, 2003, Acting Justice Secretary Ma.

Merceditas N. Gutierrez reversed and set aside the resolution
issued by State Prosecutor Lim in I.S. No. 2001-042 to 2001-067,
and directed the Chief State Prosecutor to cause the withdrawal
of the criminal informations filed against Samson in
court,32 disposing as follows:
ACCORDINGLY, the assailed joint resolution is
hereby REVERSED and SET ASIDE. The Chief State Prosecutor
is directed to forthwith cause the withdrawal of the informations
filed in court against respondent Manolo P. Samson and to report
action taken hereon within ten (10) days from receipts hereof.33
chanroblesvirtuallawlibrary

Acting Justice Secretary Gutierrez based her resolution on the

order dated June 26, 2001, whereby the RTC of Valenzuela City,
Branch 172, had quashed the 26 search warrants upon motion of
Samson.34Consequently, the goods seized and confiscated by
virtue of the quashed search warrants could no longer be
admitted in evidence

Correspondingly, Presiding Judge Lerma of the RTC ordered the

withdrawal of Criminal Cases Nos. 02-240 to 02-243 on February
4, 2003.35

Aggrieved, Caterpillar assailed the order of Judge Lerma for the

withdrawal of Criminal Cases Nos. 02-240 to 02-2432003 by
petition for certiorari in the CA on October 16, 2003, docketed as
CA-G.R. SP No. 79937,36 and the CA ultimately granted the
petition for certiorari,37 setting aside the assailed January 13,
2003 resolution of the Acting Justice Secretary and directing the
re-filing of the withdrawn informations against Samson. The
Court ultimately affirmed the CA's decision through the resolution
promulgated on October 17, 2005 in G.R. No. 169199, and ruling
that probable cause existed for the re-filing of the criminal
charges for unfair competition under the IP Code.38

In the assailed January 21, 2004 decision,39 the CA dismissed

Caterpillar's petition for certiorari in CA-G.R. SP No. 75526, viz.:

Petition has no merit.

The mere fact that public respondent denied petitioner's motion

for reconsideration does not justify this petition on the ground of
abuse of discretion. Grave abuse of discretion means such
capricious and whimsical exercise of judgment as is equivalent to
lack of jurisdiction, or, in other words where the power is
exercised in an arbitrary or despotic manner by reason of passion
or personal hostility and it must be so patent and gross as to
amount to an evasion of positive duty or to a virtual refusal to
perform the duty enjoined or to act at all in contemplation of law.
(Benito vs. Comelec, 349 SCRA 705).

Petitioner in this case failed to overcome the burden of showing

how public respondent acted with grave abuse of discretion in
granting private respondent's motion and denying his own motion
for reconsideration. What is clear is that public respondent court
acted judiciously. A petition for certiorari under Rule 65 of the
Rules of Court will prosper only if there is showing of grave abuse
of discretion or an act without or in excess of jurisdiction on the
part of respondent tribunal (Garcia vs. HRET, 312 SCRA 353).

Granting arguendo that public respondent court erred in its

ruling, still a petition for certiorari under Rule 65 cannot be
justified. Where the court has jurisdiction over the subject
matter, the orders or decision upon all questions pertaining to the
cause are orders or decisions within its jurisdiction and however
erroneous they may be, they cannot be corrected by certiorari
(De Baron vs. Court of Appeals, 368 SCRA 407).

WHEREFORE, foregoing premises considered, the Petition having

no merit in fact and in law is hereby DENIED DUE COURSE and
ordered DISMISSED. With costs to Petitioners.

SO ORDERED.40
chanroblesvirtuallawlibrary

Caterpillar sought the reconsideration of the dismissal, but the CA

denied the motion on June 30, 2004.41cralawred

Hence, Caterpillar appealed the CA's decision in C.A.-G.R. SP No.

75526 (G.R. No. 164352).
 G.R.No. 205972

In the meanwhile, in August 2002, upon receiving the information

that Samson and his affiliate entities continuously sold and
distributed products bearing Caterpillar's Core Marks without
Caterpillar's consent, the latter requested the assistance of the
Regional Intelligence and Investigation Division of the National
Region Public Police (RIID-NCRPO) for the conduct of an
investigation. Subsequently, after the investigation, the RIID-
NCRPO applied for and was granted 16 search warrants against
various outlets owned or operated by Samson in Mandaluyong,
Quezon City, Manila, Caloocan, Makati, Parañaque, Las Piñas,
Pampanga and Cavite. The warrants were served on August 27,
2002,42 and as the result products bearing Caterpillar's Core
Marks were seized and confiscated. Consequently, on the basis of
the search warrants issued by the various courts, Caterpillar
again instituted criminal complaints in the DOJ for violation of
Section 168.3(a), in relation to Sections 131.3, 123.1(e) and 170
of the IP Code against Samson, docketed as I.S. Nos. 2002-995
to 2002-997; 2002-999 to 2002-1010; and 2002-1036.

After the conduct of the preliminary investigation, the DOJ,

through State Prosecutor Melvin J. Abad, issued a joint resolution
dated August 21, 2003 dismissing the complaint upon finding that
there was no probable cause to charge Samson with unfair
competition.43

Caterpillar moved for the reconsideration of the dismissal, but

State Prosecutor Abad denied the motion on June 18, 2004.44

The Secretary of Justice affirmed the dismissal of the complaint

through the resolution issued on September 19, 2005,45 and
denied Caterpillar's motion for reconsideration on December 20,
2007.

Accordingly, Caterpillar appealed to the CA through a petition for

review under Rule 43, Rules of Court (C.A.-G.R. SP No.
102316).46

On May 8, 2012,47 however, the CA denied due course to

Caterpillar's petition for review, viz.:

WHEREFORE, premises considered, the petition is DENIED DUE

COURSE, and accordingly, DISMISSED.

SO ORDERED. cralawlawlibrary48
chanroblesvirtuallawlibrary

The CA opined that an appeal under Rule 43 to assail the

resolution by the Secretary of Justice determining the existence
or non-existence of probable cause was an improper remedy; and
that while it could treat an appeal as a special civil action
for certiorari under Rule 65, it could not do so therein because
the allegations of the petition did not sufficiently show grave
abuse of discretion on the part of the Secretary of Justice in
issuing the assailed resolutions.

Caterpillar filed a motion for reconsideration, but the CA denied

the motion for its lack of merit on February 12, 2013.49

Hence, Caterpillar commenced G.R. No. 205972.

Issues

Caterpillar submits that the CA erred as follows:

G.R. No. 164352

A.
THE COURT OF APPEALS COMMITTED SERIOUS REVERSIBLE
ERROR IN DENYING DUE COURSE TO CATERPILLAR INC.'S
PETITION FOR CERTIORARI.

B.
THE COURT OF APPEALS COMMITTED SERIOUS REVERSIBLE
ERROR IN NOT HOLDING THAT THE ORDER SUSPENDING
PROCEEDINGS IN CRIMINAL CASES NOS. 02-238 TO 02-243, ON
THE BASIS OF AN ALLEGED PREJUDICIAL QUESTION, WAS
CONTRARY TO LAW AND ESTABLISHED JURISPRUDENCE.

C.
THE HONORABLE COURT OF APPEALS COMMITTED SERIOUS
REVERSIBLE ERROR IN NOT HOLDING THAT A CRIMINAL
COMPLAINT FOR UNFAIR COMPETITION CAN PROCEED
INDEPENDENTLY OF, AND SIMULTANEOUS WITH, THE CIVIL
CASE FOR THE SAME.50
chanroblesvirtuallawlibrary

Caterpillar posits that the suspension of proceedings in Criminal

Cases Nos. 02-238 to 02-243 was contrary to Rule 111 of
the Rules of Court, Article 33 of the Civil Code on independent
civil actions, and Section 170 of the IP Code, which specifically
provides that the criminal penalties for unfair competition were
independent of the civil and administrative sanctions imposed by
law; that the determination of the lawful owner of the
"CATERPILLAR" trademark in Civil Case No. Q-00-41446 would
not be decisive of the guilt of Samson for unfair competition in
Criminal Cases Nos. 02-238 to 02-243 because registration was
not an element of the crime of unfair competition; that the civil
case sought to enforce Samson's civil liability arising from the IP
Code while the criminal cases would enforce Samson's liability
arising from the crime of unfair competition; and that the Court
already ruled in Samson v. Daway51 that Civil Case No. Q-00-
41446 was an independent civil action under Article 33 of
the Civil Code and, as such, could proceed independently of the
criminal actions.

In his comment,52 Samson counters that the issues of the lawful

and registered owner of the trademark, the true owner of the
goodwill, a nd whether "CATERPILLAR" was an internationally
well-known mark are intimately related to the issue of guilt in the
criminal actions, the resolution of which should determine
whether or not the criminal actions for unfair competition could
proceed.

G.R. No. 205972

In this appeal, the petitioner interposes that:

THE HONORABLE COURT OF APPEALS ERRED IN DISMISSING

THE PETITIONER'S PETITION FOR REVIEW SOLELY ON THE
GROUND OF AN ALLEGED WRONG REMEDY, DESPITE
PETITIONERS HAVING CLEARLY ESTABLISHED THAT THE
SECRETARY OF JUSTICE ACTED WITH GRAVE ABUSE OF
DISCRETION IN ISSUING THE RESOLUTIONS DATED 19
SEPTEMBER 2005 AND 20 DECEMBER 2007, AFFIRMING THE
FINDINGS OF THE INVESTIGATING PROSECUTOR THAT NO
PROBABLE CAUSE EXISTS TO CHARGE THE RESPONDENT OF THE
CRIME OF UNFAIR COMPETITION.53
chanroblesvirtuallawlibrary

Caterpillar seeks the liberal interpretation of procedural rules in

order to serve the higher interest of substantial justice following
the denial by the CA of its petition for being an incorrect remedy;
and insists that it presented substantial evidence to warrant a
finding of probable cause for unfair competition against Samson.

In sum, the issues to be resolved in these consolidated cases

are: firstly, whether or not the CA committed a reversible error in
ruling that the trial court a quo did not commit grave abuse of
discretion in suspending the criminal proceedings on account of a
prejudicial question; and, secondly, whether or not the CA
committed reversible error in upholding the decision of the
Secretary of Justice finding that there was no probable cause to
charge Samson with unfair competition.

Rulings of the Court

G.R. No. 164352

The appeal in G.R. No. 164352 is meritorious.

We note, to begin with, that Civil Case No. Q-00-41446, the civil
case filed by Caterpillar in the RTC in Quezon City, was for unfair
competition, damages and cancellation of trademark, while
Criminal Cases Nos. Q-02-108043-44 were the criminal
prosecution of Samson for unfair competition. A common element
of all such cases for unfair competition – civil and criminal –
was fraud. Under Article 33 of the Civil Code, a civil action
entirely separate and distinct from the criminal action may be
brought by the injured party in cases of fraud, and such civil
action shall proceed independently of the criminal prosecution. In
view of its being an independent civil action, Civil Case No. Q-00-
41446 did not operate as a prejudicial question that justified the
suspension of the proceedings in Criminal Cases Nos. Q-02-
108043-44.

In fact, this issue has already been raised in relation to the

suspension of the arraignment of Samson in Criminal Cases Nos.
Q-02-108043-44 in Samson v. Daway,54 and the Court resolved it
against Samson and in favor of Caterpillar thusly:

Anent the second issue, petitioner failed to substantiate his claim

that there was a prejudicial question. In his petition, he prayed
for the reversal of the March 26, 2003 order which sustained the
denial of his motion to suspend arraignment and other
proceedings in Criminal Case Nos. Q-02-108043-44. For unknown
reasons, however, he made no discussion in support of said
prayer in his petition and reply to comment. Neither did he attach
a copy of the complaint in Civil Case No. Q-00-41446 nor quote
the pertinent portion thereof to prove the existence of a
prejudicial question.

At any rate, there is no prejudicial question if the civil and the

criminal action can, according to law, proceed independently of
each other. Under Rule 111, Section 3 of the Revised Rules on
Criminal Procedure, in the cases provided in Articles 32, 33, 34
and 2176 of the Civil Code, the independent civil action may be
brought by the offended party. It shall proceed independently of
the criminal action and shall require only a preponderance of
evidence.

In the case at bar, the common element in the acts constituting

unfair competition under Section 168 of R.A. No. 8293 is fraud.
Pursuant to Article 33 of the Civil Code, in cases of
defamation, fraud, and physical injuries, a civil action for
damages, entirely separate and distinct from the criminal action,
may be brought by the injured party. Hence, Civil Case No. Q-
00-41446, which as admitted by private respondent also
relate to unfair competition, is an independent civil action
under Article 33 of the Civil Code. As such, it will not
operate as a prejudicial question that will justify the
suspension of the criminal cases at bar.55 (Bold emphasis
supplied)
chanroblesvirtuallawlibrary

Secondly, a civil action for damages and cancellation of

trademark cannot be considered a prejudicial question by which
to suspend the proceedings in the criminal cases for unfair
competition. A prejudicial question is that which arises in a civil
case the resolution of which is a logical antecedent of the issues
to be determined in the criminal case. It must appear not only
that the civil case involves facts upon which the criminal action is
based, but also that the resolution of the issues raised in the
civil56 action will necessarily be determinative of the criminal
case.56 As stated in Librodo v. Judge Coscolluela, Jr.:57

A prejudicial question is one based on a fact distinct and separate

from the crime but so intimately connected with it that it
determines the guilt or innocence of the accused, and for it to
suspend the criminal action, it must appear not only that said
case involves facts intimately related to those upon which the
criminal prosecution would be based but also that in the
resolution of the issue or issues raised in the civil case, the guilt
or innocence of the accused would necessarily be determined. It
comes into play generally in a situation where a civil action
and a criminal action are both pending and there exists in
the former an issue which must be preemptively resolved
before the criminal action may proceed, because
howsoever the issue raised in the civil action is resolved
would be determinative juris et de jure of the guilt or
innocence of the accused in the criminal case.58 (Bold
underscoring supplied for emphasis)
chanroblesvirtuallawlibrary

The elements of a prejudicial question are provided in Section 7

of Rule 111, Rules of Court, to wit: (a) a previously instituted civil
action involves an issue similar to or intimately related to the
issue raised in the subsequent criminal action, and (b) the
resolution of such issue determines whether or not the criminal
action may proceed.59

An examination of the nature of the two kinds of cases involved is

necessary to determine whether a prejudicial question existed.

An action for the cancellation of trademark like Civil Case No. Q-

00-41446 is a remedy available to a person who believes that he
is or will be damaged by the registration of a mark.60 On the
other hand, the criminal actions for unfair competition (Criminal
Cases Nos. Q-02-108043-44) involved the determination of
whether or not Samson had given his goods the general
appearance of the goods of Caterpillar, with the intent to deceive
the public or defraud Caterpillar as his competitor.61 In the suit
for the cancellation of trademark, the issue of lawful registration
should necessarily be determined, but registration was not a
consideration necessary in unfair competition.62 Indeed, unfair
competition is committed if the effect of the act is "to pass off to
the public the goods of one man as the goods of another;"63 it is
independent of registration. As fittingly put in R.F. & Alexander &
Co. v. Ang,64 "one may be declared unfair competitor even if his
competing trade-mark is registered."
Clearly, the determination of the lawful ownership of the
trademark in the civil action was not determinative of whether or
not the criminal actions for unfair competition shall proceed
against Samson.

G.R. No. 205972

The petition for review on certiorari in G.R. No. 205972 is denied

for being bereft of merit.

Firstly, Caterpillar assailed the resolution of the Secretary of

Justice by filing a petition for review under Rule 43 of the Rules of
Court. Such resort to the petition for review under Rule 43 was
erroneous,65 and the egregious error warranted the denial of the
appeal. The petition for review under Rule 43 applied to all
appeals to the CA from quasi-judicial agencies or bodies,
particularly those listed in Section 1 of Rule 43. However, the
Secretary of Justice, in the review of the findings of probable
cause by the investigating public prosecutor, was not exercising a
quasi-judicial function, but performing an executive function.66

Moreover, the courts could intervene in the determination of

probable cause only through the special civil action
for certiorari under Rule 65 of the Rules of Court, not by appeal
through the petition for review under Rule 43. Thus, the CA could
not reverse or undo the findings and conclusions on probable
cause by the Secretary of Justice except upon clear
demonstration of grave abuse of discretion amounting to lack or
excess of jurisdiction committed by the Secretary of
Justice.67 Caterpillar did not so demonstrate.

And, secondly, even discounting the technicalities as to consider

Caterpillar's petition for review as one brought under Rule 65, the
recourse must still fail.

Probable cause for the purpose of filing an information in court

consists in such facts and circumstances as would engender a
well-founded belief that a crime has been committed and the
accused may probably be guilty thereof.68 The determination of
probable cause lies solely within the sound discretion of the
investigating public prosecutor after the conduct of a preliminary
investigation. It is a sound judicial policy to refrain from
interfering with the determination of what constitutes sufficient
and convincing evidence to establish probable cause for the
prosecution of the accused.69 Thus, it is imperative that by the
nature of his office, the public prosecutor cannot be compelled to
file a criminal information in court if he is not convinced of the
sufficiency of the evidence adduced for a finding of probable
cause.70 Neither can he be precluded from filing an information if
he is convinced of the merits of the case.

In not finding probable cause to indict Samson for unfair

competition, State Prosecutor Abad as the investigating public
prosecutor discharged the discretion given to him by the law.
Specifically, he resolved as follows:

It appears from the records that respondent started marketing

his (class 25) products bearing the trademark Caterpillar as early
as 1992. In 1994, respondent caused the registration of the
trademark "Caterpillar With A Triangle Device Beneath The Letter
[A]" with the Intellectual Property Office. Sometime on June 16,
1997, the IPO issued Certificate of Registration No. 64705 which
appears to be valid for twenty (20) years, or up to June 16, 2017.
Upon the strength of this registration, respondent continued with
his business of marketing shoes, slippers, sandals, boots and
similar Class 25 items bearing his registered trademark
"Caterpillar". Under the law, respondent's operative act of
registering his Caterpillar trademark and the concomitant
approval/issuance by the governmental entity concerned,
conferred upon him the exclusive right to use said trademark
unless otherwise declared illegal. There being no evidence to
controvert the fact that respondent's Certificate of Registration
No. 64705 covering Caterpillar trademark was fraudulently or
illegally obtained, it necessarily follows that its subsequent use
and/or being passed on to the public militates malice or
fraudulent intent on the part of respondent. Otherwise stated and
from the facts obtaining, presumption of regularity lies, both from
the standpoint of registration and use/passing on of the assailed
Caterpillar products.

Complainant's argument that respondent may still be held liable

for unfair competition by reason of his having passed on five (5)
other Caterpillar products like "Cat", "Caterpillar", "Cat and
Design", "Walking Machines" and "Track-Type Tractor Design" is
equally difficult to sustain. As may be gleaned from the records,
respondent has been engaged in the sale and distribution of
Caterpillar products since 1992 leading to the establishment of
numerous marketing outlets. As such, it would be difficult to
assail the presumption that respondent has already established
goodwill insofar as his registered Caterpillar products are
concerned. On the other hand, complainant's registration of the
other Caterpillar products appears to have been caused only in
1995. In this premise, respondent may be considered as prior
user, while the latter, a subsequent one. Jurisprudence dictates
that prior user of the trademark by one, will controvert the claim
by a subsequent one.71
chanroblesvirtuallawlibrary

We reiterate that the full discretionary authority to determine the

existence of probable cause is lodged in the Executive Branch of
the Government, through the public prosecutor, in the first
instance, and the Secretary of Justice, on review. Such authority
is exclusive, and the courts are prohibited from encroaching on
the executive function, unless there is a clear showing of grave
abuse of discretion amounting to lack or excess of jurisdiction on
the part of the public prosecutor or the Secretary of Justice. As
declared in Callo-Claridad v. Esteban:72

A public prosecutor alone determines the sufficiency of evidence

that establishes the probable cause justifying the filing of a
criminal information against the respondent because the
determination of existence of a probable cause is the function of
the public prosecutor. Generally, the public prosecutor is afforded
a wide latitude of discretion in the conduct of a preliminary
investigation. Consequently, it is a sound judicial policy to refrain
from interfering in the conduct of preliminary investigations, and
to just leave to the Department of Justice the ample latitude of
discretion in the determination of what constitutes sufficient
evidence to establish probable cause for the prosecution of
supposed offenders. Consistent with this policy, courts do not
reverse the Secretary of Justice's findings and conclusions on the
matter of probable cause except in clear cases of grave abuse of
discretion. By way of exception, however, judicial review is
permitted where the respondent in the preliminary investigation
clearly establishes that the public prosecutor committed grave
abuse of discretion, that is, when the public prosecutor has
exercised his discretion in an arbitrary, capricious, whimsical or
despotic manner by reason of passion or personal hostility, patent
and gross enough as to amount to an evasion of a positive duty
or virtual refusal to perform a duty enjoined by law. Moreover,
the trial court may ultimately resolve the existence or non-
existence of probable cause by examining the records of the
preliminary investigation when necessary for the orderly
administration of justice. Although policy considerations call for
the widest latitude of deference to the public prosecutor's
findings, the courts should never shirk from exercising their
power, when the circumstances warrant, to determine whether
the public prosecutor's findings are supported by the facts, and
by the law.
chanroblesvirtuallawlibrary

Relevantly, grave abuse of discretion means such capricious or

whimsical exercise of judgment that is equivalent to lack of
jurisdiction. The abuse of discretion must be grave, as when the
power is exercised in an arbitrary or despotic manner by reason
of passion or personal hostility, and it must be so patent and
gross as to amount to an evasion of a positive duty or to a virtual
refusal to perform the duty enjoined, or to act at all, in
contemplation of law, as to be equivalent to having acted without
jurisdiction.73 Herein, Caterpillar did not show the grave abuse of
discretion on the part of the Secretary of Justice.
WHEREFORE, the Court GRANTS the petition for review in G.R.
No. 164352; SETS ASIDE the decision promulgated on January
21,2004 in CA-G.R. SP No. 75526; DIRECTS the Regional Trial
Court in Muntinlupa City to reinstate Criminal Cases Nos. Q-02-
108043-44 and forthwith try and decide them without undue
delay; DENIES the petition for review on certiorari in G.R. No.
205972; and ORDERS respondent Manolo P. Samson to pay the
costs of suit.

SO ORDERED. cralawlawlibrary

Sereno, C.J., Leonardo-De Castro, Perlas-Bernabe, and Caguioa,

JJ., concur.

Endnotes:

G.R. No. 198664, November 23, 2016

PEOPLE OF THE PHILIPPINES, Plaintiff-Appellee, v. OWEN

MARCELO CAGALINGAN AND BEATRIZ B.
CAGALINGAN, Accused-Appellants.

DECISION

BERSAMIN, J.:

Illegal recruitment is a crime committed by a person who, not

having the valid license or authority required by law to enable
him to lawfully engage in recruitment and placement of workers,
undertakes any of the activities within the meaning of
"recruitment and placement" mentioned in Article 13(b) of
the Labor Code, or any of the prohibited practices enumerated in
Section 6 of Republic Act No. 8042 (Migrant Workers'
Act), against three or more persons, individually or as a group.

The Case
The accused-appellants assail the decision promulgated on March
18, 2011,1 whereby the Court of Appeals (CA) affirmed their
convictions for illegal recruitment in large scale and three counts
of estafa handed down on November 25, 2004 by the Regional
Trial Court (RTC), Branch 18, in Cagayan de Oro City.2

Antecedents

The factual and procedural antecedents, as summarized by the

CA, are as follows:

Accused-appellants Owen Marcelo Cagalingan (Owen) and Beatriz

B. Cagalingan (Beatriz) (accused spouses) were charged with
Illegal Recruitment in Large Scale before the Regional Trial Court
of Cagayan de Oro City in a complaint initiated by private
complainants Reynalyn B. Cagalingan (Reynalyn), Roselle Q.
Cagalingan (Roselle), Laarni E. Sanchez (Laarni), Norma R.
Cagalingan (Norma); and Arcele J. Bacorro (Arcele). Accused-
appellants were likewise indicted for three (3) counts of estafa in
the same court by private complainants Reynalyn, Roselle, and
Arcele, docketed as Criminal Case Nos. 2003-124, 2003-125, and
2003-238, respectively.

The information in Criminal Case No. 2003-173, which charged

the accused with illegal recruitment in large scale reads, as
follows:

"That on or about and during the period from the months of

October up to November, 2002, in the City of Cagayan de Oro,
Philippines, and within the jurisdiction of this Honorable Court,
the above-named accused, representing themselves to have the
capacity to contract, enlist, hire and transport Filipino workers for
employment in Macau, China, conspiring, confederating together
and mutually helping one another, did then and there willfully,
unlawfully and feloniously, for a fee, recruit and promise
employment/job placement to the following persons:

1. Reynalyn B. Cagalingan
2. Roselle Q. Cagalingan
3. Laarni E. Sanchez
4. Norma R. Cagalingan; and
5. Arcele J. Bacorro

Without first having secured or obtained the required license or

authority from the government agency.

Contrary to and in Violation of Section 6, in relation to Section

7(b) of RA 8042, the Migrant Workers and Overseas Filipinos Act
of 1995."
chanroblesvirtuallawlibrary

That in Criminal Case No. 2003-124 for the crime of estafa, the
information reads:

"That on or about November 23, 2002 in the City of Cagayan de

Oro, Philippines and within the jurisdiction of this Honorable
Court, the above-named accused, conspiring, confederating
together and mutually helping one another, did then and there
willfully, unlawfully and feloniously defraud Reynalyn Cagalingan
in the following manner, to wit: the said accused, by means of
false manifestation and fraudulent representations which they
made to said Reynalyn Cagalingan to the effect that they had the
power and capacity to recruit and employ her abroad as a worker
in Macao, China and could facilitate the pertinent papers, if given
the necessary amount, to meet the requirements thereof, and by
means of other similar deceits, induced and succeeded in
inducing the said Reynalyn Cagalingan to give and deliver, as in
fact the latter gave and deliver (sic), to said accused the amount
of Php 40,000.00 on the strength of said manifestations and
representations, said accused well knowing that the same were
false and fraudulent and were made solely to obtain, as in fact
they did obtain the amount of Php 40,000.00 which amount once
in their possession, with intent to defraud, they willfully,
unlawfully and feloniously appropriated, misapplied and converted
to their own personal use and benefit, to the damage and
prejudice of said Reynalyn Cagalingan in the aforesaid amount of
Php 40,000.00, Philippine Currency.

Contrary to Article 315 (2)(a) of the Revised Penal Code."

cralawlawlibrary
That in Criminal Case No. 2003-125 for the crime of estafa, the
information reads:

"That on or about November 22, 2002 in the City of Cagayan de

Oro, Philippines, and within the jurisdiction of this Honorable
Code, the above-named accused, conspiring, confederating
together and mutually helping one another, did then and there
willfully, unlawfully and feloniously defraud Roselle Cagalingan in
the following manner, to wit: the said accused, by means of false
manifestation and fraudulent representations which they made to
said Roselle Cagalingan to the effect that they had the power and
capacity to recruit and employ her abroad as a worker in Macau,
China and could facilitate the pertinent papers, if given the
necessary amount, to meet the requirements thereof, and by
means of other similar deceits, induced and succeeded in
inducing the said Roselle Cagalingan to give and deliver, as in
fact the latter gave and deliver (sic), to said accused the amount
of Php 40,000.00 on the strength of said manifestation and
fraudulent representations, said accused well knowing that the
same were false and fraudulent and were made solely to obtain,
as in fact they did obtain the amount of Php 40,000.00 which
amount once in their possession, with intent to defraud, they
willfully, unlawfully and feloniously appropriated, misapplied and
converted to their own personal use and benefit, to the damage
and prejudice of said Roselle Cagalingan in the aforesaid amount
of Php. 40,000.00, Philippine Currency.

CONTRARY to Article 315 (2)(a) of the Revised Penal Code."

chanroblesvirtuallawlibrary

And that in Criminal Case No. 2003-238 for estafa, the

information reads:

"That on October 28, 2002, in the City of Cagayan de Oro,

Philippines, and within the jurisdiction of this Honorable Court,
the above-named accused, conspiring, confederating together
and mutually helping one another, did then and there willfully,
unlawfully and feloniously defraud Arcele J. Bacorro in the
following manner, to wit: accused by means of false pretenses
and fraudulent representations, which they made to said Arcele J.
Bacorro representing that they had the power and capacity to
recruit and employ her to work at Macau, China and by means of
their similar deceits, induced and succeeded in inducing the said
Arcele J. Bacorro to give and deliver, as in fact the latter did give
and deliver (sic), to said accused the amount of Php 40,000.00 as
placement fee well-knowing that their representations were false
and fraudulent and made solely to obtain, as in fact they did
obtain the amount of Php 40,00.00 which amount once in their
possession, accused willfully, unlawfully and feloniously
misappropriated, misapplied and converted to their own personal,
use, gain and benefit, to the damage and prejudice of the
offended party Arcele J. Bacorro in the aforesaid sum of
P40,000.00, Philippine Currency.

Contrary to and in violation of Article 315 (2)(a) of the Revised

Penal Code."
chanroblesvirtuallawlibrary

Warrants of arrest against accused spouses were issued on

various dates and accused spouses were arrested on May 26,
2003 in Vigan, Ilocos Sur. Nevertheless, due to budgetary
constraints, accused spouses were brought to the court a
quo only on June 4, 2004.

Thereafter, upon arraignment both accused assisted by counsel

pleaded "not guilty" to the crimes charged. Joint trial ensued
thereafter.

The prosecution presented as witnesses the following: private

complainants Arcele, Reynalyn, Laarni, and Roselle; Leonardo G.
Rodrigo (Leonardo), Officer-in-Charge of the Philippine Overseas
Employment Administration (POEA)-Regional Extension Unit-10,
Cagayan de Oro City; and Marichu Damasing (Marichu), Branch
Clerk of Court, Branch 1, MTCC-Cagayan de Oro City. The
evidence presented by the prosecution established the following
facts.

On different dates and occasions, private complainants were

recruited by Accused Spouses to work in Macau, China for a fee.
Accused spouses Owen and Beatriz were from Vigan, Ilocos Sur
but Owen grew up and finished his high school education in
Cagayan de Oro City. Owen is the first cousin of the husbands of
private complainants Reynalyn and Roselle and the nephew of the
husband of private complainant Norma.

Private complainant Arcele testified that she met accused spouses

on October 28, 2002 at around 12 o'clock noon, at the house of
private complainant Norma. The latter introduced accused
spouses to her and she was told by accused Owen that her wife,
accused Beatriz, was asked by her employer, a certain Lu Ting
Hoi Simon, of Macau, China to hire office workers who are
computer literate to work at Mandarin Oriental Hotel. Beatriz
confirmed this information and added that she was even given a
leave of absence by her employer just to come home in order to
hire workers. It was Owen who explained to her about the job
and the requirements like: passport, bio-data, Diploma in lieu of
Transcript of Records, and Forty Thousand Pesos (P40,000.00) for
roundtrip tickets and documentation fees as Beatriz could not
speak Visayan.

On November 6, 2002, Arcele paid Fifteen Thousand Pesos

(P15,000.00) to accused Owen and subsequently, another
P5,000.00 after she mortgaged her house in order to raise the
required amount. She was issued a receipt for the P20,000.00
and was told that the balance of P20,0000.00 was needed for the
documentation fee. She was likewise told that her departure for
Manila would be on November 22, 2002 and on November 23,
2002 for Macau, China. Nonetheless, as she was not able to pay
the P20,000.00 before the scheduled date, her departure was
postponed. Hence, on November 23, 2002, she paid in full the
balance of P20,000.00 without receipt as she trusted accused
spouses. The departure was rescheduled on November 29, 2002
for Manila at 3 o'clock in the afternoon and on November 30,
2002 for Macau, China. They further agreed that Accused
Spouses would fetch her at her house at 12 o'clock noon on
November 29, 2002. Unfortunately, on the said date and time.
accused spouses failed to appear. Hence, she decided to proceed
to Cagayan de Oro City airport and look for accused spouses but
the latter were not around. Instead, she met the other recruits at
the airport and they all realized that they were victims of illegal
recruitment. She and the other private complainants went home
aggrieved and humiliated.

Private complainant Reynalyn likewise recounted that accused

Owen was the first cousin of her husband and accused spouses
were introduced to her by her parents-in-law on October 4, 2002
as the latter stayed at the house of her parents-in-law located
adjacent to her house. Accused Owen offered to help her find
work in Macau, China as accused Beatriz was allegedly asked by
her employer to find Filipino workers who could replace the
Taiwanese and Protuguese workers in Mandarin Oriental Hotel at
Macau, China. As Reynalyn was not a college graduate, she was
told that she could be assigned at the laundry section with a
salary rate equivalent to Eighteen Thousand Pesos (P18,000.00)
per month. She was told to secure her passport, to fill-up the bio-
data with Chinese character and to pay P40,000.00 for plane
tickets and other documents. She paid accused spouses the said
amount and a receipt was issued to her. However, on the
scheduled date of departure to Manila on November 29, 2002,
she waited for accused spouses at the airport but to her
disappointment, the latter failed to show up.
Another prosecution witness, private complainant Laarni, also
testified that it was private complainant Roselle who informed her
that accused spouses were recruiting workers for Macau, China.
On October 21, 2002, she met Roselle together with accused
spouses and the latter asked her if she was willing to work in
Macau. She was asked about her educational background and
upon knowing that she is an AB Journalism graduate, and took up
computer informatics, Beatriz assured her that she could work in
Macau. She was offered as office secretary for a two (2) years
contract with a salary of P18,000.00 a month. She was then
given a bio-data with Chinese characters with a corresponding
English translation to fill up and was required to submit her
transcript of records, diploma, certificate of employment and a
photocopy of her passport. She was also required to pay
P40,000.00 for the processing fee, plane ticket and
documentation. Thereafter, accused spouses made follow-ups at
the office of her father at Branch 1, MTCC-Cagayan de Oro City.

On November 20, 2002, she met accused spouses again at the

office of her father and she told accused spouses that she might
not proceed with her application as she was able to raise only
P11,500.00 and the said amount was even borrowed from a
lending institution. Accused Spouses nonetheless accepted the
said amount and told her that the balance of the payment would
be deducted from her salary in Macau, China. Thereafter, Accused
Spouses issued a receipt and she was told that her departure for
Manila would be on November 29, 2002 and they would just meet
at Cagayan de Oro airport at 1 o'clock in the afternoon. However,
on the said date, she did not find accused spouses at the airport
and upon inquiry from the airline counter she was informed that
their names were not on the plane manifest.

The testimony of Laarni as to the receipt of P11,500.00 was

collaborated by prosecution witness Marichu Damasing. She
testified that the said amount was received by Beatriz and the
latter even counted the money at her table. The receipt was
prepared by Laarni's father and was signed by Beatriz and
witnessed by her. She further testified that upon receipt of the
said amount, accused spouses left the office.

Corollarily, private complainant Roselle narrated that she met

accused spouses on October 4, 2002 at the house of her mother-
in-law. Accused spouses told her that they would be hiring
workers for Macau, China and considering that at that time she
was jobless, she told them of her interest to apply for work. She
was then offered the position of an office clerk for two (2) years
with a monthly salary of P22,000.00 and was asked to submit the
required documents and to pay P40,000.00 as placement fee.
Albeit it was the first time she met them, yet, she trusted them
considering that Owen was the first cousin of his husband and
they were staying at the same house. On November 20, 2002,
she initially paid P20,000.00 and on November 26, 2002, the
balance of P20,000.00. A receipt was issued to her and she was
told that her depmiure to Manila would be on November 29,
2002. Upon the request of accused spouses, a "despidida" party
was held on November 28, 2002 at the house of private
complainant Reynalyn located just beside the house of her
mother-in-law.

She further narrated that on November 29, 2002, accused

spouses left the house of her mother-in-law at about 8 o'clock in
the morning and told her that they would go to Gusa, Cagayan de
Oro City to attend another "despidida" party and they would just
meet at the airport. Accordingly, at about 12 o'clock noon, she
and other private complainants were already at the Cagayan de
Oro City airport but accused spouses were not around. They
stayed at the airpmi until 5 o'clock in the afternoon but still
accused spouses did not show up. Together with the other private
complainants, they proceeded to Macabalan, Cagayan de Oro City
at the house of Arcele and stayed there until 12 o'clock midnight
as she was ashamed of her neighbours (sic). When she finally got
home, she and her family checked the bag of accused spouses
which was left at the house of her mother-in-law and to their
surprise, the bag contained pillows only. Hence, she reported the
incident and upon verification with the POEA she learned that
Accused Spouses were not licensed recruiters.
The prosecution likewise presented Leonardo, the officer-in-
charge of the POEA-Regional Extension Unit-10. At the trial, he
issued certifications upon requests of private complainants
Reynalyn, Roselle, Arcele and Norma certifying that upon
verification of their computer database, accused spouses were
neither licensed nor authorized to recruit workers and/or
applicants for employment abroad.

On the other hand, the accused spouses denied the charges

against them and argued that they neither recruited nor promised
private complainants any work in Macau and explained that it was
very difficult to find work in Macau, China unless they have
relatives or siblings working there who could find work for them
and who could recommend them to their employers. Albeit they
admitted to be in Cagayan de Oro City sometime in August and
September 2002, yet, they denied being in Cagayan de Oro City
sometime in October and November 2002 as alleged by private
complainants. They admitted that they met private complainants
on different occasions while they were in Cagayan de Oro City as
some of them were relatives of accused Owen but they asserted
that they neither offered any work nor required private
complainants to submit any documents and pay any amount for
possible work in Macau. In fact, it was private complainants who
requested them to find work for them in Macau but they turned
down their requests as it was very difficult to find work in said
place. They likewise denied having received any money from
private complainants because they were not in Cagayan de Oro
City when the alleged payments were made and as indicated in
the receipts and they further testified that some of the private
complainants were hard up and were incapable of producing the
said amount. They could not think of any reason why private
complainants accused them and filed charges against them
except that they turned down their requests for job placements in
Macau, China.3
chanroblesvirtuallawlibrary

Judgment of the RTC

On November 25, 2004, the RTC rendered judgment convicting
the accused-appellants,4 disposing:

IN THE LIGHT OF ALL THE FOREGOING, the court finds

accused OWEN MARCELO CAGALINGAN and BEATRIZ B.
CAGALINGAN GUILTY beyond reasonable doubt of violating
Section 6 of Republic Act 8042, otherwise known as "Migrant
Workers and Overseas Filipinos Act of 1995" (Criminal Case No.
2003-173). Accordingly, they are hereby sentenced and are SO
ORDERED to suffer the penalty of LIFE IMPRISONMENT, and
for each accused to pay a fine of One Million Pesos
(P1,000,000.00).

Both accused are jointly and severally directed and SO

ORDERED to pay to Mrs. Arcele J. Bacorro the sum of Forty
Thousand Pesos (P40,000.00), with legal interest to start from
the date of the promulgation of this judgement until fully
satisfied, as refund for the plane ticket and documentation
fee; SO ORDERED to pay Mrs. Reynalyn Cagalingan the sum of
Forty Thousand Pesos (P40,000.00), with legal interest to start
from the date of promulgation until fully satisfied as refund for
the plane ticket and affidavit of support; SO ORDERED to pay
Mrs. Roselle Q. Cagalingan the sum of Forty Thousand Pesos
(P40,000.00), with legal interest to start from the date of the
promulgation until fully satisfied, as refund for the plane ticket
and affidavit of support; SO ORDERED to pay Miss Laarni E.
Sanchez the sum of Eleven Thousand Five Hundred Pesos
(P11,500.00), with legal interest to start from the promulgation
until fully satisfied, as refund for the processing fee.

The Court likewise finds OWEN MARCELO CAGALINGAN and

BEATRIZ B. CAGALINGAN GUlLTY beyond reasonable
doubt (in Criminal Case No. 2003-124) of violating paragraph
2(a) of Article 315 of the Revised Penal Code, for swindling
Reynalyn Cagalingan the sum of P40,000.00 with the promised
(sic) to employ her in Macao, (sic) China. Accordingly, after
applying the Indeterminate Sentence law, both accused are
hereby sentenced and SO ORDERED to suffer the imprisonment
of Four (4) Years Nine Months and Eleven (11) days of Frisian
Correccional, as the Minimum, to Nine (9) years of Frisian Mayor.
as the maximu, including its accessory penalty.

The Court likewise finds OWN MARCELO CAGALINGAN and

BEATRIZ B. CAGALINGAN GUILTY beyond reasonable
doubt (in Criminal Case No. 2003-125) of violating paragraph
2(a) of Article 315 of the Revised Penal Code, for swindling
Roselle Cagalingan the sum of P40,000.00 with the promised (sic)
to employ her in Macao (sic), China. Accordingly, after applying
the Indeterminate Sentence Law, both accused are hereby
sentenced and SO ORDERED to suffer the imprisonment of Four
(4) Years Nine (9) Months and Eleven (11) days of Prision
Correccional, as the Minimum, to Nine (9) years of Prision Mayor,
as the Maximum, including its accessory penalty.

The Court likewise finds OWEN MARCELO CAGALINGAN and

BEATRIZ B. CAGALINGAN GUILTY beyond reasonable
doubt (in Criminal Case No. 2003-238) of violating paragraph
2(a) of Article 315 of the Revised Penal Code, for swindling Arcele
J. Bacorro the sum of P40,000.00 with the promised to employ
her in Macao (sic), China. Accordingly, after applying the
Indeterminate Sentence Law, both accused are hereby sentenced
and SO ORDERED to suffer the imprisonment of Four (4) Years
Nine (9) Months and Eleven (11) days of Prision Correccional, as
the Minimum, to Nine (9) years of Prision Mayor, as the
Maximum, including its accessory penalty.

The Court declines to award damages in estafa cases since they

were provided already in the case of Illegal Recruitment in Large
Scale.

SO ORDERED. cralawlawlibrary5
cralawlawlibrary
Decision of the CA
On March 18, 2011, the CA affirmed the convictions of the
accused-appellants by the RTC,6viz.:

WHEREFORE, premises foregoing, the instant appeal

is DISMISSED for lack of merit.

SO ORDERED. cralawlawlibrary7
chanroblesvirtuallawlibrary

Hence, this appeal.

Issue

The accused-appellants assign the sole error that:

THE COURT OF APPEALS GRAVELY ERRED IN AFFIRMING THE

RTC DECISION FINDING THE ACCUSED-APPELLANTS GUILTY OF
THE CRIME CHARGED DESPITE THE PROSECUTION'S FAILURE TO
ESTABLISH BEYOND REASONABLE DOUBT ALL THE ELEMENTS OF
THE CRIMES CHARGED.8
chanroblesvirtuallawlibrary

The accused-appellants insist that the complainants well knew

that they were not connected to any recruitment agency, or that
they were not recruiters themselves; that they did not represent
themselves to the latter as having the capability to deploy
workers overseas;9 that they did not commit any act of fraudulent
misrepresentations essential in the estafa for which they were
convicted; and that they simply assisted in processing the papers
of the latter to help them realize their desire to work abroad.10

Did the CA correctly affirm the convictions of the accused-

appellants for illegal recruitment in large scale and for three
counts of estafa?

Ruling of the Court

The appeal lacks merit.

We find no reason to disturb the factual findings and legal

conclusions by the CA affirming the factual findings of the RTC, to
wit:

To constitute illegal recruitment in large scale,

three elements must concur: (a) the offender has no valid
license or authority required by law to enable him to lawfully
engage in recruitment and placement of workers; (b) the
offender undertakes any of the activities within the meaning of
"recruitment and placement" under Article 13(b) of the Labor
Code, or any of the prohibited practices enumerated under Article
34 of the same Code (now Section 6 of Republic Act No. 8042);
and, (c) the offender committed the same against three (3) or
more persons, individually or as a group.

xxxx

In the case at bench, all three (3) elements were established

during trial. First, it was proved by private complaints that
accused spouses were not licensed or authorized to engage in
recruitment activities. This fact was substantiated by POEA's
Certifications and as testified to by the Officer-in-Charge of the
POEA who issued the same. Second, private complainants
testified and proved that indeed accused spouses undertook acts
constituting recruitment and placement as defined under Article
13 (b) of the Labor Code. They testified that they were induced,
offered and promised by accused spouses employment in Macau,
China for two (2) years for a fee. They were made to believe that
accused spouses were authorized to hire them and capable of
sending them to Macau for work with higher pays. They paid
accused spouses for documentation and processing fees, yet,
they were unable to go abroad. These testimonies, as well as the
documentary evidence they submitted consisting of the receipts
issued to them by accused spouses, all proved that the latter
were engaged in recruitment and placement activities. And third,
there are five (5) complainants against whom accused spouses
are alleged to have recruited.

Moreover, the defense proffered by accused spouses consisted

merely of alibi and denial. It is however noteworthy to state that
denial, like alibi, is inherently a weak defense and it is not at all
persuasive. Accused spouses did not deny being in Cagayan de
Oro City, albeit they asserted to have arrived months earlier than
the alleged date, and they likewise did not deny having met
private complainants on different occasions as some of the
private complainants were even relatives of accused Owen.

xxxx

Parenthetically, there is no question that accused spouses are

likewise liable for estafa under Article 315 (2) (a) of the Revised
Penal Code. We are convinced that the prosecution proved
beyond reasonable doubt Accused Spouses' guilt for three (3)
counts of Estafa.

xxxx

There are three ways of committing estafa under Article 315 (a)
of the Revised Penal Code: (1) by using a fictitious name; (2) by
falsely pretending to possess power, influence,
qualifications, property, credit, agency, business or
imaginary transactions; and (3) by means of other similar
deceits. Under this class of estafa, the element of deceit is
indispensable. Likewise, it is essential that the false statement or
fraudulent representation constitutes the very cause or the only
motive which induces the complainant to part with the thing of
value.

In the present case, private complainants were led to believe by

accused spouses that they possessed the power and qualifications
to provide them with work in Macau when in fact they were
neither licensed nor authorized to do so. Accused spouses made it
appear to private complainants that Beatriz was requested by her
employer to hire workers for Macau, when in fact she was not.
They even recruited their own relatives in the guise of helping
them get better jobs with higher pays abroad for them to improve
their standard of living. Likewise, private complainants were
deceived by accused spouses by pretending that the latter could
arrange their employment in Macau, China. With these
misrepresentations, false assurances and deceit, they suffered
damages and they were forced to part with their hard-earned
money, as one of them even testified to have mortgaged her
house and another, to have borrowed money from a lending
institution just to raise the alleged processing fees.11
chanroblesvirtuallawlibrary

The factual findings of the CA are accepted because the Court is

not a trier of facts. Such findings, which affirmed those of the
RTC as the trial court, are now even binding on us. This is
because the RTC had the unique advantage to observe the
witnesses' demeanor while testifying, and the personal
opportunity to test the accuracy and reliability of their
recollections of past events, both of which are very decisive in a
litigation like this criminal prosecution for the serious crime of
illegal recruitment committed in large scale where the parties
have disagreed on the material facts.12 The Court may revise
such findings in its rare and extraordinary role of a trier of facts
only when the appellants convincingly demonstrate that such
findings were either erroneous, or biased, or unfounded, or
incomplete, or unreliable, or conflicted with the findings of fact of
the CA.13 Alas, that demonstration was not made herein.

The records show that the Prosecution presented the

complainants themselves to establish that the accused-appellants
had made the complainants believe that they could deploy them
abroad for a fee despite their having had no license or authority
to do so from the proper government agency; receipts; and the
certification from the POEA on the lack of the license to recruit
having been issued in favor of the accused-appellants.
In contrast, the accused-appellants offered only denial. Such
defense was futile because denial, essentially a negation of a fact,
did not prevail over the affirmative assertions of the fact. The
courts – trial as well as appellate – have generally viewed denial
in criminal cases with considerable caution, if not outright
rejection. This dismissive judicial attitude comes from the
recognition that denial is inherently weak and unreliable by virtue
of its being an excuse too easy and too convenient for the guilty
to make. Denial, to be worthy of consideration at all, should be
substantiated by clear and convincing evidence. Hence, the
appeal of the accused should also fail because it relied solely on
negative and self-serving negations. Verily, the denial carried no
weight in law and had no greater evidentiary value than the
testimonies of credible witnesses of the Prosecution who testified
on affirmative matters.14

We next ascertain if the CA properly affirmed the imposition of

the penalties for illegal recruitment in large scale and the three
counts of estafa.

Under Section 7(b)15 of the Migrant Workers' Act, the penalty for
illegal recruitment in large scale is life imprisonment and fine of
not less than P500,000.00 nor more than P1,000,000.00
Although Republic Act No. 10022,16 approved on March 8, 2010,
has since introduced an amendment to the Migrant Workers'
Act to raise the imposable fine to not less than P2,000,000.00 nor
more than P5,000,000.00, the amendment does not apply herein
because the illegal recruitment subject of this case was
committed in October and November, 2002, or long before the
amendment took effect. Accordingly, we hold that the RTC and
CA correctly imposed life imprisonment and fine of
P1,000,000.00.17

For the three counts of estafa, the relevant legal provision is

Article 315, first paragraph, of the Revised Penal Code, which
provides:
Article 315. Swindling (estafa). - Any person who shall defraud
another by any of the means mentioned herein below shall be
punished by:

1st. The penalty of prision correccional in its maximum period

to prision mayor in its minimum period, if the amount of the fraud
is over 12,000 pesos but does not exceed 22,000 pesos; and if
such amount exceeds the latter sum, the penalty provided in this
paragraph shall be imposed in its maximum period, adding one
year for each additional 10,000 pesos; but the total penalty which
may be imposed shall not exceed twenty years. In such cases,
and in connection with the accessory penalties which may be
imposed and for the purpose of the other provisions of this Code,
the penalty shall be termed prision mayor or reclusion
temporal, as the case may be.

xxxx
chanroblesvirtuallawlibrary

The minimum of the indeterminate sentence for each count

of estafa is fixed within the range of the penalty next lower to
that prescribed by Article 315 of the Revised Penal Code,18 which
is prision correccional in its minimum period to prision
correccional in its medium period (i.e., six months and one day to
four years and two months). The RTC imposed the minimum of
four years, nine months, and eleven days of prision
correccional, thereby exceeding the legal range for the minimum
of the indeterminate sentence. Accordingly, the minimum of the
indeterminate sentence is reduced to four years of prision
correccional considering the absence of any modifying
circumstances.

As to the maximum term for each count of estafa under

the Indeterminate Sentence Law, the maximum period of the
prescribed penalty is first determined, and the incremental
penalty of one year of imprisonment for every P10,000.00 in
excess of P22,000.00 is then added, provided that the total
penalty shall not exceed 20 years. To compute the maximum
period of the prescribed penalty, the time included in prision
correccional maximum to prision mayor minimum shall be divided
into three equal portions, with each portion forming a
period.19 Based on the computation, the maximum period
for prision correccional maximum to prision mayor minimum is
from six years, eight months, and 21 days to eight years. The
incremental penalty, when proper, shall thus be added to
anywhere from six years, eight months, and 21 days to eight
years, at the discretion of the court. In computing the
incremental penalty, the amount defrauded shall be subtracted by
P22,000.00, and the difference shall be divided by P10,000.00.
Any fraction of a year is disregarded.20

For the maximum term of the three counts of estafa, the RTC
imposed nine years. We note that the RTC ordered the gravest
imposable penalty within the range (eight years of prision
mayor plus the one-year incremental penalty). However, because
neither the RTC nor the CA found the attendance of any
modifying circumstance,21 we reduce the maximum to six years,
eight months, and 21 days of prision mayor and add the
incremental penalty of one year, or a total of seven years, eight
months, and 21 days.

Finally, in line with prevailing jurisprudence,22 the accused-

appellants shall pay interest of 6% per annum on the respective
amounts due to each of the complainants, reckoned from the
finality of this decision until the amounts are fully paid.

WHEREFORE, the Court AFFIRMS the decision promulgated on

March 18, 2011 IN ALL RESPECTS subject to the
following MODIFICATIONS:

1. In Criminal Case No. 2003-173, the accused-appellants shall

suffer the penalty of life imprisonment and fine of P1,000,000.00
each;

2. In each of Criminal Case No. 2003-124, Criminal Case No.

2003-125, and Criminal Case No. 2003-238, the accused-
appellants shall suffer an indeterminate penalty of four years
of prision correcional, as minimum, to seven years, eight months,
and 21 days of prision mayor;

3. The accused-appellants shall indemnify complainants Arcele J.

Bacorro, Reynalyn Cagalingan, Roselle Q. Cagalingan, and Laarni
E. Sanchez in the respective amounts of P40,000.00, P40,000.00,
P40,000.00, and P11,500.00 plus interest of 6% per annum from
the finality of this decision until the amounts are fully paid; and

4. The accused-appellants shall pay the costs of suit.

SO ORDERED. cralawlawlibrary

Sereno, C.J., Leonardo-De Castro, and Caguioa, JJ., concur.

Perlas-Bernabe, J., on leave.

G.R. No. 220598

GLORIA MACAPAGAL-ARROYO, Petitioner,

vs
PEOPLE OF THE PHILIPPINES AND THE SANDIGANBAYAN (First
Division), Respondents.

x-----------------------x

G.R. No. 220953

BENIGNO B. AGUAS, Petitioner,

vs.
SANDIGANBAYAN (First Division), Respondent.

DECISION

BERSAMIN, J.:

We resolve the consolidated petitions for certiorari separately brought to

assail and annul the resolutions issued on April 6, 20151 and September
10, 2015,2 whereby the Sandiganbayan respectively denied their demurrer
to evidence, and their motions for reconsideration, asserting such denials
to be tainted with grave abuse of discretion amounting to lack or excess of
jurisdiction.

Antecedents

On July 10, 2012, the Ombudsman charged in the Sandiganbayan former

President Gloria Macapagal-Arroyo (GMA); Philippine Charity Sweepstakes
Office (PCSO) Budget and Accounts Officer Benigno Aguas; PCSO
General Manager and Vice Chairman Rosario C. Uriarte; PCSO Chairman
of the Board of Directors Sergio 0. Valencia; Members of the PCSO Board
of Directors, namely: Manuel L. Morato, Jose R. Taruc V, Raymundo T.
Roquero, and Ma. Fatima A.S. Valdes; Commission on Audit (COA)
Chairman Reynaldo A. Villar; and COA Head of Intelligence/Confidential
Fund Fraud Audit Unit Nilda B. Plaras with plunder. The case was docketed
as Criminal Case No. SB-12-CRM-O 174 and assigned to the First Division
of the Sandiganbayan.

The information3 reads:

The undersigned Assistant Ombudsman and Gratl Investigation and

Prosecution Officer III, Office of the Ombudsman, hereby accuse GLORIA
MACAPAGAL-ARROYO, ROSARIO C. URIARTE, SERGIO O. VALENCIA,
MANUEL L. MORA TO, JOSE R. TARUC V, RAYMUNDO T. ROQUERO,
MA. FATIMA A.S. V ALOES, BENIGNO B. AGUAS, REYNALDO A.
VILLAR and NILDA B. PLARAS, of the crime of PLUNDER, as defined by,
and penalized under Section 2 of Republic Act (R.A.) No. 7080, as
amended by R.A. No. 7659, committed, as follows:

That during the period from January 2008 to June 2010 or sometime prior
or subsequent thereto, in Quezon City, Philippines, and within the
jurisdiction of this Honorable Court, accused GLORIA MA CAP A GAL-
ARROYO, then the President of the Philippines, ROSARIO C. URIARTE,
then General Manager and Vice Chairman, SERGIO O. VALENCIA, then
Chairman of the Board of Directors, MANUEL L. MORA TO, JOSE R.
TARUC V, RAYMUNDO T. ROQUERO, MA. FATIMA A.S. V ALOES, then
members of the Board of Directors, BENIGNO B. AGUAS, then Budget and
Accounts Manager, all of the Philippine Charity Sweepstakes Office
(PCSO), REYNALDO A. VILLAR, then Chairman, and NILDA B. PLARAS,
then Head of Intelligence/Confidential Fund Fraud Audit Unit, both of the
Commission on Audit, all public officers committing the offense in relation
to their respective offices and taking undue advantage of their respective
official positions, authority, relationships, connections or influence,
conniving, conspiring and confederating with one another, did then and
there willfully, unlawfully and criminally amass, accumulate and/or acquire.
Directly or indirectly, ill-gotten wealth in the aggregate amount or total value
of THREE HUNDRED SIXTY FIVE MILLION NINE HUNDRED NINETY
SEVEN THOUSAND NINE HUNDRED FIFTEEN PESOS
(PHP365,997,915.00), more or less, through any or a combination or a
series of overt or criminal acts, or similar schemes or means, described as
follows:

(a) diverting in several instances, funds from the operating

budget of PCSO to its Confidential/Intelligence Fund that could
be accessed and withdrawn at any time with minimal
restrictions, and converting, misusing, and/or illegally conveying
or transferring the proceeds drawn from said fund in the
aforementioned sum, also in several instances, to themselves,
in the guise of fictitious expenditures, for their personal gain
and benefit;

(b) raiding the public treasury by withdrawing and receiving, in

several instances, the above-mentioned amount from the
Confidential/Intelligence Fund from PCSO's accounts, and or
unlawfully transferring or conveying the same into their
possession and control through irregularly issued disbursement
vouchers and fictitious expenditures; and

(c) taking advantage of their respective official positions,

authority, relationships, connections or influence, in several
instances, to unjustly enrich themselves in the aforementioned
sum, at the expense of, and the damage and prejudice of the
Filipino people and the Republic of the Philippines.

CONTRARY TO LAW.

By the end of October 2012, the Sandiganbayan already acquired

jurisdiction over GMA, Valencia, Morato and Aguas. Plaras, on the other
hand, was able to secure a temporary restraining order (TRO) from this
Court in Plaras v. Sandiganbayan docketed as G.R. Nos. 203693-94.
Insofar as Roquero is concerned, the Sandiganbayan acquired jurisdiction
as to him by the early part of 2013. Uriarte and Valdes remained at large.

Thereafter, several of the accused separately filed their respective petitions

for bail. On June 6, 2013, the Sandiganbayan granted the petitions for bail
of Valencia, Morato and Roquero upon finding that the evidence of guilt
against them was not strong.4 In the case of petitioners GMA and Aguas,
the Sandiganbayan, through the resolution dated November 5, 2013,
denied their petitions for bail on the ground that the evidence of guilt
against them was strong.5 The motions for reconsideration filed by GMA
and Aguas were denied by the Sandiganbayan on February 19,
2014.6 Accordingly, GMA assailed the denial of her petition for bail in this
Court, but her challenge has remained pending and unresolved todate.

Personal jurisdiction over Taruc and Villar was acquired by

the Sandiganbayan in 2014. Thereafter, said accused sought to be granted
bail, and their motions were granted on different dates, specifically on
March 31, 20147 and May 9, 2014,8 respectively.

The case proceeded to trial, at which the State presented Atty. Aleta
Tolentino as its main witness against all the accused.
The Sandiganbayan rendered the following summary of her testimony and
evidence in its resolution dated November 5, 2013 denying the petitions for
bail of GMA and Aguas, to wit:

She is a certified public accountant and a lawyer. She is a member of the

Philippine Institute of Certified Public Accountants and the Integrated Bar of
the Philippines. She has been a CPA for 30 years and a lawyer for 20
years. She has practiced accountancy and law. She became accounting
manager of several companies. She has also taught subjects in University
of Santo Tomas, Manuel L. Quezon University, Adamson University and
the Ateneo de Manila Graduate School. She currently teaches Economics,
Taxation and Land Reform.

Presently, she is a Member of the Board of Directors of the PCSO. The

Board appointed her as Chairman of an Audit Committee. The audit review
proceeded when she reviewed the COA Annual Reports of the PCSO for
2006 2007 2008 and 2009 (Exhibits "D" "E" "F" and "G" respectively), and
the annual financial statements contained therein for the years 2005 to
2009. The reports were given to them by the COA. These are transmitted
to the PCSO annually after the subject year of audit.

One of her major findings was that the former management of the PCSO
was commingling the charity fund, the prize fund and the operating fund. By
commingling she means that the funds were maintained in only one main
account. This violates Section 6 of Republic Act 1169 (PCSO Charter) and
generally accepted accounting principles.

The Audit Committee also found out that there was excessive
disbursement of the Confidential and Intelligence Fund (CIF). There were
also excessive disbursements for advertising expenses. The internal audit
department was also merged with the budget and accounting department,
which is a violation of internal audit rules.

There was excessive disbursement of the CIF because the PCSO was
given only P10 million in 2002, i.e. P5 million for the Office of the Chairman
and P5 million for the Office of the General Manager. Such allocation was
based on the letters of then Chairman Lopez (Exh. "I") and then General
Manager Golpeo (Exh. "J"), asking for P5 million intelligence fund each.
Both were dated February 21, 2000, and sent to then President Estrada,
who approved them. This allocation should have been the basis for the
original allocation of the CIF in the PCSO, but there were several
subsequent requests made by the General Manager during the time of, and
which were approved by, former President Arroyo.

The allocation in excess of P10 million was in violation of the PCSO

Charter. PCSO did not have a budget for this. They were working on a
deficit from 2004 to 2009. The charter allows only 15% of the revenue as
operating fund, which was already exceeded. The financial statements
indicate that they were operating on a deficit in the years 2006 to 2009.

It is within the power of the General Manager to ask for additional funds
from the President, but there should be a budget for it. The CIF should
come from the operating fund, such that, when there is no more operating
fund, the other funds cannot be used.

The funds were maintained in a commingled main account and PCSO did
not have a registry of budget utilization. The excess was not taken from the
operating fund, but from the prize fund and the charity fund.
In 2005, the deficit was P916 million; in 2006, Pl,000,078,683.23. One of
the causes of the deficit for 2006 was the CIF expense of P215 million,
which was in excess of the approved allocation of P10 million. The net cash
provided by operating expenses in 2006 is negative, which means that
there were more expenses than what was received.

In the 2007 COA report, it was found that there was still no deposit to the
prize and charity funds. The COA made a recommendation regarding the
deposits in one main account. There were also excessive disbursements of
CIF amounting to P77,478,705.

She received a copy of the PCSO corporate operating budget (COB) for
the year 2008 in 2010 because she was already a member of its Board of
Directors. The 2008 approved COB has a comparative analysis of the
actual budget for 2007 (Exh. "K"). It is stated there that the budget for CTF
in 2007 is only P25,480,550. But the financial statements reflect P77
million. The budget was prepared and signed by then PCSO General
Manager Rosario Uriarte. It had accompanying Board Resolution No. 305,
Series of 2008, which was approved by then Chairperson Valencia, and
board members Valdes, Morato, Domingo, and attested to by Board
Secretary Atty. Ronald T. Reyes.

In the 2008 COA report, it was noted that there was still no deposit to the
prize and charity funds, adverted in the 2007 COA report. There was
already a recommendation by the COA to separate the deposits or funds in
2007. But the COA noted that this was not followed. The financial
statements show the Confidential and the Extra-Ordinary Miscellaneous
Expenses account is P38,293,137, which is more than the P10 million that
was approved.

In the Comparative Income Statement (Exh. "K"), the 2008

Confidential/Intelligence Expense budget was approved for P28 million.
The Confidential and Extra-Ordinary Miscellaneous Expenses is the
account being used for confidential and intelligence expenses. The amount
in the financial statements is over the budgeted amount of P28 million.
Further, the real disbursement is more than that, based on a summary of
expenditures she had asked the treasurer to prepare.

In the Comparative Income Statement for 2009 Budget against the 2008
Actual Budget (Exh. "L"), the budget for CIF and expenses was P60 million.
In the 2009 COA report, it was noted that there was still no deposit to the
prize and charity funds, despite the instruction or recommendation of COA.
The funds were still deposited in one account. The COA observation in
2007 states that there is juggling or commingling of funds.

After she had concluded the audit review, she reported her findings to the
Board of Directors in one of their executive meetings. The Board instructed
her to go in-depth in the investigation of the disbursements of CIF.

The Audit Committee also asked Aguas why there were disbursements in
excess of P10 million. He explained that there were board resolutions
confirming additional CIF which were approved by former President Arroyo.
Aguas mentioned this in one of their meetings with the directors and
corporate secretary. The board secretary, Atty. Ed Araullo, gave them the
records of those resolutions.

In the records that Araullo submitted to her, it appears that Uriarte would
ask for additional CIF, by letter and President Arroyo approves it by affixing
her signature on that same letter-request. There were seven letters or
memoranda to then President Arroyo, with the subject "Request for
Intelligence Fund."

She then asked their Treasurer, Mercy Hinayon, to give her a summary of
all the disbursements from CIF from 2007 to 2010. The total of all the
amounts in the summaries for three years is P365,997,915.

After receiving the summaries of the disbursed checks, she asked Hinayon
to give her the checks or copies thereof. She also asked Dorothy Robles,
Budget and Accounting Manager, to give her the corresponding vouchers.
Only two original checks were given to her, as the rest were with the bank.
She asked her to request certified true copies of the checks.

They were then called to the Senate Blue Ribbon Committee, which was
then investigating the operation of PCSO, including the CIF. She was
invited as a resource speaker in an invitation from Chairman Teofisto
Guingona III (Exh. "DD"). Before the hearing, the Committee Chairman
went to the PCSO and got some documents regarding the subject matter
being investigated. Araullo was tasked to prepare all the documents
needed by the Committee. These documents included the CIF summary of
disbursements, letters of Uriarte and the approval of the former president.
She attended whenever there were committee hearings. Among those who
also attended were the incoming members if the PCSO Board Directors
and the directors. Accused Valencia and Aguas were also present in some
hearings as resources speakers. They were invited in connection with the
past disbursements of PCSO related to advertising expenses, CIF, vehicles
for the bishops, and the commingling of funds.

The proceedings in the Committee were recorded and she secured a copy
of the transcript of stenographic notes from the Office of the Blue Ribbon
Committee. In the proceeding on June 7, 2011 (Exh. ''EE"), Uriarte testified.
The witness was about two to three meters away from Uriarte when the
latter testified, and using a microphone.

According to the witness, Uriarte testified that all the confidential

intelligence projects she had proposed were approved by President Arroyo;
all the requests she gave to the President were approved and signed by
the latter personally in her (Uriarte's) presence; and all the documents
pertaining to the CIF were submitted to President Arroyo. On the other
hand, Valencia and Taruc said they did not know about the projects.
Statements before the Committee are under oath.

After the Committee hearings, she then referred to the laws and regulations
involved to check whether the disbursements were in accordance with law.
One of the duties and responsibilities of the audit committee was to verify
compliance with the laws.

She considered the following laws: R.A. 1169, as amended (PCSO

Charter); P.D. 1445 (COA Code); LOI 1282; COA Circular 92-385, as
amended by Circular 2003-002, which provides the procedure for approval
of disbursements and liquidation of confidential intelligence funds. She
made a handwritten flowchart (Exh. "II") of the
allocations/disbursements/liquidation and audit of the CIF, based on LOI
1282 and the COA Circulars. A digital presentation of this flowchart was
made available.

The first step is the provision or allotment of a budget because no CIF fund
can be disbursed without the allocation. This is provided in the second
whereas clause of Circular 92-385. For GOCCs, applying Circular 2003-
002, there must be allocation or budget for the CIF and it should be
specifically in the corporate operating budget or would be taken from
savings authorized by special provisions.

This was not followed in the PCSO CIF disbursement in 2008. The
disbursement for that year was P86,555,060. The CIF budget for that year
was only P28 million, and there were no savings because they were on
deficit. This was also not followed for the year 2009. The CIF disbursement
for that year was P139,420,875. But the CIF budget was only P60 million,
and there was also no savings, as they were in deficit. For the year 2010,
the total disbursement, as of June 2010, was P141,021,980. The budget
was only P60 million.

The requirements in the disbursement of the CIF are the budget and the
approval of the President. If the budget is correct, the President will
approve the disbursement or release of the CIF. In this case, the President
approved the release of the fund without a budget and savings. Also, the
President approved the same in violation of LOI 1282, because there were
no detailed specific project proposals and specifications accompanying the
request for additional CIF. The requests for the year 2008, 2009 and 2010
were uniform and just enumerated the purposes, not projects. They did not
contain what was required in the LOI.

The purpose of this requirement is stated in the LOI itself. The request for
allocations must contain full details and specific purposes for which the
fund will be used. A detailed presentation is made to avoid duplication of
expenditures, as what had happened in the past, because of a lack of
centralized planning and organization or intelligence fund.

There was no reason for each additional intelligence fund that was
approved by then President Arroyo.

The third step is the designation of the disbursing officer. In this case, the
Board of Directors designated Uriarte as Special Disbursing Officer (SDO)
for the portion of the CIF that she withdrew. For the portion withdrawn by
Valencia, there was no special disbursing officer designated on record.

The designation of Uriarte was in violation of internal control which is the

responsibility of the department head, as required by Section 3 of Circular
2003-002. When she went through copies of the checks and disbursement
vouchers submitted to her, she found out that Uriarte was both the SDO
and the authorized officer to sign the vouchers and checks. She was also
the payee of the checks. All the checks withdrawn by Uriarte were paid to
her and she was also the signatory of the checks.

Aside from Uriarte, Valencia also disbursed funds in the CIF. For the funds
withdrawn by Valencia, he was also the authorized officer to sign the
vouchers and checks. He was also the payee of the checks.

The confidential funds were withdrawn through cash advance. She

identified the vouchers and checks pertaining to the disbursements made
by Uriarte and Valencia in 2008, 2009 and 2010.

The checks of Uriarte and Valencia had the treasurer as cosignatory. The
treasurer who signed depends on when the checks were issued

She knows the signatures of Uriarte, Valencia and Aguas because they
have their signatures on the records.

Uriarte and Valencia signed the vouchers to certify to the necessity and
legality of the vouchers; they also signed to approve the same, signify they
are "okay" for payment and claim the amount certified and approved as
payee. Gloria P. Araullo signed as releasing officer, giving the checks to
the claimants.

Accused Aguas signed the vouchers to certify that there are adequate
funds and budgetary allotment, that the expenditures were properly
certified and supported by documents, and that the previous cash
advances were liquidated and accounted for. This certification means that
the cash advance voucher can be released. This is because the COA rule
on cash advance is that before any subsequent cash advance is released,
the previous cash advance must be liquidated first. This certification
allowed the requesting party and payee to get the cash advance from the
voucher. Without this certification, Uriarte and Valencia could not have
been able to get the cash advance. Otherwise, it was a violation of P.D.
1445 (Government Auditing Code).

The third box in the flowchart is the designation of the SDO. Board
Resolutions No. 217, Series of2009 (Exh."M"), No. 2356, Series of 2009
(Exh."N"), and No. 029, Series of 2010 (Exh. "O"), resolved to designate
Uriarte as SDO for the CIF. These resolutions were signed and approved
by Valencia, Taruc, Valdes, Uriarte, Roquero and Morato. The witness is
familiar with these persons' signature because their signatures appear on
PCSO official records.

Valencia designated himself as SDO upon the recommendation of COA

Auditor Plaras. There was no board resolution for this designation. There
was just a certification dated February 2, 2009 (Exh. "Z4"). This certification
was signed by Valencia himself and designates himself as the SDO since
he is personally taking care of the funds which are to be handled with
utmost confidentiality. The witness is familiar with Valencia's signature
because it appears on PCSO official documents. Under COA rules, the
Board of Directors has authority to designate the SDO. The chairman could
not do this by himself.

Plaras wrote a letter dated December 15, 2008 to Valencia. It appears in

the letter that to substantiate the liquidation report, Plaras told Valencia to
designate himself as SDO because there was no disbursing officer. It was
the suggestion of Plaras. Plaras is the head of the CIF Unit under then
COA Chairman Villar. Liquidation vouchers and supporting papers were
submitted to them, with corresponding fidelity bond.

COA Circulars 92-385 and 2003-002 indicate that to disburse CIF, one
must be a special disbursing officer or SDO. All disbursing officers of the
government must have fidelity bonds. The bond is to protect the
government from and answer for misappropriation that the disbursing
officer may do. The bond amount required is the same as the amount that
may be disbursed by the officer. It is based on total accountability and not
determined by the head of the agency as a matter of discretion. The head
determines the accountability which will be the basis of the bond amount.

The Charter states that the head of the agency is the Board of Directors,
headed by the Chairman. But now, under the Governance of Government
Corporation law, it is the general manager.

Plaras should have disallowed or suspended the cash advances because

there was no fidelity bond and the disbursing officer was not authorized.
There was no bond put up for Valencia. The records show that the bond for
Uriarte was only for the amount of Pl.5 million. This is shown in a letter
dated August 23, 2010, to COA Chairman Villar through Plaras from Aguas
(Exh. "B5"), with an attachment from the Bureau of Treasury, dated March
2, 2009. It appears there that the bond for Uriarte for the CIF covering the
period February 2009 to February 2010 was only Pl.5 million.

Aguas submitted this fidelity bond certification, which was received on

August 24, 2010, late, because under the COA Circulars, it should have
been submitted when the disbursing officer was designated. It should have
been submitted to COA because a disbursing officer cannot get cash
advances if they do not have a fidelity bond.

Once an SDO is designated, the specimen signature must be submitted to

COA, together with the fidelity bond and the signatories for the cash
advances.

The approval of the President pertains to the release of the budget, not its
allocation. She thinks the action of the Board was done because there was
no budget. The Board's confirmation was needed because it was in excess
of the budget that was approved. They were trying to give a color of legality
to them approval of the CIF in excess of the approved corporate operating
budget. The Board approval was required for the amount to be released,
which amount was approved in excess of the allotted budget for the year.
The President cannot approve an additional amount, unless there is an
appropriation or a provision saying a particular savings will be used for the
CIF. The approvals here were all in excess of the approved budget.

Cash advances can be given on a per project basis for CIF. For one to get
a cash advance, one must state what the project is as to that cash
advance. No subsequent cash advance should be given, until previous
cash advances have been liquidated and accounted for. If it is a continuing
project, monthly liquidation reports must be given. The difference in
liquidation process between CIF and regular cash advances is that for CIF,
the liquidation goes to the Chair and not to the resident auditor of the
agency or the GOCC. All of the liquidation papers should go to the COA
Chair, given on a monthly basis.

In this case, the vouchers themselves are couched generally and just say
cash advance from CIF of the Chairman or from the GM's office in
accordance with her duties. There is no particular project indicated for the
cash advance. Also, the requirement that prior advances be liquidated first
for subsequent advances to be given was not followed. The witness
prepared a summary of the cash advances withdrawn by the two disbursing
officers covering the years 2008, 2009 and 2010 (Exh. "D5"). The basis for
this summary is the record submitted to them by Aguas, which were
supposedly submitted to COA. It shows that there were subsequent cash
advances, even if a prior advance has not yet been liquidated. Valencia
submitted liquidation reports to Villar, which consists of a letter, certification
and schedule of cash advances, and liquidation reports. One is dated July
24, 2008 (Exh. "G5") and another is dated February 13, 2009 (Exh. "H5").

When she secured Exhibit "G5", together with the attached documents, she
did not find any supporting documents despite the statement in Exhibit "G5"
that the supporting details of the expenses that were incurred from the fund
can be made available, if required. Aguas, the person who processed the
cash advances said he did not have the details or suppmiing details of
documents of the expenditures.

Normally, when liquidating CIF, the certification of the head of the agency is
necessary. If there were vouchers or receipts involved, then all these
should be attached to the liquidation report. There should also be an
accomplishment report which should be done on a monthly basis. All of
these should be enclosed in a sealed envelope and sent to the Chairman of
the COA, although the agency concerned must retain a photocopy of the
documents. The report should have a cover/transmittal letter itemizing the
documents, as well as liquidation vouchers and other supporting papers. If
the liquidation voucher and the supporting papers are in order, then the
COA Chairman or his representative shall issue a credit memorandum.
Supporting papers consist of receipts and sales invoices. The head of the
agency would have to certify that those were all actually incurred and are
legal. In this case, there were no supporting documents submitted with
respect to Valencia's cash advances in 2008. Only the certifications by the
SDO were submitted. These certifications stated that he has the
documents in his custody and they can be made available, if and when
necessary.

When she reviewed the CIF, she asked Aguas to produce the supporting
documents which were indicated in Valencia's certification and Aguas's
own certification in the cash advance vouchers, where he also certified that
the documents supporting the cash advance were in their possession and
that there was proper liquidation. Aguas replied that he did not have them.
She identified the letter of Uriarte to Villar dated July 24, 2008 as well as a
transmittal letter by Uriarte for August 1, 2008, a certification and schedule
of cash advances and an undetailed liquidation report. Among the
attachments is Board Resolution 305, a copy of the COB for 2008, a
document for the second half of 2008, a document dated April 2, 2009, and
a document for liquidation of P2,295,000. She also identified another letter
for P50 million, dated February 13, 2009, attached to the transmittal letter.
There is a certification attached to those two letters amounting to
P2,295,000. Also attached is the schedule of cash advances by Aguas and
a liquidation report where Aguas certified that the supporting documents
are complete and proper although the supporting documents and papers
are not attached to the liquidation report, only the general statement. These
documents were submitted to them by Aguas.

She was shown the four liquidation reports (Exhibits "M5", "N5", "05" and
"P5") attached to the transmittal letter and was asked whether they were
properly and legally accomplished. She replied that they were couched in
general terms and the voucher for which the cash advance was liquidated
is not indicated and only the voucher number is specified. She adds that
the form of the liquidation is correct, but the details are not there and
neither are the supporting papers.

The liquidation report was dated July 24, 2008, but it was submitted only on
August 1, 2008 to COA, and it supposedly covered the cash advances of
Uriarte from January to May 2008. This is stated in her summary of
liquidation that was earlier marked. There were no supporting papers
stated on or attached to the liquidation report.

She identified a set of documents to liquidate the cash advances from the
CIF for the second semester of 2008 by Uriarte. The transmittal letter of
Uriarte was received by the COA on April 2, 2009. Upon inquiry with
Aguas, he said that he did not have any of the supporting papers that he
supposedly had according to the certification. According to him, they are
with Uriarte. Uriarte, on the other hand, said, during the Senate hearing,
that she gave them to President Arroyo.

When Plaras wrote Valencia on December 15, 2008, Aguas wrote back on
behalf of Valencia, who had designated himself as SDO. However, their
designations, or in what capacity they signed the voucher are not stated.
Among the attachments is also a memorandum dated April 2, 2008 (Exhibit
"P5"), containing the signature of Arroyo, indicating her approval to the
utilization of funds. Another memorandum, dated August 13, 2008,
indicating the approval of Arroyo was also attached to the transmittal letter
of Aguas on April 4, 2009. These two memoranda bear the reasons for the
cash advances, couched in general terms. The reasons were donated
medicines that were sold and authorized expenditures on endowment fund.
The reasons stated in the memoranda are practically the same. Uriarte did
not submit any accomplishment reports regarding the intelligence fund.
Aguas submitted an accomplishment report, but the accomplishments were
not indicated in definite fashion or with specificity.

The witness narrated, based on her Summary of Liquidation Reports in

2009, that the total cash advance made by Uriarte was P132,760,096.
Arroyo approved P90 million for release. P10 million in January 2009 and
April 27, 2009, and then P50 million in May 6, 2009.In July 2, 2009, P10
million or a total of P70 million. In October 2009, P20 million or a total of
P90 million. The amount that was cash advanced by Valencia was
P5,660,779. Therefore, the total cash advances by these two officials were
P138,420,875, but all of these were never liquidated in 2009. Uriarte and
Valencia only submitted a liquidation voucher and a report to COA on April
I2, 2010. For the January 22, 2009 disbursements, the date of the
liquidation voucher was June 30, 2009, but it was submitted to COA on
April 12, 2010. Witness identified the transmittal letter for P28 million by
Uriarte, dated October 19, 2009, which was received by the COA only on
April 12, 2010, with an accompanying certification from Uriarte as to some
of the documents from which the witness's Summary of Liquidation was
based.

The cash advances made by Uriarte and Valencia violated par. I, Sec. 4
and Sec. 84 of P.D. I445 and par. 2, III, COA Circular No. 92-385.

Since these cash advances were in excess of the appropriation, in effect,

they were disbursed without any appropriation. These cash advances were
also made without any specific project, in violation of par. 2 of COA Circular
No. 92-385. In this case, the cash advances were not for a specific project.
The vouchers only indicate the source of the fund. The vouchers did not
specify specific projects.
The total cash advances for the years 2008, 2009 and 2010 to accused
Uriarte and Valencia is more than P366,000,000. Valencia cash advanced
PI 3.3 million. The rest was made by Uriarte.

The memoranda to President Arroyo stated only the problems encountered

by the PCSO. These problems, as stated in each memorandum, included
donated medicines sometimes ending up in store for sale, unofficial use of
ambulances, rise of expenditures of endowment fund, lotto sweepstakes
scams, fixers for programs of the PCSO, and other fraudulent schemes. No
projects were mentioned.

As regards the sixth step - the credit notice, the same was not validly
issued by the COA. The credit notice is a settlement or an action made by
the COA Auditors and is given once the Chairman, in the case of CIF Fund,
finds that the liquidation report and all the supporting papers are in order. In
this case, the supporting papers and the liquidation report were not in
order, hence, the credit notice should not have been issued. Further, the
credit notice has to follow a specific form. The COA Chairman or his
representative can: 1) settle the cash advance when everything is in order;
2) suspend the settlement if there are deficiencies and then ask for
submission of the deficiencies; or 3) out rightly disallow it in case said cash
advances are illegal, irregular or unconscionable, extravagant or excessive.
Instead of following this form, the COA issued a document dated January
10, 2011, which stated that there is an irregular use of the price fund and
the charity fund for CIF Fund. The document bears an annotation which
says, "wait for transmittal, draft" among others. The document was not
signed by Plaras, who was the Head of the Confidential and Intelligence
Fund Unit under COA Chairman Villar. Instead, she instructed her staff to
"please ask Aguas to submit the supplemental budget." This document was
not delivered to PCSO General Manager J.M. Roxas. They instead
received another letter dated January 13, 2011 which was almost identical
to the first document, except it was signed by Plaras, and the finding of the
irregular use of the prize fund and the charity fund was omitted. Instead,
the work "various" was substituted and then the amount of P137,5000,000.
Therefore, instead of the earlier finding of irregularity, suddenly, the COA
issued a credit notice as regards the total of P140,000,000. The credit
notice also did not specify that the transaction had been audited, indicating
that no audit was made.
A letter dated May 11, 2009 from the COA and signed by Plaras, states
that the credit notice is hereby issued. Thus, it is equivalent to the credit
notice, although it did not come in the required form. It merely stated that
the credit notice is issued for P29,700,000, without specifying for which
vouchers and for which project the credit notice was being given. It merely
says "First Semester of 2008". In other words, it is a "global" credit notice
that she issued and it did not state that she made an audit.

Another letter, dated July 14, 2010 and signed by Plaras, supposedly
covers all the cash advances in 2009, but only up to the amount of
P116,386,800. It also did not state that an audit was made.

There were no supporting papers attached to the voucher, and the

certification issued is not in conformity with the required certification by
COA Circular 2003-002. The certification dated July 24, 2008 by Valencia
was not in conformity with the certification required by COA. The required
form should specify the project for which the certification was being issued,
and file code of the specific project. The certification dated July 24, 2008,
however, just specified that it was to certify that the P2 million from the
2008 CIF Fund was incurred by the undersigned, in the exercise of his
functions as PCSO Chairman for the various projects, projects and
activities related to the operation of the office, and there was no specific
project or program or file code of the intelligence fund, as required by COA.
Furthermore, the certification also did not contain the last paragraph as
required by COA. Instead, the following was stated in the certification: "He
further certifies that the details and supporting documents and papers on
these highly confidential missions and assignments are in our custody and
kept in our confidential file which can be made available if circumstances
so demand." No details or supporting documents were reviewed by the
witness, and though she personally asked Aguas, the latter said that he did
not have the supporting papers, and they were not in the official files of the
PCSO. Two people should have custody of the papers, namely, The
Chairman of COA and the PCSO or its Special Disbursing Officer. The
witness asked Aguas because Valencia was not there, and also because
Aguas was the one who made the certification and was in-charge of
accounting. The vouchers, supposedly certified by Aguas, as Budget and
Accounting Department Manager, each time cash advances were issued,
stated that the supporting documents are complete, so the witness went to
him to procure the documents.
A certification dated February 13, 2009, stating that P2,857,000 was
incurred by Valencia in the exercise of his function as PCSO Chairman,
related to the operations of his office without the specific intelligence
project. In the same document, there is a certification similar to one in the
earlier voucher. No details of this certification were submitted by Aguas.

Another certification dated July 24, 2008 was presented, and it also did not
specify the intelligence and confidential project, and it did not contain any
certification that the amount was disbursed legally or that no benefits was
given to any person. Similarly, the fourth paragraph of the same document
states that Uriarte certified that details and supporting papers of the cash
advance that she made of P27,700,000 are "kept in their confidential" (sic).
The same were not in the PCSO official records.

The certification dated October 19, 2009 for the amount of P2,498,300, was
submitted to the witness by Aguas. It also did not conform to the COA
requirements, as it also did not specify the use of the cash advance, did not
contain any certification that the cash advance was incurred for legal
purposes, or that no benefits to other people were paid out of it. Again, no
supporting documents were found and none were given by Aguas.
Similarly, a certification dated February 8, 2010 for the amount of
P2,394,654 was presented, and it also does not conform with the COA
circular, as it only stated that the amount was spent or incurred by Valencia
for projects covering the period of July 1 to December 31, 2009 to exercise
his function as PCSO Chairman, thus no particular intelligence fund or
project was stated. As in the other certifications, though it was stated that
the details were in the confidential file, it appeared that these were not in
the possession of PCSO. Another certification dated October 19, 2009
submitted by Uriarte was examined by the witness in the course of her
audit, and found that it also did not conform to the requirements, as it only
stated that the P25 million and P10 million intelligence and confidential fund
dated January 29, 2009 and April 27, 2009 were used in the exercise of her
function as PCSO Vice Chairman and General Manager.

All the documents were furnished by Aguas during the course of the audit
of the financial transactions of PCSO. Other documents given by Aguas
include a letter by Valencia to COA Chairman Villar, which was attached to
the letter dated July 24, 2008. For the Certification issued by Valencia for
P2,857,000, there was also a certification attached dated February 13,
2009. As to Exhibit "J5", together with the certification, there was a letter but
no other documents were submitted. Similarly, as to Exhibit "M6", it was
attached to a letter dated October 19, 2009 and was submitted to the
witness by Aguas. Exhibit "N6" was attached to the letter of Valencia dated
February 8, 2010, the October 19, 2009 certification was attached to the
October 19, 2009 letter to Chairman Villar.

The certification dated June 29, 2010, signed by Valencia in the amount of
P2,075,000, also does not conform with the COA requirement as it only
specifies that the fund was disbursed by Valencia under his office for
various programs in the exercise of his function as Chairman. Though there
was a certification that the supporting papers were kept in the office, these
papers were not found in the records of the PCSO and Aguas did not have
any of the records. The certification was attached to the letter of Valencia to
Villar dated June 29, 2010.

In the certification dated June 29, 2010 signed by Uriarte in the amount of
P137 ,500,000, the witness also said that the certification did not conform
to the COA Circular because it only stated that the amount was disbursed
from a special intelligence fund, authorized and approved by the President
under the disposition of the Office of the Vice Chairman. Despite the
statement certifying that there were documents for the audit, no documents
were provided and the same were not in the official files of PCSO . The
certification was attached to a letter by Uriarte dated July 1, 2010
addressed to Villar.

In the certification dated October 19, 2009 signed by Uriarte in the amount
of P2,500,000, the witness made the same finding that it also did not
conform to the COA Circular, as it did not specify the project for which the
cash advance was obtained and there were also no records in the PCSO. It
was attached to the letter dated October 19, 2009.

Finally, in the certification dated February 9, 2010 signed by Uriarte in the

amount of P73,993,846, the witness likewise found that it did not conform
with the requirements of the COA, as all it said was the amount was used
for the exercise of the functions of the PCSO Chairman and General
Manager. The documents related to this were also not in the PCSO records
and Aguas did not submit the same. It was attached to a letter dated
February 8, 2010 from Uriarte to Villar.
There are two kinds of audit on disbursements of government funds: pre-
audit and post-audit. Both are defined in COA Circular 2009-002. Pre-audit
is the examination of documents supporting the transaction, before these
are paid for and recorded. The auditor determines whether: (1) the
proposed expenditure was in compliance with the appropriate law, specific
statutory authority or regulations; (2) sufficient funds are available to enable
payment of the claim; (3) the proposed expenditure is not illegal, irregular,
extravagant, unconscionable or unnecessary, and (4) the transaction is
approved by the proper authority and duly supported by authentic
underlying evidence. On the other hand, the post-audit requirement is the
process where the COA or the auditor will have to do exactly what was
done in the pre-audit, and in addition, the auditor must supplement what
she did by tracing the transaction under audit to the books of accounts, and
that the transaction is all recorded in the books of accounts. The auditor, in
post-audit, also makes the final determination of whether the transaction
was not illegal, irregular, extravagant, excessive, unconscionable or
unnecessary.

In this case, no audit was conducted. In a letter dated May 11, 2009 signed
by Plaras, it was stated that a credit advice was given. However, the letter
did not conform to the requirements or form of a credit notice. Such form
was in COA Circular 2003-002, and should specify the liquidation report
number, the amount, check numbers, and the action taken by the auditor.
The auditor should also include a certification that these have been
audited. In this instance, no certification that the transaction was audited
was given by Plaras. Other similar letters did not conform with the COA
Circular. All transactions of the government must be subject to audit in
accordance with the provisions of the Constitution. Nevertheless, the
requirements for audit are the same.

The effect of the issuance of the credit notice by the COA was that the
agency will take it up in the books and credit the cash advance. This is the
seventh step in the flowchart. Once there is a cash advance, the liability of
the officers who obtained the cash advance would be recorded in the
books. The credit notice, when received, would indicate that the account
was settled. The agency will credit the receivable or the cash advance, and
remove from the books as a liability of the person liable for the cash
advance. The effect of this was that the financial liabilities of Uriarte and
Valencia were removed from the books, but they could still be subject to
criminal liability based on Sec. 10 of COA Circular 91-368 (Government
Accounting and Auditing Manuals, Vol. 1, implementing P.O. 1445), which
states: "The settlement of an account whether or not on appeal has been
made within the statutory period is no bar to criminal prosecution against
persons liable." From the 2008 COA Annual Audited Financial Statements
of PCSO, it was seen that the procedure was not followed because the
liability of the officers was already credited even before the credit notice
was received. In the financial statements, it was stated that the amount due
from officers and employees, which should include the cash advances
obtained by Uriarte and Valencia, were not included because the amount
stated therein was P35 million, while the total vouchers of Uriarte and
Valencia was P86 million.

The witness also related that she traced the records of the CIF fund (since
such was no longer stated as a receivable), and reviewed whether it was
recorded as an expense in 2008. She found out that the recorded CIF fund
expense, as recorded in the corporate operating budget as actually
disbursed, was only P21,102,000. As such, she confronted her accountants
and asked them "Saan tinago itong amount na to?" The personnel in the
accounting office said that the balance of the P86 million or the additional
P21 million was not recorded in the operating fund budget because they
used the prize fund and charity fund as instructed by Aguas. Journal Entry
Voucher No. 8121443 dated December 31, 2008, signed by Elmer Camba,
Aguas (Head of the Accounting Department), and Hutch Balleras (one of
the staff in the Accounting Department), showed that this procedure was
done.

The contents of the Journal Entry Voucher are as follows:

(a) Accounts and Explanation: Due to other funds. This means that the
amount of P63,750,000 was credited as confidential expense from the
operating fund. The amount was then removed from the operating fund,
and it was passed on to other funds.

(b) PF Miscellaneous, Account No. 424-1-L P41,250,000 and CF

Miscellaneous for 424-2-G for P22,500,000. PF Miscellaneous means Prize
Fund Miscellaneous and CF stands for Charity Fund Miscellaneous. This
means that funds used to release the cash advances to Uriarte and
Valencia were from the prize fund and charity.
Attached to the Journal Entry Voucher was a document which reads
"Allocation of Confidential and Intelligence Fund Expenses", and was the
basis of Camba in doing the Journal Entry Voucher. In the same document,
there was a written annotation dated 12-31-2008 which reads that the
adjustment of CIF, CF and IF, beneficiary of the fund is CF and PF and
signed by Aguas.

The year 2009 was a similar case, as the witness traced the recording of
the credit notice at the end of 2009, and despite the absence of the credit
notice, the Accounting Department removed from the books of PCSO the
liability of Uriarte and Valencia, corresponding to the cash advances
obtained in 2009. She based this finding on the COA Annual Audit Report
on the PCSO for the year ended December 31, 2009. It was stated in the
Audit Report that the total liability due from officers and employees was
only P87,747,280 and it was less than the total cash advances of Uriarte
and Valencia, which was P138 million. As a result, the witness checked the
corresponding entry for the expenses in the corporate operating budget
and found out that the same was understated. The CIF expenses were only
P24,968,300, as against the actual amount per vouchers, which was
P138,420,875. Upon checking with the Accounting Department, the
department showed her another Journal Entry Voucher No. 9121157, dated
December 29, 2009, where the personnel removed immediately the
expense and recorded it as expense for the prize fund and charity fund by
the end of December 31.

The contents of the Journal Entry Voucher, especially the notation "due
from'', means the accountability of those who had cash advance was
instead credited. It was removed, and the amount was P106 million. The
entry was confidential expense for P15,958,020 and then the due to other
funds was P90,428,780. The explanation for "424" was found in the middle
part, stating: "424-1-L" of miscellaneous prize fund was used in the amount
of P58,502,740 and the charity fund was used in the amount of P31,
916,040. The total amount of the receivables from Uriarte and Valencia that
was removed was P106,386,800 and P90,428,780 respectively which
came from the prize fund and charity fund.

The witness reported the discrepancy because there were violations of

R.A. 1169, Sec. 6, which provides for the different funds of PCSO namely:
prize fund (55% of the net receipts), charity fund (30% of the net receipts),
and operating fund (15% ). The proceeds of the lotto and sweepstakes
ticket sales provide the money for these different funds, removing first the
printing cost and the net proceeds (98%) is divided among the three funds
mentioned. The prize fund is the fund set aside to be used to pay the prizes
for the winnings in the lotto or sweepstakes draws, whether they are
jackpot or consolation prizes. Incentives to the lotto operators or horse
owners are also drawn from this fund, as all of the expenses connected to
the winnings of the draw. On the other hand, the charity fund is reserved for
charity programs approved by the board of PCSO, and constitutes hospital
and medical assistance to individuals, or to help facilities and other
charities of national character. Operating expenses are charged to the
expenses to operate, personnel services, and MOOE. One kind of fund
cannot be used for another kind, as they become a trust fund which should
only be used for the purpose for which it was authorized, not even with the
approval of the board.

The amounts obtained from the charity fund and prize fund for 2008 was
P63,750,000, and in 2009 P90,428,780. The Board of Directors was given
a copy of the COA Audit Reports for years 2008 and 2009. The Board of
Directors for both years was composed of: Chairman Valencia, and Board
Members Morato, Roquero, Taruc and Valdez. Uriarte was the Vice
Chairman of the Board of Directors. The witness did not know whether the
Board checked the COA reports, but there was no action on their part, and
neither did they question the correctness of the statements. They also had
the Audit Committee (which was composed of members of the board) at
that time, and one of the duties of the Audit Committee was to verify the
balances.

The witness identified the documents referring to the confirmation by the

Board of Directors of PCSO of the CIF. Board Resolution No. 217,
approved on February 18, 2009, confirms the CIF approved by the
President. It did not state which CIF they were approving. They also
assigned Uriarte as the Special Disbursing Officer of the CIF, but it did say
for what year. The signatories to the same Board Resolution were
Valencia, Taruc, Valdes, Uriarte, Roquero and Morato. The same were the
witness's findings for Board Resolution No. 2356 S. 2009, approved on
December 9, 2009. As for Board Resolution No. 29, S. 2010, approved on
January 6, 2010, the Board confirmed the fund approved by the President
for 2010, though the approval of the President was only received on August
13, 2010 as shown in the Memorandum dated January 4. In effect, the
Board was aware of the requests, and because they ratified the cash
advances, they agreed to the act of obtaining the same.

Apart from the President violating LOI 1282, the witness also observed that
the President directly dealt with the PCSO, although the President, by
Executive Order No. 383 dated November 14, 2004, and Executive Order
No. 455 dated August 22, 2005, transferred the direct control and
supervision of the PCSO to the Department of Social Welfare and
Development (DSWD), and later to the Department of Health (DOH). A
project should first be approved by the Supervising and Controlling
Secretary of the Secretary of Health; that the President had transferred her
direct control and supervision, and lost the same. The witness said her
basis was administrative procedure. In this regard, President Aquino now
has transferred the control and supervision of the PCSO back to the Office
of the President through Executive Order No. 14, S. 2010, dated November
19, 2010.

Uriarte should not have gone directly to the President to ask for the latter's
approval for allocation. Nonetheless, the release of the CIF must still be
approved by the President.9

The State also presented evidence consisting in the testimonies of officers

coming from different law enforcement agencies10 to corroborate
Tolentino's testimony to the effect that the PCSO had not requested from
their respective offices any intelligence operations contrary to the
liquidation report submitted by Uriarte and Aguas.

To complete the evidence for the Prosecution, Atty. Anamarie Villaluz

Gonzales, Office-in-Charge and Department Manager of the Human
Resources of PCSO; Flerida Africa Jimenez, Head of the Intelligence and
Confidential Fund Audit Unit of the COA; and Noel Clemente, Director of
COA were presented as additional witnesses.

After the Prosecution rested its case, GMA, Aguas, Valencia, Morato,
Taruc V, Roquero and Villar separately filed their demurrers to evidence
asserting that the Prosecution did not establish a case for plunder against
them.

On April 6, 2015, the Sandiganbayan granted the demurrers to evidence of

Morato, Roquero, Taruc and Villar, and dismissed the charge against them.
It held that said accused who were members of the PCSO Board of
Directors were not shown to have diverted any PCSO funds to themselves,
or to have raided the public treasury by conveying and transferring into
their possession and control any money or funds from PCSO account; that
as to Villar, there had been no clear showing that his designation of Plaras
had been tainted with any criminal design; and that the fact that Plaras had
signed "by authority" of Villar as the COA Chairman could not criminally
bind him in the absence of any showing of conspiracy.

However, the Sandiganbayan denied the demurrers of GMA, Aguas and

Valencia, holding that there was sufficient evidence showing that they had
conspired to commit plunder; and that the Prosecution had sufficiently
established a case of malversation against Valencia, pertinently saying:

Demurrer to evidence is an objection by one of the parties in an action, to

the effect that the evidence which his adversary produced is insufficient in
point of law, whether true or not, to make out a case or sustain the
issue. The party demurring challenges the sufficiency of the whole
evidence to sustain a verdict. The court then ascertains whether there
is a competent or sufficient evidence to sustain the indictment or to
support a verdict of guilt.

xxxx

Sufficient evidence for purposes of frustrating a demurrer thereto is such

evidence in character, weight or amount as will legally justify the judicial or
official action demanded to accord to circumstances. To be considered
sufficient therefore, the evidence must prove (a) the commission of the
crime, and (b) the precise degree of paiiicipation therein by the
accused (Gutib v. CA, 110 SCAD 743, 312 SCRA 365 [1999]).

xxx xxx xxx

A. Demurrer filed by Arroyo and Aguas:

It must be remembered that in Our November 5, 2013 Resolution, We

found strong evidence of guilt against Arroyo and Aguas, only as to
the second predicate act charged in the Information, which reads:

(b) raiding the public treasury by withdrawing and receiving, in several

instances, the above-mentioned amount from the Confidential/Intelligence
Fund from PCSO's accounts, and/or unlawfully transferring or conveying
the same into their possession and control through irregularly issued
disbursement vouchers and fictitious expenditures.

In the November 5, 2013 Resolution, We said:

It should be noted that in both R.A. No. 7080 and the PCGG rules, the
enumeration of the possible predicate acts in the commission of plunder did
not associate or require the concept of personal gain/benefit or unjust
enrichment with respect to raids on the public treasury, as a means to
commit plunder. It would, therefore, appear that a "raid on the public
treasury" is consummated where all the acts necessary for its execution
and accomplishment are present. Thus a "raid on the public treasury" can
be said to have been achieved thru the pillaging or looting of public coffers
either through misuse, misappropriation or conversion, without need of
establishing gain or profit to the raider. Otherwise stated, once a
"raider" gets material possession of a government asset through
improper means and has free disposal of the same, the raid or pillage
is completed. x x x

xxxx

Clearly, the improper acquisition and illegal use of CIF funds, which is
obviously a government asset, will amount to a raid on the public treasury,
and therefore fall into the category of ill-gotten wealth.

xxxx

xxx It is not disputed that Uriarte asked for and was granted authority by
Arroyo to use additional CIF funds during the period 2008-2010. Uriarte
was able [to] accumulate during that period CIF funds in the total
amount of P.352,681,646. This was through a series of withdrawals as
cash advances of the CIF funds from the PCSO coffers, as evidenced by
the disbursement vouchers and checks issued and encashed by her,
through her authorized representative.

These flagrant violations of the rules on the use of CIF funds evidently
characterize the series of withdrawals by and releases to Uriarte as
"raids" on the PCSO coffers, which is part of the public
treasury. These were, in every sense, "pillage," as Uriarte looted
government funds and appears to have not been able to account for
it. The monies came into her possession and, admittedly, she disbursed it
for purposes other than what these were intended for, thus, amounting to
"misuse" of the same. Therefore, the additional CIF funds are ill-gotten, as
defined by R.A. 7080, the PCGG rules, and Republic v.
Sandiganbayan. The encashment of the checks, which named her as
the "payee," gave Uriarte material possession of the CIF funds which
she disposed of at will.

As to the determination whether the threshold amount of P50million was

met by the prosecution's evidence, the Court believes this to have been
established. Even if the computation is limited only to the cash
advances/releases made by accused Uriarte alone AFTER Arroyo had
approved her requests and the PCSO Board approved CIF budget and the
"regular" P5million CIF budget accorded to the PCSO Chairman and Vice
Chairman are NOT taken into account, still the total cash advances
through accused Uriarte's series of withdrawals will total
P189,681,646. This amount surpasses the P50million threshold.

The evidence shows that for the year 2010 alone, Uriarte asked for P150
million additional CIF funds, and Arroyo granted such request and
authorized its use. From January 8, 2010 up to June 18, 2010, Uriarte
made a series of eleven (11) cash advances in the total amount of
P138,223,490. According to Uriarte's testimony before the Senate, the
main purpose for these cash advances was for the "roll-out" of the small
town lottery program. However, the accomplishment report submitted by
Aguas shows that P137,500,000 was spent on non-related PCSO activities,
such as "bomb threat, kidnapping, terrorism and bilateral and security
relations." All the cash advances made by Uriarte in 2010 were made in
violation of LOI 1282, and COA Circulars 2003-002 and 92-385. These
were thus improper use of the additional Cff funds amounting to raids on
the PCSO coffers and were ill-gotten because Uriarte had encashed the
checks and came into possession of the monies, which she had complete
freedom to dispose of but was not able to properly account for.

These findings of the Court clearly point out the commission by Uriarte of
the crime of Plunder under the second predicate act charged in the
Information. As to Arroyo's participation, the Court stated in its
November 5, 2013 Resolution that:

The evidence shows that Arroyo approved not only Uriarte's request for
additional CIF funds in 2008-2010, but also authorized the latter to use
such funds. Arroyo's "OK" notation and signature on Uriartc's letter-
requests signified unqualified approval of Uriarte's request to use the
additional CIF funds because the last paragraph of Uriarte's requests
uniformly ended with this phrase: "With the use of intelligence fund,
PCSO can protect its image and integrity of its operations.

The letter-request of Uriarte in 2010 was more explicit because it

categorically asked for: "The approval on the use of the fifty percent of the
PR Fund as PCSO Intelligence Fund will greatly help PCSO in the
disbursement of funds to immediately address urgent issues."

Arroyo cannot, therefore, successfully argue that what she approved were
only the request for the grant or allocation of additional CIF funds,
because Arroyo's "OK" notation was unqualified and, therefore,
covered also the request to use such funds, through releases of the
same in favor of Uriarte. 11

The Sandiganbayan later also denied the respective Motions for

Reconsideration of GMA and Aguas, observing that:

In this case, to require proof that monies went to a plunderer's bank

account or was used to acquire real or personal properties or used for
any other purpose to personally benefit the plunderer, is
absurd. Suppose a plunderer had already illegally amassed, acquired or
accumulated P50 Million or more of government funds and just decided to
keep it in his vault and never used such funds for any purpose to benefit
him, would that not be plunder? Or, if immediately right after such
amassing, the monies went up in flames or recovered by the police,
negating any opportunity for the person to actually benefit, would that not
still be plunder? Surely, in such cases, a plunder charge could still prosper
and the argument that the fact of personal benefit should still be evidence-
based must fail.

Also, accused Arroyo insists that there was no proof of the fact of amassing
the ill-gotten wealth, and that the "overt act" of approving the disbursement
is not the "overt act" contemplated by law. She further stresses that there
was no proof of conspiracy between accused Arroyo and her co-accused
and that the Prosecution was unable to prove their case against accused
Arroyo. What accused Arroyo forgets is that although she did not
actually commit any "overt act" of illegally amassing CIF funds, her
act of approving not only the additional CIF funds but also their
releases, aided and abetted accused Uriarte's successful raids on the
public treasury. Accused Arroyo is therefore rightly charged as a
coconspirator of Uriarte who accumulated the CIF funds. Moreover, the
performance of an overt act is not indispensable when a conspirator
is the mastermind.12

Considering that the Sandiganbayan denied the demurrers to evidence of

GMA and Aguas, they have come to the Court on certiorari to assail and
set aside said denial, claiming that the denial was with grave abuse of
discretion amounting to lack or excess of jurisdiction.

Issues

GMA pleads that the denial of her demurrer to evidence was in patent and
flagrant violation of Republic Act No. 7080, the law on plunder, and was
consequently arbitrary and oppressive, not only in grave abuse of
discretion but rendered without jurisdiction because:

First Ground

On the basis of the above Resolutions, the Sandiganbayan has denied

petitioner Arroyo's Demurrer to Evidence and considering the
reasons for doing so, would find petitioner Arroyo guilty of the
offense of plunder under Republic Act No. 7080 as charged in the
Information notwithstanding the following:

a. While the gravamen, indeed corpus delicti of the offense of plunder

under R.A. No. 7080, and as charged in the Information, is that the
public officer ... "amasses, accumulates or acquires ill-gotten wealth
through a combination or series of overt or criminal acts as described
in Section l(d) hereof, in the aggregate amount or total value of at
least Fifty million pesos (P50,000,000.00)", the Sandiganbayan
Resolutions extirpate this vital element of the offense of plunder;

b. In point of fact, not a single exhibit of the 637 exhibits offered by

the prosecution nor a single testimony of the 21 witnesses of the
prosecution was offered by the prosecution to prove that petitioner
amassed, accumulated or acquired even a single peso of the alleged
ill-gotten wealth amounting to P365,997,915.00 or any part of that
amount alleged in the Information;
c. Implicitly confirming the above, and aggravating its error, on the
basis solely of petitioner Arroyo's authorization of the release of the
Confidential/Intelligence Fund from PCSO's accounts, the
Sandiganbayan ruled that she has committed the offense of plunder
under R.A. No. 7080 for the reason that her release of CIF funds to the
PCSO amount to a violation of Sec. l(d) [11 of R.A. No. 7080 which
reads, as follows:

1) Through misappropriation, conversion, misuse, or malversation of

public funds or raids on the public treasury;

which, "did not associate or require the concept of personal

gain/benefit or un.just enrichment with respect to raids on the public
treasury", thereby disregarding the gravamen or the corpus delicti of
the offense of plunder under R.A. No. 7080.

Second Ground

Worsening the above error of the Sandiganbayan, the Resolutions,

with absolutely no justification in law or in the evidence, purportedly
as the "mastermind" of a conspiracy, and without performing any
overt act, would impute to petitioner Arroyo the "series of withdrawals
as cash advances of the CIF funds from the PCSO coffers" by Uriarte
as "raids on the PCSO coffers, which is part of the public treasury"
and "in every sense, 'pillage' as Uriarte looted government funds and
appears to have not been able to account for it". Parenthetically,
Uriarte has not been arrested, was not arraigned and did not
participate in the trial of the case.

Third Ground

That as an obvious consequence of the above, denial of petitioner

Arroyo's Demurrer To Evidence for the reasons stated in the
Sandiganbayan Resolutions, amounting no less to convicting her on
the basis of a disjointed reading of the crime of plunder as defined in
R.A. No. 7080, aggravated by the extirpation in the process of
its "corpus delicti" - the amassing, accumulation or acquisition of ill-
gotten wealth, hence, of a crime that docs not exist in law and
consequently a blatant deprivation of liberty without due process of
law.
Fourth Ground

The Information alleges that the ten (10) persons accused in Crim.
Case No. SB-12-CRM-0174, namely: Gloria Macapagal-Arroyo, Rosario
C. Uriarte, Sergio 0. Valencia, Manuel L. Morato, Jose R. Taruc V,
Raymundo T. Roquero, [M]a. Fatima A.S. Valdes, Benigno B. Aguas,
Reynaldo A. Villar and Nilda B. Plaras" ... all public officers
committing the offense in relation to their respective offices and
taking undue advantage of their respective official positions,
authority, relationships, connections or influence, conniving,
conspiring and confederating with one another, did then and there
willfully, unlawfully and criminally amass, accumulate and/or acquire,
directly or indirectly, ill-gotten wealth in the aggregate amount or total
value of THREE HUNDRED SIXTY FIVE MILLION NINE HUNDRED
NINETY SEVEN THOUSAND NINE HUNDRED FIFTEEN PESOS
(PHP365,997,915.00), more or less, through any or a combination or a
series of overt or criminal acts, or similar schemes or means,
described as follows ... " or each of them, P36,599,791.50 which would
not qualify the offense charged as "plunder" under R.A. No. 7080
against all ten (10) accused together, for which reason the Information
docs not charge the offense of plunder and, as a consequence, all
proceedings thereafter held under the Information arc void.13

On his part, Aguas contends that:

A. In light of the factual setting described above and the evidence

offered and admitted, docs proof beyond reasonable doubt exist to
warrant a holding that Prosecution proved the guilt of the accused
such that there is legal reason to deny Petitioner's Demurrer'?

B. Did the Prosecution's offered evidence squarely and properly

support the allegations in the Information'?

PETITIONER STRONGLY SUBMITS THAT PROSECUTION FAILED TO

ESTABLISH BY PROOF BEYOND REASONABLE DOUBT THE
EXISTENCE OF THE CORE ELEMENTS OF THE CRIME OF
PLUNDER.14

On the other hand, the Prosecution insists that the petitions

for certiorari should be dismissed upon the following grounds, namely:
A. CERTIORARI IS NOT THE PROPER REMEDY FROM AN ORDER OR
RESOLUTION DENYING DEMURRER TO EVIDENCE.

B. THERE IS NO GRAVE ABUSE OF DISCRETION BECAUSE THE

SANDIGANBAYAN MERELY INTERPRETED WHAT CONSTITUTES
PLUNDER UNDER LAW AND JURISPRUDENCE IN LIGHT OF FACTS
OF THE CASE. IT DID NOT JUDICIALLY LEGISLATE A "NEW"
OFFENSE.

1. ACTUAL PERSONAL GAIN, BENEFIT OR ENRICHMENT IS NOT AN

ELEMENT OF PLUNDER UNDER R.A. No. 7080.

2. EVIDENCE SHOWS THAT ARROYO, BY INDISPENSABLE

COOPERATION, CONSPIRED WITH HER CO-ACCUSED AND
PARTICIPATED IN THE COMPLEX, ILLEGAL SCHEME WHICH
DEFRAUDED PCSO IN HUNDREDS OF MILLIONS OF PESOS, WHICH
CONSTITUTES PLUNDER.

3. ARROYO IS NOT SIMILARLY SITUATED WITH ACCUSED PCSO

BOARD MEMBERS AND CANNOT THUS DEMAND THAT THE
SANDIGANBA YAN DISMISS THE PLUNDER CASE AGAINST HER.

C. ARROYO'S BELATED, COLLATERAL ATTACK ON THE

INFORMATION CHARGING HER AND CO-ACCUSED FOR PLUNDER IS
HIGHLY IMPROPER, ESPECIALLY AT THIS LA TE STAGE OF THE
PROCEEDING.

1. THE FACTS CONSTITUTING THE OFFENSE ARE CLEARLY

ALLEGED IN THE INFORMATION.

2. ARROYO'S ACTIVE PARTICIPATION IN THE PROCEEDINGS

ARISING FROM OR RELATING TO SB-12-CRM-0174 PROVES THAT
SHE HAS ALWAYS KNOWN AND UNDERSTOOD THE NATURE AND
SCOPE OF THE ACCUSATIONS AGAINST HER.

D. ARROYO IS NOT ENTITLED TO A TEMPORARY RESTRAINING

ORDER BECAUSE THE CRIMINAL PROSECUTION IN SB-12-CRM-0174
CANNOT BE ENJOINED.15

Based on the submissions of the parties, the Court synthesizes the

decisive issues to be considered and resolved, as follows:
Procedural Issue:

1. Whether or not the special civil action for certiorari is proper to assail the
denial of the demurrers to evidence.

Substantive Issues:

1. Whether or not the State sufficiently established the existence of

conspiracy among GMA, Aguas, and Uriarte;

2. Whether or not the State sufficiently established all the elements of the
crime of plunder:

a. Was there evidence of amassing, accumulating or acquiring ill-gotten

wealth in the total amount of not less than P50,000,000.00?

b. Was the predicate act of raiding the public treasury alleged in the
information proved by the Prosecution?

Ruling of the Court

The consolidated petitions for certiorari are meritorious.

I.
The Court cannot be deprived of its jurisdiction
to correct grave abuse of discretion

The Prosecution insists that the petition for certiorari of GMA was improper
to challenge the denial of her demurrer to evidence; that she also thereby
failed to show that there was grave abuse of discretion on the part of
the Sandiganbayan in denying her demurrer to evidence; and that, on the
contrary, the Sandiganbayan only interpreted what constituted plunder
under the law and jurisprudence in light of the established facts, and did not
legislate a new offense, by extensively discussing how she had connived
with her co-accused to commit plunder.16

The Court holds that it should take cognizance of the petitions

for certiorari because the Sandiganbayan, as shall shortly be
demonstrated, gravely abused its discretion amounting to lack or excess of
jurisdiction.
The special civil action for certiorari is generally not proper to assail such
an interlocutory order issued by the trial court because of the availability of
another remedy in the ordinary course of law.17 Moreover, Section 23, Rule
119 of the Rules of Court expressly provides that "the order denying the
motion for leave of court to file demurrer to evidence or the demurrer itself
shall not be reviewable by appeal or by certiorari before judgment." It is not
an insuperable obstacle to this action, however, that the denial of the
demurrers to evidence of the petitioners was an interlocutory order that did
not terminate the proceedings, and the proper recourse of the demurring
accused was to go to trial, and that in case of their conviction they may
then appeal the conviction, and assign the denial as among the errors to be
reviewed.18 Indeed, it is doctrinal that the situations in which the writ
of certiorari may issue should not be limited,19 because to do so –

x x x would be to destroy its comprehensiveness and usefulness. So wide

is the discretion of the court that authority is not wanting to show
that certiorari is more discretionary than either prohibition or mandamus. In
the exercise of our superintending control over other courts, we are
to be guided by all the circumstances of each particular case 'as the
ends of justice may require.' So it is that the writ will be granted where
necessary to prevent a substantial wrong or to do substantial
justice.20

The Constitution itself has imposed upon the Court and the other courts of
justice the duty to correct errors of jurisdiction as a result of capricious,
arbitrary, whimsical and despotic exercise of discretion by expressly
incorporating in Section 1 of Article VIII the following provision:

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

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

The exercise of this power to correct grave abuse of discretion amounting

to lack or excess of jurisdiction on the part of any branch or instrumentality
of the Government cannot be thwarted by rules of procedure to the contrary
or for the sake of the convenience of one side. This is because the Court
has the bounden constitutional duty to strike down grave abuse of
discretion whenever and wherever it is committed. Thus, notwithstanding
the interlocutory character and effect of the denial of the demurrers to
evidence, the petitioners as the accused could avail themselves of the
remedy of certiorari when the denial was tainted with grave abuse of
discretion.21 As we shall soon show, the Sandiganbayan as the trial court
was guilty of grave abuse of discretion when it capriciously denied the
demurrers to evidence despite the absence of competent and sufficient
evidence to sustain the indictment for plunder, and despite the absence of
the factual bases to expect a guilty verdict.22

II.
The Prosecution did not properly allege and prove
the existence of conspiracy among GMA, Aguas and Uriarte

Conspiracy exists when two or more persons come to an agreement

concerning the commission of a felony, and decide to commit it.23 In this
jurisdiction, conspiracy is either a crime in itself or a mere means to commit
a crime.

As a rule, conspiracy is not a crime unless the law considers it a crime, and
prescribes a penalty for it.24 The exception is exemplified in Article
115 (conspiracy and proposal to commit treason), Article 136 (conspiracy
and proposal to commit coup d'etat, rebellion or insurrection) and Article
141 (conspiracy to commit sedition) of the Revised Penal Code. When
conspiracy is a means to commit a crime, it is indispensable that the
agreement to commit the crime among all the conspirators, or their
community of criminal design must be alleged and competently shown.

We also stress that the community of design to commit an offense must be

a conscious one.25 Conspiracy transcends mere companionship, and mere
presence at the scene of the crime does not in itself amount to conspiracy.
Even knowledge of, or acquiescence in, or agreement to cooperate is not
enough to constitute one a party to a conspiracy, absent any active
participation in the commission of the crime with a view to the furtherance
of the common design and purpose.26 Hence, conspiracy must be
established, not by conjecture, but by positive and conclusive evidence.
In terms of proving its existence, conspiracy takes two forms. The first is
the express form, which requires proof of an actual agreement among all
the co-conspirators to commit the crime. However, conspiracies are not
always shown to have been expressly agreed upon. Thus, we have the
second form, the implied conspiracy. An implied conspiracy exists when
two or more persons are shown to have aimed by their acts towards the
accomplishment of the same unlawful object, each doing a part so that their
combined acts, though apparently independent, were in fact connected and
cooperative, indicating closeness of personal association and a
concurrence of sentiment.27Implied conspiracy is proved through the mode
and manner of the commission of the offense, or from the acts of the
accused before, during and after the commission of the crime indubitably
pointing to a joint purpose, a concert of action and a community of
interest.28

But to be considered a part of the conspiracy, each of the accused must be

shown to have performed at least an overt act in pursuance or in
furtherance of the conspiracy, for without being shown to do so none of
them will be liable as a co-conspirator, and each may only be held
responsible for the results of his own acts. In this connection, the character
of the overt act has been explained in People v. Lizada:29

An overt or external act is defined as some physical activity or deed,

indicating the intention to commit a particular crime, more than a mere
planning or preparation, which if carried out to its complete termination
following its natural course, without being frustrated by external obstacles
nor by the spontaneous desistance of the perpetrator, will logically and
necessarily ripen into a concrete offense. The raison d'etre for the law
requiring a direct overt act is that, in a majority of cases, the conduct
of the accused consisting merely of acts of preparation has never
ceased to be equivocal; and this is necessarily so, irrespective of his
declared intent. It is that quality of being equivocal that must be
lacking before the act becomes one which may be said to be a
commencement of the commission of the crime, or an overt act or
before any fragment of the crime itself has been committed, and this
is so for the reason that so long as the equivocal quality remains, no
one can say with certainty what the intent of the accused is. It is
necessary that the overt act should have been the ultimate step towards
the consummation of the design. It is sufficient if it was the "first or some
subsequent step in a direct movement towards the commission of the
offense after the preparations are made." The act done need not
constitute the last proximate one for completion. It is necessary,
however, that the attempt must have a causal relation to the intended
crime. In the words of Viada, the overt acts must have an immediate
and necessary relation to the offense. (Bold underscoring supplied for
emphasis)

In her case, GMA points out that all that the State showed was her having
affixed her unqualified "OK" on the requests for the additional CIFs by
Uriarte. She argues that such act was not even an overt act of plunder
because it had no immediate and necessary relation to plunder by virtue of
her approval not being per se illegal or irregular. However,
the Sandiganbayan, in denying the Motions for Reconsideration of GMA
and Aguas vis-a-vis the denial of the demurrers, observed that:

xxxx accused Arroyo insists that there was no proof of the fact of amassing
the ill-gotten wealth, and that the "overt act" of approving the disbursement
is not the "overt act" contemplated by Jaw. She further stresses that there
was no proof of conspiracy between accused Arroyo and her co-accused
and that the Prosecution was unable to prove their case against accused
Arroyo. What accused Arroyo forgets is that although she did not actually
commit any "overt act" of illegally amassing CIF funds, her act of approving
not only the additional CIF funds but also their releases, aided and abetted
accused Uriarte's successful raids on the public treasury. Accused Arroyo
is therefore rightly charged as a co-conspirator of Uriarte who accumulated
the CIF funds. Moreover, the performance of an overt act is not
indispensable when a conspirator is the mastermind.30

It is in this regard that the Sandigabayan gravely abused its discretion

amounting to lack or excess of its jurisdiction. To start with, its conclusion
that GMA had been the mastermind of plunder was plainly conjectural and
outrightly unfounded considering that the information did not aver at all that
she had been the mastermind; hence, the Sandigabayan thereby acted
capriciously and arbitrarily. In the second place, the treatment by
the Sandiganbayan of her handwritten unqualified "OK" as an overt act of
plunder was absolutely unwarranted considering that such act was a
common legal and valid practice of signifying approval of a fund release by
the President. Indeed, pursuant to People v. Lizada, supra, an act or
conduct becomes an overt act of a crime only when it evinces a causal
relation to the intended crime because the act or conduct will not be an
overt act of the crime if it does not have an immediate and necessary
relation to the offense.

In Estrada v. Sandiganbayan,31the Court recognized two nuances of

appreciating conspiracy as a means to commit a crime, the wheel
conspiracy and the chain conspiracy.

The wheel conspiracy occurs when there is a single person or group (the
hub) dealing individually with two or more other persons or groups (the
spokes). The spoke typically interacts with the hub rather than with another
spoke. In the event that the spoke shares a common purpose to succeed,
there is a single conspiracy. However, in the instances when each spoke is
unconcerned with the success of the other spokes, there are multiple
conspiracies.32

An illustration of wheel conspiracy wherein there is only one conspiracy

involved was the conspiracy alleged in the information for plunder filed
against former President Estrada and his co-conspirators. Former
President Estrada was the hub while the spokes were all the other accused
individuals. The rim that enclosed the spokes was the common goal in the
overall conspiracy, i.e., the amassing, accumulation and acquisition of ill-
gotten wealth.

On the other hand, the American case of Kotteakos v. United

States33 illustrates a wheel conspiracy where multiple conspiracies were
established instead of one single conspiracy. There, Simon Brown, the hub,
assisted 31 independent individuals to obtain separate fraudulent loans
from the US Government. Although all the defendants were engaged in the
same type of illegal activity, there was no common purpose or overall plan
among them, and they were not liable for involvement in a single
conspiracy. Each loan was an end in itself, separate from all others,
although all were alike in having similar illegal objects. Except for Brown,
the common figure, no conspirator was interested in whether any loan
except his own went through. Thus, the US Supreme Court concluded that
there existed 32 separate conspiracies involving Brown rather than one
common conspiracy.34

The chain conspiracy recognized in Estrada v. Sandiganbayan exists when

there is successive communication and cooperation in much the same way
as with legitimate business operations between manufacturer and
wholesaler, then wholesaler and retailer, and then retailer and consumer.35

This involves individuals linked together in a vertical chain to achieve a

criminal objective.36 Illustrative of chain conspiracy was that involved
in United States v. Bruno,37of the US Court of Appeals for the Second
Circuit. There, 88 defendants were indicted for a conspiracy to import, sell,
and possess narcotics. This case involved several smugglers who had
brought narcotics to retailers who, in turn, had sold the narcotics to
operatives in Texas and Louisiana for distribution to addicts. The US Court
of Appeals for the Second Circuit ruled that what transpired was a single
chain conspiracy in which the smugglers knew that the middlemen must
sell to retailers for distribution to addicts, and the retailers knew that the
middle men must purchase drugs from smugglers. As reasoned by the
court, "the conspirators at one end of the chain knew that the unlawful
business would not and could not, stop with their buyers; and those at the
other end knew that it had not begun with their sellers." Each conspirator
knew that "the success of that part with which he was immediately
concerned was dependent upon success of the whole." This means,
therefore, that "every member of the conspiracy was liable for every illegal
transaction carried out by other members of the conspiracy in Texas and in
Louisiana."38

Once the State proved the conspiracy as a means to commit a crime, each
co-conspirator is as criminally liable as the others, for the act of one is the
act of all. A co-conspirator does not have to participate in every detail of the
execution; neither does he have to know the exact part performed by the
co-conspirator in the execution of the criminal act.39 Otherwise, the criminal
liability of each accused is individual and independent.

The Prosecution insisted that a conspiracy existed among GMA, Uriarte,

Valencia and the Members of the PCSO Board of Directors, Aguas, Villar
and Plaras. The Sandiganbayan agreed with the Prosecution as to the
conspirators involved, declaring that GMA, Aguas, and Uriarte had
conspired and committed plunder.

A review of the records of the case compels us to reject

the Sandiganbayan's declaration in light of the information filed against the
petitioners, and the foregoing exposition on the nature, forms and extent of
conspiracy. On the contrary, the Prosecution did not sufficiently allege the
existence of a conspiracy among GMA, Aguas and Uriarte.

A perusal of the information suggests that what the Prosecution sought to

show was an implied conspiracy to commit plunder among all of the
accused on the basis of their collective actions prior to, during and after the
implied agreement. It is notable that the Prosecution did not allege that the
conspiracy among all of the accused was by express agreement, or was a
wheel conspiracy or a chain conspiracy.

This was another fatal flaw of the Prosecution.

In its present version, under which the petitioners were charged, Section 2
of Republic Act No. 7080 (Plunder Law) states:

Section 2. Definition of the Crime of Plunder; Penalties. – Any public officer

who, by himself or in connivance with members of his family, relatives by
affinity or consanguinity, business associates, subordinates or other
persons, amasses, accumulates or acquires ill-gotten wealth through a
combination or series of overt criminal acts as described in Section 1 (d)
hereof in the aggregate amount or total value of at least Fifty million pesos
(P50,000,000.00) shall be guilty of the crime of plunder and shall be
punished by reclusion perpetua to death. Any person who participated with
the said public officer in the commission of an offense contributing to the
crime of plunder shall likewise be punished for such offense. In the
imposition of penalties, the degree of participation and the attendance of
mitigating and extenuating circumstances, as provided by the Revised
Penal Code, shall be considered by the court. The court shall declare any
and all ill-gotten wealth and their interests and other incomes and assets
including the properties and shares of stocks derived from the deposit or
investment thereof forfeited in favor of the State. [As Amended by Section
12, Republic Act No. 7659 (The Death Penalty Law)]

Section l(d) of Republic Act No. 7080 provides:

Section 1. Definition of terms. - As used in this Act, the term:

xxxx

d. "Ill-gotten wealth" means any asset, property, business enterprise or

material possession of any person within the purview of Section two (2)
hereof, acquired by him directly or indirectly through dummies, nominees,
agents, subordinates and/or business associates by any combination or
series of the following means or similar schemes:

1. Through misappropriation, conversion, misuse, or malversation of public

funds or raids on the public treasury;

2. By receiving, directly or indirectly, any commission, gift, share,

percentage, kickbacks or any/or entity in connection with any government
contract or project or by reason of the office or position of the public officer
concerned;

3. By the illegal or fraudulent conveyance or disposition of assets belonging

to the National Government or any of its subdivisions, agencies or
instrumentalities or government-owned or controlled corporations and their
subsidiaries;

4. By obtaining, receiving or accepting directly or indirectly any shares of

stock, equity or any other form of interest or participation including the
promise of future employment in any business enterprise or undertaking;

5. By establishing agricultural, industrial or commercial monopolies or other

combinations and/or implementation of decrees and orders intended to
benefit particular persons or special interests; or

6. By taking undue advantage of official position, authority, relationship,

connection or influence to unjustly enrich himself or themselves at the
expense and to the damage and prejudice of the Filipino people and the
Republic of the Philippines.

The law on plunder requires that a particular public officer must be

identified as the one who amassed, acquired or accumulated ill-gotten
wealth because it plainly states that plunder is committed by any public
officer who, by himself or in connivance with members of his family,
relatives by affinity or consanguinity, business associates, subordinates or
other persons, amasses, accumulates or acquires ill-gotten wealth in the
aggregate amount or total value of at least P50,000,000.00 through
a combination or series of overt criminal acts as described in Section l(d)
hereof. Surely, the law requires in the criminal charge for plunder against
several individuals that there must be a main plunderer and her co-
conspirators, who may be members of her family, relatives by affinity or
consanguinity, business associates, subordinates or other persons. In other
words, the allegation of the wheel conspiracy or express conspiracy in the
information was appropriate because the main plunderer would then be
identified in either manner. Of course, implied conspiracy could also identify
the main plunderer, but that fact must be properly alleged and duly proven
by the Prosecution.

This interpretation is supported by Estrada v. Sandiganbayan,40where the

Court explained the nature of the conspiracy charge and the necessity for
the main plunderer for whose benefit the amassment, accumulation and
acquisition was made, thus:

There is no denying the fact that the "plunder of an entire nation resulting in
material damage to the national economy" is made up of a complex and
manifold network of crimes. In the crime of plunder, therefore, different
parties may be united by a common purpose. In the case at bar, the
different accused and their different criminal acts have a commonality - to
help the former President amass, accumulate or acquire ill-gotten wealth.
Sub-paragraphs (a) to (d) in the Amended Information alleged the different
participation of each accused in the conspiracy. The gravamen of the
conspiracy charge, therefore, is not that each accused agreed to receive
protection money from illegal gambling, that each misappropriated a portion
of the tobacco excise tax, that each accused ordered the GSIS and SSS to
purchase shares of Belle Corporation and receive commissions from such
sale, nor that each unjustly enriched himself from commissions, gifts and
kickbacks; rather, it is that each of them, by their individual acts,
agreed to participate, directly or indirectly, in the amassing,
accumulation and acquisition of ill-gotten wealth of and/or for former
President Estrada. [bold underscoring supplied for emphasis]

Here, considering that 10 persons have been accused of amassing,

accumulating and/or acquiring ill-gotten wealth aggregating
P365,997,915.00, it would be improbable that the crime charged was
plunder if none of them was alleged to be the main plunderer. As such,
each of the 10 accused would account for the aliquot amount of only
P36,599,791.50, or exactly 1/10 of the alleged aggregate ill-gotten wealth,
which is far below the threshold value of ill-gotten wealth required for
plunder.
We are not unmindful of the holding in Estrada v. Sandiganabayan41 to the
effect that an information alleging conspiracy is sufficient if the information
alleges conspiracy either: (1) with the use of the word conspire, or its
derivatives or synonyms, such as confederate, connive, collude, etc; or (2)
by allegations of the basic facts constituting the conspiracy in a manner
that a person of common understanding would know what is being
conveyed, and with such precision as would enable the accused to
competently enter a plea to a subsequent indictment based on the same
facts. We are not talking about the sufficiency of the information as to the
allegation of conspiracy, however, but rather the identification of the main
plunderer sought to be prosecuted under R.A. No. 7080 as an element of
the crime of plunder. Such identification of the main plunderer was not only
necessary because the law required such identification, but also because it
was essential in safeguarding the rights of all of the accused to be properly
informed of the charges they were being made answerable for. The main
purpose of requiring the various elements of the crime charged to be set
out in the information is to enable all the accused to suitably prepare their
defense because they are presumed to have no independent knowledge of
the facts that constituted the offense charged.42

For sure, even the Sandiganbayan was at a loss in this respect. Despite
the silence of the information on who the main plunderer or the mastermind
was, the Sandiganbayan readily condemned GMA in its resolution dated
September 10, 2015 as the mastermind despite the absence of the specific
allegation in the information to that effect. Even worse, there was no
evidence that substantiated such sweeping generalization.

In fine, the Prosecution's failure to properly allege the main plunderer

should be fatal to the cause of the State against the petitioners for violating
the rights of each accused to be informed of the charges against each of
them.

Nevertheless, the Prosecution insists that GMA, Uriarte and Aguas

committed acts showing the existence of an implied conspiracy among
themselves, thereby making all of them the main plunderers. On this score,
the Prosecution points out that the sole overt act of GMA to become a part
of the conspiracy was her approval via the marginal note of "OK" of all the
requests made by Uriarte for the use of additional intelligence fund. The
Prosecution stresses that by approving Uriaiie's requests in that manner,
GMA violated the following:
a. Letter of Instruction 1282, which required requests for additional
confidential and intelligence funds (CIFs) to be accompanied with detailed,
specific project proposals and specifications; and

b. COA Circular No. 92-385, which allowed the President to approve the
release of additional CIFs only if there was an existing budget to cover the
request.

The insistence of the Prosecution is unwarranted. GMA's approval of

Uriarte's requests for additional CIFs did not make her part of any design to
raid the public treasury as the means to amass, accumulate and acquire ill-
gotten wealth. Absent the specific allegation in the information to that
effect, and competent proof thereon, GMA' s approval of Uriarte' s
requests, even if unqualified, could not make her part of any criminal
conspiracy to commit plunder or any other crime considering that her
approval was not by any means irregular or illegal.

The Prosecution takes GMA to task for approving Uriarte's request despite
the requests failing to provide "the full detail [ ofJ the specific purposes for
which said funds shall be spent and shall explain the circumstances giving
rise to the necessity for the expenditure and the particular aims to be
accomplished." It posits that the requests were not specific enough,
contrary to what is required by LOI 1282.

LOI 1282 reads:

LETTER OF INSTRUCTION No. 1282

To: All Ministries and Offices Concerned

In recent years intelligence funds appropriated for the various ministries

and certain offices have been, as reports reaching me indicate, spent with
less than full regard for secrecy and prudence. On the one hand, there
have been far too many leakages of information on expenditures of said
funds; and on the other hand, where secrecy has been observed, the
President himself was often left unaware of how these funds had been
utilized.

Effective immediately, all requests for the allocation or release of

intelligence funds shall indicate in full detail the specific purposes for which
said funds shall be spent and shall explain the circumstances giving rise to
the necessity for the expenditure and the particular aims to be
accomplished.

The requests and the detailed explanations shall be submitted to the

President personally.

It is imperative that such detailed presentations be made to the President in

order to avoid such duplication of expenditures as has taken place in the
past because of the lack of centralized planning and organized disposition
of intelligence funds.

Full compliance herewith is desired.

Manila, January 12, 1983.

(Sgd.) FERDINANDE. MARCOS

President of the Philippines

However, an examination of Uriarte' s several requests indicates their

compliance with LOI No. 1282. The requests, similarly worded, furnished:
(a) the full details of the specific purposes for which the funds would be
spent; (b) the explanations of the circumstances giving rise to the necessity
of the expenditure; and (c) the particular aims to be accomplished.

The specific purposes and circumstances for the necessity of the

expenditures were laid down as follows:

In dispensing its mandate, PCSO has been constantly encountering a

number of fraudulent schemes and nefarious activities on a continuing
basis which affect the integrity of our operations, to wit:

1. Donated medicines sometimes end up in drug stores for sale even if they
were labeled "Donated by PCSO- Not for Sale";

2. Unwarranted or unofficial use of ambulances by beneficiarydonees;

3. Unauthorized expenditures of endowment fund for charity patients and

organizations;

4. Lotto and sweepstakes scams victimizing innocent people of winning the

jackpot and selling tampered tickets as winning tickets;
5. Fixers for the different programs of PCSO such as Ambulance Donation
Project, Endowment Fund Program and Individual Medical Assistance
Program;

6. Other fraudulent schemes and activities which put the PCSO in bad
light.43

A reading of the requests also reveals that the additional CIFs requested
were to be used to protect PCSO's image and the integrity of its operations.
The Court thus cannot share the Prosecution's dismissiveness of the
requests for not being compliant with LOI No. 1282. According to its terms,
LOI No. 1282 did not detail any qualification as to how specific the requests
should be made. Hence, we should not make any other pronouncement
than to rule that Uriarte's requests were compliant with LOI No. 1282.

COA Circular No. 92-385 required that additional request for CIFs would be
approved only when there was available budget. In this regard, the
Prosecution suggests that there was no longer any budget when GMA
approved Uriarte's requests because the budget had earmarked
intelligence funds that had already been maxed out and used. The
suggestion is not acceptable, however, considering that the funds of the
PCSO were comingled into one account as early as 2007. Consequently,
although only 15% of PCSO's revenues was appropriated to an operation
fund from which the CIF could be sourced, the remaining 85% of PCSO's
revenues, already co-mingled with the operating fund, could still sustain the
additional requests. In short, there was available budget from which to draw
the additional requests for CIFs.

It is notable that the COA, although frowning upon PCSO's co-mingling of

funds, did not rule such co-mingling as illegal. As such, sourcing the
requested additional CIFs from one account was far from illegal.

Lastly, the Prosecution's effort to show irregularities as badges of bad faith

has led it to claim that GMA had known that Uriarte would raid the public
treasury, and would misuse the amounts disbursed. This knowledge was
imputed to GMA by virtue of her power of control over PCSO.

The Prosecution seems to be relying on the doctrine of command

responsibility to impute the actions of subordinate officers to GMA as the
superior officer. The reliance is misplaced, for incriminating GMA under
those terms was legally unacceptable and incomprehensible. The
application of the doctrine of command responsibility is limited, and cannot
be true for all litigations. The Court ruled in Rodriguez v. Macapagal-
Arroyo44that command responsibility pertains to the responsibility of
commanders for crimes committed by subordinate members of the armed
forces or other persons subject to their control in international wars or
domestic conflict. The doctrine has also found application in civil actions for
human rights abuses. But this case involves neither a probe of GMA' s
actions as the Commander-in-Chief of the Armed Forces of the Philippines,
nor of a human rights issue. As such, it is legally improper to impute the
actions of Uriarte to GMA in the absence of any conspiracy between them.

On the part of Aguas, the Sandiganbayan pronounced him to be as much a

member of the implied conspiracy as GMA was, and detailed his
participation in this manner:

In all of the disbursement vouchers covering the cash advances/releases to

Uriarte of the CIF funds, Aguas certified that:

CERTIFIED: Adequate available funds/budgetary allotment in the amount

of P___________ ; expenditure properly certified; supported by documents
marked (X) per checklist and back hereof; account codes proper; previous
cash advance liquidated/accounted for.

These certifications, after close scrutiny, were not true because: 1.) there
were no documents which lent support to the cash advances on a per
project basis. The particulars of payment simply read: "To draw cash
advance form the CIF Fund of the Office of the Vice-Chairman and General
Manager". No particular purpose or project was specified contrary to the
requirement under COA Circular 2003-002 that cash advances must be on
a per project basis. Without specifics on the project covered by each cash
advance. Aguas could not certify that supporting documents existed simply
because he would not know what project was being funded by the cash
advances; and 2.) There were no previous liquidations made of prior cash
advances when Aguas made the certifications. COA circular 2003-002
required that cash advances be liquidated within one (1) month from the
date the purpose of the cash advance was accomplished. If the completion
of the projects mentioned were for more than one month, a monthly
progress liquidation report was necessary. In the case of Uriarte' s cash
advances certified to by Aguas, the liquidation made was wholesale, i.e.
these were done on a semi-annual basis without a monthly liquidation or at
least a monthly liquidation progress report. How then could Aguas correctly
certify that previous liquidations were accounted for? Aguas's certification
also violated Sec. 89 of P.D. 1445 which states:

Limitations on cash advance. No cash advance shall be given unless for a

legally authorized specific purpose. A cash advance shall be reported on
and liquidated as soon as the purpose for which it was given has been
served. No additional cash advance shall be allowed to any official or
employee unless the previous cash advance given to him is first settled or
a proper accounting thereof is made.

There is a great presumption of guilt against Aguas, as his action aided and
abetted Uriarte's being able to draw these irregular CIF funds in
contravention of the rules on CIF funds. Without Aguas's certification, the
disbursement vouchers could not have been processed for payment.
Accordingly, the certification that there were supporting documents and
prior liquidation paved the way for Uriarte to acquire ill-gotten wealth by
raiding the public coffers of the PCSO.

By just taking cognizance of the series and number of cash advances and
the staggering amounts involved, Aguas should have been alerted that
something was greatly amiss and that Uriarte was up to something. If
Aguas was not into the scheme, it would have been easy for him to refuse
to sign the certification, but he did not. The conspiracy "gravamen" is
therefore present in the case of Aguas. Moreover, Aguas's attempt to
cover-up Uriarte's misuse of these CIF funds in his accomplishment report
only contributed to unmasking the actual activities for which these funds
were utilized. Aguas' s accomplishment report, which was conformed to by
Uriarte, made it self-evidence that the bulk of the CIF funds in 2009 and
2010 were allegedly spend for non-PCSO related activities, e.g. bomb
threats, kidnapping, terrorism, and others.45

Thus, the Sandiganbayan concluded that Aguas became a part of the

implied conspiracy when he signed the disbursement vouchers despite the
absence of certain legal requirements, and issued certain certifications to
the effect that the budgetary allotment/funds for cash advance to be
withdrawn were available; that the expenditures were supported by
documents; and that the previous cash advances had been liquidated or
accounted for.
We opine and declare, however, that Aguas' certifications and signatures
on the disbursement vouchers were insufficient bases to conclude that he
was into any conspiracy to commit plunder or any other crime. Without
GMA's participation, he could not release any money because there was
then no budget available for the additional CIFs. Whatever irregularities he
might have committed did not amount to plunder, or to any implied
conspiracy to commit plunder.

Under the circumstances, the Sandiganbayan's finding on the existence of

the conspiracy to commit plunder was unsustainable. It then becomes
unavoidable for the Court to rule that because the Prosecution failed to
properly allege the elements of the crime, as well as to prove that any
implied conspiracy to commit plunder or any other crime existed among
GMA, Aguas and Uriarte there was no conspiracy to commit plunder
among them. As a result, GMA and Aguas could be criminally responsible
only for their own respective actions, if any.

III.
No proof of amassing, or accumulating, or acquiring
ill-gotten wealth of at least P50 Million
was adduced against GMA and Aguas

The Sandiganbayan sustained the sufficiency of the evidence to convict the

petitioners for plunder on the basis that the Prosecution established all the
elements of plunder.

After a review of the records, we find and rule that the Prosecution had no
case for plunder against the petitioners.

To successfully mount a criminal prosecution for plunder, the State must

allege and establish the following elements, namely:

1. That the offender is a public officer who acts by herself or in connivance

with members of her family, relatives by affinity or consanguinity, business
associates, subordinates or other persons;

2. That the offender amasses, accumulates or acquires ill-gotten wealth

through a combination or series of the following overt or criminal acts: (a)
through misappropriation, conversion, misuse, or malversation of public
funds or raids on the public treasury; (b) by receiving, directly or indirectly,
any commission, gift, share, percentage, kickback or any other form of
pecuniary benefits from any person and/or entity in connection with any
government contract or project or by reason of the office or position of the
public officer; (c) by the illegal or fraudulent conveyance or disposition of
assets belonging to the National Government or any of its subdivisions,
agencies or instrumentalities of Government owned or controlled
corporations or their subsidiaries; (d) by obtaining, receiving or accepting
directly or indirectly any shares of stock, equity or any other form of interest
or participation including the promise of future employment in any business
enterprise or undertaking; (e) by establishing agricultural, industrial or
commercial monopolies or other combinations and/or implementation of
decrees and orders intended to benefit particular persons or special
interests; or (f) by taking advantage of official position, authority,
relationship, connection or influence to unjustly enrich himself or
themselves at the expense and to the damage and prejudice of the Filipino
people and the Republic of the Philippines; and,

3. That the aggregate amount or total value of the ill-gotten wealth

amassed, accumulated or acquired is at least P50,000,000.00.46

The corpus delicti of plunder is the amassment, accumulation or acquisition

of ill-gotten wealth valued at not less than P50,000,000.00. The failure to
establish the corpus delicti should lead to the dismissal of the criminal
prosecution.

As regards the element that the public officer must have amassed,
accumulated or acquired ill-gotten wealth worth at least P50,000,000.00,
the Prosecution adduced no evidence showing that either GMA or Aguas or
even Uriarte, for that matter, had amassed, accumulated or acquired ill-
gotten wealth of any amount. There was also no evidence, testimonial or
otherwise, presented by the Prosecution showing even the remotest
possibility that the CIFs of the PCSO had been diverted to either GMA or
Aguas, or Uriarte.

The absolute lack of evidence on this material but defining and decisive
aspect of the criminal prosecution was explicitly noted in the concurring and
partial dissenting opinion of Justice Rodolfo A. Ponferrada of
the Sandiganbayan, to wit:

Here the evidence of the prosecution failed to show the existence of the
crime of plunder as no evidence was presented that any of the accused,
accumulated and/or acquired ill-gotten wealth. In fact, the principal witness
of the prosecution when asked, said that she does not know the existence
or whereabouts of the alleged ill-gotten wealth, to wit:

Q: Of course, you don't know where is this ill-gotten wealth are (sic) now?

A: Yes, Your Honors. We don't know whether they saved it, squandered
it or what? We don't know, Your Honor.47 [bold emphasis supplied]

After Atty. Tolentino, as the Prosecution's main witness, conceded lack of

any knowledge of the amassing, accumulating or acquiring of ill-gotten
wealth of at least P50,000,000.00, nothing more remained of the criminal
prosecution for plunder. Hence, the Sandiganbayan should have granted
the demurrers of GMA and Aguas, and dismissed the criminal action
against them.

IV.
The Prosecution failed to prove the
predicate act of raiding the public treasury

The Sandiganbayan observed that the Prosecution established the

predicate act of raiding the public treasury, to wit:

Secondly, the terms "unjust enrichment," "benefit," and "pecuniary benefit"

are only mentioned in the predicate acts mentioned in par. 2, 5 and 6 of
Section 1 (d) of the Plunder Law. Paragraph 1 of the same section where
"raids on the public treasury" is mentioned did not mention "unjust
enrichment" or "personal benefit". Lastly, the predicate act covering "raids
on the public treasury" is lumped up with the phrases misappropriation,
conversion, misuse and malversation of public funds. Thus, once public
funds, as in the case of CIF funds, are illegally accumulated, amassed or
acquired. To the tune of PSO Million or more, there will be no need to
establish any motive to gain, or much more establish where the money
eventually ended up. As stated in Our Resolution dated November 5, 2013:

It should be noted that in both R.A. No. 7080 and the PCGG rules, the
enumeration of the possible predicate acts in the commission of plunder did
not associate or require the concept of personal gain/benefit or unjust
enrichment with respect to raids on the public treasury, as a means to
commit plunder. It would, therefore, appear that a "raid on the public
treasury" is consummated where all the acts necessary for its execution
and accomplishment are present. Thus a "raid on the public treasury" can
be said to have been achieved thru the pillaging or looting of public coffers
either through misuse, misappropriation or conversion, without need of
establishing gain or profit to the "raider" gets material possession of a
government asset through improper means and has free disposal of the
same, the raid or pillage is completed.

xxxx

Clearly, the improper acquisition and illegal use of CIF funds, which is
obviously a government asset, will amount to a raid on the public treasury,
and therefore fall into the category of ill-gotten wealth.

xxxx

x x x It is not disputed that Uriarte asked for and was granted authority by
Arroyo to use additional CIF funds during the period 2008 - 2010. Uriarte
was able to accumulate during that period CIF funds in the total amount of
P352,681,646. This was through a series of withdrawals as cash advances
of the CIF funds from the PCSO coffers, as evidenced by the disbursement
vouchers and checks issued and encashed by her, through her authorized
representatives.

These flagrant violations of the rules on the use of CIF funds evidently
characterize the series of withdrawals by and releases to Uriarte as "raids"
on the PCSO coffers, which is part of the public treasury. These were, in
every sense, "pillage," as Uriarte looted government funds and appears to
have not been able to account for it. The monies came into her possession
and, admittedly, she disbursed it for purposes other than what these were
intended for, thus amounting to "misuse" of the same. xxx

In this case, to require proof that monies went to a plunderer's bank

account or was used to acquire real or personal properties or used for any
other purpose to personally benefit the plunderer, is absurd. Suppose a
plunderer had already amassed, acquired or accumulated P50 Million or
more of government funds and just decide to keep it in his vault and never
used such funds for any purpose to benefit him, would that not be plunder?
Or, if immediately right after such amassing, the monies went up in flames
or recovered by the police, negating any opportunity for the purpose to
actually benefit, would that not still be plunder? Surely, in such cases, a
plunder charge could still prosper and the argument that the fact of
personal benefit should still be evidence-based must fail.48

The Sandiganbayan contended that in order to prove the predicate act

of raids of the public treasury, the Prosecution need not establish that the
public officer had benefited from such act; and that what was necessary
was proving that the public officer had raided the public coffers. In support
of this, it referred to the records of the deliberations of Congress to buttress
its observation.

We do not share the Sandiganbayan' s contention.

The phrase raids on the public treasury is found in Section 1 (d) of R.A. No.
7080, which provides:

Section I .Definition of Terms. - x x x

xxxx

d) Ill-gotten wealth means any asset, property, business enterprise or

material possession of any person within the purview of Section Two (2)
hereof, acquired by him directly or indirectly through dummies, nominees,
agents, subordinates and/or business associates by any combination or
series of the following means or similar schemes:

1) Through misappropriation, conversion, misuse, or malversation of public

funds or raids on the public treasury;

xxxx

To discern the proper import of the phrase raids on the public treasury, the
key is to look at the accompanying words: misappropriation, conversion,
misuse or malversation of public funds. This process is conformable with
the maxim of statutory construction noscitur a sociis, by which the correct
construction of a particular word or phrase that is ambiguous in itself or is
equally susceptible of various meanings may be made by considering the
company of the words in which the word or phrase is found or with which it
is associated. Verily, a word or phrase in a statute is always used in
association with other words or phrases, and its meaning may, therefore,
be modified or restricted by the latter.49
To convert connotes the act of using or disposing of another's property as if
it were one's own; to misappropriate means to own, to take something for
one's own benefit;50 misuse means "a good, substance, privilege, or right
used improperly, unforeseeably, or not as
intended;"51 and malversation occurs when "any public officer who, by
reason of the duties of his office, is accountable for public funds or
property, shall appropriate the same or shall take or misappropriate or shall
consent, through abandonment or negligence, shall permit any other
person to take such public funds, or property, wholly or partially."52 The
common thread that binds all the four terms together is that the public
officer used the property taken. Considering that raids on the public
treasury is in the company of the four other terms that require the use of
the property taken, the phrase raids on the public treasury similarly requires
such use of the property taken. Accordingly, the Sandiganbayan gravely
erred in contending that the mere accumulation and gathering constituted
the forbidden act of raids on the public treasury. Pursuant to the maxim
of noscitur a sociis, raids on the public treasury requires the raider to use
the property taken impliedly for his personal benefit.

The Prosecution asserts that the Senate deliberations removed personal

benefit as a requirement for plunder. In not requiring personal benefit,
the Sandiganbayan quoted the following exchanges between Senator
Enrile and Senator Tañada, viz.:

Senator Emile. The word here, Mr. President, "such public officer or person
who conspired or knowingly benefited". One does not have to conspire
or rescheme. The only element needed is that he "knowingly benefited". A
candidate for the Senate for instance, who received a political contribution
from a plunderer, knowing that the contributor is a plunderer and therefore,
he knowingly benefited from the plunder, would he also suffer the penalty,
Mr. President, for life imprisonment?

Senator Tañada. In the committee amendments, Mr. President, we have

deleted these lines 1 to 4 and part ofline 5, on page 3. But, in a way, Mr.
President, it is good that the Gentleman is bringing out these questions, I
believe that under the examples he has given, the Court will have to ...

Senator Emile. How about the wife, Mr. President, he may not agree with
the plunderer to plunder the country but because she is a dutiful wife or a
faithful husband, she has to keep her or his vow of fidelity to the spouse.
And, of course, she enjoys the benefits out of the plunder. Would the
Gentleman now impute to her or him the crime of plunder simply because
she or he knowingly benefited out of the fruits of the plunder and, therefore,
he must suffer or he must suffer the penalty of life imprisonment?

The President. That was stricken out already in the Committee

amendment.

Senator Tañada. Yes, Mr. President. Lines l to 4 and part of line 5 were
stricken out in the Committee amendment. But, as I said, the eamples of
the Minority Floor Leader are still worth spreading the Record. And, I
believe that in those examples, the Court will have just to take into
consideration all the other circumstances prevailing in the case and the
evidence that will be submitted.

The President. In any event, 'knowingly benefited' has already been

stricken off."53

The exchanges between Senator Enrile and Senator Tañada reveal,

therefore, that what was removed from the coverage of the bill and the final
version that eventually became the law was a person who was not the main
plunderer or a co-conspirator, but one who personally benefited from the
plunderers' action. The requirement of personal benefit on the part of the
main plunderer or his co-conspirators by virtue of their plunder was not
removed.

As a result, not only did the Prosecution fail to show where the money went
but, more importantly, that GMA and Aguas had personally benefited from
the same. Hence, the Prosecution did not prove the predicate act of raids
on the public treasury beyond reasonable doubt.

V.
Summation

In view of the foregoing, the Court inevitably concludes that

the Sandiganbayan completely ignored the failure of the information to
sufficiently charge conspiracy to commit plunder against the petitioners;
and ignored the lack of evidence establishing the corpus delicti of
amassing, accumulation and acquisition of ill-gotten wealth in the total
amount of at least P50,000,000.00 through any or all of the predicate
crimes. The Sandiganbayan thereby acted capriciously, thus gravely
abusing its discretion amounting to lack or excess of jurisdiction.

Grave abuse of discretion means such capricious or whimsical exercise of

judgment which is equivalent to lack of jurisdiction.54 To justify the issuance
of the writ of certiorari, the abuse of discretion must be grave, as when the
power is exercised in an arbitrary or despotic manner by reason of passion
or personal hostility, and the abuse must be so patent and gross as to
amount to an evasion of a positive duty or to a virtual refusal to perform the
duty enjoined, or to act at all, in contemplation of law, as to be equivalent to
having acted without jurisdiction.55

WHEREFORE, the Court GRANTS the petitions

for certiorari; ANNULS and SETS ASIDE the resolutions issued in Criminal
Case No. SB-12-CRM-0174 by the Sandiganbayan on April 6, 2015 and
September 10, 2015; GRANTS the petitioners' respective demurrers to
evidence; DISMISSES Criminal Case No. SB-12-CRM-0174 as to the
petitioners GLORIA MACAPAGAL-ARROYO and BENIGNO AGUAS for
insufficiency of evidence; ORDERS the immediate release from detention
of said petitioners; and MAKES no pronouncements on costs of suit.

SO ORDERED.

LUCAS P. BERSAMIN
Associate Justice

WE CONCUR:

I join the Dissent of J. Leonen

And attach my separate Dissent
MARIA LOURDES P.A. SERENO
Chief Justice

I join the Dissenting

PRESBITERO J. VELASCO,
Opinion of J. Leonen
JR.
ANTONIO T. CARPIO
Associate Justice
Associate Justice

TERESITA J. LEONARDO-DE ARTURO D. BRION

CASTRO Associate Justice
 Associate Justice

DIOSDADO M. PERALTA MARIANO C. DEL CASTILLO

Associate Justice Associate Justice

JOSE PORTUGAL PEREZ JOSE CATRAL MENDOZA

Associate Justice Associate Justice

Please see my separate

concurring
BIENVENIDO L. REYES and dissenting opinion
Associate Justice ESTELA M. PERLAS-
BERNABE
Associate Justice

I dissent. See separate opinion

FRANCIS H. JARDELEZA
MARVIC M.V.F. LEONEN
Associate Justice
Associate Justice

I join the dissent of J. Leonen

ALFREDO BENJAMIN S. CAGUIOA
Associate Justice

CERTIFICATION

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

MARIA LOURDES P. A. SERENO

Chief Justice

FACTS:
Petitioners in this case are former President Gloria Macapagal-Arroyo and
former Philippine Charity Sweepstakes Office (PCSO) Budget and
Accounts Officer Benigno Aguas.

The Ombudsman charged in the Sandiganbayan with plunder as defined

by, and penalized under Section 2 of Republic Act (R.A.) No. 7080, as
amended by R.A. No. 7659 the following: (1) GMA, (2) Aguas, (3) former
PCSO General Manager and Vice Chairman Rosario C. Uriarte, (4) former
PCSO Chairman of the Board of Directors Sergio O. Valencia, (5) former
members of the PCSO Board of Directors, and (6) two former officials of
the Commission on Audit (COA).

The information read:

…[the] accused…all public officers committing the offense in relation to their

respective offices and taking undue advantage of their respective official positions,
authority, relationships, connections or influence, conniving, conspiring and
confederating with one another, did then and there willfully, unlawfully and
criminally amass, accumulate and/or acquire. Directly or indirectly, ill-gotten
wealth in the aggregate amount or total value of THREE HUNDRED SIXTY FIVE
MILLION NINE HUNDRED NINETY SEVEN THOUSAND NINE HUNDRED
FIFTEEN PESOS (PHP365,997,915.00), more or less, through any or a
combination or a series of overt or criminal acts, or similar schemes or means,
described as follows:

(a) diverting in several instances, funds from the operating budget of PCSO to its
Confidential/Intelligence Fund that could be accessed and withdrawn at any time
with minimal restrictions, · and converting, misusing, and/or illegally conveying or
transferring the proceeds drawn from said fund in the aforementioned sum, also in
several instances, to themselves, in the guise of fictitious expenditures, for their
personal gain and benefit;

(b) raiding the public treasury by withdrawing and receiving, in several instances,
the above-mentioned amount from the Confidential/Intelligence Fund from
PCSO’s accounts, and or unlawfully transferring or conveying the same into their
possession and control through irregularly issued disbursement vouchers and
fictitious expenditures; and
(c) taking advantage of their respective official positions, authority, relationships,
connections or influence, in several instances, to unjustly enrich themselves in the
aforementioned sum, at the expense of, and the damage and prejudice of the
Filipino people and the Republic of the Philippines.

CONTRARY TO LAW

The Sandiganbayan eventually acquired jurisidiction over most of the

accused, including petitioners. All filed petitions for bail, which the
Sandiganbayan granted except those of the petitioners. Their motions for
reconsideration were denied. GMA assailed the denial of her petition for
bail before the Supreme Court. However, this remains unresolved.

After the Prosecution rested its case, the accused separately filed their
demurrers to evidence asserting that the Prosecution did not establish a
case for plunder against them.

The Sandiganbayan granted the demurrers and dismissed the case against
the accused within its jurisdiction, except for petitioners and Valencia. It
held that there was sufficient evidence showing that they had conspired to
commit plunder.

Petitioners filed this case before the Supreme Court on certiorari before the
Supreme Court to assail the denial of their demurrers to evidence, on the
ground of grave abuse of discretion amounting to lack or excess of
jurisdiction.
ISSUES:
1.) Procedural Issue: WON the special civil action for certiorari is proper to
assail the denial of the demurrers to evidence – YES.
PROSECUTION: The petition for certiorari of GMA was improper to
challenge the denial of her demurrer to evidence.
HELD: Certiorari is proper since the Sandiganbayan gravely abused its
discretion in denying GMA’s demurrer to evidence.
General rule: The special civil action for certiorari is generally not proper to assail
such an interlocutory order issued by the trial court because of the availability of
another remedy in the ordinary course of law. Moreover, Section 23, Rule 119 of
the Rules of Court expressly provides, “the order denying the motion for leave of
court to file demurrer to evidence or the demurrer itself shall not be reviewable by
appeal or by certiorari before judgment.”
Exception: “In the exercise of our superintending control over other courts, we are
to be guided by all the circumstances of each particular case ‘as the ends of justice
may require.’ So it is that the writ will be granted where necessary to prevent a
substantial wrong or to do substantial” (citing Ong v. People [G.R. No. 140904,
October 9, 2000]).
2.) Substantive Issue: WoN the Prosecution sufficiently established the
existence of conspiracy among GMA, Aguas, and Uriarte – NO.
A. As regards petitioner GMA
HELD: The Supreme Court rejected the Sandiganbayan’s declaration in
denying GMA’s demurrer that GMA, Aguas, and Uriate had conspired and
committed plunder. The Prosecution did not sufficiently allege the existence of
a conspiracy among GMA, Aguas and Uriarte.
A perusal of the information (quoted above) suggests that what the Prosecution
sought to show was an implied conspiracy to commit plunder among all of the
accused on the basis of their collective actions prior to, during and after the implied
agreement. It is notable that the Prosecution did not allege that the conspiracy
among all of the accused was by express agreement, or was a wheel conspiracy or
a chain conspiracy. This was another fatal flaw of the Prosecution.
Section 2 of Republic Act No. 7080 (Plunder Law) requires in the criminal
charge for plunder against several individuals that there must be a main
plunderer and her co-conspirators, who may be members of her family, relatives
by affinity or consanguinity, business associates, subordinates or other persons. In
other words, the allegation of the wheel conspiracy or express conspiracy in the
information was appropriate because the main plunderer would then be identified
in either manner. Citing Estrada v. Sandiganbayan, “The gravamen of the
conspiracy charge…is that each of them, by their individual acts, agreed to
participate, directly or indirectly, in the amassing, accumulation and acquisition of
ill-gotten wealth of and/or for former President Estrada.”
Such identification of the main plunderer was not only necessary because the law
required such identification, but also because it was essential in safeguarding the
rights of all of the accused to be properly informed of the charges they were being
made answerable for.
In fine, the Prosecution’s failure to properly allege the main plunderer should
be fatal to the cause against the petitioners for violating the rights of each
accused to be informed of the charges against each of them.
PROSECUTION: GMA, Uriarte and Aguas committed acts showing the
existence of an implied conspiracy among themselves, thereby making all
of them the main plunderers. The sole overt act of GMA to become a part
of the conspiracy was her approval via the marginal note of “OK” of all the
requests made by Uriarte for the use of additional intelligence fund. By
approving Uriaiie’s requests in that manner, GMA violated the following:
a. Letter of Instruction 1282, which required requests for additional
confidential and intelligence funds (CIFs) to be accompanied with detailed,
specific project proposals and specifications; and

b. COA Circular No. 92-385, which allowed the President to approve the
release of additional CIFs only if there was an existing budget to cover the
request.

HELD: GMA’s approval of Uriarte’s requests for additional CIFs did not
make her part of any design to raid the public treasury as the means to amass,
accumulate and acquire illgotten wealth. Absent the specific allegation in the
information to that effect, and competent proof thereon, GMA’s approval of
Uriarte’s requests, even if unqualified, could not make her part of any
criminal conspiracy to commit plunder or any other crime considering that
her approval was not by any means irregular or illegal.
a. An examination of Uriarte’s several requests indicates their compliance with
LOI No. 1282. The requests, similarly worded, furnished:
(1) the full details of the specific purposes for which the funds would be spent;
(2) the explanations of the circumstances giving rise to the necessity of the
expenditure; and
(3) the particular aims to be accomplished.
The additional CIFs requested were to be used to protect PCSO’s image and the
integrity of its operations. According to its terms, LOI No. 1282 did not detail any
qualification as to how specific the requests should be made.
b. The funds of the PCSO were comingled into one account as early as 2007.
Consequently, although only 15% of PCSO’s revenues was appropriated to an
operation fund from which the CIF could be sourced, the remaining 85% of
PCSO’s revenues, already co-mingled with the operating fund, could still sustain
the additional requests. In short, there was available budget from which to draw the
additional requests for CIFs.
PROSECUTION: GMA had known that Uriarte would raid the public
treasury, and would misuse the amounts disbursed. This knowledge was
imputed to GMA by virtue of her power of control over PCSO.
HELD: The Prosecution seems to be relying on the doctrine of command
responsibility to impute the actions of subordinate officers to GMA as the
superior officer. The reliance is misplaced, for incriminating GMA under
those terms was legally unacceptable and incomprehensible.
The application of the doctrine of command responsibility is limited, and cannot be
true for all litigations. This case involves neither a probe of GMA’s actions as the
Commander-in-Chief of the Armed Forces of the Philippines, nor of a human
rights issue (compare to Rodriguez v. Macapagal-Arroyo [G.R. No. 191805,
November 15, 2011]).
B. As regards Aguas
HELD: Aguas’ certifications and signatures on the disbursement vouchers
were insufficient bases to conclude that he was into any conspiracy to commit
plunder or any other crime. Without GMA’s participation, he could not release
any money because there was then no budget available for the additional CIFs.
Whatever irregularities he might have committed did not amount to plunder, or to
any implied conspiracy to commit plunder.
3.) Substantive Issue: WoN the Prosecution sufficiently established all
the elements of the crime of plunder – NO.
A. WoN there was evidence of amassing, accumulating or acquiring ill-gotten
wealth in the total amount of not less than P50 million – NO.
HELD: The Prosecution adduced no evidence showing that either GMA or
Aguas or even Uriarte, for that matter, had amassed, accumulated or
acquired illgotten wealth of any amount. There was also no evidence,
testimonial or otherwise, presented by the Prosecution showing even the remotest
possibility that the CIFs of the PCSO had been diverted to either GMA or Aguas,
or Uriarte.
B. WoN the predicate act of raiding the public treasury alleged in the
information was proved by the Prosecution – NO.
SANDIGANBAYAN: In order to prove the predicate act of raids of the
public treasury, the Prosecution need not establish that the public officer
had benefited from such act; and that what was necessary was proving that
the public officer had raided the public coffers.
HELD: The common thread that binds all the four terms in Section 1(d) of
Republic Act No. 7080 together (misappropriation, conversion, misuse or
malversation of public funds) is that the public officer used the property
taken. Pursuant to the maxim of noscitur a sociis, raids on the public treasury
requires the raider to use the property taken impliedly for his personal
benefit.
 FIRST DIVISION

G.R. No. 164974, August 05, 2015

CHARLIE TE, Petitioner, v. HON. AUGUSTO V. BREVA, IN HIS

CAPACITY AS THE PRESIDING JUDGE OF THE REGIONAL
TRIAL COURT, 11TH JUDICIAL REGION, BRANCH 10,
DAVAO CITY; U R. BAHINTING, IN HIS CAPACITY AS
SPECIAL INVESTIGATOR OF THE NATIONAL BUREAU OF
INVESTIGATION, SARANGGANI DISTRICT OFFICE; AND
PRYCE GASES, INC., Respondents.

DECISION

BERSAMIN, J.:

The issue for resolution is whether the People of the Philippines

should be impleaded as respondents in the petition
for certiorari filed in the Court of Appeals (CA) to annul and set
aside the order of the Regional Trial Court (RTC) denying the
petitioner's motion to quash the search warrant issued against
him.

Antecedents

It appears that respondent Presiding Judge issued a search

warrant against the petitioner upon the application of respondent
Special Investigator U R. Bahinting of the Saranggani District
Office of the National Bureau of Investigation (NBI SARDO) on
the basis of his finding of probable cause for a violation of Section
2(b) of Batas Pambansa Blg. 33, as amended by Presidential
Decree No. 1865, for hoarding large quantities of liquefied
petroleum gas (LPG) in steel cylinders belonging to respondent
Pryce Gases, Inc. (Pryce Gases). The application for the search
warrant was filed at the instance of Pryce Gases through its letter
dated September 28, 2003 to the NBI SARDO complaining about
the collection and hoarding by the petitioner of embossed or
name-plated Pryce Gases' LPG cylinders in violation of Sections
155, 156, 168 and 169 of Republic Act No. 8293 (Intellectual
Property Code of the Philippines).

On October 14, 2003, the petitioner presented his Omnibus

Motion to Quash Warrant and/or Suppress Evidence and to Order
Return of Seized Items, raising therein the lack of probable
cause, failure to specify the single offense committed, illegality of
the nighttime search, improper application of the plain view
doctrine, and inclusion of other offenses.

In his order of November 20, 2003,1 respondent Presiding Judge

denied the petitioner's Omnibus Motion to Quash Warrant and/or
Suppress Evidence and to Order Return of Seized Items by
observing that he had issued the search warrant for one specific
offense; that there was probable cause to issue the search
warrant; that the search began late in the day and continued into
the night, but the actual seizure was carried out in the daytime of
the next day; and that the seizure of the blue cylinders with the
markings and logo of Pryce Gases was justified under the plain
view doctrine because they were found among the large stockpile
of cylinders in the petitioner's warehouse.

The petitioner's motion for reconsideration was denied on January

5, 2004.2cralawrednad

Decision of the CA

The petitioner assailed the order of November 20, 2003

on certiorari,3 mainly positing that respondent Presiding Judge
had committed grave abuse of discretion amounting to excess of
jurisdiction:cralawlawlibrary
x x x in issuing the November 20, 2003 Order by ruling that the
search warrant was issued based on the existence of probable
cause in connection with a specified offense and validly
implemented even if the same was served starting at nighttime
and including the seizure of blue colored steel cylinders and steel
cylinders of different brand names despite the fact that the steel
cylinders were either empty or effectively empty having been
received and possessed by petitioner in the ordinary course of his
business being a legitimate dealer of Shellane brand LPG, a
petroleum product of the Pilipinas Shell Petroleum Corp. and
thereafter in issuing the Order dated January 5, 2004 denying the
motion for reconsideration.4
However, the CA promulgated the first assailed order on March
25, 2004,5 dismissing the petition for certiorari for failure to
implead the People of the Philippines as respondents, and for lack
of any showing that a copy of the petition had been served on the
OSG, to wit:cralawlawlibrary
We resolve to DISMISS the petition pursuant to Section 3, Rule
46 of the Revised Rules of Court for the following reasons:

1. the People of the Philippines is not impleaded as a

respondent;

2. no proof that a copy of the petition was served on the Office

of the Solicitor General.

SO ORDERED.
The petitioner moved for reconsideration,6 arguing that
impleading the People of the Philippines as respondents was
premature because no criminal case had yet been filed against
him with only the application for the issuance of the search
warrant having been made; and that serving the copy of the
petition on the OSG pursuant to Section 3, Rule 46 of the Rules of
Court was not indispensable. Nevertheless, he attached to his
motion for reconsideration the affidavit of service executed by
one Salvador R. Dumaop, Jr. presumably to conform with the rule
on proof of service to the respondents, whereby the affiant
attested that the copy of the petition and the motion for
reconsideration were served on the OSG by registered mail.

On July 21, 2004, the CA denied the petitioner's motion for

reconsideration7 on the ground that although the petitioner had
served on the OSG copies of the petition and the motion for
reconsideration he did not file the appropriate motion or
manifestation to amend the petition and to actually amend the
petition in order to implead the People of the Philippines as
respondents. The CA ratiocinated that:cralawlawlibrary
We call the petitioner's attention to the fact that Section 1, Rule
126 of the Revised Rules of Court provides hat "a search warrant
is an order in writing issued in the name of the People of the
Philippines signed by a judge and directed to a peace officer
commanding him to search for personal property described
therein and bring it before the Court." A search warrant is issued
in the name of the People of the Philippines because there is a
finding of probable cause in connection with one specific offense
that the object sought in connection with the offense are in the
place sought to be searched. In legal contemplation, the crime or
offense had been committed against the State - the People of the
Philippines - and this is the State interest in the proceedings. If
the petitioner wishes to contest the finding of probable cause or
any other aspect of the issuance of the search warrant, then he
must implead the entity who in legal contemplation made the
finding and in whose name the finding was made; otherwise,
there can be no final determination of the case because the party
indispensable to its resolution had been omitted.8
Hence, according to the CA, it was left with no choice but to deny
the motion for reconsideration.

Not satisfied, the petitioner has come to the Court on appeal to

reverse and set aside the aforesaid resolutions by insisting that
the failure to implead the People of the Philippines was not a fatal
defect.

Issue

In this appeal, the petitioner relevantly avers in his petition for

review on certiorari,9 as follows:cralawlawlibrary
xxxx

20. It is humbly submitted that the Court of Appeals committed a

reversible error in grave abuse of its discretion amounting to
excess of jurisdiction in dismissing the petition by ruling that the
failure to implead the People of the Philippines as an
indispensable party is a fatal defect. The petition has shown a
grave violation of a constitutional right that must necessarily
override a rule on technicality, assuming it is applicable and
correct.

21. Specifically, it is submitted that it is not a necessary requisite

and an indispensable condition that the People of the Philippine
(sic) be impleaded in a petition filed assailing the denial of a
motion to quash a search warrant. And that such failure to so
include it as an indispensable party is not a fatal defect more so
with the fact that there was a showing of a gross violation of a
constitutional right.10cralawrednad

xxxx
However, on November 8, 2004, the Court denied the petition for
review,11viz.:cralawlawlibrary
G.R. No. 164974 (Charlie Te vs. Augusto Breva, etc., et al.).
- The Court Resolves to DENY the motion of petition for an
extension of thirty (30) days from the expiration of reglementary
period within which to file petition for review on certiorari, for
failing to pay the balance of P330.00 representing docket and
other legal fees and deposit for costs within the reglementary
period under Secs. 2 and 3, Rule 45 in relation to Sec. 5(c), Rule
56, 1997 Rules of Civil Procedure.

The Court further Resolves to DENY the ex-parte motion of

petitioner to accept payment of fee amounting to P300.00, the
payment being insufficient.

Pursuant to Rule 45 and other related provisions of the 1997

Rules of Civil Procedure, as amended, governing appeals by
certiorari to the Supreme Court, only petitions which are
accompanied by or which comply strictly with the requirements
specified therein shall be entertained. On the basis thereof, the
Court further more Resolves to DENY the instant petition for
review on certiorari of the resolutions of the Court of Appeals
dated March 25, 2004 and July 21, 2004 for late filing as the
petition was filed beyond the reglementary period of fifteen (15)
days fixed in Sec. 2, Rule 45 in relation to Sec. 5(a), Rule 56.12
Upon the petitioner's motion for reconsideration,13 the Court
reinstated the petition for review and required the respondents
herein to comment within 10 days from notice on February 9,
2005.14 On May 19, 2005, the respondents filed their
compliance,15 and attached thereto their comment dated April 20,
2005,16 with annexes. On July 4, 2005, the Court noted the
compliance ofthe respondents and the submission ofthe comment
on the petition for review on certiorari; and required the
petitioner to file his reply within 10 days from
notice.17cralawrednad

Ruling of the Court

The petition lacks merit.

The petitioner argues that his petition for certiorari did not need
to implead the People of the Philippines because there was yet no
criminal case commenced in court, averring:cralawlawlibrary
To restate, a search warrant proceedings is not a criminal action,
much less a civil action (WASHINGTON DISTILLERS INC. VS.
COURT OF APPEALS, 260 SCRA 821, quoting Malaloan vs. Court
of Appeals, 232 SCRA 249). While a search warrant is issued in
the name of the People of the Philippines, the application is made
not by the People of the Philippines but by the interested party or
parties. In this instant case, it is the NBI-SARDO (through
respondent SI Bahinting) and Pryce Gases, Inc. It is humbly
submitted that since there is no criminal case filed and pending
when the search warrant application was made, the People of the
Philippines is not yet a proper party to be impleaded as
respondent as required under Section 3 of Rule 46 of the Rules of
Court.18
The argument of the petitioner is untenable.

Impleading the People of the Philippines in the petition

for certiorari did not depend on whether or not an actual criminal
action had already been commenced in court against the
petitioner. It cannot be denied that the search warrant in
question had been issued in the name of the People of the
Philippines, and that fact rendered the People of the Philippines
indispensable parties in the special civil action
for certiorari brought to nullify the questioned orders of
respondent Presiding Judge. We also note that the impleading is
further expressly demanded in Section 3, Rule 46 of the Rules of
Court, to wit:cralawlawlibrary
Section 3. Contents and filing of petition; effect of non-
compliance with requirements. - The petition shall contain the full
names and actual addresses of all the petitioners and
respondents. a concise statement of the matters involved. the
factual background of the case, and the grounds relied upon for
the relief prayed for.

xxxx

The failure of the petitioner to comply with any of the

foregoing requirements shall be sufficient ground for the
dismissal of the petition. (n) (Emphasis supplied)
Accordingly, the omission of the People of the Philippines from
the petition was fatal.

The requirement that the search warrant be issued in the name of

the People of the Philippines is imposed by Section 1, Rule 126 of
the Rules of Court, to wit:cralawlawlibrary
Section 1. Search warrant defined. -- A search warrant is an
order in writing issued in the name of the People of the
Philippines, signed by a judge and directed to a peace officer,
commanding him to search for personal property described
therein and bring it before the court.
We may agree with the petitioner that the application for the
search warrant was not a criminal action; and that the application
for the search warrant was not of the same form as that of a
criminal action. Verily, the search warrant is not similar to a
criminal action but is rather a legal process that may be likened
to a writ of discovery employed by no less than the State to
procure relevant evidence of a crime. In that respect, it is an
instrument or tool, issued under the State's police power, and
this is the reason why it must issue in the name of the People of
the Philippines.19cralawrednad

Equally clear is that the sworn application for the search

warrant20 and the search warrant itself21 were upon the behest of
the People of the Philippines. It defies logic and common sense
for the petitioner to contend, therefore, that the application
against him was not made by the People of the Philippines but by
the interested party or parties. The immutable truth is that every
search warrant is applied for and issued by and under the
authority of the State, regardless of who initiates its application
or causes its issuance.

The petitioner could have quickly rectified his omission by the

immediate amendment of the petition. However, although made
aware of the omission as a fatal defect, he did not cause the
amendment but continued to ignore the need to amend. He
thereby exhibited his adamant refusal to recognize the People of
the Philippines as indispensable parties, which impelled the CA to
aptly remark in its denial of his motion for reconsideration,
thusly:cralawlawlibrary
We note that while the petitioner furnished the OSG with copies
of the petition and the motion for reconsideration, he did not
attempt to cure the defect of the petition - i.e. the failure to
implead the People of the Philippines - by filing the appropriate
motion or manifestation to amend the petition and by amending
the petition to implead the Republic of the Philippines as a party
to the proceedings. Hence, the first ground upon which we based
our dismissal of the petition still holds and we are left with no
choice but to deny the present motion.22 (Emphasis supplied)
With its dismissal of the petition for certiorari being proper and in
accord with the pertinent rules of procedure, the CA did not
abuse its discretion, least of all gravely. Grave abuse of
discretion, as the ground for the issuance of the writ of certiorari,
connotes whimsical and capricious exercise of judgment as is
equivalent to excess, or lack of jurisdiction.23 The abuse must be
so patent and gross as to amount to an evasion of a positive duty
or to a virtual refusal to perform a duty enjoined by law, or to act
at all in contemplation of law as where the power is exercised in
an arbitrary and despotic manner by reason of passion or
hostility.24cralawrednad

WHEREFORE, the Court DENIES the petition for review

on certiorari; AFFIRMS the resolution of the Court of Appeals
promulgated on March 25, 2004 (dismissing the petition
for certiorari in C.A.-G.R. SP No. 82797); and ORDERS the
petitioner to pay the costs of suit.

SO ORDERED.chanrobles virtuallawlibrary

Sereno, C.J., Leonardo-De Castro, Perez, and Perlas-Bernabe, JJ.,

concur.ChanRoblesVirtualawlibrary

Endnotes:

BERSAMIN, J.:
The issue for resolution is whether the People of the Philippines should be
impleaded as respondents in the petition for certiorari filed in the Court of
Appeals (CA) to annul and set aside the order of the Regional Trial Court
(RTC) denying the petitioner's motion to quash the search warrant issued
against him.

Antecedents

It appears that respondent Presiding Judge issued a search warrant against

the petitioner upon the application of respondent Special Investigator U R.
Bahinting of the Saranggani District Office of the National Bureau of
Investigation (NBI SARDO) on the basis of his finding of probable cause for
a violation of Section 2(b) of Batas Pambansa Blg. 33, as amended by
Presidential Decree No. 1865, for hoarding large quantities of liquefied
petroleum gas (LPG) in steel cylinders belonging to respondent Pryce
Gases, Inc. (Pryce Gases). The application for the search warrant was filed
at the instance of Pryce Gases through its letter dated September 28, 2003
to the NBI SARDO complaining about the collection and hoarding by the
petitioner of embossed or name-plated Pryce Gases' LPG cylinders in
violation of Sections 155, 156, 168 and 169 of Republic Act No. 8293
(Intellectual Property Code of the Philippines).

On October 14, 2003, the petitioner presented his Omnibus Motion to

Quash Warrant and/or Suppress Evidence and to Order Return of Seized
Items, raising therein the lack of probable cause, failure to specify the single
offense committed, illegality of the nighttime search, improper application
of the plain view doctrine, and inclusion of other offenses.

In his order of November 20, 2003,[1] respondent Presiding Judge denied

the petitioner's Omnibus Motion to Quash Warrant and/or Suppress
Evidence and to Order Return of Seized Items by observing that he had
issued the search warrant for one specific offense; that there was probable
cause to issue the search warrant; that the search began late in the day and
continued into the night, but the actual seizure was carried out in the
daytime of the next day; and that the seizure of the blue cylinders with the
markings and logo of Pryce Gases was justified under the plain view
doctrine because they were found among the large stockpile of cylinders in
the petitioner's warehouse.

The petitioner's motion for reconsideration was denied on January 5,

2004.[2]

Decision of the CA

The petitioner assailed the order of November 20, 2003

on certiorari,[3] mainly positing that respondent Presiding Judge had
committed grave abuse of discretion amounting to excess of jurisdiction:

x x x in issuing the November 20, 2003 Order by ruling that the search
warrant was issued based on the existence of probable cause in connection
with a specified offense and validly implemented even if the same was
served starting at nighttime and including the seizure of blue colored steel
cylinders and steel cylinders of different brand names despite the fact that
the steel cylinders were either empty or effectively empty having been
received and possessed by petitioner in the ordinary course of his business
being a legitimate dealer of Shellane brand LPG, a petroleum product of the
Pilipinas Shell Petroleum Corp. and thereafter in issuing the Order dated
January 5, 2004 denying the motion for reconsideration.[4]
However, the CA promulgated the first assailed order on March 25,
2004,[5] dismissing the petition for certiorari for failure to implead the
People of the Philippines as respondents, and for lack of any showing that a
copy of the petition had been served on the OSG, to wit:

We resolve to DISMISS the petition pursuant to Section 3, Rule 46 of the

Revised Rules of Court for the following reasons:

1. the People of the Philippines is not impleaded as a respondent;

2. no proof that a copy of the petition was served on the Office of the
Solicitor General.

SO ORDERED.
The petitioner moved for reconsideration,[6] arguing that impleading the
People of the Philippines as respondents was premature because no
criminal case had yet been filed against him with only the application for
the issuance of the search warrant having been made; and that serving the
copy of the petition on the OSG pursuant to Section 3, Rule 46 of the Rules
of Court was not indispensable. Nevertheless, he attached to his motion for
reconsideration the affidavit of service executed by one Salvador R.
Dumaop, Jr. presumably to conform with the rule on proof of service to the
respondents, whereby the affiant attested that the copy of the petition and
the motion for reconsideration were served on the OSG by registered mail.

On July 21, 2004, the CA denied the petitioner's motion for

reconsideration[7] on the ground that although the petitioner had served on
the OSG copies of the petition and the motion for reconsideration he did
not file the appropriate motion or manifestation to amend the petition and
to actually amend the petition in order to implead the People of the
Philippines as respondents. The CA ratiocinated that:

We call the petitioner's attention to the fact that Section 1, Rule 126 of the
Revised Rules of Court provides hat "a search warrant is an order in
writing issued in the name of the People of the Philippines signed by a
judge and directed to a peace officer commanding him to search for
personal property described therein and bring it before the Court." A
search warrant is issued in the name of the People of the Philippines
because there is a finding of probable cause in connection with one specific
offense that the object sought in connection with the offense are in the
place sought to be searched. In legal contemplation, the crime or offense
had been committed against the State - the People of the Philippines - and
this is the State interest in the proceedings. If the petitioner wishes to
contest the finding of probable cause or any other aspect of the issuance of
the search warrant, then he must implead the entity who in legal
contemplation made the finding and in whose name the finding was made;
otherwise, there can be no final determination of the case because the party
indispensable to its resolution had been omitted.[8]
Hence, according to the CA, it was left with no choice but to deny the
motion for reconsideration.

Not satisfied, the petitioner has come to the Court on appeal to reverse and
set aside the aforesaid resolutions by insisting that the failure to implead
the People of the Philippines was not a fatal defect.

Issue

In this appeal, the petitioner relevantly avers in his petition for review
on certiorari,[9] as follows:

xxxx

20. It is humbly submitted that the Court of Appeals committed a reversible

error in grave abuse of its discretion amounting to excess of jurisdiction in
dismissing the petition by ruling that the failure to implead the People of
the Philippines as an indispensable party is a fatal defect. The petition has
shown a grave violation of a constitutional right that must necessarily
override a rule on technicality, assuming it is applicable and correct.

21. Specifically, it is submitted that it is not a necessary requisite and an

indispensable condition that the People of the Philippine (sic) be impleaded
in a petition filed assailing the denial of a motion to quash a search warrant.
And that such failure to so include it as an indispensable party is not a fatal
defect more so with the fact that there was a showing of a gross violation of
a constitutional right.[10]

xxxx
However, on November 8, 2004, the Court denied the petition for
review,[11] viz.:

G.R. No. 164974 (Charlie Te vs. Augusto Breva, etc., et al.). - The
Court Resolves to DENY the motion of petition for an extension of thirty
(30) days from the expiration of reglementary period within which to file
petition for review on certiorari, for failing to pay the balance of P330.00
representing docket and other legal fees and deposit for costs within the
reglementary period under Secs. 2 and 3, Rule 45 in relation to Sec. 5(c),
Rule 56, 1997 Rules of Civil Procedure.

The Court further Resolves to DENY the ex-parte motion of petitioner to

accept payment of fee amounting to P300.00, the payment being
insufficient.

Pursuant to Rule 45 and other related provisions of the 1997 Rules of Civil
Procedure, as amended, governing appeals by certiorari to the Supreme
Court, only petitions which are accompanied by or which comply strictly
with the requirements specified therein shall be entertained. On the basis
thereof, the Court further more Resolves to DENY the instant petition for
review on certiorari of the resolutions of the Court of Appeals dated March
25, 2004 and July 21, 2004 for late filing as the petition was filed beyond
the reglementary period of fifteen (15) days fixed in Sec. 2, Rule 45 in
relation to Sec. 5(a), Rule 56.[12]
Upon the petitioner's motion for reconsideration,[13] the Court reinstated
the petition for review and required the respondents herein to comment
within 10 days from notice on February 9, 2005.[14] On May 19, 2005, the
respondents filed their compliance,[15] and attached thereto their comment
dated April 20, 2005,[16] with annexes. On July 4, 2005, the Court noted the
compliance ofthe respondents and the submission ofthe comment on the
petition for review on certiorari; and required the petitioner to file his reply
within 10 days from notice.[17]

Ruling of the Court

The petition lacks merit.

The petitioner argues that his petition for certiorari did not need to
implead the People of the Philippines because there was yet no criminal
case commenced in court, averring:

To restate, a search warrant proceedings is not a criminal action, much less

a civil action (WASHINGTON DISTILLERS INC. VS. COURT OF
APPEALS, 260 SCRA 821, quoting Malaloan vs. Court of Appeals, 232
SCRA 249). While a search warrant is issued in the name of the People of
the Philippines, the application is made not by the People of the Philippines
but by the interested party or parties. In this instant case, it is the NBI-
SARDO (through respondent SI Bahinting) and Pryce Gases, Inc. It is
humbly submitted that since there is no criminal case filed and pending
when the search warrant application was made, the People of the
Philippines is not yet a proper party to be impleaded as respondent as
required under Section 3 of Rule 46 of the Rules of Court.[18]
The argument of the petitioner is untenable.

Impleading the People of the Philippines in the petition for certiorari did
not depend on whether or not an actual criminal action had already been
commenced in court against the petitioner. It cannot be denied that the
search warrant in question had been issued in the name of the People of the
Philippines, and that fact rendered the People of the Philippines
indispensable parties in the special civil action for certiorari brought to
nullify the questioned orders of respondent Presiding Judge. We also note
that the impleading is further expressly demanded in Section 3, Rule 46 of
the Rules of Court, to wit:

Section 3. Contents and filing of petition; effect of non-compliance with

requirements. - The petition shall contain the full names and actual
addresses of all the petitioners and respondents. a concise statement of the
matters involved. the factual background of the case, and the grounds relied
upon for the relief prayed for.

xxxx

The failure of the petitioner to comply with any of the foregoing

requirements shall be sufficient ground for the dismissal of the
petition. (n) (emphasis supplied)
Accordingly, the omission of the People of the Philippines from the petition
was fatal.

The requirement that the search warrant be issued in the name of the
People of the Philippines is imposed by Section 1, Rule 126 of the Rules of
Court, to wit:

Section 1. Search warrant defined. -- A search warrant is an order in

writing issued in the name of the People of the Philippines, signed
by a judge and directed to a peace officer, commanding him to search for
personal property described therein and bring it before the court.
We may agree with the petitioner that the application for the search
warrant was not a criminal action; and that the application for the search
warrant was not of the same form as that of a criminal action. Verily, the
search warrant is not similar to a criminal action but is rather a legal
process that may be likened to a writ of discovery employed by no less than
the State to procure relevant evidence of a crime. In that respect, it is an
instrument or tool, issued under the State's police power, and this is the
reason why it must issue in the name of the People of the Philippines.[19]

Equally clear is that the sworn application for the search warrant[20] and the
search warrant itself[21] were upon the behest of the People of the
Philippines. It defies logic and common sense for the petitioner to contend,
therefore, that the application against him was not made by the People of
the Philippines but by the interested party or parties. The immutable truth
is that every search warrant is applied for and issued by and under the
authority of the State, regardless of who initiates its application or causes
its issuance.

The petitioner could have quickly rectified his omission by the immediate
amendment of the petition. However, although made aware of the omission
as a fatal defect, he did not cause the amendment but continued to ignore
the need to amend. He thereby exhibited his adamant refusal to recognize
the People of the Philippines as indispensable parties, which impelled the
CA to aptly remark in its denial of his motion for reconsideration, thusly:

We note that while the petitioner furnished the OSG with copies of the
petition and the motion for reconsideration, he did not attempt to cure the
defect of the petition - i.e. the failure to implead the People of the
Philippines - by filing the appropriate motion or manifestation to amend
the petition and by amending the petition to implead the Republic of the
Philippines as a party to the proceedings. Hence, the first ground upon
which we based our dismissal of the petition still holds and we are left with
no choice but to deny the present motion.[22] (emphasis supplied)
With its dismissal of the petition for certiorari being proper and in accord
with the pertinent rules of procedure, the CA did not abuse its discretion,
least of all gravely. Grave abuse of discretion, as the ground for the
issuance of the writ of certiorari, connotes whimsical and capricious
exercise of judgment as is equivalent to excess, or lack of
jurisdiction.[23] The abuse must be so patent and gross as to amount to an
evasion of a positive duty or to a virtual refusal to perform a duty enjoined
by law, or to act at all in contemplation of law as where the power is
exercised in an arbitrary and despotic manner by reason of passion or
hostility.[24]

WHEREFORE, the Court DENIES the petition for review

on certiorari; AFFIRMS the resolution of the Court of Appeals
promulgated on March 25, 2004 (dismissing the petition for certiorari in
C.A.-G.R. SP No. 82797); and ORDERS the petitioner to pay the costs of
suit.

SO ORDERED.

FIRST DIVISION

G.R. No. 168157, August 19, 2015

HILARIO P. SORIANO, Petitioner, v. DEPUTY OMBUDSMAN

FOR LUZON VICTOR C. FERNANDEZ, FLORIZA A. BRIONES,
GRAFT INVESTIGATION AND PROSECUTION OFFICER II,
DONNA B. PASCUAL, GRAFT INVESTIGATION AND
PROSECUTION OFFICER II, AND ATTY. ADONIS C.
CLEOFE, Respondents.

DECISION
 BERSAMIN, J.:

The discretion of the Office of the Ombudsman in the

determination of probable cause to charge a respondent public
official or employee cannot be interfered with in the absence of a
clear showing of grave abuse of discretion amounting to lack or
excess of jurisdiction.

The Case

By petition for certiorari, the complainant assails the resolution

issued on August 30, 2004 dismissing for lack of probable cause
the criminal complaint he had filed on February 27, 2003 in the
Office of the Deputy Ombudsman for Luzon charging respondent
Adonis C. Cleofe, Acting Registrar of Deeds of Batangas City, with
violation of Section 3(e) of Republic Act No. 3019 (Anti-Graft and
Corrupt Practices Act), docketed as OMB-L-C-04-0292-C. It is
noted that the dismissal of the charge had been recommended by
Floriza A. Briones, Graft Investigation and Prosecution Officer II
of the Office of the Ombudsman; endorsed by Director Emilio A.
Gonzales, III, CESO III; and approved by respondent Victor C.
Fernandez, as Deputy Ombudsman for Luzon.1

The petitioner moved to reconsider the dismissal, but his motion

was denied on March 1, 2005 for its lack of merit.2

Antecedents

The petitioner was the president of Soriano Holdings Corporation.

He attested that on September 8, 1999, one Romeo L. Santos
executed a Deed of Assignment3 transferring and conveying to
Soriano Holdings Corporation the parcel of land situated on P.
Burgos Street, Batangas City, where the First Coconut Rural
Bank, Inc. (First Coconut) conducted its business. As a
consequence, Santos delivered the owner's copy of Transfer
Certificate of Title No. T-43029 to Soriano Holdings Corporation.
However, the petitioner was not able to register the Deed of
Assignment because of some urgent business transactions that
then required his full attention.

Prior to the assignment on September 8, 1999, however, Santos

and First Coconut had a standing lease contract covering the
parcel of land that would expire on February 3, 2008. Thus,
although TCT No. T-43029 was still in the name of Santos, First
Coconut paid its monthly rentals directly to Soriano Holdings
Corporation with the acquiescence of Santos.

On or about August 25, 2003, First Coconut received a copy of

the writ of possession issued by then Presiding Judge Romeo F.
Barza of the Regional Trial Court, Branch 3, in Batangas City
(RTC) directing First Coconut to vacate the leased premises within
five days from notice. First Coconut then learned for the first time
that the land had been the subject of a litigation between Santos
and one Ma. Teresa Robles.4

First Coconut further learned from its inquiries that the RTC had
earlier disposed of the case between Santos and Robles through
its order dated January 28, 2002,5 as follows:
WHEREFORE, in view of the foregoing, the instant motion is
hereby granted and order is hereby
given:chanRoblesvirtualLawlibrary

1. Divesting defendants spouses Romeo L. Santos and Florencia

P. Puno of their title over the parcel of land covered by TCT No.
T-43029 and vesting title thereof to plaintiff Ma. Teresa S.
Robles;ChanRoblesVirtualawlibrary

2. Directing the Batangas City Register of Deeds to cancel the

outstanding owner's duplicate copy of TCT No. T-43029 issued in
the name of Romeo L. Santos, married to Florencia Puno and
issue in lieu thereof a new owner's duplicate copy in the name of
Ma. Teresa S. Robles containing a memorandum of annulment of
outstanding duplicate after payment of proper taxes and
fees;ChanRoblesVirtualawlibrary
3. Directing the Branch Clerk of Court to issue the writ of
possession.
The order of January 28, 2002 was the product of the order
earlier issued on February 28, 2001 to resolve Robles' Motion For
Judgment on the Pleadings by directing, on one hand, the
Spouses Romeo L. Santos and Florencia Puno (Spouses Santos)
to cause the Deed of Absolute Sale to be notarized before a
Notary Public; to deliver the notarized Deed of Absolute Sale to
Robles; and to surrender possession of TCT No. T-43029 to
Robles; and, on the other hand, Robles to execute a Special
Power of Attorney authorizing the Spouses Santos to sell the
property covered by TCT No. T-43029 at a price higher than
P20,000,000.00, and afterward to divide the difference between
the purchase price and the P20,000,000.00 equally between
herself, and the Spouses Santos.6

Robles complied with the order of February 28, 2001, but the
Spouses Santos did not. Flence, Robles moved for the issuance of
the writ of execution to compel the Spouses Santos to comply
with the order.7

On September 25, 2001, the RTC issued the writ of

execution.8 However, on October 15, 2001, the sheriff reported
that the Spouses Santos did not comply with the writ of
execution.9 Hence, Robles sought an order from the RTC to:
(1) direct the sheriff or the clerk of this Court to execute a deed of
sale over the subject property in favor of the plaintiff or in lieu
of directing a conveyance, divesting the title of the defendants
over the said property and vesting said title in the plaintiff,
under Sec. 10 (a) of Rule 39 of the Revised Rules of Civil
Procedure; (2) annul owner's duplicate certificate of TCT No.
T-43029 and direct the Register of Deeds of Batangas City to
issue a new certificate of title in lieu thereof in the name of
plaintiff upon payment of the necessary taxes and fees; and
(3) issue a writ of possession over the subject property in
favor of the plaintiff.10
On January 28, 2002, the RTC issued the writ of possession.11
On August 27, 2003, First Coconut filed an Urgent Motion to
Quash Writ of Possession in order to protect its interest in the
parcel of land.12

Respondent Atty. Cleofe, then the Acting Registrar of Deeds,

canceled TCT No. T-43029, and issued a new owner's TCT in the
name of Robles without the payment of proper taxes and fees.13

Consequently, on August 29, 2003,14 the petitioner, through

counsel, wrote to Atty. Cleofe for enlightenment on the transfer
of the parcel of land without the payment of the capital gains tax
and related fees. Atty. Cleofe's reply did not satisfy the
petitioner.15

On February 27, 2004, therefore, the petitioner charged Atty.

Cleofe in the Office of the Deputy Ombudsman for Luzon with the
violation of Section 3 (e) of Republic Act No. 3019, as
amended.16 He alleged in his affidavit that Atty. Cleofe had given
Robles unwarranted advantage or preference by illegally
canceling TCT No. T-43029 and then issuing a new owner's TCT
without the payment of the proper taxes and fees, and had
caused First Coconut, Soriano Holdings Corporation and the
Government undue injury through manifest partiality, evident bad
faith and gross inexcusable negligence.17 He insisted that the
Deed of Sale between the Spouses Santos and Robles was void
because the parcel of land had already been sold/assigned to
Soriano Holdings Corporation; and that Soriano Holdings
Corporation still held the owner's copy of TCT No. T-43029.18 He
argued that Atty. Cleofe had thereby prejudiced not only First
Coconut and Soriano Floldings Corporation by depriving them of
their lease, possession, and ownership of the parcel of land, but
had also thereby deprived the Government P1,500,000.00 by way
of capital gains tax and related fees based on the consideration of
P20,000,000.00; and that Atty. Cleofe had further besmirched
the reputation of Soriano Holdings Corporation.19

On June 7, 2004, Atty. Cleofe submitted his counter-

affidavit,20 stating that the petitioner had filed on September 11,
2003 a complaint against him in the Office of the City Mayor of
Batangas City, to which he filed his answer; that not contented
with this complaint, the petitioner filed another complaint upon
the same issue in the Land Registration Authority (LRA), to which
he also submitted his answer; that the complaint in the
Ombudsman was but a reiteration of the previous complaints,
thereby showing a pattern of harassment and malice geared
towards the destruction of his good name, and in evident
violation of Circular No. 28-91 prohibiting forum shopping, which
was a ground for the summary dismissal of the complaint; that
the requirement of paying capital gains tax was not applicable to
involuntary transactions like the transfer by virtue of the court
order, but only to voluntary transactions where there was a Deed
of Absolute Sale by which the computation of the tax would be
based; that the absence of the Deed of Sale had been caused by
the Spouses Santos' refusal to execute the same; and that the
RTC divested the Spouses Santos of the title, and vested it in
Robles.

Atty. Cleofe further averred that the petitioner actually nurtured

his ire against him because of the unregisterability of the Deed of
Assignment executed in favor of Soriano Holdings Corporation
due to the lack of the consent of Puno as the spouse of assignor
Santos; that the petitioner had no one to blame except himself
because he did not register the Deed of Assignment at the
earliest opportune time; that the petitioner's proper remedy was
to file the appropriate action in the regular courts; that the
petitioner's complaint was nothing more than a saving device to
exculpate himself from being answerable for his miserable acts to
the Board of Directors of the Soriano Holdings Corporation; and
that the petitioner's demand for P10,000,000.00 as moral and
exemplary damages was ridiculous because he represented a
corporation that could not experience physical suffering or mental
anguish.21

On August 30, 2004, respondent Briones rendered her findings on

the lack of probable cause to hold Atty. Cleofe liable as charged,
and recommended the dismissal of the criminal complaint of the
petitioner,22viz.:
After a careful evaluation of the records of the case, we do not
find probable cause to hold the respondent liable as charged.

Section 3(e), R.A. 3019, as amended, requires proof of manifest

partiality or evident bad faith or gross inexcusable negligence.
The circumstances obtaining in the case before Us, failed to show
the presence of any of these elements. Indeed, the complainant
failed to overcome the presumption of good faith to which every
public official, acting in the discharge of his official duties is
entitled.

xxx The record is bereft of any evidence to prove that the

respondent was actuated with malice and/or bad faith when he
issued a new title in the name of Ma. Teresa Robles. Neither was
there evidence to show that respondent had gained pecuniary
benefit from his act of issuing the new title, which in the first
place was ordered by the court of competent jurisdiction.

Also, the respondent, in issuing the new title, even without the
payment of taxes, is guided by the Order previously issued by the
LRA in a similar case, (Consulta Case No. 2402), which was
brought in consulta to the LRA, wherein it was ruled that payment
of transfer tax, capital gains tax and documentary stamp tax and
the submission of a real estate tax clearance do not apply to
court order. Respondent is on the honest belief that the matter at
hand involved an involuntary transaction to which payment of
taxes and fees may no longer be required. Whether or not such
transaction is involuntary, or otherwise, is no longer the concern
of the instant proceedings. As pointed out by the respondent, the
LRA is governed by its own rules and regulations the wisdom of
which cannot be looked into by this Office, as the land
Registration Authority is possessed with the necessary special
knowledge and expertise to interpret and implement the same.

In passing, the cause of action of herein complainant is more

civil, rather than criminal in nature, against Mr. Romeo Santos
and/or Ma. Teresa Robles, which can be properly ventilated in the
regular court of justice.23
On September 21, 2004, the petitioner sought
reconsideration,24 which Atty. Cleofe opposed.25cralawred

On March 1, 2005, the Office of the Deputy Ombudsman for

Luzon denied the petitioner's Motion For
Reconsideration,26 holding that there were no compelling grounds
to reverse its earlier resolution; that the Spouses Santos refused
to have the Deed of Sale notarized, thus removing the contract
out of the scope of voluntary transactions; that Atty. Cleofe was
justified in canceling the TCT of the Spouses Santos and issuing a
new TCT in favor of Robles without payment of the capital gains
taxes and fees based on the ruling in LRA Consulta Case No.
2402; and that Atty. Cleofe had not shown manifest partiality or
evident bad faith in complying with the order of the RTC.

Issues

The petitioner avers that the public respondents acted with grave
abuse of discretion amounting to lack or excess of jurisdiction.

In its comment,27 the Office of the Solicitor General (OSG) prays

that the petition for certiorari be dismissed because: (a) the
petitioner deviated from the settled meaning of grave abuse of
discretion; (b) the public respondents followed and applied the
accepted principles on the determination of probable cause; and
(c) the petition for certiorari was contrary to the evidence on
record. The OSG argues:
It can be seen that the Ombudsman's finding of lack of
malice/bad faith on the part of private respondent proceeds from
the fact that private respondent's act of canceling the subject TCT
and issuing another one in the name of Ma. Teresa Robles was
based on the Order of the presiding Judge Romeo F. Barza of RTC
Branch 3, Pallocan, Batangas City in relation to Consulta case No.
2402. Therefore, it can neither be said that private respondent
acted with "palpable and patent fraud with dishonest purpose to
do moral obliquity, nor with conscious wrongdoing for some some
perverse motive or ill will" (Llorente vs. Sandiganbayan, 287
SCRA 382 [1998]; Sistoza vs. Desierto, 388 SCRA 307 [2002])
x x x.

It is a settled rule that the courts do not interfere in the

determination of the Ombudsman regarding the existence of
probable cause, provided there is no grave abuse in the exercise
of such discretion ( Esquivel and Esquivel vs. The Hon.
Ombudsman, 389 SCRA 143 [2002]). xxx

Likewise, a thorough evaluation of petitioner's discussion

supporting his ground for filing the petition would show that
petitioner would like the Ombudsman to declare the nature of,
and enumerate, the "proper taxes and fees" stated in the Order
issued by Presiding Judge Romeo F. Barza, RTC, Branch 3,
Pallocan, Batangas City and eventually adjudge that private
respondent could be indicted for the offense charged since, the
transfer was made without payment of the "proper taxes and
fees." Evidently, the Ombudsman is precluded from making any
declaration to such effect, otherwise it would be arrogating unto
itself the power of the court that issued the Order to clarify what
are included in the phrase "proper taxes and fees." Verily, no
grave abuse of discretion attended the Ombudsman's dismissal of
petitioner's complaint.28
Ruling of the Court

The petition for certiorari is dismissed for lack of merit.

First of all, the public respondents, in dismissing the charge

against Atty. Cleofe, did not gravely abuse their discretion. The
Office of the Ombudsman found the evidence against him to be
insufficient to support a finding of probable cause to charge him.
Undoubtedly, he was a public officer discharging official functions,
an essential element of the crime of violation of Section 3 (e) of
Republic Act No. 3019. However, the other elements of the crime,
specifically: that the accused must have acted with manifest
partiality, evident bad faith or gross inexcusable negligence; and
that his acts complained of caused any undue injury to any party,
including the Government, or gave any private party unwarranted
benefits, advantage or preference in the discharge of his
functions were not shown to be present.

According to the Office of the Deputy Ombudsman for Luzon,

Atty. Cleofe was not actuated with malice or bad faith in issuing
the new TCT in the name of Robles, and did not gain any
pecuniary benefit from his issuance of the new TCT pursuant to
the order of the RTC, a court of competent jurisdiction, but was
rather guided by the ruling in LRA Consulta Case No. 2402 to the
effect that the requirement for the payment of transfer tax,
capital gains tax, and documentary stamp tax, and for the
submission of a real estate tax clearance did not apply to a
transfer pursuant to a court order.

We agree with the findings and recommendation to dismiss. The

fact that Atty. Cleofe obeyed the ruling in LRA Consulta Case No.
2402 was indicative of his good faith. For sure, he, being a
Register of Deeds, was officially bound to obey the ruling in LRA
Consulta Case No. 2402 because Section 117 of Presidential
Decree No. 1529 (Property Registration Decree) so provides:
Sec. 117. Procedure. - When the Register of Deeds is in doubt
with regard to the proper step to be taken or memorandum to be
made in pursuance of any deed, mortgage or other instrument
presented to him for registration, or where any party in interest
does not agree with the action taken by the Register of Deeds
with reference to any such instrument, the question shall be
submitted to the Commissioner of Land Registration by the
Register of Deeds, or by the party in interest thru the Register of
Deeds.

Where the instrument is denied registration, the Register of

Deeds shall notify the interested party in writing, setting forth the
defects of the instrument or legal grounds relied upon, and
advising him that if he is not agreeable to such ruling, he may,
without withdrawing the documents from the Registry, elevate
the matter by consulta within five days from receipt of notice of
the denial of registration to the Commissioner of Land
Registration.

The Register of Deeds shall make a memorandum of the

pending consulta on the certificate of title which shall be
cancelled motu proprio by the Register of Deeds after final
resolution or decision thereof, or before resolution, if withdrawn
by petitioner.

The Commissioner of Land Registration, considering

the consulta and the records certified to him after notice to
the parties and hearing, shall enter an order prescribing
the step to be taken or memorandum to be made. His
resolution or ruling in consultas shall be conclusive and
binding upon all Registers of Deeds, provided, that the
party in interest who disagrees with the final resolution,
ruling or order of the Commissioner relative
to consultas may appeal to the Court of Appeals within the
period and in manner provided in Republic Act No.
5434. (Emphasis supplied)
The petitioner's recourse if he did not consider Atty. Cleofe's
stance on the treatment of the transfer by virtue of the judgment
of the RTC as contained in the latter's reply to his letter of August
29, 2003 legally sustainable was to follow the procedure
prescribed by Section 117, supra, which was for him to elevate in
consulta to the LRA his disagreement with such stance. However,
there is no showing that the petitioner elevated his concerns in
consulta. His inaction signified his acceptance of Atty. Cleofe's
stance on the matter. Under the circumstances, the petitioner
could not justly accuse Atty. Cleofe of manifest partiality, evident
bad faith or gross inexcusable negligence.

Secondly, the exclusive discretion to determine the existence of

probable cause to charge Atty. Cleofe as a public official in a
criminal case pertained to the Office of the Ombudsman. Such
discretion cannot be interfered with. As the Court has pointed out
in Vergara v. Ombudsman:29
Jurisprudence explains that the Office of the Ombudsman is
vested with the sole power to investigate and prosecute, motu
proprio or on complaint of 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.
The Ombudsman's power to investigate and to prosecute is
plenary and unqualified.

The Ombudsman has the discretion to determine whether a

criminal case, given its attendant facts and circumstances, should
be filed or not. The Ombudsman may dismiss the complaint
should the Ombudsman find the complaint insufficient in form or
substance, or the Ombudsman may proceed with the
investigation if, in the Ombudsman's view, the complaint is in due
form and substance. Hence, the filing or non-filing of the
information is primarily lodged within the "full discretion" of the
Ombudsman.

This Court has consistently adopted a policy of non-interference

in the exercise of the Ombudsman's constitutionally mandated
powers. The Ombudsman, which is "beholden to no one, acts as
the champion of the people and the preserver of the integrity of
the public service." However, this Court is not precluded from
reviewing the Ombudsman's action when there is grave abuse of
discretion, in which case the certiorari jurisdiction of the Court
may be exceptionally invoked pursuant to Section 1, Article VIII
of the Constitution. We have enumerated instances where the
courts may interfere with the Ombudsman's investigatory
powers:chanRoblesvirtualLawlibrary

(a) To afford protection to the constitutional rights of the accused;

(b) When necessary for the orderly administration of justice or to
avoid oppression or multiplicity of actions;
(c) When there is a prejudicial question which is sub judice;
(d) When the acts of the officer are without or in excess of
authority;
(e) Where the prosecution is under an invalid law, ordinance or
regulation;
(f) When double jeopardy is clearly apparent;
(g) Where the court has no jurisdiction over the offense;
(h) Where it is a case of persecution rather than prosecution;
(i) Where the charges are manifestly false and motivated by the
lust for vengeance.
None of the exceptions was present herein.

To justify the issuance of the writ of certiorari, the petitioner

must show that the Office of the Deputy Ombudsman for Luzon
gravely abused its discretion amounting to lack or excess of
jurisdiction in making its determination and in arriving at the
conclusion reached. In short, the petitioner must establish grave
abuse of discretion on the part of the Office of the Deputy
Ombudsman for Luzon, which connotes the whimsical and
capricious exercise of judgment as is equivalent to excess, or lack
of jurisdiction;30 the abuse must be so patent and gross as to
amount to an evasion of a positive duty or to a virtual refusal to
perform a duty enjoined by law, or to act at all in contemplation
of law as where the power is exercised in an arbitrary and
despotic manner by reason of passion or hostility.31 Obviously,
the Office of the Deputy Ombudsman for Luzon, having correctly
resolved the question of probable cause, did not abuse their
discretion, least of all gravely, in dismissing the charge against
Atty. Cleofe.

Thirdly, the petitioner did not specify the fees whose non-
collection would have caused undue injury to the Government. All
that he stated were sweeping allegations of non-collection on the
basis of the gross amount of P20,000,000.00 as the alleged
consideration for the sale. The Deed of Absolute Sale was
essential in determining the value of the consideration, but was
not submitted due to the refusal of the Spouses Santos to have it
notarized as required by the RTC's judgment. This omission yet
emphasized the inanity of his charge against Atty. Cleofe.
Registration fees payable to the Register of Deeds for registering
any instrument, order, judgment or decree divesting the title of
the registered owner, except in favor of a trustee, executor,
administrator, or receiver, where no specific fee is prescribed
therefor, are based on the value of the consideration in
accordance with the schedule set forth by the Land Registration
Authority.32

Lastly, the power of the Office of the Ombudsman to investigate

and to prosecute is plenary and unqualified. The Congress has
vested in the Ombudsman broad powers to enable the
Ombudsman to implement her own actions.33 Moreover, the
Constitution vests in the Office of the Ombudsman the authority
and duty to promulgate rules of procedure. Among such rules of
procedure was Administrative Order No. 07,34 dated April 10,
1990, as amended, clothing the investigating officer with the
authority and the duty to dismiss outright a complaint for want of
palpable merit, thus:
RULE II
PROCEDURE IN CRIMINAL CASES

SECTION 1. GROUNDS. — A criminal complaint may be brought

for an offense in violation of R.A. 3019, as amended, R.A. 1379,
as amended, R.A. 6713, Title VII Chapter II, Section 2 of the
Revised Penal Code, and for such other offenses committed by
public officers and employees in relation to office.

Sec, 2. EVALUATION. — Upon evaluating the complaint, the

investigating officer shall recommend whether it may be:
a) dismissed outright for want of palpable merit;
b) referred to respondent for comment;
c) indorsed to the proper government office or agency which has
jurisdiction over the case;
d) forwarded to the appropriate office or official for fact-finding
investigation;
e) referred for administrative adjudication; or
f) subjected to a preliminary investigation,
xxxx
Sec. 4. PROCEDURE. — Preliminary investigation of cases falling
under the jurisdiction of the Sandiganbayan and Regional Trial
Courts shall be conducted in the manner prescribed in Section 3,
Rule 112 of the Rules of Court, subject to the following
provisions:chanRoblesvirtualLawlibrary
xxxx

No information may be filed and no complaint may be dismissed

without the written authority or approval of the Ombudsman in
cases falling within the jurisdiction of the Sandiganbayan, or of
the proper Deputy Ombudsman in all other cases.
The authority and the duty to dismiss a worthless complaint fully
accorded with the primary responsibility of an officer engaged in
public prosecution of offenses not to convict the offender but to
see that justice is done. The suppression of facts or the
concealment of witnesses capable of establishing the innocence of
the accused is highly reprehensible and is a cause for disciplinary
action.35Conformably with this tenet, the respondent public
officials had the authority and the duty to dismiss the petitioner's
complaint once they determined it to be devoid of merit; thus, no
abuse of discretion, much less grave abuse, could be attributed to
them.36chanroblesvirtuallawlibrary

WHEREFORE, the Court DISMISSES the petition

for certiorari for its lack of merit; and ORDERS the petitioner to
pay the costs of suit.

SO ORDERED.chanroblesvirtuallawlibrary

Sereno, C.J., Leonardo-De Castro, Perez, and Perlas-Bernabe, JJ.,

concur.

Endnotes:

FIRST DIVISION

G.R. No. 175210, February 01, 2016

MARIO JOSE E. SERENO, EXECUTIVE DIRECTOR OF THE

ASSOCIATION OF PETROCHEMICAL MANUFACTURERS OF
 THE PHILIPPINES, INC. (APMP), Petitioner, v. COMMITTEE
ON TRADE AND RELATED MATTERS (CTRM) OF THE
NATIONAL ECONOMIC AND DEVELOPMENT AUTHORITY
(NEDA), COMPOSED OF THE DIRECTOR-GENERAL OF THE
NEDA SECRETARIAT, THE EXECUTIVE SECRETARY, THE
SECRETARIES OF TRADE AND INDUSTRY, FINANCE,
FOREIGN AFFAIRS, AGRICULTURE, ENVIRONMENT AND
NATURAL RESOURCES, BUDGET AND MANAGEMENT,
TRANSPORTATION AND COMMUNICATION, LABOR AND
EMPLOYMENT, AGRARIAN REFORM, THE GOVERNOR OF
THE BANGKO SENTRAL NG PILIPINAS AND THE CHAIRMAN
OF THE TARIFF COMMISSION, AND BRENDA R. MENDOZA
IN HER CAPACITY AS DIRECTOR OF THE TRADE, INDUSTRY
& UTILITIES STAFF, Respondents.

DECISION

BERSAMIN, J.:

The constitutional guarantee to information does not open every

door to any and all information, but is rather confined to matters
of public concern. It is subject to such limitations as may be
provided by law. The State's policy of full public disclosure is
restricted to transactions involving public interest, and is
tempered by reasonable conditions prescribed by law.

The Case

The petitioner appeals the decision rendered on October 16, 2006

by the Regional Trial Court (RTC), Branch 268, in Pasig
City1 dismissing the petition for mandamus he had filed in his
capacity as a citizen and as a stakeholder in the Philippine
petrochemical industry to compel respondent Committee on Tariff
and Related Matters (CTRM) to provide him a copy of the minutes
of its May 23, 2005 meeting; as well as to provide copies of all
official records, documents, papers and government research
data used as basis for the issuance of Executive Order No. 486.2

Antecedents
On May 23, 2005, the CTRM, an office under the National
Economic Development Authority (NEDA), held a meeting in
which it resolved to recommend to President Gloria Macapagal-
Arroyo the lifting of the suspension of the tariff reduction
schedule on petrochemicals and certain plastic products, thereby
reducing the Common Effective Preferential Tariff (CEPT) rates on
products covered by Executive Order (E.O.) No. 161 from 7% or
10% to 5% starting July 2005.3

On June 9, 2005, Wilfredo A. Paras (Paras), then the Chairman of

the Association of Petrochemical Manufacturers of the Philippines
(APMP), the main industry association in the petrochemical
sector, wrote to the CTRM Secretariat, through its Director
Brenda Mendoza (Director Mendoza), to request a copy of the
minutes of the meeting held on May 23, 2005.

Director Mendoza denied the request through her letter of June

20, 2005,4 to wit:
chanRoblesvirtualLawlibrary
With reference to your request for a copy of the minutes and
resolution of the Committee on Tariff and Related Matters (CTRM)
meeting held on 23 May 2005, our Legal Staff advised that we
cannot provide the minutes of the meeting detailing the position
and views of different CTRM member agencies. We may,
however, provide you with the action taken of the CTRM as
follows:
chanRoblesvirtualLawlibrary
"The CTRM agreed to reduce the CEPT rates on petrochemical
resins and plastic products covered under EO 161 from 7% / 10%
to 5% starting July 2005, and to revert the CEPT rates on these
products to EO 161 levels once the proposed naphtha cracker
plant is in commercial operation."
The CTRM has yet to confirm the minutes including the action
taken during the said meeting since it has not met after 23 May
2005.
The CTRM, again through Director Mendoza, sent a second letter
dated August 31, 2005 as a response to the series of letter-
requests from the APMP, stating:
chanRoblesvirtualLawlibrary
The CTRM during its meeting on 14 July 2005 noted that Section
3, Rule IV of the Implementing Rules and Regulations of Republic
Act 6713 or the Code of Conduct and Ethical Standards for Public
Officials and Employees provides that every department, office or
agency shall provide official information, records or documents to
any requesting public (sic). However, the section also provides
exceptions to the rules, such as if '...(c) such information, record
or document south (sic) falls within the concepts of established
privileged or recognized exceptions as may be provided by law or
settled policy or jurisprudence...' The acknowledged limitations to
information access under Section 3 (c) include diplomatic
correspondence, closed-door Cabinet meetings and executive
sessions of either House of Congress, as well as internal
deliberations of the Supreme Court (Chavez vs. Presidential
Commission on Good Government, 299 SCRA 744)

The CTRM is of the view that the limitation pertaining to closed-

door cabinet meetings under Section 3 (c) of the IRR applies to
the minutes of the meeting requested by APMP. In view thereof,
the CTRM is constrained [not] to provide the said minutes to the
APMP.5ChanRoblesVirtualawlibrary
The APMP sent another letter-request dated October 27, 2005 to
the CTRM through Director Mendoza reminding about the legal
implications of the refusal to furnish copies of the minutes as in
violation of the petitioner's Constitutional right of access to
information on matters of public concern. However, the CTRM
continued to refuse access to the documents sought by the
APMP.6

The attitude of the CTRM prompted the petitioner and the APMP
to bring the petition for mandamus in the RTC to compel the
CTRM to provide the copy of the minutes and to grant access to
the minutes. The case was docketed as SCA No. 2903.

The APMP, through Paras and Concepcion I. Tanglao, respectively

its Chairman and President at the time, sent letters dated
December 12, 20057 and January 10, 20068 to the Office of the
President (OP), stating the reasons why the recommendation of
the CTRM should be rejected, but the OP did not respond to the
letters.

Thereafter, the petitioner filed an Urgent Motion for the Issuance

of a Writ of Preliminary Mandatory Injunction dated January 3,
2006, to which the respondent filed its Opposition dated January
26, 2006 and Motion to Dismiss dated February 16, 2006.9

Meanwhile, President Arroyo signed Executive Order No.

486,10 dated January 12, 2006, to lift the suspension of the tariff
reduction on petrochemical resins and other plastic products
under the ASEAN Free Trade Area - Common Effective
Preferential Tariff (AFTA-CEPT) Scheme. The relevant portions of
E.O. No. 486 read:
chanRoblesvirtualLawlibrary
WHEREAS, Executive Order 234 dated 27 April 2000, which
implemented the 2000-2003 Philippine schedule of tariff
reduction of products transferred from the Temporary Exclusion
List and the Sensitive List to the Inclusion List of the accelerated
CEPT Scheme for the AFTA, provided that the CEPT rates on
petrochemicals and certain plastic products will be reduced to 5%
on 01 January 2003;

WHEREAS, Executive Order 161 issued on 9 January 2003

provides for the suspension of the application of the tariff
reduction schedule on petrochemicals and certain products in
2003 and 2004 only;

WHEREAS, the government recognizes the need to provide an

enabling environment for the naphtha cracker plant to attain
international competitiveness;

WHEREAS, the NEDA Board approved the lifting of the

suspension of the aforesaid tariff reduction schedule on
petrochemicals and certain plastic products and the reversion of
the CEPT rates on these products to EO 161 (s.2003) levels once
the naphtha cracker plant is in commercial operation;

NOW, THEREFORE, I, GLORIA MACAPAGAL-ARROYO,

President of the Republic of the Philippines, pursuant to the
powers vested in me under Section 402 of the Tariff and Customs
Code of 1978 (Presidential Decree No. 1464), as amended, do
hereby order:

SECTION 1. The articles specifically listed in Annex "A" (Articles

Granted Concession under the CEPT Scheme for the AFT A)
hereof, as classified under Section 104 of the Tariff and Customs
Code of 1978, as amended shall be subject to the ASEAN CEPT
rates in accordance with the schedule indicated in Column 4
of Annex "A". The ASEAN CEPT rates so indicated shall be
accorded to imports coming from ASEAN Member States applying
CEPT concession to the same product pursuant to Article 4 of the
CEPT Agreement and its Interpretative Notes.
In its order of May 9, 2006, the RTC denied the Urgent Motion for
the Issuance of a Writ of Preliminary Mandatory Injunction but
directed the parties to file their respective memorandums after
noting that the controversy involved a pure question of law.11

Subsequently, the RTC rendered its assailed decision on October

16, 200612 dismissing the petition for mandamus for lack of
merit. It relied on the relevant portions of Section 3 of Rule IV of
the Implementing Rules and Regulations of R.A. No. 6713 (Code
of Conduct and Ethical Standards for Public Officials and
Employees), to wit:
chanRoblesvirtualLawlibrary
Sec 3. Every department, office or agency shall provide official
information, records and documents to any requesting public
except if:

xxxx

(c) the information, record or document sought falls within the

concepts of established privilege or recognized exceptions as may
be provided by law or settled policy or jurisprudence;
(d) such information, record or document comprises drafts or
decisions, orders, rulings, policies, memoranda, etc.
and relevant portions of Section 7 (c) of the same law, viz.:
chanRoblesvirtualLawlibrary
Section 7. Prohibited Acts and Transactions. - In addition to acts
and omissions of public officials and employees now prescribed in
the Constitution and existing laws, the following shall constitute
prohibited acts and transactions of any public official and
employee and are hereby declared unlawful:

xxxx

(c) Disclosure and/or misuse of confidential information - Public

officials and employees shall not use or divulge confidential or
classified information officially known to them by reason of their
office and not made available to the public either:

xxxx

(2) To the prejudice of public

interest.13ChanRoblesVirtualawlibrary
The RTC declared that the "CTRM is an advisory body composed
of various department heads or secretaries and is classified as
cabinet meetings and inter-agency communications;"14 and that
the record of the communications of such body "falls under the
category of privileged information because of the sensitive
subject matter which could seriously affect public interest."15

Hence, this appeal directly to the Court on questions of law.16

Issues

The petitioner submits the following issues for resolution, namely:

chanRoblesvirtualLawlibrary

I. Are meetings of the CTRM and the minutes thereof exempt

from the Constitutional right of access to information?
 II. Assuming arguendo that the minutes of CTRM meetings are
privileged or confidential, is such privilege or confidentiality
absolute?

III. Can privilege or confidentiality be invoked to evade public

accountability, or worse, to cover up incompetence and
malice?17

In short, the issue is whether or not the CTRM may be compelled

by mandamus to furnish the petitioner with a copy of the minutes
of the May 23, 2005 meeting based on the constitutional right to
information on matters of public concern and the State's policy of
full public disclosure. The request for information was motivated
by his desire to understand the basis for the CTRM's
recommendation that allegedly caused tremendous losses to the
petrochemical industry through the issuance of E.O. No. 486.

In seeking the nullification of the assailed decision of the RTC,

and the consequent release of the minutes and the disclosure of
all official records, documents, papers and government research
data used as the basis for the issuance of E.O. No. 486, the
petitioner invokes the following provisions of the 1987
Constitution and R.A. No. 6713, thusly:

Section 28 of Article II of the 1987 Constitution:

chanRoblesvirtualLawlibrary
Section 28. Subject to reasonable conditions prescribed by law,
the State adopts and implements a policy of full public disclosure
of all its transactions involving public interest.
Section 7 of Article III of the 1987 Constitution:
chanRoblesvirtualLawlibrary
Section 7. The right of the people to information on matters of
public concern shall be recognized. Access to official records, and
to documents, and papers pertaining to official acts, transactions,
or decisions, as well as to government research data used as
basis for policy development, shall be afforded the citizen, subject
to such limitations as may be provided by law.
Section 1 of Article XI of the 1987 Constitution:
chanRoblesvirtualLawlibrary
Section 1. Public office is a public trust. Public officers and
employees must at all times be accountable to the people, serve
them with utmost responsibility, integrity, loyalty, and efficiency,
act with patriotism and justice, and lead modest lives.
Section 5 of R.A. No. 6713:
chanRoblesvirtualLawlibrary
Section 5. Duties of Public Officials and Employees. - In the
performance of their duties, all public officials and employees are
under obligation to:
chanRoblesvirtualLawlibrary
xxxx

(e) Make documents accessible to the public. - All public

documents must be made accessible to, and readily available for
inspection by, the public within reasonable working hours.
Ruling of the Court

The dismissal of the petition for mandamus by the RTC is

affirmed.

The constitutional guarantee of the right to information on

matters of public concern enunciated in Section 7 of Article III of
the 1987 Constitution complements the State's policy of full
public disclosure in all transactions involving public interest
expressed in Section 28 of Article II of the 1987 Constitution.
These provisions are aimed at ensuring transparency in policy-
making as well as in the operations of the Government, and at
safeguarding the exercise by the people of the freedom of
expression. In a democratic society like ours, the free exchange
of information is necessary, and can be possible only if the people
are provided the proper information on matters that affect them.
But the people's right to information is not absolute. According
to Legaspi v. Civil Service Commission,18 the constitutional
guarantee to information "does not open every door to any and
all information."19 It is limited to matters of public concern, and is
subject to such limitations as may be provided by law.20 Likewise,
the State's policy of full public disclosure is restricted to
transactions involving public interest, and is further subject to
reasonable conditions prescribed by law.21

Two requisites must concur before the right to information may

be compelled by writ of mandamus. Firstly, the information
sought must be in relation to matters of public concern or public
interest. And, secondly, it must not be exempt by law from the
operation of the constitutional guarantee.

As to the first requisite, there is no rigid test in determining

whether or not a particular information is of public concern or
public interest.22 Both terms cover a wide-range of issues that the
public may want to be familiar with either because the issues
have a direct effect on them or because the issues "naturally
arouse the interest of an ordinary citizen."23 As such, whether or
not the information sought is of public interest or public concern
is left to the proper determination of the courts on a case to case
basis.

In his capacity as a citizen and as the Executive Director of the

APMP, the petitioner has sought to obtain official information
dealing with the policy recommendation of the CTRM with respect
to the reduction of tariffs on petrochemical resins and plastic
products. He has asserted that the recommendation, which would
be effected through E.O. No. 486, not only brought significant
losses to the petrochemical industry that undermined the
industry's long-term viability and survival, but also conflicted with
official government pronouncements, policy directives, and
enactments designed to support and develop an integrated
petrochemical industry. He has claimed that the implementation
of E.O. No. 486 effectively deprived the industry of tariff support
and market share, thereby jeopardizing large investments
without due process of law.24

The Philippine petrochemical industry centers on the manufacture

of plastic and other related materials, and provides essential
input requirements for the agricultural and industrial sectors of
the country. Thus, the position of the petrochemical industry as
an essential contributor to the overall growth of our country's
economy easily makes the information sought a matter of public
concern or interest.

The second requisite is that the information requested must not

be excluded by law from the constitutional guarantee. In that
regard, the Court has already declared that the constitutional
guarantee of the people's right to information does not cover
national security matters and intelligence information, trade
secrets and banking transactions and criminal matters.25 Equally
excluded from coverage of the constitutional guarantee are
diplomatic correspondence, closed-door Cabinet meeting and
executive sessions of either house of Congress, as well as the
internal deliberations of the Supreme Court.26 In Chavez v. Public
Estates Authority,27 the Court has ruled that the right to
information does not extend to matters acknowledged as
"privileged information under the separation of powers," which
include "Presidential conversations, correspondences, or
discussions during closed-door Cabinet meetings."28 Likewise
exempted from the right to information are "information on
military and diplomatic secrets, information affecting national
security, and information on investigations of crimes by law
enforcement agencies before the prosecution of the accused."29

The respondents claim exemption on the ground that the May 23,
2005 meeting was classified as a closed-door Cabinet meeting by
virtue of the committee's composition and the nature of its
mandate dealing with matters of foreign affairs, trade and policy-
making. They assert that the information withheld was within the
scope of the exemption from disclosure because the CTRM
meetings were directly related to the exercise of the sovereign
prerogative of the President as the Head of State in the conduct
of foreign affairs and the regulation of trade, as provided in
Section 3 (a) of Rule IV of the Rules Implementing R.A. No.
6713.30

The authority of the CTRM as the advisory body of the President

and the NEDA is set forth in E.O. No. 230, series of 1987
(Reorganization Act of the National Economic and Development
Authority), to wit:
chanRoblesvirtualLawlibrary
SECTION 6. National Economic and Development Authority Inter-
agency Committees. - To assist the NEDA Board in the
performance ol its functions, there are hereby created the
following committees which shall nereafter be under the direct
control of the NEDA Board and shall submit all their
recommendations to the President for approval on matters
involving their respective concerns. The Chairman of these
committees shall be designated by the President. The NEDA
Board shall likewise determine where the technical staff of the
said committees shall be based.

xxxx

(e) Committee on Tariff and Related Matters (TRM) - The TRM to

be composed of the Director-General of the National Economic
and Development Authority Secretariat, the Executive Secretary,
the Secretaries of Trade and Industry, Foreign Affairs,
Agriculture, Environment and Natural Resources and of Budget
and Management, the Governor of the Central Bank and the
Chairman of the Tariff Commission shall have the following
functions:
chanRoblesvirtualLawlibrary
(i) Advise the President and the NEDA Board on tariff and related
matters, and on the effects on the country of various
international developments;

(ii) Coordinate agency positions and recommend national

positions for international economic negotiations;

(iii) Recommend to the President a continuous rationalization

program for the country's tariff structure. (underlining supplied)
The respondents are correct. It is always necessary, given the
highly important and complex powers to fix tariff rates vested in
the President,31 that the recommendations submitted for the
President's consideration be well-thought out and well-
deliberated. The Court has expressly recognized in Chavez v.
Public Estates Authority32 that "a frank exchange of exploratory
ideas and assessments, free from the glare of publicity and
pressure by interested parties, is essential to protect the
independence of decision-making of those tasked to exercise
Presidential, Legislative and Judicial power." In Almonte v.
Vasquez33the Court has stressed the need for confidentiality and
privacy, stating thusly: "A President and those who assist him
must be free to explore alternatives in the process of shaping
policies and making decisions and to do so in a way many would
be unwilling to express except privately."34 Without doubt,
therefore, ensuring and promoting the free exchange of ideas
among the members of the committee tasked to give tariff
recommendations to the President were truly imperative.

Every claim of exemption, being a limitation on a right

constitutionally granted to the people, is liberally construed in
favor of disclosure and strictly against the claim of confidentiality.
However, the claim of privilege as a cause for exemption from the
obligation to disclose information must be clearly asserted by
specifying the grounds for the exemption.35 In case of denial of
access to the information, it is the government agency concerned
that has the burden of showing that the information sought to be
obtained is not a matter of public concern, or that the same is
exempted from the coverage of the constitutional
guarantee.36 We reiterate, therefore, that the burden has been
well discharged herein.

The respondents further assert that the information sought fell

within the concept of established privilege provided by
jurisprudence under Section 3 (c) of Rule IV of the Rules
Implementing R.A. No. 6713, the May 23, 2005 meeting being
regarded as a closed-door Cabinet meeting.37 The petitioner,
disagreeing, posits that R.A. No. 6713, by itself, neither provides
exceptions to the constitutional right to information nor specifies
limitations on the State policy of full public disclosure; that the
Implementing Rules and Regulations went beyond the scope of
R.A. No. 6713 in providing exceptions not covered by the law;
that the alleged closed-door Cabinet meeting exception, so as to
fall within the ambit of Section 3(c) of the Rules Implementing
R.A. No. 6713, was not established under settled policy or
jurisprudence; that the reliance on the rulings in Chavez v.
PCGG and Chavez v. PEA-Amari that declared the closed-door
Cabinet meeting as an exception to the right to information was
misplaced considering that the exception was not squarely in
issue in those cases; that the pronouncement could only be
regarded as obiter dicta; that the closed-door Cabinet meeting
exception, assuming though not admitting the same to have been
established by law or settled jurisprudence, could not be
automatically applied to all the CTRM meetings because the CTRM
was different from the Cabinet inasmuch as two of its members,
namely, the Governor of the Bangko Sentral ng Pilipinas and the
Chairman of the Tariff Commission, were not members of the
President's Cabinet; and that the deliberations of the CTRM as a
body merely akin to the Cabinet could not be given the privilege
and confidentiality not expressly provided for by law or
jurisprudence, most especially considering that only by legislative
enactment could the constitutional guarantee to the right to
information be restricted.

We cannot side with the petitioner.

In Senate of the Philippines v. Ermita,38 we have said that

executive privilege is properly invoked in relation to specific
categories of information, not to categories of persons. As such,
the fact that some members of the committee were not part of
the President's Cabinet was of no moment. What should
determine whether or not information was within the ambit of the
exception from the people's right to access to information was not
the composition of the body, but the nature of the information
sought to be accessed. A different holding would only result to
the unwanted situation wherein any concerned citizen, like the
petitioner, invoking the right to information on a matter of public
concern and the State's policy of full public disclosure, could
demand information from any government agency under all
conditions whenever he felt aggrieved by the decision or
recommendation of the latter.

In case of conflict, there is a need to strike a balance between the

right of the people and the interest of the Government to be
protected. Here, the need to ensure the protection of the privilege
of non-disclosure is necessary to allow the free exchange of ideas
among Government officials as well as to guarantee the well-
considered recommendation free from interference of the
inquisitive public.chanrobleslaw

WHEREFORE, the Court DENIES the petition for review

on certiorari; and AFFIRMS the decision of the Regional Trial
Court in Special Civil Action No. 2903, without pronouncement on
costs of suit.

SO ORDERED.cralawlawlibrary

Leonardo-De Castro, (Acting Chairman), Peralta,*Perlas-Bernabe,

and Jardeleza, JJ., concur.chanroblesvirtuallawlibrary

Digest – scribd

VALERIO E. KALAW, G.R. No. 166357

Petitioner,

Present:

CORONA, C.J., Chairperson,

- versus - LEONARDO-DE CASTRO,
BERSAMIN,
DEL CASTILLO, and
PEREZ,⃰ JJ.

MA. ELENA FERNANDEZ, Promulgated:

Respondent. September 19, 2011
x--------------------------------------------------------------
-----x

DECISION

DEL CASTILLO, J.:

A finding of psychological incapacity must be supported by well-established facts. It is

the plaintiffs burden to convince the court of the existence of these facts.

Before the Court is a Petition for Review[1] of the Court of Appeals (CA) May 27, 2004
Decision[2] and December 15, 2004 Resolution[3] in CA-G.R. CV No. 64240, which
reversed the trial courts declaration of nullity of the herein parties marriage. The fallo of
the assailed Decision reads:

WHEREFOREthe appeal is GRANTED, and the assailed Decision

is SET ASIDE and VACATED while the petition for declaration of
nullity of marriage is hereby DISMISSED.

SO ORDERED.[4]

Factual Antecedents

Petitioner Valerio E. Kalaw (Tyrone) and respondent Ma. Elena Fernandez (Malyn) met
in 1973. They maintained a relationship and eventually married in Hong Kong on
November 4, 1976.They had four children, Valerio (Rio), Maria Eva (Ria), Ramon
Miguel (Miggy or Mickey), and Jaime Teodoro (Jay).
Shortly after the birth of their youngest son, Tyrone had an extramarital affair with
Jocelyn Quejano (Jocelyn), who gave birth to a son in March 1983.[5]

In May 1985, Malyn left the conjugal home (the house of her Kalaw in-laws) and her
four children with Tyrone.[6] Meanwhile, Tyrone started living with Jocelyn, who bore
him three more children.[7]
In 1990, Tyrone went to the United States (US) with Jocelyn and their children. He left
his four children from his marriage with Malyn in a rented house in Valle Verde with
only a househelp and a driver.[8] The househelp would just call Malyn to take care of the
children whenever any of them got sick. Also, in accordance with their custody
agreement, the children stayed with Malyn on weekends.[9]

In 1994, the two elder children, Rio and Ria, asked for Malyns permission to go to Japan
for a one-week vacation. Malyn acceded only to learn later that Tyrone brought the
children to the US.[10] After just one year, Ria returned to the Philippines and chose to live
with Malyn.
Meanwhile, Tyrone and Jocelyns family returned to the Philippines and resumed physical
custody of the two younger children, Miggy and Jay. According to Malyn, from that time
on, the children refused to go to her house on weekends because of alleged weekend
plans with their father.[11]

Complaint for declaration of nullity of marriage

On July 6, 1994, nine years since the de facto separation from his wife, Tyrone filed a
petition for declaration of nullity of marriage based on Article 36 of the Family
Code.[12] He alleged that Malyn was psychologically incapacitated to perform and
comply with the essential marital obligations at the time of the celebration of their
marriage. He further claimed that her psychological incapacity was manifested by her
immaturity and irresponsibility towards Tyrone and their children during their co-
habitation, as shown by Malyns following acts:

1. she left the children without proper care and attention as she
played mahjong all day and all night;

2. she left the house to party with male friends and returned in the
early hours of the following day; and

3. she committed adultery on June 9, 1985, which act Tyrone

discovered in flagrante delicto.[13]

During trial,[14] Tyrone narrated the circumstances of Malyns alleged

infidelity. According to him, on June 9, 1985, he and his brother-in-law, Ronald
Fernandez (Malyns brother), proceeded to Hyatt Hotel and learned that Malyn was
occupying a room with a certain Benjie Guevarra (Benjie). When he proceeded to the
said room, he saw Benjie and Malyn inside.[15] At rebuttal, Tyrone elaborated that Benjie
was wearing only a towel around his waist, while Malyn was lying in bed in her
underwear. After an exchange of words, he agreed not to charge Malyn with adultery
when the latter agreed to relinquish all her marital and parental rights.[16] They put their
agreement in writing before Atty. Jose Palarca.

Tyrone presented a psychologist, Dr. Cristina Gates (Dr. Gates), and a Catholic canon
law expert, Fr. Gerard Healy, S.J. (Fr. Healy), to testify on Malyns psychological
incapacity.

Dr. Gates explained on the stand that the factual allegations regarding Malyns behavior
her sexual infidelity, habitual mahjong playing, and her frequent nights-out with friends
may reflect a narcissistic personality disorder (NPD).[17] NPD is present when a person
is obsessed to meet her wants and needs in utter disregard of her significant
others.[18] Malyns NPD is manifest in her utter neglect of her duties as a mother.[19]

Dr. Gates reported that Malyns personality disorder may have been evident even prior to
her marriage because it is rooted in her family background and upbringing, which the
psychologist gathered to be materially deprived and without a proper maternal role
model.[20]

Dr. Gates based her diagnosis on the facts revealed by her interviews with Tyrone,
Trinidad Kalaw (Tyrones sister-in-law), and the son Miggy. She also read the transcript
of Tyrones court testimony.[21]

Fr. Healy corroborated Dr. Gates assessment. He concluded that Malyn was
psychologically incapacitated to perform her marital duties.[22] He explained that her
psychological incapacity is rooted in her role as the breadwinner of her family. This role
allegedly inflated Malyns ego to the point that her needs became priority, while her kids
and husbands needs became secondary.Malyn is so self-absorbed that she is incapable of
prioritizing her familys needs.

Fr. Healy clarified that playing mahjong and spending time with friends are not disorders
by themselves. They only constitute psychological incapacity whenever inordinate
amounts of time are spent on these activities to the detriment of ones familial
duties.[23] Fr. Healy characterized Malyns psychological incapacity as grave and
incurable.[24]

He based his opinion on his interview with Tyrone, the trial transcripts, as well as the
report of Dr. Natividad Dayan (Dr. Dayan), Malyns expert witness.[25] He clarified that he
did not verify the truthfulness of the factual allegations regarding Malyns habits because
he believed it is the courts duty to do so.[26] Instead, he formed his opinion on the
assumption that the factual allegations are indeed true.

Malyns version

Malyn denied being psychologically incapacitated.[27] While she admitted playing

mahjong, she denied playing as frequently as Tyrone alleged. She maintained that she did
so only two to three times a week and always between 1 p.m. to 6 p.m. only.[28] And in
those instances, she always had Tyrones permission and would often bring the children
and their respective yayas with her.[29] She maintained that she did not neglect her duties
as mother and wife.

Malyn admitted leaving the conjugal home in May 1985. She, however, explained that
she did so only to escape her physically abusive husband.[30] On the day she left, Tyrone,
who preferred to keep Malyn a housewife, was upset that Malyn was preparing to go to
work. He called up the security guards and instructed them not to let Malyn out of the
house. Tyrone then placed cigarette ashes on Malyns head and proceeded to lock the
bedroom doors. Fearing another beating, Malyn rushed out of their bedroom and into her
mother-in-laws room. She blurted that Tyrone would beat her up again so her mother-in-
law gave her P300 to leave the house.[31] She never returned to their conjugal home.

Malyn explained that she applied for work, against Tyrones wishes, because she wanted
to be self-sufficient. Her resolve came from her discovery that Tyrone had a son by
Jocelyn and had secretly gone to the US with Jocelyn.[32]

Malyn denied the allegation of adultery. She maintained that Benjie only booked a room
at the Hyatt Hotel for her because she was so drunk after partying with friends. She
admitted finding her brother Ronald and Tyrone at the door of the Hyatt Hotel room, but
maintained being fully clothed at that time.[33] Malyn insisted that she wrote the letter
relinquishing all her spousal and parental rights under duress.[34]

After the Hyatt Hotel incident, Malyn only saw her children by surreptitiously visiting
them in school. She later obtained partial custody of the children as an incident to the
legal separation action filed by Tyrone against her (which action was subsequently
dismissed for lack of interest).

As an affirmative defense, Malyn maintained that it was Tyrone who was suffering from
psychological incapacity, as manifested by his drug dependence, habitual drinking,
womanizing, and physical violence.[35] Malyn presented Dr. Dayan a clinical
psychologist, as her expert witness.

Dr. Dayan interviewed Tyrone, Malyn, Miggy/Mickey, Jay, and Ria for her
psychological evaluation of the spouses. The factual narrations culled from these
interviews reveal that Tyrone found Malyn a lousy mother because of her mahjong
habit,[36] while Malyn was fed up with Tyrones sexual infidelity, drug habit, and physical
abuse.[37] Dr. Dayan determined that both Tyrone and Malyn were behaviorally
immature. They encountered problems because of their personality differences, which
ultimately led to the demise of their marriage. Her diagnostic impressions are
summarized below:

The marriage of Tyrone and Malyn was a mistake from the very
beginning. Both of them were not truly ready for marriage even after two
years of living together and having a child. When Malyn first met Tyrone
who showered her with gifts, flowers, and affection she resisted his
overtures. She made it clear that she could take him or leave him. But the
minute she started to care, she became a different person clingy and
immature, doubting his love, constantly demanding reassurance that she
was the most important person in his life. She became relationship-
dependent. It appears that her style then was when she begins to care for a
man, she puts all her energy into him and loses focus on herself. This
imbalance between thinking and feeling was overwhelming to Tyrone who
admitted that the thought of commitment scared him. Tyrone admitted that
when he was in his younger years, he was often out seeking other
women. His interest in them was not necessarily for sex, just for fun
dancing, drinking, or simply flirting.
 Both of them seem behaviorally immature. For some time, Malyn adapted
to her husband who was a moody man with short temper and unresolved
issues with parents and siblings. He was a distancer, concerned more about
his work and friends tha[n] he was about spending time with his
family. Because of Malyns and Tyrones backgrounds (both came from
families with high conflicts) they experienced turmoil and chaos in their
marriage. The conflicts they had struggled to avoid suddenly galloped out
of control Their individual personalities broke through, precipitating the
demise of their marriage.[38]

Dr. Dayan likewise wrote in her psychological evaluation report that Malyn
exhibited significant, but not severe, dependency, narcissism, and
compulsiveness.[39]

On the stand, the psychologist elaborated that while Malyn had relationship problems
with Tyrone, she appeared to have a good relationship with her kids.[40] As for Tyrone, he
has commitment issues which prevent him from committing himself to his duties as a
husband. He is unable to remain faithful to Malyn and is psychologically incapacitated to
perform this duty.[41]

Childrens version

The children all stated that both their parents took care of them, provided for their needs,
and loved them. Rio testified that they would accompany their mother to White Plains on
days that she played mahjong with her friends. None of them reported being neglected or
feeling abandoned.

The two elder kids remembered the fights between their parents but it was only Ria who
admitted actually witnessing physical abuse inflicted on her mother.[42] The two elder
kids also recalled that, after the separation, their mother would visit them only in
school.[43]

The children recalled living in Valle Verde with only the househelp and driver during the
time that their dad was abroad.[44] While they did not live with their mother while they
were housed in Valle Verde, the kids were in agreement that their mother took care of
them on weekends and would see to their needs. They had a common recollection that
the househelp would call their mother to come and take care of them in Valle Verde
whenever any of them was sick.[45]
Other witnesses

Dr. Cornelio Banaag, Tyrones attending psychiatrist at the Manila Sanitarium, testified
that, for the duration of Tyrones confinement, the couple appeared happy and the wife
was commendable for the support she gave to her spouse.[46] He likewise testified that
Tyrone tested negative for drugs and was not a drug dependent.[47]

Malyns brother, Ronald Fernandez, confirmed Tyrones allegation that they found Malyn
with Benjie in the Hyatt hotel room. Contrary to Tyrones version, he testified that neither
he nor Tyrone entered the room, but stayed in the hallway. He likewise did not recall
seeing Benjie or Malyn half-naked.[48]

Tyrone then presented Mario Calma (Mario), who was allegedly part of Malyns group of
friends. He stated on the stand that they would go on nights-out as a group and Malyn
would meet with a male musician-friend afterwards.[49]

Social worker

The trial court ordered the court social worker, Jocelyn V. Arre (Arre), to conduct a social
case study on the parties as well as the minor children. Arre interviewed the parties
Tyrone and Malyn; the minor children Miggy/Mickey and Jay; Tyrones live-in partner,
Jocelyn;[50] and Tyrone and Malyns only daughter, Ria. While both parents are financially
stable and have positive relationships with their children, she recommended that the
custody of the minor children be awarded to Malyn. Based on the interviews of family
members themselves, Malyn was shown to be more available to the children and to
exercise better supervision and care. The social worker commended the fact that even
after Malyn left the conjugal home in 1985, she made efforts to visit her children
clandestinely in their respective schools. And while she was only granted weekend
custody of the children, it appeared that she made efforts to personally attend to their
needs and to devote time with them.[51]
On the contrary, Tyrone, who had custody of the children since the couples de
facto separation, simply left the children for several years with only a maid and a driver to
care for them while he lived with his second family abroad.[52] The social worker found
that Tyrone tended to prioritize his second family to the detriment of his children with
Malyn. Given this history during the formative years of the children, the social worker
did not find Tyrone a reliable parent to whom custody of adolescents may be awarded.

Ruling of the Regional Trial Court[53]

After summarizing the evidence presented by both parties, the trial court concluded that
both parties are psychologically incapacitated to perform the essential marital obligations
under the Family Code. The courts Decision is encapsulated in this paragraph:

From the evidence, it appears that parties are both suffering from
psychological incapacity to perform their essential marital obligations
under Article 36 of the Family Code. The parties entered into a marriage
without as much as understanding what it entails. They failed to commit
themselves to its essential obligations: the conjugal act, the community of
life and love, the rendering of mutual help, the procreation and education of
their children to become responsible individuals. Parties psychological
incapacity is grave, and serious such that both are incapable of carrying out
the ordinary duties required in marriage. The incapacity has been clinically
established and was found to be pervasive, grave and incurable.[54]
The trial court then declared the parties marriage void ab initio pursuant to Article 36 of
the Family Code.[55]

Ruling of the Court of Appeals[56]

Malyn appealed the trial courts Decision to the CA. The CA reversed the trial courts
ruling because it is not supported by the facts on record. Both parties allegations and
incriminations against each other do not support a finding of psychological
incapacity. The parties faults tend only to picture their immaturity and irresponsibility in
performing their marital and familial obligations.At most, there may be sufficient
grounds for a legal separation.[57] Moreover, the psychological report submitted by
petitioners expert witness, Dr. Gates, does not explain how the diagnosis of NPD came to
be drawn from the sources. It failed to satisfy the legal and jurisprudential requirements
for the declaration of nullity of marriage.[58]

Tyrone filed a motion for reconsideration[59] but the same was denied on December 15,
2004.[60]
Petitioners arguments

Petitioner Tyrone argues that the CA erred in disregarding the factual findings of the trial
court, which is the court that is in the best position to appreciate the evidence. He opines
that he has presented preponderant evidence to prove that respondent is psychologically
incapacitated to perform her essential marital obligations, to wit:

a) the expert witnesses, Dr. Gates and Fr. Healy, proved on the stand that
respondents egocentric attitude, immaturity, self-obsession and self-centeredness
were manifestations of respondents NPD;[61]

b) these expert witnesses proved that respondents NPD is grave and

incurable and prevents her from performing her essential martial
obligations;[62] and

c) that respondents NPD existed at the time of the celebration of the

marriage because it is rooted in her upbringing, family background, and socialite
lifestyle prior to her marriage.[63]

Petitioner stresses that even respondent insisted that their marriage is void because of
psychological incapacity, albeit on petitioners part.[64]

Respondents arguments

Respondent maintains that Tyrone failed to discharge his burden of proving her alleged
psychological incapacity.[65] She argues that the testimonies of her children and the
findings of the court social worker to the effect that she was a good, loving, and attentive
mother are sufficient to rebut Tyrones allegation that she was negligent and
irresponsible.[66]

She assails Dr. Gatess report as one-sided and lacking in depth. Dr. Gates did not
interview her, their common children, or even Jocelyn. Moreover, her report failed to
state that Malyns alleged psychological incapacity was grave and incurable.[67] Fr. Healys
testimony, on the other hand, was based only on Tyrones version of the facts.[68]
Malyn reiterates the appellate courts ruling that the trial court Decision is intrinsically
defective for failing to support its conclusion of psychological incapacity with factual
findings.

Almost four years after filing her memorandum, respondent apparently had a change of
heart and filed a Manifestation with Motion for Leave to Withdraw Comment and
Memorandum.[69]She manifested that she was no longer disputing the possibility that
their marriage may really be void on the basis of Tyrones psychological incapacity. She
then asked the Court to dispose of the case with justice.[70] Her manifestation and motion
were noted by the Court in its January 20, 2010 Resolution.[71]

Issue

Whether petitioner has sufficiently proved that respondent suffers from psychological
incapacity

Our Ruling

The petition has no merit. The CA committed no reversible error in setting aside the trial
courts Decision for lack of legal and factual basis.

A petition for declaration of nullity of marriage is governed by Article 36 of the Family

Code which provides:
ART. 36. A marriage contracted by any party who, at the time of the
celebration, was psychologically incapacitated to comply with the essential
marital obligations of marriage, shall likewise be void even if such
incapacity becomes manifest only after its solemnization.

Psychological incapacity is the downright incapacity or inability to take cognizance of

and to assume the basic marital obligations.[72] The burden of proving psychological
incapacity is on the plaintiff.[73] The plaintiff must prove that the incapacitated party,
based on his or her actions or behavior, suffers a serious psychological disorder that
completely disables him or her from understanding and discharging the essential
obligations of the marital state. The psychological problem must be grave, must have
existed at the time of marriage, and must be incurable.[74]
In the case at bar, petitioner failed to prove that his wife (respondent) suffers from
psychological incapacity. He presented the testimonies of two supposed expert witnesses
who concluded that respondent is psychologically incapacitated, but the conclusions of
these witnesses were premised on the alleged acts or behavior of respondent which had
not been sufficiently proven.Petitioners experts heavily relied on petitioners allegations of
respondents constant mahjong sessions, visits to the beauty parlor, going out with friends,
adultery, and neglect of their children. Petitioners experts opined that respondents alleged
habits, when performed constantly to the detriment of quality and quantity of time
devoted to her duties as mother and wife, constitute a psychological incapacity in the
form of NPD.

But petitioners allegations, which served as the bases or underlying premises of

the conclusions of his experts, were not actually proven. In fact, respondent presented
contrary evidence refuting these allegations of the petitioner.

For instance, petitioner alleged that respondent constantly played mahjong and neglected
their children as a result. Respondent admittedly played mahjong, but it was not proven
that she engaged in mahjong so frequently that she neglected her duties as a mother and a
wife. Respondent refuted petitioners allegations that she played four to five times a
week. She maintained it was only two to three times a week and always with the
permission of her husband and without abandoning her children at home. The children
corroborated this, saying that they were with their mother when she played mahjong in
their relatives home. Petitioner did not present any proof, other than his own testimony,
that the mahjong sessions were so frequent that respondent neglected her family. While
he intimated that two of his sons repeated the second grade, he was not able to link this
episode to respondents mahjong-playing. The least that could have been done was to
prove the frequency of respondents mahjong-playing during the years when these two
children were in second grade. This was not done. Thus, while there is no dispute that
respondent played mahjong, its alleged debilitating frequency and adverse effect on the
children were not proven.
Also unproven was petitioners claim about respondents alleged constant visits to the
beauty parlor, going out with friends, and obsessive need for attention from other
men. No proof whatsoever was presented to prove her visits to beauty salons or her
frequent partying with friends. Petitioner presented Mario (an alleged companion of
respondent during these nights-out) in order to prove that respondent had affairs with
other men, but Mario only testified that respondent appeared to be dating other
men. Even assuming arguendo that petitioner was able to prove that respondent had an
extramarital affair with another man, that one instance of sexual infidelity cannot, by
itself, be equated with obsessive need for attention from other men. Sexual infidelity per
se is a ground for legal separation, but it does not necessarily constitute psychological
incapacity.
Given the insufficiency of evidence that respondent actually engaged in the behaviors
described as constitutive of NPD, there is no basis for concluding that she was indeed
psychologically incapacitated. Indeed, the totality of the evidence points to the opposite
conclusion. A fair assessment of the facts would show that respondent was not totally
remiss and incapable of appreciating and performing her marital and parental duties. Not
once did the children state that they were neglected by their mother. On the contrary, they
narrated that she took care of them, was around when they were sick, and cooked the
food they like. It appears that respondent made real efforts to see and take care of her
children despite her estrangement from their father.There was no testimony whatsoever
that shows abandonment and neglect of familial duties. While petitioner cites the fact that
his two sons, Rio and Miggy, both failed the second elementary level despite having
tutors, there is nothing to link their academic shortcomings to Malyns actions.

After poring over the records of the case, the Court finds no factual basis for the
conclusion of psychological incapacity. There is no error in the CAs reversal of the trial
courts ruling that there was psychological incapacity. The trial courts Decision merely
summarized the allegations, testimonies, and evidence of the respective parties, but it did
not actually assess the veracity of these allegations, the credibility of the witnesses, and
the weight of the evidence. The trial court did not make factual findings which can serve
as bases for its legal conclusion of psychological incapacity.

What transpired between the parties is acrimony and, perhaps, infidelity, which
may have constrained them from dedicating the best of themselves to each other and to
their children. There may be grounds for legal separation, but certainly not psychological
incapacity that voids a marriage.

WHEREFORE, premises considered, the petition is DENIED. The Court of Appeals

May 27, 2004 Decision and its December 15, 2004 Resolution in CA-G.R. CV No.
64240 are AFFIRMED.
SO ORDERED.

VALERIO E. KALAW, Petitioner,

vs.

ELENA FERNANDEZ, Respondent.

G.R. No. 166357 January 14, 2015

Read the 2011 Kalaw v. Fernandez case digest HERE.

PONENTE: Bersamin, J.

TOPIC: Psychological incapacity, Declaration of Nullity of Marriage

FACTS:

In the case at bar, Kalaw presented the testimonies of two

supposed expert witnesses who concluded that respondent is
psychologically incapacitated. Petitioner’s experts heavily relied on
petitioner’s allegations of respondent’s constant mahjong sessions, visits to
the beauty parlor, going out with friends, adultery, and neglect of their
children. Petitioner’s experts opined that respondent’s alleged habits, when
performed constantly to the detriment of quality and quantity of time
devoted to her duties as mother and wife, constitute a psychological
incapacity in the form of NPD.

However, the Supreme Court in its September 19, 2011

decision dismissed the complaint for declaration of nullity of the marriage
on the ground that there was no factual basis for the conclusion of
psychological incapacity.

ISSUE:
 Whether or not the marriage was void on the ground of
psychological incapacity.

HELD:

YES. The Court in granting the Motion for Reconsideration held

that Fernandez was indeed psychologically incapacitated as they relaxed
the previously set forth guidelines with regard to this case.

Note: Molina guidelines were not abandoned, expert opinions were just
given much respect in this case.

Guidelines too rigid, thus relaxed IN THIS CASE

The Court held that the guidelines set in the case of Republic v. CA
have turned out to be rigid, such that their application to every instance
practically condemned the petitions for declaration of nullity to the fate of
certain rejection. But Article 36 of the Family Code must not be so strictly
and too literally read and applied given the clear intendment of the drafters
to adopt its enacted version of “less specificity” obviously to enable “some
resiliency in its application.” Instead, every court should approach the issue
of nullity “not on the basis of a priori assumptions, predilections or
generalizations, but according to its own facts” in recognition of the verity
that no case would be on “all fours” with the next one in the field of
psychological incapacity as a ground for the nullity of marriage; hence,
every “trial judge must take pains in examining the factual milieu and
the appellate court must, as much as possible, avoid substituting its own
judgment for that of the trial court.

In the task of ascertaining the presence of psychological incapacity

as a ground for the nullity of marriage, the courts, which are
concededly not endowed with expertise in the field of
psychology, must of necessity rely on the opinions of experts in
order to inform themselves on the matter, and thus enable
themselves to arrive at an intelligent and judicious
judgment. Indeed, the conditions for the malady of being grave,
antecedent and incurable demand the in-depth diagnosis by experts.
Personal examination by party not required; totality of evidence
must be considered

We have to stress that the fulfillment of the constitutional mandate

for the State to protect marriage as an inviolable social institution only
relates to a valid marriage. No protection can be accorded to a marriage
that is null and void

ab initio, because such a marriage has no legal existence.

There is no requirement for one to be declared psychologically

incapacitated to be personally examined by a physician, because what is
important is the presence of evidence that adequately establishes the
party’s psychological incapacity. Hence, “if the totality of evidence
presented is enough to sustain a finding of psychological incapacity, then
actual medical examination of the person concerned need not be resorted
to.”

Verily, the totality of the evidence must show a link, medical or the
like, between the acts that manifest psychological incapacity and the
psychological disorderitself. If other evidence showing that a certain
condition could possibly result from an assumed state of facts existed in the
record, the expert opinion should be admissible and be weighed as an aid
for the court in interpreting such other evidence on the causation.

Indeed, an expert opinion on psychological incapacity should be

considered as conjectural or speculative and without any probative value
only in the absence of other evidence to establish causation. The expert’s
findings under such circumstances would not constitute hearsay that would
justify their exclusion as evidence.

Expert opinion considered as decisive evidence as to

psychological and emotional temperaments

The findings and evaluation by the RTC as the trial court deserved
credence because it was in the better position to view and examine the
demeanor of the witnesses while they were testifying. The position and role
of the trial judge in the appreciation of the evidence showing the
psychological incapacity were not to be downplayed but should be accorded
due importance and respect.

The Court considered it improper and unwarranted to give to such

expert opinions a merely generalized consideration and treatment, least of
all to dismiss their value as inadequate basis for the declaration of the
nullity of the marriage. Instead, we hold that said experts sufficiently and
competently described the psychological incapacity of the respondent
within the standards of Article 36 of the Family Code. We uphold the
conclusions reached by the two expert witnesses because they were largely
drawn from the case records and affidavits, and should not anymore be
disputed after the RTC itself had accepted the veracity of the petitioner’s
factual premises.

The Court also held that the courts must accord weight to expert
testimony on the psychological and mental state of the parties in cases for
the declaration of the nullity of marriages, for by the very nature of Article
36 of the Family Code the courts, “despite having the primary task
and burden of decision-making, must not discount but, instead,
must consider as decisive evidence the expert opinion on the
psychological and mental temperaments of the parties.”

Willfully exposing children to gambling constitutes neglect of

parental duties

The frequency of the respondent’s mahjong playing should not

have delimited our determination of the presence or absence of
psychological incapacity. Instead, the determinant should be her obvious
failure to fully appreciate the duties and responsibilities of parenthood at
the time she made her marital vows. Had she fully appreciated such duties
and responsibilities, she would have known that bringing along her
children of very tender ages to her mahjong sessions would expose them to
a culture of gambling and other vices that would erode their moral fiber.
Nonetheless, the long-term effects of the respondent’s obsessive mahjong
playing surely impacted on her family life, particularly on her very young
children.
 The fact that the respondent brought her children with her to her
mahjong sessions did not only point to her neglect of parental duties, but
also manifested her tendency to expose them to a culture of gambling. Her
willfully exposing her children to the culture of gambling on every occasion
of her mahjong sessions was a very grave and serious act of subordinating
their needs for parenting to the gratification of her own personal and
escapist desires.

The respondent revealed her wanton disregard for her children’s

moral and mental development. This disregard violated her duty as a
parent to safeguard and protect her children.

FALLO:

WHEREFORE, the Court GRANTS the Motion for Reconsideration;

REVERSES and SETS ASIDE the decision promulgated on September 19,
2011; and REINSTATES the decision rendered by the Regional Trial Court
declaring the marriage between the petitioner and the respondent on
November 4, 1976 as NULL AND VOID AB JN/TIO due to the
psychological incapacity of the parties pursuant to Article 36 of the
Family Code.

G.R. No. 188016 January 14, 2015

REPUBLIC OF THE PHILIPPINES, represented by the COMMISSIONER

OF INTERNAL REVENUE, Petitioner,
vs.
TEAM (PHILS.) ENERGY CORPORATION (formerly MIRANT (PHILS.)
ENERGY CORPORATION), Respondent.

DECISION

BERSAMIN, J.:

The Republic of the Philippines, represented by the Commissioner of

Internal Revenue, appeals the decision promulgated on April 15,
2009,1 whereby the Court of Tax Appeals En Banc (CTA En Banc) upheld
the decision of the CTA in Division rendered on May 15, 2008 ordering the
Commissioner of Internal Revenue to refund or to issue a tax credit
certificate in favor of the respondent in the modified amount
of P16,366,412.59 representing the respondent's excess and unutilized
creditable withholding taxes for calendar years 2002 and 2003.
Antecedents

Respondent Mirant (Philippines) Energy Corporation, a domestic

corporation, is primarily engaged in the business of developing, designing,
constructing, erecting, assembling, commissioning, owning, operating,
maintaining, rehabilitating, and managing gas turbine and other power
generating plants and related facilities for conversion into electricity, coal,
distillate and other fuel provided by and under contract with the
Government, or any subdivision, instrumentality or agency thereof, or any
government-owned or controlled corporations or any entity engaged in the
development, supply or distribution of energy.2 On August 16, 2001, the
respondent filed with the Securities and Exchange Commission (SEC) its
Amended Articles of Incorporation stating its intent to change its corporate
name from Mirant (Philippines) Mobile Corporation to Mirant (Philippines)
Energy Corporation; and to include the business of supplying and
delivering electricity and providing services necessary in connection with
the supply or delivery of electricity. The SEC approved the amendment on
October 22, 2001.3

The respondent filed its annual income tax return (ITR) for calendar years
2002 and 2003 on April 15, 2003 and April 15, 2004, respectively, reflecting
overpaid income taxes or excess creditable withholding taxes in the
amounts of P6,232,003.00 and P10,134,410.00 for taxable years 2002 and
2003, respectively.4 It indicated in the ITRs its option for the refund of the
tax overpayments for calendar years 2002 and 2003.5

On March 22, 2005, the respondent filed an administrative claim for refund
or issuance of tax credit certificate with the Bureau of Internal Revenue
(BIR) in the total amount of P16,366,413.00, representing the overpaid
income tax or the excess creditable withholding tax of the respondent for
calendar years 2002 and 2003.6

Due to the inaction of the BIR and in order to toll the running of the two-
year prescriptive period for claiming a refund under Section 229 of the
National Internal Revenue Code (NIRC) of 1997, the respondent filed a
petition for review in the Court of Tax Appeals (CTA) on April 14, 2005.7 In
the answer, the petitioner interposed the following special and affirmative
defenses, to wit:

xxxx

3. He reiterates and repleads the preceding paragraphs of this

answer as part of his Special and Affirmative Defenses;

4. Petitioner’s claim for refund is still subject to the administrative

routinary investigation/examination by the respondent's Bureau;

5. Taxes paid and collected are presumed to have been made in

accordance with law and implementing regulations, hence, not
refundable.

6. Petitioner's claim for refund/issuance of tax credit in the amount

of P16,366,413.00, as alleged overpaid income taxes or excess
creditable withholding taxes for taxable year ended December 31,
2002 and December 31, 2003 were not fully substantiated by proper
documentary evidence.

7. Petitioner failed to prove that the amount of P16,366,413.00as

alleged overpaid income taxes or excess creditable withholding taxes
for taxable year ended December 31, 2002 and December 31, 2003
were included as part of its gross income for the said taxable years
2002 and 2003, and did not carry-over to the succeeding taxable
quarter/year the subject of its claim, and the same were not utilized in
payment of its income tax liability for the succeeding taxable
quarter/year.

8. The filing of the instant petition for review with this Honorable Court
was premature since respondent was not given an ample opportunity
to examine its claim for refund;

9. Assuming but without admitting that petitioner is entitled to tax

refund, it is incumbent upon the latter to show that it complied with
the provisions of Sections 204in relation to Section 230 (now 229)of
the Tax Code. Otherwise, its failure to prove the same is fatal to its
claim for refund.
 10. Claims for refund are construed strictly against the claimant for
the same partake the nature of exemption from taxation
(Commissioner of Internal Revenue v. Ledesma, 31 SCRA 95) and
as such, they are looked upon with disfavor (Western Minolco Corp.
v. Commissioner of Internal Revenue, 124 SCRA 121).8

On May 15, 2008, the CTA in Division rendered its decision in favor of the
respondent, disposing thusly:

WHEREFORE, the instant "Petition for Review" is hereby GRANTED.

Accordingly, respondent is hereby ORDERED TO REFUND or TO ISSUE
A TAX CREDIT CERTIFICATE in favor of petitioner in the modified amount
of SIXTEEN MILLION THREE HUNDRED SIXTY-SIX THOUSAND FOUR
HUNDRED TWELVE AND 59/100 (P16,366,412.59), representing
petitioner's excess and unutilized creditable withholding taxes for calendar
years 2002 and 2003. SO ORDERED.9

The CTA in Division found that the respondent had signified in its ITRs for
the same years its intent to have its excess creditable tax withheld for
calendar years 2002 and 2003 be refunded; that the respondent’s
administrative and judicial claims for refund had been timely filed within the
two-year prescriptive period under Section 204 (C) in relation to Section
229 of the NIRC; that the fact of withholding had been established by the
respondent because it had submitted its certificate of creditable tax
withheld at source showing that the aggregate amount of P17,168,749.60
constituted the CWT withheld by the respondent onits services to Republic
Cement Corporation, Mirant (Philippines) Industrial Power Corporation and
Solid Development Corporation for taxable years 2002 and 2003; and that
the income from which the CWT had been withheld was duly declared as
part of the respondent’s income in itsannual ITRs for 2002 and 2003.

The petitioner then filed a motion for reconsideration, but the CTA in
Division denied the motion on September 5, 2008.

The petitioner brought a petition for review before the CTA En Banc raising
two issues, namely:

I.

THE SECOND DIVISION OF THISHONORABLE COURT ERRED IN

HOLDING THAT RESPONDENT IS ENTITLED TO ITS CLAIMED
 REFUND OF EXCESS ANDUNUTILIZED CREDITABLE
WITHHOLDING TAXES FOR CALENDAR YEARS 2002 AND 2003,
SINCE THERE WAS A VIOLATION ON THE PART OF THE
RESPONDENT TO FULLY COMPLYWITH THE REQUIREMENTS
UNDER SECTION 76 OF THE 1997 TAX CODE.

II.

THE SECOND DIVISION OF THIS HONORABLE COURT ERRED

IN NOT APPLYING THE RULE THAT TAX REFUNDS BEING IN
THE NATURE OF TAX EXEMPTION ARE CONSTRUED
STRICTISSIMI JURIS AGAINST THE PERSON OR ENTITY
CLAIMING THE EXEMPTION.10

On April 15, 2009, however, the CTA En Banc rendered its assailed
judgment, disposing thus: WHEREFORE, the instant petition is hereby
DISMISSED. Accordingly, the assailed Decision and Resolution are hereby
AFFIRMED.

SO ORDERED.11

The CTA En Banc held that the defenses raised by the petitioner were
general and standard arguments to oppose any claim for refund by a
taxpayer; that the trial proper was conducted in the CTA in Division, during
which the respondent presented evidence of its entitlement to the refund
and in negation of the defenses of the petitioner; and that the petitioner
raised the issue on the non-presentment of the respondent’s quarterly
returns for 2002 and 2003 only in the petition for review, which was not
allowed, stating thusly:

This cannot be allowed. Petitioner had the opportunity to raise this issue
either during the trial or at the latest, in his Motion for Reconsideration of
the assailed Decision of the Court in Division but he cited only the following
grounds in his motion: x x x

xxxx

In its assailed Resolution, the Court in Division reiterated its finding that
respondent had complied with the substantiation requirements for its
entitlement to refund. It also ruled that the alleged under-declaration of
respondent cannot be determined by the Court since it is the duty of the
BIR to investigate and confirm the truthfulness of each and every item in
the ITR. It finally declared that respondent, by presenting copies of CWT
certificates of unutilized CWT, sufficiently complied with the requirements of
the fact of withholding.

Thus, petitioner's averment that Section 76 of the NIRC speaks of quarterly

income tax payments which consequently requires the offer in evidence of
quarterly income tax returns is raised for the first time on appeal with the
Court En Banc. It is a well-settled rule that points of law, theories, issues
and arguments not adequately brought to the attention of the lower court
need not be considered by the reviewing court as they cannot be raised for
the first time on appeal. x x x

xxxx

In the present case, petitioner could have simply exercised his power to
examine and verify respondent's claim for refund by presenting the latter's
quarterly income tax returns. The BIR ought to have on file the originals or
copies of respondent's quarterly income tax returns for the subject years,
on the basis of which it could rebut respondent's claim that it did not carry-
over its unutilized and excess creditable withholding taxes for taxable years
2002 and 2003 to the succeeding taxable quarters of taxable years 2003
and 2004. Petitioner's failure to present these vital documents before the
Court in Division to support his contention against the grant of a tax refund
to respondent, is fatal.

At any rate, Section 76 of the 1997 NIRC speaks only of the filing of the
Final Adjusted Return and as held by the Supreme Court, the Annual ITR
or "(t)he Final Adjustment Return is the most reliable first hand evidence of
corporate acts pertaining to income taxes. In it are found the itemization
and summary of additions to and deductions from income taxes due. These
entries are not without rhyme or reason. They are required, because they
facilitate the tax administration process." And in this case, respondent
offered in evidence its Annual ITRs for calendar years 2002, 2003, and
2004.12

As to whether the respondent proved its entitlement to the refund, the CTA
En Banc declared:

However, petitioner's entitlement torefund is still subject to the satisfaction

of the requirements laid down by the NIRC of 1997, as amended, namely:
 1. That the claim for refund was filed within the two-year reglamentary
period pursuant to Section 230 of the Tax Code, as amended;

2. That the fact of withholding isestablished by a copy of the

statement duly issued by the payor to the payee showing the amount
paid and the amount withheld therefrom; and

3. That the income upon which the taxes were withheld is included as
part of the gross income declared in the income tax return of the
recipient.

Petitioner complied with the first requisite. The subject claim involves
calendar years 2002 and 2003. Petitioner filed its Annual Income Tax
Returns on April 15, 2003 and April 15, 2004. Counting from these dates,
petitioner had until April 15, 2005 and April 15, 2006 within which to file its
administrative and judicial claims for refund. Petitioner filed with the BIR its
administrative claim for refund on March 22, 2005. The instant petition was
filed on April 15,2005. Hence, both the administrative and judicial claims for
refund weretimely filed within the two-year prescriptive period.

Anent the second requirement, the Supreme Court enunciated in the case
of Banco Filipino Savings and Mortgage Bank v. Court of Appeals, Court of
Tax Appeals and Commissioner of Internal Revenue that the fact of
withholding isestablished by a copy of the statement duly issued by the
payor to the payee through the Certificates of Creditable Taxes Withheld at
Source. In the present case, petitioner submitted to this Court as part of its
documentary evidence ten (10) Certificates of Creditable Taxes Withheld at
Source. x x x

xxxx

The aggregate amount of P17,168,749.60 constitutes the creditable

withholding taxes withheld from the Certificates of Creditable Tax Withheld
at Source on its services to Republic Cement Corporation, Mirant
(Philippines) Industrial Power Corporation and Solid Development
Corporation for taxable years 2002 and 2003.

Regarding the third requisite, the income from which the creditable taxes
were withheld were duly declaredas part of petitioner's income in its Annual
Income Tax Returns for 2002 and 2003.13 x x x
Aggrieved, the petitioner has brought this appeal.

Issue

The issue is whether or not the respondent proved its entitlement to the
refund.

The petitioner asserts the necessity of submission of the quarterly return of

the respondent to prove its entitlement to the refund pursuant to Sec. 76 of
the NIRC because such quarterly returns would establish the correctness
of the total amount of payments made and the taxes due as reported on the
adjusted return at the end of the year. The petitioner insists that the amount
claimed for refund was not carried over to the succeeding year; that the
submission of the quarterly return would prevent the possibility of a
claimant carrying over the excess credit and then claiming a refund for it;
that the final adjustment return was not sufficient to establish the
respondent’s claim for refund because it only reflected the sum of the
payments made and the taxes due for the year; that the quarterly return
was necessary to prove that the sum, as stated in the adjusted return, was
correct; and that should the respondent chose to carry over the previous
year’s excess credit, the quarterly returns would prove that the carrying-
over was properly done during the succeeding year.

In its comment/opposition, the respondent, while admitting having the

burden of proving the factual basis for its claim for refund, contends that it
discharged its burden. It counters that with the presentation of its annual
ITRs for the years 2002, 2003 and 2004, it already properly established
that its excess creditable withholding taxes for taxable years 2002 and
2003 were not carried over to succeeding taxable periods.

In its reply, the petitioner states that the issue on the respondent’s failure to
present its quarterly income tax returns for taxable years 2002 and 2003,
even if not raised by the petitioner at the trial, could be raised before the
CTA En Banc, because it was interposed as a defense in the answer; and
that every issue raised in an answer may be raised on appeal even if it was
not taken up in the court of original jurisdiction.

Ruling

The petition is without merit.

Section 76 of the NIRC outlines the mechanisms and remedies that a
corporate taxpayer may opt to exercise, viz:

Section 76. Final Adjusted Return.- Every corporation liable to tax under
Section 27 shall file a final adjustment return covering the total taxable
income for the preceding calendar of fiscal year. If the sum of the quarterly
tax payments made during the said taxable year is not equal to the total tax
due on the entire taxable income of that year, the corporation shall either:

(A) Pay the balance of the tax still due; or

(B) Carry over the excess credit; or

(C) Be credited or refunded withthe excess amount paid, as the case

may be.

In case the corporation is entitled to a tax credit or refund of the excess

estimated quarterly income taxes paid, the excess amount shown on its
final adjustment return may be carried over and credited against the
estimated quarterly income tax liabilities for the taxable quarters of the
succeeding taxable years. Once the option to carry over and apply the
excess quarterly income tax against income tax due for the taxable years of
the succeeding taxable years has been made, such option shall be
considered irrevocable for that taxable period and no application for cash
refund or issuance of a tax credit certificate shall be allowed therefor.
(emphasis supplied) The two options are alternative and not cumulative in
nature, that is, the choice of one precludes the other. The logic behind the
rule, according to Philam Asset Management, Inc. v. Commissioner of
Internal Revenue,14 is to ease tax administration, particularly the self-
assessment and collection aspects. In Philam Asset Management, Inc., the
Court expounds on the two alternative options of a corporate taxpayer on
how the choice of one option precludes the other, viz:

The first option is relatively simple. Any tax on income that is paid in excess
of the amount due the government may be refunded, provided that a
taxpayer properly applies for the refund.

The second option works by applying the refundable amount, as shown on

the FAR of a given taxable year, against the estimated quarterly income tax
liabilities of the succeeding taxable year.
These two options under Section 76 are alternative in nature. The choice of
one precludes the other. Indeed, in Philippine Bank of Communications v.
Commissioner of Internal Revenue, the Court ruled that a corporation must
signify its intention – whether to request a tax refund or claim a tax credit–
by marking the corresponding option box provided in the FAR. While a
taxpayer is required to mark its choice in the form provided by the BIR, this
requirement is only for the purpose of facilitating tax collection.

One cannot get a tax refund and a tax credit at the same time for the same
excess income taxes paid. x x x (emphasis supplied)

In Commissioner of Internal Revenuev. Bank of the Philippine Islands,15 the

Court, citing the pronouncement in Philam Asset Management, Inc., points
out that Section 76 of the NIRC of 1997 is clear and unequivocal in
providing that the carry-over option, once actually or constructively chosen
by a corporate taxpayer, becomes irrevocable. The Court explains: Hence,
the controlling factor for the operation of the irrevocability ruleis that the
taxpayer chose an option; and once it had already done so, it could no
longer make another one. Consequently, after the taxpayer opts to carry-
over its excess tax credit to the following taxable period, the question of
whether or not it actually gets to apply said tax credit is irrelevant. Section
76 of the NIRC of 1997 is explicit in stating that once the option to carry
over has been made, "no application for tax refund or issuance of a tax
credit certificate shall be allowed therefor."

The last sentence of Section 76 of the NIRC of 1997 reads: "Once the
option to carry-over and apply the excess quarterly income tax against
income tax due for the taxable quarters of the succeeding taxable years
has been made, such option shall be considered irrevocable for that
taxable periodand no application for tax refund or issuance ofa tax credit
certificate shall be allowed therefor." The phrase "for that taxable period"
merely identifies the excess income tax, subject of the option, by referring
to the taxable period when it was acquired by the taxpayer. In the present
case, the excess income tax credit, which BPI opted to carry over, was
acquired by the said bank during the taxable year 1998. The option of BPI
to carry over its 1998 excess income tax credit is irrevocable; it cannot later
on opt to apply for a refund of the very same 1998 excess income tax
credit.
The Court of Appeals mistakenly understood the phrase "for that taxable
period" as a prescriptive period for the irrevocability rule. This would mean
that since the tax credit in this case was acquired in 1998, and BPI opted to
carry it overto 1999, then the irrevocability of the option to carry over
expired by the end of 1999, leaving BPI free to again take another option
as regards its 1998 excess income tax credit. This construal effectively
renders nugatory the irrevocability rule. The evident intent of the legislature,
in adding the last sentence to Section 76 of the NIRC of 1997, is to keep
the taxpayer from flip-flopping on its options, and avoid confusion and
complication as regards said taxpayer's excess tax credit. The
interpretation of the Court of Appeals only delays the flip-flopping to the end
of each succeeding taxable period.

The Court similarly disagrees in the declaration of the Court of Appeals that
to deny the claim for refund of BPI, because of the irrevocability rule, would
be tantamount to unjust enrichment on the part of the
government.1âwphi1 The Court addressed the very same argument in
Philam, where it elucidated that there would be no unjust enrichment in the
event of denial of the claim for refund under such circumstances, because
there would be no forfeiture of any amount in favor of the government. The
amount being claimed asa refund would remain in the account of the
taxpayer until utilized in succeeding taxable years, as provided in Section
76 of the NIRC of 1997. It is worthy to note that unlike the option for refund
of excess income tax, which prescribes after two years from the filing of the
FAR, there is no prescriptive period for the carrying over of the same.
Therefore, the excess income tax credit of BPI, which it acquired in 1998
and opted to carry over, may be repeatedly carried over to succeeding
taxable years, i.e., to 1999, 2000, 2001, and so on and so forth, until
actually applied or credited to a tax liability of BPI.16(emphasis ours) In the
instant case, the respondent opted to be refunded or to be issued a tax
credit certificate, not to carry over the excess withholding tax for taxable
year 2002 to the following taxable year. The taking of the option was duly
noted by the CTA En Banc, citing the decision of the CTA in Division, as
follows:

Under Line 30 of the 2002 Annual ITR, petitioner marked "x" the box "To be
refunded". In order toprove that petitioner did not carryover its 2002 excess
withholding tax, petitioner presented its 2003 Annual ITR which does not
have any entry inLine 27A "Prior Year's Excess Credits." Under Line 31 of
the same2003 Annual ITR, petitioner marked "x" the box "To be refunded"
and petitioner presented its 2004 Annual ITR, showing no entry in Line 27A
"Prior Year's Excess Credit" to prove that it did not carry-over its 2003
excess withholding tax.17

Consequently, the only issue that remains is whether the respondent was
entitled to the refund of excess withholding tax.

The requirements for entitlement of a corporate taxpayer for a refund or the

issuance of tax credit certificate involving excess withholding taxes are as
follows:

1. That the claim for refund was filed within the two-year reglementary
period pursuant to Section 22918 of the NIRC;

2. When it is shown on the ITR that the income payment received is

being declared part of the taxpayer’s gross income; and

3. When the fact of withholding is established by a copy of the

withholding tax statement, duly issued by the payor to the payee,
showing the amount paidand income tax withheld from that amount.

We do not expound anymore on the first requirement because even the

petitioner does not contest that the respondent filed its administrative and
judicial claim for refund within the statutory period.

With regard to the second requirement, it is fundamental that the findings of

fact by the CTA in Divisionare not to be disturbed without any showing of
grave abuse of discretion considering that the members of the Division are
in the best position to analyze the documents presented by the
parties.19 Consequently, we adopt the findings of the CTA in Division, which
the CTA En Banc cited, as follows.

The above mentioned declarations are further supported by the testimonies

of Ms. Imelda Dela Cruz Tagama, petitioner’s Accounting Manager and Mr.
Ruben R. Rubio, the Independent Certified Public Accountant (ICPA) duly
commissioned by the Court, proving that the total amount of Creditable
Withholding Tax per petitioner's Annual ITRs for calendar years ended
December 31, 2002 and December 31, 2003 agrees with the total amount
of Creditable Withholding Tax presented on petitioner’s Schedule of
Creditable Withholding Tax Certificates for the calendar years ended
December 31, 2002 and December 31, 2003. Moreover, the total amount of
gross sales/revenue reported in the Annual ITRs for calendar years 2002
and 2003 is equal to the amounts recorded in the General Ledger Listing of
the Creditable Withholding Tax on the Transfer of Real Property and Sale
of Electricity, 2002 Reconciliation of Revenue per ITR and per General
Ledger. Hence, the third requirement is satisfied.20

With respect to the third requirement, the respondent proved that it had met
the requirement by presenting the 10 certificates of creditable taxes
withheld at source. The petitioner did not challenge the respondent’s
compliance with the requirement.

We are likewise unmoved by the assertion of the petitioner that the

respondent should have submitted the quarterly returns of the respondent
to show that it did not carry-over the excess withholding tax to the
succeeding quarter. When the respondent was able to establish prima facie
its right to the refund by testimonial and object evidence, the petitioner
should have presented rebuttal evidence to shift the burden of evidence
back to the respondent. Indeed, the petitioner ought to have its own copies
of the respondent’s quarterly returns on file, on the basis of which it could
rebut the respondent's claim that it did not carry over its unutilized and
excess creditable withholding taxes for the immediately succeeding
quarters. The BIR's failure to present such vital document during the trial in
order to bolster the petitioner's contention against the respondent's claim
for the tax refund was fatal.21

WHEREFORE, we DENY the petition for review on certiorari, and AFFIRM

the decision promulgated on April 15, 2009.

SO ORDERED.

LUCAS P. BERSAMIN
Associate Justice

WE CONCUR:

FIRST DIVISION
 G.R. No. 163362, July 08, 2015

ALEJANDRA ARADO HEIRS: JESUSA ARADO, VICTORIANO

ALCORIZA, PEDRO ARADO, HEIRS: JUDITHO ARADO,
JENNIFER ARADO, BOBBIE ZITO ARADO, SHIRLY ABAD,
ANTONIETA ARADO, NELSON SOMOZA, JUVENIL ARADO,
NICETAS VENTULA, AND NILA ARADO, PEDRO ARADO,
TOMASA V. ARADO, Petitioners, v. ANACLETO ALCORAN AND
ELENETTE SUNJACO, Respondents.

DECISION

BERSAMIN, J.:

Under review on certiorari is the decision promulgated on

February 28, 2003,1 whereby the Court of Appeals (CA) affirmed
the judgment rendered on January 15, 1997 by the Regional Trial
Court, Branch 43, in Dumaguete City (RTC)2 dismissing the
complaint and the counterclaim for being without merit.

Antecedents

Raymundo Alcoran (Raymundo) was married to Joaquina Arado

(Joaquina), and their marriage produced a son named Nicolas
Alcoran (Nicolas).3 In turn, Nicolas married Florencia Limpahan
(Florencia)4 but their union had no offspring. During their
marriage, however, Nicolas had an extramarital affair with
Francisca Sarita (Francisca), who gave birth to respondent
Anacleto Alcoran (Anacleto) on July 13, 19515 during the
subsistence of Nicolas' marriage to Florencia.6 In 1972, Anacleto
married Elenette Sonjaco.7redarclaw

Raymundo died in 1939, while Nicolas died m 1954. Likewise,

Florencia died in 1960, and Joaquina in 1981.8redarclaw

Florencia had three siblings, namely: Sulpicio, Braulia and

Veronica Limpahan.9 Joaquina had four siblings, i.e., Alejandra,
Nemesio, Celedonia and Melania, all surnamed Arado.10 Nemesio
had six children, namely: (1) Jesusa, who was married to
Victoriano Alcoriza; (2) Pedro, who was married to Tomasa
Arado; (3) Teodorico; (4) Josefina; (5) Gliceria;11 and (6)
Felicisima.12 During the pendency of the case, Pedro died, and
was substituted by his following heirs, to wit: (1) Juditho and his
spouse, Jennifer Ebrole; (2) Bobbie Zito and his spouse, Shirly
Abad; (3) Juvenil and his spouse, Nicetas Ventula; (4) Antonieta
and her spouse, Nelson Somoza; and (5) Nila.

On January 14, 1992, Alejandra, Jesusa, Victoriano Alcoriza,

Pedro and Tomasa filed in the RTC a complaint for recovery of
property and damages (with application for a writ of preliminary
mandatory injunction) against Anacleto and Elenette.13 Named as
unwilling co-plaintiffs were Sulpicio, Braulia and Veronica
Limpahan, along with Teodorico, Josefina, Gliceria and Felicisima.

The properties subject of the action were the following: (1) Lot
No. 4100, covered by Original Certificate of Title (OCT) No. OV-
1379; (2) Lot No. 4054, covered by OCT No. OV-1380; (3) a
parcel of land covered by Tax Declaration No. 6065; (4) a parcel
of land covered by Tax Declaration No. 20470; (5) a parcel of
land covered by Tax Declaration No. 11-028-A; (6) Lot No. 709
covered by OCT No. OV-7784; (7) a parcel of land covered by Tax
Declaration No. 87-011-215-A; (8) a parcel of land covered by
Tax Declaration No. 87-011-217; (9) Lot No. 5234 covered by
OCT No. 3489-A; and (10) Lot No. 5224 covered by Tax
Declaration No. 8-201.14 The parties later stipulated that the first
eight of the subject properties had previously belonged to
Raymundo, while the last two had been the paraphernal
properties of Joaquina.15redarclaw

The plaintiffs alleged in their complaint that when Raymundo died

in 1939, his properties were inherited by his son Nicolas alone "as
it was during the period of the old Civil Code, where the spouse
could not inherit but only a share of the usufruct, which was
extinguished upon the death of the usufructuary;"16that when
Nicolas died in 1954 without issue, half of his properties were
inherited by his wife, Florencia, and the other half by his mother,
Joaquina; that Florencia was, in turn, succeeded by her siblings
Sulpicio, Braulia and Veronica; that during the marriage of
Nicolas and Florencia, the former had an affair with Francisca,
from which affair Anacleto was born, but it was unknown whether
he was the spurious son of Nicolas; that Nicolas did not recognize
Anacleto as his spurious child during Nicolas' lifetime; hence,
Anacleto was not entitled to inherit from Nicolas; that
nonetheless, Anacleto claimed entitlement to the properties as
the heir of Nicolas and by virtue of the will executed by Joaquina;
that the will was void for not having been executed according to
the formalities of the law, and the same did not reflect the true
intention of Joaquina; that the supposed testator did not
acknowledge the will, which was not submitted for probate; that
they were the rightful heirs to the properties; that
notwithstanding their repeated demands for the return of the
properties, the defendants persistently refused; that a writ of
preliminary mandatory injunction should issue to prevent the
defendants from further violating their rights in the properties;
and that the defendants should be ordered to reconvey the
properties, and to pay; P20,000.00 as actual damages;
P20,000.00 as moral and exemplary damages, and P20,000.00 as
attorney's fees.17redarclaw

In their answer,18 the defendants (respondents herein) countered

that Anacleto was expressly recognized by Nicolas as the latter's
son, a fact evidenced by the certificate of birth of Anacleto; that
Anacleto thus had the right to inherit the properties from Nicolas;
that because Anacleto was still too young when Nicolas died, the
administration of the properties passed to Anacleto's
grandmother, Joaquina; that Joaquina executed a last will and
testament in Anacleto's favor; that Joaquina's possession of the
properties was for and in behalf of Anacleto, who had been living
with her since his birth; that such possession began in 1954 when
Nicolas died and continued until Joaquina's death in 1981; that
Anacleto then took over the possession of the properties to the
exclusion of all others; that granting for the sake of argument
that the plaintiffs had rights in the properties, the same were
already lost through laches, estoppel and prescription; and that
Anacleto was the rightful owner of the properties, and his
ownership and possession should not be disturbed.

By way of counterclaim, the defendants prayed that the plaintiffs

be ordered to pay 50,000.00 as moral damages, 1,000.00 "as
initial expenses as costs of this litigation which will increase as
the case progresses"19 and 10,000.00 as attorney's fees.

Veronica Limpahan and Sulpicio Limpahan likewise filed their

answer20 to the complaint, stating that they were not interested
in pursuing any claim of ownership in the properties; that
assuming that they were entitled, they were abandoning their
rights, interests, title and participation in the properties; and that
they be excluded from further court processes.

Judgrnent of the RTC

On January 15, 1997, the RTC rendered judgment, decreeing

thusly:LawlibraryofCRAlaw
ChanRoblesVirtualawlibrary
Wherefore, premises considered, judgment is hereby rendered
dismissing the complaint and the counterclaim for lack of merit.

Costs against the plaintiffs.

SO ORDERED.21
The RTC opined that Anacleto established that he was really the
acknowledged illegitimate son of Nicolas. It cited the certificate of
birth of Anacleto (Exhibit 4) and Page 53, Book 4, Register No.
214 of the Register of Births of the Municipality of Bacong (Exhibit
3), which proved that Nicolas had himself caused the registration
of Anacleto's birth by providing the details thereof and indicating
that he was the father of Anacleto. It observed that the name of
Nicolas appeared under the column "Remarks" in the register of
births, which was the space provided for the name of the
informant; that because the plaintiffs did not present evidence to
refute the entry in the register of births, the entry became
conclusive with respect to the facts contained therein; that
Anacleto's claim of recognition was bolstered by his baptismal
certificate (Exhibit F), in which was indicated that his parents
were Nicolas Alcoran and Francisca Sarita; that also presented
was a picture taken during the wake of Nicolas (Exhibit 5)
showing the young Anacleto being carried by Joaquina, and also
Nicolas' wife, Florencia; that in addition, the school records of
Anacleto (Exhibit 6) showed that Joaquina stood as his guardian
during his grade school years; that when Anacleto got married, it
was Joaquina who gave consent to his marriage because he was
then still a minor (Exhibit 8); and that Joaquina executed her will
in 1978 (Exhibit 9), bequeathing the subject properties to
Anacleto, but the will was yet to be probated.

As the case was filed during the effectivity of the Family Code,
the RTC ruled that Articles 172,22 17323and 17524 of the Family
Code allowed Anacleto to establish his filiation during his lifetime
through the record of his birth appearing in the civil register. It
further ruled that because there were no legitimate children of
Nicolas who contested Anacleto's right to inherit, the rule on the
separation of the legitimate from the illegitimate family was
rendered irrelevant; and that, accordingly, Anacleto was entitled
to possess the subject properties upon having established that he
was the acknowledged illegitimate son of Nicolas. Consequently,
it also dismissed the defendants' counterclaim for lack of
sufficient basis.

The plaintiffs appealed to the CA.25redarclaw

Decision of the CA

On February 28, 2003, the CA promulgated its

decision,26 affirming the judgment of the RTC in this
wise:LawlibraryofCRAlaw
ChanRoblesVirtualawlibrary
WHEREFORE, premises considered, the instant appeal is hereby
DISMISSED. Accordingly, the Decision of the Regional Trial Court
of Dumaguete City, Branch 43 stands.
The CA sustained the ruling of the RTC to the effect that Anacleto
was an acknowledged illegitimate son of Nicolas. It agreed that
the Register of Births of the Municipality of Bacong, Negros
Oriental showed that Nicolas was the father of Anacleto, and that
the former had supplied the information on the latter's birth. It
declared that the plaintiffs did not rebut the filiation of Anacleto
by contrary evidence; that the baptismal certificate of Anacleto
and the picture taken during the wake of Nicolas further showed
that Anacleto had been acknowledged by Nicolas; that based on
the Articles 172, 173 and 175 of the Family Code, the law
applicable at the time of the filing of the case, Anacleto's filiation
was established by the record of his birth appearing in the civil
register; and that Anacleto possessed rights in the subject
properties.

Anent the successional rights of the parties, the CA pronounced

that after Raymundo died in 1939, his wife, Joaquina, and his
son, Nicolas, inherited his properties; that when Nicolas died in
1954, he was survived by Joaquina (his mother), Florencia (his
legitimate wife), and Anacleto (his illegitimate son); that Joaquina
was entitled to one-half of Nicolas' estate, and the remaining half
should be divided between Florencia and Anacleto; that in 1960,
when Florencia died without issue, the share she had inherited
from Nicolas was inherited by her siblings Sulpicio, Braulia and
Veronica; and that when Joaquina died in 1981, she was survived
by her sibling Alejandra; her nieces Jesusa,27 Josefina, Gliceria
and Felicisima; her nephews Pedro and Teodorico; and her
illegitimate grandson, Anacleto.

The CA declared that the plaintiffs were already barred from

asserting their rights in the properties by estoppel by laches; that
Joaquina had executed her last will and testament on April 19,
1978, whereby she bequeathed her properties to Anacleto; that
the properties were thus transmitted to Anacleto upon her death
in 1981; that the plaintiffs filed their complairtt in the RTC only
on January 14, 1992; that it would be unjust to award the subject
properties to the plaintiffs who had slept on their rights for a long
time; and that the plaintiffs could probably pursue their claim in
the appropriate intestate or testate proceedings.
The plaintiffs filed a Motion for Reconsideration,28 but the CA
denied their motion on March 24, 2004.

Issues

In this appeal, the plaintiffs, herein petitioners,29 implore the

Court to nullify the assailed rulings of the CA, and to determine
once and for all the following issues:LawlibraryofCRAlaw
ChanRoblesVirtualawlibrary
(a) Whether Anacleto Alcoran is the illegitimate son of Nicolas
Alcoran x x x; and

(b) Whether he is entitled to the properties in litigation.30

The petitioners insist that Anacleto was not duly recognized as
Nicolas' illegitimate son; that inasmuch as Anacleto was born to
Francisca during the subsistence of Nicolas' marriage to Florencia,
Anacleto could only be the spurious child of Nicolas; that there
was no law for the acknowledgment of a spurious child; that even
if Anacleto would be given the benefit of the doubt and be
considered a natural child. Article 278 of the Civil Code states
that "[r]ecognition shall be made in the record of birth, a will, a
statement before a court of record, or in any authentic writing;"
that the appearance of the father's name in the certificate of birth
alone, without his actual intervention, was insufficient to prove
paternity; that the mere certificate by the civil registrar that the
father himself registered the child, without the father's signature,
was not proof of the father's voluntary acknowledgment; that the
baptismal certificate was insufficient proof of paternity; and that
if there was ground for Anacleto's recognition, the period to claim
recognition already prescribed.

The petitioners reject the claim of Anacleto that Joaquina

bequeathed the subject properties to him by last will and
testament. They assail the validity and due execution of the will,
which was not submitted for probate; that the joint affidavit
allegedly executed in favor of Anacleto by Sulpicio, Braulia and
Veronica Limpahan, with Josefina, Gliceria and Felicisima Arado,
whereby they ceded their rights in the subject properties in favor
of Anacleto, was unwarranted; and that the veracity of the
affidavit was doubtful because it was purportedly inconsistent
with Anacleto's stance that he had inherited the properties in his
own right.

In tum, the defendants, herein respondents, counter that Nicolas

recognized Anacleto as his illegitimate child because Nicolas had
himself caused the registration of Anacleto's birth; that the
petitioners' allegation of prescription lacked basis inasmuch as
Anacleto was not seeking compulsory recognition; and that
Anacleto had already been voluntarily recognized by Nicolas as
his illegitimate son.

Ruling of the Court

We affirm the dismissal of the petitioners' complaint by the RTC,

albeit for different reasons.

The complaint filed by the petitioners in the RTC to recover the

subject properties is properly characterized as an accion
reivindicatoria. According to Cañezo v. Bautista,31 an "[a]ccion
reivindicatoria seeks the recovery of ownership and includes
the jus utendi and the jus fruendi brought in the proper regional
trial court. Accion reivindicatoria is an action whereby plaintiff
alleges ownership over a parcel of land and seeks recovery of its
full possession." In essence, the petitioners seek to put an end to
Anacleto's possession of the properties on the basis of their being
the rightful heirs considering that Anacleto, being the spurious
child of Nicolas, held no successional rights in the estate of
Nicolas.

The burden of proof to establish the averments of the complaint

by preponderance of evidence pertained to the petitioners as the
plaintiffs. In that regard, we have discoursed on preponderance
of evidence in Amoroso v. Alegre,
Jr.,32 thusly:LawlibraryofCRAlaw
ChanRoblesVirtualawlibrary
"Preponderance of evidence" is the weight, credit, and value of
the aggregate evidence on either side and is usually considered to
be synonymous with the term "greater weight of the evidence" or
"greater weight of the credible evidence." Preponderance of
evidence is a phrase which, in the last analysis, means
probability of the truth. It is evidence which is more
convincing to the court as worthy of belief than that which
is offered in opposition thereto. If plaintiff claims a right
granted or created by law, he must prove his claim by
competent evidence. He must rely on the strength of his
own evidence and not upon the weakness of that of his
opponent. (Bold underscoring for emphasis)
The petitioners did not discharge their burden of proof.

At the outset, the Court affirms the holding by the RTC and the
CA that the provisions of the Family Code33 should apply because
the petitioners' complaint was filed, litigated and decided by the
RTC during the effectivity of the Family Code. Under the Family
Code, the classification of children is limited to either legitimate
or illegitimate.34 Illegitimate filiation is proved in accordance with
Article 175 of the Family Code, to wit:LawlibraryofCRAlaw
ChanRoblesVirtualawlibrary
ART. 175. Illegitimate children may establish their illegitimate
filiation in the same way and on the same evidence as legitimate
children.

The action must be brought within the same period specified in

Article 173, except when the action is based on the second
paragraph of Article I72, in which case the action may be brought
during the lifetime of the alleged parent.
On the other hand, legitimate filiation is established m
accordance with Articles 172 and 173 of the Family Code, which
state:LawlibraryofCRAlaw
ChanRoblesVirtualawlibrary
ART. 172. The filiation of legitimate children is established by any
of the following:LawlibraryofCRAlaw

(1) The record of birth appearing in the civil register or a final

judgment; or

(2) An admission of legitimate filiation in a public document or a

private handwritten instrument and signed by the parent
concerned.

In the absence of the foregoing evidence, the legitimate filiation

shall be proved by:LawlibraryofCRAlaw

(1) The open and continuous possession of the status of a

legitimate child; or laws.

(2) Any other means allowed by the Rules of Court and special

ART. 173. The action to claim legitimacy may be brought by the

child during his or her lifetime and shall be transmitted to the
heirs should the child die during minority or in a state of insanity.
In these cases, the heirs shall have a period of five years within
which to institute the action.

The action already commenced by the child shall survive

notwithstanding the death of either or both of the parties.
Rightly enough, the RTC and the CA unanimously concluded that
Nicolas had duly acknowledged Anacleto as his illegitimate son.
The birth certificate of Anacleto appearing in the Register of
Births of the Municipality of Bacong, Negros Oriental (Exhibits 3,
3-A) showed that Nicolas had himself caused the registration of
the birth of Anacleto. The showing was by means of the name of
Nicolas appearing in the column "Remarks" in Page 53, Book 4,
Register No. 214 of the Register of Births. Based on the
certification (Exhibit 3-B) issued by the Local Civil Registrar of the
Municipality of Bacong, Negros Oriental, the column in the
Register of Births entitled "Remarks" (Observaciones) was the
space provided for the name of the informant of the live birth to
be registered. Considering that Nicolas, the putative father, had a
direct hand in the preparation of the birth certificate, reliance on
the birth certificate of Anacleto as evidence of his paternity was
fully warranted.35redarclaw
Anacleto's baptismal certificate (Exhibit 7) was of no consequence
in determining his filiation. We have already held in Cabatania v.
Court of Appeals36 that "while a baptismal certificate may be
considered a public document, it can only serve as evidence of
the administration of the sacrament on the date specified but not
the veracity of the entries with respect to the child's paternity;"
and that baptismal certificates were "per se inadmissible in
evidence as proof of filiation," and thus "cannot be admitted
indirectly as circumstantial evidence to prove [filiation]." Hence,
we attach no probative value to the baptismal certificate as proof
of the filiation of Anacleto.

The weight accorded by the RTC and the CA to the picture

depicting the young Anacleto in the arms of Joaquina as she
stood beside the coffin of the departed Nicolas (Exhibit 5) was
also undeserved. At best, the picture merely manifested that it
was Joaquina who had acknowledged her filiation with Anacleto.
Cautioning against the admission in evidence of a picture of
similar nature, we have pointed out in Solinap v. Locsin,
Jr.37 that:LawlibraryofCRAlaw
ChanRoblesVirtualawlibrary
[R]espondent's photograph with his mother near the coffin of the
late Juan C. Locsin cannot and will not constitute proof of filiation,
lest we recklessly set a very dangerous precedent that would
encourage and sanction fraudulent claims. Anybody can have a
picture taken while standing before a coffin with others and
thereafter utilize it in claiming the estate of the deceased.
The school records of Anacleto (Exhibit 6), which evinced that
Joaquina was the guardian of Anacleto in his grade school years,
and the marriage contract between Anacleto and Elenette
(Exhibits 8 to 8-C), which indicated that Joaquina had given
consent to Anacleto's marriage, did not have the evidentiary
value accorded by the RTC and the CA. Joaquina's apparent
recognition of Anacleto mattered little, for, as we stressed
in Cenido v. Apacionado,38 the recognition "must be made
personally by the parent himself or herself, not by any brother,
sister or relative; after all, the concept of recognition speaks of a
voluntary declaration by the parent, of if the parent refuses, by
judicial authority, to establish the paternity or maternity of
children born outside wedlock."

The lack of probative value of the respondents' aforecited

corroborative evidence notwithstanding, Anacleto's recognition as
Nicolas' illegitimate child remained beyond question in view of the
showing that Nicolas had personally and directly acknowledged
Anacleto as his illegitimate son.

How should the acknowledgment of Anacleto by Nicolas affect the

respective rights of the parties in relation to the specific
properties subject of the complaint?

To recall, the parties stipulated that the first eight of the subject
properties had previously belonged to Raymundo, while the
remaining two had been the paraphernal properties of Joaquina.

With Raymundo having died in 1939, the Spanish Civil Code of

1889 was the governing law on succession. Under Article 807
thereof,39 Joaquina and Nicolas, i.e., the surviving spouse and the
legitimate son of Raymundo, were the forced heirs who acquired
legal title to Raymundo's estate upon his death. In accordance
with Article 834 thereof,40 Nicolas was entitled to inherit the
entire estate of Raymundo, while Joaquina was entitled to a
portion in usufruct equal to the one third portion available for
betterment.

When Nicolas died in 1954, the Civil Code of the Philippines was
already in effect.41 Under Article 1000 thereof,42 the heirs entitled
to inherit from Nicolas's estate were Joaquina (his mother),
Florencia (his surviving spouse), and Anacleto (his acknowledged
illegitimate son). Said heirs became co-owners of the properties
comprising the entire estate of Nicolas prior to the estate's
partition in accordance with Article 107843 of the Civil Code.

Anacleto had an established right to inherit from Nicolas, whose

estate included the first eight of the subject properties that had
previously belonged to Raymundo. Anacleto became a co-owner
of said properties, pro indiviso, when Nicolas died in
1954.44 Likewise, Joaquina succeeded to, and became a pro
indiviso co-owner of, the properties that formed part of the estate
of Nicolas. When Joaquina died in 1981, her hereditary estate
included the two remaining properties, as well as her share in the
estate of Nicolas. In as much as Joaquina died without any
surviving legitimate descendant, ascendant, illegitimate child or
spouse, Article 100345 of the Civil Code mandated that her
collateral relatives should inherit her entire estate.

Contrary to the rulings of the lower courts, Anacleto was barred

by law from inheriting from the estate of Joaquina. To start with,
Anacleto could not inherit from Joaquina by right of
representation of Nicolas, the legitimate son of Joaquina.46 Under
Article 992 of the Civil Code, an illegitimate child has no right to
inherit ab intestato from the legitimate children and relatives of
his father or mother; in the same manner, such children or
relatives shall not inherit from the illegitimate child. As certified
in Diaz v. Intermediate Appellate Court,47 the right of
representation is not available to illegitimate descendants
of legitimate children in the inheritance of a legitimate
grandparent. And, secondly, Anacleto could not inherit from the
estate of Joaquina by virtue of the latter's last will and
testament, i.e., the Katapusan Tugon (Testamento) (Exhibit K).
Article 838 of the Civil Code dictates that no will shall pass either
real or personal property unless the same is proved and allowed
in accordance with the Rules of Court. We have clarified
in Gallanosa v. Arcangel48 that in order that a will may take
effect, "it has to be probated, legalized or allowed in the proper
testamentary proceeding. The probate of the will is mandatory."
It appears that such will remained ineffective considering that the
records are silent as to whether it had ever been presented for
probate, and had been allowed by a court of competent
jurisdiction. The petitioners alleged this fact in their complaint,
and the respondents did not controvert the allegation. In the
absence of proof showing that the supposed will of Joaquina had
been duly approved by the competent court, we hold that it had
not been so approved. Hence, we cannot sustain the CA's ruling
to the effect that Joaquina had bequeathed her properties to
Anacleto by will, and that the properties had been transmitted to
him upon her death.

As the petitioners were among the collateral relatives of Joaquina,

they are the ones entitled to inherit from her estate.

Nonetheless, the petitioners' appeal still fails because the parties

did not establish that the estates of Raymundo, Nicolas and
Joaquina had been respectively settled with finality through the
appropriate testate or intestate proceedings, and partitioned in
due course. Unless there was a proper and valid partition of the
assets of the respective estates of Raymundo, Nicolas and
Joaquina, whether extrajudicially or judicially, their heirs could
not adjudicate unto themselves and claim specific portions of
their estates, because, as we have declared in Carvajal v. Court
of Appeals:49
ChanRoblesVirtualawlibrary
x x x Unless a project of partition is effected, each heir cannot
claim ownership over a definite portion of the inheritance.
Without partition, either by agreement between the parties or by
judicial proceeding, a co-heir cannot dispose of a specific portion
of the estate. For where there are two or more heirs, the whole
estate of the decedent is, before its partition, owned in common
by such heirs. Upon the death of a person, each of his heirs
becomes the undivided owner of the whole estate left with
respect to the part or portion which might be adjudicated to him,
a community of ownership being thus formed among the co-
owners of the estate or co-heirs while it remains undivided.
Without the showing that the respective estates of Raymundo,
Nicolas and Joaquina had been previously partitioned, the Court
concludes and holds that none of the parties herein can lay claim
over any of the disputed specific properties. The petitioners
cannot contend, therefore, that they were the rightful owners of
the properties of the late Joaquina to the exclusion of Anacleto.
Thus, we uphold the dismissal of the petitioners' complaint for
recovery of such properties.
WHEREFORE, the Court AFFIRMS the decision promulgated on
February 28, 2003 by the Court of Appeals; and ORDERS the
petitioners to pay the costs of suit.

SO ORDERED.cralawlawlibrary

Sereno, C.J., Leonardo-De Castro, Perez, and Perlas-Bernabe, JJ.,

concur.

Endnotes:

GR No 163362 Arado vs Alcoran

Facts: Raymundo Alcoran was married to Joaquina Arado,
and their marriage produced a son named Nicolas
Alcoran. In turn, Nicolas married Florencia, but their
union had no offspring. Nicolas had an extramarital
affair with Francisca Sarita, who gave birth to
respondent Anacleto Alcoran on July 13, 1951 during the
subsistence of Nicolas’ marriage to Florencia.

Raymundo died leaving properties to Nicolas and his

wife. Nicolas died subsequently leaving the properties
to his illegitimate son. Joaquina died shortly
thereafter with a will. Anacleto claims entitlement to
the properties as the heir of Nicolas and by virtue of
the will executed by Joaquina

ISSUE: Whether or not an illegitimate child has a right

to inherit from his father.

HELD: No, an illegitimate child has no right to inherit

ab intestato from the legitimate children and relatives
of his father or mother, as provided for under Article
992 of the Civil Code; in the same manner, such
children or relatives shall not inherit from the
illegitimate child. As certified in Diaz v.
Intermediate Appellate Court, the right of
representation is not available to illegitimate
descendants of legitimate children in the inheritance
of a legitimate grandparent. Anacleto could not inherit
from the estate of Joaquina by virtue of the latter’s
last will and testament. Article 838 of the Civil Code
dictates that no will shall pass either real or
personal property unless the same is proved and allowed
in accordance with the Rules of Court. In Gallanosa v.
Arcangel that in order that a will may take effect, “it
has to be probated, legalized or allowed in the proper
testamentary proceeding. The probate of the will is
mandatory.”