Page 1 of 78

RULE 110

 Zaldivia v. Reyes, 211 SCRA 277

Republic of the Philippines

SUPREME COURT
Manila

EN BANC

G.R. No. 102342 July 3, 1992

LUZ M. ZALDIVIA, petitioner,

vs.
HON. ANDRES B. REYES, JR., in his capacity as Acting Presiding Judge of the Regional
Trial Court, Fourth Judicial Region, Branch 76, San Mateo, Rizal, and PEOPLE OF THE
PHILIPPINES, respondents.

CRUZ, J.:

The Court is asked to determine the applicable law specifying the prescriptive period for
violations of municipal ordinances.

The petitioner is charged with quarrying for commercial purposes without a mayor's permit in
violation of Ordinance No. 2, Series of 1988, of the Municipality of Rodriguez, in the Province of
Rizal.

The offense was allegedly committed on May 11, 1990.1 The referral-complaint of the police
was received by the Office of the Provincial Prosecutor of Rizal on May 30, 1990. 2 The
corresponding information was filed with the Municipal Trial Court of Rodriguez on October 2,
1990. 3

The petitioner moved to quash the information on the ground that the crime had prescribed, but
the motion was denied. On appeal to the Regional Trial Court of Rizal, the denial was sustained
by the respondent judge. 4

In the present petition for review on certiorari, the petitioner first argues that the charge against
her is governed by the following provisions of the Rule on Summary Procedure:

Sec. 1. Scope — This rule shall govern the procedure in the Metropolitan Trial
Courts, the Municipal Trial Courts, and the Municipal Circuit Trial Courts in the
following cases:

Page 1 of 78
 Page 2 of 78

xxx xxx xxx

B. Criminal Cases:

1. Violations of traffic laws, rules and regulations;

2. Violations of rental law;

3. Violations of municipal or city ordinances;

4. All other criminal cases where the penalty prescribed by law for the offenses
charged does not exceed six months imprisonment, or a fine of one thousand
pesos (P1,000.00), or both, irrespective of other imposable penalties, accessory
or otherwise, or of the civil liability arising therefrom. . . . (Emphasis supplied.)

xxx xxx xxx

Sec. 9. How commenced. — The prosecution of criminal cases falling within the
scope of this Rule shall be either by complaint or by information filed directly in
court without need of a prior preliminary examination or preliminary investigation:
Provided, however, That in Metropolitan Manila and chartered cities, such cases
shall be commenced only by information; Provided, further, That when the
offense cannot be prosecuted de oficio, the corresponding complaint shall be
signed and sworn to before the fiscal by the offended party.

She then invokes Act. No. 3326, as amended, entitled "An Act to Establish Periods of
Prescription for Violations Penalized by Special Acts and Municipal Ordinances and to Provide
When Prescription Shall Begin to Run," reading as follows:

Sec. 1. Violations penalized by special acts shall, unless provided in such acts,
prescribe in accordance with the following rules: . . . Violations penalized by
municipal ordinances shall prescribe after two months.

Sec. 2. Prescription shall begin to run from the day of the commission of the
violation of the law, and if the same be not known at the time, from the discovery
thereof and the institution of judicial proceedings for its investigation and
punishment.

The prescription shall be interrupted when proceedings are instituted against the
guilty person, and shall begin to run again if the proceedings are dismissed for
reasons not constituting jeopardy.

Sec. 3. For the purposes of this Act, special acts shall be acts defining and
penalizing violations of law not included in the Penal Code. (Emphasis supplied)

Her conclusion is that as the information was filed way beyond the
two-month statutory period from the date of the alleged commission of the offense, the charge
against her should have been dismissed on the ground of prescription.

Page 2 of 78
 Page 3 of 78

For its part, the prosecution contends that the prescriptive period was suspended upon the filing
of the complaint against her with the Office of the Provincial Prosecutor. Agreeing with the
respondent judge, the Solicitor General also invokes Section 1, Rule 110 of the 1985 Rules on
Criminal Procedure, providing as follows:

Sec. 1. How Instituted — For offenses not subject to the rule on summary
procedure in special cases, the institution of criminal action shall be as follows:

a) For offenses falling under the jurisdiction of the Regional Trial

Court, by filing the complaint with the appropriate officer for the
purpose of conducting the requisite preliminary investigation
therein;

b) For offenses falling under the jurisdiction of the Municipal Trial

Courts and Municipal Circuit Trial Courts, by filing the complaint
directly with the said courts, or a complaint with the fiscal's office.
However, in Metropolitan Manila and other chartered cities, the
complaint may be filed only with the office of the fiscal.

In all cases such institution interrupts the period of prescription of the

offense charged. (Emphasis supplied.)

Emphasis is laid on the last paragraph. The respondent maintains that the filing of the complaint
with the Office of the Provincial Prosecutor comes under the phrase "such institution" and that
the phrase "in all cases" applies to all cases, without distinction, including those falling under the
Rule on Summary Procedure.

The said paragraph, according to the respondent, was an adoption of the following dictum
in Francisco v. Court of Appeals: 5

In view of this diversity of precedents, and in order to provide guidance for Bench
and Bar, this Court has re-examined the question and, after mature
consideration, has arrived at the conclusion that the true doctrine is, and should
be, the one established by the decisions holding that the filing of the complaint in
the Municipal Court, even if it be merely for purposes of preliminary examination
or investigation, should, and does, interrupt the period of prescription of the
criminal responsibility, even if the court where the complaint or information is filed
can not try the case on its merits. Several reasons buttress this conclusion: first,
the text of Article 91 of the Revised Penal Code, in declaring that the period of
prescription "shall be interrupted by the filing of the complaint or information"
without distinguishing whether the complaint is filed in the court for preliminary
examination or investigation merely, or for action on the merits. Second, even if
the court where the complaint or information is filed may only proceed to
investigate the case, its actuations already represent the initial step of the
proceedings against the offender. Third, it is unjust to deprive the injured party of
the right to obtain vindication on account of delays that are not under his control.
All that the victim of the offense may do on his part to initiate the prosecution is to
file the requisite complaint.

Page 3 of 78
 Page 4 of 78

It is important to note that this decision was promulgated on May 30, 1983, two months before
the promulgation of the Rule on Summary Procedure on August 1, 1983. On the other hand,
Section 1 of Rule 110 is new, having been incorporated therein with the revision of the Rules on
Criminal Procedure on January 1, 1985, except for the last paragraph, which was added on
October 1, 1988.

That section meaningfully begins with the phrase, "for offenses not subject to the rule on
summary procedure in special cases," which plainly signifies that the section does not apply to
offenses which are subject to summary procedure. The phrase "in all cases" appearing in the
last paragraph obviously refers to the cases covered by the Section, that is, those offenses not
governed by the Rule on Summary Procedure. This interpretation conforms to the canon that
words in a statute should be read in relation to and not isolation from the rest of the measure, to
discover the true legislative intent.

As it is clearly provided in the Rule on Summary Procedure that among the offenses it covers
are violations of municipal or city ordinances, it should follow that the charge against the
petitioner, which is for violation of a municipal ordinance of Rodriguez, is governed by that rule
and not Section 1 of Rule 110.

Where paragraph (b) of the section does speak of "offenses falling under the jurisdiction of the
Municipal Trial Courts and Municipal Circuit Trial Courts," the obvious reference is to Section
32(2) of B.P. No. 129, vesting in such courts:

(2) Exclusive original jurisdiction over all offenses punishable with imprisonment
of not exceeding four years and two months, or a fine of not more than four
thousand pesos, or both such fine and imprisonment, regardless of other
imposable accessory or other penalties, including the civil liability arising from
such offenses or predicated thereon, irrespective of kind, nature, value, or
amount thereof; Provided, however, That in offenses involving damage to
property through criminal negligence they shall have exclusive original
jurisdiction where the imposable fine does not exceed twenty thousand pesos.

These offenses are not covered by the Rule on Summary Procedure.

Under Section 9 of the Rule on Summary Procedure, "the complaint or information shall be filed
directly in court without need of a prior preliminary examination or preliminary
investigation." 6 Both parties agree that this provision does not prevent the prosecutor from
conducting a preliminary investigation if he wants to. However, the case shall be deemed
commenced only when it is filed in court, whether or not the prosecution decides to conduct a
preliminary investigation. This means that the running of the prescriptive period shall be halted
on the date the case is actually filed in court and not on any date before that.

This interpretation is in consonance with the afore-quoted Act No. 3326 which says that the
period of prescription shall be suspended "when proceedings are instituted against the guilty
party." The proceedings referred to in Section 2 thereof are "judicial proceedings," contrary to
the submission of the Solicitor General that they include administrative proceedings. His
contention is that we must not distinguish as the law does not distinguish. As a matter of fact, it
does.

Page 4 of 78
 Page 5 of 78

At any rate, the Court feels that if there be a conflict between the Rule on Summary Procedure
and Section 1 of Rule 110 of the Rules on Criminal Procedure, the former should prevail as the
special law. And if there be a conflict between Act. No. 3326 and Rule 110 of the Rules on
Criminal Procedure, the latter must again yield because this Court, in the exercise of its rule-
making power, is not allowed to "diminish, increase or modify substantive rights" under Article
VIII, Section 5(5) of the Constitution. Prescription in criminal cases is a substantive right. 7

Going back to the Francisco case, we find it not irrelevant to observe that the decision would
have been conformable to Section 1, Rule 110, as the offense involved was grave oral
defamation punishable under the Revised Penal Code with arresto mayor in its maximum period
to prision correccional in its minimum period. By contrast, the prosecution in the instant case is
for violation of a municipal ordinance, for which the penalty cannot exceed six months, 8 and is
thus covered by the Rule on Summary Procedure.

The Court realizes that under the above interpretation, a crime may prescribe even if the
complaint is filed seasonably with the prosecutor's office if, intentionally or not, he delays the
institution of the necessary judicial proceedings until it is too late. However, that possibility
should not justify a misreading of the applicable rules beyond their obvious intent as reasonably
deduced from their plain language. The remedy is not a distortion of the meaning of the rules
but a rewording thereof to prevent the problem here sought to be corrected.

Our conclusion is that the prescriptive period for the crime imputed to the petitioner commenced
from its alleged commission on May 11, 1990, and ended two months thereafter, on July 11,
1990, in accordance with Section 1 of Act No. 3326. It was not interrupted by the filing of the
complaint with the Office of the Provincial Prosecutor on May 30, 1990, as this was not a judicial
proceeding. The judicial proceeding that could have interrupted the period was the filing of the
information with the Municipal Trial Court of Rodriguez, but this was done only on October 2,
1990, after the crime had already prescribed.

WHEREFORE, the petition is GRANTED, and the challenged Order dated October 2, 1991 is
SET ASIDE. Criminal Case No. 90-089 in the Municipal Trial Court of Rodriguez, Rizal, is
hereby DISMISSED on the ground of prescription. It is so ordered.

Page 5 of 78
 Page 6 of 78

 SEC v. Interport Resources Corp., Oct. 6, 2008

G . R. No. 135808, October 6, 2008

DECISION

CHICO-NAZARIO, J.:

This is a Petition for Review on Certiorari under Rule 45 of the Rules of Court, assailing the
Decision,[1] dated 20 August 1998, rendered by the Court of Appeals in C.A.-G.R. SP No. 37036,
enjoining petitioner Securities and Exchange Commission (SEC) from taking cognizance of or initiating
any action against the respondent corporation InterportResources Corporation (IRC) and members of its
board of directors, respondents Manuel S. Recto, Rene S. Villarica, Pelagio Ricalde, Antonio Reina,
Francisco Anonuevo, Joseph Sy and Santiago Tanchan, Jr., with respect to Sections 8, 30 and 36 of the
Revised Securities Act. In the same Decision of the appellate court, all the proceedings taken against the
respondents, including the assailed SEC Omnibus Orders of 25 January 1995 and 30 March 1995, were
declared void.

The antecedent facts of the present case are as follows.

On 6 August 1994, the Board of Directors of IRC approved a Memorandum of Agreement

with Ganda Holdings Berhad (GHB). Under the Memorandum of Agreement, IRC acquired 100% or the
entire capital stock of Ganda Energy Holdings, Inc. (GEHI),[2] which would own and operate a 102
megawatt (MW) gas turbine power-generating barge. The agreement also stipulates that GEHI would
assume a five-year power purchase contract with National Power Corporation. At that
time, GEHIs power-generating barge was 97% complete and would go on-line by mid-September of
1994. In exchange, IRC will issue to GHB 55% of the expanded capital stock of IRC amounting to 40.88
billion shares which had a total par value of P488.44 million.[3]

On the side, IRC would acquire 67% of the entire capital stock of Philippine Racing Club, Inc.
(PRCI). PRCI owns 25.724 hectares of real estate property in Makati.Under the Agreement, GHB, a
member of the Westmont Group of Companies in Malaysia, shall extend or arrange a loan required to
pay for the proposed acquisition by IRC of PRCI. [4]

IRC alleged that on 8 August 1994, a press release announcing the approval of the agreement was
sent through facsimile transmission to the Philippine Stock Exchange and the SEC, but that the
facsimile machine of the SEC could not receive it. Upon the advice of the SEC, the IRC sent the press
release on the morning of 9 August 1994.[5]

The SEC averred that it received reports that IRC failed to make timely public disclosures of its
negotiations with GHB and that some of its directors, respondents herein, heavily traded IRC shares
utilizing this material insider information. On 16 August 1994, the SEC Chairman issued a directive
requiring IRC to submit to the SEC a copy of its aforesaid Memorandum of Agreement with GHB. The
SEC Chairman further directed all principal officers of IRC to appear at a hearing before the Brokers
and Exchanges Department (BED) of the SEC to explain IRCs failure to immediately disclose the
information as required by the Rules on Disclosure of Material Facts. [6]

Page 6 of 78
 Page 7 of 78

In compliance with the SEC Chairmans directive, the IRC sent a letter dated 16 August 1994 to the
SEC, attaching thereto copies of the Memorandum of Agreement. Its directors, Manuel Recto,
Rene Villarica and Pelagio Ricalde, also appeared before the SEC on 22 August 1994 to explain IRCs
alleged failure to immediately disclose material information as required under the Rules on Disclosure
of Material Facts.[7]

On 19 September 1994, the SEC Chairman issued an Order finding that IRC violated the Rules on
Disclosure of Material Facts, in connection with the Old Securities Act of 1936, when it failed to make
timely disclosure of its negotiations with GHB. In addition, the SEC pronounced that some of the
officers and directors of IRC entered into transactions involving IRC shares in violation of Section 30, in
relation to Section 36, of the Revised Securities Act.[8]

Respondents filed an Omnibus Motion, dated 21 September 1994, which was superseded by an
Amended Omnibus Motion, filed on 18 October 1994, alleging that the SEC had no authority to
investigate the subject matter, since under Section 8 of Presidential Decree No. 902-A,[9] as amended
by Presidential Decree No. 1758, jurisdiction was conferred upon the Prosecution and Enforcement
Department (PED) of the SEC. Respondents also claimed that the SEC violated their right to due
process when it ordered that the respondents appear before the SEC and show cause why no
administrative, civil or criminal sanctions should be imposed on them, and, thus, shifted the burden of
proof to the respondents. Lastly, they sought to have their cases tried jointly given the identical factual
situations surrounding the alleged violation committed by the respondents.[10]

Respondents also filed a Motion for Continuance of Proceedings on 24 October 1994, wherein they
moved for discontinuance of the investigations and the proceedings before the SEC until the undue
publicity had abated and the investigating officials had become reasonably free from prejudice and
public pressure.[11]

No formal hearings were conducted in connection with the aforementioned motions, but on 25 January
1995, the SEC issued an Omnibus Order which thus disposed of the same in this wise: [12]

WHEREFORE, premised on the foregoing considerations, the Commission

resolves and hereby rules:

1. To create a special investigating panel to hear and decide the instant case in accordance
with the Rules of Practice and Procedure Before the Prosecution and Enforcement
Department (PED), Securities and Exchange Commission, to be composed of Attys. James
K. Abugan, Medardo Devera (Prosecution and Enforcement Department), and
Jose Aquino (Brokers and Exchanges Department), which is hereby directed to
expeditiously resolve the case by conducting continuous hearings, if possible.

2. To recall the show cause orders dated September 19, 1994 requiring the respondents to
appear and show cause why no administrative, civil or criminal sanctions should be
imposed on them.

3. To deny the Motion for Continuance for lack of merit.

Page 7 of 78
 Page 8 of 78

Respondents filed an Omnibus Motion for Partial Reconsideration, [13] questioning the creation of the
special investigating panel to hear the case and the denial of the Motion for Continuance. The SEC
denied reconsideration in its Omnibus Order dated 30 March 1995.[14]
The respondents filed a petition before the Court of Appeals docketed as C.A.-G.R. SP No. 37036,
questioning the Omnibus Orders dated 25 January 1995 and 30 March 1995.[15] During the proceedings
before the Court of Appeals, respondents filed a Supplemental Motion [16] dated 16 May 1995, wherein
they prayed for the issuance of a writ of preliminary injunction enjoining the SEC and its agents from
investigating and proceeding with the hearing of the case against respondents herein. On 5 May 1995,
the Court of Appeals granted their motion and issued a writ of preliminary injunction, which effectively
enjoined the SEC from filing any criminal, civil or administrative case against the respondents herein. [17]

On 23 October 1995, the SEC filed a Motion for Leave to Quash SEC Omnibus Orders so that
the case may be investigated by the PED in accordance with the SEC Rules and Presidential Decree
No. 902-A, and not by the special body whose creation the SEC had earlier ordered. [18]

The Court of Appeals promulgated a Decision[19] on 20 August 1998. It determined that there
were no implementing rules and regulations regarding disclosure, insider trading, or any of the
provisions of the Revised Securities Acts which the respondents allegedly violated. The Court of
Appeals likewise noted that it found no statutory authority for the SEC to initiate and file any suit for civil
liability under Sections 8, 30 and 36 of the Revised Securities Act. Thus, it ruled that no civil, criminal or
administrative proceedings may possibly be held against the respondents without violating their rights
to due process and equal protection. It further resolved that absent any implementing rules, the SEC
cannot be allowed to quash the assailed Omnibus Orders for the sole purpose of re-filing the same
case against the respondents.[20]
The Court of Appeals further decided that the Rules of Practice and Procedure Before the PED,
which took effect on 14 April 1990, did not comply with the statutory requirements contained in the
Administrative Code of 1997. Section 8, Rule V of the Rules of Practice and Procedure Before the PED
affords a party the right to be present but without the right to cross-examine witnesses presented
against him, in violation of Section 12(3), Chapter 3, Book VII of the Administrative Code. [21]

In the dispositive portion of its Decision, dated 20 August 1998, the Court of Appeals ruled
that[22]:

WHEREFORE, [herein petitioner SECs] Motion for Leave to Quash SEC Omnibus
Orders is hereby DENIED. The petition for certiorari, prohibition and mandamus is
GRANTED.Consequently, all proceedings taken against [herein respondents] in this
case, including the Omnibus Orders of January 25, 1995 and March 30, 1995 are
declared null and void. The writ of preliminary injunction is hereby made permanent
and, accordingly, [SEC] is hereby prohibited from taking cognizance or initiating
any action, be they civil, criminal, or administrative against [respondents] with respect to
Sections 8 (Procedure for Registration), 30 (Insiders duty to disclose when trading) and
36 (Directors, Officers and Principal Stockholders) in relation to Sections 46
(Administrative sanctions) 56 (Penalties) 44 (Liabilities of Controlling persons) and 45
(Investigations, injunctions and prosecution of offenses) of the Revised Securities Act
and Section 144 (Violations of the Code) of the Corporation Code. (Emphasis provided.)

The SEC filed a Motion for Reconsideration, which the Court of Appeals denied in a
Resolution[23] issued on 30 September 1998.

Page 8 of 78
 Page 9 of 78

Hence, the present petition, which relies on the following grounds [24]:

THE COURT OF APPEALS ERRED WHEN IT DENIED PETITIONERS MOTION FOR

LEAVE TO QUASH THE ASSAILED SEC OMNIBUS ORDERS DATED JANUARY 25
AND MARCH 30, 1995.

II

THE COURT OF APPEALS ERRED WHEN IT RULED THAT THERE IS NO

STATUTORY AUTHORITY WHATSOEVER FOR PETITIONER SEC TO INITIATE AND
FILE ANY SUIT BE THEY CIVIL, CRIMINAL OR ADMINISTRATIVE AGAINST
RESPONDENT CORPORATION AND ITS DIRECTORS WITH RESPECT TO SECTION
30 (INSIDERS DUTY TO DISCOLSED [sic] WHEN TRADING) AND 36 (DIRECTORS
OFFICERS AND PRINCIPAL STOCKHOLDERS) OF THE REVISED SECURITIES ACT;
AND

III

THE COURT OF APPEALS ERRED WHEN IT RULED THAT RULES OF PRACTICE

AND PROSECUTION BEFORE THE PED AND THE SICD RULES OF PROCEDURE
ON ADMINISTRATIVE ACTIONS/PROCEEDINGS[25] ARE INVALID AS THEY FAIL TO
COMPLY WITH THE STATUTORY REQUIREMENTS CONTAINED IN THE
ADMINISTRATIVE CODE OF 1987.

The petition is impressed with merit.

Before discussing the merits of this case, it should be noted that while this case was pending in
this Court, Republic Act No. 8799, otherwise known as the Securities Regulation Code, took effect on 8
August 2000. Section 8 of Presidential Decree No. 902-A, as amended, which created the PED, was
already repealed as provided for in Section 76 of the Securities Regulation Code:

SEC. 76. Repealing Clause. The Revised Securities Act (Batas Pambansa Blg.
178), as amended, in its entirety, and Sections 2, 4 and 8 of Presidential Decree 902-A,
as amended, are hereby repealed. All other laws, orders, rules and regulations, or parts
thereof, inconsistent with any provision of this Code are hereby repealed or modified
accordingly.

Thus, under the new law, the PED has been abolished, and the Securities Regulation Code has
taken the place of the Revised Securities Act.

The Court now proceeds with a discussion of the present case.

Page 9 of 78
 Page 10 of 78

I. Sctions 8, 30 and 36 of the Revised Securities Act do not

require the enactment of implementing rules to make
them binding and effective.

The Court of Appeals ruled that absent any implementing rules for Sections 8, 30 and 36 of the
Revised Securities Act, no civil, criminal or administrative actions can possibly be had against the
respondents without violating their right to due process and equal protection, citing as its basis the
case Yick Wo v. Hopkins.[26] This is untenable.

In the absence of any constitutional or statutory infirmity, which may concern Sections 30 and 36
of the Revised Securities Act, this Court upholds these provisions as legal and binding. It is well settled
that every law has in its favor the presumption of validity. Unless and until a specific provision of the law is
declared invalid and unconstitutional, the same is valid and binding for all intents and purposes. [27] The
mere absence of implementing rules cannot effectively invalidate provisions of law, where a reasonable
construction that will support the law may be given. In People v. Rosenthal,[28] this Court ruled that:

In this connection we cannot pretermit reference to the rule that legislation should not be
held invalid on the ground of uncertainty if susceptible of any reasonable construction
that will support and give it effect. An Act will not be declared inoperative and ineffectual
on the ground that it furnishes no adequate means to secure the purpose for which it is
passed, if men of common sense and reason can devise and provide the means, and all
the instrumentalities necessary for its execution are within the reach of
those intrusted therewith. (25 R.C.L., pp. 810, 811)

In Garcia v. Executive Secretary,[29] the Court underlined the importance of the presumption of
validity of laws and the careful consideration with which the judiciary strikes down as invalid acts of the
legislature:

The policy of the courts is to avoid ruling on constitutional questions and to presume that
the acts of the political departments are valid in the absence of a clear and unmistakable
showing to the contrary. To doubt is to sustain. This presumption is based on the doctrine
of separation of powers which enjoins upon each department a becoming respect for the
acts of the other departments.The theory is that as the joint act of Congress and the
President of the Philippines, a law has been carefully studied and determined to be in
accordance with the fundamental law before it was finally enacted.

The necessity for vesting administrative authorities with power to make rules and regulations is
based on the impracticability of lawmakers providing general regulations for various and varying details of
management.[30] To rule that the absence of implementing rules can render ineffective an act of
Congress, such as the Revised Securities Act, would empower the administrative bodies to defeat the
legislative will by delaying the implementing rules. To assert that a law is less than a law, because it is
made to depend on a future event or act, is to rob the Legislature of the power to act wisely for the public
welfare whenever a law is passed relating to a state of affairs not yet developed, or to things future and
impossible to fully know.[31] It is well established that administrative authorities have the power to
promulgate rules and regulations to implement a given statute and to effectuate its policies, provided such
rules and regulations conform to the terms and standards prescribed by the statute as well as purport to
carry into effect its general policies. Nevertheless, it is undisputable that the rules and regulations cannot

Page 10 of 78
 Page 11 of 78

assert for themselves a more extensive prerogative or deviate from the mandate of the
statute.[32]Moreover, where the statute contains sufficient standards and an unmistakable intent, as in the
case of Sections 30 and 36 of the Revised Securities Act, there should be no impediment to its
implementation.

The reliance placed by the Court of Appeals in Yick Wo v. Hopkins[33] shows a glaring error. In
the cited case, this Court found unconstitutional an ordinance which gave the board of supervisors
authority to refuse permission to carry on laundries located in buildings that were not made of brick and
stone, because it violated the equal protection clause and was highly discriminatory and hostile to
Chinese residents and not because the standards provided therein were vague or ambiguous.

This Court does not discern any vagueness or ambiguity in Sections 30 and 36 of the Revised
Securities Act, such that the acts proscribed and/or required would not be understood by a person of
ordinary intelligence.

Section 30 of the Revised Securities Act

Section 30 of the Revised Securities Act reads:

Sec. 30. Insiders duty to disclose when trading. (a) It shall be unlawful for an
insider to sell or buy a security of the issuer, if he knows a fact of special significance with
respect to the issuer or the security that is not generally available, unless (1) the insider
proves that the fact is generally available or (2) if the other party to the transaction (or his
agent) is identified, (a) the insider proves that the other party knows it, or (b) that other
party in fact knows it from the insider or otherwise.

(b) Insider means (1) the issuer, (2) a director or officer of, or a person
controlling, controlled by, or under common control with, the issuer, (3) a person whose
relationship or former relationship to the issuer gives or gave him access to a fact of
special significance about the issuer or the security that is not generally available, or (4) a
person who learns such a fact from any of the foregoing insiders as defined in this
subsection, with knowledge that the person from whom he learns the fact is such an
insider.

(c) A fact is of special significance if (a) in addition to being material it would be

likely, on being made generally available, to affect the market price of a security to a
significant extent, or (b) a reasonable person would consider it especially important under
the circumstances in determining his course of action in the light of such factors as the
degree of its specificity, the extent of its difference from information generally available
previously, and its nature and reliability.

(d) This section shall apply to an insider as defined in subsection (b) (3) hereof
only to the extent that he knows of a fact of special significance by virtue of his being an
insider.

The provision explains in simple terms that the insider's misuse of nonpublic and undisclosed
information is the gravamen of illegal conduct. The intent of the law is the protection of investors against
fraud, committed when an insider, using secret information, takes advantage of an uninformed investor.

Page 11 of 78
 Page 12 of 78

Insiders are obligated to disclose material information to the other party or abstain from trading the shares
of his corporation. This duty to disclose or abstain is based on two factors: first, the existence of a
relationship giving access, directly or indirectly, to information intended to be available only for a
corporate purpose and not for the personal benefit of anyone; and second, the inherent unfairness
involved when a party takes advantage of such information knowing it is unavailable to those with whom
he is dealing.[34]

In the United States (U.S.), the obligation to disclose or abstain has been traditionally imposed on
corporate insiders, particularly officers, directors, or controlling stockholders, but that definition has since
been expanded.[35] The term insiders now includes persons whose relationship or former relationship to
the issuer gives or gave them access to a fact of special significance about the issuer or the security that
is not generally available, and one who learns such a fact from an insider knowing that the person from
whom he learns the fact is such an insider. Insiders have the duty to disclose material facts which are
known to them by virtue of their position but which are not known to persons with whom they deal and
which, if known, would affect their investment judgment. In some cases, however, there may be valid
corporate reasons for the nondisclosure of material information. Where such reasons exist, an issuers
decision not to make any public disclosures is not ordinarily considered as a violation of insider trading. At
the same time, the undisclosed information should not be improperly used for non-corporate purposes,
particularly to disadvantage other persons with whom an insider might transact, and therefore the insider
must abstain from entering into transactions involving such securities. [36]

Respondents further aver that under Section 30 of the Revised Securities Act, the SEC still
needed to define the following terms: material fact, reasonable person, nature and
reliability and generally available. [37] In determining whether or not these terms are vague, these terms
must be evaluated in the context of Section 30 of the Revised Securties Act. To fully understand how the
terms were used in the aforementioned provision, a discussion of what the law recognizes as a fact of
special significance is required, since the duty to disclose such fact or to abstain from any transaction is
imposed on the insider only in connection with a fact of special significance.

Under the law, what is required to be disclosed is a fact of special significance which may be
(a) a material fact which would be likely, on being made generally available, to affect the market price of a
security to a significant extent, or (b) one which a reasonable person would consider especially important
in determining his course of action with regard to the shares of stock.

(a) Material Fact The concept of a material fact is not a new one. As early as 1973, the Rules
Requiring Disclosure of Material Facts by Corporations Whose Securities Are Listed In Any Stock
Exchange or Registered/Licensed Under the Securities Act, issued by the SEC on 29 January 1973,
explained that [a] fact is material if it induces or tends to induce or otherwise affect the sale or purchase of
its securities. Thus, Section 30 of the Revised Securities Act provides that if a fact affects the sale or
purchase of securities, as well as its price, then the insider would be required to disclose such information
to the other party to the transaction involving the securities. This is the first definition given to a fact of
special significance.
(b.1) Reasonable Person The second definition given to a fact of special significance involves the
judgment of a reasonable person. Contrary to the allegations of the respondents, a reasonable person is
not a problematic legal concept that needs to be clarified for the purpose of giving effect to a statute;
rather, it is the standard on which most of our legal doctrines stand. The doctrine on negligence uses the
discretion of the reasonable man as the standard.[38] A purchaser in good faith must also take into
account facts which put a reasonable man on his guard. [39] In addition, it is the belief of the reasonable
and prudent man that an offense was committed that sets the criteria for probable cause for a warrant of

Page 12 of 78
 Page 13 of 78

arrest.[40] This Court, in such cases, differentiated the reasonable and prudent man from a person with
training in the law such as a prosecutor or a judge, and identified him as the average man on the street,
who weighs facts and circumstances without resorting to the calibrations of our technical rules of
evidence of which his knowledge is nil. Rather, he relies on the calculus of common sense of which all
reasonable men have in abundance.[41] In the same vein, the U.S. Supreme Court similarly determined its
standards by the actual significance in the deliberations of a reasonable investor, when it ruled in TSC
Industries, Inc. v. Northway, Inc.,[42] that the determination of materiality requires delicate assessments of
the inferences a reasonable shareholder would draw from a given set of facts and the significance of
those inferences to him.

(b.2) Nature and Reliability The factors affecting the second definition of a fact of special
significance, which is of such importance that it is expected to affect the judgment of a reasonable man,
were substantially lifted from a test of materiality pronounced in the case In the Matter of Investors
Management Co., Inc.[43]:

Among the factors to be considered in determining whether information is material under

this test are the degree of its specificity, the extent to which it differs from information
previously publicly disseminated, and its reliability in light of its nature and source and the
circumstances under which it was received.

It can be deduced from the foregoing that the nature and reliability of a significant fact in determining the
course of action a reasonable person takes regarding securities must be clearly viewed in connection with
the particular circumstances of a case. To enumerate all circumstances that would render the nature and
reliability of a fact to be of special significance is close to impossible. Nevertheless, the proper
adjudicative body would undoubtedly be able to determine if facts of a certain nature and reliability can
influence a reasonable persons decision to retain, sell or buy securities, and thereafter explain and justify
its factual findings in its decision.

(c) Materiality Concept A discussion of the materiality concept would be relevant to both a
material fact which would affect the market price of a security to a significant extent and/or a fact which a
reasonable person would consider in determining his or her cause of action with regard to the shares of
stock. Significantly, what is referred to in our laws as a fact of special significance is referred to in
the U.S. as the materiality concept and the latter is similarly not provided with a precise
definition. In Basic v. Levinson,[44]the U.S. Supreme Court cautioned against confining materiality to a
rigid formula, stating thus:

A bright-line rule indeed is easier to follow than a standard that requires the exercise of
judgment in the light of all the circumstances. But ease of application alone is not an
excuse for ignoring the purposes of the Securities Act and Congress policy
decisions. Any approach that designates a single fact or occurrence as always
determinative of an inherently fact-specific finding such as materiality, must necessarily
be overinclusive or underinclusive.

Moreover, materiality will depend at any given time upon a balancing of both the indicated probability that
the event will occur and the anticipated magnitude of the event in light of the totality of the company
activity.[45] In drafting the Securities Act of 1934, the U.S. Congress put emphasis on the limitations to the
definition of materiality:

Page 13 of 78
 Page 14 of 78

Although the Committee believes that ideally it would be desirable to have absolute
certainty in the application of the materiality concept, it is its view that such a goal is
illusory and unrealistic. The materiality concept is judgmental in nature and it is not
possible to translate this into a numerical formula. The Committee's advice to the
[SEC] is to avoid this quest for certainty and to continue consideration of
materiality on a case-by-case basis as disclosure problems are identified. House
Committee on Interstate and Foreign Commerce, Report of the Advisory Committee on
Corporate Disclosure to the Securities and Exchange Commission, 95th Cong.,
1st Sess., 327 (Comm.Print 1977). (Emphasis provided.)[46]

(d) Generally Available Section 30 of the Revised Securities Act allows the insider the
defense that in a transaction of securities, where the insider is in possession of facts of special
significance, such information is generally available to the public. Whether information found in a
newspaper, a specialized magazine, or any cyberspace media be sufficient for the term generally
available is a matter which may be adjudged given the particular circumstances of the case. The
standards cannot remain at a standstill. A medium, which is widely used today was, at some
previous point in time, inaccessible to most. Furthermore, it would be difficult to approximate how
the rules may be applied to the instant case, where investigation has not even been
started. Respondents failed to allege that the negotiations of their agreement with GHB were made
known to the public through any form of media for there to be a proper appreciation of the issue
presented.

Section 36(a) of the Revised Securities Act

As regards Section 36(a) of the Revised Securities Act, respondents claim that the term beneficial
ownership is vague and that it requires implementing rules to give effect to the law. Section 36(a) of the
Revised Securities Act is a straightforward provision that imposes upon (1) a beneficial owner of more
than ten percent of any class of any equity security or (2) a director or any officer of the issuer of such
security, the obligation to submit a statement indicating his or her ownership of the issuers securities and
such changes in his or her ownership thereof. The said provision reads:

Sec. 36. Directors, officers and principal stockholders. (a) Every person who is
directly or indirectly the beneficial owner of more than ten per centum of any [class] of
any equity security which is registered pursuant to this Act, or who is [a] director or an
officer of the issuer of such security, shall file, at the time of the registration of such
security on a securities exchange or by the effective date of a registration statement or
within ten days after he becomes such a beneficial owner, director or officer, a statement
with the Commission and, if such security is registered on a securities exchange, also
with the exchange, of the amount of all equity securities of such issuer of which he is the
beneficial owner, and within ten days after the close of each calendar month thereafter, if
there has been a change in such ownership during such month, shall file with the
Commission, and if such security is registered on a securities exchange, shall also file
with the exchange, a statement indicating his ownership at the close of the calendar
month and such changes in his ownership as have occurred during such calendar month.
(Emphasis provided.)

Page 14 of 78
 Page 15 of 78

Section 36(a) refers to the beneficial owner. Beneficial owner has been defined in the following manner:

[F]irst, to indicate the interest of a beneficiary in trust property (also called equitable
ownership); and second, to refer to the power of a corporate shareholder to buy or sell
the shares, though the shareholder is not registered in the corporations books as the
owner. Usually, beneficial ownership is distinguished from naked ownership, which is the
enjoyment of all the benefits and privileges of ownership, as against possession of the
bare title to property.[47]
Even assuming that the term beneficial ownership was vague, it would not affect respondents case,
where the respondents are directors and/or officers of the corporation, who are specifically required to
comply with the reportorial requirements under Section 36(a) of the Revised Securities Act. The validity of
a statute may be contested only by one who will sustain a direct injury as a result of its enforcement. [48]

Sections 30 and 36 of the Revised Securities Act were enacted to promote full disclosure in the
securities market and prevent unscrupulous individuals, who by their positions obtain non-public
information, from taking advantage of an uninformed public. No individual would invest in a market which
can be manipulated by a limited number of corporate insiders. Such reaction would stifle, if not stunt, the
growth of the securities market. To avert the occurrence of such an event, Section 30 of the Revised
Securities Act prevented the unfair use of non-public information in securities transactions, while Section
36 allowed the SEC to monitor the transactions entered into by corporate officers and directors as
regards the securities of their companies.

In the case In the Matter of Investors Management Co.,[49] it was cautioned that the broad
language of the anti-fraud provisions, which include the provisions on insider trading, should not be
circumscribed by fine distinctions and rigid classifications. The ambit of anti-fraud provisions is
necessarily broad so as to embrace the infinite variety of deceptive conduct. [50]

In Tatad v. Secretary of Department of Energy,[51] this Court brushed aside a contention, similar
to that made by the respondents in this case, that certain words or phrases used in a statute do not set
determinate standards, declaring that:

Petitioners contend that the words as far as practicable, declining and stable should have
been defined in R.A. No. 8180 as they do not set determinate and determinable
standards. This stubborn submission deserves scant consideration. The dictionary
meanings of these words are well settled and cannot confuse men of reasonable
intelligence. x x x. The fear of petitioners that these words will result in the exercise of
executive discretion that will run riot is thus groundless. To be sure, the Court has
sustained the validity of similar, if not more general standards in other cases.

Among the words or phrases that this Court upheld as valid standards were simplicity and
dignity,[52] public interest,[53] and interests of law and order.[54]

The Revised Securities Act was approved on 23 February 1982. The fact that the Full Disclosure
Rules were promulgated by the SEC only on 24 July 1996 does not render ineffective in the meantime
Section 36 of the Revised Securities Act. It is already unequivocal that the Revised Securities Act
requires full disclosure and the Full Disclosure Rules were issued to make the enforcement of the law
more consistent, efficient and effective. It is equally reasonable to state that the disclosure forms later
provided by the SEC, do not, in any way imply that no compliance was required before the forms were

Page 15 of 78
 Page 16 of 78

provided. The effectivity of a statute which imposes reportorial requirements cannot be suspended by the
issuance of specified forms, especially where compliance therewith may be made even without such
forms. The forms merely made more efficient the processing of requirements already identified by the
statute.

For the same reason, the Court of Appeals made an evident mistake when it ruled that no civil, criminal or
administrative actions can possibly be had against the respondents in connection with Sections 8, 30 and
36 of the Revised Securities Act due to the absence of implementing rules. These provisions are
sufficiently clear and complete by themselves.Their requirements are specifically set out, and the acts
which are enjoined are determinable. In particular, Section 8[55] of the Revised Securities Act is a
straightforward enumeration of the procedure for the registration of securities and the particular matters
which need to be reported in the registration statement thereof. The Decision, dated 20 August 1998,
provides no valid reason to exempt the respondent IRC from such requirements. The lack of
implementing rules cannot suspend the effectivity of these provisions. Thus, this Court cannot find any
cogent reason to prevent the SEC from exercising its authority to investigate respondents for violation of
Section 8 of the Revised Securities Act.

II. The right to cross-examination is not absolute and cannot

be demanded during investigative proceedings
before the PED.

In its assailed Decision dated 20 August 1998, the Court of Appeals pronounced that the PED
Rules of Practice and Procedure was invalid since Section 8, Rule V [56]thereof failed to provide for the
parties right to cross-examination, in violation of the Administrative Code of 1987 particularly Section
12(3), Chapter 3, Book VII thereof. This ruling is incorrect.

Firstly, Section 4, Rule I of the PED Rules of Practice and Procedure, categorically stated that the
proceedings before the PED are summary in nature:

Section 4. Nature of Proceedings Subject to the requirements of due process,

proceedings before the PED shall be summary in nature not necessarily adhering to or
following the technical rules of evidence obtaining in the courts of law. The Rules of Court
may apply in said proceedings in suppletory character whenever practicable.

Rule V of the PED Rules of Practice and Procedure further specified that:

Section 5. Submission of Documents During the preliminary conference/hearing, or

immediately thereafter, the Hearing Officer may require the parties to simultaneously
submit their respective verified position papers accompanied by all supporting documents
and the affidavits of their witnesses, if any which shall take the place of their direct
testimony. The parties shall furnish each other with copies of the position papers together
with the supporting affidavits and documents submitted by them.

Section 6. Determination of necessity of hearing. Immediately after the submission by the

parties of their position papers and supporting documents, the Hearing Officer shall
determine whether there is a need for a formal hearing. At this stage, he may, in his
discretion, and for the purpose of making such determination, elicit pertinent facts or
information, including documentary evidence, if any, from any party or witness to

Page 16 of 78
 Page 17 of 78

complete, as far as possible, the facts of the case. Facts or information so elicited may
serve as basis for his clarification or simplifications of the issues in the case. Admissions
and stipulation of facts to abbreviate the proceedings shall be encouraged.

Section 7. Disposition of Case. If the Hearing Officer finds no necessity of further hearing
after the parties have submitted their position papers and supporting documents, he shall
so inform the parties stating the reasons therefor and shall ask them to acknowledge the
fact that they were so informed by signing the minutes of the hearing and the case shall
be deemed submitted for resolution.

As such, the PED Rules provided that the Hearing Officer may require the parties to submit their
respective verified position papers, together with all supporting documents and affidavits of witnesses. A
formal hearing was not mandatory; it was within the discretion of the Hearing Officer to determine whether
there was a need for a formal hearing.Since, according to the foregoing rules, the holding of a hearing
before the PED is discretionary, then the right to cross-examination could not have been demanded by
either party.

Secondly, it must be pointed out that Chapter 3, Book VII of the Administrative Code, entitled
Adjudication, does not affect the investigatory functions of the agencies. The law creating the PED,
Section 8 of Presidential Decree No. 902-A, as amended, defines the authority granted to the PED, thus:

SEC. 8. The Prosecution and Enforcement Department shall have, subject to the
Commissions control and supervision, the exclusive authority to investigate, on
complaint or motu proprio, any act or omission of the Board of Directors/Trustees of
corporations, or of partnerships, or of other associations, or of their stockholders, officers
or partners, including any fraudulent devices, schemes or representations, in violation of
any law or rules and regulations administered and enforced by the Commission; to file
and prosecute in accordance with law and rules and regulations issued by the
Commission and in appropriate cases, the corresponding criminal or civil case before the
Commission or the proper court or body upon prima facie finding of violation of any laws
or rules and regulations administered and enforced by the Commission; and to perform
such other powers and functions as may be provided by law or duly delegated to it by the
Commission. (Emphasis provided.)

The law creating PED empowers it to investigate violations of the rules and regulations promulgated by
the SEC and to file and prosecute such cases. It fails to mention any adjudicatory functions insofar as the
PED is concerned. Thus, the PED Rules of Practice and Procedure need not comply with the provisions
of the Administrative Code on adjudication, particularly Section 12(3), Chapter 3, Book VII.

In Cario v. Commission on Human Rights,[57] this Court sets out the distinction between investigative and
adjudicative functions, thus:

Investigate, commonly understood, means to examine, explore, inquire or delve

or probe into, research on, study. The dictionary definition of investigate is to observe or
study closely; inquire into systematically: to search or inquire into xx to subject to an
official probe xx: to conduct an official inquiry. The purpose of an investigation, of course
is to discover, to find out, to learn, obtain information. Nowhere included or intimated is

Page 17 of 78
 Page 18 of 78

the notion of settling, deciding or resolving a controversy involved in the facts inquired
into by application of the law to the facts established by the inquiry.

The legal meaning of investigate is essentially the same: (t)o follow up step by
step by patient inquiry or observation. To trace or track; to search into; to examine and
inquire into with care and accuracy; to find out by careful inquisition; examination; the
taking of evidence; a legal inquiry; to inquire; to make an investigation, investigation
being in turn described as (a)n administrative function, the exercise of which ordinarily
does not require a hearing. 2 Am J2d Adm L Sec. 257; xx an inquiry, judicial or
otherwise, for the discovery and collection of facts concerning a certain matter or matters.

Adjudicate, commonly or popularly understood, means to adjudge, arbitrate,

judge, decide, determine, resolve, rule on, settle. The dictionary defines the term as to
settle finally (the rights and duties of parties to a court case) on the merits of issues
raised: xx to pass judgment on: settle judicially: xx act as judge. And adjudge means to
decide or rule upon as a judge or with judicial or quasi-judicial powers: xx to award or
grant judicially in a case of controversy x x x.

In a legal sense, adjudicate means: To settle in the exercise of judicial authority.

To determine finally. Synonymous with adjudge in its strictest sense; and adjudge means:
To pass on judicially, to decide, settle, or decree, or to sentence or condemn.
x x x Implies a judicial determination of a fact, and the entry of a judgment.

There is no merit to the respondents averment that the sections under Chapter 3, Book VII of the
Administrative Code, do not distinguish between investigative and adjudicatory functions. Chapter 3,
Book VII of the Administrative Code, is unequivocally entitled Adjudication.

Respondents insist that the PED performs adjudicative functions, as enumerated under Section
1(h) and (j), Rule II; and Section 2(4), Rule VII of the PED Rules of Practice and Procedure:

Section 1. Authority of the Prosecution and Enforcement Department Pursuant to

Presidential Decree No. 902-A, as amended by Presidential Decree No. 1758, the
Prosecution and Enforcement Department is primarily charged with the following:

xxxx

(h) Suspends or revokes, after proper notice and hearing in accordance with these Rules,
the franchise or certificate of registration of corporations, partnerships or associations,
upon any of the following grounds:

1. Fraud in procuring its certificate of registration;

2. Serious misrepresentation as to what the corporation can do or is doing to the great

prejudice of or damage to the general public;

3. Refusal to comply or defiance of any lawful order of the Commission restraining

commission of acts which would amount to a grave violation of its franchise;

Page 18 of 78
 Page 19 of 78

xxxx

(j) Imposes charges, fines and fees, which by law, it is authorized to collect;

xxxx

Section 2. Powers of the Hearing Officer. The Hearing Officer shall have the following
powers:

xxxx

4. To cite and/or declare any person in direct or indirect contempt in accordance with
pertinent provisions of the Rules of Court.

Even assuming that these are adjudicative functions, the PED, in the instant case, exercised its
investigative powers; thus, respondents do not have the requisite standing to assail the validity of the
rules on adjudication. A valid source of a statute or a rule can only be contested by one who will sustain a
direct injury as a result of its enforcement.[58]In the instant case, respondents are only being investigated
by the PED for their alleged failure to disclose their negotiations with GHB and the transactions entered
into by its directors involving IRC shares. The respondents have not shown themselves to be under any
imminent danger of sustaining any personal injury attributable to the exercise of adjudicative functions by
the SEC. They are not being or about to be subjected by the PED to charges, fees or fines; to citations for
contempt; or to the cancellation of their certificate of registration under Section 1(h), Rule II of the PED
Rules of Practice and Procedure.

To repeat, the only powers which the PED was likely to exercise over the respondents were
investigative in nature, to wit:

Section 1. Authority of the Prosecution and Enforcement Department Pursuant to

Presidential Decree No. 902-A, as amended by Presidential Decree No. 1758, the
Prosecution and Enforcement Department is primarily charged with the following:
xxxx

b. Initiates proper investigation of corporations and partnerships or persons, their

books, records and other properties and assets, involving their business
transactions, in coordination with the operating department involved;

xxxx

e. Files and prosecutes civil or criminal cases before the Commission and other
courts of justice involving violations of laws and decrees enforced by the Commission
and the rules and regulations promulgated thereunder;

f. Prosecutes erring directors, officers and stockholders of corporations and

partnerships, commercial paper issuers or persons in accordance with the pertinent
rules on procedures;

Page 19 of 78
 Page 20 of 78

The authority granted to the PED under Section 1(b), (e), and (f), Rule II of the PED Rules of Practice and
Procedure, need not comply with Section 12, Chapter 3, Rule VII of the Administrative Code, which
affects only the adjudicatory functions of administrative bodies. Thus, the PED would still be able to
investigate the respondents under its rules for their alleged failure to disclose their negotiations with GHB
and the transactions entered into by its directors involving IRC shares.

This is not to say that administrative bodies performing adjudicative functions are required to
strictly comply with the requirements of Chapter 3, Rule VII of the Administrative Code, particularly, the
right to cross-examination. It should be noted that under Section 2.2 of Executive Order No. 26, issued
on 7 October 1992, abbreviated proceedings are prescribed in the disposition of administrative cases:

2. Abbreviation of Proceedings. All administrative agencies are hereby directed to adopt

and include in their respective Rules of Procedure the following provisions:
xxxx

2.2 Rules adopting, unless otherwise provided by special laws and without prejudice to
Section 12, Chapter 3, Book VII of the Administrative Code of 1987, the mandatory use of
affidavits in lieu of direct testimonies and the preferred use of depositions whenever
practicable and convenient.

As a consequence, in proceedings before administrative or quasi-judicial bodies, such as the

National Labor Relations Commission and the Philippine Overseas Employment Agency, created under
laws which authorize summary proceedings, decisions may be reached on the basis of position papers or
other documentary evidence only.They are not bound by technical rules of procedure and evidence. [59] In
fact, the hearings before such agencies do not connote full adversarial proceedings. [60] Thus, it is not
necessary for the rules to require affiants to appear and testify and to be cross-examined by the counsel
of the adverse party. To require otherwise would negate the summary nature of the administrative or
quasi-judicial proceedings.[61] In Atlas Consolidated Mining and Development Corporation v. Factoran,
Jr.,[62] this Court stated that:

[I]t is sufficient that administrative findings of fact are supported by evidence, or

negatively stated, it is sufficient that findings of fact are not shown to be unsupported by
evidence. Substantial evidence is all that is needed to support an administrative finding of
fact, and substantial evidence is such relevant evidence as a reasonable mind might
accept as adequate to support a conclusion.

In order to comply with the requirements of due process, what is required, among other things, is that
every litigant be given reasonable opportunity to appear and defend his right and to introduce relevant
evidence in his favor.[63]

III. The Securities Regulations Code did not repeal Sections

8, 30 and 36 of the Revised Securities Act since said
provisions were reenacted in the new law.

The Securities Regulations Code absolutely repealed the Revised Securities Act. While the
absolute repeal of a law generally deprives a court of its authority to penalize the person charged with the

Page 20 of 78
 Page 21 of 78

violation of the old law prior to its appeal, an exception to this rule comes about when the repealing law
punishes the act previously penalized under the old law. The Court, in Benedicto v. Court of Appeals, sets
down the rules in such instances:[64]

As a rule, an absolute repeal of a penal law has the effect of depriving the court
of its authority to punish a person charged with violation of the old law prior to its
repeal. This is because an unqualified repeal of a penal law constitutes a legislative act of
rendering legal what had been previously declared as illegal, such that the offense no
longer exists and it is as if the person who committed it never did so. There are,
however, exceptions to the rule. One is the inclusion of a saving clause in the repealing
statute that provides that the repeal shall have no effect on pending actions. Another
exception is where the repealing act reenacts the former statute and punishes the act
previously penalized under the old law. In such instance, the act committed before the
reenactment continues to be an offense in the statute books and pending cases are not
affected, regardless of whether the new penalty to be imposed is more favorable to the
accused. (Emphasis provided.)

In the present case, a criminal case may still be filed against the respondents despite the repeal,
since Sections 8, [65] 12,[66] 26,[67] 27[68] and 23[69] of the Securities Regulations Code impose duties that
are substantially similar to Sections 8, 30 and 36 of the repealed Revised Securities Act.

Section 8 of the Revised Securities Act, which previously provided for the registration of securities
and the information that needs to be included in the registration statements, was expanded under Section
12, in connection with Section 8 of the Securities Regulations Code. Further details of the information
required to be disclosed by the registrant are explained in the Amended Implementing Rules and
Regulations of the Securities Regulations Code, issued on 30 December 2003, particularly Sections 8
and 12 thereof.

Section 30 of the Revised Securities Act has been reenacted as Section 27 of the Securities
Regulations Code, still penalizing an insiders misuse of material and non-public information about the
issuer, for the purpose of protecting public investors. Section 26 of the Securities Regulations Code even
widens the coverage of punishable acts, which intend to defraud public investors through various devices,
misinformation and omissions.

Section 23 of the Securities Regulations Code was practically lifted from Section 36(a) of the
Revised Securities Act. Both provisions impose upon (1) a beneficial owner of more than ten percent of
any class of any equity security or (2) a director or any officer of the issuer of such security, the obligation
to submit a statement indicating his or her ownership of the issuers securities and such changes in his or
her ownership thereof.

Clearly, the legislature had not intended to deprive the courts of their authority to punish a person
charged with violation of the old law that was repealed; in this case, the Revised Securities Act.

IV. The SEC retained the jurisdiction to investigate

violations of the Revised Securities Act, reenacted in
the Securities Regulations Code, despite the
abolition of the PED.

Page 21 of 78
 Page 22 of 78

Section 53 of the Securities Regulations Code clearly provides that criminal complaints for
violations of rules and regulations enforced or administered by the SEC shall be referred to the
Department of Justice (DOJ) for preliminary investigation, while the SEC nevertheless retains limited
investigatory powers.[70] Additionally, the SEC may still impose the appropriate administrative sanctions
under Section 54 of the aforementioned law.[71]

In Morato v. Court of Appeals,[72] the cases therein were still pending before the PED for
investigation and the SEC for resolution when the Securities Regulations Code was enacted. The case
before the SEC involved an intra-corporate dispute, while the subject matter of the other case
investigated by the PED involved the schemes, devices, and violations of pertinent rules and laws of the
companys board of directors. The enactment of the Securities Regulations Code did not result in the
dismissal of the cases; rather, this Court ordered the transfer of one case to the proper regional trial court
and the SEC to continue with the investigation of the other case.

The case at bar is comparable to the aforecited case. In this case, the SEC already commenced the
investigative proceedings against respondents as early as 1994. Respondents were called to appear
before the SEC and explain their failure to disclose pertinent information on 14 August 1994. Thereafter,
the SEC Chairman, having already made initial findings that respondents failed to make timely
disclosures of their negotiations with GHB, ordered a special investigating panel to hear the case. The
investigative proceedings were interrupted only by the writ of preliminary injunction issued by the Court of
Appeals, which became permanent by virtue of the Decision, dated 20 August 1998, in C.A.-G.R. SP No.
37036. During the pendency of this case, the Securities Regulations Code repealed the Revised
Securities Act. As in Morato v. Court of Appeals, the repeal cannot deprive SEC of its jurisdiction to
continue investigating the case; or the regional trial court, to hear any case which may later be filed
against the respondents.

V. The instant case has not yet prescribed.

Respondents have taken the position that this case is moot and academic, since any criminal complaint
that may be filed against them resulting from the SECs investigation of this case has already
prescribed.[73] They point out that the prescription period applicable to offenses punished under special
laws, such as violations of the Revised Securities Act, is twelve years under Section 1 of Act No. 3326, as
amended by Act No. 3585 and Act No. 3763, entitled An Act to Establish Periods of Prescription for
Violations Penalized by Special Acts and Municipal Ordinances and to Provide When Prescription Shall
Begin to Act.[74] Since the offense was committed in 1994, they reasoned that prescription set in as early
as 2006 and rendered this case moot. Such position, however, is incongruent with the factual
circumstances of this case, as well as the applicable laws and jurisprudence.

It is an established doctrine that a preliminary investigation interrupts the prescription period. [75] A
preliminary investigation is essentially a determination whether an offense has been committed, and
whether there is probable cause for the accused to have committed an offense:

A preliminary investigation is merely inquisitorial, and it is often the only means of discovering
the persons who may be reasonably charged with a crime, to enable the fiscal to prepare the
complaint or information. It is not a trial of the case on the merits and has no purpose except
that of determining whether a crime has been committed or whether there is probable cause
to believe that the accused is guilty thereof.[76]

Page 22 of 78
 Page 23 of 78

Under Section 45 of the Revised Securities Act, which is entitled Investigations, Injunctions and
Prosecution of Offenses, the Securities Exchange Commission (SEC) has the authority to make such
investigations as it deems necessary to determine whether any person has violated or is about to violate
any provision of this Act XXX. After a finding that a person has violated the Revised Securities Act, the
SEC may refer the case to the DOJ for preliminary investigation and prosecution.

While the SEC investigation serves the same purpose and entails substantially similar duties as
the preliminary investigation conducted by the DOJ, this process cannot simply be
disregarded. In Baviera v. Paglinawan,[77] this Court enunciated that a criminal complaint is first filed with
the SEC, which determines the existence of probable cause, before a preliminary investigation can be
commenced by the DOJ. In the aforecited case, the complaint filed directly with the DOJ was dismissed
on the ground that it should have been filed first with the SEC. Similarly, the offense was a violation of the
Securities Regulations Code, wherein the procedure for criminal prosecution was reproduced from
Section 45 of the Revised Securities Act. [78] This Court affirmed the dismissal, which it explained thus:

The Court of Appeals held that under the above provision, a criminal complaint
for violation of any law or rule administered by the SEC must first be filed with the latter. If
the Commission finds that there is probable cause, then it should refer the case to the
DOJ. Since petitioner failed to comply with the foregoing procedural requirement, the
DOJ did not gravely abuse its discretion in dismissing his complaint in I.S. No. 2004-229.

A criminal charge for violation of the Securities Regulation Code is a specialized

dispute. Hence, it must first be referred to an administrative agency of special
competence, i.e., the SEC. Under the doctrine of primary jurisdiction, courts will not
determine a controversy involving a question within the jurisdiction of the administrative
tribunal, where the question demands the exercise of sound administrative discretion
requiring the specialized knowledge and expertise of said administrative tribunal to
determine technical and intricate matters of fact. The Securities Regulation Code is a
special law. Its enforcement is particularly vested in the SEC. Hence, all complaints for
any violation of the Code and its implementing rules and regulations should be filed with
the SEC. Where the complaint is criminal in nature, the SEC shall indorse the complaint
to the DOJ for preliminary investigation and prosecution as provided in Section 53.1
earlier quoted.

We thus agree with the Court of Appeals that petitioner committed a fatal
procedural lapse when he filed his criminal complaint directly with the DOJ. Verily, no
grave abuse of discretion can be ascribed to the DOJ in dismissing petitioners complaint.

The said case puts in perspective the nature of the investigation undertaken by the SEC, which is
a requisite before a criminal case may be referred to the DOJ. The Court declared that it is imperative that
the criminal prosecution be initiated before the SEC, the administrative agency with the special
competence.

It should be noted that the SEC started investigative proceedings against the respondents as
early as 1994. This investigation effectively interrupted the prescription period.However, said proceedings
were disrupted by a preliminary injunction issued by the Court of Appeals on 5 May 1995, which
effectively enjoined the SEC from filing any criminal, civil, or administrative case against the respondents
herein.[79] Thereafter, on 20 August 1998, the appellate court issued the assailed Decision in C.A. G.R.

Page 23 of 78
 Page 24 of 78

SP. No. 37036 ordering that the writ of injunction be made permanent and prohibiting the SEC from
taking cognizance of and initiating any action against herein respondents. The SEC was bound to comply
with the aforementioned writ of preliminary injunction and writ of injunction issued by the Court of Appeals
enjoining it from continuing with the investigation of respondents for 12 years. Any deviation by the SEC
from the injunctive writs would be sufficient ground for contempt. Moreover, any step the SEC takes in
defiance of such orders will be considered void for having been taken against an order issued by a court
of competent jurisdiction.

An investigation of the case by any other administrative or judicial body would likewise be
impossible pending the injunctive writs issued by the Court of Appeals. Given the ruling of this Court
in Baviera v. Paglinawan,[80] the DOJ itself could not have taken cognizance of the case and conducted its
preliminary investigation without a prior determination of probable cause by the SEC. Thus, even
presuming that the DOJ was not enjoined by the Court of Appeals from conducting a preliminary
investigation, any preliminary investigation conducted by the DOJ would have been a futile effort since
the SEC had only started with its investigation when respondents themselves applied for and were
granted an injunction by the Court of Appeals.

Moreover, the DOJ could not have conducted a preliminary investigation or filed a criminal case
against the respondents during the time that issues on the effectivity of Sections 8, 30 and 36 of the
Revised Securities Act and the PED Rules of Practice and Procedure were still pending before the Court
of Appeals. After the Court of Appeals declared the aforementioned statutory and regulatory provisions
invalid and, thus, no civil, criminal or administrative case may be filed against the respondents for
violations thereof, the DOJ would have been at a loss, as there was no statutory provision which
respondents could be accused of violating.
Accordingly, it is only after this Court corrects the erroneous ruling of the Court of Appeals in its
Decision dated 20 August 1998 that either the SEC or DOJ may properly conduct any kind of
investigation against the respondents for violations of Sections 8, 30 and 36 of the Revised Securities
Act. Until then, the prescription period is deemed interrupted.

To reiterate, the SEC must first conduct its investigations and make a finding of probable cause in
accordance with the doctrine pronounced in Baviera v. Paglinawan.[81]In this case, the DOJ was
precluded from initiating a preliminary investigation since the SEC was halted by the Court of Appeals
from continuing with its investigation. Such a situation leaves the prosecution of the case at a standstill,
and neither the SEC nor the DOJ can conduct any investigation against the respondents, who, in the first
place, sought the injunction to prevent their prosecution. All that the SEC could do in order to break the
impasse was to have the Decision of the Court of Appeals overturned, as it had done at the earliest
opportunity in this case. Therefore, the period during which the SEC was prevented from continuing with
its investigation should not be counted against it. The law on the prescription period was never intended
to put the prosecuting bodies in an impossible bind in which the prosecution of a case would be placed
way beyond their control; for even if they avail themselves of the proper remedy, they would still be
barred from investigating and prosecuting the case.

Indubitably, the prescription period is interrupted by commencing the proceedings for the
prosecution of the accused. In criminal cases, this is accomplished by initiating the preliminary
investigation. The prosecution of offenses punishable under the Revised Securities Act and the Securities
Regulations Code is initiated by the filing of a complaint with the SEC or by an investigation conducted by
the SEC motu proprio. Only after a finding of probable cause is made by the SEC can the DOJ instigate a
preliminary investigation. Thus, the investigation that was commenced by the SEC in 1995, soon after it

Page 24 of 78
 Page 25 of 78

discovered the questionable acts of the respondents, effectively interrupted the prescription period. Given
the nature and purpose of the investigation conducted by the SEC, which is equivalent to the preliminary
investigation conducted by the DOJ in criminal cases, such investigation would surely interrupt the
prescription period.

VI. The Court of Appeals was justified in denying SECs

Motion for Leave to Quash SEC Omnibus Orders
dated 23 October 1995.
The SEC avers that the Court of Appeals erred when it denied its Motion for Leave to Quash SEC
Omnibus Orders, dated 23 October 1995, in the light of its admission that the PED had the sole authority
to investigate the present case. On this matter, this Court cannot agree with the SEC.

In the assailed decision, the Court of Appeals denied the SECs Motion for Leave to Quash SEC
Omnibus Orders, since it found other issues that were more important than whether or not the PED was
the proper body to investigate the matter. Its refusal was premised on its earlier finding that no criminal,
civil, or administrative case may be filed against the respondents under Sections 8, 30 and 36 of the
Revised Securities Act, due to the absence of any implementing rules and regulations. Moreover, the
validity of the PED Rules on Practice and Procedure was also raised as an issue. The Court of Appeals,
thus, reasoned that if the quashal of the orders was granted, then it would be deprived of the opportunity
to determine the validity of the aforementioned rules and statutory provisions. In addition, the SEC would
merely pursue the same case without the Court of Appeals having determined whether or not it may do
so in accordance with due process requirements. Absent a determination of whether the SEC may file a
case against the respondents based on the assailed provisions of the Revised Securities Act, it would
have been improper for the Court of Appeals to grant the SECs Motion for Leave to Quash SEC Omnibus
Orders.

IN ALL, this Court rules that no implementing rules were needed to render effective Sections 8,
30 and 36 of the Revised Securities Act; nor was the PED Rules of Practice and Procedure invalid, prior
to the enactment of the Securities Regulations Code, for failure to provide parties with the right to cross-
examine the witnesses presented against them. Thus, the respondents may be investigated by the
appropriate authority under the proper rules of procedure of the Securities Regulations Code for violations
of Sections 8, 30, and 36 of the Revised Securities Act. [82]

IN VIEW OF THE FOREGOING, the instant Petition is GRANTED. This Court

hereby REVERSES the assailed Decision of the Court of Appeals promulgated on 20 August 1998 in CA-
G.R. SP No. 37036 and LIFTS the permanent injunction issued pursuant thereto. This Court
further DECLARES that the investigation of the respondents for violations of Sections 8, 30 and 36 of the
Revised Securities Act may be undertaken by the proper authorities in accordance with the Securities
Regulations Code. No costs.

SO ORDERED.

Page 25 of 78
 Page 26 of 78

 Sanrio Co. Ltd. v. Lim, Feb. 19, 2008

G.R. No. 168662, February 19, 2008

DECISION

CORONA, J.:

This petition for review on certiorari[1] seeks to set aside the decision of the Court of Appeals (CA) in CA-
G.R. CV No. 74660[2] and its resolution[3] denying reconsideration.

Petitioner Sanrio Company Limited, a Japanese corporation, owns the copyright of various animated
characters such as Hello Kitty, Little Twin Stars, My Melody, Tuxedo Sam and Zashikibuta among
others.[4] While it is not engaged in business in the Philippines, its products are sold locally by its
exclusive distributor, Gift Gate Incorporated (GGI).[5]

As such exclusive distributor, GGI entered into licensing agreements with JC Lucas Creative Products,
Inc., Paper Line Graphics, Inc. and Melawares Manufacturing Corporation. [6] These local entities were
allowed to manufacture certain products (bearing petitioner's copyrighted animated characters) for the
local market.

Sometime in 2001, due to the deluge of counterfeit Sanrio products, GGI asked IP Manila Associates
(IPMA) to conduct a market research. The research's objective was to identify those factories, department
stores and retail outlets manufacturing and/or selling fake Sanrio items. [7] After conducting several test-
buys in various commercial areas, IPMA confirmed that respondent's Orignamura Trading in Tutuban
Center, Manila was selling imitations of petitioner's products.[8]

Consequently, on May 29, 2000, IPMA agents Lea A. Carmona and Arnel P. Dausan executed a joint
affidavit attesting to the aforementioned facts.[9] IPMA forwarded the said affidavit to the National Bureau
of Investigation (NBI) which thereafter filed an application for the issuance of a search warrant in the
office of the Executive Judge of the Regional Trial Court of Manila.[10]

After conducting the requisite searching inquiry, the executive judge issued a search warrant on May 30,
2000.[11] On the same day, agents of the NBI searched the premises of Orignamura Trading. As a result
thereof, they were able to seize various Sanrio products. [12]

On April 4, 2002, petitioner, through its attorney-in-fact Teodoro Y. Kalaw IV of the Quisumbing Torres
law firm, filed a complaint-affidavit[13] with the Task-Force on Anti-Intellectual Property Piracy (TAPP) of
the Department of Justice (DOJ) against respondent for violation of Section 217 (in relation to Sections
177[14] and 178[15]) of the Intellectual Property Code (IPC) which states:
Section 217. Criminal Penalties. 217.1. Any person infringing any right secured by
provisions of Part IV of this Act or aiding or abetting such infringement shall be guilty of
a crime punishable by:

(a) Imprisonment of one (1) year to three (3) years plus a fine ranging from Fifty
thousand pesos (P50,000) to One hundred fifty thousand pesos (P150,000) for the first
offense.

Page 26 of 78
 Page 27 of 78

(b) Imprisonment of three (3) years and one (1) day to six (6) years plus a fine ranging
from One hundred fifty thousand pesos (P150,000) to Five hundred thousand pesos
(P500,000) for the second offense.

(c) Imprisonment of six (6) years and one (1) day to nine (9) years plus a fine ranging
from Five hundred thousand pesos (P500,000) to One million five hundred thousand
pesos (P1,500,000) for the third and subsequent offenses.

(d) In all cases, subsidiary imprisonment in cases of insolvency.

217.2. In determining the number of years of imprisonment and the amount of fine, the
court shall consider the value of the infringing materials that the defendant has produced
or manufactured and the damage that the copyright owner has suffered by reason of
infringement.

217.3. Any person who at the time when copyright subsists in a work has in his
possession an article which he knows, or ought to know, to be an infringing copy
of the work for the purpose of:

(a) Selling, letting for hire, or by way of trade offering or exposing for sale, or hire,
the article;

(b) Distributing the article for purpose of trade or any other purpose to an extent
that will prejudice the rights of the copyright of the owner in the work; or

(c) Trade exhibit of the article in public, shall be guilty of an offense and shall be liable
on conviction to imprisonment and fine as above mentioned. (emphasis supplied)

Respondent asserted in his counter-affidavit[16] that he committed no violation of the provisions of the IPC
because he was only a retailer.[17] Respondent neither reproduced nor manufactured any of petitioner's
copyrighted item; thus, he did not transgress the economic rights of petitioner. [18] Moreover, he obtained
his merchandise from authorized manufacturers of petitioner's products.[19]

On September 25, 2002, the TAPP found that:

Evidence on record would show that respondent bought his merchandise from
legitimate sources, as shown by official receipts issued by JC Lucas Creative Products,
Inc., Paper Line Graphics, Inc. and Melawares Manufacturing Corporation. In fact, in
her letter dated May 23, 2002, Ms. Ma. Angela S. Garcia certified that JC Lucas
Creative Products, Inc., Paper Line Graphics, Inc. and Melawares Manufacturing
Corporation are authorized to produce certain Sanrio products. While it appears that
some of the items seized during the search are not among those products
which [GGI] authorized these establishments to produce, the fact remains that
respondent bought these from the abovecited legitimate sources. At this juncture,
it bears stressing that respondent relied on the representations of these
manufacturers and distributors that the items they sold were genuine. As such, it
is not incumbent upon respondent to verify from these sources what items [GGI] only
authorized them to produce. Thus, as far as respondent is concerned, the items in

Page 27 of 78
 Page 28 of 78

his possession are not infringing copies of the original [petitioner's] products.
(emphasis supplied)[20]

Thus, in a resolution dated September 25, 2002, it dismissed the complaint due to insufficiency of
evidence.[21]

Petitioner moved for reconsideration but it was denied.[22] Hence, it filed a petition for review in the Office
of the Chief State Prosecutor of the DOJ.[23] In a resolution dated August 29, 2003,[24] the Office of the
Chief State Prosecutor affirmed the TAPP resolution. The petition was dismissed for lack of reversible
error.
Aggrieved, petitioner filed a petition for certiorari in the CA. On May 3, 2005, the appellate court
dismissed the petition on the ground of prescription. It based its action on Act 3326 which states:
Section 1. Violations penalized by special acts shall, unless otherwise provided
in such acts, prescribe in accordance with the following rules: (a) after a year for
offenses punished only by a fine or by imprisonment for not more than one month, or
both; (b) after four years for those punished by imprisonment for more than one
month, but less than two years; (c) after eight years for those punished by
imprisonment for two years or more, but less than six years; and (d) after twelve
years for any other offense punished by imprisonment for six years or more, except the
crime of treason, which shall prescribe after twenty years; Provided, however, That all
offenses against any law or part of law administered by the Bureau of Internal Revenue
shall prescribe after five years. Violations penalized by municipal ordinances shall
prescribe after two months.

Section 2. Prescription shall begin to run from the day of the commission of the
violation of the law, and if the same may not be known at the time, from the discovery
thereof and the institution of judicial proceedings for its investigation and punishment.

The prescription shall be interrupted when proceedings are instituted against the
guilty person, and shall begin to run again if the proceedings are dismissed for reasons
not constituting jeopardy. (emphasis supplied)

According to the CA, because no complaint was filed in court within two years after the commission of the
alleged violation, the offense had already prescribed.[25]

On the merits of the case, the CA concluded that the DOJ did not commit grave abuse of discretion in
dismissing the petition for review.[26] To be criminally liable for violation of Section 217.3 of the IPC, the
following requisites must be present:
1. possession of the infringing copy and

2. knowledge or suspicion that the copy is an infringement of the genuine

article.

The CA agreed with the DOJ that petitioner failed to prove that respondent knew that the
merchandise he sold was counterfeit. Respondent, on the other hand, was able to show that he obtained
these goods from legitimate sources.[27]

Page 28 of 78
 Page 29 of 78

Petitioner moved for reconsideration but it was denied. Hence, this petition.

Petitioner now essentially avers that the CA erred in concluding that the alleged violations of the IPC had
prescribed. Recent jurisprudence holds that the pendency of a preliminary investigation suspends the
running of the prescriptive period.[28] Moreover, the CA erred in finding that the DOJ did not commit grave
abuse of discretion in dismissing the complaint. Respondent is liable for copyright infringement (even if he
obtained his merchandise from legitimate sources) because he sold counterfeit goods. [29]

Although we do not agree wholly with the CA, we deny the petition.

FILING OF THE COMPLAINT IN THE DOJ TOLLED

THE PRESCRIPTIVE PERIOD

Section 2 of Act 3326 provides that the prescriptive period for violation of special laws starts on the day
such offense was committed and is interrupted by the institution of proceedings against respondent (i.e.,
the accused).

Petitioner in this instance filed its complaint-affidavit on April 4, 2002 or one year, ten months and
four days after the NBI searched respondent's premises and seized Sanrio merchandise therefrom.
Although no information was immediately filed in court, respondent's alleged violation had not yet
prescribed.[30]

In the recent case of Brillantes v. Court of Appeals,[31] we affirmed that the filing of the complaint for
purposes of preliminary investigation interrupts the period of prescription of criminal
responsibility.[32] Thus, the prescriptive period for the prosecution of the alleged violation of the IPC was
tolled by petitioner's timely filing of the complaint-affidavit before the TAPP.

IN THE ABSENCE OF GRAVE ABUSE OF

DISCRETION, THE FACTUAL FINDINGS OF THE
DOJ IN PRELIMINARY INVESTIGATIONS WILL NOT
BE DISTURBED

In a preliminary investigation, a public prosecutor determines whether a crime has been committed and
whether there is probable cause that the accused is guilty thereof. [33]Probable cause is defined as such
facts and circumstances that will engender a well-founded belief that a crime has been committed and
that the respondent is probably guilty thereof and should be held for trial. [34] Because a public prosecutor
is the one conducting a preliminary investigation, he determines the existence of probable
cause.[35]Consequently, the decision to file a criminal information in court or to dismiss a complaint
depends on his sound discretion.[36]

As a general rule, a public prosecutor is afforded a wide latitude of discretion in the conduct of a
preliminary investigation. For this reason, courts generally do not interfere with the results of such
proceedings. A prosecutor alone determines the sufficiency of evidence that will establish probable cause
justifying the filing of a criminal information against the respondent.[37] By way of exception, however,
judicial review is allowed where respondent has clearly established that the prosecutor committed grave
abuse of discretion.[38] Otherwise stated, such review is appropriate only when the prosecutor has

Page 29 of 78
 Page 30 of 78

exercised his discretion in an arbitrary, capricious, whimsical or despotic manner by reason of passion or
personal hostility, patent and gross enough to amount to an evasion of a positive duty or virtual refusal to
perform a duty enjoined by law.[39]

The prosecutors in this case consistently found that no probable cause existed against respondent for
violation of the IPC. They were in the best position to determine whether or not there was probable cause.
We find that they arrived at their findings after carefully evaluating the respective evidence of petitioner
and respondent. Their conclusion was not tainted with grave abuse of discretion.

WHEREFORE, the petition is hereby DENIED.

Costs against petitioner.

SO ORDERED.

 Panaguiton Jr. v. DOJ, Nov. 25, 2008

G.R. No. 167571, November 25, 2008

DECISION

TINGA, J.:

This is a Petition for Review[1] of the resolutions of the Court of Appeals dated 29 October 2004 and 21
March 2005 in CA G.R. SP No. 87119, which dismissed Luis Panaguiton, Jr.s (petitioners) petition for
certiorari and his subsequent motion for reconsideration.[2]

The facts, as culled from the records, follow.

In 1992, Rodrigo Cawili (Cawili) borrowed various sums of money amounting to P1,979,459.00 from
petitioner. On 8 January 1993, Cawili and his business associate, Ramon C. Tongson (Tongson), jointly
issued in favor of petitioner three (3) checks in payment of the said loans. Significantly, all three (3)
checks bore the signatures of both Cawili and Tongson. Upon presentment for payment on 18 March
1993, the checks were dishonored, either for insufficiency of funds or by the closure of the
account. Petitioner made formal demands to pay the amounts of the checks upon Cawili on 23 May
1995 and upon Tongson on 26 June 1995, but to no avail.[3]

On 24 August 1995, petitioner filed a complaint against Cawili and Tongson[4] for violating Batas
Pambansa Bilang 22 (B.P. Blg. 22)[5] before the Quezon City Prosecutors Office. During the preliminary
investigation, only Tongson appeared and filed his counter-affidavit.[6] Tongson claimed that he had been
unjustly included as party-respondent in the case since petitioner had lent money to Cawili in the latters
personal capacity. Moreover, like petitioner, he had lent various sums to Cawili and in appreciation of his
services, he was

Page 30 of 78
 Page 31 of 78

offered to be an officer of Roma Oil Corporation. He averred that he was not Cawilis business associate;
in fact, he himself had filed several criminal cases against Cawili for violation of B.P. Blg. 22. Tongson
denied that he had issued the bounced checks and pointed out that his signatures on the said checks had
been falsified.

To counter these allegations, petitioner presented several documents showing Tongsons signatures,
which were purportedly the same as the those appearing on the checks.[7] He also showed a copy of an
affidavit of adverse claim wherein Tongson himself had claimed to be Cawilis business associate. [8]

In a resolution dated 6 December 1995,[9] City Prosecutor III Eliodoro V. Lara found probable cause only
against Cawili and dismissed the charges against Tongson. Petitioner filed a partial appeal before the
Department of Justice (DOJ) even while the case against Cawili was filed before the proper court. In a
letter-resolution dated 11 July 1997,[10]after finding that it was possible for Tongson to co-sign the
bounced checks and that he had deliberately altered his signature in the pleadings submitted during the
preliminary investigation, Chief State Prosecutor Jovencito R. Zuo directed the City Prosecutor of Quezon
City to conduct a reinvestigation of the case against Tongson and to refer the questioned signatures to
the National Bureau of Investigation (NBI).

Tongson moved for the reconsideration of the resolution, but his motion was denied for lack of merit.

On 15 March 1999, Assistant City Prosecutor Ma. Lelibet S. Sampaga (ACP Sampaga) dismissed the
complaint against Tongson without referring the matter to the NBI per the Chief State Prosecutors
resolution. In her resolution,[11] ACP Sampaga held that the case had already prescribed pursuant to Act
No. 3326, as amended,[12] which provides thatviolations penalized by B.P. Blg. 22 shall prescribe after
four (4) years. In this case, the four (4)-year period started on the date the checks were dishonored, or
on 20 January 1993and 18 March 1993. The filing of the complaint before the Quezon City
Prosecutor on 24 August 1995 did not interrupt the running of the prescriptive period, as the law
contemplates judicial, and not administrative proceedings. Thus, considering that from 1993 to 1998,
more than four (4) years had already elapsed and no information had as yet been filed against Tongson,
the alleged violation of B.P. Blg. 22 imputed to him had already prescribed. [13] Moreover, ACP
Sampaga stated that the order of the Chief State Prosecutor to refer the matter to the NBI could no longer
be sanctioned under Section 3, Rule 112 of the Rules of Criminal Procedure because the initiative should
come from petitioner himself and not the investigating prosecutor.[14] Finally, ACP Sampaga found that
Tongson had no dealings with petitioner.[15]

Petitioner appealed to the DOJ. But the DOJ, through Undersecretary Manuel A.J. Teehankee, dismissed
the same, stating that the offense had already prescribed pursuant to Act No. 3326. [16] Petitioner filed
a motion for reconsideration of the DOJ resolution. On 3 April 2003,[17] the DOJ, this time through then
Undersecretary Ma. Merceditas N. Gutierrez, ruled in his favor and declared that the offense had not
prescribed and that the filing of the complaint with the prosecutors office interrupted the running of the
prescriptive period citing Ingco v. Sandiganbayan.[18] Thus, the Office of the City Prosecutor of Quezon
City was directed to file three (3) separate informations against Tongson for violation of B.P. Blg.
22.[19] On 8 July 2003, the City Prosecutors Office filed an information[20] charging petitioner with three (3)
counts of violation of B.P. Blg. 22.[21]

Page 31 of 78
 Page 32 of 78

However, in a resolution dated 9 August 2004,[22] the DOJ, presumably acting on a motion for
reconsideration filed by Tongson, ruled that the subject offense had already prescribed and ordered the
withdrawal of the three (3) informations for violation of B.P. Blg. 22 against Tongson. In justifying its
sudden turnabout, the DOJ explained that Act No. 3326 applies to violations of special acts that do not
provide for a prescriptive period for the offenses thereunder. Since B.P. Blg. 22, as a special act, does not
provide for the prescription of the offense it defines and punishes, Act No. 3326 applies to it, and not Art.
90 of the Revised Penal Code which governs the prescription of offenses penalized thereunder.[23] The
DOJ also cited the case of Zaldivia v. Reyes, Jr.,[24] wherein the Supreme Court ruled that the
proceedings referred to in Act No. 3326, as amended, are judicial proceedings, and not the one before
the prosecutors office.

Petitioner thus filed a petition for certiorari[25] before the Court of Appeals assailing the 9 August
2004 resolution of the DOJ. The petition was dismissed by the Court of Appeals in view of
petitioners failure to attach a proper verification and certification of non-forum shopping. The Court of
Appeals also noted that the 3 April 2003 resolution of the DOJ attached to the petition is a mere
photocopy.[26] Petitioner moved for the reconsideration of the appellate courts resolution, attaching to said
motion an amended Verification/Certification of Non-Forum Shopping.[27] Still, the Court of Appeals denied
petitioners motion, stating that subsequent compliance with the formal requirements would not per
se warrant a reconsideration of its resolution. Besides, the Court of Appeals added, thepetition is patently
without merit and the questions raised therein are too unsubstantial to require consideration. [28]

In the instant petition, petitioner claims that the Court of Appeals committed grave error in dismissing his
petition on technical grounds and in ruling that the petition before it was patently without merit and the
questions are too unsubstantial to require consideration.

The DOJ, in its comment,[29] states that the Court of Appeals did not err in dismissing the petition for non-
compliance with the Rules of Court. It also reiterates that the filing of a complaint with the Office of the
City Prosecutor of Quezon City does not interrupt the running of the prescriptive period for violation of
B.P. Blg. 22. It argues that under B.P. Blg. 22, a special law which does not provide for its own
prescriptive period, offenses prescribe in four (4) years in accordance with Act No. 3326.

Cawili and Tongson submitted their comment, arguing that the Court of Appeals did not err in dismissing
the petition for certiorari. They claim that the offense of violation of B.P. Blg. 22 has already prescribed
per Act No. 3326. In addition, they claim that the long delay, attributable to petitioner and the State,
violated their constitutional right to speedy disposition of cases. [30]

The petition is meritorious.

First on the technical issues.

Petitioner submits that the verification attached to his petition before the Court of Appeals substantially
complies with the rules, the verification being intended simply to secure an assurance that the allegations
in the pleading are true and correct and not a product of the imagination or a matter of speculation. He
points out that this Court has held in a number of cases that a deficiency in the verification can be
excused or dispensed with, the defect being neither jurisdictional nor always fatal. [31]

Indeed, the verification is merely a formal requirement intended to secure an assurance that matters
which are alleged are true and correctthe court may simply order the correction of unverified pleadings or
act on them and waive strict compliance with the rules in order that the ends of justice may be
served,[32] as in the instant case. In the case at bar, we find that by attaching the pertinent verification to
his motion for reconsideration, petitioner sufficiently complied with the verification requirement.

Page 32 of 78
 Page 33 of 78

Petitioner also submits that the Court of Appeals erred in dismissing the petition on the ground that there
was failure to attach a certified true copy or duplicate original of the 3 April 2003 resolution
of the DOJ. We agree. A plain reading of the petition before the

Court of Appeals shows that it seeks the annulment of the DOJ resolution dated 9 August 2004,[33] a
certified true copy of which was attached as Annex A.[34] Obviously, the Court of Appeals committed a
grievous mistake.

Now, on the substantive aspects.

Petitioner assails the DOJs reliance on Zaldivia v. Reyes,[35] a case involving the violation of a municipal
ordinance, in declaring that the prescriptive period is tolled only upon filing of the information in
court. According to petitioner, what is applicable in this case is Ingco v.
Sandiganbayan,[36] wherein this Court ruled that the filing of the complaint with the fiscals office for
preliminary investigation suspends the running of the prescriptive period. Petitioner also notes that
the Ingco case similarly involved the violation of a special law, Republic Act (R.A.) No. 3019, otherwise
known as the Anti-Graft and Corrupt Practices Act, petitioner notes.[37] He argues that sustaining the
DOJs and the Court of Appeals pronouncements would result in grave injustice to him since the delays in
the present case were clearly beyond his control.[38]

There is no question that Act No. 3326, appropriately entitled An Act to Establish Prescription for
Violations of Special Acts and Municipal Ordinances and to Provide WhenPrescription Shall Begin, is the
law applicable to offenses under special laws which do not provide their own prescriptive periods. The
pertinent provisions read:

SECTION 1. Violations penalized by special acts shall, unless otherwise provided

in such acts, prescribe in accordance with the following rules: (a) x x x; (b) after four years
for those punished by imprisonment for more than one month, but less than two years; (c)
xxx

SEC. 2. Prescription shall begin to run from the day of the commission of the
violation of the law, and if the same be not known at the time, from the discovery thereof
and the institution of judicial proceedings for its investigation and punishment.

The prescription shall be interrupted when proceedings are instituted against the
guilty person, and shall begin to run again if the proceedings are dismissed for reasons not
constituting jeopardy.

We agree that Act. No. 3326 applies to offenses under B.P. Blg. 22. An offense under B.P. Blg.
22 merits the penalty of imprisonment of not less than thirty (30) days but not more than one year or by a
fine, hence, under Act No. 3326, a violation of B.P. Blg. 22 prescribes in four (4) years from the
commission of the offense or, if the same be not known at the time, from the discovery
thereof. Nevertheless, we cannot uphold the position that only the filing of a case in court can toll the
running of the prescriptive period.

It must be pointed out that when Act No. 3326 was passed on 4 December 1926, preliminary
investigation of criminal offenses was conducted by justices of the peace, thus, the phraseology in the
law, institution of judicial proceedings for its investigation and punishment, [39] and the prevailing rule at the

Page 33 of 78
 Page 34 of 78

time was that once a complaint is filed with the justice of the peace for preliminary investigation, the
prescription of the offense is halted.[40]

The historical perspective on the application of Act No. 3326 is illuminating.[41] Act No. 3226 was
approved on 4 December 1926 at a time when the function of conducting the preliminary investigation of
criminal offenses was vested in the justices of the peace. Thus, the prevailing rule at the time, as shown
in the cases of U.S. v. Lazada[42] and People v. Joson,[43] is that the prescription of the offense is tolled
once a complaint is filed with the justice of the peace for preliminary investigation inasmuch as the
filing of the complaint signifies the institution of the criminal proceedings against the accused.[44] These
cases were followed by our declaration in People v. Parao and Parao[45] that the first step taken in the
investigation or examination of offenses partakes the nature of a judicial proceeding which suspends the
prescription of the offense.[46] Subsequently, in People v. Olarte,[47] we held that the filing of the complaint
in the Municipal Court, even if it be merely for purposes of preliminary examination or investigation,
should, and does, interrupt the period of prescription of the criminal responsibility, even if the court where
the complaint or information is filed cannot try the case on the merits. In addition, even if the court where
the complaint or information is filed may only proceed to investigate the case, its actuations already
represent the initial step of the proceedings against the offender,[48] and hence, the prescriptive period
should be interrupted.

In Ingco v. Sandiganbayan[49] and Sanrio Company Limited v. Lim,[50] which involved violations of
the Anti-Graft and Corrupt Practices Act (R.A. No. 3019) and the Intellectual Property Code (R.A. No.
8293), which are both special laws, the Court ruled that the

prescriptive period is interrupted by the institution of proceedings for preliminary investigation against the
accused. In the more recent case of Securities and Exchange Commission v. Interport Resources
Corporation, et al.,[51] the Court ruled that the nature and purpose of the investigation conducted by the
Securities and Exchange Commission on violations of the Revised Securities Act, [52] another special
law, is equivalent to the preliminary investigation conducted by the DOJ in criminal cases, and thus
effectively interrupts the prescriptive period.

The following disquisition in the Interport Resources case[53] is instructive, thus:

While it may be observed that the term judicial proceedings in Sec. 2 of Act No.
3326 appears before investigation and punishment in the old law, with the subsequent
change in set-up whereby the investigation of the charge for purposes of prosecution
has become the exclusive function of the executive branch, the term proceedings should
now be understood either executive or judicial in character: executive when it involves
the investigation phase and judicial when it refers to the trial and judgment stage. With
this clarification, any kind of investigative proceeding instituted against the guilty person
which may ultimately lead to his prosecution should be sufficient to toll prescription.[54]

Indeed, to rule otherwise would deprive the injured party the right to obtain vindication on account
of delays that are not under his control.[55] A clear example would be this case, wherein petitioner filed his
complaint-affidavit on 24 August 1995, well within the four (4)-year prescriptive period. He likewise timely
filed his appeals and his motions for reconsideration on the dismissal of the charges against

Tongson. He went through the proper channels, within the prescribed periods. However, from the time
petitioner filed his complaint-affidavit with the Office of the City Prosecutor (24 August 1995) up to the
time the DOJ issued the assailed resolution, an aggregate period of nine (9) years had elapsed. Clearly,
the delay was beyond petitioners control. After all, he had already initiated the active prosecution of the

Page 34 of 78
 Page 35 of 78

case as early as 24 August 1995, only to suffer setbacks because of the DOJs flip-flopping resolutions
and its misapplication of Act No. 3326. Aggrieved parties, especially those who do not sleep on their
rights and actively pursue their causes, should not be allowed to suffer unnecessarily further simply
because of circumstances beyond their control, like the accuseds delaying tactics or the delay and
inefficiency of the investigating agencies.

We rule and so hold that the offense has not yet prescribed. Petitioner s filing of
his complaintaffidavit before the Office of the City Prosecutor on 24 August 1995 signified the
commencement of the proceedings for the prosecution of the accused and thus effectively interrupted
the prescriptive period for the offenses they had been charged under B.P. Blg. 22. Moreover, since there
is a definite finding of probable cause, with the debunking of the claim of prescription there is no longer
any impediment to the filing of the information against petitioner.

WHEREFORE, the petition is GRANTED. The resolutions of the Court of Appeals dated 29
October 2004 and 21 March 2005 are REVERSED and SET ASIDE. The resolution of the Department of
Justice dated 9 August 2004 is also ANNULLED and SET ASIDE. The Department of Justice is
ORDERED to REFILE the information against the petitioner.

No costs.

SO ORDERED.

 Baviera v. Paglinawan, Feb 8, 2007

G.R. No. 168380, February 8, 2007

DECISION

SANDOVAL-GUTIERREZ, J.:

Before us are two consolidated Petitions for Review on Certiorari assailing the Decisions of the Court of
Appeals in CA-G.R. SP No. 87328[1] and in CA-G.R. SP No. 85078.[2]

The common factual antecedents of these cases as shown by the records are:

Manuel Baviera, petitioner in these cases, was the former head of the HR Service Delivery and Industrial
Relations of Standard Chartered Bank-Philippines (SCB), one of herein respondents. SCB is a foreign
banking corporation duly licensed to engage in banking, trust, and other fiduciary business in
the Philippines. Pursuant to Resolution No. 1142 dated December 3, 1992 of the Monetary Board of
the Bangko Sentral ng Pilipinas (BSP), the conduct of SCBs business in this jurisdiction is subject to the
following conditions:

1. At the end of a one-year period from the date the SCB starts its trust functions,
at least 25% of its trust accounts must be for the account of non-residents of the

Page 35 of 78
 Page 36 of 78

Philippines and that actual foreign exchange had been remitted into the
Philippines to fund such accounts or that the establishment of such accounts had
reduced the indebtedness of residents (individuals or corporations or government
agencies) of the Philippines to non-residents. At the end of the second year, the
above ratio shall be 50%, which ratio must be observed continuously thereafter;

2. The trust operations of SCB shall be subject to all existing laws, rules and
regulations applicable to trust services, particularly the creation of a Trust
Committee; and

3. The bank shall inform the appropriate supervising and examining department of
the BSP at the start of its operations.

Apparently, SCB did not comply with the above conditions. Instead, as early as 1996, it acted as a stock
broker, soliciting from local residents foreign securities called GLOBAL THIRD PARTY MUTUAL FUNDS
(GTPMF), denominated in US dollars. These securities were not registered with the Securities and
Exchange Commission (SEC). These were then remitted outwardly to SCB-Hong Kong and SCB-
Singapore.

SCBs counsel, Romulo Mabanta Buenaventura Sayoc and Delos Angeles Law Office, advised the bank
to proceed with the selling of the foreign securities although unregistered with the SEC, under the guise of
a custodianship agreement; and should it be questioned, it shall invoke Section 72 [3] of the General
Banking Act (Republic Act No.337).[4] In sum, SCB was able to sell GTPMF securities worth around P6
billion to some 645 investors.

However, SCBs operations did not remain unchallenged. On July 18, 1997, the Investment Capital
Association of the Philippines (ICAP) filed with the SEC a complaint alleging that SCB violated the
Revised Securities Act,[5] particularly the provision prohibiting the selling of securities without prior
registration with the SEC; and that its actions are potentially damaging to the local mutual fund industry.

In its answer, SCB denied offering and selling securities, contending that it has been performing a purely
informational function without solicitations for any of its investment outlets abroad; that it has a trust
license and the services it renders under the Custodianship Agreement for offshore investments are
authorized by Section 72[6] of the General Banking Act; that its clients were the ones who took the
initiative to invest in securities; and it has been acting merely as an agent or passive order taker for them.

On September 2, 1997, the SEC issued a Cease and Desist Order against SCB, holding that its services
violated Sections 4(a)[7] and 19[8] of the
Revised Securities Act.

Meantime, the SEC indorsed ICAPs complaint and its supporting documents to the BSP.

Page 36 of 78
 Page 37 of 78

On October 31, 1997, the SEC informed the Secretary of Finance that it withdrew GTPMF securities from
the market and that it will not sell the same without the necessary clearances from the regulatory
authorities.

Meanwhile, on August 17, 1998, the BSP directed SCB not to include investments in global mutual funds
issued abroad in its trust investments portfolio without prior registration with the SEC.

On August 31, 1998, SCB sent a letter to the BSP confirming that it will withdraw third-party fund products
which could be directly purchased by investors.

However, notwithstanding its commitment and the BSP directive, SCB continued to offer and sell GTPMF
securities in this country. This prompted petitioner to enter into an Investment Trust Agreement with SCB
wherein he purchased US$8,000.00 worth of securities upon the banks promise of 40% return on his
investment and a guarantee that his money is safe. After six (6) months, however, petitioner learned that
the value of his investment went down to US$7,000.00. He tried to withdraw his investment but was
persuaded by Antonette de los Reyes of SCB to hold on to it for another six (6) months in view of the
possibility that the market would pick up.

Meanwhile, on November 27, 2000, the BSP found that SCB failed to comply with its directive of August
17, 1998. Consequently, it was fined in the amount of P30,000.00.

The trend in the securities market, however, was bearish and the worth of petitioners investment went
down further to only US$3,000.00.

On October 26, 2001, petitioner learned from Marivel Gonzales, head of the SCB Legal and Compliance
Department, that the latter had been prohibited by the BSP to sell GPTMF securities. Petitioner then filed
with the BSP a letter-complaint demanding compensation for his lost investment. But SCB denied his
demand on the ground that his investment is regular.

On July 15, 2003, petitioner filed with the Department of Justice (DOJ), represented herein by its
prosecutors, public respondents, a complaint charging the above-named officers and members of the
SCB Board of Directors and other SCB officials, private respondents, with syndicated estafa, docketed as
I.S. No. 2003-1059.

For their part, private respondents filed the following as counter-charges against petitioner: (1) blackmail
and extortion, docketed as I.S. No. 2003-1059-A; and blackmail and perjury, docketed as I.S. No. 2003-
1278.

On September 29, 2003, petitioner also filed a complaint for perjury against private respondents Paul
Simon Morris and Marivel Gonzales, docketed as I.S. No. 2003-1278-A.

On December 4, 2003, the SEC issued a Cease and Desist Order against SCB restraining it from further
offering, soliciting, or otherwise selling its securities to the public until these have been registered with the
SEC.

Subsequently, the SEC and SCB reached an amicable settlement.

On January 20, 2004, the SEC lifted its Cease and Desist Order and approved the P7 million settlement
offered by SCB. Thereupon, SCB made a commitment not to offer or sell securities without prior
compliance with the requirements of the SEC.

Page 37 of 78
 Page 38 of 78

On February 7, 2004, petitioner filed with the DOJ a complaint for violation of Section 8.1 [9] of the
Securities Regulation Code against private respondents, docketed as I.S. No. 2004-229.

On February 23, 2004, the DOJ rendered its Joint Resolution [10] dismissing petitioners complaint for
syndicated estafa in I.S. No. 2003-1059; private respondents complaint for blackmail and extortion in I.S.
No. 2003-1059-A; private respondents complaint for blackmail and perjury in I.S. No. 2003-1278; and
petitioners complaint for perjury against private respondents Morris and Gonzales in I.S. No. 2003-1278-
A.

Meanwhile, in a Resolution[11] dated April 4, 2004, the DOJ dismissed petitioners complaint in I.S. No.
2004-229 (violation of Securities Regulation Code), holding that it should have been filed with the SEC.

Petitioners motions to dismiss his complaints were denied by the DOJ. Thus, he filed with the Court of
Appeals a petition for certiorari, docketed as CA-G.R. SP No. 85078. He alleged that the DOJ acted with
grave abuse of discretion amounting to lack or excess of jurisdiction in dismissing his complaint
for syndicated estafa.

He also filed with the Court of Appeals a separate petition for certiorari assailing the DOJ Resolution
dismissing I.S. No. 2004-229 for violation of the Securities Regulation Code. This petition was
docketed as CA-G.R. SP No. 87328. Petitioner claimed that the DOJ acted with grave abuse of discretion
tantamount to lack or excess of jurisdiction in holding that the complaint should have been filed with the
SEC.

On January 7, 2005, the Court of Appeals promulgated its Decision dismissing the petition. It sustained
the ruling of the DOJ that the case should have been filed initially with the SEC.

Petitioner filed a motion for reconsideration but it was denied in a Resolution dated May 27, 2005.

Meanwhile, on February 21, 2005, the Court of Appeals rendered its Decision in CA-G.R. SP No. 85078
(involving petitioners charges and respondents counter charges) dismissing the petition on the ground
that the purpose of a petition for certiorari is not to evaluate and weigh the parties evidence but to
determine whether the assailed Resolution of the DOJ was issued with grave abuse of discretion
tantamount to lack of jurisdiction. Again, petitioner moved for a reconsideration but it was denied in a
Resolution of November 22, 2005.

Hence, the instant petitions for review on certiorari.

For our resolution is the fundamental issue of whether the Court of Appeals erred in concluding that the
DOJ did not commit grave abuse of discretion in dismissing petitioners complaint in I.S. 2004-229 for
violation of Securities Regulation Code and his complaint in I.S. No. 2003-1059 for syndicated estafa.

G.R. No 168380

Re: I.S. No. 2004-229

For violation of the Securities Regulation Code

Page 38 of 78
 Page 39 of 78

Section 53.1 of the Securities Regulation Code provides:

SEC. 53. Investigations, Injunctions and Prosecution of Offenses.

53. 1. The Commission may, in its discretion, make such investigation as it deems
necessary to determine whether any person has violated or is about to violate any
provision of this Code, any rule, regulation or order thereunder, or any rule of an
Exchange, registered securities association, clearing agency, other self-regulatory
organization, and may require or permit any person to file with it a statement in writing,
under oath or otherwise, as the Commission shall determine, as to all facts and
circumstances concerning the matter to be investigated. The Commission may publish
information concerning any such violations and to investigate any fact, condition,
practice or matter which it may deem necessary or proper to aid in the enforcement of
the provisions of this Code, in the prescribing of rules and regulations thereunder, or in
securing information to serve as a basis for recommending further legislation concerning
the matters to which this Code relates: Provided, however, That any person requested
or subpoenaed to produce documents or testify in any investigation shall simultaneously
be notified in writing of the purpose of such investigation: Provided, further, That all
criminal complaints for violations of this Code and the implementing rules and
regulations enforced or administered by the Commission shall be referred to the
Department of Justice for preliminary investigation and prosecution before the
proper court: Provided, furthermore, That in instances where the law allows
independent civil or criminal proceedings of violations arising from the act, the
Commission shall take appropriate action to implement the same: Provided, finally; That
the investigation, prosecution, and trial of such cases shall be given priority.

The Court of Appeals held that under the above provision, a criminal complaint for violation of any law or
rule administered by the SEC must first be filed with the latter. If the Commission finds that there is
probable cause, then it should refer the case to the DOJ. Since petitioner failed to comply with the
foregoing procedural requirement, the DOJ did not gravely abuse its discretion in dismissing his complaint
in I.S. No. 2004-229.

A criminal charge for violation of the Securities Regulation Code is a specialized dispute. Hence, it must
first be referred to an administrative agency of special competence, i.e., the SEC. Under the doctrine of
primary jurisdiction, courts will not determine a controversy involving a question within the jurisdiction of
the administrative tribunal, where the question demands the exercise of sound administrative discretion
requiring the specialized knowledge and expertise of said administrative tribunal to determine technical
and intricate matters of fact.[12] The Securities Regulation Code is a special law. Its enforcement is
particularly vested in the SEC. Hence, all complaints for any violation of the Code and its implementing
rules and regulations should be filed with the SEC. Where the complaint is criminal in nature, the SEC
shall indorse the complaint to the DOJ for preliminary investigation and prosecution as provided in
Section 53.1 earlier quoted.

We thus agree with the Court of Appeals that petitioner committed a fatal procedural lapse when
he filed his criminal complaint directly with the DOJ. Verily, no grave abuse of discretion can be ascribed
to the DOJ in dismissing petitioners complaint.

Page 39 of 78
 Page 40 of 78

G.R. No. 170602

Re: I.S. No. 2003-1059 for

Syndicated Estafa

Section 5, Rule 110 of the 2000 Rules of Criminal Procedure, as amended, provides that all criminal
actions, commenced by either a complaint or an information, shall be prosecuted under the direction and
control of a public prosecutor. This mandate is founded on the theory that a crime is a breach of the
security and peace of the people at large, an outrage against the very sovereignty of the State. It follows
that a representative of the State shall direct and control the prosecution of the offense.[13] This
representative of the State is the public prosecutor, whom this Court described in the old case of Suarez
v. Platon,[14] as:

[T]he representative not of an ordinary party to a controversy, but of a sovereignty

whose obligation to govern impartially is as compelling as its obligation to govern at all;
and whose interest, therefore, in a criminal prosecution is not that it shall win a case, but
that justice shall be done. As such, he is in a peculiar and very definite sense a servant
of the law, the twofold aim of which is that guilt shall not escape or innocence suffers.

Concomitant with his authority and power to control the prosecution of criminal offenses, the public
prosecutor is vested with the discretionary power to determine whether a prima facie case exists or
not.[15] This is done through a preliminary investigation designed to secure the respondent from hasty,
malicious and oppressive prosecution. A preliminary investigation is essentially an inquiry to determine
whether (a) a crime has been committed; and (b) whether there is probable cause that the accused is
guilty thereof.[16] In Pontejos v. Office of the Ombudsman,[17] probable cause is defined as such facts and
circumstances that would engender a well-founded belief that a crime has been committed and that the
respondent is probably guilty thereof and should be held for trial. It is the public prosecutor who
determines during the preliminary investigation whether probable cause exists. Thus, the decision
whether or not to dismiss the criminal complaint against the accused depends on the sound discretion of
the prosecutor.

Given this latitude and authority granted by law to the investigating prosecutor, the rule in this
jurisdiction is that courts will not interfere with the conduct of preliminary investigations or
reinvestigations or in the determination of what constitutes sufficient probable cause for the filing
of the corresponding information against an offender. [18] Courts are not empowered to substitute their
own judgment for that of the executive branch.[19] Differently stated, as the matter of whether to prosecute
or not is purely discretionary on his part, courts cannot compel a public prosecutor to file the
corresponding information, upon a complaint, where he finds the evidence before him insufficient to
warrant the filing of an action in court. In sum, the prosecutors findings on the existence of probable
cause are not subject to review by the courts, unless these are patently shown to have been made
with grave abuse of discretion.[20]

Page 40 of 78
 Page 41 of 78

Grave abuse of discretion is such capricious and whimsical exercise of judgment on the part of the public
officer concerned which is equivalent to an excess or lack of jurisdiction. The abuse of discretion must be
as patent and gross as to amount to an evasion of a positive duty or a virtual refusal to perform a duty
enjoined by law, or to act at all in contemplation of law, as where the power is exercised in an arbitrary
and despotic manner by reason of passion or hostility.[21]

In determining whether the DOJ committed grave abuse of discretion, it is expedient to know if
the findings of fact of herein public prosecutors were reached in an arbitrary or despotic manner.

The Court of Appeals held that petitioners evidence is insufficient to establish probable cause for
syndicated estafa. There is no showing from the record that private respondents herein did induce
petitioner by false representations to invest in the GTPMF securities. Nor did they act as a syndicate to
misappropriate his money for their own benefit. Rather, they invested it in accordance with his written
instructions. That he lost his investment is not their fault since it was highly speculative.

Records show that public respondents examined petitioners evidence with care, well aware of their duty
to prevent material damage to his constitutional right to liberty and fair play. In Suarez previously cited,
this Court made it clear that a public prosecutors duty is two-fold. On one hand, he is bound by his oath of
office to prosecute persons where the complainants evidence is ample and sufficient to
show prima facie guilt of a crime. Yet, on the other hand, he is likewise duty-bound to protect innocent
persons from groundless, false, or malicious prosecution.[22]

Hence, we hold that the Court of Appeals was correct in dismissing the petition for review against
private respondents and in concluding that the DOJ did not act with grave abuse of discretion tantamount
to lack or excess of jurisdiction.

On petitioners complaint for violation of the Securities Regulation Code, suffice it to state that, as
aptly declared by the Court of Appeals, he should have filed it with the SEC, not the DOJ. Again, there is
no indication here that in dismissing petitioners complaint, the DOJ acted capriciously or arbitrarily.

WHEREFORE, we DENY the petitions and AFFIRM the assailed Decisions of the Court of Appeals in
CA-G.R. SP No. 87328 and in CA-G.R. SP No. 85078.

Costs against petitioner.

SO ORDERED.

Page 41 of 78
 Page 42 of 78

 Arambulo v. Laqui Sr., 342 SCRA 740

THIRD DIVISION
[G.R. No. 138596. October 12, 2000]
SR. FIDELIS ARAMBULO, petitioner, vs. HON. HILARION LAQUI, SR. HELEN OJARIO and SR.
BERNADINE JUAREZ, respondents.
DECISION
GONZAGA-REYES, J.:
Before us is a Petition for Review on Certiorari of the Decision[1] of the Court of Appeals[2] in CA-G.R.
SP No. 47089 promulgated on March 01, 1999 and the subsequent Resolution [3]dated May 11, 1999
denying petitioners Motion for Reconsideration.
The facts of the case, as summarized by the appellate court, are as follows:
On February 2, 1994, private respondents filed a joint complaint-affidavit for libel against

petitioners before the Office of the City Prosecutor of Quezon City alleging that the latter

circulated on December 21, 1993 a letter containing malicious imputations against them.

An information for libel then was filed before the Metropolitan Trial Court of Quezon City

on May 18, 1994.

After the prosecution presented its evidence, petitioner filed a Demurrer to

Evidence. Without resolving the incident, the Metropolitan Trial Court in its Order dated

November 9, 1996 ruled that it had no jurisdiction over the case as the same falls under

the original and exclusive jurisdiction of the Regional Trial Court, and ordered that the case

be forwarded to the RTC for further proceedings.

On November 29, 1996, the case was forwarded to branch 215 Regional Trial Court of

Quezon City docketed as Criminal Case No. 96-6870.

On January 3, 1997, petitioner filed a Motion to Dismiss on the ground of lack of

jurisdiction and prescription of the offense of Libel. The RTC dismissed the case in an Order

dated April 2, 1997 but, stating that the offense had not yet prescribed, ordered the City

Prosecutor of Quezon City to re-file the Information for Libel with the RTC.

On April 27, 1997, the Information for Libel was re-filed with respondent court docketed

as Criminal Case No. Q-97-70948.

On June 17, 1997, petitioner filed a Motion to quash on the ground of prescription. The

motion was denied in the assailed Resolution dated October 3, 1997.

Petitioners Motion for Reconsideration was also denied in the other Assailed Order dated

December 4, 1997.[4]
Not satisfied with the Resolution and Order of the trial court, herein petitioner appealed to the Court
of Appeals raising the issue of whether or not public respondent committed grave abuse of discretion or
grossly erred in holding that the offense of libel in the instant case has not yet prescribed.[5] The Court of

Page 42 of 78
 Page 43 of 78

Appeals, in its decision dated March 01, 1999, upheld the contention of the trial court that the offense of
libel had not yet prescribed and consequently, dismissed the said petition. The appellate court likewise
denied herein petitioners Motion for Reconsideration in its Resolution dated May 11, 1999. [6]
Petitioner is now before this Court seeking a reversal of the decision of the Court of Appeals and
contending that -
I.
THE COURT OF APPEALS ERRED IN RULING THAT THE CRIME OF LIBEL HAS NOT YET

PRESCRIBED.
II.
THE COURT OF APPEALS ERRED IN RULING THAT PETITIONER HAS NOT BEEN DENIED

HER CONSTITUTIONAL RIGHT TO A SPEEDY TRIAL.[7]

Under Article 90 of the Revised Penal Code, as amended, the crime of libel prescribes in one (1)
year, to wit:
ART. 90. Prescription of crime.- Crimes punishable by death, reclusion

perpetua or reclusion temporal shall prescribe in twenty years.

Crimes punishable by other afflictive penalties shall prescribe in fifteen years.

Those punishable by a correctional penalty shall prescribe in 10 years; with the exception of

those punishable by arresto mayor, which shall prescribe in five years.

The crime of libel or other similar offenses shall prescribe in one year. (underscoring

supplied)
The said prescriptive period is computed under Article 91 of the Revised Penal Code, as follows:
Art. 91. Computation of prescription of offenses. - The period of prescription shall

commence to run from the day on which the crime is discovered by the offended party,

the authorities, or their agents, and shall be interrupted by the filing of the complaint or

information, and shall proceed to run again when such proceedings terminate without the

accused being convicted or acquitted, or are unjustifiably stopped for any reason not

imputable to him.

The term of prescription shall not run when the offender is absent from the Philippine

Archipelago.
In the case at bench, the offense of libel allegedly occurred on December 21, 1993 when petitioner
circulated a letter containing allegedly malicious imputations against private respondents Srs. Helen
Ojario and Bernadine Juarez. At this point, the period of prescription for the alleged crime had already
started to run.
The one-year period of prescription for the crime was interrupted on February 2, 1994 when
respondents filed a joint complaint-affidavit[8] for libel against petitioner before the Office of the city
Prosecutor in Quezon city. At this point, the prescription period had already run for forty-two (42) days.
A preliminary investigation by the Office of the City prosecutor was thus conducted. On April 27,
1994, Asst. City Prosecutor Ma. Aurora Escasa-Ramos issued a Resolution stating that probable cause

Page 43 of 78
 Page 44 of 78

exists against petitioner and recommended the filing of an information for libel against her. Consequently,
an information[9] for libel was filed against petitioner on May 18, 1994 before the Metropolitan Trial Court
of Quezon City, Branch 32[10]
Despite the fact that the Metropolitan Trial Court had no jurisdiction over the crime of libel, the said
court proceeded to conduct trial on the merits. After the prosecution had rested, petitioner filed a
Demurrer to Evidence dated September 18, 1996. However, instead of acting on the said demurrer, the
Metropolitan Trial court, on November 08, 1996, issued an Order [11]ruling that it had no jurisdiction over
the crime of libel as the same falls under the exclusive jurisdiction of the Regional Trial Court. Instead of
dismissing the case outright, the MTC ordered the forwarding of the records of the case to the Regional
Trial Court for further proceedings. The case was eventually raffled off to Branch 215 of the Regional Trial
Court of Quezon City[12]
On the basis of a Motion to Dismiss [13] filed by petitioner, Branch 215 of the Regional Trial Court
dismissed the case on April 2, 1997 on the ground of lack of jurisdiction as the information against
petitioner should have been re-filed anew. The court ruled, however, that the crime had not yet prescribed
and ordered the re-filling of the case[14]. On April 27, 1997, the Office of the City Prosecutor re-filed the
case with the Regional Trial Court and eventually the same was raffled to Branch 218 of the said court [15].
Petitioner tried to have this case dismissed on the ground of prescription but her motion to quash [16]the
information was denied by Branch 218 of the Quezon City Regional Trial Court in a Resolution[17]dated
October 3, 1997. The denial by the Regional Trial Court of petitioners motion to quash was subsequently
upheld by the Court of Appeals.
It is the contention of petitioner that the prescription period for the crime of libel charged against her
commenced to run again when the Assistant City prosecutor recommended the filing of the information
for libel. Petitioner further argues that the prescriptive period could have been interrupted again had the
information been filed with the Regional Trial Court, the court with the proper jurisdiction to try the case
for libel. Considering however that the case was filed before the Metropolitan Trial Court, which under the
law does not have jurisdiction over the crime of libel, the period of prescription continued to run its
course. Consequently, petitioner concludes that when the information for libel was finally filed with the
Regional Trial Court, the crime had already prescribed and the State can no longer pursue the case
against her.
In support of her arguments, petitioner questions the reliance made by the Regional Trial Court and
the Court of Appeals in the landmark case of People vs. Olarte[18]Petitioner submits that the adherence to
the Olarte case must be examined considering that in the said case, the principal issue was whether or
not the filing of a complaint in the Municipal Trial Court for purposes of preliminary investigation, interrupts
the period of prescription of a crime. Petitioner argues that the cited case is inapplicable as it is not
disputed in the case at bench that the period of prescription was interrupted during the process of
preliminary investigation.
We are not persuaded.
In the landmark case of People vs. Olarte, this Court speaking through Justice J.B.L. Reyes, finally
resolved the then conflicting views as to whether or not the filing of a complaint with the Municipal Trial
Court for purposes of preliminary investigation suspends the running of the prescriptive period for the
crime. The Court restated the correct and prevailing doctrine, as follows:
In view of this diversity of precedents, and in order to provide guidance for the Bench and

Bar, this Court has reexamined the question and, after mature consideration, has arrived

at the conclusion that the true doctrine is, and should be, the one established by the

decisions holding that the filing of the complaint with the Municipal Court, even if it be

merely for purposes of preliminary examination or investigation, should, and does,

Page 44 of 78
 Page 45 of 78

interrupt the period of prescription of the criminal responsibility, even if the court where

the complaint or information is filed can not try the case on the merits. Several reasons

buttress this conclusion: first, the text of Article 91 of the Revised Penal code, in declaring

that the period of prescription shall be interrupted by the filing of the complaint or

information without distinguishing whether the complaint is filed in the court for

preliminary examination or investigation merely, or for action on the merits.Second , even

if the court where the complaint or information is filed may only proceed to investigate

the case, its actuations already represent the initial step of the proceedings against the

offender. Third, it is unjust to deprive the injured party the right to obtain vindication on

account of delays that are not under his control. All that the victim of the offense may do

on his part to initiate the prosecution is to file the requisite complaint.

And it is no argument that Article 91 also expresses that the interrupted prescription shall

commence to run again when such proceedings terminate without the accused being

convicted or acquitted, thereby indicating that the court in which the complaint or

information is filed must have the power to convict or acquit the accused. Precisely, the

trial on the merits usually terminates in conviction or acquittal, not otherwise. But it is in

the court conducting a preliminary investigation where the proceedings may terminate

without conviction or acquittal, if the court should discharge the accused because no prima

facie case had been shown.

Subsequently, this Court, in Francisco vs. Court of Appeals[19], broadened the scope of Olarte by
holding that the filing of the complaint with the fiscals office also suspends the running of the prescriptive
period.
Petitioner insists that the ruling in Olarte with respect to the interruption of the prescriptive period is
not applicable. In the case at bench, the fact that the period of prescription was interrupted by the filing of
private respondents joint affidavit with the Quezon City Prosecutors Office is not
disputed. The Olarte case, however, makes several other pronouncements that are determinative of the
issues raised by petitioner.
It is clear from the Olarte case that the filing of the complaint or information for purposes of
preliminary investigation represents the initial step of the proceedings against the offender.This is one of
the reasons why such filing is deemed as having interrupted the period of prescription for the prosecution
of a crime. This period of prescription commences to run again when the proceedings terminate without
conviction or acquittal, if the court (or prosecutor) should discharge the accused because no prima
facie case has been shown.[20]
It is thus evident that petitioners first premise that the period of prescription commenced to run again
when the Quezon City prosecutors Office recommended the filing of a criminal complaint against her is
incorrect. When the City Prosecutor recommended the filing of libel charges against petitioner, the
proceedings against her were not terminated, precisely because a prima facie case for libel was found
against her. Instead of terminating the proceedings against petitioner, the resolution of the city prosecutor

Page 45 of 78
 Page 46 of 78

actually directed the continuation of the proceedings against the petitioner by the filing of the appropriate
information against her and by the holding of trial on the merits. As such, when the information for libel
was filed with the Metropolitan Trial Court, the period of prescription for the crime was still suspended.
Another important teaching in Olarte is that it is unjust to deprive the injured party of the right to
obtain vindication on account of delays that are not under his control. This is because in criminal
prosecutions, the only thing that the victim of the offense may do on his part to initiate the prosecution is
to file the requisite complaint.
In the case at bench, private respondents were not remiss in their right to seek grievance against
respondent as they filed their complaint before the city prosecutor forty-two days after the alleged crime of
libel occurred. It was the Office of the City Prosecutor that committed an error when it filed the complaint
with the Metropolitan Trial Court.
The error was probably due to the confusion as to the proper venue for the crime of libel brought
about by the passage of R.A. 7691[21] which took effect on April 15, 1994. Under Section 2 of the said
Republic Act, the jurisdiction of Metropolitan Trial Courts, Municipal Trial Courts and Municipal Circuit
Trial Courts was expanded to include all offenses punishable with imprisonment not exceeding six (6)
years. However, libel, which is punishable by imprisonment ranging from six months and one day to four
years[22] is not covered as the said law excludes from its coverage cases within the exclusive jurisdiction
of the Regional Trial Courts[23]. Under Article 360 of the Revised Penal Code, the information for libel
should be filed with the Court of First Instance, now the Regional Trial Court. The confusion was cleared
up when this Court issued Administrative Order No. 104-96 dated October 21, 1996 which categorically
stated that LIBEL CASES SHALL BE TRIED BY THE REGIONAL TRIAL COURTS HAVING
JURISDICTION OVER THEM TO THE EXCLUSION OF THE METROPOLITAN TRIAL COURTS,
MUNICIPAL TRIAL COURTS IN CITIES, MUNICIPAL TRIAL COURTS AND MUNICIPAL CIRCUIT
TRIAL COURTS.[24]
Evidently, branch 215 of the Metropolitan Trial Court of Quezon City was not spared the confusion
brought about by R.A. 7691, as its dismissal of the case then pending before it was made only on
November 8, 1996 or more than two years after it had taken cognizance of the case. Notably, the
dismissal by the Metropolitan Trial Court took place a mere eighteen (18) days after the issuance of S.C.
Administrative Order No. 104-96.
The mistake of the Office of the City Prosecutor in filing the complaint and of the Metropolitan Trial
Court in taking cognizance of the case was thus understandable. The error was immediately rectified by
the said court upon realizing its mistake when it ruled it was the Regional Trial Court which had the proper
jurisdiction over the case. This mistake should not operate to prejudice the interest of the state to
prosecute criminal offenses and, more importantly, the right of the offended party to obtain grievance.
Moreover, the doctrine in People vs. Olarte, as applied in later cases, was not meant to apply solely
to cases where the filing of the complaint with the municipal trial court or the prosecutors office operates
to interrupt the prescription period for the prosecution of a crime.
In People vs. Galano[25], an information was filed with the Batangas Regional Trial Court even though
the evidence of both the prosecution and defense shows that the crime was committed in Manila. This
Court, applying People vs. Olarte, held that it was only when the trial court dismissed the case due to lack
of jurisdiction that the proceedings therein terminated without conviction and acquittal and it was only then
that the prescriptive period (which was interrupted during the during the pendency of the case in the
Batangas Court) commenced to run again.
In People vs. Enrile[26], informations were filed against civilians before military tribunals which had no
jurisdiction over the persons of these civilians. These civilians questioned the re-filing of the cases against
them before the civil courts raising, among others, that the crimes for which they are being charged have
already prescribed. This Court, applying by analogy the ruling in the Olarte case, threw out the defense of
prescription and held that the filing of the first indictments suspended the running of the prescriptive
period, and the prosecutions under the informations to be filed should be regarded as mere continuations

Page 46 of 78
 Page 47 of 78

of the previous proceedings. At the very least, the Court ruled, the filing of the first charges should be
considered as having interrupted the prescriptive period notwithstanding the lack of jurisdiction of the
military tribunal in which they were filed.
More recently, in the case of Reodica vs. Court of Appeals[27], an information for reckless
imprudence resulting in damage to property with slight physical injuries was filed with the Regional Trial
Court even though the offense was within the exclusive jurisdiction of the municipal trial court. The Court,
even as it dismissed the cases pending before the Regional Trial Court for lack of jurisdiction,
disregarded the defense of prescription raised by the accused. The Court, citing Olarte and the
subsequent cases of Francisco vs. Court of Appeals[28] and People vs. Cuaresma[29], ruled that the
prescriptive period for the quasi offenses in question was interrupted by the filing of the complaint with the
fiscals office three days after the vehicular mishap and remained tolled pending the termination of the
case.
From these cases, it is clear that the Apellate Court committed no reversible error in ruling that the
offense of libel charged against petitioner had not yet prescribed. The period of prescription for the crime
was interrupted when the complaint was lodged with the Office of the City Prosecutor and remained tolled
pending the termination of the case against petitioner.Branch 218 of the Regional Trial Court of Quezon
City, therefore, correctly assumed jurisdiction over the case of petitioner as the offense of libel for which
she was being charged has not yet prescribed.
Petitioners other argument that she has been denied her right to a speedy trial deserves scant
consideration. Well-established is the doctrine that the right to a speedy trial is violated only where there
is an unreasonable, vexatious and oppressive delay without participation or fault of the accused, or when
unjustified postponements are sought which prolong the trial for an unreasonable length of time [30]. In the
case at bench, besides the filing of the petitions before the Court of Appeals and this Court, petitioner had
likewise filed a Motion to Quash and a Motion for Reconsideration with the Regional Trial Court of
Quezon City, Branch 218. As such, it is clear that petitioner is not without fault in the delay in the
prosecution of the case against her.
Wherefore, the petition is hereby DENIED, and the decision of the Court of Appeals dated May 1,
1999 is hereby AFFIRMED.
SO ORDERED.

 People v. Bautista, Apr. 27, 2007

G.R. No. 168641, April 27, 2007

DECISION

AUSTRIA-MARTINEZ, J.:

Before us is a Petition for Review on Certiorari filed by the People of the Philippines assailing the
Decision[1] of the Court of Appeals (CA) dated June 22, 2005 in CA-G.R. SP No. 72784, reversing the
Order of the Regional Trial Court (RTC), Branch 19, Manila and dismissing the criminal case for slight
physical injuries against respondent on the ground that the offense charged had already prescribed.

The undisputed facts are as follows.

Page 47 of 78
 Page 48 of 78

On June 12, 1999, a dispute arose between respondent and his co-accused Leonida Bautista, on
one hand, and private complainant Felipe Goyena, Jr., on the other.

Private complainant filed a Complaint with the Office of the Barangay of Malate, Manila, but no
settlement was reached. The barangay chairman then issued a Certification to file action dated August
11, 1999.[2]

On August 16, 1999, private complainant filed with the Office of the City Prosecutor (OCP) a
Complaint for slight physical injuries against herein respondent and his co-accused. After conducting the
preliminary investigation, Prosecutor Jessica Junsay-Ong issued a Joint Resolution dated November 8,
1999 recommending the filing of an Information against herein respondent. Such recommendation was
approved by the City Prosecutor, represented by First Assistant City Prosecutor Eufrocino A. Sulla, but
the date of such approval cannot be found in the records. The Information was, however, filed with the
Metropolitan Trial Court (MeTC) of Manila, Branch 28 only on June 20, 2000.

Respondent sought the dismissal of the case against him on the ground that by the time the Information
was filed, the 60-day period of prescription from the date of the commission of the crime, that is, on June
12, 1999 had already elapsed. The MeTC ruled that the offense had not yet prescribed.
Respondent elevated the issue to the RTC via a Petition for Certiorari, but the RTC denied said
petition and concurred with the opinion of the MeTC.

Respondent then filed a Petition for Certiorari with the CA. On June 22, 2005, the CA rendered its
Decision wherein it held that, indeed, the 60-day prescriptive period was interrupted when the offended
party filed a Complaint with the OCP of Manila on August 16, 1999. Nevertheless, the CA concluded that
the offense had prescribed by the time the Information was filed with the MeTC, reasoning as follows:

In the case on hand, although the approval of the Joint Resolution of ACP Junsay-
Ong bears no date, it effectively terminated the proceedings at the OCP. Hence, even if
the 10-day period for the CP or ACP Sulla, his designated alter ego, to act on the
resolution is extended up to the utmost limit, it ought not have been taken as late as the
last day of the year 1999. Yet, the information was filed with the MeTC only on June 20,
2000, or already nearly six (6) months into the next year. To use once again the
language of Article 91 of the RPC, the proceedings at the CPO was unjustifiably
stopped for any reason not imputable to him (the accused) for a time very much
more than the prescriptive period of only two (2) months. The offense charged had,
therefore, already prescribed when filed with the court on June 20,
2000. x x x[3] (Emphasis supplied)

The dispositive portion of the assailed CA Decision reads as follows:

WHEREFORE, we hereby REVERSE and SET ASIDE the appealed Orders of both
courts below and Criminal Case No. 344030-CR, entitled: People of the Philippines,
Plaintiff, -versus- Clemente Bautista and Leonida Bautista, Accused, is
ordered DISMISSED. Costs de oficio.

SO ORDERED.[4]

Petitioner now comes before this Court seeking the reversal of the foregoing CA Decision. The Court
gives due course to the petition notwithstanding the fact that petitioner did not file a Motion for

Page 48 of 78
 Page 49 of 78

Reconsideration of the decision of the CA before the filing of herein petition. It is not a condition sine qua
non for the filing of a petition for review under Rule 45 of the Rules of Court.[5]

The Court finds merit in the petition.

It is not disputed that the filing of the Complaint with the OCP effectively interrupted the running of
the 60-day prescriptive period for instituting the criminal action for slight physical injuries. However, the
sole issue for resolution in this case is whether the prescriptive period began to run anew after the
investigating prosecutors recommendation to file the proper criminal information against respondent was
approved by the City Prosecutor.

The answer is in the negative.

Article 91 of the Revised Penal Code provides thus:

Art. 91. Computation of prescription of offenses. - The period of prescription shall

commence to run from the day on which the crime is discovered by the offended party,
the authorities, or their agents, and shall be interrupted by the filing of the complaint or
information, and shall commence to run again when such proceedings terminate
without the accused being convicted or acquitted, or are unjustifiably stopped for
any reason not imputable to him.

The term of prescription shall not run when the offender is absent from
the Philipppine Archipelago. (Emphasis supplied)
The CA and respondent are of the view that upon approval of the investigating prosecutor's
recommendation for the filing of an information against respondent, the period of prescription began to
run again. The Court does not agree. It is a well-settled rule that the filing of the complaint with
the fiscals office suspends the running of the prescriptive period. [6]
The proceedings against respondent was not terminated upon the City Prosecutor's approval of
the investigating prosecutor's recommendation that an information be filed with the court. The prescriptive
period remains tolled from the time the complaint was filed with the Office of the Prosecutor until such
time that respondent is either convicted or acquitted by the proper court.

The Office of the Prosecutor miserably incurred some delay in filing the information but such mistake or
negligence should not unduly prejudice the interests of the State and the offended party. As held
in People v. Olarte,[7] it is unjust to deprive the injured party of the right to obtain vindication on account of
delays that are not under his control. All that the victim of the offense may do on his part to initiate the
prosecution is to file the requisite complaint.[8]

The constitutional right of the accused to a speedy trial cannot be invoked by the petitioner in the
present petition considering that the delay occurred not in the conduct of preliminary investigation or trial
in court but in the filing of the Information after the City Prosecutor had approved the recommendation of
the investigating prosecutor to file the information.

The Office of the Solicitor General does not offer any explanation as to the delay in the filing of
the information. The Court will not be made as an unwitting tool in the deprivation of the right of the
offended party to vindicate a wrong purportedly inflicted on him by the mere expediency of a prosecutor
not filing the proper information in due time.

Page 49 of 78
 Page 50 of 78

The Court will not tolerate the prosecutors apparent lack of a sense of urgency in fulfilling their
mandate. Under the circumstances, the more appropriate course of action should be the filing of an
administrative disciplinary action against the erring public officials.

WHEREFORE, the Petition is hereby GRANTED. The Decision of the Court of Appeals in CA-G.R. SP
No. 72784 is hereby REVERSED and SET ASIDE and the Decision of the Regional Trial Court of Manila
in Civil Case No. 02-103990 is hereby REINSTATED.

Let the Secretary of the Department of Justice be furnished a copy of herein Decision for appropriate
action against the erring officials.

SO ORDERED.

 Brocka et. al. v. Enrile et. al., 192 SCRA 183

[G.R. No. 69863-65 : December 10, 1990.]

192 SCRA 183
DECISION

MEDIALDEA, J.:

This petition was originally filed on February 13, 1985 to secure the release of petitioners on
habeas corpus and to permanently enjoin the City Fiscal of Quezon City from investigating
charges of "Inciting to Sedition" against petitioners Lino Brocka, Benjamin Cervantes, Cosme
Garcia and Rodolfo Santos, (hereafter Brocka, et al.). On learning that the corresponding
informations for this offense has been filed by the City Fiscal against them on February 11,
1985, a supplemental petition was filed on February 19, 1985 (p. 51, Rollo) to implead the
Presiding Judge, 1 and to enjoin the prosecution of Criminal Cases Nos. Q-38023, Q-38024 and
Q-38025 (p. 349, Rollo) and the issuance of warrants for their arrests, including their
arraignment. Since then President Ferdinand E. Marcos had ordered the provisional release of
Brocka, et al., the issue on habeas corpus has become moot and academic (p. 396, Rollo). We
shall thus focus on the question of whether or not the prosecution of the criminal cases for
Inciting to Sedition may lawfully be enjoined.
Petitioners were arrested on January 28, 1985 by elements of the Northern Police District
following the forcible and violent dispersal of a demonstration held in sympathy with the jeepney
strike called by the Alliance of Concerned Transport Organization (ACTO). Thereafter, they
were charged with Illegal Assembly in Criminal Cases Nos. 37783, 37787 and 37788 with
Branch 108, Regional Trial Court, NCJR, Quezon City. 2
Except for Brocka, et al. who were charged as leaders of the offense of Illegal Assembly and for
whom no bail was recommended, the other petitioners were released on bail of P3,000.00 each.

Page 50 of 78
 Page 51 of 78

Brocka, et al.'s provisional release was ordered only upon an urgent petition for bail for which
daily hearings from February 1-7, 1985 were held.
However, despite service of the order of release on February 9, 1985, Brocka, et al. remained in
detention, respondents having invoked a Preventive Detention Action (PDA) allegedly issued
against them on January 28, 1985 (p. 6, Rollo). Neither the original, duplicate original nor
certified true copy of the PDA was ever shown to them (p. 367, Rollo).
Brocka, et al. were subsequently charged on February 11, 1985 with Inciting to Sedition,
docketed as Criminal Cases Nos. Q-38023, Q-38024 and Q-38025 (p. 349, Rollo), without prior
notice to their counsel (p. 7, Rollo). The original informations filed recommended no bail (p. 349,
Rollo). The circumstances surrounding the hasty filing of this second offense are cited by
Brocka, et al. (quoting from a separate petition filed on their behalf in G.R. Nos. 69848-50
entitled "Sedfrey A. Ordoñez vs. Col. Julian Arzaga, et al."), as follows:
"x x x
"6. The sham' character of the inquest examination concocted by all respondents is starkly
bizarre when we consider that as early as 10:30 A.M. today, February 11, 1985, Benjamin
Cervantes was able to contact undersigned petitioner by phone informing counsel that said
Benjamin Cervantes and the 4 other persons who are the subjects of this petition will be brought
before the Quezon City Fiscal at 2:30 for undisclosed reasons: subsequently, another phone
call was received by petitioning counsel informing him that the appearance of Benjamin
Cervantes et al. was to be at 2:00 P.M. When petitioning counsel arrived in the office of
Assistant City Fiscal Arturo Tugonon, the complainants' affidavits had not yet been received by
any of the panel of three assistant city fiscals, although the five persons under detention were
already in the office of said assistant fiscal as early as 2:00 P.M. It was only at 3:00 when a
representative of the military arrived bringing with him alleged statements of complainants
against Lino Broka (sic) et al. for alleged inciting to sedition, whereupon undersigned counsel
asked respondent Colonel Agapito Abad 'who ordered the detained persons to be brought to the
office of Assistant Fiscal Arturo Tugonon since there were no charges on file;' and said Colonel
Agapito Abad said aloud: 'I only received a telephone call from Colonel Arzaga about 11:00
A.M. to bring the detained persons today — I am only the custodian.' At 3:15, petitioning
counsel inquired from the Records Custodian when the charges against Lino Broka (sic) had
been officially received and he was informed that the said charges were never coursed through
the Records Office.
"7. Under the facts narrated above, respondents have conspired to use the strong arm of the
law and hatched the nefarious scheme to deprive Lino Broka (sic) et al. the right to bail because
the utterances allegedly constituting inciting to sedition under Article 142 of the Revised Penal
Code are, except for varying nuances, almost verbatim the same utterances which are the
subject of Criminal Cases No. 37783, 37787 and 37788 and for which said detained persons
are entitled to be released on bail as a matter of constitutional right. Among the utterances
allegedly made by the accused and which the respondents claimed to be violative of Article 142
of the Revised Penal Code are: 'Makiisa sa mga drivers, "Makiisa sa aming layunin, "Digmaang
bayan ang sagot sa kahirapan,' Itigil ang pakikialam ng imperyalismo sa Pilipinas,' 'Rollback ng
presyo ng langis sa 95 Centavos.' (See Annex B)

Page 51 of 78
 Page 52 of 78

"8. That when petitioning counsel and other members of the defense panel requested that they
be given 7 days within which said counsel may confer with their clients — the detained persons
named above, the panel of assistant fiscals demanded that said detained persons should sign a
'waiver' of their rights under Article 125 of the Revised Penal Code as a condition for the grant
of said request, which is a harassing requirement considering that Lino Broka (sic) et al. were
already under the detention, albeit illegally, and they could not have waived the right under Rule
125 which they did not enjoy at the time the ruling was made by the panel of assistant city
fiscals." (pp. 4-6, Rollo in G.R. 69848-50).
They were released provisionally on February 14, 1985, on orders of then President F. E.
Marcos. The circumstances of their release are narrated in Our resolution dated January 26,
1985, as quoted in the Solicitor General's Manifestation as follows:
"G.R. Nos. 69848-50 (Sedfrey A. Ordoñez, Petitioner, vs. Col. Julian Arzaga, et al.,
Respondents). — Petitioner Sedfrey A. Ordoñez filed this petition for habeas corpus in behalf of
Lino Brocka, Benjamin Cervantes, Cosme Garcia, Alexander Luzano, and Rodolfo Santos, who
were all detained under a Preventive Detention Action (PDA) issued by then President
Ferdinand E. Marcos on January 28, 1985. They were charged in three separate informations of
the crime of illegal assembly under Art. 146, paragraph 3 of the Revised Penal Code, as
amended by PD 1834. On February 7, 1985, the Honorable Miriam Defensor Santiago,
Regional Trial Judge of Quezon City, issued a resolution in the above criminal cases, directing
the release of the five accused on bail of P6,000.00 for each of them, and from which resolution
the respondent fiscals took no appeal. Immediately thereafter, the accused filed their respective
bail bonds. This notwithstanding, they continued to be held in detention by order of the
respondent colonels; and on February 11, 1985, these same accused were 'reinvestigated,' this
time on charges of 'inciting to sedition' ** under Art. 142 of the Revised Penal Code, following
which corresponding cases were filed. The respondents complied with Our resolution requiring
them, inter alia, to make a RETURN of the writ of habeas corpus. In their RETURN, it appeared
that all the accused had already been released, four of them on February 15, 1985 and one
February 8, 1985. The petitioner, nevertheless, argued that the petition has not become moot
and academic because the accused continue to be in the custody of the law under an invalid
charge of inciting to sedition." (p. 395, Rollo).
Hence, this petition.
Brocka, et al. contend that respondents' manifest bad faith and/or harassment are sufficient
bases for enjoining their criminal prosecution, aside from the fact that the second offense of
inciting to sedition is illegal, since it is premised on one and the same act of attending and
participating in the ACTO jeepney strike. They maintain that while there may be a complex
crime from a single act (Art. 48, RTC), the law does not allow the splitting of a single act into two
offenses and filing two informations therefor, further, that they will be placed in double jeopardy.
The primary issue here is the legality of enjoining the criminal prosecution of a case, since the
two other issues raised by Brocka, et al. are matters of defense against the sedition charge.
We rule in favor of Brocka, et al. and enjoin their criminal prosecution for the second offense of
inciting to sedition.

Page 52 of 78
 Page 53 of 78

Indeed, the general rule is that criminal prosecution may not be restrained or stayed by
injunction, preliminary or final. There are however exceptions, among which are:
"a. To afford adequate protection to the constitutional rights of the accused (Hernandez
vs. Albano, et al., L-19272, January 25, 1967, 19 SCRA 95);
"b. When necessary for the orderly administration of justice or to avoid oppression or multiplicity
of actions (Dimayuga, et al. vs. Fernandez, 43 Phil. 304; Hernandez vs. Albano, supra; Fortun
vs. Labang, et al., L-38383, May 27, 1981, 104 SCRA 607);
"c. When there is a pre-judicial question which is sub judice (De Leon vs. Mabanag, 70 Phil.
202);
"d. When the acts of the officer are without or in excess of authority (Planas vs. Gil, 67 Phil. 62);
"e. Where the prosecution is under an invalid law, ordinance or regulation (Young vs. Rafferty,
33 Phil. 556; Yu Cong Eng vs. Trinidad, 47 Phil. 385, 389);
"f. When double jeopardy is clearly apparent (Sangalang vs. People and Avendia, 109 Phil.
1140);
"g. Where the court has no jurisdiction over the offense (Lopez vs. City Judge, L-25795,
October 29, 1966, 18 SCRA 616);
"h. Where it is a case of persecution rather than prosecution (Rustia vs. Ocampo, CA-G.R. No.
4760, March 25, 1960);
"i. Where the charges are manifestly false and motivated by the lust for vengeance (Recto
vs. Castelo, 18 L.J. [1953], cited in Rañoa vs. Alvendia, CA-G.R. No. 30720-R, October 8,
1962; Cf, Guingona, et al vs. City Fiscal, L-60033, April 4, 1984, 128 SCRA 577); and
"j. When there is clearly no prima facie case against the accused and a motion to quash on that
ground has been denied (Salonga vs. Paño, et al., L-59524, February 18, 1985, 134 SCRA
438).
"7. Preliminary injunction has been issued by the Supreme Court to prevent the threatened
unlawful arrest of petitioners (Rodriguez vs. Castelo, L-6374, August 1, 1958)." (cited in
Regalado, Remedial Law Compendium, p. 188, 1988 Ed.)
In the petition before Us, Brocka, et al. have cited the circumstances to show that the criminal
proceedings had become a case of persecution, having been undertaken by state officials in
bad faith.: nad
Respondents, on the other hand, had invoked a PDA in refusing Brocka, et al.'s release from
detention (before their release on orders of then Pres. Marcos). This PDA was, however, issued
on January 28, 1985, but was invoked only on February 9, 1985 (upon receipt of the trial court's
order of release). Under the guidelines issued, PDAs shall be invoked within 24 hours (in Metro
Manila) or 48 hours (outside Metro Manila). (Ilagan v. Enrile, G.R. No. 70748, October 28, 1985,
139 SCRA 349). Noteworthy also is Brocka, et al.'s claim that, despite subpoenas for its
production, the prosecution merely presented a purported xerox copy of the invoked PDA (par.
4, Counter-Rejoinder, p. 367, Rollo).

Page 53 of 78
 Page 54 of 78

The foregoing circumstances were not disputed by the Solicitor General's office. In fact they
found petitioner's plight "deplorable" (par. 51, Manifestation, p. 396, Rollo).
The hasty filing of the second offense, premised on a spurious and inoperational PDA, certainly
betrays respondent's bad faith and malicious intent to pursue criminal charges against Brocka,
et al.
We have expressed Our view in the Ilagan case that "individuals against whom PDAs have
been issued should be furnished with the original, and the duplicate original, and a certified true
copy issued by the official having official custody of the PDA, at the time of the apprehension"
(supra, p. 369).
We do not begrudge the zeal that may characterize a public official's prosecution of criminal
offenders. We, however, believe that this should not be a license to run roughshod over a
citizen's basic constitutional lights, such as due process, or manipulate the law to suit dictatorial
tendencies.
We are impelled to point out a citizen's helplessness against the awesome powers of a
dictatorship. Thus, while We agree with the Solicitor General's observation and/or manifestation
that Brocka, et al. should have filed a motion to quash the information, We, however, believe
that such a course of action would have been a futile move, considering the circumstances then
prevailing. Thus, the tenacious invocation of a spurious and inoperational PDA and the sham
and hasty preliminary investigation were clear signals that the prosecutors intended to keep
Brocka, et al. in detention until the second offense of "Inciting to Sedition" could be facilitated
and justified without need of issuing a warrant of arrest anew. As a matter of fact the
corresponding informations for this second offense were hastily filed on February 11, 1985, or
two days after Brocka, et al.'s release from detention was ordered by the trial judge on February
9, 1985.
Constitutional rights must be upheld at all costs, for this gesture is the true sign of democracy.
These may not be set aside to satisfy perceived illusory visions of national grandeur.: nad
In the case of J. Salonga v. Cruz Paño, We point out:
"Infinitely more important than conventional adherence to general rules of criminal procedure is
respect for the citizen's right to be free not only from arbitrary arrest and punishment but also
from unwarranted and vexatious prosecution . . ." (G.R. No. L-59524, February 18, 1985, 134
SCRA 438-at p. 448).
We, therefore, rule that where there is manifest bad faith that accompanies the filing of criminal
charges, as in the instant case where Brocka, et al. were barred from enjoying provisional
release until such time that charges were filed, and where a sham preliminary investigation was
hastily conducted, charges that are filed as a result should lawfully be enjoined.
ACCORDINGLY, the petition is hereby GRANTED. The trial court is PERMANENTLY
ENJOINED from proceeding in any manner with the cases subject of the petition. No costs.
SO ORDERED.

Page 54 of 78
 Page 55 of 78

 Salonga v. Paño, 134 SCRA 438

Republic of the Philippines

SUPREME COURT
Manila

EN BANC

G.R. No. L-59524 February 18, 1985

JOVITO R. SALONGA, petitioner,

vs.
HON. ERNANI CRUZ PAÑO, Presiding Judge of the Court of First Instance of Rizal
Branch XVIII (Quezon City), HON. JUDGE RODOLFO ORTIZ, Presiding Judge of the
Court of First Instance of Rizal, Branch XXXI (Quezon City) CITY FISCAL SERGIO
APOSTOL of Quezon City; COL. BALBINO DIEGO and COL. ROMAN
MADELLA, respondents.

GUTIERREZ, JR., J.:

The petitioner invokes the constitutionally protected right to life and liberty guaranteed by
the due process clause, alleging that no prima facie case has been established to warrant
the filing of an information for subversion against him. Petitioner asks this Court to prohibit
and prevent the respondents from using the iron arm of the law to harass, oppress, and
persecute him, a member of the democratic opposition in the Philippines.

The background of this case is a matter of public knowledge.

A rash of bombings occurred in the Metro Manila area in the months of August, September
and October of 1980. On September 6, 1980, one Victor Burns Lovely, Jr., a Philippine-born
American citizen from Los Angeles, California, almost killed himself and injured his younger
brother, Romeo, as a result of the explosion of a small bomb inside his room at the YMCA
building in Manila. Found in Lovely's possession by police and military authorities were
several pictures taken sometime in May, 1980 at the birthday party of former Congressman
Raul Daza held at the latter's residence in a Los Angeles suburb. Petitioner Jovito R.
Salonga and his wife were among those whose likenesses appeared in the group pictures
together with other guests, including Lovely.

As a result of the serious injuries he suffered, Lovely was brought by military and police
authorities to the AFP Medical Center (V. Luna Hospital) where he was placed in the
custody and detention of Col. Roman P. Madella, under the over-all direction of General
Fabian Ver, head of the National Intelligence and Security Authority (NISA). Shortly
afterwards, Mr. Lovely and his two brothers, Romeo and Baltazar Lovely were charged with
subversion, illegal possession of explosives, and damage to property.

Page 55 of 78
 Page 56 of 78

On September 12, 1980, bombs once again exploded in Metro Manila including one which
resulted in the death of an American lady who was shopping at Rustan's Supermarket in
Makati and others which caused injuries to a number of persons.

On September 20, 1980, the President's anniversary television radio press conference was
broadcast. The younger brother of Victor Lovely, Romeo, was presented during the
conference. In his interview, Romeo stated that he had driven his elder brother, Victor, to
the petitioner's house in Greenhills on two occasions. The first time was on August 20,
1980. Romeo stated that Victor did not bring any bag with him on that day when he went to
the petitioner's residence and did not carry a bag when he left. The second time was in the
afternoon of August 31, 1980 when he brought Victor only to the gate of the petitioner's
house. Romeo did not enter the petitioner's residence. Neither did he return that day to pick
up his brother.

The next day, newspapers came out with almost Identical headlines stating in effect that
petitioner had been linked to the various bombings in Metro Manila.

Meanwhile, on September 25, 1980, Lovely was taken out of the hospital's intensive care
unit and transferred to the office of Col. Madella where he was held incommunicado for
some time.

On the night of October 4, 1980, more bombs were reported to have exploded at three big
hotels in Metro Manila, namely: Philippine Plaza, Century Park Sheraton and Manila
Peninsula. The bombs injured nine people. A meeting of the General Military Council was
called for October 6, 1980.

On October 19, 1980, minutes after the President had finished delivering his speech before
the International Conference of the American Society of Travel Agents at the Philippine
International Convention Center, a small bomb exploded. Within the next twenty-four hours,
arrest, search, and seizure orders (ASSOs) were issued against persons who were
apparently implicated by Victor Lovely in the series of bombings in Metro Manila. One of
them was herein petitioner. Victor Lovely offered himself to be a "state witness" and in his
letter to the President, he stated that he will reveal everything he knows about the
bombings.

On October 21, 1980, elements of the military went to the hospital room of the petitioner at
the Manila Medical Center where he was confined due to his recurrent and chronic ailment
of bronchial asthma and placed him under arrest. The arresting officer showed the petitioner
the ASSO form which however did not specify the charge or charges against him. For some
time, the petitioner's lawyers were not permitted to visit him in his hospital room until this
Court in the case of Ordoñez v. Gen. Fabian Ver, et al., (G.R. No. 55345, October 28, 1980)
issued an order directing that the petitioner's right to be visited by counsel be respected.

On November 2, 1980, the petitioner was transferred against his objections from his
hospital arrest to an isolation room without windows in an army prison camp at Fort
Bonifacio, Makati. The petitioner states that he was not informed why he was transferred
and detained, nor was he ever investigated or questioned by any military or civil authority.

Page 56 of 78
 Page 57 of 78

Subsequently, on November 27, 1980, the petitioner was released for humanitarian reasons
from military custody and placed "under house arrest in the custody of Mrs. Lydia Salonga"
still without the benefit of any investigation or charges.

On December 10, 1980, the Judge Advocate General sent the petitioner a "Notice of
Preliminary Investigation" in People v. Benigno Aquino, Jr., et al. (which included petitioner
as a co-accused), stating that "the preliminary investigation of the above-entitled case has
been set at 2:30 o'clock p.m. on December 12, 1980" and that petitioner was given ten (10)
days from receipt of the charge sheet and the supporting evidence within which to file his
counter-evidence. The petitioner states that up to the time martial law was lifted on January
17, 1981, and despite assurance to the contrary, he has not received any copies of the
charges against him nor any copies of the so-called supporting evidence.

On February 9, 1981, the records of the case were turned over by the Judge Advocate
General's Office to the Ministry of Justice.

On February 24, 1981, the respondent City Fiscal filed a complaint accusing petitioner,
among others of having violated Republic Act No. 1700, as amended by P.D. 885 and
Batas Pambansa Blg. 31 in relation to Article 142 of the Revised Penal Code. The inquest
court set the preliminary investigation for March 17, 1981.

On March 6, 1981, the petitioner was allowed to leave the country to attend a series of
church conferences and undergo comprehensive medical examinations of the heart,
stomach, liver, eye and ear including a possible removal of his left eye to save his right eye.
Petitioner Salonga almost died as one of the principal victims of the dastardly bombing of a
Liberal Party rally at Plaza Miranda on August 20, 1971. Since then, he has suffered serious
disabilities. The petitioner was riddled with shrapnel and pieces still remain in various parts
of his body. He has an AV fistula caused by a piece of shrapnel lodged one millimeter from
his aorta. The petitioner has limited use of his one remaining hand and arms, is completely
blind and physical in the left eye, and has scar like formations in the remaining right eye. He
is totally deaf in the right ear and partially deaf in the left ear. The petitioner's physical
ailments led him to seek treatment abroad.

On or around March 26, 1981, the counsel for petitioner was furnished a copy of an
amended complaint signed by Gen. Prospero Olivas, dated March 12, 1981, charging the
petitioner, along with 39 other accused with the violation of R.A. 1700, as amended by P.D.
885, Batas Pambansa Blg. 31 and P.D. 1736. Hearings for preliminary investigation were
conducted. The prosecution presented as its witnesses Ambassador Armando Fernandez,
the Consul General of the Philippines in Los Angeles, California, Col. Balbino Diego,
PSC/NISA Chief, Investigation and Legal Panel of the Presidential Security Command and
Victor Lovely himself.

On October 15, 1981, the counsel for petitioner filed a motion to dismiss the charges
against petitioner for failure of the prosecution to establish a prima facie case against him.

On December 2, 1981, the respondent judge denied the motion. On January 4, 1982, he
issued a resolution ordering the filing of an information for violation of the Revised Anti-
Subversion Act, as amended, against forty (40) people, including herein petitioner.

Page 57 of 78
 Page 58 of 78

The resolutions of the respondent judge dated December 2, 1981 and January 4, 1982 are
now the subject of the petition. It is the contention of the petitioner that no prima facie case
has been established by the prosecution to justify the filing of an information against him.
He states that to sanction his further prosecution despite the lack of evidence against him
would be to admit that no rule of law exists in the Philippines today.

After a painstaking review of the records, this Court finds the evidence offered by the
prosecution utterly insufficient to establish a prima facie case against the petitioner. We
grant the petition.

However, before going into the merits of the case, we shall pass upon a procedural issue
raised by the respondents.

The respondents call for adherence to the consistent rule that the denial of a motion to
quash or to dismiss, being interlocutory in character, cannot be questioned by certiorari; that
since the question of dismissal will again be considered by the court when it decides the
case, the movant has a plain, speedy and adequate remedy in the ordinary course of law;
and that public interest dictates that criminal prosecutions should not be enjoined.

The general rule is correctly stated. However, the respondents fail to appreciate or take into
account certain exceptions when a petition for certiorari is clearly warranted. The case at
bar is one such exception.

In the case of Mead v. Angel (115 SCRA 256) the same contentions were advanced by the
respondents to wit:

xxx xxx xxx

... Respondents advert to the rule that when a motion to quash filed by an
accused in a criminal case shall be denied, the remedy of the accused-
movant is not to file a petition for certiorari or mandamus or prohibition, the
proper recourse being to go to trial, without prejudice to his right to reiterate
the grounds invoked in his motion to quash if an adverse judgment is
rendered against him, in the appeal that he may take therefrom in the manner
authorized by law. (Mill v. People, et al., 101 Phil. 599; Echarol v. Purisima, et
al., 13 SCRA 309.)

On this argument, we ruled:

There is no disputing the validity and wisdom of the rule invoked by the
respondents. However, it is also recognized that, under certain situations,
recourse to the extraordinary legal remedies of certiorari, prohibition or
mandamus to question the denial of a motion to quash is considered proper
in the interest of "more enlightened and substantial justice", as was so
declared in "Yap v. Lutero, G.R. No. L-12669, April 30, 1969."

Infinitely more important than conventional adherence to general rules of criminal procedure
is respect for the citizen's right to be free not only from arbitrary arrest and punishment but

Page 58 of 78
 Page 59 of 78

also from unwarranted and vexatious prosecution. The integrity of a democratic society is
corrupted if a person is carelessly included in the trial of around forty persons when on the
very face of the record no evidence linking him to the alleged conspiracy exists. Ex-Senator
Jovito Salonga, himself a victim of the still unresolved and heinous Plaza Miranda
bombings, was arrested at the Manila Medical Center while hospitalized for bronchial
asthma. When arrested, he was not informed of the nature of the charges against him.
Neither was counsel allowed to talk to him until this Court intervened through the issuance
of an order directing that his lawyers be permitted to visit him (Ordonez v. Gen. Fabian Ver,
et al., G.R. No. 55345, October 28, 1980). Only after four months of detention was the
petitioner informed for the first time of the nature of the charges against him. After the
preliminary investigation, the petitioner moved to dismiss the complaint but the same was
denied. Subsequently, the respondent judge issued a resolution ordering the filing of an
information after finding that a prima facie case had been established against an of the forty
persons accused.

In the light of the failure to show prima facie that the petitioner was probably guilty of
conspiring to commit the crime, the initial disregard of petitioner's constitutional rights
together with the massive and damaging publicity made against him, justifies the favorable
consideration of this petition by this Court. With former Senator Benigno Aquino, Jr. now
deceased, there are at least 38 other co-accused to be tried with the petitioner. The
prosecution must present proof beyond reasonable doubt against each and every one of the
39 accused, most of whom have varying participations in the charge for subversion. The
prosecution's star witness Victor Lovely and the only source of information with regard to
the alleged link between the petitioner and the series of terrorist bombings is now in the
United States. There is reason to believe the petitioner's citation of international news
dispatches * that the prosecution may find it difficult if not infeasible to bring him back to the Philippines to testify against the petitioner.
If Lovely refused to testify before an American federal grand jury how could he possibly be made to testify when the charges against the
respondent come up in the course of the trial against the 39 accused. Considering the foregoing, we find it in the interest of justice to resolve
at this stage the issue of whether or not the respondent judge gravely abused his discretion in issuing the questioned resolutions.

The respondents contend that the prosecution will introduce additional evidence during the
trial and if the evidence, by then, is not sufficient to prove the petitioner's guilt, he would
anyway be acquitted. Yes, but under the circumstances of this case, at what cost not only to
the petitioner but to the basic fabric of our criminal justice system?

The term "prima facie evidence" denotes evidence which, if unexplained or uncontradicted,
is sufficient to sustain the proposition it supports or to establish the facts, or to counter-
balance the presumption of innocence to warrant a conviction. The question raised before
us now is: Were the evidences against the petitioner uncontradicted and if they were
unexplained or uncontradicted, would they, standing alone, sufficiently overcome the
presumption of innocence and warrant his conviction?

We do not think so.

The records reveal that in finding a case against the petitioner, the respondent judge relied
only on the testimonies of Col. Balbino Diego and Victor Lovely. Ambassador Armando
Fernandez, when called upon to testify on subversive organizations in the United States
nowhere mentioned the petitioner as an organizer, officer or member of the Movement for
Free Philippines (MFP), or any of the organizations mentioned in the complaint. Col. Diego,

Page 59 of 78
 Page 60 of 78

on the other hand, when asked what evidence he was able to gather against the petitioner
depended only on the statement of Lovely "that it was the residence of ex-Senator Salonga
where they met together with Renato Tañada, one of the brains of the bombing conspiracy
... and the fact that Sen. Salonga has been meeting with several subversive personnel
based in the U.S.A. was also revealed to me by Victor Burns Lovely; 11 and on the group
pictures taken at former Congressman Raul Daza's birthday party. In concluding that a
conspiracy exists to overthrow by violent means the government of the Philippines in the
United States, his only bases were "documentary as well as physical and sworn statements
that were referred to me or taken by me personally," which of course negate personal
knowledge on his part. When asked by the court how he would categorize petitioner in any
of the subversive organizations, whether petitioner was an organizer, officer or a member,
the witness replied:

A. To categorize former Senator Salonga if he were an organizer, he is an

officer or he is a member, your Honor, please, we have to consider the
surrounding circumstances and on his involvement: first, Senator Salonga
wanted always to travel to the United States at least once a year or more
often under the pretext of to undergo some sort of operation and participate in
some sort of seminar. (t.s.n., April 21, 1981, pp- 14-15)

Such testimony, being based on affidavits of other persons and purely hearsay, can hardly
qualify as prima facie evidence of subversion. It should not have been given credence by
the court in the first place. Hearsay evidence, whether objected to or not, -has no probative
value as the affiant could not have been cross-examined on the facts stated therein. (See
People v. Labinia, 115 SCRA 223; People v. Valero, 112 SCRA 661). Moreover, as Victor
Lovely, himself, was personally examined by the court, there was no need for the testimony
of Col. Diego. Thus, the inquest judge should have confined his investigation to Victor Burns
Lovely, the sole witness whose testimony had apparently implicated petitioner in the
bombings which eventually led to the filing of the information.

Lovely's account of the petitioner's involvement with the former's bombing mission is found
in his sworn statement made before Col. Diego and Lt. Col. Madella and taken on October
17, 1980 at the AFP Medical Center. Lovely was not presented as a prosecution or state
witness but only as a defense witness for his two younger brothers, Romeo and Baltazar,
who were both included in the complaint but who were later dropped from the information.
Victor Lovely was examined by his counsel and cross-examined by the fiscal. In the
process, he Identified the statement which he made before Col. Diego and Lt. Col. Madella.
After Lovely's testimony, the prosecution made a manifestation before the court that it was
adopting Lovely as a prosecution witness.

According to Lovely's statement, the following events took place:

36. Q. Did Psinakis tell you where to stay?

A. Yes, at first he told me to check-in at Manila Hotel or the

Plaza Hotel where somebody would come to contact me and
give the materials needed in the execution of my mission. I
thought this was not safe so I disagreed with him. Mr. Psinakis

Page 60 of 78
 Page 61 of 78

changed the plan and instead told me to visit the residence of

Ex-Sen. Jovito Salonga as often as I can and someone will
meet me there to give the materials I needed to accomplish my
mission

37. Q. Did you comply as instructed?

A. Yes, I arrived in Manila on August 20, 1980 and stayed at

the residence of Mr. Johnny Chua, husband of my business
partner, then I went to the Hospital where I visited my mother
and checked-in at Room 303 of the YMCA at Concepcion
Street, Manila.

38. Q. Did you visit the residence of former Senator Jovito

Salonga as directed by Psinakis?

A. I visited Sen. Salonga's place three (3) times, the first visit
was August 20 or 21, and the last was 4:00 P.M. of August 31,
1980. In addition to these visits, I TALKED to him on the phone
about three or four times. On my first visit, I told him "I am
expecting an attache case from somebody which will be
delivered to your house," for which Sen. Salonga replied "Wala
namang nagpunta dito at wala namang attache case para sa
iyo." However, if your attache case arrives, I'll just call you." I
gave him my number. On my second visit, Salonga said, "I'll be
very busy so just come back on the 31st of August at 4 P.M."
On that date, I was with friends at Batulao Resort and had to
hurry back to be at Salonga's place for the appointment. I
arrived at Salonga's place at exactly 4 P.M.

39. Q. What happened then?

A. I was ushered to the sala by Mrs. Salonga and after five

minutes, Sen. Salonga joined me in the sala. Sen. Salonga
informed me that somebody will be coming to give me the
attache case but did not tell me the name.

40. Q. Are there any subject matters you discuss while waiting
for that somebody to deliver your materials?

A. Yes, Salonga asked if Sen. Aquino and I have met, I

explained to him the efforts of Raul Daza in setting up that
meeting but I have previous business commitments at Norfolk,
Virginia. I told him, however, that through the efforts of Raul
Daza, I was able to talk with Ninoy Aquino in the airport
telephone booth in San Francisco. He also asked about Raul
Daza, Steve Psinakis and the latest opposition group activities
but it seems he is well informed.

Page 61 of 78
 Page 62 of 78

41. Q. How long did you wait until that somebody arrived?

A. About thirty (30) minutes.

41. Q. What happened when the man arrived?

A. This man arrived and I was greatly surprised to see Atty.

Renato Tañada Jovy Salonga was the one who met him and as
I observed parang nasa sariling bahay si Tañada nung
dumating. They talked for five (5) minutes in very low tones so I
did not hear what they talked about. After their whispering
conversations, Sen. Salonga left and at this time Atty. "Nits"
Tañada told me "Nasa akin ang kailangan mo, nasa kotse."

43. Q. Were the materials given to you?

A. When Sen. Salonga came back, we asked to be permitted to

leave and I rode in Atty. "Nits" Tañadas old Pontiac car colored
dirty brown and proceeded to Broadway Centrum where before
I alighted, Atty. Tañada handed me a "Puma" bag containing all
the materials I needed.

xxx xxx xxx

45. Q. What were the contents of the Puma bag?

A. Ten (10) pieces of Westclox pocket watch with screw and

wirings, ten (10) pieces electrical blasting caps 4" length, ten
(10) pieces non-electrical blasting caps 1 " length, nine (9)
pieces volts dry cell battery, two (2) improvised electrical
testers. ten (10) plastic packs of high explosive about 1 pound
weight each.

However, in his interview with Mr. Ronnie Nathanielz which was aired on Channel 4 on
November 8, 1980 and which was also offered as evidence by the accused, Lovely gave a
different story which negates the above testimony insofar as the petitioner's participation
was concerned:

xxx xxx xxx

Q. Who were the people that you contacted in Manila and for
what purpose?

A. Before I left for the Philippines, Mr. Psinakis told me to check

in at the Manila Hotel or the Plaza Hotel, and somebody would
just deliver the materials I would need. I disapproved of this,
and I told him I would prefer a place that is familiar to me or

Page 62 of 78
 Page 63 of 78

who is close to me. Mr. Psinakis suggested the residence of

Sen. Salonga.

And so, I arrived in Manila on August 20, 1980, 1 made a call to

Sen. Salonga, but he was out. The next day I made a call
again. I was able to contact him. I made an appointment t• see
him. I went to Sen. Salonga's house the following day. I asked
Sen. Salonga if someone had given him an attache case for
me. He said nobody. Afterwards, I made three calls to Sen.
Salonga. Sen. Salonga told me "call me again on the 31st of
August. I did not call him, I just went to his house on the 31st of
August at 4 P.M. A few minutes after my arrival Atty. Renato
Tañada arrived. When he had a chance to be near me, he
(Atty. Tanada) whispered to me that he had the attache case
and the materials I needed in his car. These materials were
given to me by Atty. Tanada When I alighted at the Broadway
Centrum. (Emphasis supplied)

During the cross-examination, counsel for petitioner asked Lovely about the so-called
destabilization plan which the latter mentioned in his sworn statement:

Q. You mentioned in your statement taken on October 17,

1980, marked Exhibit "G" about the so-called destabilization
plan of Aquino. When you attended the birthday party of Raul
Daza wherein Jovito Salonga was also present, was this
destabilization plan as alleged by you already formulated?

WITNESS:

A. Not to my knowledge.

COURT TO WITNESS:

Q. Mr. Witness, who invited you to the party?

A. Raul Daza, your Honor.

Q. Were you told that Mr. Salonga would be present in the

party.

A. I am really not quite sure, your Honor.

Q. Alright. You said initially it was social but then it became

political. Was there any political action taken as a result of the
party?

A. Only political discussion, your Honor. (TSN, July 8, 1981, pp.

69-84).

Page 63 of 78
 Page 64 of 78

Counsel for petitioner also asked Lovely whether in view of the latter's awareness of the
physical condition of petitioner, he really implicated petitioner in any of the bombings that
occurred in Metro Manila. The fiscal objected without stating any ground. In sustaining the
objection, the Court said:

Sustained . . . The use of the word 'implicate' might expand the role of Mr.
Salonga. In other words, you are widening the avenue of Mr. Salonga's role
beyond the participation stated in the testimony of this witness about Mr.
Salonga, at least, as far as the evidence is concerned, I supposed, is only
being in the house of Mr. Salonga which was used as the contact point. He
never mentions Mr. Salonga about the bombings. Now these words had to be
put in the mouth of this witness. That would be unfair to Mr. Salonga. (TSN.
July 8, 1981, p. 67)

Respondent judge further said:

COURT:

As the Court said earlier, the parts or portions affecting

Salonga only refers to the witness coming to Manila already
then the matter of . . . I have gone over the statement and there
is no mention of Salonga insofar as activities in the United
States is concerned. I don't know why it concerns this cross-
examination.

ATTY. YAP:

Because according to him, it was in pursuance of the plan that

he came to Manila.

COURT:

According to him it was Aquino, Daza, and Psinakis who asked

him to come here, but Salonga was introduced only when he
(Lovely) came here. Now, the tendency of the question is also
to connect Salonga to the activities in the United States. It
seems to be the thrust of the questions.

COURT:

In other words, the point of the Court as of the time when you
asked him question, the focus on Salonga was only from the
time when he met Salonga at Greenhills. It was the first time
that the name of Salonga came up. There was no mention of
Salonga in the formulation of the destabilization plan as
affirmed by him. But you are bringing this up although you are
only cross-examining for Salonga as if his (Lovely's) activities in

Page 64 of 78
 Page 65 of 78

the United States affected Salonga. (TSN. July 8, 1981, pp. 73-
74).

Apparently, the respondent judge wanted to put things in proper perspective by limiting the
petitioner's alleged "participation" in the bombing mission only to the fact that petitioner's
house was used as a "contact point" between Lovely and Tañada, which was all that Lovely
really stated in his testimony.

However, in the questioned resolution dated December 2, 1981, the respondent judge
suddenly included the "activities" of petitioner in the United States as his basis for denying
the motion to dismiss:

On the activities of Salonga in the United States, the witness, Lovely, in one
of his statements declared: 'To the best of my recollection he mentioned of
some kind of violent struggle in the Philippines being most likely should
reforms be not instituted by President Marcos immediately.

It is therefore clear that the prosecution's evidence has established facts and
circumstances sufficient for a finding that excludes a Motion to Dismiss by
respondent Salonga. The Movement for Free Philippines is undoubtedly a
force born on foreign soil it appears to rely on the resources of foreign
entities, and is being (sic) on gaining ascendancy in the Philippines with the
use of force and for that purpose it has linked itself with even communist
organizations to achieve its end. It appears to rely on aliens for its supporters
and financiers.

The jump from the "contact point" theory to the conclusion of involvement in subversive
activities in the United States is not only inexplicable but without foundation.

The respondents admit that no evidence was presented directly linking petitioner Salonga to
actual acts of violence or terrorism. There is no proof of his direct participation in any overt
acts of subversion. However, he is tagged as a leader of subversive organizations for two
reasons-

(1) Because his house was used as a "contactpoint"; and

(2) Because "he mentioned some kind of violent struggle in the Philippines being most likely
should reforms be not instituted by President Marcos immediately."

The "contact point" theory or what the petitioner calls the guilt by visit or guilt by
association" theory is too tenuous a basis to conclude that Senator Salonga was a leader or
mastermind of the bombing incidents. To indict a person simply because some plotters,
masquerading as visitors, have somehow met in his house or office would be to establish a
dangerous precedent. The right of citizens to be secure against abuse of governmental
processes in criminal prosecutions would be seriously undermined.

The testimony of Victor Lovely against petitioner Salonga is full of inconsistencies. Senator
Salonga and Atty. Renato Tañada could not have whispered to one another because the

Page 65 of 78
 Page 66 of 78

petitioner is almost totally deaf. Lovely could not have met Senator Salonga at a Manglapus
party in Washington, D.C. in 1977 because the petitioner left for the United States only
on November, 1978. Senator Salonga denies having known Mr. Lovely in the United States
or in the Philippines. He states that he has hundred of visitors from week to week in his
residence but cannot recall any Victor Lovely.

The presence of Lovely in a group picture taken at Mr. Raul Daza's birthday party in Los
Angeles where Senator Salonga was a guest is not proof of conspiracy. As stated by the
petitioner, in his many years in the turbulent world of politics, he has posed with all kinds of
people in various groups and various places and could not possibly vouch for their conduct.
Commenting on the matter, newspaper columnist Teodoro Valencia stated that Filipinos
love to pose with important visitors and the picture proves nothing.

It is likewise probable that a national figure and former politician of Senator Salonga's
stature can expect guests and visitors of all kinds to be visiting his home or office. If a rebel
or subversive happens to pose with the petitioner for a group picture at a birthday party
abroad, or even visit him with others in his home, the petitioner does not thereby become a
rebel or subversive, much less a leader of a subversive group. More credible and stronger
evidence is necessary for an indictment. Nonetheless, even if we discount the flaws in
Lovely's testimony and dismiss the refutations and arguments of the petitioner, the
prosecution evidence is still inadequate to establish a prima facie finding.

The prosecution has not come up with even a single iota of evidence which could positively
link the petitioner to any proscribed activities of the Movement for Free Philippines or any
subversive organization mentioned in the complaint. Lovely had already testified that during
the party of former Congressman Raul Daza which was alleged to have been attended by a
number of members of the MFP, no political action was taken but only political discussion.
Furthermore, the alleged opinion of the petitioner about the likelihood of a violent struggle
here in the Philippines if reforms are not instituted, assuming that he really stated the same,
is nothing but a legitimate exercise of freedom of thought and expression. No man deserves
punishment for his thoughts. Cogitationis poenam memo meretur. And as the late Justice
Oliver W. Holmes stated in the case of U.S. v. Schwimmer, 279 U.S. 644, " ... if there is any
principle of the Constitution that more imperatively calls for attachment than any other it is
the principle of free thought not free thought for those who agree with us but freedom for the
thought that we hate."

We have adopted the concept that freedom of expression is a "preferred" right and,
therefore, stands on a higher level than substantive economic or other liberties. The
primacy, the high estate accorded freedom of expression is a fundamental postulate of our
constitutional system. (Gonzales v. Commission on Elections, 29 SCRA 835). As explained
by Justice Cardozo in Palko v. Connecticut (302 U.S. 319) this must be so because the
lessons of history, both political and legal, illustrate that freedom of thought and speech is
the indispensable condition of nearly every other form of freedom. Protection is especially
mandated for political discussions. This Court is particularly concerned when allegations are
made that restraints have been imposed upon mere criticisms of government and public
officials. Political discussion is essential to the ascertainment of political truth. It cannot be
the basis of criminal indictments.

Page 66 of 78
 Page 67 of 78

The United States Supreme Court in Noto v. United States (367 U.S. 290) distinguished
between the abstract teaching of the moral propriety or even moral necessity for a resort to
force and violence and speech which would prepare a group for violent action and steel it to
such action. In Watts v. United States (394 U.S. 705), the American court distinguished
between criminal threats and constitutionally protected speech.

It stated:

We do not believe that the kind of political hyperbole indulged in by petitioner

fits within that statutory term. For we must interpret the language Congress
chose against the background of a profound national commitment to the
principle that debate on public issues should be uninhibited, robust, and wide
open and that it may well include vehement, caustic, and sometimes
unpleasantly sharp attacks on government and public officials. New York
Times Co. v. Sullivan (376 U.S. 254). The language of the political arena, like
the language used in labor disputed is often vituperative abusive, and inexact.
We agree with petitioner that his only offense was a kind of very crude
offensive method of stating a political opposition to the President.

In the case before us, there is no teaching of the moral propriety of a resort to violence,
much less an advocacy of force or a conspiracy to organize the use of force against the
duly constituted authorities. The alleged remark about the likelihood of violent struggle
unless reforms are instituted is not a threat against the government. Nor is it even the
uninhibited, robust, caustic, or unpleasantly sharp attack which is protected by the
guarantee of free speech. Parenthetically, the American case of Brandenburg v. Ohio (395
U.S. 444) states that the constitutional guarantees of free speech and free press do not
permit a State to forbid or proscribe advocacy of the use of force or of law violation except
where such advocacy is directed to inciting or producing imminent lawless action and is
likely to incite or produce such action. The words which petitioner allegedly used according
to the best recollections of Mr. Lovely are light years away from such type of proscribed
advocacy.

Political discussion even among those opposed to the present administration is within the
protective clause of freedom of speech and expression. The same cannot be construed as
subversive activities per se or as evidence of membership in a subversive organization.
Under Presidential Decree No. 885, Section 3, paragraph 6, political discussion will only
constitute, prima facie evidence of membership in a subversive organization if such
discussion amounts to:

(6) Conferring with officers or other members of such association or

organization in furtherance of any plan or enterprise thereof.

As stated earlier, the prosecution has failed to produce evidence that would establish any
link between petitioner and any subversive organization. Even if we lend credence to
Lovely's testimony that a political discussion took place at Daza's birthday party, no proof
whatsoever was adduced that such discussion was in furtherance of any plan to overthrow
the government through illegal means. The alleged opinion that violent struggle is likely

Page 67 of 78
 Page 68 of 78

unless reforms are instituted by no means shows either advocacy of or incitement to

violence or furtherance of the objectives of a subversive organization.

Lovely also declared that he had nothing to do with the bombing on August 22, 1980, which
was the only bombing incident that occurred after his arrival in Manila on August 20, and
before the YMCA explosion on September 6, 1980. (See TSN, pp. 63-63, July 8, 1981). He
further testified that:

WITNESS:

Actually, it was not my intention to do some kind of bombing

against the government. My bombing mission was directed
against the particular family (referring to the Cabarrus family
[TSN, p. 11, July 9, 1981] [Rollo, p. 10].

Such a statement wholly negates any politically motivated or subversive assignment which
Lovely was supposed to have been commissioned to perform upon the orders of his co-
accused and which was the very reason why they answer charged in the first place. The
respondent judge also asked Lovely about the possible relation between Cabarrus and
petitioner:

COURT:

Q. Did you suspect any relation between Cabarrus and Jovito

Salonga, why did you implicate Jovito Salonga?

A. No, your Honor. I did not try to implicate Salonga.

It should be noted that after Lovely's testimony, the prosecution manifested to the court that
it was adopting him as a prosecution witness. Therefore, the prosecution became
irreversively bound by Lovely's disclaimers on the witness stand, that it was not his intention
"to do some kind of bombing against the government" and that he "did not try to implicate
Salonga", especially since Lovely is the sole witness adopted by the prosecution who could
supposedly establish the link between the petitioner and the bombing incidents.

The respondent court should have taken these factors into consideration before concluding
that a prima facie case exists against the petitioner. Evidence must not only proceed from
the mouth of a credible witness but it must be credible in itself such as the common
experience and observation of mankind can approve as probable under the circumstances.
(People v. Dayad, 56 SCRA 439). In the case at bar, the prosecution cannot even present a
credible version of the petitioner's role in the bombings even if it ignores the subsequent
disclaimers of Lovely and without relying on mere affidavits including those made by Lovely
during his detention.

The resolution dated January 4, 1982 suffers from the same defect. In this resolution,
Lovely's previous declarations about the bombings as part of the alleged destabilization
plan and the people behind the same were accorded such credibility by the respondent
judge as if they had already been proved beyond reasonable doubt.

Page 68 of 78
 Page 69 of 78

The purpose of a preliminary investigation is to secure the innocent against hasty, malicious
and oppressive prosecution, and to protect him from an open and public accusation of
crime, from the trouble, expense and anxiety of a public trial, and also to protect the state
from useless and expensive trials. (Trocio v. Manta, 118 SCRA 241; citing Hashim v.
Boncan, 71 Phil. 216). The right to a preliminary investigation is a statutory grant, and to
withhold it would be to transgress constitutional due process. (See People v. Oandasa, 25
SCRA 277) However, in order to satisfy the due process clause it is not enough that the
preliminary investigation is conducted in the sense of making sure that a transgressor shall
not escape with impunity. A preliminary investigation serves not only the purposes of the
State. More important, it is a part of the guarantees of freedom and fair play which are
birthrights of all who live in our country. It is, therefore, imperative upon the fiscal or the
judge as the case may be, to relieve the accused from the pain of going through a trial once
it is ascertained that the evidence is insufficient to sustain a prima facie case or that no
probable cause exists to form a sufficient belief as to the guilt of the accused. Although
there is no general formula or fixed rule for the determination of probable cause since the
same must be decided in the light of the conditions obtaining in given situations and its
existence depends to a large degree upon the finding or opinion of the judge conducting the
examination, such a finding should not disregard the facts before the judge nor run counter
to the clear dictates of reasons (See La Chemise Lacoste, S.A. v. Fernandez, 129 SCRA
391). The judge or fiscal, therefore, should not go on with the prosecution in the hope that
some credible evidence might later turn up during trial for this would be a flagrant violation
of a basic right which the courts are created to uphold. It bears repeating that the judiciary
lives up to its mission by vitalizing and not denigrating constitutional rights. So it has been
before. It should continue to be so. Mercado v. Court of First Instance of Rizal, 116 SCRA
93).

The Court had already deliberated on this case, a consensus on the Court's judgment had
been arrived at, and a draft ponencia was circulating for concurrences and separate
opinions, if any, when on January 18, 1985, respondent Judge Rodolfo Ortiz granted the
motion of respondent City Fiscal Sergio Apostol to drop the subversion case against the
petitioner. Pursuant to instructions of the Minister of Justice, the prosecution restudied its
evidence and decided to seek the exclusion of petitioner Jovito Salonga as one of the
accused in the information filed under the questioned resolution.

We were constrained by this action of the prosecution and the respondent Judge to
withdraw the draft ponencia from circulating for concurrences and signatures and to place it
once again in the Court's crowded agenda for further deliberations.

Insofar as the absence of a prima facie case to warrant the filing of subversion charges is
concerned, this decision has been rendered moot and academic by the action of the
prosecution.

Respondent Fiscal Sergio Apostol correctly points out, however, that he is not precluded
from filing new charges for the same acts because the petitioner has not been arraigned
and double jeopardy does not apply. in that sense, the case is not completely academic.

Recent developments in this case serve to focus attention on a not too well known aspect of
the Supreme Court's functions.

Page 69 of 78
 Page 70 of 78

The setting aside or declaring void, in proper cases, of intrusions of State authority into
areas reserved by the Bill of Rights for the individual as constitutionally protected spheres
where even the awesome powers of Government may not enter at will is not the totality of
the Court's functions.

The Court also has the duty to formulate guiding and controlling constitutional principles,
precepts, doctrines, or rules. It has the symbolic function of educating bench and bar on the
extent of protection given by constitutional guarantees.

In dela Camara v. Enage (41 SCRA 1), the petitioner who questioned a P1,195,200.00 bail
bond as excessive and, therefore, constitutionally void, escaped from the provincial jail
while his petition was pending. The petition became moot because of his escape but we
nonetheless rendered a decision and stated:

The fact that the case is moot and academic should not preclude this Tribunal
from setting forth in language clear and unmistakable, the obligation of fidelity
on the part of lower court judges to the unequivocal command of the
Constitution that excessive bail shall not be required.

In Gonzales v. Marcos (65 SCRA 624) whether or not the Cultural Center of the Philippines
could validly be created through an executive order was mooted by Presidential Decree No.
15, the Center's new charter pursuant to the President's legislative powers under martial
law. Stan, this Court discussed the constitutional mandate on the preservation and
development of Filipino culture for national Identity. (Article XV, Section 9, Paragraph 2 of
the Constitution).

In the habeas corpus case of Aquino, Jr., v. Enrile, 59 SCRA 183), during the pendency of
the case, 26 petitioners were released from custody and one withdrew his petition. The sole
remaining petitioner was facing charges of murder, subversion, and illegal possession of
firearms. The fact that the petition was moot and academic did not prevent this Court in the
exercise of its symbolic function from promulgating one of the most voluminous decisions
ever printed in the Reports.

In this case, the respondents agree with our earlier finding that the prosecution evidence
miserably fails to establish a prima facie case against the petitioner, either as a co-
conspirator of a destabilization plan to overthrow the government or as an officer or leader
of any subversive organization. They have taken the initiative of dropping the charges
against the petitioner. We reiterate the rule, however, that this Court will not validate the
filing of an information based on the kind of evidence against the petitioner found in the
records.

WHEREFORE, the petition is DISMISSED for having become moot and academic.

SO ORDERED.

Page 70 of 78
 Page 71 of 78

 People v. Grey, 625 SCRA 523 (2010)

G.R. No. 180109, July 26, 2010

DECISION

NACHURA, J.:

Before this Court is a Petition for Review under Rule 45 of the Rules of Court filed by the People
of the Philippines, through the Office of the Solicitor General (OSG), seeking the nullification of the Court
of Appeals (CA) (Cebu City-Eighteenth Division) Resolution[1] dated March 13, 2007, Decision[2] dated
May 8, 2007, and Resolution[3]dated October 8, 2007, in CA-G.R. SP No. 02558, entitled Mayor Joseph
Jojo V. Grey and Francis B. Grey v. Hon. Roberto A. Navidad, Presiding Judge of the Regional Trial Court
of Calbayog City, Branch 32, and the People of the Philippines.

On December 11, 2006, an Information for Murder was filed against respondent Joseph Grey,
former Mayor of San Jorge, Samar; his son, respondent Francis Grey; and two others for the death of
Rolando Diocton, an employee of the San Jorge municipal government, before the Regional Trial Court
(RTC), Branch 41, Gandara, Samar. The Information was accompanied by other supporting documents
and a motion for the issuance of a warrant of arrest.[4]

Respondents filed a petition for review with the Secretary of Justice. Meanwhile, RTC Branch 41
Presiding Judge Rosario Bandal denied the motion for the issuance of a warrant of arrest. Judge Bandal
found the prosecutions evidence to be insufficient to link respondents to the crime charged. She directed
the prosecution to present, within five days, additional evidence that would show that accused were the
assailants or that they conspired, confederated, or helped in the commission of the crime charged. [5]

The prosecution then filed an Omnibus Motion for Reconsideration and a motion for the inhibition
of Judge Bandal.[6] The judge inhibited herself but denied the motion for reconsideration. [7]

Thereafter, the provincial prosecutor filed a petition for change of venue before this Court,
attaching thereto a letter from the victims wife expressing fear for her life and that of the other
witnesses.[8]

The Secretary of Justice, in a Resolution dated January 4, 2007, dismissed the petition for review
and respondents counter charge of perjury. He found no error to warrant the modification or reversal of
the prosecutors resolution. The Secretary of Justice ruled that the evidence adduced against respondents
was sufficient to establish probable cause for the offense charged. Respondents motion for
reconsideration was denied on January 30, 2007.[9]

Subsequently, the prosecution withdrew their motion for change of venue before this Court, citing
financial difficulties in bringing witnesses to Manila.[10] Respondents opposed the motion and prayed that
all proceedings be suspended until after the May 14, 2007 elections. [11]

However, on February 19, 2007, respondents filed their own petition for change of venue before
this Court, alleging that the presiding judge who took over the case, Judge Roberto Navidad, was a pawn
in the political persecution being staged against them. [12] In its August 22, 2007 Resolution, this Court
denied the petition for lack of merit and directed Judge Navidad to hear the case with dispatch. [13]

Page 71 of 78
 Page 72 of 78

Accordingly, Judge Navidad proceeded with the preliminary inquiry on the existence of probable
cause, and, in an Order dated February 20, 2007, ruled that the finding of probable cause was supported
by the evidence on record. He then issued warrants of arrest against respondents and all but one of their
co-accused.[14]

Respondents filed a Petition[15] for Certiorari and Prohibition before the CA, alleging that Judge
Navidad gravely abused his discretion in issuing the February 20, 2007 Order, and seeking a temporary
restraining order (TRO) and/or a writ of preliminary injunction. They alleged that the filing of the murder
charges against them on the basis of perjured statements coming from their political opponents
supporters smacks of political harassment at its foulest form. [16] Respondents pointed out that the criminal
complaint was filed barely two months after Joseph Grey declared his intentions to challenge incumbent
Congressman Reynaldo S. Uy, a former ally, in the May 2007 congressional elections. Likewise,
respondents claimed that one of the witnesses, Urien Moloboco, who executed an affidavit before the
Provincial Prosecutor, was the subject of an Alias Warrant of Arrest for murder issued by the RTC of
Gandara, Samar on June 26, 2006, and, hence, was a fugitive from the law at the time of the filing of the
criminal complaint against respondents. Respondents maintain that the fact that Moloboco was not
arrested when he executed his affidavit before the prosecutor, spoke of the power and clout of the
witness protectors.[17]

The CA Eighteenth Division issued a TRO on March 13, 2007.[18] After oral arguments, the CA
issued a Decision[19] dated May 8, 2007, making the TRO permanent, ordering that warrants of arrest be
set aside, and dismissing the criminal case without prejudice.

The CA held that Judge Navidad failed to abide by the constitutional mandate for him to
personally determine the existence of probable cause.[20] According to the CA, nowhere in the assailed
Order did Judge Navidad state his personal assessment of the evidence before him and the personal
justification for his finding of probable cause. It found that the judge extensively quoted from the Joint
Resolution of the Provincial Prosecutor and the Resolution of the Secretary of Justice, and then adopted
these to conclude that there was sufficient evidence to support the finding of probable cause. The CA
held that the Constitution commands the judge to personally determine the existence of probable cause
before issuing warrants of arrest.[21]

Moreover, the CA also ruled that the Information was not supported by the allegations in the
submitted affidavits.[22] It pointed out that the Information charged respondents as principals by direct
participation, but the complaint-affidavit and supporting affidavits uniformly alleged that respondents were
not at the scene of the shooting.[23] The CA further found that the allegations in the complaint-affidavit and
supporting affidavits were insufficient to establish probable cause. It said that there was nothing in the
affidavits to show acts that would support the prosecutions theory that respondents were also charged as
principals by conspiracy.[24]

Petitioners motion for reconsideration of the CAs May 8, 2007 Decision was denied in a
Resolution dated October 8, 2007.[25] Hence, this petition for review.

Petitioner argues that respondents committed forum shopping, which would warrant the outright
dismissal of their petition below. Petitioner alleges that respondents petition for change of venue before
this Court and their petition for prohibition before the CA actually involve the same subject matter, parties,
and issues that of enjoining Judge Navidad from proceeding with the trial of the criminal case against

Page 72 of 78
 Page 73 of 78

them.[26] Moreover, these two proceedings have resulted in conflicting decisions, with this Court resolving
to proceed with the case and with the CA enjoining the same.[27]

Petitioner also argues against the CAs ruling that Judge Navidad failed to personally determine
the existence of probable cause. It said that although the judge adopted the findings of the prosecutors as
to the sufficiency of evidence constituting probable cause, the language of the Order clearly reflects that
the judge himself personally examined the records and found that there was probable cause for the
issuance of warrants of arrest.[28] Moreover, the judge was correct in finding probable cause based on the
sworn statements of the witnesses submitted to the court.[29] Petitioner avers that the CA disregarded the
fact that the Information alleged conspiracy.[30] In any case, petitioner asserts that a perceived defect in
the Information is not jurisdictional as the same may be amended anytime before arraignment or with
leave of court after arraignment.[31]

Petitioner also claims that respondents had not shown any clear and unmistakable right to the
relief they sought. It said that there are more than enough plain, speedy, and adequate remedies
available to respondents. Their constitutional rights are amply protected in the enforcement of the
warrants of arrest. They can likewise apply for bail or move to quash the allegedly defective
Information.[32]

Petitioner also argues that this Court has laid down the rule that criminal prosecution cannot be
enjoined, and any exception to this rule must be convincingly established.[33] On the other hand, the
comparative injury to the People in permanently enjoining a criminal case is beyond any of respondents
speculative claim of injury.

Thus, petitioner is praying that the CAs May 8, 2007 Decision and October 8, 2007 Resolution be
reversed and set aside, and the writ of injunction be dissolved. [34]

In their Comment, respondents assert that the trial court issued its February 20, 2007 Order in
gross violation of the Constitution and prevailing jurisprudence on the matter. [35] Respondents claim that
the trial courts violation is evident in the indecent haste with which it issued the Order and Warrants of
Arrest, and in its own admission in the Order itself. [36] Respondents also maintain that the trial court acted
whimsically, capriciously, and with grave abuse of discretion when it concluded that there was probable
cause to issue warrants of arrest against respondents.[37] Respondents likewise assert that the trial court
committed grave abuse of discretion when it reversed the finding of Judge Bandal, who first heard the
case.[38]

The petition is impressed with merit.

Initially, we decide the issue of forum shopping raised by petitioner.

Petitioner maintains that respondents committed forum shopping when it filed a petition for change of
venue before this Court and a petition for prohibition before the CA.

Forum shopping is an act of a party, against whom an adverse judgment or order has been
rendered in one forum, of seeking and possibly getting a favorable opinion in another forum, other than by
appeal or special civil action for certiorari. It may also involve the institution of two or more actions or
proceedings grounded on the same cause on the supposition that one or the other court would make a
favorable disposition.[39]

Page 73 of 78
 Page 74 of 78

Forum shopping exists where the elements of litis pendentia are present, and where a final
judgment in one case will amount to res judicata in the other. The elements of forum shopping are: (a)
identity of parties, or at least such parties as would represent the same interest in both actions; (b)
identity of rights asserted and relief prayed for, the relief being founded on the same facts; and (c) identity
of the two preceding particulars such that any judgment rendered in the other action will, regardless of
which party is successful, amount to res judicata in the action under consideration.[40]

The elements of res judicita are: (a) the former judgment must be final; (b) the court which
rendered judgment had jurisdiction over the parties and the subject matter; (c) it must be a judgment on
the merits; and (d) there must be, between the first and second actions, identity of parties, subject matter,
and cause of action.[41]

A reexamination of the two actions in this case, in light of the foregoing jurisprudence, is in order.

In the petition for change of venue filed on February 19, 2007, respondents prayed for the transfer of the
criminal case to any court in Metro Manila,[42] alleging that the prosecution was politically motivated and
designed to hamper the plan of respondent Joseph Grey to run for a congressional seat in the May 2007
elections.[43] They contended that it would be extremely pernicious to the interest of justice if trial of this
case and (of) the other two cases are held in Samar, especially in the City of Calbayog, where the said
(Congressman) Reynaldo Uy is a resident and absolutely wields power. [44] They also asked the Court to
hold the proceedings in abeyance until after the May 14, 2007 elections.

In its August 22, 2007 Resolution, the Court denied the petition for transfer of venue for lack of merit. It
also directed Judge Navidad to hear the case with dispatch.[45]

On March 5, 2007, while their petition for change of venue was pending before this Court,
respondents filed a petition for certiorari before the CA. They prayed, first, for the issuance of a TRO
and/or a writ of preliminary injunction to prohibit Judge Navidad from proceeding with Criminal Case No.
4916 and from causing the implementation of the warrants of arrest against respondents; and second, for
the Court to set aside Judge Navidads February 20, 2007 Order and the corresponding warrants he
issued.[46] The TRO was granted on March 13, 2007, and the CA Decision making the same injunction
permanent and setting aside the warrants of arrest was promulgated on May 8, 2007, a few days before
the May 14, 2007 elections.

The CA correctly ruled that respondents were not guilty of forum shopping when they filed the two
actions. Respondents raised different issues and sought different reliefs in the two actions, although both
were grounded on the same set of facts.

The issue in the petition for change of venue is whether the trial of the case was to be moved to
another court in light of respondents allegations that the same was being used as a tool for their political
persecution. On the other hand, the issue in the petition for certiorari before the CA was whether Judge
Navidad gravely abused his discretion in issuing the February 20, 2007 Order and the warrants for
respondents arrest.

Thus, this Courts Resolution would not have amounted to res judicata that would bar the petition
for certiorari before the CA.

We now resolve the substantive issues.

Page 74 of 78
 Page 75 of 78

Respondents, in their petition before the CA, questioned the alleged lack of personal
determination of probable cause by Judge Navidad in issuing the warrants for their arrest.

Judge Navidads Order reads:

In this separate, independent constitutionally-mandated Inquiry conducted for the

purpose of determining the sufficiency of the evidence constituting probable cause to
justify the issuance of a Warrant of Arrest, the Court perforce, made a very careful and
meticulous and (sic) review not only of the records but also the evidence adduced by
the prosecution, particularly the sworn statements/affidavits of Mario Abella, Uriendo
Moloboco and Edgar Pellina.[47]

The language of the Order clearly shows that the judge made his own personal determination of the
existence of probable cause by examining not only the prosecutors report but also his supporting
evidence, consisting mainly of the sworn statements of the prosecutions witnesses.

It is well to remember that there is a distinction between the preliminary inquiry which determines
probable cause for the issuance of a warrant of arrest and the preliminary investigation proper which
ascertains whether the offender should be held for trial or be released. The determination of probable
cause for purposes of issuing the warrant of arrest is made by the judge. The preliminary investigation
proper whether or not there is reasonable ground to believe that the accused is guilty of the offense
charged is the function of the investigating prosecutor. [48]

The duty of the judge to determine probable cause to issue a warrant of arrest is mandated by
Article III, Section 2 of the Philippine Constitution:

Section 2. The right of the people to be secure in their persons, houses, papers,
and effects against unreasonable searches and seizures of whatever nature and for any
purpose shall be inviolable, and no search warrant or warrant of arrest shall issue except
upon probable cause to be determined personally by the judge after examination under
oath or affirmation of the complainant and the witnesses he may produce, and particularly
describing the place to be searched and the persons or things to be seized.

In Soliven v. Makasiar,[49] the Court explained that this constitutional provision does not
mandatorily require the judge to personally examine the complainant and her witnesses. Instead, he may
opt to personally evaluate the report and supporting documents submitted by the prosecutor or he may
disregard the prosecutors report and require the submission of supporting affidavits of witnesses. Thus,
in Soliven, we said:

What the Constitution underscores is the exclusive and personal responsibility of

the issuing judge to satisfy himself of the existence of probable cause. In satisfying
himself of the existence of probable cause for the issuance of a warrant of arrest, the
judge is not required to personally examine the complainant and his witnesses. Following
established doctrine and procedure, he shall: (1) personally evaluate the report and the
supporting documents submitted by the fiscal regarding the existence of probable cause
and, on the basis thereof, issue a warrant of arrest; or (2) if on the basis thereof he finds
no probable cause, he may disregard the fiscals report and require the submission of

Page 75 of 78
 Page 76 of 78

supporting affidavits of witnesses to aid him in arriving at a conclusion as to the existence

of probable cause.

Sound policy dictates this procedure, otherwise judges would by unduly laden
with the preliminary examination and investigation of criminal complaints instead of
concentrating on hearing and deciding cases filed before their courts. [50]

What the law requires as personal determination on the part of a judge is that he should not
rely solely on the report of the investigating prosecutor.[51] This means that the judge should consider not
only the report of the investigating prosecutor but also the affidavit and the documentary evidence of the
parties, the counter-affidavit of the accused and his witnesses, as well as the transcript of stenographic
notes taken during the preliminary investigation, if any, submitted to the court by the investigating
prosecutor upon the filing of the Information.[52]

The Court has also ruled that the personal examination of the complainant and his witnesses is
not mandatory and indispensable in the determination of probable cause for the issuance of a warrant of
arrest. The necessity arises only when there is an utter failure of the evidence to show the existence of
probable cause.[53] Otherwise, the judge may rely on the report of the investigating prosecutor, provided
that he likewise evaluates the documentary evidence in support thereof.

Contrary to respondents claim, Judge Navidad did not gravely abuse his discretion in issuing the same.

A perusal of the assailed Order bears out this fact.

It was only through a review of the proceedings before the prosecutor that could have led Judge
Navidad to determine that the accused were given the widest latitude and ample opportunity to challenge
the charge of Murder which resulted, among others, (in) a filing of a counter-charge of
Perjury.[54] Likewise, his personal determination revealed no improper motive on the part of the
prosecution and no circumstance which would overwhelm the presumption of regularity in the
performance of official functions.[55] Thus, he concluded that the previous Order, denying the motion for
the issuance of warrants of arrest, was not correct.[56]

These statements sufficiently establish the fact that Judge Navidad complied with the
constitutional mandate for personal determination of probable cause before issuing the warrants of arrest.

The CA likewise overlooked a fundamental rule we follow in this jurisdiction. It is an established doctrine
that injunction will not lie to enjoin a criminal prosecution because public interest requires that criminal
acts be immediately investigated and prosecuted for the protection of society.[57]

However, it is also true that various decisions of this Court have laid down exceptions to this rule,
among which are:

a. To afford adequate protection to the constitutional rights of the accused

(Hernandez v. Albano, et al., L-19272, January 25, 1967, 19 SCRA 95);

b. When necessary for the orderly administration of justice or to avoid oppression

or multiplicity of actions (Dimayuga, et al. v. Fernandez, 43 Phil. 304; Hernandez v.
Albano, supra; Fortun v. Labang, et al., L-38383, May 27, 1981, 104 SCRA 607);

Page 76 of 78
 Page 77 of 78

c. When there is a pre-judicial question which is sub[-]judice (De Leon v.

Mabanag, 70 Phil. 202);

d. When the acts of the officer are without or in excess of authority (Planas v. Gil,
67 Phil. 62);

e. Where the prosecution is under an invalid law, ordinance or regulation (Young

v. Rafferty, 33 Phil. 556; Yu Cong Eng v. Trinidad, 47 Phil. 385, 389);

f. When double jeopardy is clearly apparent (Sangalang v. People and Avendia,

109 Phil. 1140);

g. Where the court has no jurisdiction over the offense (Lopez v. City Judge, L-
25795, October 29, 1966, 18 SCRA 616);

h. Where there is a case of persecution rather than prosecution (Rustia v.

Ocampo, CA-G.R. No. 4760, March 25, 1960);

i. Where the charges are manifestly false and motivated by the lust for
vengeance (Recto v. Castelo, 18 L.J. [1953], cited in Raoa v. Alvendia, CA-G.R. No.
30720-R, October 8, 1962; Cf. Guingona, et al. v. City Fiscal, L-60033, April 4, 1984, 128
SCRA 577); x x x

j. When there is clearly no prima facie case against the accused and a motion to
quash on that ground has been denied (Salonga v. Pao, et al., L-59524, February 18,
1985, 134 SCRA 438)[; and]

[k.] Preliminary injunction has been issued by the Supreme Court to prevent the
threatened unlawful arrest of petitioners (Rodriguez v. Castelo, L-6374, August 1,
1953).[58]

Respondents insisted that political persecution by their political rivals was the underlying reason for the
filing of criminal charges against them, and used this as basis for asking the appellate court to stop the
proceedings in the trial court.

Indeed, this Court has recognized that, in certain instances, political persecution or political motives may
have impelled the filing of criminal charges against certain political rivals. But this Court has also ruled
that any allegation that the filing of the charges is politically motivated cannot justify the prohibition of a
criminal prosecution if there is otherwise evidence to support the charges.[59]

In this case, the judge, upon his personal examination of the complaint and evidence before him,
determined that there was probable cause to issue the warrants of arrest after the provincial prosecution,
based on the affidavits presented by complainant and her witnesses, found probable cause to file the
criminal Information. This finding of the Provincial Prosecutor was affirmed by the Secretary of Justice.

Page 77 of 78
 Page 78 of 78

To establish political harassment, respondents must prove that the public prosecutor, not just the
private complainant, acted in bad faith in prosecuting the case or has lent himself to a scheme that could
have no other purpose than to place respondents in contempt and disrepute. [60] It must be shown that the
complainant possesses the power and the influence to control the prosecution of cases. [61]

Likewise, the allegation that the filing of the complaint was politically motivated does not serve to
justify the nullification of the informations where the existence of such motive has not been sufficiently
established nor substantial evidence presented in support thereof.[62]

Other than their own self-serving claims, respondents have adduced absolutely no proof of the perceived
political persecution being waged by their rivals. Respondents have not shown any evidence of such a
grand design. They have not alleged, much less proved, any ill motive or malice that could have impelled
the provincial prosecutor, the judge, and even the Secretary of Justice to have respectively ruled in the
way each of them did. In short, respondents are holding tenuously only on the hope that this Court will
take them at their word and grant the relief they pray for. This Court, however, cannot anchor its ruling on
mere allegations.

Needless to say, a full-blown trial is to be preferred to ferret out the truth.[63] If, as respondents
claim, there is no evidence of their culpability, then their petition for bail would easily be granted.
Thereafter, the credibility of the prosecutions and the accuseds respective evidence may be tested during
the trial. It is only then that the guilt or innocence of respondents will be determined. Whether the criminal
prosecution was merely a tool for harassment or whether the prosecutions evidence can pass the strict
standards set by the law and withstand the exacting scrutiny of the court will all be resolved at the trial of
the case.

The criminal Information in this case was filed four years ago and trial has yet to begin. The
victims kin, indeed, all the parties, are awaiting its resolution. Any further delay will amount to an injustice.

WHEREFORE, the foregoing premises considered, the Court of Appeals Decision dated May 8,
2007 and Resolution dated October 8, 2007 in CA-G.R. SP No. 02558 are hereby REVERSED and SET
ASIDE, and the Permanent Injunction is hereby DISSOLVED. The Order of
the Regional Trial Court of Calbayog City, Samar, dated February 20, 2007, is hereby REINSTATED.
The Regional Trial Court of Calbayog City, Samar, is DIRECTED to proceed with hearing, and to decide
Criminal Case No. 4916 with dispatch.

SO ORDERED.

Page 78 of 78