EN BANC RODOLFO S. BELTRAN, doing G.R. No.

133640 business under the name and style, OUR LADY OF FATIMA BLOOD BANK, FELY G. MOSALE, doing business under the name and style, MOTHER SEATON BLOOD BANK; PEOPLES BLOOD BANK, INC.; MARIA VICTORIA T. VITO, M.D., doing business under the name and style, AVENUE BLOOD BANK; JESUS M. GARCIA, M.D., doing business under the name and style, HOLY REDEEMER BLOOD BANK, ALBERT L. LAPITAN, doing business under the name and style, BLUE CROSS BLOOD TRANSFUSION SERVICES; EDGARDO R. RODAS, M.D., doing business under the name and style, RECORD BLOOD BANK, in their individual capacities and for and in behalf of PHILIPPINE ASSOCIATION OF BLOOD BANKS, Petitioners, versus

THE SECRETARY OF HEALTH, Respondent. x ------------------------------------------------ x DOCTORS BLOOD CENTER, G.R. No. 133661 Petitioner, - versus DEPARTMENT OF HEALTH. Respondent. x --------------------------------------------- x RODOLFO S. BELTRAN, doing G.R. No. 139147 business under the name and style, OUR LADY OF FATIMA BLOOD BANK, FELY G. MOSALE, doing Present: business under the name and style, MOTHER SEATON BLOOD BANK; DAVIDE, JR., C.J., PEOPLES BLOOD BANK, INC.; PUNO, MARIA VICTORIA T. VITO, M.D., PANGANIBAN, doing business under the name and QUISUMBING, style, AVENUE BLOOD BANK; YNARES-SANTIAGO, JESUS M. GARCIA, M.D., doing SANDOVAL-GUTIERREZ, business under the name and style, CARPIO, HOLY REDEEMER BLOOD BANK, AUSTRIA-MARTINEZ, ALBERT L. LAPITAN, doing CORONA, business under the name and style, CARPIO-MORALES, BLUE CROSS BLOOD CALLEJO, SR., TRANSFUSION SERVICES; AZCUNA, EDGARDO R. RODAS, M.D., doing TINGA, business under the name and style, CHIZO-NAZARIO,* and RECORD BLOOD BANK, in their GARCIA, JJ. Individual capacities and for and in behalf of PHILIPPINE Promulgated: ASSOCIATION OF BLOOD BANKS, Petitioners, November 25, 2005 versus THE SECRETARY OF HEALTH, Respondent. x ---------------------------------------------------------------------------------------- x DECISION AZCUNA, J.: Before this Court are petitions assailing primarily the constitutionality of Section 7 of Republic Act No. 7719, otherwise known as the National Blood Services Act of 1994, and the validity of Administrative Order (A.O.) No. 9, series of 1995 or the Rules and Regulations Implementing Republic Act No. 7719. G.R. No. 133640,[1] entitled Rodolfo S. Beltran, doing business under the name and style, Our Lady of Fatima Blood Bank, et al., vs. The Secretary of Health and G.R. No. 133661,[2] entitled Doctors Blood Bank Center vs. Department of Health are petitions for certiorari and mandamus, respectively, seeking the annulment of the following: (1) Section 7 of Republic Act No. 7719; and, (2) Administrative Order (A.O.) No. 9, series of 1995. Both petitions likewise pray for the issuance of a writ of prohibitory injunction enjoining the Secretary of Health from implementing and enforcing the aforementioned law and its Implementing Rules and Regulations; and, for a mandatory injunction ordering and commanding the Secretary of Health to grant, issue or renew petitioners license to operate free standing blood banks (FSBB). The above cases were consolidated in a resolution of the Court En Banc dated June 2, 1998.[3] G.R. No. 139147,[4] entitled Rodolfo S. Beltran, doing business under the name and style, Our Lady of Fatima Blood Bank, et al., vs. The Secretary of Health, on the other hand, is a petition to show cause why respondent Secretary of Health should not be held in contempt of court. This case was originally assigned to the Third Division of this Court and later consolidated with G.R. Nos. 133640 and 133661 in a resolution dated August 4, 1999.[5] Petitioners comprise the majority of the Board of Directors of the Philippine Association of Blood Banks, a duly registered non-stock and non-profit association composed of free standing blood banks. Public respondent Secretary of Health is being sued in his capacity as the public official directly involved and charged with the enforcement and implementation of the law in question. The facts of the case are as follows: Republic Act No. 7719 or the National Blood Services Act of 1994 was enacted into law on April 2, 1994. The Act seeks to provide

an adequate supply of safe blood by promoting voluntary blood donation and by regulating blood banks in the country. It was approved by then President Fidel V. Ramos on May 15, 1994 and was subsequently published in the Official Gazette on August 18, 1994. The law took effect on August 23, 1994. On April 28, 1995, Administrative Order No. 9, Series of 1995, constituting the Implementing Rules and Regulations of said law was promulgated by respondent Secretary of the Department of Health (DOH).[6] Section 7 of R.A. 7719 [7] provides: Section 7. Phase-out of Commercial Blood Banks - All commercial blood banks shall be phased-out over a period of two (2) years after the effectivity of this Act, extendable to a maximum period of two (2) years by the Secretary. Section 23 of Administrative Order No. 9 provides: Section 23. Process of Phasing Out. -- The Department shall effect the phasing-out of all commercial blood banks over a period of two (2) years, extendible for a maximum period of two (2) years after the effectivity of R.A. 7719. The decision to extend shall be based on the result of a careful study and review of the blood supply and demand and public safety.[8] Blood banking and blood transfusion services in the country have been arranged in four (4) categories: blood centers run by the Philippine National Red Cross (PNRC), government-run blood services, private hospital blood banks, and commercial blood services. Years prior to the passage of the National Blood Services Act of 1994, petitioners have already been operating commercial blood banks under Republic Act No. 1517, entitled An Act Regulating the Collection, Processing and Sale of Human Blood, and the Establishment and Operation of Blood Banks and Blood Processing Laboratories. The law, which was enacted on June 16, 1956, allowed the establishment and operation by licensed physicians of blood banks and blood processing laboratories. The Bureau of Research and Laboratories (BRL) was created in 1958 and was given the power to regulate clinical laboratories in 1966 under Republic Act No. 4688. In 1971, the Licensure Section was created within the BRL. It was given the duty to enforce the licensure requirements for blood banks as well as clinical laboratories. Due to this development, Administrative Order No. 156, Series of 1971, was issued. The new rules and regulations triggered a stricter enforcement of the Blood Banking Law, which was characterized by frequent spot checks, immediate suspension and communication of such suspensions to hospitals, a more systematic record-keeping and frequent communication with blood banks through monthly information bulletins. Unfortunately, by the 1980s, financial difficulties constrained the BRL to reduce the frequency of its supervisory visits to the blood banks.[9] Meanwhile, in the international scene, concern for the safety of blood and blood products intensified when the dreaded disease Acute Immune Deficiency Syndrome (AIDS) was first described in 1979. In 1980, the International Society of Blood Transfusion (ISBT) formulated the Code of Ethics for Blood Donation and Transfusion. In 1982, the first case of transfusion-associated AIDS was described in an infant. Hence, the ISBT drafted in 1984, a model for a national blood policy outlining certain principles that should be taken into consideration. By 1985, the ISBT had disseminated guidelines requiring AIDS testing of blood and blood products for transfusion.[10] In 1989, another revision of the Blood Banking Guidelines was made. The DOH issued Administrative Order No. 57, Series of 1989, which classified banks into primary, secondary and tertiary depending on the services they provided. The standards were adjusted according to this classification. For instance, floor area requirements varied according to classification level. The new guidelines likewise required Hepatitis B and HIV testing, and that the blood bank be headed by a pathologist or a hematologist.[11] In 1992, the DOH issued Administrative Order No. 118-A institutionalizing the National Blood Services Program (NBSP). The BRL was designated as the central office primarily responsible for the NBSP. The program paved the way for the creation of a committee that will implement the policies of the program and the formation of the Regional Blood Councils. In August 1992, Senate Bill No. 1011, entitled An Act Promoting Voluntary Blood Donation, Providing for an Adequate Supply of Safe Blood, Regulating Blood Banks and Providing Penalties for Violations Thereof, and for other Purposes was introduced in the Senate.[12] Meanwhile, in the House of Representatives, House Bills No. 384, 546, 780 and 1978 were being deliberated to address the issue of safety of the Philippine blood bank system. Subsequently, the Senate and House Bills were referred to the appropriate committees and subsequently consolidated.[13] In January of 1994, the New Tropical Medicine Foundation, with the assistance of the U.S. Agency for International Development (USAID) released its final report of a study on the Philippine blood banking system entitled Project to Evaluate the Safety of the Philippine Blood Banking System. It was revealed that of the blood units collected in 1992, 64.4 % were supplied by commercial blood banks, 14.5% by the PNRC, 13.7% by government hospital-based blood banks, and 7.4% by private hospital-based blood banks. During the time the study was made, there were only twenty-four (24) registered or licensed free-standing or commercial blood banks in the country. Hence, with these numbers in mind, the study deduced that each commercial blood bank produces five times more blood than the Red Cross and fifteen times more than the government-run blood banks. The study, therefore, showed that the Philippines heavily relied on commercial sources of blood. The study likewise revealed that 99.6% of the donors of commercial blood banks and 77.0% of the donors of private-hospital based blood banks are paid donors. Paid donors are those who receive remuneration for donating their blood. Blood donors of the PNRC and government-run hospitals, on the other hand, are mostly voluntary.[14] It was further found, among other things, that blood sold by persons to blood commercial banks are three times more likely to have any of the four (4) tested infections or blood transfusion transmissible diseases, namely, malaria, syphilis, Hepatitis B and Acquired Immune Deficiency Syndrome (AIDS) than those donated to PNRC.[15] Commercial blood banks give paid donors varying rates around P50 to P150, and because of this arrangement, many of these donors are poor, and often they are students, who need cash immediately. Since they need the money, these donors are not usually honest about their medical or social history. Thus, blood from healthy, voluntary donors who give their true medical and social history are about three times much safer than blood from paid donors. [16] What the study also found alarming is that many Filipino doctors are not yet fully trained on the specific indications for blood component transfusion. They are not aware of the lack of blood supply and do not feel the need to adjust their practices and use of blood and blood products. It also does not matter to them where the blood comes from.[17] On August 23, 1994, the National Blood Services Act providing for the phase out of commercial blood banks took effect. On April 28, 1995, Administrative Order No. 9, Series of 1995, constituting the Implementing Rules and Regulations of said law was promulgated by DOH. The phase-out period was extended for two years by the DOH pursuant to Section 7 of Republic Act No. 7719 and Section 23 of its Implementing Rules and Regulations. Pursuant to said Act, all commercial blood banks should have been phased out by May 28, 1998. Hence, petitioners were granted by the Secretary of Health their licenses to open and operate a blood bank only until May 27, 1998. On May 20, 1998, prior to the expiration of the licenses granted to petitioners, they filed a petition for certiorari with application for the issuance of a writ of preliminary injunction or temporary restraining order under Rule 65 of the Rules of Court assailing the constitutionality and validity of the aforementioned Act and its Implementing Rules and Regulations. The case was entitled Rodolfo S. Beltran, doing business under the name and style, Our Lady of Fatima Blood Bank, docketed as G.R. No. 133640. On June 1, 1998, petitioners filed an Amended Petition for Certiorari with Prayer for Issuance of a Temporary Restraining Order, writ of preliminary mandatory injunction and/or status quo ante order.[18]

In the aforementioned petition, petitioners assail the constitutionality of the questioned legal provisions, namely, Section 7 of Republic Act No. 7719 and Section 23 of Administrative Order No. 9, Series of 1995, on the following grounds: [19] 1. The questioned legal provisions of the National Blood Services Act and its Implementing Rules violate the equal protection clause for irrationally discriminating against free standing blood banks in a manner which is not germane to the purpose of the law; 2. The questioned provisions of the National Blood Services Act and its Implementing Rules represent undue delegation if not outright abdication of the police power of the state; and, 3. The questioned provisions of the National Blood Services Act and its Implementing Rules are unwarranted deprivation of personal liberty.

On May 22, 1998, the Doctors Blood Center filed a similar petition for mandamus with a prayer for the issuance of a temporary restraining order, preliminary prohibitory and mandatory injunction before this Court entitled Doctors Blood Center vs. Department of Health, docketed as G.R. No. 133661. [20] This was consolidated with G.R. No. 133640.[21] Similarly, the petition attacked the constitutionality of Republic Act No. 7719 and its implementing rules and regulations, thus, praying for the issuance of a license to operate commercial blood banks beyond May 27, 1998. Specifically, with regard to Republic Act No. 7719, the petition submitted the following questions[22] for resolution: 1. 2. 3. Was it passed in the exercise of police power, and was it a valid exercise of such power? Does it not amount to deprivation of property without due process? Does it not unlawfully impair the obligation of contracts?

4. With the commercial blood banks being abolished and with no ready machinery to deliver the same supply and services, does R.A. 7719 truly serve the public welfare? On June 2, 1998, this Court issued a Resolution directing respondent DOH to file a consolidated comment. In the same Resolution, the Court issued a temporary restraining order (TRO) for respondent to cease and desist from implementing and enforcing Section 7 of Republic Act No. 7719 and its implementing rules and regulations until further orders from the Court.[23] On August 26, 1998, respondent Secretary of Health filed a Consolidated Comment on the petitions for certiorari and mandamus in G.R. Nos. 133640 and 133661, with opposition to the issuance of a temporary restraining order.[24] In the Consolidated Comment, respondent Secretary of Health submitted that blood from commercial blood banks is unsafe and therefore the State, in the exercise of its police power, can close down commercial blood banks to protect the public. He cited the record of deliberations on Senate Bill No. 1101 which later became Republic Act No. 7719, and the sponsorship speech of Senator Orlando Mercado. The rationale for the closure of these commercial blood banks can be found in the deliberations of Senate Bill No. 1011, excerpts of which are quoted below: Senator Mercado: I am providing over a period of two years to phase out all commercial blood banks. So that in the end, the new section would have a provision that states: ALL COMMERCIAL BLOOD BANKS SHALL BE PHASED OUT OVER A PERIOD OF TWO YEARS AFTER THE EFFECTIVITY OF THIS ACT. BLOOD SHALL BE COLLECTED FROM VOLUNTARY DONORS ONLY AND THE SERVICE FEE TO BE CHARGED FOR EVERY BLOOD PRODUCT ISSUED SHALL BE LIMITED TO THE NECESSARY EXPENSES ENTAILED IN COLLECTING AND PROCESSING OF BLOOD. THE SERVICE FEE SHALL BE MADE UNIFORM THROUGH GUIDELINES TO BE SET BY THE DEPARTMENTOF HEALTH. I am supporting Mr. President, the finding of a study called Project to Evaluate the Safety of the Philippine Blood Banking System. This has been taken note of. This is a study done with the assistance of the USAID by doctors under the New Tropical Medicine Foundation in Alabang. Part of the long-term measures proposed by this particular study is to improve laws, outlaw buying and selling of blood and legally define good manufacturing processes for blood. This goes to the very heart of my amendment which seeks to put into law the principle that blood should not be subject of commerce of man. The Presiding Officer [Senator Aquino]: What does the sponsor say? Senator Webb: Mr. President, just for clarity, I would like to find out how the Gentleman defines a commercial blood bank. I am at a loss at times what a commercial blood bank really is. Senator Mercado: We have a definition, I believe, in the measure, Mr. President.

The Presiding Officer [Senator Aquino]: It is a business where profit is considered. Senator Mercado: If the Chairman of the Committee would accept it, we can put a provision on Section 3, a definition of a commercial blood bank, which, as defined in this law, exists for profit and engages in the buying and selling of blood or its components. Senator Webb: That is a good description, Mr. President. Senator Mercado: I refer, Mr. President, to a letter written by Dr. Jaime Galvez-Tan, the Chief of Staff, Undersecretary of Health, to the good Chairperson of the Committee on Health. In recommendation No. 4, he says: The need to phase out all commercial blood banks within a two-year period will give the Department of Health enough time to build up governments capability to provide an adequate supply of blood for the needs of the nation...the use of blood for transfusion is a medical service and not a sale of commodity. Taking into consideration the experience of the National Kidney Institute, which has succeeded in making the hospital 100 percent dependent on voluntary blood donation, here is a success story of a hospital that does not buy blood. All those who are operated on and need blood have to convince their relatives or have to get volunteers who would donate blood If we give the responsibility of the testing of blood to those commercial blood banks, they will cut corners because it will protect their profit. In the first place, the people who sell their blood are the people who are normally in the high-risk category. So we should stop the system of selling and buying blood so that we can go into a national voluntary blood program.

It has been said here in this report, and I quote: Why is buying and selling of blood not safe? This is not safe because a donor who expects payment for his blood will not tell the truth about his illnesses and will deny any risky social behavior such as sexual promiscuity which increases the risk of having syphilis or AIDS or abuse of intravenous addictive drugs. Laboratory tests are of limited value and will not detect early infections. Laboratory tests are required only for four diseases in the Philippines. There are other blood transmissible diseases we do not yet screen for and there could be others where there are no tests available yet. A blood bank owner expecting to gain profit from selling blood will also try his best to limit his expenses. Usually he tries to increase his profit by buying cheaper reagents or test kits, hiring cheaper manpower or skipping some tests altogether. He may also try to sell blood even though these have infections in them. Because there is no existing system of counterchecking these, the blood bank owner can usually get away with many unethical practices. The experience of Germany, Mr. President is illustrative of this issue. The reason why contaminated blood was sold was that there were corners cut by commercial blood banks in the testing process. They were protecting their profits.[25] The sponsorship speech of Senator Mercado further elucidated his stand on the issue: Senator Mercado: Today, across the country, hundreds of poverty-stricken, sickly and weak Filipinos, who, unemployed, without hope and without money to buy the next meal, will walk into a commercial blood bank, extend their arms and plead that their blood be bought. They will lie about their age, their medical history. They will lie about when they last sold their blood. For doing this, they will receive close to a hundred pesos. This may tide them over for the next few days. Of course, until the next bloodletting. This same blood will travel to the posh city hospitals and urbane medical centers. This same blood will now be bought by the rich at a price over 500% of the value for which it was sold. Between this buying and selling, obviously, someone has made a very fast buck. Every doctor has handled at least one transfusion-related disease in an otherwise normal patient. Patients come in for minor surgery of the hand or whatever and they leave with hepatitis B. A patient comes in for an appendectomy and he leaves with malaria. The worst nightmare: A patient comes in for a Caesarian section and leaves with AIDS. We do not expect good blood from donors who sell their blood because of poverty. The humane dimension of blood transfusion is not in the act of receiving blood, but in the act of giving it For years, our people have been at the mercy of commercial blood banks that lobby their interests among medical technologists, hospital administrators and sometimes even physicians so that a proactive system for collection of blood from healthy donors becomes difficult, tedious and unrewarding. The Department of Health has never institutionalized a comprehensive national program for safe blood and for voluntary blood donation even if this is a serious public health concern and has fallen for the linen of commercial blood bankers, hook, line and sinker because it is more convenient to tell the patient to buy blood. Commercial blood banks hold us hostage to their threat that if we are to close them down, there will be no blood supply. This is true if the Government does not step in to ensure that safe supply of blood. We cannot allow commercial interest groups to dictate policy on what is and what should be a humanitarian effort. This cannot and will never work because their interest in blood donation is merely monetary. We cannot expect commercial blood banks to take the lead in voluntary blood donation. Only the Government can do it, and the Government must do it.[26] On May 5, 1999, petitioners filed a Motion for Issuance of Expanded Temporary Restraining Order for the Court to order respondent Secretary of Health to cease and desist from announcing the closure of commercial blood banks, compelling the public to source the needed blood from voluntary donors only, and committing similar acts that will ultimately cause the shutdown of petitioners blood banks.[27] On July 8, 1999, respondent Secretary filed his Comment and/or Opposition to the above motion stating that he has not ordered the closure of commercial blood banks on account of the Temporary Restraining Order (TRO) issued on June 2, 1998 by the Court. In compliance with the TRO, DOH had likewise ceased to distribute the health advisory leaflets, posters and flyers to the public which state that blood banks are closed or will be closed. According to respondent Secretary, the same were printed and circulated in anticipation of the closure of the commercial blood banks in accordance with R.A. No. 7719, and were printed and circulated prior to the issuance of the TRO.[28] On July 15, 1999, petitioners in G.R. No. 133640 filed a Petition to Show Cause Why Public Respondent Should Not be Held in Contempt of Court, docketed as G.R. No. 139147, citing public respondents willful disobedience of or resistance to the restraining order issued by the Court in the said case. Petitioners alleged that respondents act constitutes circumvention of the temporary restraining order and a mockery of the authority of the Court and the orderly administration of justice.[29] Petitioners added that despite the issuance of the temporary restraining order in G.R. No. 133640, respondent, in his effort to strike down the existence of commercial blood banks, disseminated misleading information under the guise of health advisories, press releases, leaflets, brochures and flyers stating, among others, that this year [1998] all commercial blood banks will be closed by 27 May. Those who need blood will have to rely on government blood banks.[30] Petitioners further claimed that respondent Secretary of Health announced in a press conference during the Blood Donors Week that commercial blood banks are illegal and dangerous and that they are at the moment protected by a restraining order on the basis that their commercial interest is more important than the lives of the people. These were all posted in bulletin boards and other conspicuous places in all government hospitals as well as other medical and health centers.[31] In respondent Secretarys Comment to the Petition to Show Cause Why Public Respondent Should Not Be Held in Contempt of Court, dated January 3, 2000, it was explained that nothing was issued by the department ordering the closure of commercial blood banks. The subject health advisory leaflets pertaining to said closure pursuant to Republic Act No. 7719 were printed and circulated prior to the Courts issuance of a temporary restraining order on June 21, 1998.[32] Public respondent further claimed that the primary purpose of the information campaign was to promote the importance and safety of voluntary blood donation and to educate the public about the hazards of patronizing blood supplies from commercial blood banks.[33] In doing so, he was merely performing his regular functions and duties as the Secretary of Health to protect the health and welfare of the public. Moreover, the DOH is the main proponent of the voluntary blood donation program espoused by Republic Act No. 7719, particularly Section 4 thereof which provides that, in order to ensure the adequate supply of human blood, voluntary blood donation shall be promoted through public education, promotion in schools, professional education, establishment of blood services network, and walking blood donors. Hence, by authority of the law, respondent Secretary contends that he has the duty to promote the program of voluntary blood donation. Certainly, his act of encouraging the public to donate blood voluntarily and educating the people on the risks associated with blood coming from a paid donor promotes general health and welfare and which should be given more importance than the commercial businesses of petitioners.[34] On July 29, 1999, interposing personal and substantial interest in the case as taxpayers and citizens, a Petition-in-Intervention was filed interjecting the same arguments and issues as laid down by petitioners in G.R. No. 133640 and 133661, namely, the unconstitutionality of the Acts, and, the issuance of a writ of prohibitory injunction. The intervenors are the immediate relatives of individuals who had died allegedly because of shortage of blood supply at a critical time.[35] The intervenors contended that Republic Act No. 7719 constitutes undue delegation of legislative powers and unwarranted deprivation of personal liberty. [36] In a resolution, dated September 7, 1999, and without giving due course to the aforementioned petition, the Court granted the Motion for Intervention that was filed by the above intervenors on August 9, 1999.

In his Comment to the petition-in-intervention, respondent Secretary of Health stated that the sale of blood is contrary to the spirit and letter of the Act that blood donation is a humanitarian act and blood transfusion is a professional medical service and not a sale of commodity (Section 2[a] and [b] of Republic Act No. 7719). The act of selling blood or charging fees other than those allowed by law is even penalized under Section 12.[37] Thus, in view of these, the Court is now tasked to pass upon the constitutionality of Section 7 of Republic Act No. 7719 or the National Blood Services Act of 1994 and its Implementing Rules and Regulations. In resolving the controversy, this Court deems it necessary to address the issues and/or questions raised by petitioners concerning the constitutionality of the aforesaid Act in G.R. No. 133640 and 133661 as summarized hereunder: I WHETHER OR NOT SECTION 7 OF R.A. 7719 CONSTITUTES UNDUE DELEGATION OF LEGISLATIVE POWER; II WHETHER OR NOT SECTION 7 OF R.A. 7719 AND ITS IMPLEMENTING RULES AND REGULATIONS VIOLATE THE EQUAL PROTECTION CLAUSE; III WHETHER OR NOT SECTION 7 OF R.A. 7719 AND ITS IMPLEMENTING RULES AND REGULATIONS VIOLATE THE NON-IMPAIRMENT CLAUSE;

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

e) to teach the benefits and rationale of voluntary blood donation in the existing health subjects of the formal education system in all public and private schools as well as the non-formal system; f) to mobilize all sectors of the community to participate in mechanisms for voluntary and non-profit collection of blood;

g) to mandate the Department of Health to establish and organize a National Blood Transfusion Service Network in order to rationalize and improve the provision of adequate and safe supply of blood; h) to provide for adequate assistance to institutions promoting voluntary blood donation and providing non-profit blood services, either through a system of reimbursement for costs from patients who can afford to pay, or donations from governmental and non-governmental entities; i) j) k) to require all blood collection units and blood banks/centers to operate on a non-profit basis; to establish scientific and professional standards for the operation of blood collection units and blood banks/centers in the Philippines; to regulate and ensure the safety of all activities related to the collection, storage and banking of blood; and,

l) to require upgrading of blood banks/centers to include preventive services and education to control spread of blood transfusion transmissible diseases. Petitioners also assert that the law and its implementing rules and regulations violate the equal protection clause enshrined in the Constitution because it unduly discriminates against commercial or free standing blood banks in a manner that is not germane to the purpose of the law.[42] What may be regarded as a denial of the equal protection of the laws is a question not always easily determined. No rule that will cover every case can be formulated. Class legislation, discriminating against some and favoring others is prohibited but classification on a reasonable basis and not made arbitrarily or capriciously is permitted. The classification, however, to be reasonable: (a) must be based on substantial distinctions which make real differences; (b) must be germane to the purpose of the law; (c) must not be limited to existing conditions only; and, (d) must apply equally to each member of the class.[43] Republic Act No. 7719 or The National Blood Services Act of 1994, was enacted for the promotion of public health and welfare. In the aforementioned study conducted by the New Tropical Medicine Foundation, it was revealed that the Philippine blood banking system is disturbingly primitive and unsafe, and with its current condition, the spread of infectious diseases such as malaria, AIDS, Hepatitis B and syphilis chiefly from blood transfusion is

unavoidable. The situation becomes more distressing as the study showed that almost 70% of the blood supply in the country is sourced from paid blood donors who are three times riskier than voluntary blood donors because they are unlikely to disclose their medical or social history during the blood screening.[44] The above study led to the passage of Republic Act No. 7719, to instill public consciousness of the importance and benefits of voluntary blood donation, safe blood supply and proper blood collection from healthy donors. To do this, the Legislature decided to order the phase out of commercial blood banks to improve the Philippine blood banking system, to regulate the supply and proper collection of safe blood, and so as not to derail the implementation of the voluntary blood donation program of the government. In lieu of commercial blood banks, non-profit blood banks or blood centers, in strict adherence to professional and scientific standards to be established by the DOH, shall be set in place.[45] Based on the foregoing, the Legislature never intended for the law to create a situation in which unjustifiable discrimination and inequality shall be allowed. To effectuate its policy, a classification was made between nonprofit blood banks/centers and commercial blood banks. We deem the classification to be valid and reasonable for the following reasons: One, it was based on substantial distinctions. The former operates for purely humanitarian reasons and as a medical service while the latter is motivated by profit. Also, while the former wholly encourages voluntary blood donation, the latter treats blood as a sale of commodity. Two, the classification, and the consequent phase out of commercial blood banks is germane to the purpose of the law, that is, to provide the nation with an adequate supply of safe blood by promoting voluntary blood donation and treating blood transfusion as a humanitarian or medical service rather than a commodity. This necessarily involves the phase out of commercial blood banks based on the fact that they operate as a business enterprise, and they source their blood supply from paid blood donors who are considered unsafe compared to voluntary blood donors as shown by the USAID-sponsored study on the Philippine blood banking system. Three, the Legislature intended for the general application of the law. Its enactment was not solely to address the peculiar circumstances of the situation nor was it intended to apply only to the existing conditions. Lastly, the law applies equally to all commercial blood banks without exception. Having said that, this Court comes to the inquiry as to whether or not Republic Act No. 7719 constitutes a valid exercise of police power. The promotion of public health is a fundamental obligation of the State. The health of the people is a primordial governmental concern. Basically, the National Blood Services Act was enacted in the exercise of the States police power in order to promote and preserve public health and safety. Police power of the state is validly exercised if (a) the interest of the public generally, as distinguished from those of a particular class, requires the interference of the State; and, (b) the means employed are reasonably necessary to the attainment of the objective sought to be accomplished and not unduly oppressive upon individuals.[46] In the earlier discussion, the Court has mentioned of the avowed policy of the law for the protection of public health by ensuring an adequate supply of safe blood in the country through voluntary blood donation. Attaining this objective requires the interference of the State given the disturbing condition of the Philippine blood banking system. In serving the interest of the public, and to give meaning to the purpose of the law, the Legislature deemed it necessary to phase out commercial blood banks. This action may seriously affect the owners and operators, as well as the employees, of commercial blood banks but their interests must give way to serve a higher end for the interest of the public. The Court finds that the National Blood Services Act is a valid exercise of the States police power. Therefore, the Legislature, under the circumstances, adopted a course of action that is both necessary and reasonable for the common good. Police power is the State authority to enact legislation that may interfere with personal liberty or property in order to promote the general welfare.[47] It is in this regard that the Court finds the related grounds and/or issues raised by petitioners, namely, deprivation of personal liberty and property, and violation of the non-impairment clause, to be unmeritorious. Petitioners are of the opinion that the Act is unconstitutional and void because it infringes on the freedom of choice of an individual in connection to what he wants to do with his blood which should be outside the domain of State intervention. Additionally, and in relation to the issue of classification, petitioners asseverate that, indeed, under the Civil Code, the human body and its organs like the heart, the kidney and the liver are outside the commerce of man but this cannot be made to apply to human blood because the latter can be replenished by the body. To treat human blood equally as the human organs would constitute invalid classification. [48] Petitioners likewise claim that the phase out of the commercial blood banks will be disadvantageous to them as it will affect their businesses and existing contracts with hospitals and other health institutions, hence Section 7 of the Act should be struck down because it violates the non-impairment clause provided by the Constitution. As stated above, the State, in order to promote the general welfare, may interfere with personal liberty, with property, and with business and occupations. Thus, persons may be subjected to certain kinds of restraints and burdens in order to secure the general welfare of the State and to this fundamental aim of government, the rights of the individual may be subordinated.[49] Moreover, in the case of Philippine Association of Service Exporters, Inc. v. Drilon,[50] settled is the rule that the non-impairment clause of the Constitution must yield to the loftier purposes targeted by the government. The right granted by this provision must submit to the demands and necessities of the States power of regulation. While the Court understands the grave implications of Section 7 of the law in question, the concern of the Government in this case, however, is not necessarily to maintain profits of business firms. In the ordinary sequence of events, it is profits that suffer as a result of government regulation. Furthermore, the freedom to contract is not absolute; all contracts and all rights are subject to the police power of the State and not only may regulations which affect them be established by the State, but all such regulations must be subject to change from time to time, as the general well-being of the community may require, or as the circumstances may change, or as experience may demonstrate the necessity.[51] This doctrine was reiterated in the case of Vda. de Genuino v. Court of Agrarian Relations[52] where the Court held that individual rights to contract and to property have to give way to police power exercised for public welfare. As for determining whether or not the shutdown of commercial blood banks will truly serve the general public considering the shortage of blood supply in the country as proffered by petitioners, we maintain that the wisdom of the Legislature in the lawful exercise of its power to enact laws cannot be inquired into by the Court. Doing so would be in derogation of the principle of separation of powers.[53] That, under the circumstances, proper regulation of all blood banks without distinction in order to achieve the objective of the law as contended by petitioners is, of course, possible; but, this would be arguing on what the law may be or should be and not what the law is. Between is and ought there is a far cry. The wisdom and propriety of legislation is not for this Court to pass upon.[54] Finally, with regard to the petition for contempt in G.R. No. 139147, on the other hand, the Court finds respondent Secretary of Healths explanation satisfactory. The statements in the flyers and posters were not aimed at influencing or threatening the Court in deciding in favor of the constitutionality of the law. Contempt of court presupposes a contumacious attitude, a flouting or arrogant belligerence in defiance of the court.[55] There is nothing contemptuous about the statements and information contained in the health advisory that were distributed by DOH before the TRO was issued by this Court ordering the former to cease and desist from distributing the same.

In sum, the Court has been unable to find any constitutional infirmity in the questioned provisions of the National Blood Services Act of 1994 and its Implementing Rules and Regulations. The fundamental criterion is that all reasonable doubts should be resolved in favor of the constitutionality of a statute. Every law has in its favor the presumption of constitutionality. For a law to be nullified, it must be shown that there is a clear and unequivocal breach of the Constitution. The ground for nullity must be clear and beyond reasonable doubt.[56] Those who petition this Court to declare a law, or parts thereof, unconstitutional must clearly establish the basis therefor. Otherwise, the petition must fail. Based on the grounds raised by petitioners to challenge the constitutionality of the National Blood Services Act of 1994 and its Implementing Rules and Regulations, the Court finds that petitioners have failed to overcome the presumption of constitutionality of the law. As to whether the Act constitutes a wise legislation, considering the issues being raised by petitioners, is for Congress to determine.[57] WHEREFORE, premises considered, the Court renders judgment as follows: 1. In G.R. Nos. 133640 and 133661, the Court UPHOLDS THE VALIDITY of Section 7 of Republic Act No. 7719, otherwise known as the National Blood Services Act of 1994, and Administrative Order No. 9, Series of 1995 or the Rules and Regulations Implementing Republic Act No. 7719. The petitions are DISMISSED. Consequently, the Temporary Restraining Order issued by this Court on June 2, 1998, is LIFTED. 2. No costs. SO ORDERED. EN BANC Agenda for October 18, 2005 Item No. 45 G.R. No. 168056 (ABAKADA Guro Party List Officer Samson S. Alcantara, et al. vs. The Hon. Executive Secretary Eduardo R. Ermita); G.R. No. 168207 (Aquilino Q. Pimentel, Jr., et al. vs. Executive Secretary Eduardo R. Ermita, et al.); G.R. No. 168461 (Association of Pilipinas Shell Dealers, Inc., et al. vs. Cesar V. Purisima, et al.); G.R. No. 168463 (Francis Joseph G. Escudero vs. Cesar V. Purisima, et al); and G.R. No. 168730 (Bataan Governor Enrique T. Garcia, Jr. vs. Hon. Eduardo R. Ermita, et al.) RESOLUTION For resolution are the following motions for reconsideration of the Courts Decision dated September 1, 2005 upholding the constitutionality of Republic Act No. 9337 or the VAT Reform Act[1]: 1) Motion for Reconsideration filed by petitioners in G.R. No. 168463, Escudero, et al., on the following grounds: A. THE DELETION OF THE NO PASS ON PROVISIONS FOR THE SALE OF PETROLEUM PRODUCTS AND POWER GENERATION SERVICES CONSTITUTED GRAVE ABUSE OF DISCRETION AMOUNTING TO LACK OR EXCESS OF JURISDICTION ON THE PART OF THE BICAMERAL CONFERENCE COMMITTEE. B. REPUBLIC ACT NO. 9337 GROSSLY VIOLATES THE CONSTITUTIONAL IMPERATIVE ON EXCLUSIVE ORIGINATION OF REVENUE BILLS UNDER 24, ARTICLE VI, 1987 PHILIPPINE CONSTITUTION. C. REPUBLIC ACT NO. 9337S STAND-BY AUTHORITY TO THE EXECUTIVE TO INCREASE THE VAT RATE, ESPECIALLY ON ACCOUNT OF THE EFFECTIVE RECOMMENDATORY POWER GRANTED TO THE SECRETARY OF FINANCE, CONSTITUTES UNDUE DELEGATION OF LEGISLATIVE AUTHORITY. 2) Motion for Reconsideration of petitioner in G.R. No. 168730, Bataan Governor Enrique T. Garcia, Jr., with the argument that burdening the consumers with significantly higher prices under a VAT regime vis--vis a 3% gross tax renders the law unconstitutional for being arbitrary, oppressive and inequitable. and 3) Motion for Reconsideration by petitioners Association of Pilipinas Shell Dealers, Inc. in G.R. No. 168461, on the grounds that: I. This Honorable Court erred in upholding the constitutionality of Section 110(A)(2) and Section 110(B) of the NIRC, as amended by the EVAT Law, imposing limitations on the amount of input VAT that may be claimed as a credit against output VAT, as well as Section 114(C) of the NIRC, as amended by the EVAT Law, requiring the government or any of its instrumentalities to withhold a 5% final withholding VAT on their gross payments on purchases of goods and services, and finding that the questioned provisions: A. are not arbitrary, oppressive and consfiscatory as to amount to a deprivation of property without due process of law in violation of Article III, Section 1 of the 1987 Philippine Constitution; B. do not violate the equal protection clause prescribed under Article III, Section 1 of the 1987 Philippine Constitution; and C. apply uniformly to all those belonging to the same class and do not violate Article VI, Section 28(1) of the 1987 Philippine Constitution. II. This Honorable Court erred in upholding the constitutionality of Section 110(B) of the NIRC, as amended by the EVAT Law, imposing a limitation on the amount of input VAT that may be claimed as a credit against output VAT notwithstanding the finding that the tax is not progressive as exhorted by Article VI, Section 28(1) of the 1987 Philippine Constitution. Respondents filed their Consolidated Comment. Petitioner Garcia filed his Reply. Petitioners Escudero, et al., insist that the bicameral conference committee should not even have acted on the no pass-on provisions since there is no disagreement between House Bill Nos. 3705 and 3555 on the one hand, and Senate Bill No. 1950 on the other, with regard to the no pass-on provision for the sale of service for power generation because both the Senate and the House were in agreement that the VAT burden for the sale of such service shall not be passed on to the end-consumer. As to the no pass-on provision for sale of petroleum products, petitioners argue that the fact that the presence of such a no pass-on provision in the House version and the absence thereof in the Senate Bill means there is no conflict because a House provision cannot be in conflict with something that does not exist. Such argument is flawed. Note that the rules of both houses of Congress provide that a conference committee shall settle the differences in the respective bills of each house. Verily, the fact that a no pass-on provision is present in one version but absent in the other, and one version intends two industries, i.e., power generation companies and petroleum sellers, to bear the burden of the tax, while the other version intended only the industry of power generation, transmission and distribution to be saddled with such burden, clearly shows that there are indeed differences between the bills coming from each house, which differences should be acted upon by the bicameral conference committee. It is incorrect to conclude that there is no clash between two opposing forces with regard to the no pass-on provision for VAT on the sale of petroleum products merely because such provision exists in the House version while it is absent in the Senate version. It is precisely the absence of such provision in the Senate bill and the presence thereof in the House bills that causes the conflict. The absence of the provision in the Senate bill shows the Senates disagreement to the intention of the House of Representatives make the sellers of petroleum bear the burden of the VAT. Thus, there are indeed two opposing forces: on one side, the House of Representatives which wants petroleum dealers to be saddled with the burden of paying VAT and on the other, the Senate which does not see it proper to make that particular industry bear said burden. Clearly, such conflicts and differences between the no pass-on provisions in the Senate and House bills had to be acted upon by the bicameral conference committee as mandated by the rules of both houses of Congress. Moreover, the deletion of the no pass-on provision made the present VAT law more in consonance with the very nature of VAT which, as stated in the Decision promulgated on September 1, 2005, is a tax on spending or consumption, thus, the burden thereof is ultimately borne by the end-consumer. Escudero, et al., then claim that there had been changes introduced in the Rules of the House of Representatives regarding the conduct of the House panel in a bicameral conference committee, since the time of Tolentino vs. Secretary of Finance[2] to act as safeguards against possible abuse of authority by the House members of the bicameral conference committee. Even assuming that the rule requiring the House panel to report back to the House if there are substantial differences in the House and Senate bills had indeed been introduced after Tolentino, the Court stands by its In G.R. No. 139147, the petition seeking to cite the Secretary of Health in contempt of court is DENIED for lack of merit.

ruling that the issue of whether or not the House panel in the bicameral conference committee complied with said internal rule cannot be inquired into by the Court. To reiterate, mere failure to conform to parliamentary usage will not invalidate the action (taken by a deliberative body) when the requisite number of members have agreed to a particular measure.[3] Escudero, et. al., also contend that Republic Act No. 9337 grossly violates the constitutional imperative on exclusive origination of revenue bills under Section 24 of Article VI of the Constitution when the Senate introduced amendments not connected with VAT. The Court is not persuaded. Article VI, Section 24 of the Constitution provides: Sec. 24 All appropriation, revenue or tariff bills, bills authorizing increase of the public debt, bills of local application, and private bills shall originate exclusively in the House of Representatives, but the Senate may propose or concur with amendments. Section 24 speaks of origination of certain bills from the House of Representatives which has been interpreted in the Tolentino case as follows: To begin with, it is not the law but the revenue bill which is required by the Constitution to "originate exclusively" in the House of Representatives. It is important to emphasize this, because a bill originating in the House may undergo such extensive changes in the Senate that the result may be a rewriting of the whole At this point, what is important to note is that, as a result of the Senate action, a distinct bill may be produced. To insist that a revenue statute and not only the bill which initiated the legislative process culminating in the enactment of the law must substantially be the same as the House bill would be to deny the Senate's power not only to "concur with amendments" but also to " propose amendments." It would be to violate the coequality of legislative power of the two houses of Congress and in fact make the House superior to the Senate. Given, then, the power of the Senate to propose amendments, the Senate can propose its own version even with respect to bills which are required by the Constitution to originate in the House. ... Indeed, what the Constitution simply means is that the initiative for filing revenue, tariff, or tax bills, bills authorizing an increase of the public debt, private bills and bills of local application must come from the House of Representatives on the theory that, elected as they are from the districts, the members of the House can be expected to be more sensitive to the local needs and problems. On the other hand, the senators, who are elected at large, are expected to approach the same problems from the national perspective. Both views are thereby made to bear on the enactment of such laws.[4] Clearly, after the House bills as approved on third reading are duly transmitted to the Senate, the Constitution states that the latter can propose or concur with amendments. The Court finds that the subject provisions found in the Senate bill are within the purview of such constitutional provision as declared in the Tolentino case. The intent of the House of Representatives in initiating House Bill Nos. 3555 and 3705 was to solve the countrys serious financial problems. It was stated in the respective explanatory notes that there is a need for the government to make significant expenditure savings and a credible package of revenue measures. These measures include improvement of tax administration and control and leakages in revenues from income taxes and value added tax. It is also stated that one opportunity that could be beneficial to the overall status of our economy is to review existing tax rates, evaluating the relevance given our present conditions. Thus, with these purposes in mind and to accomplish these purposes for which the house bills were filed, i.e., to raise revenues for the government, the Senate introduced amendments on income taxes, which as admitted by Senator Ralph Recto, would yield about P10.5 billion a year. Moreover, since the objective of these house bills is to raise revenues, the increase in corporate income taxes would be a great help and would also soften the impact of VAT measure on the consumers by distributing the burden across all sectors instead of putting it entirely on the shoulders of the consumers. As to the other National Internal Revenue Code (NIRC) provisions found in Senate Bill No. 1950, i.e., percentage taxes, franchise taxes, amusement and excise taxes, these provisions are needed so as to cushion the effects of VAT on consumers. As we said in our decision, certain goods and services which were subject to percentage tax and excise tax would no longer be VAT exempt, thus, the consumer would be burdened more as they would be paying the VAT in addition to these taxes. Thus, there is a need to amend these sections to soften the impact of VAT. The Court finds no reason to reverse the earlier ruling that the Senate introduced amendments that are germane to the subject matter and purposes of the house bills. Petitioners Escudero, et al., also reiterate that R.A. No. 9337s stand- by authority to the Executive to increase the VAT rate, especially on account of the recommendatory power granted to the Secretary of Finance, constitutes undue delegation of legislative power. They submit that the recommendatory power given to the Secretary of Finance in regard to the occurrence of either of two events using the Gross Domestic Product (GDP) as a benchmark necessarily and inherently required extended analysis and evaluation, as well as policy making. There is no merit in this contention. The Court reiterates that in making his recommendation to the President on the existence of either of the two conditions, the Secretary of Finance is not acting as the alter ego of the President or even her subordinate. He is acting as the agent of the legislative department, to determine and declare the event upon which its expressed will is to take effect. The Secretary of Finance becomes the means or tool by which legislative policy is determined and implemented, considering that he possesses all the facilities to gather data and information and has a much broader perspective to properly evaluate them. His function is to gather and collate statistical data and other pertinent information and verify if any of the two conditions laid out by Congress is present. Congress granted the Secretary of Finance the authority to ascertain the existence of a fact, namely, whether by December 31, 2005, the value-added tax collection as a percentage of GDP of the previous year exceeds two and four-fifth percent (2 4/5%) or the national government deficit as a percentage of GDP of the previous year exceeds one and one-half percent (1%). If either of these two instances has occurred, the Secretary of Finance, by legislative mandate, must submit such information to the President. Then the 12% VAT rate must be imposed by the President effective January 1, 2006. Congress does not abdicate its functions or unduly delegate power when it describes what job must be done, who must do it, and what is the scope of his authority; in our complex economy that is frequently the only way in which the legislative process can go forward. There is no undue delegation of legislative power but only of the discretion as to the execution of a law. This is constitutionally permissible. Congress did not delegate the power to tax but the mere implementation of the law. The intent and will to increase the VAT rate to 12% came from Congress and the task of the President is to simply execute the legislative policy. That Congress chose to use the GDP as a benchmark to determine economic growth is not within the province of the Court to inquire into, its task being to interpret the law. With regard to petitioner Garcias arguments, the Court also finds the same to be without merit. As stated in the assailed Decision, the Court recognizes the burden that the consumers will be bearing with the passage of R.A. No. 9337. But as was also stated by the Court, it cannot strike down the law as unconstitutional simply because of its yokes. The legislature has spoken and the only role that the Court plays in the picture is to determine whether the law was passed with due regard to the mandates of the Constitution. Inasmuch as the Court finds that there are no constitutional infirmities with its passage, the validity of the law must therefore be upheld. Finally, petitioners Association of Pilipinas Shell Dealers, Inc. reiterated their arguments in the petition, citing this time, the dissertation of Associate Justice Dante O. Tinga in his Dissenting Opinion. The glitch in petitioners arguments is that it presents figures based on an event that is yet to happen. Their illustration of the possible effects of the 70% limitation, while seemingly concrete, still remains theoretical. Theories have no place in this case as the Court must only deal with an existing case or controversy that is appropriate or ripe for judicial determination, not one that is conjectural or merely anticipatory.[5] The Court will not intervene absent an actual and substantial controversy admitting of specific relief through a decree conclusive in nature, as distinguished from an opinion advising what the law would be upon a hypothetical state of facts.[6] The impact of the 70% limitation on the creditable input tax will ultimately depend on how one manages and operates its business. Market forces, strategy and acumen will dictate their moves. With or without these VAT provisions, an entrepreneur who does not have the ken to adapt to economic variables will surely perish in the competition. The arguments posed are within the realm of business, and the solution lies also in business. Petitioners also reiterate their argument that the input tax is a property or a property right. In the same breath, the Court reiterates its finding that it is not a property or a property right, and a VAT-registered persons entitlement to the creditable input tax is a mere statutory privilege. Petitioners also contend that even if the right to credit the input VAT is merely a statutory privilege, it has already evolved into a vested right that the State cannot remove. As the Court stated in its Decision, the right to credit the input tax is a mere creation of law. Prior to the enactment of multi-stage sales taxation, the sales taxes paid at every level of distribution are not recoverable from the taxes payable. With the advent of Executive Order No. 273 imposing a 10% multi-stage tax on all sales, it was only then that the crediting of the input tax paid on purchase or importation of goods and services by VAT-registered persons against the output tax was established. This continued with the Expanded VAT Law (R.A. No. 7716), and The Tax Reform Act of 1997 (R.A. No. 8424). The right to credit input tax as against the output tax is clearly a privilege created by law, a privilege that also the law can limit. It should be stressed that a person has no vested right in statutory privileges.[7] The concept of vested right is a consequence of the constitutional guaranty of due process that expresses a present fixed interest which in right reason and natural justice is protected against arbitrary state action; it includes not only legal or equitable title to the enforcement of a demand but also exemptions from new obligations created after the right has become vested. Rights are

considered vested when the right to enjoyment is a present interest, absolute, unconditional, and perfect or fixed and irrefutable.[8] As adeptly stated by Associate Justice Minita V. ChicoNazario in her Concurring Opinion, which the Court adopts, petitioners right to the input VAT credits has not yet vested, thus It should be remembered that prior to Rep. Act No. 9337, the petroleum dealers input VAT credits were inexistent they were unrecognized and disallowed by law. The petroleum dealers had no such property called input VAT credits. It is only rational, therefore, that they cannot acquire vested rights to the use of such input VAT credits when they were never entitled to such credits in the first place, at least, not until Rep. Act No. 9337. My view, at this point, when Rep. Act No. 9337 has not yet even been implemented, is that petroleum dealers right to use their input VAT as credit against their output VAT unlimitedly has not vested, being a mere expectancy of a future benefit and being contingent on the continuance of Section 110 of the National Internal Revenue Code of 1997, prior to its amendment by Rep. Act No. 9337. The elucidation of Associate Justice Artemio V. Panganiban is likewise worthy of note, to wit: Moreover, there is no vested right in generally accepted accounting principles. These refer to accounting concepts, measurement techniques, and standards of presentation in a companys financial statements, and are not rooted in laws of nature, as are the laws of physical science, for these are merely developed and continually modified by local and international regulatory accounting bodies. To state otherwise and recognize such asset account as a vested right is to limit the taxing power of the State. Unlimited, plenary, comprehensive and supreme, this power cannot be unduly restricted by mere creations of the State. More importantly, the assailed provisions of R.A. No. 9337 already involve legislative policy and wisdom. So long as there is a public end for which R.A. No. 9337 was passed, the means through which such end shall be accomplished is for the legislature to choose so long as it is within constitutional bounds. As stated in Carmichael vs. Southern Coal & Coke Co.: If the question were ours to decide, we could not say that the legislature, in adopting the present scheme rather than another, had no basis for its choice, or was arbitrary or unreasonable in its action. But, as the state is free to distribute the burden of a tax without regard to the particular purpose for which it is to be used, there is no warrant in the Constitution for setting the tax aside because a court thinks that it could have distributed the burden more wisely. Those are functions reserved for the legislature.[9] WHEREFORE, the Motions for Reconsideration are hereby DENIED WITH FINALITY. The temporary restraining order issued by the Court is LIFTED. SO ORDERED. EN BANC [G.R. No. 118127. April 12, 2005] CITY OF MANILA, HON. ALFREDO S. LIM as the Mayor of the City of Manila, HON. JOSELITO L. ATIENZA, in his capacity as Vice-Mayor of the City of Manila and Presiding Officer of the City Council of Manila, HON. ERNESTO A. NIEVA, HON. GONZALO P. GONZALES, HON. AVELINO S. CAILIAN, HON. ROBERTO C. OCAMPO, HON. ALBERTO DOMINGO, HON. HONORIO U. LOPEZ, HON. FRANCISCO G. VARONA, JR., HON. ROMUALDO S. MARANAN, HON. NESTOR C. PONCE, JR., HON. HUMBERTO B. BASCO, HON. FLAVIANO F. CONCEPCION, JR., HON. ROMEO G. RIVERA, HON. MANUEL M. ZARCAL, HON. PEDRO S. DE JESUS, HON. BERNARDITO C. ANG, HON. MANUEL L. QUIN, HON. JHOSEP Y. LOPEZ, HON. CHIKA G. GO, HON. VICTORIANO A. MELENDEZ, HON. ERNESTO V.P. MACEDA, JR., HON. ROLANDO P. NIETO, HON. DANILO V. ROLEDA, HON. GERINO A. TOLENTINO, JR., HON. MA. PAZ E. HERRERA, HON. JOEY D. HIZON, HON. FELIXBERTO D. ESPIRITU, HON. KARLO Q. BUTIONG, HON. ROGELIO P. DELA PAZ, HON. BERNARDO D. RAGAZA, HON. MA. CORAZON R. CABALLES, HON. CASIMIRO C. SISON, HON. BIENVINIDO M. ABANTE, JR., HON. MA. LOURDES M. ISIP, HON. ALEXANDER S. RICAFORT, HON. ERNESTO F. RIVERA, HON. LEONARDO L. ANGAT, and HON. JOCELYN B. DAWIS, in their capacity as councilors of the City of Manila, petitioners, vs. HON. PERFECTO A.S. LAGUIO, JR., as Presiding Judge, RTC, Manila and MALATE TOURIST DEVELOPMENT CORPORATION, respondents. DECISION TINGA, J.: I know only that what is moral is what you feel good after and what is immoral is what you feel bad after. Ernest Hermingway Death in the Afternoon, Ch. 1 It is a moral and political axiom that any dishonorable act, if performed by oneself, is less immoral than if performed by someone else, who would be well-intentioned in his dishonesty. J. Christopher Gerald Bonaparte in Egypt, Ch. I The Courts commitment to the protection of morals is secondary to its fealty to the fundamental law of the land. It is foremost a guardian of the Constitution but not the conscience of individuals. And if it need be, the Court will not hesitate to make the hammer fall, and heavily in the words of Justice Laurel, and uphold the constitutional guarantees when faced with laws that, though not lacking in zeal to promote morality, nevertheless fail to pass the test of constitutionality. The pivotal issue in this Petition[1] under Rule 45 (then Rule 42) of the Revised Rules on Civil Procedure seeking the reversal of the Decision[2] in Civil Case No. 93-66511 of the Regional Trial Court (RTC) of Manila, Branch 18 (lower court),[3] is the validity of Ordinance No. 7783 (the Ordinance) of the City of Manila.[4] The antecedents are as follows: Private respondent Malate Tourist Development Corporation (MTDC) is a corporation engaged in the business of operating hotels, motels, hostels and lodging houses.[5] It built and opened Victoria Court in Malate which was licensed as a motel although duly accredited with the Department of Tourism as a hotel.[6] On 28 June 1993, MTDC filed a Petition for Declaratory Relief with Prayer for a Writ of Preliminary Injunction and/or Temporary Restraining Order [7] (RTC Petition) with the lower court impleading as defendants, herein petitioners City of Manila, Hon. Alfredo S. Lim (Lim), Hon. Joselito L. Atienza, and the members of the City Council of Manila (City Council). MTDC prayed that the Ordinance, insofar as it includes motels and inns as among its prohibited establishments, be declared invalid and unconstitutional.[8] Enacted by the City Council[9] on 9 March 1993 and approved by petitioner City Mayor on 30 March 1993, the said Ordinance is entitled AN ORDINANCE PROHIBITING THE ESTABLISHMENT OR OPERATION OF BUSINESSES PROVIDING CERTAIN FORMS OF AMUSEMENT, ENTERTAINMENT, SERVICES AND FACILITIES IN THE ERMITA-MALATE AREA, PRESCRIBING PENALTIES FOR VIOLATION THEREOF, AND FOR OTHER PURPOSES.[10] The Ordinance is reproduced in full, hereunder: SECTION 1. Any provision of existing laws and ordinances to the contrary notwithstanding, no person, partnership, corporation or entity shall, in the Ermita-Malate area bounded by Teodoro M. Kalaw Sr. Street in the North, Taft Avenue in the East, Vito Cruz Street in the South and Roxas Boulevard in the West, pursuant to P.D. 499 be allowed or authorized to contract and engage in, any business providing certain forms of amusement, entertainment, services and facilities where women are used as tools in entertainment and which tend to disturb the community, annoy the inhabitants, and adversely affect the social and moral welfare of the community, such as but not limited to: 1. Sauna Parlors 5. Night Clubs 9. Cabarets 2. Massage Parlors 6. Day Clubs 10. Dance Halls 3. Karaoke Bars 7. Super Clubs 11. Motels 4. Beerhouses 8. Discotheques 12. Inns SEC. 2 The City Mayor, the City Treasurer or any person acting in behalf of the said officials are prohibited from issuing permits, temporary or otherwise, or from granting licenses and accepting payments for the operation of business enumerated in the preceding section. SEC. 3. Owners and/or operator of establishments engaged in, or devoted to, the businesses enumerated in Section 1 hereof are hereby given three (3) months from the date of approval of this ordinance within which to wind up business operations or to transfer to any place outside of the Ermita-Malate area or convert said businesses to other kinds of business allowable within the area, such as but not limited to: 1. Curio or antique shop 8. Flower shops 11. Businesses allowable within the law and medium 2. Souvenir Shops 9. Music lounge and sing-along restaurants, with wellintensity districts as provided for in the zoning 3. Handicrafts display centers defined activities for wholesome family entertainment ordinances for Metropolitan Manila, except new 4. Art galleries that cater to both local and foreign clientele. warehouse or open-storage depot, dock or yard, motor 5. Records and music shops 10. Theaters engaged in the exhibition, not only of repair shop, gasoline service station, light industry 6. Restaurants motion pictures but also of cultural shows, stage and with any machinery, or funeral establishments. 7. Coffee shops theatrical plays, art exhibitions, concerts and the like. SEC. 4. Any person violating any provisions of this ordinance, shall upon conviction, be punished by imprisonment of one (1) year or fine of FIVE THOUSAND (P5,000.00) PESOS, or both, at the discretion of the Court, PROVIDED, that in case of juridical person, the President, the General Manager, or person-in-charge of operation shall be liable thereof; PROVIDED FURTHER, that in case of subsequent violation and conviction, the premises of the erring establishment shall be closed and padlocked permanently. SEC. 5. This ordinance shall take effect upon approval. Enacted by the City Council of Manila at its regular session today, March 9, 1993. Approved by His Honor, the Mayor on March 30, 1993. (Emphasis supplied)

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In the RTC Petition, MTDC argued that the Ordinance erroneously and improperly included in its enumeration of prohibited establishments, motels and inns such as MTDCs Victoria Court considering that these were not establishments for amusement or entertainment and they were not services or facilities for entertainment, nor did they use women as tools for entertainment, and neither did they disturb the community, annoy the inhabitants or adversely affect the social and moral welfare of the community.[11] MTDC further advanced that the Ordinance was invalid and unconstitutional for the following reasons: (1) The City Council has no power to prohibit the operation of motels as Section 458 (a) 4 (iv)[12] of the Local Government Code of 1991 (the Code) grants to the City Council only the power to regulate the establishment, operation and maintenance of hotels, motels, inns, pension houses, lodging houses and other similar establishments; (2) The Ordinance is void as it is violative of Presidential Decree (P.D.) No. 499[13] which specifically declared portions of the ErmitaMalate area as a commercial zone with certain restrictions; (3) The Ordinance does not constitute a proper exercise of police power as the compulsory closure of the motel business has no reasonable relation to the legitimate municipal interests sought to be protected; (4) The Ordinance constitutes an ex post facto law by punishing the operation of Victoria Court which was a legitimate business prior to its enactment; (5) The Ordinance violates MTDCs constitutional rights in that: (a) it is confiscatory and constitutes an invasion of plaintiffs property rights; (b) the City Council has no power to find as a fact that a particular thing is a nuisance per se nor does it have the power to extrajudicially destroy it; and (6) The Ordinance constitutes a denial of equal protection under the law as no reasonable basis exists for prohibiting the operation of motels and inns, but not pension houses, hotels, lodging houses or other similar establishments, and for prohibiting said business in the Ermita-Malate area but not outside of this area.[14] In their Answer[15] dated 23 July 1993, petitioners City of Manila and Lim maintained that the City Council had the power to prohibit certain forms of entertainment in order to protect the social and moral welfare of the community as provided for in Section 458 (a) 4 (vii) of the Local Government Code,[16] which reads, thus: Section 458. Powers, Duties, Functions and Compensation. (a) The sangguniang panlungsod, as the legislative body of the city, shall enact ordinances, approve resolutions and appropriate funds for the general welfare of the city and its inhabitants pursuant to Section 16 of this Code and in the proper exercise of the corporate powers of the city as provided for under Section 22 of this Code, and shall: .... (4) Regulate activities relative to the use of land, buildings and structures within the city in order to promote the general welfare and for said purpose shall: .... (vii) Regulate the establishment, operation, and maintenance of any entertainment or amusement facilities, including theatrical performances, circuses, billiard pools, public dancing schools, public dance halls, sauna baths, massage parlors, and other places for entertainment or amusement; regulate such other events or activities for amusement or entertainment, particularly those which tend to disturb the community or annoy the inhabitants, or require the suspension or suppression of the same; or, prohibit certain forms of amusement or entertainment in order to protect the social and moral welfare of the community. Citing Kwong Sing v. City of Manila,[17] petitioners insisted that the power of regulation spoken of in the above-quoted provision included the power to control, to govern and to restrain places of exhibition and amusement.[18] Petitioners likewise asserted that the Ordinance was enacted by the City Council of Manila to protect the social and moral welfare of the community in conjunction with its police power as found in Article III, Section 18(kk) of Republic Act No. 409,[19] otherwise known as the Revised Charter of the City of Manila (Revised Charter of Manila)[20] which reads, thus: ARTICLE III THE MUNICIPAL BOARD . . . Section 18. Legislative powers. The Municipal Board shall have the following legislative powers: . . . (kk) To enact all ordinances it may deem necessary and proper for the sanitation and safety, the furtherance of the prosperity, and the promotion of the morality, peace, good order, comfort, convenience, and general welfare of the city and its inhabitants, and such others as may be necessary to carry into effect and discharge the powers and duties conferred by this chapter; and to fix penalties for the violation of ordinances which shall not exceed two hundred pesos fine or six months imprisonment, or both such fine and imprisonment, for a single offense. Further, the petitioners noted, the Ordinance had the presumption of validity; hence, private respondent had the burden to prove its illegality or unconstitutionality.[21] Petitioners also maintained that there was no inconsistency between P.D. 499 and the Ordinance as the latter simply disauthorized certain forms of businesses and allowed the Ermita-Malate area to remain a commercial zone.[22] The Ordinance, the petitioners likewise claimed, cannot be assailed as ex post facto as it was prospective in operation.[23] The Ordinance also did not infringe the equal protection clause and cannot be denounced as class legislation as there existed substantial and real differences between the Ermita-Malate area and other places in the City of Manila. [24] On 28 June 1993, respondent Judge Perfecto A.S. Laguio, Jr. (Judge Laguio) issued an ex-parte temporary restraining order against the enforcement of the Ordinance.[25] And on 16 July 1993, again in an intrepid gesture, he granted the writ of preliminary injunction prayed for by MTDC.[26] After trial, on 25 November 1994, Judge Laguio rendered the assailed Decision, enjoining the petitioners from implementing the Ordinance. The dispositive portion of said Decision reads:[27] WHEREFORE, judgment is hereby rendered declaring Ordinance No. 778[3], Series of 1993, of the City of Manila null and void, and making permanent the writ of preliminary injunction that had been issued by this Court against the defendant. No costs. SO ORDERED.[28] Petitioners filed with the lower court a Notice of Appeal[29] on 12 December 1994, manifesting that they are elevating the case to this Court under then Rule 42 on pure questions of law.[30] On 11 January 1995, petitioners filed the present Petition, alleging that the following errors were committed by the lower court in its ruling: (1) It erred in concluding that the subject ordinance is ultra vires, or otherwise, unfair, unreasonable and oppressive exercise of police power; (2) It erred in holding that the questioned Ordinance contravenes P.D. 499[31] which allows operators of all kinds of commercial establishments, except those specified therein; and (3) It erred in declaring the Ordinance void and unconstitutional.[32] In the Petition and in its Memorandum,[33] petitioners in essence repeat the assertions they made before the lower court. They contend that the assailed Ordinance was enacted in the exercise of the inherent and plenary power of the State and the general welfare clause exercised by local government units provided for in Art. 3, Sec. 18 (kk) of the Revised Charter of Manila and conjunctively, Section 458 (a) 4 (vii) of the Code.[34] They allege that the Ordinance is a valid exercise of police power; it does not contravene P.D. 499; and that it enjoys the presumption of validity.[35] In its Memorandum[36] dated 27 May 1996, private respondent maintains that the Ordinance is ultra vires and that it is void for being repugnant to the general law. It reiterates that the questioned Ordinance is not a valid exercise of police power; that it is violative of due process, confiscatory and amounts to an arbitrary interference with its lawful business; that it is violative of the equal protection clause; and that it confers on petitioner City Mayor or any officer unregulated discretion in the execution of the Ordinance absent rules to guide and control his actions. This is an opportune time to express the Courts deep sentiment and tenderness for the Ermita-Malate area being its home for several decades. A long-time resident, the Court witnessed the areas many turn of events. It relished its glory days and endured its days of infamy. Much as the Court harks back to the resplendent era of the Old Manila and yearns to restore its lost grandeur, it believes that the Ordinance is not the fitting means to that end. The Court is of the opinion, and so holds, that the lower court did not err in declaring the Ordinance, as it did, ultra vires and therefore null and void. The Ordinance is so replete with constitutional infirmities that almost every sentence thereof violates a constitutional provision. The prohibitions and sanctions therein transgress the cardinal rights of persons enshrined by the Constitution. The Court is called upon to shelter these rights from attempts at rendering them worthless. The tests of a valid ordinance are well established. A long line of decisions has held that for an ordinance to be valid, it must not only be within the corporate powers of the local government unit to enact and must be passed according to the procedure prescribed by law, it must also conform to the following substantive requirements: (1) must not contravene the Constitution or any statute; (2) must not be unfair or oppressive; (3) must not be partial or discriminatory; (4) must not prohibit but may regulate trade; (5) must be general and consistent with public policy; and (6) must not be unreasonable.[37] Anent the first criterion, ordinances shall only be valid when they are not contrary to the Constitution and to the laws.[38] The Ordinance must satisfy two requirements: it must pass muster under the test of constitutionality and the test of consistency with the prevailing laws. That ordinances should be constitutional uphold the principle of the supremacy of the Constitution. The requirement that the enactment must not violate existing law gives stress to the precept that local government units are able to legislate only by virtue of their derivative legislative power, a delegation of legislative power from the national legislature. The delegate cannot be superior to the principal or exercise powers higher than those of the latter.[39] This relationship between the national legislature and the local government units has not been enfeebled by the new provisions in the Constitution strengthening the policy of local autonomy. The national legislature is still the principal of the local government units, which cannot defy its will or modify or violate it.[40] The Ordinance was passed by the City Council in the exercise of its police power, an enactment of the City Council acting as agent of Congress. Local government units, as agencies of the State, are endowed with police power in order to effectively accomplish and carry out the declared objects of their creation.[41] This delegated police power is found in Section 16 of the Code, known as the general welfare clause, viz: SECTION 16. General Welfare.Every local government unit shall exercise the powers expressly granted, those necessarily implied therefrom, as well as powers necessary, appropriate, or incidental for its efficient and effective governance, and those which are essential to the promotion of the general welfare. Within their respective territorial jurisdictions, local government units shall ensure and support, among other things, the preservation and enrichment of culture, promote health and safety, enhance the right of the people to a balanced ecology, encourage and support the development of appropriate and self-reliant scientific and technological capabilities, improve public morals, enhance economic prosperity and social justice, promote full employment among their residents, maintain peace and order, and preserve the comfort and convenience of their inhabitants. Local government units exercise police power through their respective legislative bodies; in this case, the sangguniang panlungsod or the city council. The Code empowers the legislative bodies to enact ordinances, approve resolutions and appropriate funds for the general welfare of the province/city/municipality and its inhabitants pursuant to Section 16 of the Code and in the proper exercise of the corporate powers of the province/city/ municipality provided under the Code.[42] The inquiry in this Petition is concerned with the validity of the exercise of such delegated power. The Ordinance contravenes the Constitution The police power of the City Council, however broad and far-reaching, is subordinate to the constitutional limitations thereon; and is subject to the limitation that its exercise must be reasonable and for the public good.[43] In the case at bar, the enactment of the Ordinance was an invalid exercise of delegated power as it is unconstitutional and repugnant to general laws. The relevant constitutional provisions are the following: SEC. 5. The maintenance of peace and order, the protection of life, liberty, and property, and the promotion of the general welfare are essential for the enjoyment by all the people of the blessings of democracy.[44]

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SEC. 14. The State recognizes the role of women in nation-building, and shall ensure the fundamental equality before the law of women and men.[45] SEC. 1. No person shall be deprived of life, liberty or property without due process of law, nor shall any person be denied the equal protection of laws.[46] Sec. 9. Private property shall not be taken for public use without just compensation.[47] A. The Ordinance infringes the Due Process Clause The constitutional safeguard of due process is embodied in the fiat (N)o person shall be deprived of life, liberty or property without due process of law. . . .[48] There is no controlling and precise definition of due process. It furnishes though a standard to which governmental action should conform in order that deprivation of life, liberty or property, in each appropriate case, be valid. This standard is aptly described as a responsiveness to the supremacy of reason, obedience to the dictates of justice,[49] and as such it is a limitation upon the exercise of the police power.[50] The purpose of the guaranty is to prevent governmental encroachment against the life, liberty and property of individuals; to secure the individual from the arbitrary exercise of the powers of the government, unrestrained by the established principles of private rights and distributive justice; to protect property from confiscation by legislative enactments, from seizure, forfeiture, and destruction without a trial and conviction by the ordinary mode of judicial procedure; and to secure to all persons equal and impartial justice and the benefit of the general law.[51] The guaranty serves as a protection against arbitrary regulation, and private corporations and partnerships are persons within the scope of the guaranty insofar as their property is concerned. [52] This clause has been interpreted as imposing two separate limits on government, usually called procedural due process and substantive due process. Procedural due process, as the phrase implies, refers to the procedures that the government must follow before it deprives a person of life, liberty, or property. Classic procedural due process issues are concerned with what kind of notice and what form of hearing the government must provide when it takes a particular action.[53] Substantive due process, as that phrase connotes, asks whether the government has an adequate reason for taking away a persons life, liberty, or property. In other words, substantive due process looks to whether there is a sufficient justification for the governments action.[54] Case law in the United States (U.S.) tells us that whether there is such a justification depends very much on the level of scrutiny used.[55] For example, if a law is in an area where only rational basis review is applied, substantive due process is met so long as the law is rationally related to a legitimate government purpose. But if it is an area where strict scrutiny is used, such as for protecting fundamental rights, then the government will meet substantive due process only if it can prove that the law is necessary to achieve a compelling government purpose.[56] The police power granted to local government units must always be exercised with utmost observance of the rights of the people to due process and equal protection of the law. Such power cannot be exercised whimsically, arbitrarily or despotically[57] as its exercise is subject to a qualification, limitation or restriction demanded by the respect and regard due to the prescription of the fundamental law, particularly those forming part of the Bill of Rights. Individual rights, it bears emphasis, may be adversely affected only to the extent that may fairly be required by the legitimate demands of public interest or public welfare.[58] Due process requires the intrinsic validity of the law in interfering with the rights of the person to his life, liberty and property.[59] Requisites for the valid exercise of Police Power are not met To successfully invoke the exercise of police power as the rationale for the enactment of the Ordinance, and to free it from the imputation of constitutional infirmity, not only must it appear that the interests of the public generally, as distinguished from those of a particular class, require an interference with private rights, but the means adopted must be reasonably necessary for the accomplishment of the purpose and not unduly oppressive upon individuals.[60] It must be evident that no other alternative for the accomplishment of the purpose less intrusive of private rights can work. A reasonable relation must exist between the purposes of the police measure and the means employed for its accomplishment, for even under the guise of protecting the public interest, personal rights and those pertaining to private property will not be permitted to be arbitrarily invaded.[61] Lacking a concurrence of these two requisites, the police measure shall be struck down as an arbitrary intrusion into private rights[62] a violation of the due process clause. The Ordinance was enacted to address and arrest the social ills purportedly spawned by the establishments in the Ermita-Malate area which are allegedly operated under the deceptive veneer of legitimate, licensed and tax-paying nightclubs, bars, karaoke bars, girlie houses, cocktail lounges, hotels and motels. Petitioners insist that even the Court in the case of Ermita-Malate Hotel and Motel Operators Association, Inc. v. City Mayor of Manila[63] had already taken judicial notice of the alarming increase in the rate of prostitution, adultery and fornication in Manila traceable in great part to existence of motels, which provide a necessary atmosphere for clandestine entry, presence and exit and thus become the ideal haven for prostitutes and thrill-seekers.[64] The object of the Ordinance was, accordingly, the promotion and protection of the social and moral values of the community. Granting for the sake of argument that the objectives of the Ordinance are within the scope of the City Councils police powers, the means employed for the accomplishment thereof were unreasonable and unduly oppressive. It is undoubtedly one of the fundamental duties of the City of Manila to make all reasonable regulations looking to the promotion of the moral and social values of the community. However, the worthy aim of fostering public morals and the eradication of the communitys social ills can be achieved through means less restrictive of private rights; it can be attained by reasonable restrictions rather than by an absolute prohibition. The closing down and transfer of businesses or their conversion into businesses allowed under the Ordinance have no reasonable relation to the accomplishment of its purposes. Otherwise stated, the prohibition of the enumerated establishments will not per se protect and promote the social and moral welfare of the community; it will not in itself eradicate the alluded social ills of prostitution, adultery, fornication nor will it arrest the spread of sexual disease in Manila. Conceding for the nonce that the Ermita-Malate area teems with houses of ill-repute and establishments of the like which the City Council may lawfully prohibit,[65] it is baseless and insupportable to bring within that classification sauna parlors, massage parlors, karaoke bars, night clubs, day clubs, super clubs, discotheques, cabarets, dance halls, motels and inns. This is not warranted under the accepted definitions of these terms. The enumerated establishments are lawful pursuits which are not per se offensive to the moral welfare of the community. That these are used as arenas to consummate illicit sexual affairs and as venues to further the illegal prostitution is of no moment. We lay stress on the acrid truth that sexual immorality, being a human frailty, may take place in the most innocent of places that it may even take place in the substitute establishments enumerated under Section 3 of the Ordinance. If the flawed logic of the Ordinance were to be followed, in the remote instance that an immoral sexual act transpires in a church cloister or a court chamber, we would behold the spectacle of the City of Manila ordering the closure of the church or court concerned. Every house, building, park, curb, street or even vehicles for that matter will not be exempt from the prohibition. Simply because there are no pure places where there are impure men. Indeed, even the Scripture and the Tradition of Christians churches continually recall the presence and universality of sin in mans history.[66] The problem, it needs to be pointed out, is not the establishment, which by its nature cannot be said to be injurious to the health or comfort of the community and which in itself is amoral, but the deplorable human activity that may occur within its premises. While a motel may be used as a venue for immoral sexual activity, it cannot for that reason alone be punished. It cannot be classified as a house of ill-repute or as a nuisance per se on a mere likelihood or a naked assumption. If that were so and if that were allowed, then the Ermita-Malate area would not only be purged of its supposed social ills, it would be extinguished of its soul as well as every human activity, reprehensible or not, in its every nook and cranny would be laid bare to the estimation of the authorities. The Ordinance seeks to legislate morality but fails to address the core issues of morality. Try as the Ordinance may to shape morality, it should not foster the illusion that it can make a moral man out of it because immorality is not a thing, a building or establishment; it is in the hearts of men. The City Council instead should regulate human conduct that occurs inside the establishments, but not to the detriment of liberty and privacy which are covenants, premiums and blessings of democracy. While petitioners earnestness at curbing clearly objectionable social ills is commendable, they unwittingly punish even the proprietors and operators of wholesome, innocent establishments. In the instant case, there is a clear invasion of personal or property rights, personal in the case of those individuals desirous of owning, operating and patronizing those motels and property in terms of the investments made and the salaries to be paid to those therein employed. If the City of Manila so desires to put an end to prostitution, fornication and other social ills, it can instead impose reasonable regulations such as daily inspections of the establishments for any violation of the conditions of their licenses or permits; it may exercise its authority to suspend or revoke their licenses for these violations;[67] and it may even impose increased license fees. In other words, there are other means to reasonably accomplish the desired end. Means employed are constitutionally infirm The Ordinance disallows the operation of sauna parlors, massage parlors, karaoke bars, beerhouses, night clubs, day clubs, super clubs, discotheques, cabarets, dance halls, motels and inns in the Ermita-Malate area. In Section 3 thereof, owners and/or operators of the enumerated establishments are given three (3) months from the date of approval of the Ordinance within which to wind up business operations or to transfer to any place outside the Ermita-Malate area or convert said businesses to other kinds of business allowable within the area. Further, it states in Section 4 that in cases of subsequent violations of the provisions of the Ordinance, the premises of the erring establishment shall be closed and padlocked permanently. It is readily apparent that the means employed by the Ordinance for the achievement of its purposes, the governmental interference itself, infringes on the constitutional guarantees of a persons fundamental right to liberty and property. Liberty as guaranteed by the Constitution was defined by Justice Malcolm to include the right to exist and the right to be free from arbitrary restraint or servitude. The term cannot be dwarfed into mere freedom from physical restraint of the person of the citizen, but is deemed to embrace the right of man to enjoy the facilities with which he has been endowed by his Creator, subject only to such restraint as are necessary for the common welfare.[68] In accordance with this case, the rights of the citizen to be free to use his faculties in all lawful ways; to live and work where he will; to earn his livelihood by any lawful calling; and to pursue any avocation are all deemed embraced in the concept of liberty.[69] The U.S. Supreme Court in the case of Roth v. Board of Regents,[70] sought to clarify the meaning of liberty. It said: While the Court has not attempted to define with exactness the liberty. . . guaranteed [by the Fifth and Fourteenth Amendments], the term denotes not merely freedom from bodily restraint but also the right of the individual to contract, to engage in any of the common occupations of life, to acquire useful knowledge, to marry, establish a home and bring up children, to worship God according to the dictates of his own conscience, and generally to enjoy those privileges long recognizedas essential to the orderly pursuit of happiness by free men. In a Constitution for a free people, there can be no doubt that the meaning of liberty must be broad indeed. In another case, it also confirmed that liberty protected by the due process clause includes personal decisions relating to marriage, procreation, contraception, family relationships, child rearing, and education. In explaining the respect the Constitution demands for the autonomy of the person in making these choices, the U.S. Supreme Court explained: These matters, involving the most intimate and personal choices a person may make in a lifetime, choices central to personal dignity and autonomy, are central to the liberty protected by the Fourteenth Amendment. At the heart of liberty is the right to define ones own concept of existence, of meaning, of universe, and of the mystery of human life. Beliefs about these matters could not define the attributes of personhood where they formed under compulsion of the State.[71] Persons desirous to own, operate and patronize the enumerated establishments under Section 1 of the Ordinance may seek autonomy for these purposes. Motel patrons who are single and unmarried may invoke this right to autonomy to consummate their bonds in intimate sexual conduct within the motels premises be it stressed that their consensual sexual behavior does not contravene any fundamental state policy as contained in the Constitution.[72] Adults have a right to choose to forge such relationships with others in the confines of their own private lives and still retain their dignity as free persons. The liberty protected by the Constitution allows persons the right to make this choice.[73] Their right to liberty

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under the due process clause gives them the full right to engage in their conduct without intervention of the government, as long as they do not run afoul of the law. Liberty should be the rule and restraint the exception. Liberty in the constitutional sense not only means freedom from unlawful government restraint; it must include privacy as well, if it is to be a repository of freedom. The right to be let alone is the beginning of all freedomit is the most comprehensive of rights and the right most valued by civilized men.[74] The concept of liberty compels respect for the individual whose claim to privacy and interference demands respect. As the case of Morfe v. Mutuc,[75] borrowing the words of Laski, so very aptly stated: Man is one among many, obstinately refusing reduction to unity. His separateness, his isolation, are indefeasible; indeed, they are so fundamental that they are the basis on which his civic obligations are built. He cannot abandon the consequences of his isolation, which are, broadly speaking, that his experience is private, and the will built out of that experience personal to himself. If he surrenders his will to others, he surrenders himself. If his will is set by the will of others, he ceases to be a master of himself. I cannot believe that a man no longer a master of himself is in any real sense free. Indeed, the right to privacy as a constitutional right was recognized in Morfe, the invasion of which should be justified by a compelling state interest. Morfe accorded recognition to the right to privacy independently of its identification with liberty; in itself it is fully deserving of constitutional protection. Governmental powers should stop short of certain intrusions into the personal life of the citizen.[76] There is a great temptation to have an extended discussion on these civil liberties but the Court chooses to exercise restraint and restrict itself to the issues presented when it should. The previous pronouncements of the Court are not to be interpreted as a license for adults to engage in criminal conduct. The reprehensibility of such conduct is not diminished. The Court only reaffirms and guarantees their right to make this choice. Should they be prosecuted for their illegal conduct, they should suffer the consequences of the choice they have made. That, ultimately, is their choice. Modality employed is unlawful taking In addition, the Ordinance is unreasonable and oppressive as it substantially divests the respondent of the beneficial use of its property.[77] The Ordinance in Section 1 thereof forbids the running of the enumerated businesses in the Ermita-Malate area and in Section 3 instructs its owners/operators to wind up business operations or to transfer outside the area or convert said businesses into allowed businesses. An ordinance which permanently restricts the use of property that it can not be used for any reasonable purpose goes beyond regulation and must be recognized as a taking of the property without just compensation.[78] It is intrusive and violative of the private property rights of individuals. The Constitution expressly provides in Article III, Section 9, that private property shall not be taken for public use without just compensation. The provision is the most important protection of property rights in the Constitution. This is a restriction on the general power of the government to take property. The constitutional provision is about ensuring that the government does not confiscate the property of some to give it to others. In part too, it is about loss spreading. If the government takes away a persons property to benefit society, then society should pay. The principal purpose of the guarantee is to bar the Government from forcing some people alone to bear public burdens which, in all fairness and justice, should be borne by the public as a whole. [79] There are two different types of taking that can be identified. A possessory taking occurs when the government confiscates or physically occupies property. A regulatory taking occurs when the governments regulation leaves no reasonable economically viable use of the property.[80] In the landmark case of Pennsylvania Coal v. Mahon,[81] it was held that a taking also could be found if government regulation of the use of property went too far. When regulation reaches a certain magnitude, in most if not in all cases there must be an exercise of eminent domain and compensation to support the act. While property may be regulated to a certain extent, if regulation goes too far it will be recognized as a taking.[82] No formula or rule can be devised to answer the questions of what is too far and when regulation becomes a taking. In Mahon, Justice Holmes recognized that it was a question of degree and therefore cannot be disposed of by general propositions. On many other occasions as well, the U.S. Supreme Court has said that the issue of when regulation constitutes a taking is a matter of considering the facts in each case. The Court asks whether justice and fairness require that the economic loss caused by public action must be compensated by the government and thus borne by the public as a whole, or whether the loss should remain concentrated on those few persons subject to the public action.[83] What is crucial in judicial consideration of regulatory takings is that government regulation is a taking if it leaves no reasonable economically viable use of property in a manner that interferes with reasonable expectations for use.[84] A regulation that permanently denies all economically beneficial or productive use of land is, from the owners point of view, equivalent to a taking unless principles of nuisance or property law that existed when the owner acquired the land make the use prohibitable.[85] When the owner of real property has been called upon to sacrifice all economically beneficial uses in the name of the common good, that is, to leave his property economically idle, he has suffered a taking.[86] A regulation which denies all economically beneficial or productive use of land will require compensation under the takings clause. Where a regulation places limitations on land that fall short of eliminating all economically beneficial use, a taking nonetheless may have occurred, depending on a complex of factors including the regulations economic effect on the landowner, the extent to which the regulation interferes with reasonable investment-backed expectations and the character of government action. These inquiries are informed by the purpose of the takings clause which is to prevent the government from forcing some people alone to bear public burdens which, in all fairness and justice, should be borne by the public as a whole.[87] A restriction on use of property may also constitute a taking if not reasonably necessary to the effectuation of a substantial public purpose or if it has an unduly harsh impact on the distinct investment-backed expectations of the owner.[88] The Ordinance gives the owners and operators of the prohibited establishments three (3) months from its approval within which to wind up business operations or to transfer to any place outside of the Ermita-Malate area or convert said businesses to other kinds of business allowable within the area. The directive to wind up business operations amounts to a closure of the establishment, a permanent deprivation of property, and is practically confiscatory. Unless the owner converts his establishment to accommodate an allowed business, the structure which housed the previous business will be left empty and gathering dust. Suppose he transfers it to another area, he will likewise leave the entire establishment idle. Consideration must be given to the substantial amount of money invested to build the edifices which the owner reasonably expects to be returned within a period of time. It is apparent that the Ordinance leaves no reasonable economically viable use of property in a manner that interferes with reasonable expectations for use. The second and third options to transfer to any place outside of the Ermita-Malate area or to convert into allowed businesses are confiscatory as well. The penalty of permanent closure in cases of subsequent violations found in Section 4 of the Ordinance is also equivalent to a taking of private property. The second option instructs the owners to abandon their property and build another one outside the Ermita-Malate area. In every sense, it qualifies as a taking without just compensation with an additional burden imposed on the owner to build another establishment solely from his coffers. The proffered solution does not put an end to the problem, it merely relocates it. Not only is this impractical, it is unreasonable, onerous and oppressive. The conversion into allowed enterprises is just as ridiculous. How may the respondent convert a motel into a restaurant or a coffee shop, art gallery or music lounge without essentially destroying its property? This is a taking of private property without due process of law, nay, even without compensation. The penalty of closure likewise constitutes unlawful taking that should be compensated by the government. The burden on the owner to convert or transfer his business, otherwise it will be closed permanently after a subsequent violation should be borne by the public as this end benefits them as a whole. Petitioners cannot take refuge in classifying the measure as a zoning ordinance. A zoning ordinance, although a valid exercise of police power, which limits a wholesome property to a use which can not reasonably be made of it constitutes the taking of such property without just compensation. Private property which is not noxious nor intended for noxious purposes may not, by zoning, be destroyed without compensation. Such principle finds no support in the principles of justice as we know them. The police powers of local government units which have always received broad and liberal interpretation cannot be stretched to cover this particular taking. Distinction should be made between destruction from necessity and eminent domain. It needs restating that the property taken in the exercise of police power is destroyed because it is noxious or intended for a noxious purpose while the property taken under the power of eminent domain is intended for a public use or purpose and is therefore wholesome.[89] If it be of public benefit that a wholesome property remain unused or relegated to a particular purpose, then certainly the public should bear the cost of reasonable compensation for the condemnation of private property for public use.[90] Further, the Ordinance fails to set up any standard to guide or limit the petitioners actions. It in no way controls or guides the discretion vested in them. It provides no definition of the establishments covered by it and it fails to set forth the conditions when the establishments come within its ambit of prohibition. The Ordinance confers upon the mayor arbitrary and unrestricted power to close down establishments. Ordinances such as this, which make possible abuses in its execution, depending upon no conditions or qualifications whatsoever other than the unregulated arbitrary will of the city authorities as the touchstone by which its validity is to be tested, are unreasonable and invalid. The Ordinance should have established a rule by which its impartial enforcement could be secured.[91] Ordinances placing restrictions upon the lawful use of property must, in order to be valid and constitutional, specify the rules and conditions to be observed and conduct to avoid; and must not admit of the exercise, or of an opportunity for the exercise, of unbridled discretion by the law enforcers in carrying out its provisions.[92] Thus, in Coates v. City of Cincinnati,[93] as cited in People v. Nazario,[94] the U.S. Supreme Court struck down an ordinance that had made it illegal for three or more persons to assemble on any sidewalk and there conduct themselves in a manner annoying to persons passing by. The ordinance was nullified as it imposed no standard at all because one may never know in advance what annoys some people but does not annoy others. Similarly, the Ordinance does not specify the standards to ascertain which establishments tend to disturb the community, annoy the inhabitants, and adversely affect the social and moral welfare of the community. The cited case supports the nullification of the Ordinance for lack of comprehensible standards to guide the law enforcers in carrying out its provisions. Petitioners cannot therefore order the closure of the enumerated establishments without infringing the due process clause. These lawful establishments may be regulated, but not prevented from carrying on their business. This is a sweeping exercise of police power that is a result of a lack of imagination on the part of the City Council and which amounts to an interference into personal and private rights which the Court will not countenance. In this regard, we take a resolute stand to uphold the constitutional guarantee of the right to liberty and property. Worthy of note is an example derived from the U.S. of a reasonable regulation which is a far cry from the ill-considered Ordinance enacted by the City Council. In FW/PBS, INC. v. Dallas,[95] the city of Dallas adopted a comprehensive ordinance regulating sexually oriented businesses, which are defined to include adult arcades, bookstores, video stores, cabarets, motels, and theaters as well as escort agencies, nude model studio and sexual encounter centers. Among other things, the ordinance required that such businesses be licensed. A group of motel owners were among the three groups of businesses that filed separate suits challenging the ordinance. The motel owners asserted that the city violated the due process clause by failing to produce adequate support for its supposition that renting room for fewer than ten (10) hours resulted in increased crime and other secondary effects. They likewise argued than the ten (10)-hour limitation on the rental of motel rooms placed an unconstitutional burden on the right to freedom of association. Anent the first contention, the U.S. Supreme Court held that the reasonableness of the legislative judgment combined with a study which the city considered, was adequate to support the citys determination that motels permitting room rentals for fewer than ten (10 ) hours should be included within the licensing scheme. As regards the second point, the Court held that limiting motel room rentals to ten (10) hours will have no discernible effect on personal bonds as those bonds that are formed from the use of a motel room for fewer than ten (10) hours are not those that have played a critical role in the culture and traditions of the nation by cultivating and transmitting shared ideals and beliefs.

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The ordinance challenged in the above-cited case merely regulated the targeted businesses. It imposed reasonable restrictions; hence, its validity was upheld. The case of Ermita Malate Hotel and Motel Operators Association, Inc. v. City Mayor of Manila ,[96] it needs pointing out, is also different from this case in that what was involved therein was a measure which regulated the mode in which motels may conduct business in order to put an end to practices which could encourage vice and immorality. Necessarily, there was no valid objection on due process or equal protection grounds as the ordinance did not prohibit motels. The Ordinance in this case however is not a regulatory measure but is an exercise of an assumed power to prohibit.[97] The foregoing premises show that the Ordinance is an unwarranted and unlawful curtailment of property and personal rights of citizens. For being unreasonable and an undue restraint of trade, it cannot, even under the guise of exercising police power, be upheld as valid. B. The Ordinance violates Equal Protection Clause Equal protection requires that all persons or things similarly situated should be treated alike, both as to rights conferred and responsibilities imposed. Similar subjects, in other words, should not be treated differently, so as to give undue favor to some and unjustly discriminate against others.[98] The guarantee means that no person or class of persons shall be denied the same protection of laws which is enjoyed by other persons or other classes in like circumstances.[99] The equal protection of the laws is a pledge of the protection of equal laws.[100] It limits governmental discrimination. The equal protection clause extends to artificial persons but only insofar as their property is concerned.[101] The Court has explained the scope of the equal protection clause in this wise: What does it signify? To quote from J.M. Tuason & Co. v. Land Tenure Administration: The ideal situation is for the laws benefits to be available to all, that none be placed outside the sphere of its coverage. Only thus could chance and favor be excluded and the affairs of men governed by that serene and impartial uniformity, which is of the very essence of the idea of law. There is recognition, however, in the opinion that what in fact exists cannot approximate the ideal. Nor is the law susceptible to the reproach that it does not take into account the realities of the situation. The constitutional guarantee then is not to be given a meaning that disregards what is, what does in fact exist. To assure that the general welfare be promoted, which is the end of law, a regulatory measure may cut into the rights to liberty and property. Those adversely affected may under such circumstances invoke the equal protection clause only if they can show that the governmental act assailed, far from being inspired by the attainment of the common weal was prompted by the spirit of hostility, or at the very least, discrimination that finds no support in reason. Classification is thus not ruled out, it being sufficient to quote from the Tuason decision anew that the laws operate equally and uniformly on all persons under similar circumstances or that all persons must be treated in the same manner, the conditions not being different, both in the privileges conferred and the liabilities imposed. Favoritism and undue preference cannot be allowed. For the principle is that equal protection and security shall be given to every person under circumstances which, if not identical, are analogous. If law be looked upon in terms of burden or charges, those that fall within a class should be treated in the same fashion, whatever restrictions cast on some in the group equally binding on the rest.[102] Legislative bodies are allowed to classify the subjects of legislation. If the classification is reasonable, the law may operate only on some and not all of the people without violating the equal protection clause.[103] The classification must, as an indispensable requisite, not be arbitrary. To be valid, it must conform to the following requirements: 1) It must be based on substantial distinctions. 2) It must be germane to the purposes of the law. 3) It must not be limited to existing conditions only. 4) It must apply equally to all members of the class.[104] In the Courts view, there are no substantial distinctions between motels, inns, pension houses, hotels, lodging houses or other similar establishments. By definition, all are commercial establishments providing lodging and usually meals and other services for the public. No reason exists for prohibiting motels and inns but not pension houses, hotels, lodging houses or other similar establishments. The classification in the instant case is invalid as similar subjects are not similarly treated, both as to rights conferred and obligations imposed. It is arbitrary as it does not rest on substantial distinctions bearing a just and fair relation to the purpose of the Ordinance. The Court likewise cannot see the logic for prohibiting the business and operation of motels in the Ermita-Malate area but not outside of this area. A noxious establishment does not become any less noxious if located outside the area. The standard where women are used as tools for entertainment is also discriminatory as prostitution one of the hinted ills the Ordinance aims to banishis not a profession exclusive to women. Both men and women have an equal propensity to engage in prostitution. It is not any less grave a sin when men engage in it. And why would the assumption that there is an ongoing immoral activity apply only when women are employed and be inapposite when men are in harness? This discrimination based on gender violates equal protection as it is not substantially related to important government objectives.[105] Thus, the discrimination is invalid. Failing the test of constitutionality, the Ordinance likewise failed to pass the test of consistency with prevailing laws. C. The Ordinance is repugnant to general laws; it is ultra vires The Ordinance is in contravention of the Code as the latter merely empowers local government units to regulate, and not prohibit, the establishments enumerated in Section 1 thereof. The power of the City Council to regulate by ordinances the establishment, operation, and maintenance of motels, hotels and other similar establishments is found in Section 458 (a) 4 (iv), which provides that: Section 458. Powers, Duties, Functions and Compensation. (a) The sangguniang panlungsod, as the legislative body of the city, shall enact ordinances, approve resolutions and appropriate funds for the general welfare of the city and its inhabitants pursuant to Section 16 of this Code and in the proper exercise of the corporate powers of the city as provided for under Section 22 of this Code, and shall: . . . (4) Regulate activities relative to the use of land, buildings and structures within the city in order to promote the general welfare and for said purpose shall: . . . (iv) Regulate the establishment, operation and maintenance of cafes, restaurants, beerhouses, hotels, motels, inns, pension houses, lodging houses, and other similar establishments, including tourist guides and transports . . . . While its power to regulate the establishment, operation and maintenance of any entertainment or amusement facilities, and to prohibit certain forms of amusement or entertainment is provided under Section 458 (a) 4 (vii) of the Code, which reads as follows: Section 458. Powers, Duties, Functions and Compensation. (a) The sangguniang panlungsod, as the legislative body of the city, shall enact ordinances, approve resolutions and appropriate funds for the general welfare of the city and its inhabitants pursuant to Section 16 of this Code and in the proper exercise of the corporate powers of the city as provided for under Section 22 of this Code, and shall: . . . (4) Regulate activities relative to the use of land, buildings and structures within the city in order to promote the general welfare and for said purpose shall: . . . (vii) Regulate the establishment, operation, and maintenance of any entertainment or amusement facilities, including theatrical performances, circuses, billiard pools, public dancing schools, public dance halls, sauna baths, massage parlors, and other places for entertainment or amusement; regulate such other events or activities for amusement or entertainment, particularly those which tend to disturb the community or annoy the inhabitants, or require the suspension or suppression of the same; or, prohibit certain forms of amusement or entertainment in order to protect the social and moral welfare of the community. Clearly, with respect to cafes, restaurants, beerhouses, hotels, motels, inns, pension houses, lodging houses, and other similar establishments, the only power of the City Council to legislate relative thereto is to regulate them to promote the general welfare. The Code still withholds from cities the power to suppress and prohibit altogether the establishment, operation and maintenance of such establishments. It is well to recall the rulings of the Court in Kwong Sing v. City of Manila[106] that: The word regulate, as used in subsection (l), section 2444 of the Administrative Code, means and includes the power to control, to govern, and to restrain; but regulate should not be construed as synonymous with suppress or prohibit. Consequently, under the power to regulate laundries, the municipal authorities could make proper police regulations as to the mode in which the employment or business shall be exercised.[107] And in People v. Esguerra,[108] wherein the Court nullified an ordinance of the Municipality of Tacloban which prohibited the selling, giving and dispensing of liquor ratiocinating that the municipality is empowered only to regulate the same and not prohibit. The Court therein declared that: (A)s a general rule when a municipal corporation is specifically given authority or power to regulate or to license and regulate the liquor traffic, power to prohibit is impliedly withheld.[109] These doctrines still hold contrary to petitioners assertion[110] that they were modified by the Code vesting upon City Councils prohibitory powers. Similarly, the City Council exercises regulatory powers over public dancing schools, public dance halls, sauna baths, massage parlors, and other places for entertainment or amusement as found in the first clause of Section 458 (a) 4 (vii). Its powers to regulate, suppress and suspend such other events or activities for amusement or entertainment, particularly those which tend to disturb the community or annoy the inhabitants and to prohibit certain forms of amusement or entertainment in order to protect the social and moral welfare of the community are stated in the second and third clauses, respectively of the same Section. The several powers of the City Council as provided in Section 458 (a) 4 (vii) of the Code, it is pertinent to emphasize, are separated by semicolons (;), the use of which indicates that the clauses in which these powers are set forth are independent of each other albeit closely related to justify being put together in a single enumeration or paragraph.[111] These powers, therefore, should not be confused, commingled or consolidated as to create a conglomerated and unified power of regulation, suppression and prohibition.[112] The Congress unequivocably specified the establishments and forms of amusement or entertainment subject to regulation among which are beerhouses, hotels, motels, inns, pension houses, lodging houses, and other similar establishments (Section 458 (a) 4 (iv)), public dancing schools, public dance halls, sauna baths, massage parlors, and other places for entertainment or amusement (Section 458 (a) 4 (vii)). This enumeration therefore cannot be included as among other events or activities for amusement or entertainment, particularly those which tend to disturb the community or annoy the inhabitants or certain forms of amusement or entertainment which the City Council may suspend, suppress or prohibit. The rule is that the City Council has only such powers as are expressly granted to it and those which are necessarily implied or incidental to the exercise thereof. By reason of its limited powers and the nature thereof, said powers are to be construed strictissimi juris and any doubt or ambiguity arising out of the terms used in granting said powers must be construed against the City Council.[113] Moreover, it is a general rule in statutory construction that the express mention of one person, thing, or consequence is tantamount to an express exclusion of all others. Expressio unius est exclusio alterium. This maxim is based upon the rules of logic and the natural workings of human mind. It is particularly applicable in the construction of such statutes as create new rights or remedies, impose penalties or punishments, or otherwise come under the rule of strict construction.[114] The argument that the City Council is empowered to enact the Ordinance by virtue of the general welfare clause of the Code and of Art. 3, Sec. 18 (kk) of the Revised Charter of Manila is likewise without merit. On the first point, the ruling of the Court in People v. Esguerra,[115] is instructive. It held that:

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The powers conferred upon a municipal council in the general welfare clause, or section 2238 of the Revised Administrative Code, refers to matters not covered by the other provisions of the same Code, and therefore it can not be applied to intoxicating liquors, for the power to regulate the selling, giving away and dispensing thereof is granted specifically by section 2242 (g) to municipal councils. To hold that, under the general power granted by section 2238, a municipal council may enact the ordinance in question, notwithstanding the provision of section 2242 (g), would be to make the latter superfluous and nugatory, because the power to prohibit, includes the power to regulate, the selling, giving away and dispensing of intoxicating liquors. On the second point, it suffices to say that the Code being a later expression of the legislative will must necessarily prevail and override the earlier law, the Revised Charter of Manila. Legis posteriores priores contrarias abrogant, or later statute repeals prior ones which are repugnant thereto. As between two laws on the same subject matter, which are irreconcilably inconsistent, that which is passed later prevails, since it is the latest expression of legislative will.[116] If there is an inconsistency or repugnance between two statutes, both relating to the same subject matter, which cannot be removed by any fair and reasonable method of interpretation, it is the latest expression of the legislative will which must prevail and override the earlier.[117] Implied repeals are those which take place when a subsequently enacted law contains provisions contrary to those of an existing law but no provisions expressly repealing them. Such repeals have been divided into two general classes: those which occur where an act is so inconsistent or irreconcilable with an existing prior act that only one of the two can remain in force and those which occur when an act covers the whole subject of an earlier act and is intended to be a substitute therefor. The validity of such a repeal is sustained on the ground that the latest expression of the legislative will should prevail.[118] In addition, Section 534(f) of the Code states that All general and special laws, acts, city charters, decrees, executive orders, proclamations and administrative regulations, or part or parts thereof which are inconsistent with any of the provisions of this Code are hereby repealed or modified accordingly. Thus, submitting to petitioners interpretation that the Revised Charter of Manila empowers the City Council to prohibit motels, that portion of the Charter stating such must be considered repealed by the Code as it is at variance with the latters provisions granting the City Council mere regulatory powers. It is well to point out that petitioners also cannot seek cover under the general welfare clause authorizing the abatement of nuisances without judicial proceedings. That tenet applies to a nuisance per se, or one which affects the immediate safety of persons and property and may be summarily abated under the undefined law of necessity. It can not be said that motels are injurious to the rights of property, health or comfort of the community. It is a legitimate business. If it be a nuisance per accidens it may be so proven in a hearing conducted for that purpose. A motel is not per se a nuisance warranting its summary abatement without judicial intervention.[119] Notably, the City Council was conferred powers to prevent and prohibit certain activities and establishments in another section of the Code which is reproduced as follows: Section 458. Powers, Duties, Functions and Compensation. (a) The sangguniang panlungsod, as the legislative body of the city, shall enact ordinances, approve resolutions and appropriate funds for the general welfare of the city and its inhabitants pursuant to Section 16 of this Code and in the proper exercise of the corporate powers of the city as provided for under Section 22 of this Code, and shall: (1) Approve ordinances and pass resolutions necessary for an efficient and effective city government, and in this connection, shall: . . . (v) Enact ordinances intended to prevent, suppress and impose appropriate penalties for habitual drunkenness in public places, vagrancy, mendicancy, prostitution, establishment and maintenance of houses of ill repute, gambling and other prohibited games of chance, fraudulent devices and ways to obtain money or property, drug addiction, maintenance of drug dens, drug pushing, juvenile delinquency, the printing, distribution or exhibition of obscene or pornographic materials or publications, and such other activities inimical to the welfare and morals of the inhabitants of the city; . . . If it were the intention of Congress to confer upon the City Council the power to prohibit the establishments enumerated in Section 1 of the Ordinance, it would have so declared in uncertain terms by adding them to the list of the matters it may prohibit under the above-quoted Section. The Ordinance now vainly attempts to lump these establishments with houses of ill-repute and expand the City Councils powers in the second and third clauses of Section 458 (a) 4 (vii) of the Code in an effort to overreach its prohibitory powers. It is evident that these establishments may only be regulated in their establishment, operation and maintenance. It is important to distinguish the punishable activities from the establishments themselves. That these establishments are recognized legitimate enterprises can be gleaned from another Section of the Code. Section 131 under the Title on Local Government Taxation expressly mentioned proprietors or operators of massage clinics, sauna, Turkish and Swedish baths, hotels, motels and lodging houses as among the contractors defined in paragraph (h) thereof. The same Section also defined amusement as a pleasurable diversion and entertainment, synonymous to relaxation, avocation, pastime or fun; and amusement places to include theaters, cinemas, concert halls, circuses and other places of amusement where one seeks admission to entertain oneself by seeing or viewing the show or performances. Thus, it can be inferred that the Code considers these establishments as legitimate enterprises and activities. It is well to recall the maxim reddendo singula singulis which means that words in different parts of a statute must be referred to their appropriate connection, giving to each in its place, its proper force and effect, and, if possible, rendering none of them useless or superfluous, even if strict grammatical construction demands otherwise. Likewise, where words under consideration appear in different sections or are widely dispersed throughout an act the same principle applies.[120] Not only does the Ordinance contravene the Code, it likewise runs counter to the provisions of P.D. 499. As correctly argued by MTDC, the statute had already converted the residential ErmitaMalate area into a commercial area. The decree allowed the establishment and operation of all kinds of commercial establishments except warehouse or open storage depot, dump or yard, motor repair shop, gasoline service station, light industry with any machinery or funeral establishment. The rule is that for an ordinance to be valid and to have force and effect, it must not only be within the powers of the council to enact but the same must not be in conflict with or repugnant to the general law.[121] As succinctly illustrated in Solicitor General v. Metropolitan Manila Authority:[122] The requirement that the enactment must not violate existing law explains itself. Local political subdivisions are able to legislate only by virtue of a valid delegation of legislative power from the national legislature (except only that the power to create their own sources of revenue and to levy taxes is conferred by the Constitution itself). They are mere agents vested with what is called the power of subordinate legislation. As delegates of the Congress, the local government units cannot contravene but must obey at all times the will of their principal. In the case before us, the enactment in question, which are merely local in origin cannot prevail against the decree, which has the force and effect of a statute.[123] Petitioners contend that the Ordinance enjoys the presumption of validity. While this may be the rule, it has already been held that although the presumption is always in favor of the validity or reasonableness of the ordinance, such presumption must nevertheless be set aside when the invalidity or unreasonableness appears on the face of the ordinance itself or is established by proper evidence. The exercise of police power by the local government is valid unless it contravenes the fundamental law of the land, or an act of the legislature, or unless it is against public policy or is unreasonable, oppressive, partial, discriminating or in derogation of a common right.[124] Conclusion All considered, the Ordinance invades fundamental personal and property rights and impairs personal privileges. It is constitutionally infirm. The Ordinance contravenes statutes; it is discriminatory and unreasonable in its operation; it is not sufficiently detailed and explicit that abuses may attend the enforcement of its sanctions. And not to be forgotten, the City Council under the Code had no power to enact the Ordinance and is therefore ultra vires, null and void. Concededly, the challenged Ordinance was enacted with the best of motives and shares the concern of the public for the cleansing of the Ermita-Malate area of its social sins. Police power legislation of such character deserves the full endorsement of the judiciary we reiterate our support for it. But inspite of its virtuous aims, the enactment of the Ordinance has no statutory or constitutional authority to stand on. Local legislative bodies, in this case, the City Council, cannot prohibit the operation of the enumerated establishments under Section 1 thereof or order their transfer or conversion without infringing the constitutional guarantees of due process and equal protection of laws not even under the guise of police power. WHEREFORE, the Petition is hereby DENIED and the decision of the Regional Trial Court declaring the Ordinance void is AFFIRMED. Costs against petitioners. SO ORDERED. SECOND DIVISION BONIFACIO L. CAAL, SR., Petitioner, PUNO, J., Chairman, AUSTRIA-MARTINEZ, TINGA, and CHICO-NAZARIO, JJ. Promulgated: PEOPLE OF THE PHILIPPINES, Respondent. October 19, 2005 - versus CALLEJO, SR., G.R. No. 163181 Present:

x-----------------------------------------------------------------------------------------x DECISION CALLEJO, SR., J.: Before the Court is a petition for review on certiorari of the Decision[1] of the Court of Appeals (CA) in CA-G.R. CR No. 24496 as well as its Resolution[2] denying the motion for reconsideration thereof.

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The Antecedents Upon complaint of Daylinda P. Caal, Bonifacio L. Caal, Sr. was charged with Grave Oral Defamation in an indictment filed by the Chief of Police, Hinatuan, Surigao del Sur in the 7 th Municipal Circuit Trial Court (MCTC) of Hinatuan-Tagbina, Surigao del Sur. The Information reads: That on or about 8:30 oclock in the morning of July 25, 1996, at the Municipal Circuit Trial Court Hall, Hinatuan, Surigao del Sur, Philippines and within the jurisdiction of this Honorable Court, the above- named accused with deliberate intent of bringing one Daylinda Caal, into discredit, disrepute and contempt, did then and there willfully, unlawfully and feloniously and publicly speak and utter against said Daylinda Caal the following insulting words and expressions, to wit: AYAW MO KAHADLOK SA TESTIGOS NI DAYLINDA KAY WALAY BANCA-AGAN, NAHADLOK KAW KANG DAYLINDA, NABUHI ITON SA PANGAWAT, NABUHI ITON SA PANGAWAT which if translated in English language will mean (You afraid to the witness of Daylinda who had no how, why you afraid to Daylinda, she live from stealing, she is a long time thieves) and other words of similar imports and as a result said defamatory utterance and expressions caused mental anguish, serious anxiety, social humiliation, and besmirched reputation, thereby giving rise to a moral damage in the amount of P10,000.00. CONTRARY TO LAW: under Article 358 of the Revised Penal Code.[3]

Upon his arraignment on November 20, 1997, with the assistance of Atty. Elias C. Irizari, as counsel de parte, Bonifacio pleaded not guilty to the charge against him.[4] The trial court thereafter set and conducted the trial of the case on the merits. To prove Bonifacios guilt, the prosecution presented two (2) witnesses, namely, Daylinda and Emelinda A. Kimilat. Emelinda declared that at around 8:30 a.m. of July 25, 1996, while she was outside the courthouse of the 7 th MCTC of Hinatuan-Tagbina, Surigao del Sur, she saw Bonifacio and clearly overheard him say in Filipino: Why should you be afraid of Daylindas witnesses, they are all nincompoops. Daylinda is a thief! She has been long eking out a living as a thief. A number of persons outside the courthouse also heard the utterances of Bonifacio.[5] For her part, Daylinda recalled that upon hearing Bonifacios offensive remarks, she felt utterly embarrassed and downright humiliated. She went inside the courtroom and simply cried her heart out.[6] After the prosecution had rested its case, Bonifacio, through his new counsel, Atty. Remedios R. Alvizo, manifested that he would be filing a demurrer to evidence within 15 days. None was, however, filed. The trial court then set the reception of the evidence for the defense on November 12, 1998. On the said date, the trial was postponed as the witness for the defense, Carmelita Salas, was absent. [7] The trial was reset to December 4, 1998. On the latter date, Bonifacios counsel asked for a postponement and since the fiscal was also absent, the trial was reset once more to January 29, 1999.[8] At the scheduled hearing on January 29, 1999, Atty. Alvizo was again nowhere in sight, prompting the prosecution to orally move that the case be submitted for decision on the ground that the defense was deemed to have waived its right to present evidence. The trial court granted the motion over Bonifacios objection.[9] However, Bonifacio failed to file any motion for the reconsideration of the said Order. The MCTC thereafter rendered judgment on July 2, 1999, the decretal portion of which reads: IN VIEW OF THIS CIRCUMSTANCE, this court found the accused to be guilty beyond reasonable doubt of the crime of Grave Oral Defamation and he is hereby sentenced to suffer the penalty of six (6) months and one (1) day to two (2) years and four (4) months and one (1) day, and to pay moral damages in the amount of P5,000.00, compensatory damages in the amount of P2,000.00 and to pay the costs. The accused is hereby ordered to suffer the penalty of imprisonment he having sentenced by this court in the previous case but he had filed a petition for probation. SO ORDERED.[10] Bonifacio did not file any motion for the reconsideration of the decision, and instead appealed such ruling to the Regional Trial Court (RTC). On August 3, 2000, the RTC rendered judgment affirming the decision of the MCTC. The decretal portion reads: After careful review of the record of this case, the trial court was right in declaring accused to have waived their ( sic) right to present evidence after giving said accused several settings for the presentation of evidence. The court is convinced that the aforesaid penalty was properly imposed especially because the accused has been previously convicted. SO ORDERED.[11] The case was elevated to the CA via petition for review, and the appellate court affirmed in toto the RTCs decision. The fallo of the CA decision reads: WHEREFORE, the Petition is DENIED. The Decision of the Regional Trial Court, Branch 29 of Bislig, Surigao del Sur is AFFIRMED. Costs against accused-petitioner. SO ORDERED.[12] Bonifacios motion for reconsideration of the decision was denied by the CA. The petitioner is now before this Court, alleging that he was deprived of his right to due process, and pleads that the decision under review be vacated and the case remanded to the MCTC for reception of his evidence. The Court initially denied the petition in a Resolution[13] dated June 16, 2004, but upon motion for reconsideration of the petitioner, the petition was reinstated on September 27, 2004.[14] The petitioner alleges that the CA gravely erred in sustaining his conviction. He insists that he was unjustly deprived of his right to adduce evidence in his behalf due to the failings of his counsel, Atty. Alvizo, who was always absent. He argues that at the MCTC, he was invariably present and ready to present his evidence; it was his counsel that did him in and he should not be made to suffer for that. He further alleges that the appellate court failed to appreciate the true facts of his case. The petition is denied for lack of merit. The Court has laid down the criterion to determine whether an accused in a criminal case has been properly accorded due process of law in Siquian v. People:[15] [I]f an accused has been heard in a court of competent jurisdiction and proceeded against under the orderly processes of law, and only punished after inquiry and investigation, upon notice to him, with an opportunity to be heard, and a judgment awarded within the authority of a constitutional law, then he has had due process of law. In the present case, the petitioner was afforded the chance to adduce evidence in his behalf, but due to the unjustifiable failure of his witness or/and counsel to appear at the hearings, the trial court declared that the case was deemed submitted for decision and considered only the evidence presented by the prosecution. The petitioner even failed to file any motion for the reconsideration of the said Order. The petitioners mere physical presence during the scheduled hearings was not enough. What is equally important is his readiness to present his evidence, lest he will be deemed to have waived his right to adduce the same. Contrary to the allegations of the petitioner, he was fully accorded the opportunity to present his evidence first, on November 12, 1998; second, on December 4, 1998; and then on January 29, 1999. Thus, his claim that he was denied due process is belied by the records, which granted him continuances for the first two hearing dates due to the absence of either his witness and/or counsel. In all the three scheduled hearings and despite due notice he failed to present any contrary evidence to controvert that of the prosecution.

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The petitioners attempt to shift the blame to his counsel is futile. The rule in this jurisdiction is that the client is bound by the negligence or failings of his counsel.[16] A client is bound by the action of his counsel in the conduct of a case and cannot be heard to complain that the result might have been different had such counsel proceeded differently.[17] If the lawyers mistake and negligence were to be admitted as reasons for reopening cases, there would never be an end to a suit so long as new counsel could be employed who could allege and show that prior counsel had not been sufficiently diligent or experienced or learned.[18] While this rule admits of exceptions, the petitioners sweeping justification failed to make out a case of excusable negligence for his counsels non-appearance at the January 29, 1999 hearing. The Court notes further that the petitioner could have dispensed with the services of his counsel de parte and engaged the services of another or new counsel to represent him. He did not. The Court likewise rejects the petitioners contention that the respondent failed to prove his guilt for the crime charged beyond reasonable doubt. It is axiomatic that in criminal cases, the prosecution has to prove the guilt of the accused beyond reasonable doubt. Indeed, by constitutional fiat, the burden of proof falls on the prosecution. Thus, a finding of guilt must rest on the strength of the prosecutions own evidence, and not on the weakness or absence of evidence for the defense.[19] Emelinda A. Kimilat, who was present during the incident, identified the petitioner and gave a blow-by-blow account of what happened. She testified that petitioner called Daylinda a thief before a crowd: Q A Q A Q A Q A While you were at the outside (sic) of Hintuan Municipal Circuit Trial Court, was there any unusual incident that happened during that time 8:30 oclock in the morning? There was. Tell us what was that? Bonifacio Caal uttered and said, why are you afraid of the witnesses of Daylinda Caal where in fact they are ignorant and they have no knowledge. Was there any utterances made by Caal aside from that? There was also. What were those utterances? Are you afraid of Daylinda she had been living ever since of stealing, she is really a thief.[20]

To say that Daylinda is a thief is irrefragably grave oral defamation. This imputes to her a crime that is dishonorable or contemptuous. However, the Court finds that the penalty imposed on the petitioner is erroneous. The penalty imposed by Article 358 of the Revised Penal Code, as amended, for grave oral defamation is arresto mayor in its maximum period to prision correccional in its minimum period which has a duration of from four (4) months and one (1) day to two (2) years and four (4) months. In order to fix the minimum term of the penalty required by the Indeterminate Sentence Law,[21] the imposable penalty should be reduced by one degree arresto mayor, in its medium and minimum period, which has a range of from one (1) month and one (1) day to four (4) months. The maximum of the penalty imposed on the accused is to be taken from the penalty imposed by the law taking into account the modifying circumstances attending the commission of the offense for which the accused is convicted. In this case, the petitioner was sentenced to an indeterminate penalty of from six (6) months and one (1) day as minimum to two (2) years and four (4) months and one (1) day, on the trial courts premise that the petitioner had been convicted for another crime for which he filed a petition for probation. However, we have reviewed the records of the CA inclusive of the decision of the MCTC, and there is no such allegation in the Information, nor is there any showing that the respondent adduced in evidence any decision convicting the petitioner by final judgment of any other crime, or that he filed a petition for probation therein. Thus, we find and so hold that the petitioner should be sentenced to suffer a straight penalty of six (6) months. The award of P2,000.00 as compensatory damages should be deleted for lack of factual basis. To be entitled to actual and compensatory damages, there must be competent proof constituting evidence of the actual amount thereof.[22] The Court affirms the trial courts award of moral damages in favor of the private complainant. Article 2219(7) of the New Civil Code allows the recovery of moral damages in case of libel, slander or any other form of defamation. This provision establishes the right of an offended party in a case for oral defamation to recover from the guilty party damages for injury to his feelings and reputation.[23] It must be remembered that every defamatory imputation is presumed to be malicious, even if it be true, if no good intention and justifiable motive for making it is shown. And malice may be inferred from the style and tone of publication subject to certain exceptions which are not present in the case at bar.[24] Indeed, calling Daylinda a thief is defamation against her character and reputation sufficient to cause her embarrassment and social humiliation. Daylinda testified to the feelings of shame and humiliation she suffered as a result of the incident complained of.[25] WHEREFORE, the Decision of the Court of Appeals in CA-G.R. CR No. 24496 is AFFIRMED WITH the MODIFICATION that petitioner Bonifacio L. Caal, Sr. is SENTENCED to a straight penalty of six (6) months of imprisonment. He is ORDERED to pay Daylinda P. Caal P5,000.00 as moral damages. The award of compensatory damages is DELETED. Costs against the petitioner. SO ORDERED. SECOND DIVISION JOSE U. ONG and NELLY M. ONG, Petitioners, G.R. No. 126858 Present: PUNO, J., Chairman, AUSTRIA-MARTINEZ , CALLEJO, SR., TINGA, and CHICO-NAZARIO, JJ. Promulgated: September 16, 2005 x --------------------------------------------------------------------x DECISION TINGA, J.: This Petition for Certiorari,[1] dated December 13, 1996 seeks the nullification of the Resolutions of the Sandiganbayan dated August 18, 1994[2] and October 22, 1996.[3] The first assailed Resolution denied petitioners motion to dismiss the petition for forfeiture filed against them, while the second questioned Resolution denied their motion for reconsideration. The antecedents are as follows:

- versus SANDIGANBAYAN (THIRD DIVISION) and OFFICE OF THE OMBUDSMAN, Respondents.

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Congressman Bonifacio H. Gillego executed a Complaint-Affidavit[4] on February 4, 1992, claiming that petitioner Jose U. Ong, then Commissioner of the Bureau of Internal Revenue (BIR), has amassed properties worth disproportionately more than his lawful income. The complaint pertinently states: In his Statement of Assets and Liabilities as of December 31, 1989 (Annex A), Commissioner Jose U. Ong declared P750,000.00 as his cash on hand and in banks. Within a short period thereafter, he was able to acquire prime real estate properties mostly in the millionaires choice areas in Alabang, Muntinglupa, Metro Manila costing millions of pesos as follows: 1. A house and lot in Alabang bought on October 9, 1990 for P5,500,000.00, now titled in the name of Jose U. Ong under Transfer Certificate of Title No. 172168, Registry of Deeds for Makati (Annexes B & C); 2. Another lot in Alabang bought for P5,700,000.00, now titled in the name of Jose U. Ong and Nelly M. Ong under Transfer Certificate of Title No. 173901. Registered on January 25, 1991 in the Registry of Deeds for Makati (Annex D);

3. Still another lot in Alabang bought for P4,675,000.00 on January 16, 1991, now titled in the name of spouses Jose U. Ong and Nelly Mercado Ong under Transfer Certificate of Title No. 173760 in the Registry of Deeds for Makati (Annexes E and F); 4. Again, another lot in Alabang bought on December 3, 1990 for P5,055,000.00, now titled in the name of the Children of Commissioner Ong and his son-in-law under transfer Certificate of Title No. 173386 in the Registry of Deeds for Makati (Annex G and H); 5. Again, a lot in Makati bought for P832,000.00 on July 1, 1990, now titled in the name of the Daughter of Commissioner Ong and his son-in-law under transfer certificate of title No. 171210 in the Registry of Deeds of Makati (Annex I & J). The above documented purchases of Commissioner Ong alone which are worth millions of pesos are obviously disproportionate to his income of just a little more than P200,000.00 per annum.[5] Ong submitted an explanation and analysis of fund sourcing, reporting his net worth covering the calendar years 1989 to 1991 and showing his sources and uses of funds, the sources of the increase in his net worth and his net worth as of December 13, 1991.[6] The Director of the Fact-Finding and Intelligence Bureau of the Office of the Ombudsman (Ombudsman) ordered the conduct of a pre-charge investigation on the matter. A Fact-Finding Report[7] was promptly submitted with the following recommendation: 1. Forfeiture Proceedings be instituted against the properties of Jose U. Ong which he illegitimately acquired in just a span of two (2) years as Commissioner of the Bureau of Internal Revenue. Such properties are briefly specified as follows: a) b) c) d) House and lot in Ayala Alabang bought on October 9, 1990 for P5.5 million under TCT No. 172168 of the Registry of Deeds for Makati, Metro Manila; Lot in Ayala Alabang bought on January 23, 1991 for P5.5 million under TCT No. 173901; Lot in Ayala Alabang bought on January 16, 1991 for P4,675,000.00 under TCT No. 173760; Lot in Ayala Alabang bought on December 3, 1990 for P5,055,000.00 under TCT No. 173386; and

e) Condominium Unit 804, located at the eight floor of the Asian Mansion, bought for P744,585.00 under CCT No. 20735 of the Registry of Deeds for Makati, Metro Manila.[8] Finding that a preliminary inquiry under Sec. 2 of Republic Act No. 1379 (RA 1379) should be conducted, Ong was directed to submit his counter-affidavit and other controverting evidence in the Order[9] dated November 18, 1992. For this purpose, Ong was furnished copies of Gillegos Complaint-Affidavit and the Fact-Finding Report, with annexes and supporting documents. Ong filed a Counter-Affidavit[10] dated December 21, 1992, submitting his Statement of Assets and Liabilities for the years 1988-1990, income tax return for 1988, bank certificate showing that he obtained a loan from Allied Banking Corporation (Allied Bank), certificate from SGV & Co. (SGV) showing that he received retirement benefits from the latter, a document entitled Acknowledgement of Trust showing that he acquired one of the questioned assets for his brother-in-law, and other documents explaining the sources of funds with which he acquired the questioned assets. In view of Ongs arguments, the Ombudsman issued another Order[11] dated February 11, 1993, the pertinent portions of which state: Results of the subpoena duces tecum ad testificandum issued to Allied Banking Corporation, Sycip, Gorres, Velayo & Co., including the BIR insofar as it pertains to the production of the documents that respondents claimed in justification of the sources of his funding/income, proved negative since Allied Bank could not produce documents that would show availment of the loan, nor could SGV itemize the documents/vouchers that would, indeed signify the grant and receipt of the claimed retirement benefits, as well as the BIR insofar as it pertains on respondents filed income tax returns for the years 1987, 1988, 1989, 1990 and 1991.

Such being the case, and in line with respondents defense as claimed in his counter-affidavit that all his acquisitions were from legitimate and valid sources based from his (respondents) salary and other sources of income, and he being the recipient thereof, copies of which he is entitled as a matter of right and party recipient on the claimed loan and retirement benefits, respondent Jose U. Ong, is hereby directed to submit in writing within a period of fifteen (15) days from receipt of this ORDER, the following, namely:-a) all documents in his possession relevant to the approval by the Allied Banking Corporation on the P6.5 million term loan including documents in availment of the loan such as the execution of promissory note/s, execution of real/chattel mortgage/s and the fact of its registration with the Register of Deeds, credit agreements, receipt of payment on amortization of the loan, if any, and such other pertinent documents that will show existence and availment of the loan granted; b) All documents in his possession that he was indeed granted by SGV and Co. P7.8 million as retirement benefits including such additional benefits as claimed as evidenced by vouchers, accounting records, computation of benefits, that would signify fact of receipt of the claimed retirement benefits; c) All documents showing the money market placements such as but not limited to the (a) confirmation sale on the placements and (b) confirmation of the purchase on the placements; d) Income tax returns as filed in the Bureau of Internal Revenue for the years, 1987, 1988, 1989, 1990 and 1991.

Failure of the respondent to comply with this ORDER within the period hereinabove prescribed shall be deemed a waiver on his part to submit the required controverting evidence and that he has no evidence on hand to show proof on the existence of the claimed defenses as above set forth and that this case shall be considered for resolution without further notice.[12]

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Instead of complying with the Order, Ong filed a Motion,[13] dated February 17, 1993 for its recall, the voluntary inhibition of the handling investigators, and reassignment of the case. Ong objected to the proceedings taken thus far, claiming that he was not notified of the subpoenas issued to SGV and Allied Bank requiring them to substantiate Ongs claims. The Order allegedly violates his right to due process and to be presumed innocent because it requires him to produce evidence to exculpate himself. A Resolution[14] dated May 31, 1993 was thereafter issued finding that Ong miserably failed to substantiate his claim that the sources of financing his said acquisition came from his other lawful income, taking into account his annual salary of P200,000.00 more or less and his cash standing at the time, even without considering his normal expenses befitting his stature and position in the Government, as well as his acquisition of movable properties for the calendar year[s] 1989 to 1991, totaling P930,000.00, and concluding that the properties acquired by him in a matter of ELEVEN (11) MONTHS from October, 1990 to September, 1991, during his incumbency as Commissioner of the Bureau of Internal Revenue, are manifestly and grossly disproportionate to his salary as a public official and his other lawful income.[15] The Resolution directed the filing by the Ombudsman, in collaboration with the Office of the Solicitor General (OSG), of a petition for recovery of illgotten/unexplained wealth under RA 1379, in relation to RAs 3019 and 6770, against Ong and all other persons concerned. The Resolution was reviewed by the Office of the Special Prosecutor (Special Prosecutor) which concurred with the findings and recommendation of the Ombudsman.[16] A Petition[17] dated November 15, 1993 for forfeiture of unlawfully acquired property was accordingly filed before the Sandiganbayan by the Republic, through the Special Prosecutor and the Deputy Ombudsman for Luzon,[18] against Ong and his wife, petitioner Nelly Ong, and docketed as Civil Case No. 0160. The Petition alleged that the total value of the questioned assets is P21,474,585.00 which is grossly disproportionate to Ongs lawful income from his public employment and other sources amounting to P1,060,412.50, considering that Nelly Ong has no visible means of income. This circumstance allegedly gave rise to the presumption under Sec. 2 of RA 1379 that the questioned properties were unlawfully acquired. In its Order[19] dated November 17, 1993, the Sandiganbayan directed the issuance of a writ of preliminary attachment against the properties of petitioners. The writ, issued on November 18, 1993, was duly served and implemented as shown in the Sheriffs Return dated December 1, 1993.[20] Petitioners Jose and Nelly Ong filed an Answer[21] dated January 27, 1994, denying that their lawful income is grossly disproportionate to the cost of the real properties they acquired during the incumbency of Ong as BIR Commissioner. According to them, the Special Prosecutor and the Ombudsman intentionally failed to consider the retirement and separation pay Ong received from SGV and other lawful sources of funds used in the acquisition of the questioned properties. They presented several affirmative defenses, such as the alleged deprivation of their right to due process considering that no preliminary investigation was conducted as regards Nelly Ong, and the nullity of the proceedings before the Ombudsman because the latter, who acted both as investigator and adjudicator in the determination of the existence of probable cause for the filing of the case, will also prosecute the same. Moreover, the Petition also allegedly failed to state a cause of action because RA 1379 is unconstitutional as it is vague and does not sufficiently define ill-gotten wealth and how it can be determined in violation of the non-delegation of legislative power provision, and insofar as it disregards the presumption of innocence by requiring them to show cause why the properties in question should not be declared property of the state. They also objected to the fact that they were not notified of the Resolution directing the filing of the case and were thereby prevented from filing a motion for reconsideration. A hearing of petitioners affirmative defenses was conducted as in a motion to dismiss, after which the Sandiganbayan issued the assailed Resolution dated August 18, 1994. The Sandiganbayan ruled that a petition for forfeiture is an action in rem, civil in character. As such, the participation of Nelly Ong in the inquiry to determine whether the properties acquired by her husband are manifestly disproportionate to his salary and other lawful income is not a mandatory requirement. Neither is the conduct of a preliminary investigation as regards Nelly Ong required. Further, Nelly Ong was only impleaded in the petition as a formal party. The court held that the power of the Ombudsman to investigate and prosecute unexplained wealth cases is founded on RAs 1379, 3019 and 6770. The Sandiganbayan, moreover, declared that the Petition sufficiently states a cause of action. Petitioners filed a Motion for Reconsideration[22] dated September 11, 1994, averring that although a forfeiture proceeding is technically a civil action, it is in substance a criminal proceeding as forfeiture is deemed a penalty for the violation of RA 1379. Hence, Nelly Ong is entitled to a preliminary investigation. To proceed against her conjugal share of the questioned assets without giving her the opportunity to present her side in a preliminary investigation violates her right to due process. Petitioners reiterated their argument that they were not notified of the Resolution directing the filing of the petition for forfeiture and were consequently deprived of their right to file a motion for reconsideration under RA 6770 and pertinent rules. The Sandiganbayan issued the second assailed Resolution dated October 22, 1996, directing the Ombudsman to furnish petitioners with a copy of the Resolution to file the forfeiture case and giving them a period of five (5) days from receipt of the Resolution within which to file a motion for reconsideration. The Ombudsman was given a period of sixty (60) days to resolve the motion for reconsideration and to report to the court the action it has taken thereon. Instead of awaiting the Ombudsmans compliance with the Resolution, petitioners filed the instant Petition for Certiorari contending that the Sandiganbayan gravely abused its discretion in ruling that Nelly Ong is not entitled to preliminary investigation; failing to annul the proceedings taken before the Ombudsman despite the alleged bias and prejudice exhibited by the latter and the disqualification of the Ombudsman from acting both as prosecutor and judge in the determination of probable cause against petitioners; and failing to declare RA 1379 unconstitutional. The OSG filed a Comment[23] dated December 10, 1997, averring that the reason why Nelly Ong was not made a party to the proceedings before the Ombudsman is because her husband never mentioned any specific property acquired solely and exclusively by her. What he stated was that all the acquisitions were through his own efforts. Hence, the Sandiganbayan correctly held that Nelly Ong is a mere formal party.

Furthermore, the presumption of innocence clause of the Constitution refers to criminal prosecutions and not to forfeiture proceedings which are civil actions in rem. The Constitution is likewise not violated by RA 1379 because statutes which declare that as a matter of law a particular inference follows from the proof of a particular fact, one fact becoming prima facie evidence of another, are not necessarily invalid, the effect of the presumption being merely to shift the burden of proof upon the adverse party. Neither is the constitutional authority of the Supreme Court to promulgate rules concerning the protection and enforcement of constitutional rights, pleading, practice and procedure in all courts violated by RA 1379 merely by authorizing the OSG to grant immunity from criminal prosecution to any person who testifies to the unlawful manner in which a respondent has acquired any property. There is no showing that the OSG or the Ombudsman is about to grant immunity to anybody under RA 1379. At any rate, the power to grant immunity in exchange for testimony has allegedly been upheld by the Court.

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The OSG further argued that the Ombudsman did not exhibit any bias and partiality against Ong. It considered his claim that he received retirement benefits from SGV, obtained a loan from Allied Bank, and had high yielding money market placements, although it found that these claims were unsubstantiated based on its investigation. Moreover, the sending of subpoenas to SGV and Allied Bank was in accordance with the powers of the Ombudsman under RA 6770. The OSG likewise alleged that RA 1379 is not vague as it defines legitimately acquired property and specifies that the acquisition of property out of proportion to the legitimate income of a public officer is proscribed. Petitioners filed a Reply to Comment[24] dated April 1, 1998, reiterating their arguments. In the Resolution[25] dated April 14, 1999, the Court gave due course to the petition and required the parties to submit their respective memoranda. Accordingly, petitioners filed their Memorandum[26] dated June 29, 1999, while the OSG submitted its Memorandum[27] dated September 27, 1999. The Special Prosecutor submitted its own Memorandum[28] dated June 20, 1999. We deny the petition.

Petitioners contend that Nelly Ong was denied due process inasmuch as no separate notices or subpoena were sent to her during the preliminary investigation conducted by the Ombudsman. They aver that Nelly Ong is entitled to a preliminary investigation because a forfeiture proceeding is criminal in nature. On the other hand, the OSG and the Ombudsman contend that Nelly Ong is not entitled to preliminary investigation, first, because forfeiture proceedings under RA 1379 are in the nature of civil actions in rem and preliminary investigation is not required; second, because even assuming that the proceeding is penal in character, the right to a preliminary investigation is a mere statutory privilege which may be, and was in this case, withheld by law; and third, because a preliminary investigation would serve no useful purpose considering that none of the questioned assets are claimed to have been acquired through Nelly Ongs funds. In Republic v. Sandiganbayan,[29] we ruled that forfeiture proceedings under RA 1379 are civil in nature and not penal or criminal in character, as they do not terminate in the imposition of a penalty but merely in the forfeiture of the properties illegally acquired in favor of the State. Moreover, the procedure outlined in the law is that provided for in a civil action, viz: Sec. 3. The petition.The petition shall contain the following information: (a) The name and address of the respondent. (b) The public office or employment he holds and such other public officer or employment which he has previously held. (c) The approximate amount of property he has acquired during his incumbency in his past and present offices and employments. (d) A description of said property, or such thereof as has been identified by the Solicitor General. (e) The total amount of his government salary and other proper earnings and incomes from legitimately acquired property, and (f) Such other information as may enable the court to determine whether or not the respondent has unlawfully acquired property during his incumbency. Sec. 4. Period for the answer.The respondent shall have a period of fifteen days within which to present his answer. Sec. 5. Hearing.The court shall set a date for a hearing which may be open to the public, and during which the respondent shall be given ample opportunity to explain, to the satisfaction of the court, how he has acquired the property in question. Sec. 6. Judgment.If the respondent is unable to show to the satisfaction of the court that he has lawfully acquired the property in question, then the court shall declare such property, forfeited in favor of the State, and by virtue of such judgment the property aforesaid shall become property of the State: Provided, that no judgment shall be rendered within six months before any general election or within three months before any special election. The court may, in addition, refer this case to the corresponding Executive Department for administrative or criminal action, or both. [Emphasis supplied.] Hence, unlike in a criminal proceeding, there is to be no reading of the information, arraignment, trial and reading of the judgment in the presence of the accused.[30] In the earlier case of Cabal v. Kapunan,[31] however, we declared that forfeiture to the State of property of a public official or employee partakes of the nature of a penalty and proceedings for forfeiture of property, although technically civil in form, are deemed criminal or penal. We clarified therein that the doctrine laid down in Almeda v. Perez[32] that forfeiture proceedings are civil in nature applies purely to the procedural aspect of such proceedings and has no bearing on the substantial rights of the respondents therein. This ruling was reiterated in Katigbak v. Solicitor General,[33] where we held that the forfeiture of property provided for in RA 1379 is in the nature of a penalty. It is in recognition of the fact that forfeiture partakes the nature of a penalty that RA 1379 affords the respondent therein the right to a previous inquiry similar to a preliminary investigation in criminal cases. Preliminary investigation is an inquiry or proceeding to determine whether there is sufficient ground to engender a well-founded belief that a crime has been committed and the respondent is probably guilty thereof, and should be held for trial. Although the right to a preliminary investigation is not a fundamental right guaranteed by the Constitution but a mere statutory privilege, it is nonetheless considered a component part of due process in criminal justice.[34] It is argued, however, that even if RA 1379 is considered a criminal proceeding, Nelly Ong is still not entitled to a preliminary investigation because the law itself withholds such right from a respondent who is not himself or herself a public officer or employee, such as Nelly Ong. RA 1379, entitled An Act Declaring Forfeiture in Favor of the State of Any Property Found to Have Been Unlawfully Acquired by Any Public Officer or Employee and Providing for the Procedure Therefor, expressly affords a respondent public officer or employee the right to a previous inquiry similar to preliminary investigation in criminal cases, but is silent as to whether the same right is enjoyed by a co-respondent who is not a public officer or employee. Sec. 2 thereof provides: Sec. 2. Filing of petition.Whenever any public officer or employee has acquired during his incumbency an amount of property which is manifestly out of proportion to his salary as such public officer or employee and to his other lawful income and the income from legitimately acquired property, said property shall be presumed prima facie to have been unlawfully acquired. The Solicitor General, upon complaint by any taxpayer to the city or provincial fiscal who shall conduct a previous inquiry similar to preliminary investigations in criminal cases and shall certify to the Solicitor General that there is reasonable ground to believe that there has been committed a violation of this Act and the respondent is probably guilty thereof, shall file, in the name and on behalf of the Republic of the Philippines, in the Court of First Instance of the city or province where said public officer or employee resides or holds

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office, a petition for a writ commanding said officer or employee to show cause why the property aforesaid, or any part thereof, should not be declared property of the State: Provided, That no such petition shall be filed within one year before any general election or within three months before any special election.[Emphasis supplied.] Is this silence to be construed to mean that the right to a preliminary investigation is withheld by RA 1379 from a co-respondent, such as Nelly Ong, who is not herself a public officer or employee? The answer is no. It is a significant fact in this case that the questioned assets are invariably registered under the names of both Jose and Nelly Ong owing to their conjugal partnership. Thus, even as RA 1379 appears to be directed only against the public officer or employee who has acquired during his incumbency an amount of property which is manifestly out of proportion to his salary as such public officer or employee and his other lawful income and the income from legitimately acquired property, the reality that the application of the law is such that the conjugal share of Nelly Ong stands to be subjected to the penalty of forfeiture grants her the right, in line with the due process clause of the Constitution, to a preliminary investigation. There is in this case, however, another legal complexion which we have to deal with. As the OSG noted, there is nothing in the affidavits and pleadings filed by petitioners which attributes the acquisition of any of the questioned assets to Nelly Ong. In his Counter-Affidavit, Ong explained that the questioned assets were purchased using his retirement benefits from SGV amounting to P7.8 Million, various money market placements, and loan from Allied Bank in the amount of P6.5 Million. He averred: 6. To fully explain the valid and legal acquisition of the foregoing listed property pointing out the sources of funding, circumstances and details of acquisition, the following information is related: A. As to the acquisition of the lot covered by TCT No. 172168, located at Ayala Alabang, Muntinlupa, Metro Manila, for P5,500,000.00 on October 9, 1990. Respondents sources for the P5,500,000.00 were: a. Interest from his money market placements up to September 30, 1990 --------------P2,404,643 b. Partial liquidation of money market placements -------------------------------------------------P3,095,357 Total -----------------------------------------P5,500,000 A brief historical narration of the money placements made by Respondent is included in the Report on the Statement of Net Worth of Com. Jose U. Ong Calendar Year 1989 to 1991, submitted by him to the Office of the Ombudsman, on or about March 24, 1992. After the acquisition of the above property, Respondents money market placements were reduced to P4,365,834 (inclusive of interest which was not used to finance the above acquisition, and which remaining balance was rolled over as part of the placements. B. As to the acquisition of the lot covered by TCT No. 173386, located at Ayala Alabang, Muntinlupa, Metro Manila, on December 3, 1990, for P5,055,000.00. Respondent was offered this lot, and finding the same to be a good investment, he obtained a loan from the Allied Banking Corporation for P6,500,000.00. P5,500,000 was used by him in the purchase of the above property. Respondents credit worthiness is self evident from his Statement of Assets and Liabilities as of end of December, 1989 where his net worth is duly reflected to be P10.9 Million. Xerox copy of the Certification executed by the Corporate Secretary of Allied Banking Corporation attesting to the grant of a five (5) year Term Loan of P6.5 Million pesos to Respondent on October 24, 1990, is attached and incorporated as Annex 3. C. As to the acquisition of the lot covered by TCT No. 173760, located at Ayala Alabang, Muntinlupa, Metro Manila, on January 16, 1991, for P4,675,000.00. After the acquisition of the property described in the next preceding sub-paragraph B, Respondent had available investible funds, money market placements, in the total sum of P5,894,815.00, the details of which are as follows:

Balance of Money Market placements after acquisition of the property covered by TCT No. 173386 ------------ 4,365,834.00 Interest earned in the above money market placements up to December 31, 1990 ------------------------ 83,981.00 Unused portion of the loan of P6.5 Million ---.P1,445,000.00 Total --------------------------- ..P5,894,815.00 From the foregoing balance of P5,894,815.00, came the P4,375,000.00 with which Respondent purchased the real property covered by TCT No. 173760. There remained a balance of P1,219,815.00. D. As to the acquisition in Respondents name of the lot at Ayala Alabang, Muntinlupa, Metro Manila, covered by TCT No. 173901, on July 1, 1990.

This is an acquisition that had to be made in Respondents name for the benefit of Hamplish D. Mercado (respondents brother-in-law) and Florentina S. Mercado, Filipino/Americans, both residents of Persippany, New Jersey, U.S.A. The funding of this purchase came from Hamplish D. Mercado who previously left funds with Respondent for the purpose of acquiring suitable property where the Mercado spouses could stay when they return to the Philippines upon retirement. Due to circumstances prevailing at the time when the sale was executed, it was done in the name of Respondent and his wife. Respondent immediately thereafter executed an Acknowledgment of Trust stating the aforementioned fact, duly notarized under date of 5 February 1991. Respondent has likewise executed and signed a Deed of Absolute Sale, confirming the truth of all the foregoing. Xerox copy of the said Acknowledgment of Trust dated February 5, 1991, and the duly signed Deed of Absolute Sale still undated, are hereto attached as Annexes 4 and 4-A, respectively. E. As to the alleged acquisition of the lot at Makati, Metro Manila, covered by TCT No. 171210 on July 1, 1990 for P832,000.00.

Regarding the aforementioned alleged acquisition, there was even an acknowledgment of error in the very making of the charge. Suffice it just to say that the Fact-Finding Report itself stated, Hence, the accusation that it was Com. Ong who provided funds for such acquisition is DEVOID of merit. F. As to the acquisition of Condominium Unit covered by CCT No. 20785.

Though not included in the Complaint-Affidavit, this was added by Investigator Soguilon, and who unilaterally and arbitrarily declared its acquisition by Respondent as coming from illegal means without affording Respondent his constitutional right to due process. Had respondent been afforded the opportunity to comment on the acquisition of subject Condominium Unit, he could have readily explained the purchase price of P744,585.00. Under No. 6-

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C of this statement, it appears that there still remained an unused balance of P1,219,815.60. Thus, even Respondents remaining investible funds easily covered the purchase price. He acknowledges the unintentional omission of the Condominium Unit in the listing of the same in his Statements of Assets and Liabilities. However, as explained in the preceding paragraph the acquisition cost of P744,585.00 is well within his readily available balance for investment after the acquisition of the property covered by TCT No. 173760, which is P1,219,815.60.[35]

Even as petitioners denied the allegation in the petition for forfeiture that Nelly Ong has no visible means of income with which she could have purchased the questioned assets, there is neither indication nor pretense that Nelly Ong had a hand in the acquisition of the properties. Jose Ong clearly declared that he purchased the properties with his retirement funds, money market placements, and proceeds from a bank loan. Whatever defenses which Nelly Ong could have raised relative to the sources of funds used in the purchase of the questioned assets are deemed waived owing to the fact that they are subsumed in the submissions of her husband. Hence, even if she is entitled to a preliminary investigation, such an inquiry would be an empty ceremony. We now consider Ongs allegations of bias and prejudice exhibited by the Ombudsman during the preliminary investigation. A perusal of the records reveals that the Graft Investigation Officer duly considered Ongs explanation as to the sources of funds with which he acquired the questioned assets. His averment that he received retirement benefits from the SGV was understandably disregarded because the only supporting document he presented then was the certification of the controller of SGV to the effect that he received such benefits. Ong was likewise unable to substantiate his claim that he had money market placements as he did not present any document evidencing such placements. Further, apart from a certification from the corporate secretary of Allied Bank to the effect that he obtained a loan from the said bank, no other document, e.g., loan application, credit investigation report, loan approval, schedule of loan releases, real estate mortgage document, promissory notes, cancelled checks, receipts for amortization payments, and statement of account, was presented to support the claim. Ong was even given the opportunity to present the documents in his possession relevant to the approval of the Allied Bank loan, his receipt of retirement benefits from SGV, and money market placements which would have validated his assertion that all the questioned acquisitions were from legitimate sources.[36] Up to this point, therefore, we find that the Ombudsman did not make any unwarranted conclusions or proceed with arbitrariness in the conduct of the preliminary inquiry. However, Ong calls the Courts attention to the fact that he was not notified of the subpoenas duces tecum ad testificandum apparently issued to SGV, Allied Bank and the BIR and the proceedings taken thereon. This objection was raised in his Motion[37] dated February 17, 1993, which was, unfortunately, perfunctorily denied. The Rules of Procedure of the Office of the Ombudsman[38] provides that the preliminary investigation of cases falling under the jurisdiction of the Sandiganbayan and Regional Trial Court shall be conducted in the manner prescribed in Section 3, Rule 112 of the Rules of Court, subject to the following provisions:

(f) If, after the filing of the requisite affidavits and their supporting evidences, there are facts material to the case which the investigating officer may need to be clarified on, he may conduct a clarificatory hearing during which the parties shall be afforded the opportunity to be present but without the right to examine or cross-examine the witness being questioned. Where the appearance of the parties or witness is impracticable, the clarificatory questioning may be conducted in writing, whereby the questions desired to be asked by the investigating officer or a party shall be reduced into writing and served on the witness concerned who shall be required to answer the same in writing and under oath. Ong, therefore, should have been notified of the subpoenas duces tecum ad testificandum issued to SGV, Allied Bank and the BIR. Although there is no indication on record that clarificatory hearings were conducted pursuant to the subpoenas, Ong is entitled to be notified of the proceedings and to be present thereat. The fact that he was not so notified is a denial of fundamental fairness which taints the preliminary investigation. So, too, did the fact that Ong was not served a copy of the Resolution directing the filing of a petition for forfeiture deprive him of his statutory right to be furnished with a copy of the Resolution to file a petition for forfeiture and to file a motion for reconsideration therefrom with the Ombudsman within five (5) days from receipt of such Resolution pursuant to Sec. 27 of RA 6770. The law provides:

Sec. 27. Effectivity and Finality of Decisions.(1) All provisionary orders of the Office of the Ombudsman are immediately effective and executory. A motion for reconsideration of any order, directive or decision of the Office of the Ombudsman must be filed within five (5) days after receipt of written notice . . . . For these reasons, we find that the Sandiganbayan, in its second assailed Resolution, correctly ordered the Ombudsman to immediately furnish petitioners a copy of the Resolution to file the petition for forfeiture, and gave petitioners a period of five (5) days from receipt of such Resolution within which to file a motion for reconsideration. Although the second Sandiganbayan Resolution was only intended to remedy the Ombudsmans failure to give petitioners a copy of the Resolution to file the petition for forfeiture, it would also have served to cure the Ombudsmans failure to notify petitioners of the issuance of subpoenas duces tecum ad testificandum to SGV, Allied Bank and the BIR. Instead of awaiting the Ombudsmans compliance with the Resolution and filing their motion for reconsideration therefrom, however, petitioners opted to go directly to this Court. With this maneuver, petitioners effectively deprived themselves of an avenue of redress with the Sandiganbayan. They are deemed to have waived their right to avail of the remedy afforded by the second Resolution. The next question is whether we should direct the Ombudsman to rectify the errors committed during the preliminary investigation, i.e., the failure to give Ong notice of the subpoenas issued to SGV, Allied Bank and the BIR and notice of the Resolution directing the filing of the petition for forfeiture. To so order the Ombudsman at this point would no longer serve any useful purpose and would only further delay the proceedings in this case. Verily, petitioners have been allowed to fully plead their arguments before this Court. After all has been said, this case should now be allowed to proceed in its course. Nonetheless, we find this an opportune time to admonish the Ombudsman to be more circumspect in its conduct of preliminary investigation to the end that participants therein are accorded the full measure of their rights under the Constitution and our laws. The other issues raised by petitioners concern the alleged disqualification of the Ombudsman to file a petition for forfeiture considering that it also conducted the preliminary investigation to determine probable cause. According to petitioners, the duality of the functions of the Ombudsman, as investigator and prosecutor, impairs its ability to act as a fair and impartial magistrate in the determination of probable cause. Petitioners are the first to agree that the Ombudsman is vested with jurisdiction to investigate and prosecute any act or omission of a public officer or employee when such act or omission appears to be illegal, unjust, improper or inefficient. They recognize that the Ombudsman has primary jurisdiction over cases, such as the present one, cognizable by the Sandiganbayan.

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The problem with petitioners contention is their assumption that the Ombudsman, a constitutionally-created body, will not perform its functions faithfully. The duality of roles which the Ombudsman exercises does not necessarily warrant a conclusion that it will be given to making a finding of probable cause in every case. At any rate, [I]n the debates on this matter in the Constitutional Commission, it was stressed by the sponsors of the Office of the Ombudsman that, whereas the original Tanodbayan was supposed to be limited to the function of prosecution of cases against public functionaries, generally for graft and corruption, the former would be considered the champion of the citizen, to entertain complaints addressed to him and to take all necessary action thereon.[39] This should leave no doubt as regards the constitutionality and propriety of the functions exercised by the Ombudsman in this case. Verily, the Court in Republic v. Sandiganbayan,[40] reviewed the powers of the Ombudsman and held: At present, the powers of the Ombudsman, as defined by Republic Act No. 6770 corollary to Section 13, Article XI of the 1987 Constitution, include, inter alia, the authority to: (1) investigate and prosecute on its own or on complaint by any person, any act or omission of any public officer or employee, office or agency, when such act or omission appears to be illegal, unjust, improper or inefficient. It has primary jurisdiction over cases cognizable by the Sandiganbayan and, in the exercise of this primary jurisdiction, it may take over, at any stage, from any investigatory agency of Government, the investigation of such cases; and (2) investigate and intiate the proper action for the recovery of ill-gotten wealth and/or unexplained wealth amassed after February 25, 1986 and the prosecution of the parties involved there.[41] In the same case, we declared that the Ombudsman has the correlative powers to investigate and initiate the proper action for the recovery of ill-gotten and/or unexplained wealth which were amassed after February 25, 1986. There is therefore no merit in petitioners contention that the absence of participation of the OSG taints the petition for forfeiture with nullity. Finally, the attacks against the constitutionality of RA 1379 because it is vague, violates the presumption of innocence and the right against self incrimination, and breaches the authority and prerogative of the Supreme Court to promulgate rules concerning the protection and enforcement of constitutional rights, are unmeritorious. The law is not vague as it defines with sufficient particularity unlawfully acquired property of a public officer or employee as that which is manifestly out of proportion to his salary as such public officer or employee and to his other lawful income and the income from legitimately acquired property. It also provides a definition of what is legitimately acquired property. Based on these parameters, the public is given fair notice of what acts are proscribed. The law, therefore, does not offend the basic concept of fairness and the due process clause of the Constitution. Neither is the presumption of innocence clause violated by Sec. 2 of RA 1379 which states that property acquired by a public officer or employee during his incumbency in an amount which is manifestly out of proportion to his salary as such public officer or employee and to his other lawful income and the income from legitimately acquired property shall be presumed prima facie to have been unlawfully acquired. As elaborated by Fr. Joaquin Bernas, under the principle of presumption of innocence, it is merely required of the State to establish a prima facie case, after which the burden of proof shifts to the accused.[42] In People v. Alicante,[43] the Court held: No rule has been better established in criminal law than that every man is presumed to be innocent until his guilt is proved beyond a reasonable doubt. In a criminal prosecution, therefore, the burden is upon the State to prove every fact and circumstance constituting the crime charged, for the purpose of showing the guilt of the accused. While that is the rule, many of the States have established a different rule and have provided that certain facts only shall constitute prima facie evidence, and that then the burden is put upon the defendant to show or to explain that such facts or acts are not criminal. It has been frequently decided, in case of statutory crimes, that no constitutional provision is violated by a statute providing that proof by the State of some material fact or facts shall constitute prima facie evidence of guilt, and that then the burden is shifted to the defendant for the purpose of showing that such act or acts are innocent and are committed without unlawful intention. . . . The State having the right to declare what acts are criminal, within certain well defined limitations, has a right to specify what act or acts shall constitute a crime, as well as what proof shall constitute prima facie evidence of guilt, and then to put upon the defendant the burden of showing that such act or acts are innocent and are not committed with any criminal intent or intention.[44] The constitutional assurance of the right against self incrimination likewise cannot be invoked by petitioners. The right is a prohibition against the use of physical or moral compulsion to extort communications from the accused. It is simply a prohibition against legal process to extract from the accuseds own lips, against his will, admission of his guilt.[45] In this case, petitioners are not compelled to present themselves as witnesses in rebutting the presumption established by law. They may present documents evidencing the purported bank loans, money market placements and other fund sources in their defense. As regards the alleged infringement of the Courts authority to promulgate rules concerning the protection and enforcement of constitutional rights, suffice it to state that there is no showing that the Ombudsman or the OSG is about to grant immunity to anyone under RA 1379. The question, therefore, is not ripe for adjudication. WHEREFORE, the petition is hereby DISMISSED. Costs against petitioners. SO ORDERED. FIRST DIVISION PEOPLE OF THE PHILIPPINES, Appellee, Davide, Jr., C.J. (Chairman), - versus Carpio, and Azcuna, JJ. JOSE TING LAN UY, JR. (Acquitted), ERNESTO GAMUS y SOTELO, JAIME OCHOA, all of the National Power Corporation, and RAUL GUTIERREZ alias Raul Nicolas, Alias George Aonuevo, alias Mara Aonuevo (At large), Accused. Promulgated: JAIME OCHOA, Appellant. November 17, 2005 x ---------------------------------------------------------------------------------------- x G.R. No. 157399 Present: Quisumbing, Ynares-Santiago,

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DECISION YNARES-SANTIAGO, J.: For allegedly diverting and collecting funds of the National Power Corporation (NPC) intended for the purchase of US Dollars from the United Coconut Planters Bank (UCPB), Jose Ting Lan Uy, Jr., Ernesto Gamus,[1] Jaime Ochoa and Raul Gutierrez were indicted before the Sandiganbayan for the complex crime of Malversation through Falsification of Commercial Documents defined and penalized under Articles 217 and 171 (8), in relation to Article 48 of the Revised Penal Code, in an amended Information,[2] docketed as Criminal Case No. 19558, which alleges That sometime in July 1990, or for sometime prior or subsequent thereto, in Quezon City, Philippines, and within the jurisdiction of this Honorable Court, accused Jose Ting Lan Uy, Jr., a public accountable officer, being the Treasurer of National Power Corporation (NAPOCOR), Ernesto Gamus and Jaime Ochoa, both public officers being the Manager of the Loan Management and Foreign Exchange Division (LOMAFED) and Foreign Trader Analyst, respectively, also of NAPOCOR, and accused Raul Gutierrez, alias Raul Nicolas, alias George Aonuevo, alias Mara Aonuevo, a private individual being a foreign exchange trader, said public officers taking advantage of their official positions, with grave abuse of authority and committing the offense in relation to their office, conspiring, confederating and mutually helping one another, with their private co-accused, did then and there willfully, unlawfully and feloniously falsify or cause to be falsified the NPCs application for managers checks with the Philippine National Bank (PNB), NPC Branch in the total amount of ONE HUNDRED EIGHTY THREE MILLION EIGHT HUNDRED FIVE THOUSAND TWO HUNDRED NINETY ONE PESOS and TWENTY FIVE CENTAVOS (P183,805,291.25), Philippine Currency, intended for the purchase of US dollars from the United Coconut Planters Bank (UCPB), by inserting the account number of Raul Gutierrez SA-111-121204-4, when in truth and in fact as the accused well knew that the Payment Instructions (PI) when signed by the NAPOCOR authorities did not indicate the account number of Raul Gutierrez, thereby making alteration or intercalation in a genuine document which changes its meaning, and with the use of the said falsified commercial documents, accused succeeded in diverting, collecting and receiving the total amount of ONE HUNDRED EIGHTY THREE MILLION EIGHT HUNDRED FIVE THOUSAND TWO HUNDRED NINETY ONE PESOS AND TWENTY FIVE CENTAVOS (P183,805,291.75), Philippine Currency from the National Power Corporation, which they thereafter malverse, embezzle, misappropriate and convert to their own personal use and benefit to the damage and prejudice of the National Power Corporation in the aforementioned sum. CONTRARY TO LAW. Upon arraignment, Gamus, Uy and Ochoa pleaded not guilty to the charge, while Gutierrez has remained at large. On pre-trial, the prosecution and the defense stipulated 1. That accused Uy at the time stated in the information was a Treasurer at the NPC;

2. That accused Ernesto Gamus was at the time mentioned in the information was (sic) the Manager of Loan Management and Foreign Exchange Division (LOMAFED); 3. 4. 5. 6. That accused Jaime Ochoa was the Senior Financial Analyst, LOMAFED, at the time mentioned in the information; That accused Gamus does not have any custody to (sic) public funds; That accused Ochoas position as Sr. Financial Analyst did not require him to take custody or control of public funds; That the application forms for cashiers check or Managers check are not accountable forms of the NAPOCOR.[3]

Trial on the merits thereafter ensued. On May 28, 2002, the Sandiganbayan rendered its Decision,[4] the dispositive portion of which reads: WHEREFORE, premises considered, accused Jaime B. Ochoa is hereby found GUILTY beyond reasonable doubt of the crime of Malversation thru falsification of Commercial Document and is sentenced to suffer the penalty of reclusion perpetua and to pay a fine equal to the amount malversed which is ONE HUNDRED EIGHTY THREE MILLION EIGHT HUNDRED FIVE THOUSAND TWO HUNDRED NINETY ONE PESOS AND TWENTY FIVE CENTAVOS (P183,805,291.25) solidarily with accused Jose Ting Lan Uy, Jr. Accused Ochoa shall also suffer the penalty of perpetual disqualification. Costs against the accused. On the ground of reasonable doubt, accused JOSE TING LAN UY, Jr. is hereby ACQUITTED of Malversation of Public Funds thru Falsification of Commercial Document. However, because of preponderance of evidence, he is CIVILLY LIABLE for the damages suffered by the NPC in the amount of ONE HUNDRED EIGHTY THREE MILLION EIGHT HUNDRED FIVE THOUSAND TWO HUNDRED NINETY ONE PESOS AND TWENTY FIVE CENTAVOS (P183,805,291.25) solidarily with accused Jaime Ochoa. The Hold Departure Order against the accused embodied in this Courts Resolution dated April 18, 2002 is recalled. Let an alias warrant of arrest be issued against Raul Gutierrez, alias Raul Nicolas, alias George Aonuevo, alias Mara Aonuevo with last known address at 1348 A. Mabini Street, Ermita, Manila or Suite 603 VIP Building, Roxas Boulevard, Manila. SO ORDERED.[5] Aggrieved, Ochoa interposed this appeal alleging that the Sandiganbayan erred in 1. 2. 3. convicting him based on the allegations in the information; admitting and considering his alleged sworn statements; considering the alleged transcripts of stenographic notes and the NBI Report.[6] The factual antecedents of the case, as summed by the Sandiganbayan, are not disputed by the parties: In July of 1990, the National Power Corporation (NPC) became embroiled in a controversy involving the disappearance of P183,805,291.25 of its funds which were originally on deposit with the Philippine National Bank, NPC Branch (PNB) but were subsequently used to purchase two (2) managers/cashiers checks (the first check was in the amount of P70,000,000.00 while the second was for P113,805,291.25) in order to comply with its loan obligations to the Asian Development Bank (ADB). As NPCs debt in favor of ADB was in yen, NPC was obligated to follow an intricate and circuitous procedure of buying US dollars from a local bank (in this case, United Coconut Planters Bank or UCPB T.M. Kalaw Branch), which local bank was supposed to remit the US dollars to an off-shore bank. This off-shore bank (in this case, the Credit Lyonnais, New York) was then supposed to remit the yen equivalent of the US dollars to a third bank (in this case, the Bank of Japan, Tokyo Branch) which would then credit the funds to the account of the ADB. The contracts of NPC with the concerned banks (embodied in three [3] Payment Instructions) included a value date (which was July 13, 1990), the mere arrival of which would trigger the above-mentioned procedure, culminating in the payment to ADB of the NPC obligation in the foreign currency agreed upon. On value date, per routing procedure, Credit Lyonnais (the second bank) remitted Japanese Yen 1,143,316,130.00 to the Bank of Japan, Tokyo Branch. Likewise, per routing procedure, UCPB T.M. Kalaw Branch was supposed to have remitted on said value date the amount of US$7,740,799.80. UCPB T.M. Kalaw, however, despite the fact that the PNB had already issued two (2) managers/cashiers checks (Managers check for brevity) for such purpose, did not make the agreed remittance to Credit Lyonnais, so Credit Lyonnais received no payment for the funds it had remitted to the Bank of Japan, Tokyo. Both the State and the accused have offered explanations for the failure of UCPB, T.M. Kalaw Branch to remit the dollar equivalent of P183,805,291.25 to Credit Lyonnais. Both explanations, naturally, were diametrically opposed.[7] The prosecution theorizes that the accused diverted the funds covered by the two PNB Managers checks by falsifying a commercial document called an Application for Cashiers Check (ACC) by inserting an account number (A/C #111-1212-04) of a private individual after the name of the payee,

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UCPB, T.M. Kalaw Branch. It claims that NPC did not authorize the insertion considering that the Payment Instruction (PI) issued by NPC instructing PNB to prepare a Managers check to be charged to NPCs savings account did not contain any account number. Through the insertion, the accused allegedly succeeded in diverting the funds from the UCPB, T.M. Kalaw Branch in favor of Raul Gutierrez @ Raul Nicolas @ George Aonuevo @ Mara Aonuevo, who is still at large. In his defense, appellant asserts that there was no evidence that he committed any of the acts alleged in the information, particularly the intercalation on the ACC; that he deposited the checks subsequently issued or that he received the proceeds thereof; or that he conspired with any of his co-accused. He claims that his conviction was based on the alleged sworn statement and the transcript of stenographic notes of a supposed interview with appellant by the NPC personnel and the report of the National Bureau of Investigation (NBI). Appellant maintains that he signed the sworn statement while confined at the Philippine Heart Center and upon assurance that it would not be used against him. He was not assisted by counsel nor was he apprised of his constitutional rights when he executed the affidavit. To be found guilty of malversation, the prosecution must prove the following essential elements: a.] b.] c.] The offender is a public officer; He has the custody or control of funds or property by reason of the duties of his office; The funds or property involved are public funds or property for which he is accountable; and

d.] He has appropriated, taken or misappropriated, or has consented to, or through abandonment or negligence, permitted the taking by another person of, such funds or property.[8] Appellant insists that he could not be convicted under the allegations in the information without violating his constitutional right to due process and to be informed of the accusation against him. He points out that the information alleges willful and intentional commission of the acts complained of while the judgment found him guilty of inexcusable negligence amounting to malice. Appellants contention lacks merit. Malversation may be committed either through a positive act of misappropriation of public funds or property or passively through negligence by allowing another to commit such misappropriation.[9] To sustain a charge of malversation, there must either be criminal intent or criminal negligence[10] and while the prevailing facts of a case may not show that deceit attended the commission of the offense, it will not preclude the reception of evidence to prove the existence of negligence because both are equally punishable in Article 217 of the Revised Penal Code. More pointedly, the felony involves breach of public trust, and whether it is committed through deceit or negligence, the law makes it punishable and prescribes a uniform penalty therefor. Even when the information charges willful malversation, conviction for malversation through negligence may still be adjudged if the evidence ultimately proves that mode of commission of the offense .[11] Explicitly stated Even on the putative assumption that the evidence against petitioner yielded a case of malversation by negligence but the information was for intentional malversation, under the circumstances of this case his conviction under the first mode of misappropriation would still be in order. Malversation is committed either intentionally or by negligence. The dolo or the culpa present in the offense is only a modality in the perpetration of the felony. Even if the mode charged differs from mode proved, the same offense of malversation is involved and conviction thereof is proper.[12] The question of whether or not an information charging the commission of the crime by means of deceit will preclude a conviction on the basis of negligence is neither novel nor of first impression. In Samson v. Court of Appeals, et al.,[13] we ruled that an accused charged with willful or intentional falsification can validly be convicted of falsification through negligence, thus: While a criminal negligent act is not a simple modality of a willful crime, as we held in Quizon vs. Justice of the Peace of Bacolor, but a distinct crime in itself, designated as a quasi offense in our Penal Code, it may however be said that a conviction for the former can be had under an information exclusively charging the commission of a willful offense, upon the theory that the greater includes the lesser offense. This is the situation that obtains in the present case. Appellant was charged with willful falsification but from the evidence submitted by the parties, the Court of Appeals found that in effecting the falsification which made possible the cashing of the checks in question, appellant did not act with criminal intent but merely failed to take proper and adequate means to assure himself of the identity of the real claimants as an ordinary prudent man would do. In other words, the information alleges acts which charge willful falsification but which turned out to be not willful but negligent. This is a case covered by the rule when there is a variance between the allegation and proof, and is similar to some of the cases decided by this Tribunal. .... The fact that the information does not allege that the falsification was committed with imprudence is of no moment for here this deficiency appears supplied by the evidence submitted by appellant himself and the result has proven beneficial to him. Certainly, having alleged that the falsification has been willful, it would be incongruous to allege at the same time that it was committed with imprudence for a charge of criminal intent is incompatible with the concept of negligence. In People v. Consigna, et al.,[14] we ruled that the afore-stated rationale also applies to the felony of malversation, that is, that an accused charged with willful malversation, in an information containing allegations similar to the present case, can be validly convicted of the same offense of malversation through negligence where the evidence sustains the latter mode of perpetrating the offense. Appellant next claims that he should be acquitted since his conviction was based on his sworn statement, transcript of stenographic notes from which the sworn statement was taken and the NBI Report, which are incompetent evidence. He contends that his sworn statement was taken without the benefit of counsel, in violation of his constitutional right under Section 12, Article III of the 1987 Constitution. Paragraph 1, Section 12, Article III of the 1987 Constitution states that Section 12. (1). Any person under investigation for the commission of an offense shall have the right to be informed of his right to remain silent and to have competent and independent counsel preferably of his own choice. If the person cannot afford the services of counsel, he must be provided with one. These rights cannot be waived except in writing and in the presence of counsel. The investigation under the above-quoted provision refers to a custodial investigation where a suspect has already been taken into police custody[15] and the investigating officers begin to ask questions to elicit information and confessions or admissions from the suspect.[16] More specifically Custodial investigation involves any questioning initiated by law enforcement authorities after a person is taken into custody or otherwise deprived of his freedom of action in any significant manner. And, the rule begins to operate at once as soon as the investigation ceases to be a general inquiry into an unsolved crime and direction is then aimed upon a particular suspect who has been taken into custody and to whom the police would then direct interrogatory question which tend to elicit incriminating statements.[17] Succinctly stated, custodial investigation refers to the critical pre-trial stage when the investigation ceases to be a general inquiry into an unsolved crime but has begun to focus on a particular person as a suspect.[18] Such a situation contemplated has been more precisely described thus where After a person is arrested and his custodial investigation begins a confrontation arises which at best may be termed unequal. The detainee is brought to an army camp or police headquarters and there questioned and cross-examined not only by one but as many investigators as may be necessary to break down his morale. He finds himself in a strange and unfamiliar surrounding, and every person he meets he considers hostile to him. The investigators are well-trained and seasoned in their work. They employ all the methods and means that experience and study has taught them to extract the truth, or what

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may pass for it, out of the detainee. Most detainees are unlettered and are not aware of their constitutional rights. And even if they were, the intimidating and coercive presence of the officers of the law in such an atmosphere overwhelms them into silence....[19] Clearly, therefore, the rights enumerated by the constitutional provision invoked by accused-appellant are not available before government investigators enter the picture.[20] Thus we held in one case[21] that admissions made during the course of an administrative investigation by Philippine Airlines do not come within the purview of Section 12. The protective mantle of the constitutional provision also does not extend to admissions or confessions made to a private individual,[22] or to a verbal admission made to a radio announcer who was not part of the investigation,[23] or even to a mayor approached as a personal confidante and not in his official capacity.[24] Along the same vein, we held that a videotaped interview showing the accused unburdening his guilt willingly, openly and publicly in the presence of newsmen is not covered by the provision although in so ruling, we warned trial courts to take extreme caution in further admitting similar confessions because we recognized the distinct possibility that the police, with the connivance of unscrupulous media practitioners, may attempt to legitimize coerced extrajudicial confessions and place them beyond the exclusionary rule by having an accused admit an offense on television.[25] Neither does the constitutional provision on custodial investigation extends to a spontaneous statement, not elicited through questioning by the authorities, but given in an ordinary manner whereby the accused orally admits having committed the crime,[26] nor to a person undergoing an audit examination because an audit examiner is not a law enforcement officer.[27] Thus, the flaw in appellants argument in this regard becomes immediately apparent vis--vis the foregoing legal yardsticks, considering that his statement was taken during the administrative investigation of NPCs audit team[28] and before he was taken into custody. As such, the inquest was still a general inquiry into an unsolved offense at the time and there was, as yet, no specific suspect. Much less can appellant claim that he was in police custody because he was confined at the time at the Philippine Heart Center and he gave this statement to NPC personnel, not to police authorities.[29] Appellant can hardly claim that, under the prevailing circumstances at the time, whatever degree of compulsion may have existed went beyond the borders of the unobjectionable where impermissible levels of duress would force him into making false and incriminating declarations against his interest. While he may have been persuaded into doing so, he cannot feign that he was intimidated in such a way as to bring his statements within the ambit of the exclusionary constitutional provision. The fact that an NBI investigation was being contemporaneously conducted at the time the sworn statement was taken will not extricate appellant from his predicament. The essence of the constitutional safeguard is protection from coercion. The interview where the sworn statement is based was conducted by NPC personnel for the NPCs administrative investigation. Any investigation conducted by the NBI is a proceeding separate, distinct and independent from the NPC inquiry and should not be confused or lumped together with the latter. Appellant invokes Galman v. Pamaran[30] in insisting that the constitutional safeguard should have been applied notwithstanding that he was not yet arrested or under detention at the time. He also invites our attention to the pronouncements of Fr. Joaquin G. Bernas[31] that the right to counsel is available if a person is in custody, even if he is not a suspect; or even if not yet in custody but he is a suspect. The contention is tenuous. Although we held in Galman that the constitutional protection covers not only confessions but admissions as well, we qualified the ruling with the statement that what is being eschewed is the evil of extorting a confession from the mouth of the person being interrogated. As defined, extortion is an act or practice of taking or obtaining anything from a person by illegal use of fear, whether by force, threats or any undue exercise of power.[32] In the context of obtaining an admission, extorting means compelling or coercing a confession or information by any means serving to overcome his power of resistance, or making the confession or admission involuntary.[33] In this case, we find nothing on record to support appellants claim that his statements were extorted from him. Furthermore, while indeed Galman taken together with the 1986 deliberations on what was later to become Section 12 (1) of the 1987 Constitution may lead to the conclusion that the rights are available when the person is already in custody as a suspect, or if the person is a suspect even if he is not yet deprived in any significant way of his liberty, Fr. Bernas[34] qualified this statement by saying that [J]urisprudence under the 1987 Constitution, however, has consistently held, following Escobedo, the stricter view, that the rights begin to be available only when the person is already in custody.[35] Appellant next advances the argument that even if his sworn statement were admissible in evidence, the contents thereof may not be sufficient to sustain a conviction. He contends that although his statement was supposedly gathered from the transcript of stenographic notes of the conversation between him and Atty. Bagcal, neither Atty. Bagcal nor the person who actually prepared the sworn statement was presented. Therefore, the sworn statement is hearsay. The argument is puerile. It bears stressing that the prosecution presented as witness Atty. Lamberto P. Melencio who saw appellant at the hospital to show him the prepared statement and to verify from him the truth of its contents.[36] Atty. Melencio testified that he asked appellant to go over the document before affixing his signature thereto.[37] He also inquired whether or not appellant was coerced or intimidated by anybody when the statement was taken. [38] Appellant denied that he was coerced or intimidated,[39] affirmed the contents of the document as a true reflection of his statements,[40] and signed the same.[41] It need not be overemphasized that the sworn statement is a duly notarized document which has in its favor the presumption of regularity and, thus, it can be contradicted only by clear and convincing evidence. Without that sort of evidence, the presumption of regularity, the evidentiary weight conferred upon such public document with respect to its execution, as well as the statements and the authenticity of the signatures thereon, stand.[42] In disclaiming the authenticity of his sworn statement, appellant insists that at the time he signed the document, he was confined in the hospital and therefore not physically and mentally fit to assess the significance of his signature. This pretext however collides with the testimony of his own witness, Dr. Teresita Sadava, who stated that appellant was confined for three days and, who, when queried whether ischemic heart disease had any emotional or psychological effect, gave the inconclusive reply that it may or may not. Moreover, as aptly observed by the Sandiganbayan, although supposedly violated and repulsed as he was by the alleged falsity of the affidavit, it is strange that appellant, who is supposedly astute in business matters as he then occupied the position of Foreign Trader Analyst of the NPC, nevertheless felt it unnecessary to execute another affidavit retracting the same after his recovery from illness. Verily, evidence to be believed must not only proceed from the mouth of a credible witness, but must be credible in itself such as the common experience and observation of mankind can approve as probable under the circumstances.[43] Appellant finally contends that both the NBI Investigation Report and the transcript of stenographic notes are hearsay for having been made extrajudicially. The record, however, shows that the prosecution presented the team leader of the NBI investigators who conducted the investigation, although his testimony was dispensed with as the parties stipulated on the existence and due execution of the NBI Investigation report albeit without admitting the truth of its contents. If at all, the admission of the reports existence is an acknowledgment that it is neither spurious nor counterfeit. All told, given the paucity of substance in the arguments advanced by appellant to prop up his cause, his appeal must fall. WHEREFORE, the May 28, 2002 Decision of the Sandiganbayan is hereby AFFIRMED in all respects. SO ORDERED. FIRST DIVISION [G.R. No. 152398. April 14, 2005] EDGAR CRISOSTOMO, petitioner, vs. SANDIGANBAYAN, respondent. DECISION CARPIO, J.: The Case This is an appeal by certiorari under Rule 65 of the Revised Rules on Civil Procedure of the Sandiganbayan Resolutions promulgated on 17 September 2001 and 14 January 2002, denying the Motion for Reconsideration filed by petitioner SPO1 Edgar Crisostomo (Crisostomo) assailing the courts Decision[1] promulgated on 28 November 2000. The Decision found Crisostomo guilty of the crime of murder and sentenced him to suffer the

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indeterminate penalty of twelve (12) years, five (5) months and eleven (11) days of prision mayor as minimum, to eighteen (18) years, eight (8) months and one (1) day of reclusion temporal as maximum. The Charge On 19 October 1993, Crisostomo, a member of the Philippine National Police and a jail guard at the Solano Municipal Jail was charged with the murder of Renato Suba (Renato), a detention prisoner at the Solano Municipal Jail. The Information alleged that Crisostomo conspired with his co-accused, Dominador C. dela Cruz (dela Cruz), Efren M. Perez (Perez), Raki T. Anggo (Anggo), Randy A. Lumabo (Lumabo), Rolando M. Norberte (Norberte) and Mario Calingayan (Calingayan), all inmates at the Solano Municipal Jail, in murdering Renato. The Information reads in full: That on or about the 14th day of February 1989, in Solano, Nueva Vizcaya, Philippines, and within the jurisdiction of this Honorable Court, the above-named accused Pat. Edgar T. Crisostomo, a public officer, being then a member of the Philippine National Police (PNP) stationed at Solano Police Station and a jailer thereat, taking advantage of his public position and thus committing the offense in relation to his office, conspiring, confederating and conniving with his co-accused who are inmates of the Solano Municipal Jail, namely: Dominador C. dela Cruz, Efren M. Perez, Raki T. Anggo, Randy A. Lumabo, Rolando M. Norberte and Mario B. Calingayan, with intent to kill and with treachery, taking advantage of superior strength and with the aid of armed men or employing means to weaken the defense or of means or persons to insure or afford impunity, did then and there wil[l]fully, unlawfully and feloniously attack and assault one Renato Suba, a detention prisoner, with the use of rough-surfaced instruments, including fist blows, inflicting upon him serious injuries causing his internal organs to be badly damaged such as his liver, messentery and stomach resulting to the death of said Renato Suba to the damage and prejudice of the heirs of the latter. CONTRARY TO LAW.[2] Arraignment and Plea On 15 December 1993, Crisostomo assisted by counsel, pleaded not guilty to the crime charged. [3] Thereafter, trial ensued. Version of the Prosecution On 13 February 1989, Renato was detained at the municipal jail in Solano, Nueva Vizcaya for allegedly hitting the head of one Diosdado Lacangan. The following day, 14 February 1989, at 5:00 p.m., Renatos brother Rizalino Suba (Rizalino) visited him at the municipal jail. Renato asked Rizalino to bring him blanket, toothbrush, clothes and food. Rizalino left the municipal jail that day at 5:20 p.m. At that time, Renato was in good physical condition and did not complain of any bodily pain. Renato was 26 years old, single, and was employed in a logging concession. At 9:00 p.m., a barangay councilman informed Rizalino that policemen assigned at the Solano municipal jail wanted Rizalino to go to the municipal building. Rizalino arrived at the municipal jail at 9:10 p.m. and saw his brother Renato already dead on the floor outside his cell. Renato was detained alone in the third cell, one of the four cells at the municipal jail. Although each of the four cells had an iron grill door equipped with a padlock, the doors were usually left open. The keys to the padlocks were with the jail guard. There was a common front door, which no one could enter but the jail guard. Only one jail guard at a time was assigned at the municipal jail. Crisostomo was the one on duty at the time of the death of Renato. At no time was Renato brought out of the cell during his detention on 13 February 1989 until his death in the evening of the following day. Crisostomos position in relation to the cell where the victim was killed was such that Crisostomo as jail guard could have heard if not seen what was going on inside the cell at the time that Renato was killed. There are unexplained discrepancies in the list of detainees/prisoners and police blotter. The list of detainees/prisoners dated 20 February 1989 shows that there were eight prisoners on 14 February 1989, including Renato, but after Renatos death, only six were turned over by Crisostomo to the incoming jail guard. On 15 February 1989, nine prisoners/detainees were on the list, including Renato who was already dead. However, the police blotter shows that only six prisoners were under custody. The persons who were detained with Renato at the time of his death were released without being investigated by the Solano police. Renato did not commit suicide. His body bore extensive injuries that could have been inflicted by several persons. The exhumation and autopsy reports ruled out suicide as the cause of Renatos death. The deafening silence of the inmates and the jail guard, Crisostomo, point to a conspiracy. Crisostomos guilt is made apparent when he jumped bail during trial. Version of the Defense The presentation of evidence for Crisostomos defense was deemed waived for his failure to appear at the scheduled hearings despite notice. Calingayan, Crisostomos co-accused, was the sole witness for the defense. Calingayan was only 16 years old at the time that he was charged with the murder of Renato. Calingayan denied killing Renato. Calingayan was detained at the Solano Municipal Jail on 12 February 1989 because his brother-in-law, Patrolman Feliciano Leal (Leal), also a jail guard, had him arrested for pawning some of the belongings of Leal. Leal told Calingayan that he had him detained for safekeeping to teach him a lesson. Renato was detained on 13 February 1989. Calingayan learned that Renato was detained for hitting somebodys head. There were four cells at the municipal jail. Calingayan was detained with five other inmates in the second cell. Renato was detained alone in the third cell. The four cells had their own separate doors with padlocks but each door was always open. It was up to the inmates to close the doors. A common door leading to the four cells was always padlocked and no one could enter the door without the jail guards permission. The jail guard had the keys to the cells and the common door. Only one jail guard was assigned to guard the cells. Crisostomo was the jail guard on duty at the time that Renato died. Calingayan was in jail for three days or until 15 February 1989. Calingayan last saw Renato alive between 5 to 6 p.m. of 14 February 1989. Just as Calingayan was about to take a bath after 6 p.m., he saw Renato lying down. One of the inmates asked for Renatos food because he did not like to eat his food. After taking a bath, Calingayan went back to his cell and played cards with his three cellmates whose names he could not recall. Calingayan did not leave his cell during the four hours that he played cards but one of his cellmates went out. Calingayan discovered Renatos body on 14 February 1989 between 9:00 p.m. to 10:00 p.m. Calingayan went to the fourth cell, where the comfort room was located, to urinate. While urinating, Calingayan saw at the corner of the cell a shadow beside him. A bulb at the alley lighted the cell. Calingayan ran away and called the other inmates, telling them that the person in cell number four was in the dark place. The other inmates ran towards the place and shouted si kuwan, si kuwan. Crisostomo was in the room at the left side from where Calingayan was detained, about fifteen meters away. Upon hearing the shouts, Crisostomo opened the main door. Once inside the cell, Crisostomo instructed the inmates to bring down Renatos body that was hanging from the iron bars of the window of the cell. At that time, Calingayan did not notice what was used in hanging Renato but when the body was brought outside, Calingayan saw that Renato had hanged himself with a thin blanket. The four cells are not similar in area and size. The cell where Renato stayed is the smallest. The cells are separated by a partition made of hollow blocks as high as the ceiling. The four cells are in one line so that if you are in one cell you cannot see what is happening in the other cells. The inmates could go to any of the four cells in the prison but they could not get out of the main door without the permission of the jail guard. The comfort room is in the fourth cell, which is also open so that the inmates would not anymore ask for the key from the office of the jail guard. The blanket that Renato used to hang himself was tied to the iron grills of the window of the cell. The window is small, only about two feet by one and one-half feet with eight iron bars. The window is nine feet from the floor. No other person was admitted on 14 February 1989. Calingayan does not have a grudge against Renato. He could not recall if there was any untoward incident between Renato and the other inmates. The Solano police investigated Calingayan the next morning. The Ruling of the Sandiganbayan Only Crisostomo and Calingayan stood trial. The other accused, dela Cruz, Perez, Anggo, Lumabo and Norberte were at large. The Sandiganbayan found sufficient circumstantial evidence to convict Crisostomo and Calingayan of murder. The Sandiganbayan relied on the autopsy and exhumation reports in disregarding the defense theory that Renato committed suicide by hanging himself with a blanket. The Sandiganbayan thus held: Premises considered, accused Edgar Crisostomo and Mario Calingayan are hereby found guilty of the crime of murder. xxx There being no attending mitigating or aggravating circumstance in the case of accused Edgar Crisostomo, and taking into consideration the Indeterminate Sentence Law, he is hereby sentenced to suffer the penalty of imprisonment for the period from twelve (12) years, five (5) months and eleven (11) days of prision mayor, minimum, to eighteen (18) years, eight (8) months and one (1) day of reclusion temporal, maximum. xxx As to the other accused, Dominador C. Dela Cruz, Efren M. Perez, Raki T. Anggo, Randy A. Lumabo and Rolando M. Norberte, considering they are still atlarge up to the present time, let an alias warrant of arrest be issued against them. In the meantime, the cases against them are hereby ordered archived. SO ORDERED.[4] The Issues Crisostomo continues to assail the Sandiganbayans jurisdiction. He raises the following issues: WHETHER THE SANDIGANBAYAN HAS JURISDICTION OVER THE CRIME OF MURDER CHARGED AGAINST CRISOSTOMO WHO IS A SENIOR POLICE OFFICER 1 (SPO1) AT THE TIME OF THE FILING OF THE INFORMATION AGAINST HIM. EVEN ASSUMING ARGUENDO THAT THE RESPONDENT COURT HAS JURISDICTION, WHETHER THE SANDIGANBAYAN COMMITTED GRAVE ABUSE OF DISCRETION AMOUNTING TO LACK OR EXCESS OF JURISDICTION WHEN IT RULED THAT CRISOSTOMO IS GUILTY OF HAVING CONSPIRED IN THE MURDER OF RENATO DESPITE THE SANDIGANBAYANS ADMISSION IN ITS DECISION THAT THERE IS NO DIRECT EVIDENCE THAT WILL SHOW THE PARTICIPATION OF CRISOSTOMO IN THE DEATH OF THE VICTIM.[5] The Courts Ruling

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The Sandiganbayan had jurisdiction to try the case. However, the prosecution failed to prove Crisostomo and Calingayans guilt beyond reasonable doubt. Thus, we acquit Crisostomo and Calingayan. The Sandiganbayan had Jurisdiction to Try the Case Crisostomo argues that the Sandiganbayan was without jurisdiction to try the case. Crisostomo points out that the crime of murder is not listed in Section 4 of Presidential Decree No. 1606 (PD 1606) as one of the crimes that the Sandiganbayan can try. Crisostomo faults the Sandiganbayan for not applying the ruling in Sanchez v. Demetriou[6] to this case. In Sanchez v. Demetriou, the Court ruled that public office must be a constituent element of the crime as defined in the statute before the Sandiganbayan could acquire jurisdiction over a case. Crisostomo insists that there is no direct relation between the commission of murder and Crisostomos public office. Crisostomo further contends that the mere allegation in the Information that the offense was committed in relation to Crisostomos office is not sufficient to confer jurisdiction on the Sandiganbayan. Such allegation without the specific factual averments is merely a conclusion of law, not a factual averment that would show the close intimacy between the offense charged and the discharge of Crisostomos official duties. We are not convinced. Since the crime was committed on 14 February 1989, the applicable provision of law is Section 4 of PD 1606, as amended by Presidential Decree No. 1861 (PD 1861), which took effect on 23 March 1983. The amended provision reads: Sec. 4. Jurisdiction. The Sandiganbayan shall exercise: (a) Exclusive original jurisdiction in all cases involving: xxx (2) Other offenses or felonies committed by public officers and employees in relation to their office, including those employed in government-owned or controlled corporations, whether simple or complexed with other crimes, where the penalty prescribed by law is higher than prision correccional or imprisonment for six (6) years, or a fine of P6,000.00: PROVIDED, HOWEVER, that offenses or felonies mentioned in this paragraph where the penalty prescribed by law does not exceed prision correccional or imprisonment for six (6) years or a fine of P6,000.00 shall be tried by the proper Regional Trial Court, Metropolitan Trial Court, Municipal Trial Court and Municipal Circuit Trial Court. Crisostomo was charged with murder, the penalty for which is reclusion temporal in its maximum period to death, a penalty within the jurisdiction of the Sandiganbayan. Crisostomo would have the Court believe that being a jail guard is a mere incidental circumstance that bears no close intimacy with the commission of murder. Crisostomos theory would have been tenable if the murdered victim was not a prisoner under his custody as a jail guard. The function of a jail guard is to insure the safe custody and proper confinement of persons detained in the jail. In this case, the Information alleges that the victim was a detention prisoner when Crisostomo, the jail guard, conspired with the inmates to kill him. Indeed, murder and homicide will never be the main function of any public office. No public office will ever be a constituent element of murder. When then would murder or homicide, committed by a public officer, fall within the exclusive and original jurisdiction of the Sandiganbayan? People v. Montejo[7] provides the answer. The Court explained that a public officer commits an offense in relation to his office if he perpetrates the offense while performing, though in an improper or irregular manner, his official functions and he cannot commit the offense without holding his public office. In such a case, there is an intimate connection between the offense and the office of the accused. If the information alleges the close connection between the offense charged and the office of the accused, the case falls within the jurisdiction of the Sandiganbayan. People v. Montejo is an exception that Sanchez v. Demetriou recognized. Thus, the jurisdiction of the Sandiganbayan over this case will stand or fall on this test: Does the Information allege a close or intimate connection between the offense charged and Crisostomos public office? The Information passes the test. The Information alleged that Crisostomo a public officer, being then a member of the Philippine National Police (PNP) stationed at Solano Police Station and a jailer thereat, taking advantage of his public position and thus committing the offense in relation to his office conspired, confederated and connived with his co-accused who are inmates of the Solano Municipal Jail to kill Renato, a detention prisoner. If the victim were not a prisoner, the Information would have to state particularly the intimate relationship between the offense charged and the accused public officers office to vest jurisdiction on the Sandiganbayan. This is not the case here. The law restrains the liberty of a prisoner and puts him under the custody and watchful eyes of his jail guard. Again, the two-fold duties of a jail guard are to insure the safe custody and proper confinement of persons detained in the jail. The law restricts access to a prisoner. However, because of the very nature of the work of a jail guard, he has access to the prisoner. Crisostomo, as the jail guard, could not have conspired with the inmates to murder the detention prisoner in his cell if Crisostomo were not a jailer. The Information accused Crisostomo of murdering a detention prisoner, a crime that collides directly with Crisostomos office as a jail guard who has the duty to insure the safe custody of the prisoner. Crisostomos purported act of killing a detention prisoner, while irregular and contrary to Crisostomos duties, was committed while he was performing his official functions. The Information sufficiently apprised Crisostomo that he stood accused of committing the crime in relation to his office, a case that is cognizable by the Sandiganbayan, not the Regional Trial Court. There was no prejudice to Crisostomos substantive rights. Assuming that the Information failed to allege that Crisostomo committed the crime in relation to his office, the Sandiganbayan still had jurisdiction to try the case. The Information was filed with the Sandiganbayan on 19 October 1993. Deloso v. Domingo,[8] promulgated on 21 November 1990, did not require that the information should allege that the accused public officer committed the offense in relation to his office before the Sandiganbayan could assume jurisdiction over the case. The ruling in Deloso v. Domingo relied solely on PD 1606. Aguinaldo v. Domagas,[9] promulgated on 26 September 1991, modified Deloso v. Domingo. Aguinaldo v. Domagas clarified that offenses specified in Section 4(a)(2) of PD 1606, as amended by PD 1861, must be committed by public officers and employees in relation to their office and the information must allege this fact. The succeeding cases of Sanchez v. Demetriou[10] and Natividad v. Felix,[11] reiterated the Aguinaldo v. Domagas ruling. However, despite the subsequent cases clarifying Deloso v. Domingo, the Court in Republic v. Asuncion,[12] promulgated on 11 March 1994, applied the ruling in Deloso v. Domingo. Since the effects of the misapprehension of Deloso v. Domingo doctrine were still persistent, the Court set out the following directives in Republic v. Asuncion: The dismissal then of Criminal Case No. Q-91-23224 solely on the basis of Deloso vs. Domingo was erroneous. In the light of Aguinaldo and Sanchez, and considering the absence of any allegation in the information that the offense was committed by private respondent in relation to his office, it would even appear that the RTC has exclusive jurisdiction over the case. However, it may yet be true that the crime of homicide charged therein was committed by the private respondent in relation to his office, which fact, however, was not alleged in the information probably because Deloso vs. Domingo did not require such an allegation. In view of this eventuality and the special circumstances of this case, and to avoid further delay, if not confusion, we shall direct the court a quo to conduct a preliminary hearing in this case to determine whether the crime charged in Criminal Case No. Q-91-23224 was committed by the private respondent in relation to his office. If it be determined in the affirmative, then it shall order the transfer of the case to the Sandiganbayan which shall forthwith docket and proceed with the case as if the same were originally filed with it. Otherwise, the court a quo shall set aside the challenged orders, proceed with the trial of the case, and render judgment thereon. Republic v. Asuncion ordered the trial court to conduct a preliminary hearing to determine whether the accused public officer committed the crime charged while performing his office. If so, the trial court must order the transfer of the case to the Sandiganbayan as if the same were originally filed with the Sandiganbayan. In the present case, the Information was filed with the Sandiganbayan upon the recommendation of the Office of the Deputy Ombudsman in a Resolution dated 30 June 1993. That Crisostomo committed the crime in relation to his office can be gleaned from the Deputy Ombudsmans resolution as it stated that: (1) Crisostomo was the jail guard on duty at the time that Renato was killed; (2) from the time that Crisostomo assumed his duty up to the discovery of Renatos body, no one had entered the jail and no one could enter the jail, as it was always locked, without the permission of the jail guard; (3) the key is always with the jail guard; (4) Renato sustained severe and multiple injuries inflicted by two or more persons indicating conspiracy; and (5) the relative position of the jail guard to the cell is in such a way that any activity inside the cell could be heard if not seen by the jail guard. Based on the foregoing findings, as well as on the Deloso v. Domingo ruling and the Courts instructions in Republic v. Asuncion, the Sandiganbayan had every reason to assume jurisdiction over this case. Crisostomo waited until the very last stage of this case, the rendition of the verdict, before he questioned the Sandiganbayans jurisdiction. Crisostomo is already estopped from questioning the Sandiganbayans jurisdiction. [13] Crisostomos Guilt was not Proven Beyond Reasonable Doubt In the exercise of the Courts judicial discretion, this petition for certiorari will be treated as an appeal from the decision of the Sandiganbayan to prevent the manifest miscarriage of justice[14] in a criminal case involving a capital offense. An appeal in a criminal case opens the entire case for review.[15] The reviewing tribunal can correct errors though unassigned in the appeal, or even reverse the lower courts decision on grounds other than those the parties raised as errors.[16] In this case, the prosecution had the burden to prove first, the conspiracy to murder Renato, and second, Crisostomos complicity in the conspiracy. The prosecution must prove that Renatos death was not the result of suicide but was produced by a deliberate intent to kill him with the attendant circumstances that would qualify the killing to murder. Since Crisostomo had no direct hand in the killing of Renato, the conviction could only be sustained if the murder was carried out through a conspiracy between Crisostomo and his co-accused, the inmates. It must be proven beyond reasonable doubt that Crisostomos action and inaction were all part of a scheme to murder Renato.

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Renato was Killed with Deliberate Intent To prove that Renatos death is a case of homicide or murder, there must be incontrovertible evidence, direct or circumstantial, that he was deliberately killed.[17] Intent to kill can be deduced from the weapons used by the malefactors, the nature, location and number of wounds sustained by the victim and the words uttered by the malefactors before, at the time or immediately after the killing of the victim. [18] If the victim dies because of a deliberate act of the malefactor, intent to kill is conclusively presumed. [19] The prosecution established that Renato did not commit suicide. Witnesses for the prosecution vouched that Renato was in good health prior to his death. Calingayan, the sole witness for the defense, did not point out that there was any thing wrong with Renato prior to his death. The autopsy and exhumation reports debunked the defenses theory that Renato hanged himself to death. Renatos injuries were so massive and grave that it would have been impossible for these injuries to have been self-inflicted by Renato. The extent of Renatos injuries indicates the perpetrators deliberate intent to kill him. Dr. Ruben M. Agobung (Dr. Agobung), the NBI Medico Legal Officer[20] who exhumed and re-autopsied Renatos body, stated in his affidavit[21] that Renato sustained several external and internal injuries, the most significant of which are the ruptured liver, torn messentery and torn stomach. The injuries caused massive intra-abdominal hemorrhage that ultimately caused Renatos death. Dr. Agobung further declared that Renatos injuries could bring about death in a matter of minutes to a few hours from the time of infliction, if not promptly and properly attended to by a competent surgeon. Renatos internal injuries were so severe that the injuries could not have been sustained prior to his detention at the Solano Municipal Jail. If this were so, Renato would have experienced continuous and severe body pains and he would have fallen into shock, which could have been obvious even to those who are not doctors. Dr. Agobung also concluded that Renatos injuries could have been inflicted by the application of considerable force with the use of a hard and rough surface as well as hard smooth surface instruments, fist blows included. While the blanket that was tied around Renatos neck caused abrasion and contusion on the neck area, these injuries, however, did not cause Renatos death because the blood vessels on his neck were still intact.[22] The Exhumation Report[23] and Exhumation Findings[24] stated that Renato died due to hemorrhagic shock, secondary to multiple internal organ injuries. These findings lead to the inevitable conclusion that Renato was killed with deliberate intent and his body was hanged just to simulate suicide. Prosecution Failed to Prove Crisostomos Involvement in the Killing No direct evidence linked Crisostomo to the killing of Renato. The prosecution relied on circumstantial evidence to prove that there was a conspiracy to kill Renato and Crisostomo participated in carrying out the conspiracy. Circumstantial evidence consists of proof of collateral facts and circumstances from which the existence of the main fact may be inferred according to reason and common experience. [25] Section 4, Rule 133 of the Revised Rules of Evidence states that circumstantial evidence is sufficient if: (a) there is more than one circumstance; (b) the facts from which the inferences are derived are proven; (c) the combination of all the circumstances is such as to produce a conviction beyond reasonable doubt. In convicting Crisostomo, the Sandiganbayan cited the following circumstantial evidence: 1. The deceased, Renato Suba, was brought to the police station on the night of February 13, 1989 for investigation for allegedly hitting the head of a certain Diosdado Lacangan; and that after investigation, the deceased was brought to the detention cell (tsn, hearing of April 21, 1994, pp. 5-11). 2. On the following day at 5:00 oclock in the afternoon, the deceased was visited by his brother, Rizalino Suba; that the deceased asked his brother to bring him a blanket, toothbrush, clothes and foods (ibid, pp. 13-14). 3. Rizalino Suba left the municipal jail on February 14, 1989, at almost 5:20 p.m., while his other brother, Rolando, brought the things to the deceased in jail; and that Rolando left their house at about 5:30 p.m. and came back at 6:00 oclock in which Rizalino asked him (Rolando) if he (Renato Suba) was able to finish the food that he sent and he answered in the affirmative (ibid, pp. 16, 18-19). 4. At that time, the deceased was in good health and in good condition and that he was not complaining anything about his body; and that the deceased was then 26 years old, single and had finished advance ROTC and worked in a logging concession (ibid, pp. 16-18). 5. Accused Mario Calingayan saw the deceased still alive lying down after 6:00 p.m. when he was about to take a bath; and that after taking a bath, he (witness) went to his cell and played cards with his three (3) cellmates (whose names he could not recall) for about four (4) hours (tsn, hearing of April 4, 1995, pp. 16-17). 6. At around 9:00 oclock of the same day, Mr. Baldovino, a barangay councilman, informed them that they should go to the municipal building as per request of the policemen; that Rizalino Suba, first asked his uncle David Suba and Manuel Rollo, a barangay councilman, to accompany him; that they arrived at the municipal building at 9:10 p.m. and they saw that the deceased was already lying dead on the cement floor outside the cell 1 in the municipal building (tsn, hearing of April 21, 1994, pp. 20-22). 7. Accused Mario Calingayan was detained with five (5) others at the second cell among four (4) cells in the jail; that the deceased, Renato Suba, was detained alone at the third cell (tsn, hearing of April 4, 1995, pp. 6-7). 8. The four (4) cells, although having their own separate doors, made of iron grills and equipped each with a padlock, were always open; that it was up to them whether to close the doors; that the keys of the padlocks are held by the guard; and that any detention prisoner could go to any cell inside the prison (ibid, pp. 7-8, 21, 23). 9. There was a common door located in front, leading inside to the cells which no one could enter because it is padlocked, except with the jail guards permission; and that the comfort room is located in the 4 th cell which is not equipped with a padlock so that if you want to go to the comfort room, you do not anymore need the key in the office of the jail guard (ibid, p. 22). 10. There is only one guard assigned in the cells and accused Edgar Crisostomo was the one who was rendering duty at the time of the death of the victim (ibid, pp. 9, 13). 11. There was no other person who was admitted on February 12, 13 and 14, 1989, and there was no instance when Suba was brought out of the prison cell from the time he was detained on February 14, 1989 (ibid, p. 29). 12. The persons who were detained together with the deceased at the time of his death were released without any investigation having been conducted by the local police (tsn, hearing of April 21, 1994, pp. 28-29). 13. The apparent inconsistency in the list of detainees/prisoners dated February 20, 1989 (Exhibit I) and the police blotter (Exhibits J and J-1) whereby in the former there were eight prisoners on February 14, 1989 including the victim but only six were turned over by accused Crisostomo to the incoming jail guard after the death of the victim; the list contains nine (9) detainees/prisoners on February 15, 1989 which includes the victim, who was then dead, while the police blotter shows that only six prisoners were under their custody. Why the apparent inconsistency? 14. Accused Mario Calingayans claim that he was detained on February 12, 1989, which is contrary to the master list of detainees showing that he was detained only on February 14, 1989 (tsn, hearing of April 4, 1995, p. 19). 15. Accused Mario Calingayans allegation that when Renato Suba was brought outside, he saw that he hanged himself with a thin blanket (tsn, hearing of April 4, 1995, pp. 12-13) which was what the policemen also told the brother of the victim (tsn, hearing of April 21, 1994, pp. 23-24). 16. After the prosecution rested its case and after co-accused Mario Calingayan was finished with his testimony in court, accused Edgar Crisostomo jumped bail and up to this day had remained at large (Rollo, pp. 297-298, 305). 17. The fact that accused Dominador C. Dela Cruz, Efren M. Perez, Raki T. Anggo, Randy A. Lumabo and Rolando M. Norberte are also still at-large. [26] The Sandiganbayan also relied on the Memorandum Report[27] dated 22 October 1991 of Oscar Oida, then National Bureau of Investigation (NBI) Regional Director for Region II, who evaluated the NBIs investigation of the case. The Sandiganbayan quoted the following portions of the report: xxx 5. That when he [victim] was brought to the Solano Municipal Jail at around 12:00 midnight on 14 February 1989 (the same was corrected by witness Oscar Oida to be February 13, 1989 when he testified in open court), he was accompanied by his brother, Rizalino Suba, his cousin, Rodolfo Suba and Brgy. Councilman Manuel Rulloda in good physical condition with no injuries[;] 6. That when Luis Suba, father of the victim, Renato Suba, visited him in jail at around 8:00 a.m., on February 14, 1989 and brought food for his breakfast, he was in good physical condition, and did not complain of any physical injury or pain. In fact, he was able to eat all the food[;] 7. That when Rizalino Suba, brother of the victim, visited the latter at around 5:00 oclock p.m. on 14 February 1989, victim was in good spirit and never complained of any injury or bodily pain. He was in good physical condition. He even requested that he be brought his clothes, beddings and food[;] 8. That when Rolando Suba, another brother of victim, brought the clothes, bedding and food as requested by the latter at around 6:00 oclock p.m. on 14 February 1989, he was in good physical condition and did not complain of any injury or body pain[;] 9. That the good physical condition of victim, Renato Suba was even corroborated by his four co-inmates, namely, Arki Anggo, Randy A. Lumabo, Rolando M. Norberte and Mario B. Calingayan and by the jailer, Pat. Edgar T. Crisostomo, when he was placed under detention in the Solano Municipal Jail; 10. That the jailer Pat. Edgar Crisostomo from the time he assumed his tour of duty from 4:00 oclock p.m. on 14 February 1989, up to the time the victim was discovered allegedly dead and hanging inside the jail at 9:00 oclock p.m. on that same day, nobody entered the jail and no one would enter said jail, as it was always locked, without the permission of the jailer. The key is always with the jailer; 11. That the only companions of the victim at the time of the discovery of his death on 14 February 1989 at around 9:00 p.m. were his six (6) co-inmates namely: Dominador C. dela Cruz, Edren M. Perez, Raki T. Anggo, Randy A. Luma[b]o, Rolando M. Norbert[e] and Mario Calingayan; 12. That definitely the cause of death was not suicide by hanging but due to several injuries sustained by the victim. The most significant and remarkable of which are the ruptured liver, torn messentery and a torn stomach which injuries resulted into massive intra-abdominal hemorrhage that ultimately caused the death of said victim per autopsy examination;

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13. That said injuries can bring about death in a matter of minutes to a few hours if not promptly and properly attended by a competent surgeon; 14. That said injuries could not have been sustained by victim before he was detained at the Solano Municipal Jail as he could have been experiencing continuous severe pain which can easily be observed by the policemen who arrested him on 14 February 1989 at around 12:00 midnight and therefore should have been brought to the hospital and not confined in the detention cell; 15. That the several injuries sustained by victim were caused by hard rough-surfaced as well as hard smooth surfaced instruments, fist blows included; 16. That the multiple injuries and the gravity of the injuries sustained by victim indicate that they were inflicted by more than two persons; 17. That the nature of the injuries sustained by victim were almost in one particular part of the body, shown by the fact that the internal organs badly damaged were the liver, messentery and stomach indicating that the victim was defenseless and helpless thus affording the assailants to pounce on continuously with impunity almost on one spot of the body of the victim. The victim could have been held by two or more assailants while the others were alternately or giving victim blows on his body with hard rough surfaced as well as hard smooth surfaced instruments, fist blows included; 18. That with the location and gravity of the injuries sustained by victim, the persons who inflicted the injuries know fully well that victim will die and knew the consequences of their acts; 19. That the motive was revenge, as victim before he was killed, hit in the head a certain Diosdado Lacangan with a wood causing serious injury. Lacangan was in serious condition at the time victim was killed[;] 20. That the claims of the Solano police and the six (6) co-inmates of victim that the latter committed suicide by hanging is only a cover up to hide a heinous offense[;] 21. That the extreme silence of the suspects regarding the death of victim is so deafening that it established only one thing, conspiracy. It is unusual for a person not to volunteer information as to who could be the author of the offense if he is not a participant to a heinous offense particularly in this case where the circumstances show that there can be no other person responsible for the death of the victim except the suspects in this instant case[;] 22. That the victim was killed between 6:00 PM to 9:00 PM on 14 February 1989 inside the Solano Municipal Jail[;] xxx The relative position of the jailer to the cell where victim was killed was such that the jailer and the policemen present, could hear if not see what was going inside the cell at the time the victim was killed. The injuries sustained by victim could not be inflicted without victim shouting and crying for help. Even the assailants when they inflicted these injuries on victim could not avoid making loud noises that could attract the attention of the police officers present. Conspiracy to kill the victim among the inmates and the police officers was clearly established from the circumstances preceding and after the killing of victim.[28] In sum, the Sandiganbayan believed that Crisostomo took part in the conspiracy to kill Renato because of these three circumstances: 1) Crisostomo as the jail guard on duty at the time of Renatos killing had in his possession the keys to the main door and the cells; (2) Crisostomo was in such a position that he could have seen or heard the killing of Renato; and (3) there are discrepancies between the list of detainees/prisoners and the police blotter. According to the Sandiganbayan, there is a prima facie case against Crisostomo. Except for the extensive injuries that Renatos body bore, there is no other evidence that proves that there was a prior agreement between Crisostomo and the six inmates to kill Renato. In People v. Corpuz,[29] one of the inmates killed by the other inmates sustained stab wounds that were possibly inflicted by ten persons. The Court ruled that conspiracy could not be inferred from the manner that the accused inmates attacked their fellow inmate because there was no sufficient showing that all the accused inmates acted pursuant to a previous common accord. Each of the accused inmates was held liable for his individual act. Although no formal agreement is necessary to establish conspiracy because conspiracy may be inferred from the circumstances attending the commission of the crime, yet conspiracy must be established by clear and convincing evidence. [30] Even if all the malefactors joined in the killing, such circumstance alone does not satisfy the requirement of conspiracy because the rule is that neither joint nor simultaneous action is per se sufficient proof of conspiracy. [31] Conspiracy must be shown to exist as clearly and convincingly as the commission of the offense itself. [32] Thus, even assuming that Renato was simultaneously attacked, this does not prove conspiracy. The malefactors who inflicted the fatal injuries may have intended by their own separate acts to bring about the death of the victim. [33] No evidence was presented to show that Crisostomo and the inmates planned to kill Renato or that Crisostomos overt acts or inaction facilitated the alleged plan to kill Renato. The prosecution had the burden to show Crisostomos intentional participation to the furtherance of the common design and purpose. The pieces of circumstantial evidence are not sufficient to create a prima facie case against Crisostomo. When the three circumstances are examined with the other evidence on record, it becomes all the more clear that these circumstances do not lead to a logical conclusion that Crisostomo lent support to an alleged conspiracy to murder Renato. First, while Crisostomo as jail guard had in his possession the keys to the main door and individual cells, there is no proof that Crisostomo allowed an outsider inside the prison. Calingayan, the sole witness for the defense, testified that no new detainee was admitted from 13 to 14 of February 1989. [34] The NBI Report[35] relied upon by the Sandiganbayan confirms Calingayans testimony that nobody entered the jail and that Renatos only companions inside the jail were the six inmates. [36] There is also no proof that Crisostomo purposely left the individual cells open to allow the inmates to attack Renato who was alone in the third cell. Calingayan, who was detained ahead of Renato,[37] testified that while each of the four cells had a padlock, the cells had always been kept open. [38] The inmates had always been allowed to enter the cells and it was up to the inmates to close the doors of the cells. [39] The inmates could freely go to the fourth cell, which was the inmates comfort room so that they would no longer ask for the key from the jail guard every time the inmates would use the comfort room.[40] Second, the Sandiganbayan should not have absolutely relied on the NBI Report [41] stating that Crisostomo as jail guard was in such a position that he could have seen or heard the killing. The prosecution failed to establish that Crisostomo actually saw and heard the killing of Renato. Based on Calingayans testimony, it was not impossible for Crisostomo not to have actually seen and heard the killing of Renato. On cross-examination, Calingayan testified that all of the cells were in one line.[42] Crisostomos office was at the left side of the cells about 15 meters away from cell number two, the cell where Calingayan was detained. [43] Hollow blocks from the floor to the ceiling separated each of the four cells. [44] With the partition, an inmate in one cell could not see what was happening in the other cells. [45] Calingayan further testified that Renatos body was in a dark place, [46] as it was lighted from outside only by a bulb at the alley, at the corridor.[47] Since Renatos body was found in cell number four, this would make the distance between Crisostomos office and the crime scene more than 15 meters. Crisostomo could not have had a full view of cell number four because of the distance between Crisostomos office and cell number four, the partitions of the four cells and poor lighting in the jail. Calingayans description of the jail, the cells, the location of Renatos body and Crisostomos actual position was not contradicted by the prosecution. There is no other evidence on record that describes the layout and conditions of the jail at the time of Renatos death. The prosecution had the burden to present evidence that Crisostomo indeed saw and heard Renatos killing and Crisostomo consented to the killing as part of the plan to kill Renato. The absence of such evidence does not preclude the possibility that Renato was covertly killed and the sounds were muffled to conceal the crime from Crisostomo, the jail guard. Or Crisostomo as jail guard was simply negligent in securing the safety of the inmates under his custody. If Crisostomo were negligent, this would be incompatible with conspiracy because negligence denotes the absence of intent while conspiracy involves a meeting of the minds to commit a crime. [48] It was the prosecutions burden to limit the possibilities to only one: that Crisostomo conspired with the inmates to kill Renato. The prosecution failed to do so. Third, the prosecution was not clear as to the implication of the discrepancies between the list of detainees/prisoners and police blotter to the conspiracy to murder Renato. The prosecution did not even pinpoint which of the two documents is the accurate document. The prosecution merely asked: why the apparent inconsistency?[49] Courts must judge the guilt or innocence of the accused based on facts and not on mere conjectures, presumptions or suspicions. [50] The inconsistency between the two documents without anything more remains as merely that an inconsistency. The inconsistency does not even have any bearing on the prosecutions conspiracy theory. The NBI Report and Calingayans testimony stated that six inmates were with Renato inside the jail. This was also the same number of inmates turned over by Crisostomo to the incoming jail guard after Renatos death. [51] The alleged motive for Renatos killing was to avenge the attack on Lacangan who was then in a serious condition because Renato hit him on the head with a piece of wood. No evidence was presented to link Crisostomo to Lacangan or to show what compelling motive made Crisostomo, a jail guard, abandon his duty and instead facilitate the killing of an inmate under his custody. Motive is generally held to be immaterial because it is not an element of the crime.[52] However, motive becomes important when the evidence on the commission of the crime is purely circumstantial or inconclusive. [53] Motive is thus vital in this case. Clearly, the Sandiganbayan had no basis to convict Crisostomo because the prosecution failed to produce the evidence necessary to overturn the presumption of innocence. The insufficiency of evidence was the same reason why the National Police Commission dismissed the administrative case for grave misconduct (murder) against Crisostomo on 24 October 1990. [54] The circumstances in this case did not constitute an unbroken chain that would lead to a reasonable conclusion that Crisostomo played a role in the inmates supposed preconceived effort to kill Renato. Thus, Crisostomo must be acquitted. The deafening silence of all of the accused does not necessarily point to a conspiracy. In the first place, not all of the accused remained silent. Calingayan put himself on the witness stand. Calingayan further claimed that the Solano police investigated him and his handwritten statements were

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taken the morning following Renatos death.[55] Secondly, an accused has the constitutional right to remain silent and to be exempt from being compelled to be a witness against himself.[56] A judgment of conviction must be predicated on the strength of the evidence for the prosecution and not on the weakness of the evidence for the defense. [57] The circumstantial evidence in this case is not sufficient to create a prima facie case to shift the burden of evidence to Crisostomo. Moreover, Calingayans testimony inured to Crisostomos favor. The supposed waiver of presentation of evidence did not work against Crisostomo because the prosecution failed to prove Crisostomos guilt beyond reasonable doubt. In Salvatierra v. CA,[58] upon ruling for the defendants acquittal, the Court disregarded the issue of whether the defendants jumped bail for failing to attend trial and whether their absence should be considered as flight and as evidence of guilt. Even with this ruling in Salvatierra v. CA, which is applicable to this case, and Crisostomos failure to question the violation of his right to procedural due process before the Court, we cannot simply ignore the Sandiganbayans grave abuse of discretion. The records show that the Sandiganbayan set the hearing of the defenses presentation of evidence on 21, 22 and 23 June 1995. The 21 June 1995 hearing was cancelled because of lack of quorum in the regular membership of the Sandiganbayans Second Division and upon the agreement of the parties.[59] The hearing was reset the next day, 22 June 1995. Crisostomo and his counsel failed to attend the 22 June 1995 hearing. The Sandiganbayan, on the very same day, issued an order[60] directing the issuance of a warrant for the arrest of Crisostomo and ordering the confiscation of his surety bond. The order further declared that Crisostomo had waived his right to present evidence because of his non-appearance at yesterdays and todays scheduled hearings.[61] The Sandiganbayan terminated the trial and gave the parties thirty days within which to file their memoranda, after which, with or without the memoranda, the case would still be deemed submitted for decision. The Sandiganbayans error is obvious. Strictly speaking, Crisostomo failed to appear only on the 22 June 1995 hearing. Crisostomos appearance on the 21 June 1995 hearing would not have mattered because the hearing on this date was cancelled for lack of quorum of justices in the Sandiganbayans Second Division. Under Section 2(c), Rule 114 and Section 1(c), Rule 115 of the Rules of Court, Crisostomos non-appearance during the 22 June 1995 trial was merely a waiver of his right to be present for trial on such date only and not for the succeeding trial dates. [62] Section 1(c) of Rule 115 clearly states that: xxx The absence of the accused without any justifiable cause at the trial on a particular date of which he had notice shall be considered a waiver of his right to be present during that trial. When an accused under custody had been notified of the date of the trial and escapes, he shall be deemed to have waived his right to be present on said date and on all subsequent trial dates until custody is regained. Moreover, Crisostomos absence on the 22 June 1995 hearing should not have been deemed as a waiver of his right to present evidence. While constitutional rights may be waived, such waiver must be clear and must be coupled with an actual intention to relinquish the right. [63] Crisostomo did not voluntarily waive in person or even through his counsel the right to present evidence. The Sandiganbayan imposed the waiver due to the agreement of the prosecution, Calingayan, and Calingayans counsel. In criminal cases where the imposable penalty may be death, as in the present case, the court is called upon to see to it that the accused is personally made aware of the consequences of a waiver of the right to present evidence.[64] In fact, it is not enough that the accused is simply warned of the consequences of another failure to attend the succeeding hearings.[65] The court must first explain to the accused personally in clear terms the exact nature and consequences of a waiver.[66] Crisostomo was not even forewarned. The Sandiganbayan simply went ahead to deprive Crisostomo of his right to present evidence without even allowing Crisostomo to explain his absence on the 22 June 1995 hearing. Clearly, the waiver of the right to present evidence in a criminal case involving a grave penalty is not assumed and taken lightly. The presence of the accused and his counsel is indispensable so that the court could personally conduct a searching inquiry into the waiver. [67] Moreover, the searching inquiry must conform to the procedure recently reiterated in People v. Beriber,[68] to wit: 1. The trial court shall hear both the prosecution and the accused with their respective counsel on the desire or manifestation of the accused to waive the right to present evidence and be heard. 2. The trial court shall ensure the attendance of the prosecution and especially the accused with their respective counsel in the hearing which must be recorded. Their presence must be duly entered in the minutes of the proceedings. 3. During the hearing, it shall be the task of the trial court to a. ask the defense counsel a series of question[s] to determine whether he had conferred with and completely explained to the accused that he had the right to present evidence and be heard as well as its meaning and consequences, together with the significance and outcome of the waiver of such right. If the lawyer for the accused has not done so, the trial court shall give the latter enough time to fulfill this professional obligation. b. inquire from the defense counsel with conformity of the accused whether he wants to present evidence or submit a memorandum elucidating on the contradictions and insufficiency of the prosecution evidence, if any or in default thereof, file a demurrer to evidence with prior leave of court, if he so believes that the prosecution evidence is so weak that it need not even be rebutted. If there is a desire to do so, the trial court shall give the defense enough time for this purpose. c. elicit information about the personality profile of the accused, such as his age, socio-economic status, and educational background, which may serve as a trustworthy index of his capacity to give a free and informed waiver. d. all questions posed to the accused should be in a language known and understood by the latter, hence, the record must state the language used for this purpose as well as reflect the corresponding translation thereof in English. If no waiver of the right to present evidence could be presumed from Crisostomos failure to attend the 22 June 1995 hearing, with more reason that flight could not be logically inferred from Crisostomos absence at that hearing. Crisostomos absence did not even justify the forfeiture of his bail bond. A bail bond may be forfeited only in instances where the presence of the accused is specifically required by the court or the Rules of Court and, despite due notice to the bondsmen to produce him before the court on a given date, the accused fails to appear in person as so required. [69] Crisostomo was not specifically required by the Sandiganbayan or the Rules of Court to appear on the 22 June 1995 hearing. Thus, there was no basis for the Sandiganbayan to order the confiscation of Crisostomos surety bond and assume that Crisostomo had jumped bail. Prior to his absence on the 22 June 1995 hearing, Crisostomo had regularly attended the hearings of the case. When it was Crisostomos turn to present his evidence, Atty. Anecio R. Guades (Atty. Guades), Crisostomos former counsel, instructed Crisostomo to wait for the notice of hearing from him and the Sandiganbayan. Crisostomo did not receive any notice from the Sandiganbayan or from Atty. Guades who disappeared without informing Crisostomo of his new office address. Upon notification of the promulgation of the case scheduled on 28 November 2000, Crisostomo voluntarily appeared before the Sandiganbayan. Crisostomo then terminated the services of Atty. Guades and engaged the services of another counsel. In the omnibus motion for new trial filed by Crisostomos new counsel, Crisostomo denied that he went into hiding. If given the chance, Crisostomo would have presented his pay slips and certificates of attendance to prove that he had been reporting for work at the Police Station in Solano, Nueva Vizcaya. [70] We could not absolutely fault the Sandiganbayan for not correcting its 22 June 1995 Order. The Sandiganbayan lost the opportunity to review the order when Crisostomos new counsel changed his legal strategy by withdrawing the omnibus motion for new trial and instead sought the nullification of the Sandiganbayans decision for lack of jurisdiction over the case. However, the withdrawal of the omnibus motion could not erase the Sandiganbayans violation of Crisostomos right to procedural due process and Atty. Guades gross negligence. Atty. Guades failed to protect his clients interest when he did not notify Crisostomo of the scheduled hearings and just vanished without informing Crisostomo and the Sandiganbayan of his new office address. The 22 June 1995 Order was served on Atty. Guades but he did not even comply with the directive in the Order to explain in writing his absence at the 21 and 22 June 1995 hearings. Atty. Guades did not file the memorandum in Crisostomos behalf required by the same Order. Atty. Guades did not also question the violation of Crisostomos right to procedural due process. The subsequent notices of hearing and promulgation were not served on Atty. Guades as he could not be located in the building where his office was located.[71] Clearly, Atty. Guadess negligence was so gross that it should not prejudice Crisostomos constitutional right to be heard, [72] especially in this case when the imposable penalty may be death. At any rate, the remand of the case is no longer necessary. [73] The prosecutions evidence failed to overturn the constitutional presumption of innocence warranting Crisostomos acquittal. The Sandiganbayan imposed an indeterminate sentence on Crisostomo. The Indeterminate Sentence Law (ISL) is not applicable to persons convicted of offenses punished with the death penalty or reclusion perpetua.[74] Since Crisostomo was accused of murder, the penalty for which is reclusion temporal in its maximum period to death, the Sandiganbayan should have imposed the penalty in its medium period since it found no aggravating circumstance. [75] The medium period of the penalty is reclusion perpertua. Calingayan must be also Acquitted The Sandiganbayan cited only two circumstances as evidence of Calingayans guilt. The Sandiganbayan held that Calingayans claim that he was detained on 12 February 1989 is contrary to the master list of detainees showing that Calingayan was detained on 14 February 1989. [76] Second is Calingayans allegation that when Renato Suba was brought outside, he saw that he hanged himself with a thin blanket, which was what the policemen also told the brother of the victim.[77] The Sandiganbayan did not elaborate on this circumstance. The Sandiganbayan was apparently suspicious of Renatos knowledge of the material that was used to hang Renato. Renato could have been killed by two or more inmates or possibly even by all of the inmates. However, since no conspiracy was proven to exist in this case, the perpetrators of the crime needed to be identified and their independent acts had to be proven. [78] The two circumstances that were held against Calingayan are not sufficient proof that Calingayan was one of the inmates who killed Renato. Thus, Calingayan must be also acquitted.

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Section 11(a) of Rule 122 of the Rules of Court provides that [a]n appeal taken by one or more [of] several accused shall not affect those who did not appeal, except insofar as the judgment of the appellant court is favorable and applicable to the latter. In this case, only Crisostomo questioned the jurisdiction and decision of the Sandiganbayan. However, the evidence against Crisostomo and Calingayan are inextricably linked as their conviction hinged on the prosecutions unproven theory of conspiracy. Thus, Crisostomos acquittal, which is favorable and applicable to Calingayan, should benefit Calingayan.[79] WHEREFORE, the Decision of the Sandiganbayan in Criminal Case No. 19780 convicting appellant EDGAR CRISOSTOMO and co-accused MARIO B. CALINGAYAN is hereby REVERSED. EDGAR CRISOSTOMO and co-accused MARIO B. CALINGAYAN are ACQUITTED of the crime of murder and ordered immediately released from prison, unless held for another lawful cause. The Director of Prisons is directed to report to this Court compliance within five (5) days from receipt of this Decision. No costs. SO ORDERED. SECOND DIVISION [G.R. Nos. 138792-804. March 31, 2005] DANTE GUEVARRA, AUGUSTUS F. CESAR and ADRIANO SALVADOR, petitioners, vs. THE HON. FOURTH DIVISION OF THE SANDIGANBAYAN, PEOPLE OF THE PHILIPPINES, ZENAIDA P. PIA and CRESENCIANO D. GATCHALIAN, respondents. DECISION CALLEJO, SR., J.: This is a petition for certiorari under Rule 65 assailing the Resolution[1] of the Sandiganbayan, dated April 6, 1999 in Criminal Case Nos. 23082, 23084, 23085, 23086, 23087, 23089, 23090, 23091, 23092, 23093, 23094, 23096 and 23097, ordering the reinstatement of said criminal cases. Cresenciano Gatchalian and Zenaida Pia, faculty members of the Polytechnic University of the Philippines (PUP), filed a complaint [2] for violation of Republic Act No. 3019 with the Office of the Ombudsman against the administrators of PUP, namely, petitioners Dr. Zenaida A. Olonan, the President, Dr. Dante Guevarra, the Vice-President for Administration and Finance, Atty. Augustus F. Cesar, Administrative Officer V, and Mr. Adriano A. Salvador, the Acting Chief of the Accounting Office. The charges were made in connection with certain questionable transactions entered into by the PUP. A special audit team of the Commission on Audit (COA) had, likewise, conducted a special audit of selected transactions, and its findings were contained in SAO-SOG Report No. 93-19. The case was docketed as COA Case No. 92-290. Petitioner Olonan submitted a copy of the said report, the Memorandum of the COA Review Panel, and her request for reconsideration of the findings of the special audit team in the said report. An Information was, thereafter, filed in the Sandiganbayan against all the accused, including petitioner Olonan. The accusatory portion of the Information reads: That on or about 1989 and for a period subsequent thereto, in Sta. Mesa, Manila, Philippines, and within the jurisdiction of this Honorable Court, accused Dr. Zenaida A. Olonan, a public officer, being then the President of the Polytechnic University of the Philippines (P.U.P.), accused Dr. Dante G. Guevarra, likewise a public officer, being then the Vice-President for Administration and Finance, of the P.U.P., accused Atty. Augustus F. Cesar, also a public officer, being then an Administrative Officer V of the P.U.P., and accused Adriano A. Salvador, a public officer too, being then the Acting Chief of the Accounting Division of the P.U.P., taking advantage of their positions and the offense being committed in relation to their office, acting in evident bad faith and manifest partiality with a single criminal intent, and all together, conspiring and confederating with each other, did then and there, willfully, unlawfully and criminally, commit the following acts, to wit: 1. After the construction of eight school buildings with a total cost of P20,912,229.31, allow the non-turnover of unused construction materials and scrap construction materials to the P.U.P.; 2. Make an overpayment of P1,107,056.45 as terminal leave benefits to Dr. Nemesio Prudente; 3. Make a payment of P1.74 Million to 64 employees of the Bureau of Construction (B.O.C.), Department of Public Works and Highways (DPWH), which amount is over and above the prescribed fees for technical and supervision services, and also make honoraria payments to 19 P.U.P. officials in the amount of P556,367.00 without legal basis; 4. Incur an overpayment of P133,200.00 on a parcel of land in Lopez, Quezon Province, by failing to register on time a Deed of Donation covering 1,332 square meters of the aforestated property, which was embodied in a Deed of Sale covering 15,919 square meters of land; 5. Make payments in the total amount of P10,646,230.28 based on blind certifications in violation of Sec. 46 of P.D. 1177, the names of creditors submitted to the DBM for purposes of cash allocation, being different from the names of the creditors in the Schedule of Accounts payable; 6. Make payment for the purchase of curtains for the C.M. Recto Auditorium, exceeding the required quantity of 159 yards worth P27,462.00; 7. Make payments with a total amount of P167,627.13 with the necessary documents to validate payments thereto in the: repainting of the elevated concrete tank; floor sanding and varnishing of the gymnasium; renovation of the four (4) tennis courts; and repair and painting of the Pacia Board High School Building; and 8. Make an overpayment of P1.99 Million when six change-work orders in the construction of the library building were imposed with the indirect cost of 19% instead of only 16%; thus, causing undue injury to the government in the aforestated amounts, to the damage and prejudice of the government. CONTRARY TO LAW.[3] The case was docketed as Criminal Case No. 22854 and raffled to the Second Division of the Sandiganbayan. On motion of the Special Prosecutor, the arraignment of the accused was reset to November 14, 1995. [4] Graft Investigation Officer II Evelina S. Maglanoc-Reyes, recommended that the charges be dismissed. [5] However, the Ombudsman disapproved this recommendation and adopted that of Special Prosecution Officer I Cicero D. Jurado, Jr., dated July 28, 1995, to charge the accused with 17 counts of violation of Section 3(e) of Rep. Act No. 3019. [6] The accused filed a motion for the reconsideration of the Resolution. Meanwhile, Special Prosecution Officer I Evelyn T. Lucero-Agcaoili reviewed the recommendation of Jurado, and submitted a Memorandum to the Ombudsman recommending that 17 Informations be filed against all the accused, and that the Information in Criminal Case No. 22854 be withdrawn. Hence, the Special Prosecutor filed a Motion to Withdraw Criminal Case No. 22854 [7] dated January 8, 1996. Appended thereto were the 17 Informations adverted to by the Special Prosecutor. On January 12, 1996, the Sandiganbayan granted the motion and dismissed Criminal Case No. 22854. The bond posted by the accused was, likewise, cancelled.[8] On February 28, 1996, Agcaoili submitted a Memorandum[9] to the Office of the Ombudsman recommending that the 17 Informations be maintained. It appears, however, that the recommendation of Agcaoili was referred to retired Court of Appeals Associate Justice Alfredo Marigomen, a Special Assistant in the Office of the Ombudsman, for review. On May 24, 1996, Justice Marigomen submitted a Report[10] recommending the dropping of some of the charges against petitioner Olonan, and her retention as one of the accused in Criminal Case Nos. 23083, 23088 and 23098. The Ombudsman approved the recommendation.[11] On June 4, 1996, the COA rendered a decision[12] in Case No. 92-290 granting the motion for reconsideration of petitioner Olonan in SAO-SOG Report No. 93-19 and exonerating her of the charges therein. On August 15, 1996, the Sandiganbayan issued a Resolution [13] requiring the Prosecutor to inform the Court when the Ombudsman received the decision of the COA in Case No. 92-290 and whether the said decision will alter the position of the prosecution. On November 27, 1997, the Special Prosecutor filed a Manifestation and Motion [14] praying, inter alia, that the arraignment of all the accused in Criminal Case No. 23098 proceed as scheduled. They, likewise, manifested that, based on the recommendation of retired Justice Marigomen, dated May 24, 1996, 13 cases filed against the accused, specifically Criminal Case Nos. 23082, 23084, 23085, 23086, 23087, 23089, 23090, 23091, 23092, 23093, 23094, 23096 and 23097 were recommended for dismissal; he had no objection to the withdrawal of the Information in Criminal Case No. 23097 since it was merely a repetition of Criminal Case No. 23096; and with respect to the remaining four cases, it appears that one of them, specifically Criminal Case No. 23095 (withholding of RATA of Buscaino), was recommended for dismissal; in regard to the three cases, Criminal Case No. 23083 (blind certification); Criminal Case No. 23088 (floor sanding and varnishing of gymnasium) and Criminal Case No. 23098 (irregular payment of salary of COA Auditors), it appears that petitioner Olonans participation was undisputed.[15] The accused opposed the motion. During the hearing of November 28, 1997, the graft court consequently, directed the Special Prosecutor to file the appropriate motion with reference to the 13 criminal cases.[16] On January 8, 1998, the Prosecutor filed a Joint Reply to the pleadings of the accused, appending thereto the Report of Justice Marigomen.[17] On January 26, 1998, the graft court issued an Order dismissing Criminal Case Nos. 23082, 23084, 23085, 23086, 23087, and 23089, 23090, 23091, 23092, 23093, 23094 and 23096 to 23097; and, with reference to Criminal Case Nos. 23083, 23088 and 23098, the Office of the Special Prosecutor was given a period of 30 days within which to further review the records of the said cases and to report to the graft court, within the same period, its findings and recommendation, and the Ombudsmans action thereon, more specifically as to whether the said cases should proceed to trial or should be dismissed. The said order was purportedly based on the recommendation of Justice Marigomen which was cited by the Special Prosecutor in his Manifestation and Motion. Consequently, the graft court held in abeyance the arraignment of petitioners Olonan, Cesar and Salvador in Criminal Case Nos. 23083, 23088 and 23098 until further assignment. Likewise, the consideration of the Motion to Suspend Accused Pendente Lite dated December 3, 1995 was held in abeyance until the graft court had received the Memorandum of the Office of the Special Prosecutor containing its findings and recommendations in Criminal Case Nos. 23083, 23088 and 23098, and the Ombudsmans final action thereon.[18]

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When the Special Prosecutor received a copy of the Order of January 26, 1998, he filed, on February 20, 1998, a motion for the partial reconsideration of the order contending that, in his report, Justice Marigomen merely recommended that only petitioner Olonan be dropped as one of the accused persons in Criminal Case Nos. 23082, 23084, 23085, 23086, 23087, 23089, 23090, 23091, 23092, 23093, 23094, 23096 and 23097; that the said cases should be maintained as against the three other accused; that the inclusion of accused Olonan in Criminal Case Nos. 23082, 23088 and 23098 remain undisturbed; and that Criminal Case Nos. 23095 should be dismissed. [19] The Special Prosecutor reasoned out that, as gleaned from the Memorandum of retired Justice Marigomen, the recommendation of dropping of the 13 criminal cases applied only to petitioner Olonan. Hence, there was no legal and factual basis for the dismissal of the 13 criminal cases as against petitioners Guevarra, Cesar and Salvador.[20] The Special Prosecutor then prayed that the January 26, 1998 Order of the graft court, dismissing the above-mentioned cases against the petitioners, be reconsidered, and the 13 cases filed against them be reinstated.[21] The petitioners opposed the motion, contending that the January 26, 1998 Order of the graft court had become final and executory. Since no appeal or a motion for reconsideration thereof was filed within the period therefor, the order of the graft court was based on no less than the Manifestation and Motion of the Special Prosecutor. On April 6, 1999, the Sandiganbayan issued a Resolution granting the motion of the Special Prosecutor and modified its January 26, 1998 Order. The graft court set aside its Order dismissing Criminal Case Nos. 23082, 23084, 23085, 23086, 23087, 23089, 23090, 23091, 23092, 23093, 23094, 23096 and 23097 as against the petitioners and ordered the reinstatement of the said cases as against them. [22] The graft court declared that, while the motion of the Special Prosecutor was filed three days beyond the period therefor, nevertheless, it granted the motion in the interest of substantial justice.[23] Hence, the present petition for certiorari, assailing the April 6, 1999 Resolution of the Sandiganbayan where the following issues are raised: I. WHETHER OR NOT RESPONDENT COURT COMMITTED GRAVE ABUSE OF DISCRETION IN REINSTATING THE THIRTEEN (13) CRIMINAL CASES AGAINST THE PETITIONERS ON THE BASIS OF THE MOTION FOR RECONSIDERATION FILED BY THE PROSECUTION FILED BEYOND THE FIFTEEN-DAY REGLEMENTARY PERIOD. II. WHETHER OR NOT RESPONDENT COURT COMMITTED GRAVE ABUSE OF DISCRETION IN GRANTING THE MOTION FOR RECONSIDERATION ON THE BASIS SOLELY OF THE GROUNDS CITED BY THE PROSECUTION.[24] The petitioners aver that under Section 7 of Presidential Decree No. 1606 and Rule VIII of the Revised Rules of Procedure of the Sandiganbayan, respondent People of the Philippines, as plaintiff, had only 15 days from notice of the graft courts final order within which to file a motion for the reconsideration thereof. The petitioners also assert that under Section 2, Rule 45, of the 1997 Rules of Civil Procedure, the respondent People of the Philippines, had only 15 days from receipt of notice of the final order or the resolution denying its motion for reconsideration thereof within which to file a petition for review with this Court. The failure of the respondent People of the Philippines to file the said motion within the period therefor rendered the order issued by the graft court final and executory. As such, no matter how erroneous the said orders may have been, it was beyond the jurisdiction of the Sandiganbayan to set aside or nullify them. Citing the ruling of this Court in Icao v. Apalisok,[25] the petitioners posit that the rule applies even to criminal cases. They further posit that penal laws should be observed strictly against the State. The petitioners point out that the Special Prosecutor has not cited any justification for his failure to file the motion for partial reconsideration within the period therefore, given the fact that he was present when the graft court issued its order in open court on January 26, 1998, dismissing the 13 cases. The petitioners further assert that in resolving whether to dismiss the 13 cases or not, it behooved the respondent People of the Philippines and the Sandiganbayan to consider not only the Report of Justice Marigomen, but also the decision of the COA in Case No. 92-290. In its comment on the petition, respondent People of the Philippines asserts that the general rule that the periods prescribed to do certain acts must be followed is subject to exceptional circumstances. A delay may be excused on grounds of substantial justice and equity, and in the exercise of equity jurisdiction. The respondent emphasized that when the graft court gave a verbal order dismissing the 13 cases during the hearing of January 26, 1998, the Special Prosecutor objected thereto. The respondent argues that the graft court did not commit any grave abuse of its discretion in issuing its April 6, 1999 Resolution, and insists that it acted in the interest of substantial justice when it rectified its January 26, 1998 Order upon realizing that it erred in dismissing the 13 cases on the basis of the Report of Justice Marigomen since it did not contain any such recommendation of dismissal. In their reply, the petitioners insist that substantial justice alone without any justification of the respondents failure to file a motion for reconsideration within the reglementary period should not prevail over the clearly laid down policy on finality of judgment and rules on reglementary period. The petition has no merit. The petitioners are correct in claiming that an order or resolution of the Sandiganbayan ordering the dismissal of criminal cases becomes final and executory upon the lapse of 15 days from notice thereof to the parties, and, as such, is beyond the jurisdiction of the graft court to review, modify or set aside, if no appeal therefrom is filed by the aggrieved party. However, if the Sandiganbayan acts in excess or lack of jurisdiction, or with grave abuse of discretion amounting to excess or lack of jurisdiction in dismissing a criminal case, the dismissal is null and void. A tribunal acts without jurisdiction if it does not have the legal power to determine the case; there is excess of jurisdiction where a tribunal, being clothed with the power to determine the case, oversteps its authority as determined by law.[26] A void judgment or order has no legal and binding effect, force or efficacy for any purpose. In contemplation of law, it is non-existent.[27] Such judgment or order may be resisted in any action or proceeding whenever it is involved. It is not even necessary to take any steps to vacate or avoid a void judgment or final order; it may simply be ignored. [28] In the present case, we find and so hold that the Sandiganbayan acted with grave abuse of its discretion amounting to excess of its jurisdiction when it issued the Order of January 26, 1998 dismissing the 13 criminal cases based on the Manifestation and Motion of the Special Prosecutor, which was, in turn, based on the report of retired Court of Appeals Justice Marigomen. The records further show that the report of Justice Marigomen was triggered by the Recommendation of Special Prosecution Officer I Cicero Jurado, Jr., dated July 28, 1995, recommending that the 17 charges against the accused be maintained which, in effect, denied the motion for reconsideration of petitioner Olonan. The report of Justice Marigomen did not delve into and resolve the matter of the retention or dismissal of the 13 criminal cases against the petitioners precisely because the same was not referred to him for study and recommendation. Hence, Justice Marigomen merely recommended that petitioner Olonan be dropped as accused in the 13 criminal cases, and that her inclusion in Criminal Case Nos. 23083, 23088 and 23098 be maintained, thus: WHEREFORE, it is hereby recommended that movant Dr. Zenaida A. Olonan be dropped as one of the accused persons in Criminal Case Nos. 23082, 23084, 23085, 23086, 23087, 23089, 23090, 23091, 23092, 23093, 23094, 23096 and 23097. Her inclusion in Criminal Case Nos. 23083, 23088 and 23098 shall remain undisturbed. The entire Criminal Case No. 23095 should be dismissed. [29] The Sandiganbayan was well aware of Justice Marigomens report since the Special Prosecutor appended a copy thereof to his Joint Reply filed on January 8, 1998, in compliance with the graft courts Order of December 10, 1997. The Sandiganbayan ordered the dismissal of the 13 cases as against the petitioners over the objection of the Special Prosecutor on its erroneous perception that Justice Marigomen recommended in his report the dismissal of the 13 cases against the petitioners. By its Order, the graft court deprived the respondent People of the Philippines of its right to due process. In fine, the Sandiganbayan acted in excess of its jurisdiction and committed grave abuse of its discretion in dismissing the 13 criminal cases against the petitioners. [30] Hence, its Order dated January 26, 1998 dismissing the 13 criminal cases, as against the petitioners, was null and void;[31] it may thus be rectified, as did the graft court, per its Resolution dated April 6, 1999 despite the lapse of fifteen days from notice of the Special Prosecutor of its January 26, 1998 Order. By rectifying its void Order, it cannot be said that the graft court acted with grave abuse of its discretion, amounting to excess or lack of jurisdiction. Indeed, in so doing, the Sandiganbayan acted in accord with law. It bears stressing that the State, like the accused, is also entitled to due process of law. Not too long ago, the Court emphasized that: Indeed, for justice to prevail, the scales must balance; justice is not to be dispensed for the accused alone. The interests of society and the offended parties which have been wronged must be equally considered. Verily, a verdict of conviction is not necessarily a denial of justice; and an acquittal is not necessarily a triumph of justice, for, to the society offended and the party wronged, it could also mean injustice. Justice then must be rendered evenhandedly to both the accused, on one hand, and the State and offended party, on the other. [32] The Special Prosecutor must share the blame with the Sandiganbayan because in his Manifestation and Motion, the Special Prosecutor averred therein that Justice Marigomen recommended the dismissal of the 13 criminal cases against all the accused, without specifically stating therein that the recommendation for dismissal pertained only to petitioner Olonan, and not to the other accused who are the petitioners herein. The Special Prosecutor should have been more precise and forthright so as not to mislead the graft court. IN LIGHT OF ALL THE FOREGOING, the petition is DISMISSED. The assailed Resolution of the Sandiganbayan, dated April 6, 1999, is AFFIRMED. No costs. SO ORDERED.

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