OPPRESSION Oppression is the exercise of authority or power in a burdensome, cruel, or unjust manner.

[1] It can also be defined as an act or instance of oppressing, the state of being oppressed, and the feeling of being heavily burdened, mentally or physically, by troubles, adverse conditions, and anxiety. Social oppression[ The systematic, socially supported mistreatment and exploitation of a group, category, or team of people or individual. Institutionalized oppression[ "Institutional Oppression occurs when established laws, customs, and practices systematically reflect and produce inequities based on ones membership in targeted social identity groups. If oppressive consequences accrue to institutional laws, customs, or practices, the institution is oppressive whether or not the individuals maintaining those practices have oppressive intentions."[2] Systematic oppression[ Police and law themselves are seen as oppression. The term oppression in such instances to refer to the subordination of a given group or social category by unjust use offorce, authority, or societal norms in order to achieve indoctrination. When institutionalized, formally or informally, it may achieve the dimension of systematic oppression. Oppression is customarily experienced as a consequence of, and expressed in, the form of a prevailing, if unconscious, assumption that the given target is in some way inferior. Oppression is rarely limited solely to formal government action: an individual may be the particular focus of oppression or persecution and in such circumstances have no group membership in which to share, and thus maybe mitigate, the burden of ostracism. In psychology, racism, sexism and other prejudices are often studied as individual beliefs which, although not necessarily oppressive in themselves, can lead to oppression if they are codified in law or become parts of a culture. By comparison, in sociology, these prejudices are often studied as being institutionalized systems of oppression in some societies. In sociology, the tools of oppression include a progression of denigration, dehumanization, and demonization; which often generate scapegoating, which is used to justify aggression against targeted groups and individuals. The Universal Declaration of Human Rights and the concept of "human rights" in general were designed to limit oppression by giving a clear articulation of what fundamental freedoms any system should allow to all of the people over whom it has power. When oppression is systematized through coercion, threats of violence, or violence by government agencies or non-government paramilitiaries with a political motive, it is often called political repression. More subtle forms of political oppression/repression can be produced by blacklisting or individualized investigations such as happened duringMcCarthyism in the United States. Transnational systems of governance that can often be oppressive include colonialism, dictatorship, imperialism, absolute monarchy and totalitarianism, and can generate aresistance movement to challenge the oppressive status quo. Internalized oppression In sociology and psychology, internalized oppression is the manner in which members of an oppressed group come to internalize the oppressive attitudes of others toward themselves and those like them. For example, sometimes members of marginalized groups hold an oppressive view toward their own group, or start to believe in negative stereotypes. Examples include internalized racism, internalized sexism, internalized theology or conflicting idealology, and internalized homophobia. Definition - Noun : an unjust or excessive exercise of power: as a : unlawful, wrongful, or corrupt exercise of authority by a public official acting under color of authority that causes a person harm b : dishonest, unfair, wrongful, or burdensome conduct by corporate directors or majority shareholders that entitles minority shareholders to compel involuntary dissolution of the corporation c : inequality of bargaining power resulting in one party's lack of ability to negotiate or exercise meaningful choice see also unconscionability

SECOND DIVISION

[G. R. No. 156047. April 12, 2005]

ENGR. PEDRO C. RUBIO, JR., petitioner, vs. HON. EMMANUEL M. PARAS, Administrator, National Irrigation Administration (NIA),respondent. DECISION CALLEJO, SR., J.: Before us is a petition for review on certiorari under Rule 45 of the Revised Rules of Court of the Resolution[1] of the Court of Appeals (CA) in CA-G.R. SP No. 70868, and its Resolution[2] denying the motion for reconsideration thereof.

The Antecedents On July 10, 2001, Rolando Ibaez, the Regional President, Regions 7 and 8 of the National Irrigation Administration (NIA) Employees Association of the Philippines, filed a complaint[3] against the petitioner, Engr. Pedro Rubio, Jr., then the Provincial Irrigation Officer of the Northern Leyte Irrigation Administration, Tacloban City, with respondent NIA Administrator. Appended thereto, as Annexes A to L thereof, were the documents in support of the complaint. Gabriel Q. Enriquez, the Chairman of the Committee on Discipline and the Assistant Administrator for Administrative Services, issued a Memorandum[4] to the petitioner dated September 3, 2001, requiring him to submit within three (3) days from notice thereof, his counter-affidavit and/or comment on the complaint. The petitioner, through counsel, submitted his Comment [5] dated October 13, 2001. Appended thereto was the Audit Report of the Commission on Audit (COA) Regional Office No. 8. On March 15, 2002, the respondent found a prima facie case against the petitioner and signed a Formal Charge, docketed as NIA Administrative Case No. 02-01, and alleged that the petitioner committed the following administrative offenses: 1. GRAVE MISCONDUCT committed as follows: a. By purchasing cement at a higher price than that prevailing in the market while implementing the rehabilitation of Patong CIS; b. By directing and/or causing the purchase of extravagant materials for the PIO Building; c. For committing irregular activities as Head of Office during the renovation of the PIO building; d. For incurring unjustified cash advances and/or directing his subordinates to cash advance on his behalf; and,

e. For causing the cancellation, without just cause, of the vouchers of GSIS remittance of casual employees in Northern Leyte PIO. 2. OPPRESSION for causing the forced resignation and/or retirement of Elmer Cabaluna, Manuel Nagado, Zosimo Lodo, Jr., Eduardo Alcober, Rogelio Ramos, Marilou Jaya, Nolan Portugal and Ruperto Hinay, among others. 3. VIOLATION OF EXISTING CSC LAW & RULES OF SERIOUS NATURE for failure to maintain a time card and/or daily time record from 1998-2000.[6] The formal charge also contained an order placing the petitioner under preventive suspension for a period of 90 days effective upon his receipt thereof. [7] The petitioner received his copy of the same on April 1, 2002. Instead of filing his answer to the charges, the petitioner filed, on April 2, 2002, a petition for certiorari[8] before the Regional Trial Court (RTC) of Tacloban City, for the nullification of the formal charge and his preventive suspension. He alleged that the charges under 1(a) and (e) and 2, except Marilou Jayas complaint for oppression, were not included in the consolidated list of the charges made by Ibaez in the Memorandum dated September 3, 2001; their inclusion in the formal charge thereby deprived him of his right to due process. The petitioner further alleged that the Civil Service Commission (CSC) had dismissed the cases against him, and the appeal thereon was likewise dismissed on July 7, 2000. He alleged, inter alia, that the charges in 1(b), (c) and (d) were the subject of a special audit of the COA; hence, beyond the jurisdiction of the NIA Administrator; Jayas charges of oppression were the subject of Administrative Disciplinary Case No. 01-026 pending before the CSC Regional Office No. 8. The petitioner concluded that since the formal charge was void, there was no legal basis for his preventive suspension. The petitioner also alleged that there was no appeal or other plain, speedy and adequate remedy in the ordinary course of law available to him. On April 15, 2002, the trial court issued a Resolution [9] dismissing the petition. While the court ruled that the petitioner was deprived of his right to due process because some of the charges contained in the formal charge were not included in the memorandum addressed to him, the proper remedy was to file a motion for the reconsideration of the formal charge and the order of preventive suspension in the Office of the Administrator, or to appeal the same to the CSC. The petitioner filed a motion for the reconsideration of the said order on the following grounds: I CONTRARY TO THE STAND OF THIS HONORABLE COURT, THERE IS NO MOTION FOR RECONSIDERATION AVAILABLE TO PETITIONER, WHICH MAY QUALIFY AS A PLAIN, SPEEDY, AND ADEQUATE REMEDY IN THE ORDINARY COURSE OF LAW, TO NULLIFY THE FORMAL CHARGE SUBJECT OF THE INSTANT PETITION FORCERTIORARI. II HAVING DETERMINED THAT RESPONDENT ACTED WITHOUT OR IN EXCESS OF HIS JURISDICTION AND WITH GRAVE ABUSE OF DISCRETION AMOUNTING TO LACK OR EXCESS OF JURISDICTION IN ISSUING THE FORMAL CHARGE, THE HONORABLE COURT SHOULD ISSUE AN INJUNCTIVE WRIT, INSTEAD OF DISMISSING THE PETITION OUTRIGHT.[10] However, on May 17, 2002, the trial court issued an Order [11] denying the said motion for reconsideration. Instead of appealing the Order to the CA under Rule 41 of the Rules of Court, the petitioner filed a petition for certiorari under Rule 65, alleging that:

GROUNDS FOR THE PETITION I HAVING DETERMINED THAT THE FORMAL CHARGE WAS EVIDENTLY WITHOUT LEGAL BASIS, RESPONDENT JUDGE ACTED WITHOUT OR IN EXCESS OF JURISDICTION AND WITH GRAVE ABUSE OF DISCRETION AMOUNTING TO LACK OR EXCESS OF JURISDICTION WHEN HE REFUSED TO ISSUE A TEMPORARY RESTRAINING ORDER AND DISMISSED THE PETITION ON A CLEARLY UNTENABLE GROUND THAT A MOTION FOR RECONSIDERATION OR AN APPEAL WAS AVAILABLE TO PETITIONER AS A PLAIN, SPEEDY, AND ADEQUATE REMEDY IN THE ORDINARY COURSE OF LAW TO NULLIFY THE FORMAL CHARGE. II RESPONDENT JUDGE ACTED WITHOUT OR IN EXCESS OF JURISDICTION AND WITH GRAVE ABUSE OF DISCRETION AMOUNTING TO LACK OR EXCESS OF JURISDICTION WHEN HE RESOLVED PETITIONERS MOTION FOR RECONSIDERATION ONLY AFTER AN UNREASONABLE PERIOD OF 15 DAYS DESPITE THE INJUNCTIVE NATURE AND OBVIOUS URGENCY OF THE PETITION. III BEING A RELATIVE BY CONSANGUINITY WITHIN THE 6TH AND PROHIBITED DEGREE TO EUGENE SYLVESTER A. JAYA, WHOSE WIFE MARILOU J. JAYA IS ONE OF THE COMPLAINANTS FOR OPPRESSION IN THE FORMAL CHARGE AND WHO HAS A PENDING CASE AGAINST PETITIONER BEFORE THE CIVIL SERVICE COMMISSION, RESPONDENT JUDGE ACTED WITHOUT OR IN EXCESS OF JURISDICTION AND WITH GRAVE ABUSE OF DISCRETION AMOUNTING TO LACK OR EXCESS OF JURISDICTION IN HEARING THE CASE, INSTEAD OF VOLUNTARILY INHIBITING HIMSELF FROM IT.[12] On June 7, 2002, the CA issued a Resolution [13] dismissing the petition on the ground that the petitioners recourse to Rule 65 of the 1997 Rules of Court was inappropriate. The appellate court ruled that the resolution of the trial court should have been appealed to the CA under Rule 41 of the said Rules. The petitioner filed a motion for the reconsideration of the Resolution alleging, inter alia, that the dismissal of his petition for certiorari by the trial court was without prejudice; hence, appeal by writ of error was proscribed. In his comment on the said petition, the respondent averred that the petitioner was not proscribed from filing a motion for the reconsideration of the formal charge against him and his preventive suspension. He also claimed that the petition had become moot and academic, and appended a copy of an undated Order issued by the Committee on Discipline where the following were stated: (a) the period for the preventive suspension of the petitioner had already lapsed, and the petitioner had been reinstated; (b) the Committee received a motion to admit an amended complaint filed by Ibaez to set out the true facts some of which were vaguely alleged or inadvertently omitted in the original complaint and wherein it was alleged that the charges of oppression and violation of existing CSC Rules on time cards had been dismissed by the CSC; (c) the Committee admitted the amended complaint and ordered the charges for oppression and violation of CSC rules on time cards dismissed and recalled the remaining charges; (d) the petitioner was ordered to submit his answer on the comment to the amended complaint within five days from receipt thereof;[14] and (e) the petitioner filed

a motion to clarify the Order, alleging that the Committee on Discipline erred in admitting the amended complaint after recalling the charges that had not been dismissed by the CSC. The respondent prayed that the appellate court dismiss the petition under the second paragraph of Section 8, Rule 65 of the Rules of Court. On November 13, 2002, the CA issued a Resolution[15] denying the petitioners motion for reconsideration. The petitioner then filed the present petition, contending that the CA acted contrary to case law and, in effect, sanctioned the refusal of the RTC Judge to voluntarily inhibit himself. [16] The petitioner avers that the trial court committed a grave abuse of its discretion when it dismissed his petition for certiorari despite its findings confirming the allegations in his petition. [17] The petitioner maintains that with its findings, the trial court should have given due course and granted his petition, considering that there was no appeal, or other plain, adequate and speedy remedy in the ordinary course of law. He argues that he was proscribed by Section 16 of the Uniform Rules on Administrative Cases in the Civil Service from filing a motion for reconsideration of the formal charge against him. He asserts that the CA erred in denying his petition for certiorari on the ground that his remedy from the assailed resolution of the trial court was an appeal by writ of error. He insists that the resolution of the trial court dismissing his petition for certiorari for being premature was without prejudice; hence, non-appealable under Section 1(h), Rule 41 of the Rules of Court. The petitioner also asserts that his petitions in the CA and in this Court had not become moot and academic because the amended complaint filed against him with the Committee on Discipline was meant to harass him and to prevent the CA, and this Court, from resolving his petition on the merits. He faults the Presiding Judge of the RTC for not voluntarily inhibiting himself since he was a relative within the sixth degree of Eugene Sylvester A. Jaya, the husband of Marilou J. Jaya, one of the complainants against him on the charge of oppression. In its comment on the petition, the respondent, through the Office of the Solicitor General, averred that: I. THE PRESENT PETITION HAS BEEN RENDERED MOOT AND ACADEMIC WITH THE DISMISSAL AND/OR RECALL OF THE FORMAL CHARGE AGAINST PETITIONER.[18] II. THE COURT OF APPEALS PROPERLY DISMISSED PETITIONERS PETITION FOR CERTIORARI.[19]

III. THE ALLEGED RELATIONSHIP OF THE TRIAL JUDGE TO A CERTAIN EUGENE SYLVESTER A. JAYA DID NOT PRESENT A LEGAL OBSTACLE FOR SAID JUDGE TO HEAR THE CASE BEFORE HIM.[20] The petition is meritorious. We agree with the contention of the petitioner that the resolution of the trial court dismissing his petition for certiorari on the ground of prematurity was without prejudice.[21]Under Section 1(h), Rule 41 of the Rules of Court, an order dismissing an action without prejudice is not appealable. The remedy of the aggrieved party in such case is to file a special civil action for certiorari under Rule 65 of the Rules of Court: SECTION 1. Subject of appeal. An appeal may be taken from a judgment or final order that completely disposes of the case, or of a particular matter therein when declared by these Rules to be appealable. No appeal may be taken from:

 (h) An order dismissing an action without prejudice. In all the above instances, where the judgment or final order is not appealable, the aggrieved party may file an appropriate civil action under Rule 65. The petitioner did file his petition for certiorari with the CA; however, the appellate court dismissed the said petition, on its erroneous ruling that the remedy of the petitioner was appeal via a writ of error under Rule 41 of the Rules of Court. We do not agree with the contention of the respondent that the petition has become moot and academic following the Committee on Disciplines admission of the amended complaint of Ibaez, the alleged dismissal by the CSC of the charges against the petitioner for oppression and violation of existing civil service rules on time cards, and the withdrawal of the other charges. There is an imperative need for the Court to resolve the issues as to whether the petitioner was deprived of his right to due process and whether there was a legal basis for his suspension. Finally, as we have previously ruled, courts will resolve a question, otherwise moot and academic, if it is capable of repetition yet evading review.[22] We agree with the respondent that the petitioner was not proscribed from filing with the respondent a motion for the reconsideration of the formal charge against him. The petitioner cannot find solace in Section 16 of the Uniform Rules on Administrative Cases in the Civil Service which reads: Section 16. Formal Charge. After a finding of a prima facie case, the disciplining authority shall formally charge the person complained of. The formal charge shall contain a specification of charge(s), a brief statement of material or relevant facts, accompanied by certified true copies of the documentary evidence, if any, sworn statements covering the testimony of witnesses, a directive to answer the charge(s) in writing under oath in not less than seventy-two (72) hours from receipt thereof, an advice for the respondent to indicate in his answer whether or not he elects a formal investigation of the charge(s), and a notice that he is entitled to be assisted by a counsel of his choice. If the respondent has submitted his comment and counter-affidavits during the preliminary investigation, he shall be given the opportunity to submit additional evidence. The disciplining authority shall not entertain requests for clarification, bills of particulars or motions to dismiss which are obviously designed to delay the administrative proceedings. If any of these pleadings are interposed by the respondent, the same shall be considered as an answer and shall be evaluated as such. Although under the afore-quoted rule a party-respondent is proscribed from filing a request for clarification, bill of particulars or a motion to dismiss the formal charge as the said pleadings are obviously designed to delay the administrative proceedings, such rule does not specifically prohibit the party-respondent from filing a motion for a reconsideration of the formal charge. Case law has it that Under the maxim expression unius est exclusio alterius, the mention of one thing implies the exclusion of another thing not mentioned. Thus, if a statute enumerates the things upon which it is to operate, everything else must necessarily and by implication be excluded from its operation and effect. This rule, as a guide to probable legislative intent, is based upon the rules of logic and natural workings of the human mind.[23]

Indeed, the rule even allows the respondent who had submitted his comment and counteraffidavits during the investigation to submit additional evidence even after the filing of the formal charge. Likewise, under Section 21 of the said Rule, the respondent therein may file a motion for the reconsideration of an order of preventive suspension with the disciplining authority and to appeal from an adverse ruling to the CSC. Section 21. Remedies from the Order of Preventive Suspension. The respondent may file a motion for reconsideration with the disciplining authority or may elevate the same to the Civil Service Commission by way of an appeal within fifteen (15) days from the receipt thereof. In fine, the petitioner had a remedy in the ordinary course of law, namely, a motion for the reconsideration of the formal charge against him, including his preventive suspension. The general rule is that the aggrieved party is mandated to exhaust all administrative remedies available before resorting to judicial recourse. The tribunal, either judicial or quasi-judicial must be given a chance to correct the imputed errors on its act or order. [24] The rule is an element of the petitioners right to action, and if he fails or refuses to avail himself of the same, the judiciary shall decline to interfere.[25] However, a motion for reconsideration of the assailed formal charge may not be adequate and speedy; hence, may be dispensed with by the aggrieved party who may file the appropriate judicial recourse under any of the following exceptional circumstances: (1) when there is a violation of due process; (2) when the issue involved is purely a legal question; (3) when the administrative action is patently illegal and amounts to lack or excess of jurisdiction; (4) when there is estoppel on the part of the administrative agency concerned; (5) when there is irreparable injury; (6) when the respondent is a department Secretary whose acts, as an alter ego of the President, bears the implied and assumed approval of the latter; (7) when to require exhaustion of administrative remedies would be unreasonable; (8) when it would amount to a nullification of a claim; (9) when the subject matter is a private land in land case proceedings; (10) when the rule does not provide a plain, speedy and adequate remedy; (11) when there are circumstances indicating the urgency of judicial intervention; and unreasonable delay would greatly prejudice the complainant; (12) when no administrative review is provided by law; (13) where the rule of qualified political agency applies; and (14) when the issue of non-exhaustion of administrative remedies has been rendered moot.[26] Relative to the second exception, there is a question of law when the doubt or difference arises as to what the law is on a certain state of facts. There is a question of fact when the doubt or difference arises as to the truth or the falsehood of the alleged facts.[27] We agree with the petitioners contention that the RTC acted capriciously and arbitrarily, amounting to excess or lack of jurisdiction, when it dismissed the petition for a writ ofcertiorari on its ruling that a motion for a reconsideration of the formal charge was a condition sine qua non to the petitioners recourse to judicial relief. In the present case, the issues before the trial court, based on the record before it, were legal. The trial court sustained the contention of the petitioner, and declared in its April 15, 2002 Resolution that the charges in paragraphs (a) and (e) of the formal charge were not included in the complaint of Ibaez against the petitioner; hence, the latter was deprived of his right to be informed of the charges against him and to respond thereto. The trial court also declared that the charges of oppression of the employees mentioned in charge no. 2 (except that of Jaya) had already been dismissed and yet

were still included in the formal charge filed by the respondent with the Committee on Discipline, while the other charges were the subject of an inquiry and investigation by the COA special audit team. Moreover, Jayas oppression charge against the petitioner was still pending in the CSC. In fact, the CSC had dismissed the complaint of Jaya and her appeal therefrom. The trial court, in effect, found the formal charges against the petitioner to be patently illegal, amounting to lack or excess of jurisdiction: Petitioner alleges that the charges for grave misconduct under paragraphs (a) and (e) are not included in the consolidated list of cases; hence, its inclusion in the formal charge, without opportunity to be heard, is violative of petitioners right to due process. With respect to paragraphs (b), (c) and (d), the same are the subject of a special audit being undertaken by the COA and the inclusion of all these five (5) items in the formal charge are acts done by the respondent with grave abuse of discretion amounting to lack or excess of jurisdiction. In the case of (b), (c) and (d), respondent has no jurisdiction over the same. As regards the charge of oppression with respect to Marilou Jaya, the same is the subject of a formal charge in Administrative Disciplinary Case No. 01-026 being heard by the Civil Service Commission, Regional Office No. 8. With respect to Manuel Negado and others, the charge for oppression is not included in the consolidated List of Issues and, therefore, its inclusion is violative of the petitioners right to due process and when the termination of employment was elevated to the CSC, the same was dismissed for lack of merit and therefore this matter has already been adjudicated. The charge for Violation of CSC Law and Rules which pertains to the alleged failure to maintain Daily Time Records is not included in the consolidated list; hence, violative of petitioners right to due process and therefore respondent acted with grave abuse of discretion amounting to lack or excess of jurisdiction. There is no question from the record of the case that the issuance of the formal charge is not backed up by the necessary legal process making it rather irregular. All of these items included in the formal charge as violations, that is, paragraphs (a) and (e) were done in violation of the petitioners right to due process while paragraphs (b), (c) and (d) are matters which were taken up and pending before the special audit of the COA. With respect to the oppression charges, particularly to Marilou Jaya, the same is the subject matter of Administrative Disciplinary Case No. 01-026, which is being heard by the Civil Service Commission. As regards to Manuel Negado and others, their complaint of alleged termination of employment which was appealed to the Civil Service Commission has been dismissed for lack of merit. Evidently, this formal charge has no basis.[28] The formal charge filed by the respondent against the petitioner was violative of the latters right to due process; hence, is void ab initio and may be assailed directly or indirectly at any time, without the petitioner being required to first exhaust all administrative remedies before the respondent: [T]he doctrine consistently adhered to by this Court is that a denial of due process suffices to cast on the official act taken by whatever branch of the government the impress of nullity. A decision rendered without due process is void ab initio and may be attacked directly or collaterally. A decision is void for lack of due process if, as a result, a party is deprived of the opportunity of being heard. A void decision may be assailed or impugned at any time either directly or collaterally, by means of a separate action, or by resisting such decision in any action or proceeding where it is invoked.[29] Indeed, in charging the petitioner anew for acts which he had been previously charged, and which charges had already been dismissed, the respondent acted contrary to law and with grave abuse of

his discretion amounting to excess or lack of jurisdiction. The respondent even assumed jurisdiction over the same charges which were already the subject of a COA special audit, as well as the other charges filed with and still pending in the CSC.[30] Although the NIA has concurrent jurisdiction with the CSC over complaints involving its personnel,[31] the respondent was, nevertheless, proscribed from assuming jurisdiction over Jayas complaint. The settled rule is that the body or agency that first takes cognizance of the complaint shall exercise jurisdiction to the exclusion of the others.[32] Furthermore, it even turned out that the said complaint had been dismissed by the CSC, and such order of dismissal had become final and executory. In the interest of proper administration of justice, the respondent should have waited for the outcome of the COA audit teams investigation before charging the petitioner anew. Instead of dismissing the petition for certiorari filed by the petitioner, the RTC should have given due course and granted the same, and nullified the formal charge and the Order of the respondent suspending the petitioner from office. IN LIGHT OF ALL THE FOREGOING, the petition is GRANTED. The assailed Resolutions of the Court of Appeals are SET ASIDE. The Formal Charge against petitioner Engr. Pedro C. Rubio, Jr., dated March 15, 2002, as well as the Order for his preventive suspension, are hereby NULLIFIED. No costs. SO ORDERED. Puno, (Chairman), Austria-Martinez, Tinga, and Chico-Nazario, JJ., concur.

Oppressive law I find the Trust Receipts Law (P.D. No. 115), one of the obnoxious legacies of the late dictator Pres. Ferdinand Marcos to the Filipino people, to be cruel, oppressive, unreasonable, and unconstitutional for being violative of the due process clause and the equal protection clause of the 1987 Philippine Constitution. I believe that, unless there is a clear showing of criminal fraud or deceit, any violation of the Trust Receipt Law should not be treated as a crime and that the pecuniary claim of the banks under the trust receipt agreement should be treated merely as an ordinary civil obligation of the defaulting customer. The true spirit of a trust receipt agreement is one of a secured loan obligation. The financial liability of the customer thereunder should be treated as purely civil in character. The banks are indeed very happy with the law, for it protects their multi-billion treasuries. They will collectively use all their financial and political resources to vehemently oppose and defeat any attempt to repeal the law. Fortunately for the banks, as the Philippine jurisprudence now stands, the law is fair, just, reasonable, and constitutional. The truth of the matter is that the banks have abused and continue to abuse the law to harass their customers, thus, making our trial courts as their obedient de facto collection agencies. The very recent case of METROPOLITAN BANK & TRUST COMPANY vs. HON. SECRETARY OF JUSTICE RAUL M. GONZALES, OLIVER T. YAO and DIANA T. YAO, G.R. No. 180165, April 7, 2009 was one such case. It involved the case of estafa under Article 315, paragraph 1(b) of the Revised Penal Code, in relation to Presidential Decree No. 115. (Trust Receipts Law). In this case, the investigating prosecutor indicted the private respondents for the crime charged by the bank. They subsequently appealed their indictment to the Secretary of Justice, who ruled that there was no probable cause to prosecute private respondents. He declared that the legitimate transactional relationship between the parties being merely a contract of loan, violations of the terms thereunder were not covered by Presidential Decree No. 115. Acting on the directive of the Secretary of Justice, the City Prosecutor moved for the withdrawal of the Informations. The Regional Trial Court (RTC) granted the same. The bank elevated the matter to the Court of Appeals (CA), which dismissed its petition after finding that the Secretary of Justice committed no grave abuse of discretion in ruling against the existence of probable cause to prosecute private respondents. The CA recognized the authority of the Secretary of Justice to control and supervise the prosecutors, which included the power to reverse or modify their decisions without committing grave abuse of discretion. Unfazed by the turn of events, petitioner went up to the Supreme Court, urging it to reverse the Court of Appeals and to direct the filing of the proper criminal Informations against private respondents. The Supreme Court found the petition to be meritorious. It concluded that there was probable cause to warrant the prosecution of private respondents for estafa. It stressed that probable cause did not require an inquiry into whether there is sufficient evidence to procure a conviction. The Court held that the offense punished under Presidential Decree No. 115 is in the nature of malum prohibitum. A mere failure to deliver the proceeds of the sale or the goods, if not sold, constituted a criminal offense that caused prejudice not only to another, but more to the public interest.

The Court rejected the allegation of private respondents that they did not give much significance to the documents that they had signed. According to the Court, considering the enormous value of the transaction involved, it was highly improbable to mistake trust receipt documents for a contract of loan when the heading thereon printed in bold and legible letters reads: Trust Receipts. Although it said that it was not prejudging the case on the merits, the Court stated that by merely glancing at the documents submitted by petitioner entitled Trust Receipts and the arguments advanced by private respondents, it was convinced that there was probable cause to file the case and to hold them for trial. I wish to digest the doctrinal pronouncements of the Court in the above-cited, for legal research purposes of the visitors of this blog. Thus:

Xxx. Probable cause has been defined as the existence of such facts and circumstances as would excite the belief in a reasonable mind, acting on the facts within the knowledge of the prosecutor, that the person charged was guilty of the crime for which he was prosecuted. Probable cause is a reasonable ground of presumption that a matter is, or may be, well founded on such a state of facts in the mind of the prosecutor as would lead a person of ordinary caution and prudence to believe, or entertain an honest or strong suspicion, that a thing is so. The term does not mean actual or positive cause nor does it import absolute certainty. It is merely based on opinion and reasonable belief. Thus, a finding of probable cause does not require an inquiry into whether there is sufficient evidence to procure a conviction. It is enough that it is believed that the act or omission complained of constitutes the offense charged. Precisely, there is a trial for the reception of evidence of the prosecution in support of the charge. To determine the existence of probable cause, there is need to conduct preliminary investigation. A preliminary investigation constitutes a realistic judicial appraisal of the merits of a case. Its purpose is to determine whether (a) a crime has been committed; and (b) whether there is a probable cause to believe that the accused is guilty thereof. It is a means of discovering which person or persons may be reasonably charged with a crime. The conduct of preliminary investigation is executive in nature. The Court may not be compelled to pass upon the correctness of the exercise of the public prosecutors function unless there is a showing of grave abuse of discretion or manifest error in his findings. Grave abuse of discretion implies a capricious and whimsical exercise of judgment tantamount to lack or excess of jurisdiction. The exercise of power must have been done in an arbitrary or a despotic manner by reason of passion or personal hostility. It must have been so patent and gross as to amount to an evasion of positive duty or a virtual refusal to perform the duty enjoined or to act at all in contemplation of law. In the present case, the abuse of discretion is patent in the act of the Secretary of Justice holding that the contractual relationship forged by the parties was a simple loan, for in so doing, the Secretary of Justice assumed the function of the trial judge of calibrating the evidence on record, done only after a full-blown trial on the merits. The fact of existence or non-existence of a trust receipt transaction is evidentiary in nature, the

veracity of which can best be passed upon after trial on the merits, for it is virtually impossible to ascertain the real nature of the transaction involved based solely on the self-serving allegations contained in the opposing parties pleadings. Clearly, the Secretary of Justice is not in a competent position to pass judgment on substantive matters. The bases of a partys accusation and defenses are better ventilated at the trial proper than at the preliminary investigation. We need not overemphasize that in a preliminary investigation, the public prosecutor merely determines whether there is probable cause or sufficient ground to engender a well-founded belief that a crime has been committed, and that the respondent is probably guilty thereof and should be held for trial. It does not call for the application of rules and standards of proof that a judgment of conviction requires after trial on the merits. The complainant need not present at this stage proof beyond reasonable doubt. A preliminary investigation does not require a full and exhaustive presentation of the parties evidence. Precisely, there is a trial to allow the reception of evidence for both parties to substantiate their respective claims. Having said the foregoing, this Court now proceeds to determine whether probable cause exists for holding private respondents liable for estafa in relation to Presidential Decree No. 115. Trust receipt transactions are governed by the provisions of Presidential Decree No. 115 which defines such a transaction as follows: Section 4. What constitutes a trust receipt transaction. A trust receipt transaction, within the meaning of this Decree, is any transaction by and between a person referred to in this Decree as the entruster, and another person referred to in this Decree as the entrustee, whereby the entruster, who owns or holds absolute title or security interests over certain specified goods, documents or instruments, releases the same to the possession of the entrustee upon the latters execution and delivery to the entruster of a signed document called a trust receipt wherein the entrustee binds himself to hold the designated goods, documents or instruments in trust for the entruster and to sell or otherwise dispose of the goods, documents or instruments with the obligation to turn over to the entruster the proceeds thereof to the extent of the amount owing to the entruster or as appears in the trust receipt or the goods, documents or instruments themselves if they are unsold or not otherwise disposed of, in accordance with the terms and conditions specified in the trust receipt, or for other purposes substantially equivalent to any one of the following: 1. In the case of goods or documents, (a) to sell the goods or procure their sale; or (b) to manufacture or process the goods with the purpose of ultimate sale: Provided, That, in the case of goods delivered under trust receipt for the purpose of manufacturing or processing before its ultimate sale, the entruster shall retain its title over the goods whether in its original or processed form until the entrustee has complied fully with his obligation under the trust receipt; or (c) to load, unload, ship or transship or otherwise deal with them in a manner preliminary or necessary to their sale; or 2. In the case of instruments, a) to sell or procure their sale or exchange; or b) to deliver them to a principal; or c) to effect the consummation of some transactions involving delivery to a depository or register; or d) to effect their presentation, collection or renewal.

The sale of goods, documents or instruments by a person in the business of selling goods, documents or instruments for profit who, at the outset of the transaction, has, as against the buyer, general property rights in such goods, documents or instruments, or who sells the same to the buyer on credit, retaining title or other

interest as security for the payment of the purchase price, does not constitute a trust receipt transaction and is outside the purview and coverage of this Decree.

An entrustee is one having or taking possession of goods, documents or instruments under a trust receipt transaction, and any successor in interest of such person for the purpose of payment specified in the trust receipt agreement. The entrustee is obliged to (1) hold the goods, documents or instruments in trust for the entruster and shall dispose of them strictly in accordance with the terms and conditions of the trust receipt; (2) receive the proceeds in trust for the entruster and turn over the same to the entruster to the extent of the amount owed to the entruster or as appears on the trust receipt; (3) insure the goods for their total value against loss from fire, theft, pilferage or other casualties; (4) keep said goods or the proceeds therefrom whether in money or whatever form, separate and capable of identification as property of the entruster; (5) return the goods, documents or instruments in the event of non-sale or upon demand of the entruster; and (6) observe all other terms and conditions of the trust receipt not contrary to the provisions of the decree. The entruster shall be entitled to the proceeds from the sale of the goods, documents or instruments released under a trust receipt to the entrustee to the extent of the amount owed to the entruster or as appears in the trust receipt; or to the return of the goods, documents or instruments in case of non-sale; and to the enforcement of all other rights conferred on him in the trust receipt, provided these are not contrary to the provisions of the document. A violation of any of these undertakings constitutes estafa defined under Article 315(1)(b) of the Revised Renal Code, as provided by Section 13 of Presidential Decree No. 115 viz: Section 13. Penalty Clause. The failure of an entrustee to turn over the proceeds of the sale of the goods, documents or instruments covered by a trust receipt to the extent of the amount owing to the entruster or as appears in the trust receipt or to return said goods, documents or instruments if they were not sold or disposed of in accordance with the terms of the trust receipt shall constitute the crime of estafa, punishable under the provisions of Article Three hundred and fifteen, paragraph one (b) of Act Numbered Three thousand eight hundred and fifteen, as amended, otherwise known as the Revised Penal Code. If the violation or offense is committed by a corporation, partnership, association or other juridical entities, the penalty provided for in this Decree shall be imposed upon the directors, officers, employees or other officials or persons therein responsible for the offense, without prejudice to the civil liabilities arising from the criminal offense.

Apropos thereto, Article 315(1)(b) of the Revised Renal Code punishes estafa committed as follows: ARTICLE 315. Swindling (estafa). Any person who shall defraud another by any of the means mentioned hereinbelow shall be punished by: 1st. The penalty of prision correccional in its maximum period to prision mayor in its minimum period, if the amount of the fraud is over 12,000 pesos but does not exceed 22,000 pesos, and if such amount exceeds the latter sum, the penalty provided in this paragraph shall be imposed in its maximum period, adding one year for each additional 10,000 pesos; but the total penalty which may be imposed shall not exceed twenty years. In such case, and in connection with the accessory penalties which may be imposed and for the purpose of the other provisions of this Code, the penalty shall be termed prision mayor to reclusion temporal, as the case may be.

2nd. The penalty of prision correccional in its minimum and medium periods, if the amount of the fraud is over 6,000 pesos but does not exceed 12,000 pesos; 3rd. The penalty of arresto mayor in its maximum period to prision correccional in its minimum period, if such amount is over 200 pesos but does not exceed 6,000 pesos; and 4th. By arresto mayor in its medium and maximum periods, if such amount does not exceed 200 pesos, provided that in the four cases mentioned, the fraud be committed by any of the following means; x x x.

As found in the Complaint-Affidavit of petitioner, private respondents were charged with failing to account for or turn over to petitioner the merchandise or goods covered by the trust receipts or the proceeds of the sale thereof in payment of their obligations thereunder. The following pieces of evidence adduced from the affidavits and documents submitted before the City Prosecutor are sufficient to establish the existence of probable cause, to wit: First, the trust receipts bearing the genuine signatures of private respondents; second, the demand letter of petitioner addressed to respondents; and third, the initial admission by private respondents of the receipt of the imported goods from petitioner. Prescinding from the foregoing, we conclude that there is ample evidence on record to warrant a finding that there is a probable cause to warrant the prosecution of private respondents for estafa. It must be once again stressed that probable cause does not require an inquiry into whether there is sufficient evidence to procure a conviction. It is enough that it is believed that the act or omission complained of constitutes the offense charged. That private respondents did not sell the goods under the trust receipt but allowed it to be used by their sister company is of no moment. The offense punished under Presidential Decree No. 115 is in the nature of malum prohibitum. A mere failure to deliver the proceeds of the sale or the goods, if not sold, constitutes a criminal offense that causes prejudice not only to another, but more to the public interest. Even more incredible is the contention of private respondents that they did not give much significance to the documents they signed, considering the enormous value of the transaction involved. Thus, it is highly improbable to mistake trust receipt documents for a contract of loan when the heading thereon printed in bold and legible letters reads: Trust Receipts. We are not prejudging this case on the merits. However, by merely glancing at the documents submitted by petitioner entitled Trust Receipts and the arguments advanced by private respondents, we are convinced that there is probable cause to file the case and to hold them for trial. All told, the evidentiary measure for the propriety of filing criminal charges has been reduced and liberalized to a mere probable cause. As implied by the words themselves, probable cause is concerned wi th probability, not absolute or moral certainty.