VANESSA MAY GA

8. Presumptions

a) Conclusive presumptions

Datalift Movers, Inc. v. Belgravia Realty & Development Corp., G.R. No. 144268, [August 30, 2006], 531
PHIL 554-563)

G.R. No. 144268 August 30, 2006

DATALIFT MOVERS, INC. and/or JAIME B. AQUINO, Petitioners,

vs.
BELGRAVIA REALTY & DEVELOPMENT CORPORATION and SAMPAGUITA BROKERAGE,
INC. Respondents.

DECISION

GARCIA, J.:

In an action for ejectment filed by Sampaguita Brokerage, Inc. and its sister company, Belgravia
Realty & Development Corporation, against the herein petitioners Datalift Movers, Inc. and/or Jaime
B. Aquino, the Metropolitan Trial Court (MeTC), of Manila, Branch 3, later the Regional Trial Court
(RTC) of Manila, Branch 36, and eventually the Court of Appeals (CA) in CA-G.R. SP No. 52189 are
one in ordering the petitioners’ ejectment from the premises involved in the suit and their payment of
unpaid rentals, attorney’s fees and costs. Undaunted, the petitioners have come to this Court via this
petition for review with application for a temporary restraining order and/or preliminary injunction to
seek the reversal of the affirmatory decision of the CA, including those of the courts below it.

We likewise AFFIRM, but first the facts:

The premises involved in this case is a warehouse (bodega) used by petitioner Datalift Movers, Inc.
(Datalift for short) for its cargoes in connection with its brokerage business. The warehouse stands
on a 3,967.70 squaremeter lot owned by the Philippine National Railways (PNR) and located at No.
883 Santibañez Street corner Cristobal Street, Pandacan, Manila.

Sometime in 1987, PNR leased out the lot to Sampaguita Brokerage, Inc. (Sampaguita, hereafter),
pursuant to a written contract commencing on July 1, 1987 and terminating on June 30, 1990 for a
monthly rental of P6,282.49, subject to a ten (10%) percent increase every year.

Sampaguita thereafter entered into a special arrangement with its sister company, Belgravia Realty
& Development Corporation (Belgravia for short) whereby the latter would put up on the lot a
warehouse for its own use. True enough, Belgravia did put up a warehouse occupying an area of
about 3,000 squaremeters of the lot. However, instead of using the said warehouse for itself,
Belgravia sublet it to petitioner Datalift, represented by its president Jaime B. Aquino, pursuant to a
1-year written contract of lease 1 dated October 2, 1990, commencing on October 5, 1990 and
ending on October 5, 1991, subject to extension upon mutual agreement by the parties. By the terms
of lease, Datalift shall pay Belgravia a monthly rental of P40,000.00 payable on or before the 15th
day of each month, provided an advance rental for two (2) months is paid upon execution of the
contract.

After the one year contract period expired, lessee Datalift continued in possession and enjoyment of
the leased warehouse, evidently by acquiesce of lessor Belgravia or by verbal understanding of the
parties. Subsequently, Belgravia unilaterally increased the monthly rental to P60,000.00 starting
June 1994 to October 1994. Monthly rental was again increased from P60,000.00 to P130,000.00
beginning November 1994 onwards, allegedly in view of the increased rental demanded by PNR on
Sampaguita for the latter’s lease of the former’s lot whereon the warehouse in question stands.
Because of the rental increase made by Belgravia, Datalift stopped paying its monthly rental for the
warehouse. Thereafter, Sampaguita addressed demand letters to Datalift asking the latter to pay its
rental in arrears in the amount of P4,120,000.00 and to vacate and surrender the warehouse in
dispute. The demands having proved futile, Belgravia and/or Sampaguita filed with the MeTC of
Manila their complaint 2 for ejectment against Datalift and/or its controlling stockholder, Jaime B.
Aquino.
In their Answer with Counterclaim, 3 the defendants interposed the following defenses:

1) Sampaguita has no cause of action against them, not being a party nor privy to the Datalift-
Belgravia contract of lease;

2) Under the PNR-Sampaguita contract of lease over the PNR lot, Sampaguita is prohibited from
subleasing the property;

3) The same PNR-Sampaguita contract had allegedly expired;

4) Lessor Belgravia likewise has no cause of action because it was neither the owner nor lessee of
the lot whereon the warehouse stands.

By way of counterclaim, defendants Datalift and Aquino prayed for the refund by Belgravia of the
rentals they paid during the entire period of their lease of the warehouse, plus exemplary damages
and litigation expenses.

In a decision 4 dated October 16, 1997, the MeTC of Manila, Branch 3, rendered judgment for
plaintiffs Sampaguita and Belgravia but reduced the amount of rental arrearages to a reasonable
level of P80,000,00 a month, saying:

Upon the other hand, this Court is not persuaded or inclined to favor the very substantial increase in
the amount demanded by Sampaguita and/or Belgravia upon Datalift, from P60,000.00
to P130,000.00 per month. Such increase is arbitrary, highly unconscionable and beyond the ambit
of equity and justice considering that the original agreed rental on the premises in 1990 was
only P45,000.00 per month, the latter increase to P60,000.00 per month. The unilateral increase
of P70,000.00 making the monthly rental P130,000.00 effective June, 1994, is, as earlier said,
beyond the conscience of man. Belgravia would be guilty likewise, of unjust enrichment.

The increase in rental for P60,000.00 per month to P80,000.00 per month, following the trend in the
amount of increase during the previous years would, to the mind of the Court be reasonable and
justified. Thus, the rental in arrears due and demandable upon defendants would be P20,000.00 per
month from June, 1994 to October, 1994, defendants having paid already P60,000.00 per month
during the five (5) months period, the P80,000.00 per month from November, 1994 to the present.

In the same decision, the MeTC rejected the defendants’ challenge against Belgravia’s title over the
PNR lot occupied by the subject warehouse.

More particularly, the MeTC decision dispositively reads:

WHEREFORE, premises considered, the Court finds and so hold that plaintiffs have proven their
case against defendants by preponderance of evidence sufficient to grant what is prayed for in their
Complaint with certain modification and hereby renders judgment:

1) Ordering defendants and all persons, natural or juridical, claiming rights, interest or title under
them, to vacate and surrender peacefully to plaintiffs that warehouse and the area/premises
occupied by them located at No. 883 Santibañez Street corner Cristobal Street, Pandacan, City of
Manila;

2) Ordering defendants to pay plaintiff Belgravia the difference of P20,000.00 from what had been
already paid of P60,000.00 per month for the months of June, 1994 to October, 1994 or a total
of P100,000.00; and the unpaid rentals at P80,000.00 per month from November, 1994 to the
present and until defendants vacate and surrender the warehouse and premises subject of this
litigation;

3) Ordering defendants to pay plaintiff P30,000.00 for and as attorney’s fees and expenses of
litigation, and

4) To pay the cost of suit.

SO ORDERED.
Obviously dissatisfied, both parties appealed to the RTC whereat the appeal was raffled to Branch
36 thereof. In their appeal, Datalift and its co-defendant Jaime B. Aquino questioned the MeTC’s
finding that there was an implied new lease between PNR and Sampaquita on the lot on which the
warehouse in question stands, and accordingly fault the same court for ordering them to vacate the
same warehouse and to pay rentals as well as attorney’s fees and litigation expenses.

For their part, Sampaguita and Belgravia assailed the MeTC decision for not ordering Datalift and
Aquino to pay the increase rental of P130,000.00 a month beginning June 1994, and for not ruling
that both defendants are jointly and subsidiary liable for the amounts awarded to them.

In a decision 5 dated March 11, 1999, the RTC, reechoing the MeTC’s ruling on the authority of
Sampaguita and Belgravia to institute the complaint for ejectment as well as the same court’s finding
as to the reasonable amount of rental in arrears due Belgravia, affirmed in toto the assailed MeTC
decision, thus:

In the light of the foregoing, the assailed decision of MeTC of Manila, Branch 3 is affirmed in toto.

SO ORDERED.

This time, only Datalift and its co-petitioner Jaime B. Aquino elevated the case to the CA in CA-G.R.
SP No. 52189.

Again, in a decision 6 dated August 4, 2000, the CA dismissed the petitioners’ recourse thereto and
affirmed with slight modification the challenged affirmatory decision of the RTC, to wit:

WHEREFORE, the petition is DISMISSED and the decision of the Regional Trial Court, Branch 36,
Manila, dated March 11, 1999, affirming in toto the decision of the Metropolitan Trial Court, Branch
3, is hereby AFFIRMED, except that the award of P30,000.00 as attorney’s fees is DELETED.

SO ORDERED.

Still unable to accept the adverse decisions of the three (3) courts below, the petitioners are now
with this Court via this petition for review on their submission that the CA erred:

XXX IN HOLDING THAT AN IMPLIED NEW LEASE WAS CREATED BETWEEN PNR AND
RESPONDENTS (i.e. SAMPAGUITA and BELGRAVIA) WHEN THE FORMER DID NOT TAKE
POSITIVE ACTION TO EJECT THE LATTER FROM THE SUBJECT PREMISES.

XXX IN HOLDING THAT PETITIONERS HAVE NO PERSONALITY TO QUESTION WHETHER AN

IMPLIED NEW LEASE WAS CREATED BETWEEN PNR AND THE RESPONDENTS.

The petition lacks merit.

Petitioners first fault the CA for affirming the RTC and the MeTC which ruled that the subject
warehouse and the land and area which it occupies rightfully belong to respondent Belgravia, not
Datalift, for an implied new lease was created between PNR, the acknowledged owner of the lot, and
Sampaguita, Belgravia's sister company, which, by virtue of a special arrangement, Sampaguita
allowed Belgravia to construct a warehouse on the leased lot and sub-leased the same to Datalift.

At first glance, the petitioners' argument may appear to have some merit, but it is still insufficient to
warrant a reversal of the CA decision.

Relative to the first argument, the CA decision pertinently reads:

There is no definite showing that the lease contract between PNR and Sampaguita Brokerage, Inc.
had been effectively terminated. As held by the court a quo: "(B)y PNR not taking a positive action to
eject Sampaguita from the leased premises up to the present, again, there is a tacit renewal of the
lease contract between PNR and Sampaguita.(Emphasis in the original.)

The Rules of Court already sufficiently shields respondent Belgravia, as lessor, from being
questioned by the petitioners as lessees, regarding its title or better right of possession as lessor
because having admitted the existence of a lessor-lessee relationship, the petitioners are barred
from assailing Belgravia's title of better right of possession as their lessor.

Section 2, Rule 131, of the Rules of Court provides:

SEC. 2. Conclusive presumptions. -- The following are instances of conclusive presumptions:

(a) Whenever a party has, by his own declaration, act, or omission, intentionally and deliberately led
another to believe a particular thing true, and to act upon such belief, he cannot, in any litigation
arising out of such declaration, act or omission, be permitted to falsify it;

(b) The tenant is not permitted to deny the title of his landlord at the time of the
commencement of the relation of landlord and tenant between them. (Underscoring ours.)

Conclusive presumptions have been defined as "inferences which the law makes so peremptory that
it will not allow them to be overturned by any contrary proof however strong." 7 As long as the lessor-
lessee relationship between the petitioners and Belgravia exists as in this case, the former, as
lessees, cannot by any proof, however strong, overturn the conclusive presumption that Belgravia
has valid title to or better right of possession to the subject leased premises than they have.

It was superfluous on the part of the MeTC to rule on the source or validity of Belgravia's title or right
of possession over the leased premises as against the petitioners as lessees in this case. If at all,
Belgravia's title or right of possession should only be taken cognizance of in a proper case between
PNR and Belgravia, but not in the present case. Any ruling which the court may render on this issue
will, at the very least, be an obiter dictum, if not outrightly ultra vires.

The apparent error made by the MeTC will, however, not affect the result of the judgment rendered
in this case. In fact, the application of the rule on conclusive presumption under the afore-quoted
Section 2, Rule 131 strengthens the position of the MeTC that the petitioners may be validly ordered
to vacate the leased premises for nonpayment of rentals. Likewise, the logical consequence of the
operation of this conclusive presumption against the petitioners is that they will never have the
personality to question whether an implied new lease was created between PNR and the
respondents, because so long as there is no showing that the lessor-lessee relationship has
terminated, the lessor’s title or better right of possession as against the lessee will eternally be a
non-issue in any proceeding before any court.

Additionally, as correctly pointed out by the CA, being non-privies to the contract of lease between
PNR and respondent Sampaguita, the petitioners have no personality to raise any factual or legal
issue relating thereto.

Despite non-merit of petitioners' arguments, and notwithstanding the petitioners' failure to assail the
accuracy of the dates when the increase of rental from P60,000.00 to P130,000.00 was effected, in
the interest of justice, the Court shall correct this plain error, and adjust the rental due in accordance
with the facts as borne by the evidence on record. The Court readily noticed that the MeTC decision
erroneously reckoned the effective date of the increased rental of P130,000.00 from June 1994
instead of the correct date of November 1994, which shall cause an overpayment of P100,000.00 by
the petitioners. It is clear from the records that the rental due and demandable, and which the
petitioners already paid to respondent Belgravia from June 1994 to October 1994 was
only P60,000.00. It was only when Belgravia drastically increased the monthly rental
from P60,000.00 to P130,000.00, effective November 1994, that the petitioners altogether stopped
paying rentals. Thus, the order to pay unpaid rentals in the adjusted amount of P80,000.00 should
be reckoned only from November 1994 until the time that the petitioners finally vacate the premises.
There are no unpaid differentials of P20,000.00/month due from June 1994 to October 1994.

WHEREFORE, the assailed Decision of the CA is hereby AFFIRMED with the MODIFICATION that
the petitioners are ordered to pay only the unpaid rentals from November 1994 in the amount
of P80,000.00 until they vacate the leased premises.

No pronouncement as to costs.

SO ORDERED.
b) Disputable presumptions

Alicbusan v. Court of Appeals, G.R. No. 113905, [March 7, 1997], 336 PHIL 321-328)

Republic of the Philippines

SUPREME COURT
Manila

THIRD DIVISION

G.R. No. 113905 March 7, 1997

LEOPOLDO ALICBUSAN, petitioner,
vs.
COURT OF APPEALS, CESAR S. CORDERO and BABY'S CANTEEN, respondents.

FRANCISCO, J.:

As a result of the dismissal of his appeal by respondent Court of Appeals in CA-G.R. CV No. 34058,
petitioner is now before this Court through this petition for review on certiorari under Rule 45 seeking
the reversal of respondent court's decision dated October 29, 1993 and the resolution of February 4,
1994, which petitioner described as a "manifestly erroneous appreciation by the Court of Appeals of
the rules of evidence, in particular the presumption contained therein and the proper party whose
burden is to dispute them."  1

The controversy stemmed from a complaint filed by private respondents Cesar Cordero and Baby's
Canteen against Leopoldo Alicbusan and Philippine Service Enterprises, Inc. before the Regional
Trial Court of Pasay City.

The circumstances which led to this suit as summarized in the assailed decision are as follows:

Plaintiff-appellee Cesar Cordero and defendant appellant Leopoldo Alicbusan were

partners in the operation of Baby's Canteen located in the Philtranco terminal in
Pasay City. Under the terms of their partnership agreement, Cordero assumed the
position of Managing Partner of the venture while Alicbusan took care of accounting,
records keeping and other comptrollership functions (Exhibit "1"). The partnership
was to exist for a fixed term, between July 1981 up to July 1984. However, on
expiration of the said period both Cordero and appellant Alicbusan continued their
relationship under the original term.

On May 11, 1990, plaintiff Cordero instituted Civil Case No. 7322 with the court
below for collection for various sums totalling P209,497.36 which was later increased
to P309,581.51 in a supplemental complaint (pp. 87-88, Rollo). The claim arose from
an arrangement whereby employees of Philtranco were allowed to buy goods and
other items from Baby's Canteen on credit which payments were subsequently
deducted by Philtranco from the employees' salaries. The total amount was then
remitted by Philtranco fifteen days later.

According to plaintiff-appellee Cordero, the remittances of salary deductions for the

months of February, March, April up to May 15, 1990 were withheld by Philtranco on
the instigation of herein appellant Leopoldo Alicbusan as President of said company
(p. 88, Record). Plaintiff-appellee Cordero averred that the withholding of the
remittances to Baby's Canteen was motivated by bad faith on the part of appellant
Alicbusan because of business differences arising from another partnership
operation between plaintiff and appellant in Sariaya, Quezon (TSN, August 24, 1990,
p. 7).

Additionally, in his supplemental complaint dated 29 June, 1990, plaintiff contended

that defendant, in retaliation of (sic) appellee's filing of the original complaint and in
 order to harass the latter, served notice of termination of lease of a stall leased by
plaintiff's wife (Stall No. 6) at the Philtranco Terminal in Malibay, Pasay City (p. 70,
Record). According to plaintiff Cordero, all the other leaseholders of stalls in the
terminal were not served notice of termination which showed that plaintiff's wife was
being singled out, in bad faith.

In response, defendant Alicbusan averred that he transferred all his rights and
interests over Baby's Canteen for the sum of Two Hundred and Fifty Thousand
Pesos (P250,000.00) as evidenced by a Deed of Sale and Transfer of Right (Record,
p. 40) between the parties on April 5, 1989. Under the said deed, plaintiff-appellee
Cordero bound himself to pay under the following terms:

1. That the total purchase price shall be TWO HUNDRED FIFTY

THOUSAND (P250,000.00) PESOS, Philippine Currency with a
downpayment of P50,000.00 which the VENDEE/TRANSFEREE
shall pay upon the signing of this agreement;

2. That the balance shall be payable in twenty (20) monthly

installments at P10,000.00 per month, with postdated checks, the first
installment being due with (sic) the first 5 days of every month
thereafter until the balance shall have been fully paid.

However, according to appellant Alicbusan, both parties subsequently agreed to

forego the P50,000.00 downpayment under an amended schedule in which Cordero
obligated himself to pay increased and accelerated installment payments (Record, p.
40). These payments totalling P90,500.00 were made between the 8th day of May,
1989 and November 24, 1989 in various amounts. According to appellant, plaintiff
Cordero stopped paying his installment payments after this period in spite of several
demands by the defendant (p. 41, Record). 2

In its decision dated February 7, 1991, the Regional Trial Court of Pasay City ruled in favor of private
respondents Cordero and Baby's Canteen, upholding the continued existence of a partnership
between respondent Cordero and petitioner, and ordered as follows:

IN VIEW OF THE FOREGOING, this Court orders:

a) the defendant Philtranco to pay the plaintiffs the

following amounts:

1) P290,912.31, representing the

credits for the months of February,
March, April and up to May 15, 1990;

2) P30,000.00 as moral damages for

the bad faith displayed by their
president Alicbusan;

b) Defendant Alicbusan to pay the plaintiffs the

amount of P30,000 as moral damages;

c) Defendants Alicbusan and Philtranco to pay jointly

and severally, the plaintiffs Cordero and Baby's
Canteen the amount of P50,000.00 as attorney's fees;

d) As counterclaim of the defendant Philtranco,

plaintiffs Cordero and Baby's Canteen to pay the
defendant Philtranco the amount of P24,000.00 as
overdue rentals;

e) Defendants Alicbusan and Philtranco to pay for the

costs of this suit.

SO ORDERED. 3
Subsequently, respondent Cordero and Philtranco entered into a compromise agreement with
respect to their liabilities to each other by offsetting their outstanding obligations and waiving
whatever actions they may have against each other. It was however agreed upon that the
compromise agreement will not affect or prejudice petitioner Alicbusan's appeal from the judgment.  4

For his part, Alicbusan proceeded to file an appeal with the Court of Appeals assailing the trial
court's finding that the deed of sale and transfer of rights between petitioner and Cordero was
fictitious, hence their partnership continued to exist. Additionally, petitioner argued that respondent
Cordero should have been ordered to pay the amount of P129,500.00 representing the balance of
the sale of his rights in the partnership and that it was error to adjudge him liable for moral damages
and attorney's fees.

On October 29, 1993, respondent Court rendered the assailed decision, affirming the judgment of
the trial court that the deed of sale transferring petitioner's rights in the partnership to private
respondent Cordero was simulated and that petitioner acted in bad faith in withholding the
remittances of Philtranco to the partnership enterprise. Thus, respondent court affirmed the award of
moral damages as well as that of attorney's fees in favor of private respondents, subject only to the
modification that the latter award was reduced into half. Petitioner sought reconsideration but the
same was denied in the resolution dated February 4, 1994.

Petitioner is now before this Court raising the same errors that it presented before the respondent
court.

At the core of petitioner's assigned errors is the issue of whether or not there is still a partnership
between petitioner and respondent Cordero. Evidently, this issue, as well as the other points raised
by petitioner, are factual matters which by the weight of judicial precedents cannot be inquired into
by this Court in an appeal on certiorari. This Court can no longer be tasked to go over the proofs
presented by the parties and analyze, assess and weigh them to ascertain if the trial court and the
appellate court were correct in according superior credit to this or that piece of evidence of one party
or the other. 
5

Petitioner faults the respondent court for disregarding the legal presumptions in favor of the validity
of the deed of sale of his partnership rights, namely: (1) that private transactions have been fair and
regular; (2) that the ordinary course of business has been followed; and (3) that there is sufficient
consideration for a contract. He contends that contrary to the Rules of Evidence, respondent court
shifted the burden of proof against his favor.

These arguments are misplaced. Petitioner overlooks the fact that the presumption he invokes are
mere presumptions juris tantum, these are disputable presumptions which can be rebutted by
evidence to the contrary. But as previously adverted, the calibration of these evidence and the
relative weight accorded to them are within the exclusive domain of both the trial and appellate
courts which cannot be set aside by this Court absent any showing that there is no evidence to
support the conclusion drawn by the court a quo.   In the instant case, contrary to petitioner's
6

assertion, the record is replete with evidence establishing the fact that the deed of sale evidencing
the transfer of rights in respondent Cordero's favor was fictitious and simulated. This was amply
confirmed by the following findings of respondent Court of Appeals, to which we are in complete
accord:

. . . The fact of the matter is that the terms enumerated under the deed of sale were
never complied with. Plaintiff Cordero never paid the Fifty Thousand Peso
downpayment and defendant has adduced no evidence to show that the installments
which plaintiff-appellee was supposed to have paid under the terms of the agreement
were ever paid or tendered.

The Deed of Sale and Transfer of Rights dated the 5th of April, 1989 stipulates the
following terms and conditions: 1. a total purchase price of TWO HUNDRED AND
FIFTY THOUSAND PESOS (P250,000.00); 2. Downpayment of FIFTY THOUSAND
PESOS (P50,000.00); 3. Twenty monthly installments at P10,000.00 per month,
payable through post-dated checks, the first installment due within the first five days
of May and the succeeding installments being due within the first five days of every
month thereafter until the balance shall have been fully paid (Exhibit "G"). In spite of
the express conditions of sale, none of these were met and no post-dated checks
were advanced. Instead, a series of checks of varying amounts — not TEN
THOUSAND PESOS (P10,000.00) as stipulated in the disputed deed of sale — were
 issued by herein appellee, which the court below found to be dividends from the
partnership profits. These checks were issued up to the fifth of January, 1990, long
after both parties agreed to the alleged sale (p. 74, Rollo).

These events, together with the defendant's apparent performance of his

comptrollership functions after the deed was signed, militiate against the defendant's
contention that the partnership was terminated on the 5th of April 1989. Based on the
evidence at hand, defendant Alicbusan continued to oversee and check daily sales
reports and vouchers. He was the approving authority as far as check vouchers were
concerned. Furthermore, the evidence shows that he subsequently delegated this
function to his wife (Exh. "H", "H-1"; Exh. "I", "I-1"; Exh. "J"). An Audit Report (Exh.
"N") carries notations and suggestions by defendant Alicbusan, which attached
balance sheet dated June 30, 1989 lists the Partner's capital as P42,362.00 each for
LCA (identified as Leopoldo Alicbusan, see TSN, Aug. 24, 1990, p. 120) and CSC
(identified as Cesar C. Cordero, herein plaintiff, ibid), for a total partnership capital of
P84,724.00. During this time, the defendant did not object to his inclusion in the
report as a partner of Baby's Canteen, which he would have if the sale were not
simulated. 7

Finally, on the propriety of the award of moral damages, we find no reason to set aside the same
considering that both the Court of Appeals and the trial court found that petitioner acted in gross and
evident bad faith in exercising his power and influence as president of Philtranco and caused the
withholding of the remittances due to Baby's Canteen from Philtranco.   The award of attorney's fees
8

is also in order as a consequence of petitioner's unjust refusal to settle private respondents' just and
lawful claim which constrained the latter to litigate in court.

WHEREFORE, the petition is hereby DENIED and the appealed decision is AFFIRMED in toto.

SO ORDERED.

Ting v. Court of Appeals, G.R. No. 140665, [November 13, 2000], 398 PHIL 481-496)

Republic of the Philippines

SUPREME COURT

THIRD DIVISION

G.R. No. 140665             November 13, 2000

VICTOR TING "SENG DEE" and EMILY CHAN-AZAJAR, petitioners,

vs.
COURT OF APPEALS and PEOPLE OF THE PHILIPPINES, respondents.

MELO, J.:

Before us is a petition for certiorari under Rule 45 seeking the reversal of the February 12, 1999
decision of the Court of Appeals which affirmed that of the Regional Trial Court of the National
Capital Judicial Region (Manila, Branch 45) finding petitioners guilty of seven (7) counts of violation
of Batas Pambansa Blg. 22.

Petitioners' version of the background events is as follows:

From 1991 to 1992, Juliet Ting "Chan Sioc Hiu" obtained loans, in the aggregate amount of
P2,750,000.00, from private complainant Josefina K. Tagle for use in Juliet's furniture business. As
payment thereof, Juliet issued eleven (11) post-dated checks which, upon maturity, were dishonored
for reasons of "Closed Account" or "Drawn Against Insufficient Funds." Juliet was subsequently
prosecuted for violation of Batas Pambansa Blg. 22.

Due to her financial difficulties, Juliet requested her husband Victor Ting "Seng Dee" and her sister
Emily Chan-Azajar (petitioners herein) to take over her furniture business, including the obligations
appurtenant thereto. Agreeing to Juliet's request, petitioners issued nineteen (19) checks in
replacement of the eleven (11) checks earlier issued by Juliet. The planned take-over, however,
never materialized since the Naga Hope Christian School, petitioner Emily Chan-Azajar's employer
in Naga, refused to let her resign to attend to her sister's business. Since the planned take-over did
not take place, petitioners requested Juliet to reassume her obligation to private complainant Tagle
by replacing the checks they had previously issued to the latter. Thus, Juliet replaced the nineteen
(19) checks issued by petitioners with twenty-three (23) Far East Bank checks in favor of Tagle.
Petitioners then requested private complainant Tagle to return the nineteen (19) checks they had
issued to her. Instead of returning the checks, Tagle deposited seven of the checks with MetroBank
where they were dishonored for being "Drawn Against Insufficient Funds."

On the other hand, private complainant Tagle alleged that sometime in April 1993, petitioners
obtained a loan of P950,000.00 from her, issuing several post-dated checks in payment thereof.
When the checks were deposited by Tagle with MetroBank, they were dishonored for having been
drawn against insufficient funds. Tagle alleged that despite verbal and written demands, petitioners
failed to pay her the value of the dishonored checks.

Consequently, seven informations for violation of Batas Pambansa Blg. 22 were filed against
petitioners. Said informations are similarly worded except with respect to the check number, the
amount involved, and the date the check was issued. The information in Criminal Case No. 94-
131945 (the other cases are Criminal Case No. 94-131946, Criminal Case No. 94-131947, Criminal
Case No. 94-131948, Criminal Case No. 94-131949, Criminal Case No. 94-131950, and Criminal
Case No. 94-131951) charged:

That sometime prior to May 27, 1993, in the City of Manila, Philippines, the said accused,
conspiring and confederating together and mutually helping each other, did then and there
wilfully, unlawfully and feloniously make or draw and issue to JOSEPHINE K. TAGLE, to
apply on account or for value Producers Bank of the Philippines, Check No. 946072 dated
May 27, 1993 payable to CASH in the amount of P250,000.00 said accused well knowing
that at the time of issue they did not have sufficient funds in or credit with the drawee bank
for payment of such check in full upon its presentment, which check when presented for
payment within ninety (90) days from the date thereof, was subsequently dishonored by the
drawee bank for Drawn Against Insufficient Funds and despite receipt of notice of such
dishonor, said accused failed to pay said JOSEFINA K. TAGLE the amount of the check or
to make arrangements for full payment of the same within five (5) banking days after
receiving said notice.

(p. 2, Original Records.)

Criminal Cases No. 94-131945 to 94-131951 were consolidated and jointly tried. When arraigned,
petitioners, assisted by counsel, pleaded not guilty. During trial, the prosecution presented only one
witness, the private complainant, the testimony of Producer's Bank representative Ferdinand Lazo
being dispensed with after counsel for petitioners admitted the dishonor of the checks subject matter
of the action.

On March 16, 1995, the trial court found petitioners guilty of violating Batas Pambansa Blg. 22 in
each of the seven cases, disposing as follows:

WHEREFORE, in view of the foregoing, accused VICTOR TING and EMILY CHAN AZAJAR
are hereby found "GUILTY" beyond reasonable doubt of all the charges contained in
Criminal Case Nos. 94-131945; 94-131946; 94-131947; 94-131948; 94-131949; 94-131950
and 94-131951 and for each count, they are hereby sentenced to suffer the penalty of one
(1) year imprisonment; to pay Josefina K. Tagle the total amount of P950,000.00; and to pay
the cost.

(p. 294, Rollo.)

Aggrieved, petitioners filed an appeal with the Court of Appeals which was docketed therein as C.A.-
G.R. No. 18054. However, the appellate court, on February 12, 1999, affirmed. Petitioners' motion
for reconsideration was, likewise, denied for lack of merit. Hence, the instant petition.

Petitioners claim that the Court of Appeals erred in affirming the decision of the trial court, given the
absence of proof beyond reasonable doubt or in the presence of facts creating reasonable doubt.
The petition has merit.

Section 1 of Batas Pambansa Blg. 22, otherwise known as the Bouncing Checks Law, provides:

Section 1. Checks without sufficient funds. — Any person who makes or draws and issues
any check to apply on account or for value, knowing at the time of issue that he does not
have sufficient funds in or credit with the drawee bank for the payment of such check in full
upon its presentment, which check is subsequently dishonored by the drawee bank for
insufficiency of funds or credit or would have been dishonored for the same reason had not
the drawer, without any valid reason, ordered the bank to stop payment, shall be punished
by imprisonment of not less than thirty days but not more than one (1) year or by a fine of not
less than but not more double the amount of the check which fine shall in no case exceed
Two hundred thousand pesos, or both such fine and imprisonment at the discretion of the
court.

The same penalty shall be imposed upon any person who having sufficient funds in or credit
with the drawee bank when he makes or draws and issues a check, shall fail to keep
sufficient funds or to maintain a credit to cover the full amount of the check if presented
within a period of ninety (90) days from the date appearing thereon, for which reason it is
dishonored by the drawee bank.

Where the check is drawn by a corporation, company or entity, the person or persons who
actually signed the check in behalf of such drawer shall be liable under this Act.

For a violation of Batas Pambansa Blg. 22 to be committed, the following elements must be
present:

(1) the making, drawing, and issuance of any check to apply for account or for value;

(2) the knowledge of the maker, drawer, or issuer that at the time of issue there are no
sufficient funds in or credit with the drawee bank for the payment of such check in full upon is
presentment; and

(3) the subsequent dishonor of the check by the drawee bank for insufficiency of funds or
credit or dishonor for the same reason had not the drawer, without any valid cause, ordered
the bank to stop payment (Sycip, Jr. vs. CA, G.R. No. 125059, March 17, 2000).

An analysis of the evidence presented, however, shows that not all the aforementioned elements
have been established by the prosecution beyond reasonable doubt.

That the seven checks in question were issued by petitioners is beyond dispute. Not only were the
dishonored checks presented in court, but petitioners even admitted signing the checks and issuing
them to private complainant. From the evidence on record, it is clear that petitioners signed and
issued the seven checks in question.

That the checks were dishonored is also clearly established. Section 3 of Batas Pambansa Blg. 22
provides that "the introduction in evidence of any unpaid and dishonored check, having the drawee's
refusal to pay stamped or written thereon, or attached thereto, with the reason therefor as aforesaid,
shall be prima facie evidence of the making or issuance of said check, and the due presentment to
the drawee for payment and the dishonor thereof, and that the same was properly dishonored for the
reason written, stamped, or attached by the drawee on such dishonored check." In the instant case,
the fact of the checks' dishonor is sufficiently shown by the return slips issued by MetroBank, the
depository bank, stating that the checks had been returned for the reason "DAIF — Drawn Against
Insufficient Funds." Not only are these check return slips prima facie evidence that the drawee bank
dishonored the checks, but the defense did not present any evidence to rebut these documents. In
fact, counsel for petitioners even admitted the fact of the checks' dishonor, agreeing to dispense with
the presentation of the bank representative who was supposed to prove the fact of dishonor of said
checks (p. 162, Rollo.).

However, for liability to attach under Batas Pambansa Blg. 22, it is not enough that the prosecution
establishes that a check was issued and that the same was subsequently dishonored. The
prosecution must also prove the second element, that is, it must further show that the issuer, at the
time of the check's issuance, had knowledge that he did not have enough funds or credit in the bank
for payment thereof upon its presentment. Since the second element involves a state of mind which
is difficult to verify, Section 2 of Batas Pambansa Blg. 22 creates a presumption juris tantum that the
second element prima facie exists when the first and third elements of the offense are present
(Magno v. People, 210 SCRA 471 [1992]). Section 2 provides:

Section 2. Evidence of knowledge of insufficient funds.— The making, drawing, and issuance
of a check payment of which is refused by the drawee because of insufficient funds or credit
with such bank, when presented within ninety days from the date of the check, shall
be prima facie evidence of knowledge of such insufficiency of funds or credit unless such
maker or drawer pays the holder thereof the amount due thereon, or makes arrangements
for payment in full by the drawee of such check within five (5) banking days after receiving
notice that such check has not been paid by the drawee."

In truth, this Court declared in King v. People (G.R. No. 131540, December 2, 1999) that "the prima
facie presumption arises when the check is issued. But the law also provides that the presumption
does not arise when the issuer pays the amount of the check or makes arrangement for its payment
'within five banking days after receiving notice that such check has not been paid by the drawee.'
Verily, BP 22 gives the accused an opportunity to satisfy the amount indicated in the check and thus
avert prosecution… This opportunity, however, can be used only upon receipt by the accused of a
notice of dishonor." Thus, the presumption that the issuer had knowledge of the insufficiency of
funds is brought into existence only after it is proved that the issuer had received a notice of
dishonor and that, within five days from receipt thereof, he failed to pay the amount of the check or
to make arrangement for its payment.

King v. People, decided by this Division, involves a set of facts similar to the case at bar. In said
case, the accused therein was proven to have issued eleven checks, all of which were duly filled up
and signed by her. It was also clearly established that these eleven checks were dishonored, as
shown by the checks themselves which were stamped "ACCOUNT CLOSED" and further supported
by the return tickets issued by PCI Bank stating that the checks had been dishonored. Yet, even if
the prosecution had already established the issuance of the checks and their subsequent dishonor,
this Court still required the prosecution to show that the issuer knew of the insufficiency of funds by
proving that he or she received a notice of dishonor and, within five banking days thereafter, failed to
satisfy the amount of the check or make arrangement for its payment.

Moreover, in Lina Lim Lao v. CA (274 SCRA 572 [1997]), we emphasized that "the full payment of
the amount appearing in the check within five banking days from notice of dishonor is a 'complete
defense.' The absence of a notice of dishonor necessarily deprives an accused an opportunity to
preclude a criminal prosecution. Accordingly, procedural due process clearly enjoins that a notice of
dishonor be actually served on petitioner. Petitioner has a right to demand — and the basic postulate
of fairness require — that the notice of dishonor be actually sent to and received by her to afford her
the opportunity to avert prosecution under BP 22."

To prove that petitioners received a notice of dishonor, the prosecution presented a copy of the
demand letter allegedly sent to petitioners through registered mail and its corresponding registry
receipt. Private complainant Josefina Tagle, the sole witness for the prosecution, testified thus:

Q:             Now, when these seven (7) checks bounced for insufficiency of funds, what step
did you take?

A:             I demanded the return of my money from them.

Q:             Now, what was the reply of the two accused?

A:             They kept on promising that they will pay but up to now they have not paid any
single centavo.

Q:             What other step did you take?

A:             I requested my lawyer to write a demand letter.

Q:             And that demand letter was sent to the accused?

A:             Yes, Sir.
 Q:             In what manner?

A:             By registered mail.

Q:             Now, was that demand letter received by the two accused?

A:             Yes, Sir.

Q:             What is your evidence?

A:             The return card.

Q:             If you are shown anew the copy of the demand letter which is already marked as
Exhibit B, would you be able to recognize the same?

A:             Yes, Sir.

Q:             Is that the one that you are referring to?

A:             Yes, Sir.

Q:             How about the return card, is that correct?

A:             Yes, Sir, this is the one.

Q:             Now, upon receipt of this letter by the two accused, did the two accused pay the
amount of the said check?

A:             No, Sir.

Q:             So what did you do next?

A:             I told my lawyer to file charges against them.

Q:             You mean the present charge?

A:             Yes, Sir.

Atty. Acuesta:

That is all, Your Honor.

(TSN, Aug. 24, 1994, p. 8-9.)

Aside from the above testimony, no other reference was made to the demand letter by the
prosecution. As can be noticed from the above exchange, the prosecution alleged that the demand
letter had been sent by mail. To prove mailing, it presented a copy of the demand letter as well as
the registry return receipt. However, no attempt was made to show that the demand letter was
indeed sent through registered mail nor was the signature on the registry return receipt
authenticated or identified. It cannot even be gleaned from the testimony of private complainant as to
who sent the demand letter and when the same was sent. In fact, the prosecution seems to have
presumed that the registry return receipt was proof enough that the demand letter was sent through
registered mail and that the same was actually received by petitioners or their agents.

As adverted to earlier, it is necessary in cases for violation of Batas Pambansa Blg. 22, that the
prosecution prove that the issuer had received a notice of dishonor. It is a general rule that when
service of notice is an issue, the person alleging that the notice was served must prove the fact of
service (58 Am Jur 2d, Notice, § 45). The burden of proving notice rests upon the party asserting its
existence. Now, ordinarily, preponderance of evidence is sufficient to prove notice. In criminal cases,
however, the quantum of proof required is proof beyond reasonable doubt. Hence, for Batas
Pambansa Blg. 22 cases, there should be clear proof of notice. Moreover, it is a general rule that,
when service of a notice is sought to be made by mail, it should appear that the conditions on which
the validity of such service depends had existence, otherwise the evidence is insufficient to establish
the fact of service (C.J.S., Notice, § 18). In the instant case, the prosecution did not present proof
that the demand letter was sent through registered mail, relying as it did only on the registry return
receipt. In civil cases, service made through registered mail is proved by the registry receipt issued
by the mailing office and an affidavit of the person mailing of facts showing compliance with Section
7 of Rule 13 (See Section 13, Rule 13, 1997 Rules of Civil Procedure). If, in addition to the registry
receipt, it is required in civil cases that an affidavit of mailing as proof of service be presented, then
with more reason should we hold in criminal cases that a registry receipt alone is insufficient as proof
of mailing. In the instant case, the prosecution failed to present the testimony, or at least the
affidavit, of the person mailing that, indeed, the demand letter was sent.

Moreover, petitioners, during the pre-trial, denied having received the demand letter (p. 135, Rollo.).
Given petitioners' denial of receipt of the demand letter, it behooved the prosecution to present proof
that the demand letter was indeed sent through registered mail and that the same was received by
petitioners. This, the prosecution miserably failed to do. Instead, it merely presented the demand
letter and registry return receipt as if mere presentation of the same was equivalent to proof that
some sort of mail matter was received by petitioners. Receipts for registered letters and return
receipts do not prove themselves; they must be properly authenticated in order to serve as proof of
receipt of the letters (Central Trust Co. v. City of Des Moines, 218 NW 580).

Likewise, for notice by mail, it must appear that the same was served on the addressee or a duly
authorized agent of the addressee. In fact, the registry return receipt itself provides that "[a]
registered article must not be delivered to anyone but the addressee, or upon the addressee's
written order, in which case the authorized agent must write the addressee's name on the proper
space and then affix legibly his own signature below it." In the case at bar, no effort was made to
show that the demand letter was received by petitioners or their agent. All that we have on record is
an illegible signature on the registry receipt as evidence that someone received the letter. As to
whether this signature is that of one of the petitioners or of their authorized agent remains a mystery.
From the registry receipt alone, it is possible that petitioners or their authorized agent did receive the
demand letter. Possibilities, however, cannot replace proof beyond reasonable doubt. There being
insufficient proof that petitioners received notice that their checks had been dishonored, the
presumption that they knew of the insufficiency of the funds therefor cannot arise.

As we stated in Savage v. Taypin (G.R. No. 134217, May 11, 2000), "penal statutes must be strictly
construed against the State and liberally in favor of the accused." Likewise, the prosecution may not
rely on the weakness of the evidence for the defense to make up for its own blunders in prosecuting
an offense. Having failed to prove all the elements of the offense, petitioners may not thus be
convicted for violation of Batas Pambansa Blg. 22.

That petitioners are civilly liable to private complainant is also doubtful. Private complainant claims
that petitioners borrowed Nine Hundred Fifty Thousand (P950,000.00) Pesos from her on or about
the end of April 1993, in payment of which petitioners issued several post-dated checks in her favor.
The seven checks issued by petitioners as payment for the amount borrowed add up to
P950,000.00. If private complainant is the businesswoman that she claims to be, she should be
collecting interest on the loan she granted to petitioners. In other words, the amount to be repaid by
petitioners should be more than P950,000.00, to account for interest on the loan. The checks issued
by petitioners, however, do not provide for interest. It is thus more credible that the seven checks
involved in this case form part of nineteen checks issued to replace the checks issued by Juliet Ting
to private complainant. This conclusion is bolstered by private complainant's admission in her reply-
affidavit that more than seven checks were issued by petitioners (p. 11, Original Records). In said
reply-affidavit, private complainant states that "respondents issued and delivered to me in Manila
several checks, which partially include their seven (7) bouncing checks herein. I say 'partially'
because I will have to file additional bouncing check cases against them, as these other checks
likewise bounced." Furthermore, in the same reply-affidavit, private complainant claims that the
checks in question were not replaced, allegedly because the replacement checks must first be
cleared, which did not happen in this case. By implication, had the 23 Far East Bank checks issued
by Juliet Ting to replace the nineteen checks issued by petitioners been cleared, then private
complainant would have considered the checks in question as having been replaced. This only
supports our conclusion that it was Juliet Ting who owed money to private complainant, not
petitioners.

Moreover, the original debtor Juliet Ting was convicted by the Regional Trial Court of Manila in
Criminal Cases 93-126581-91 for eleven counts of violation of Batas Pambansa Blg. 22. These
eleven bouncing check cases involved the same obligation being sued upon by private complainant
Tagle herein. The trial court expressly acknowledged in said cases that nineteen (19) checks were
issued by petitioners as payment for Juliet Ting's obligation. In its August 7, 1997 decision convicting
Juliet Ting for violation of Batas Pambansa Blg. 22, the trial court declared that "to cover the
additional loans, accused (Juliet Ting) delivered 19 post-dated checks issued by Victor Ting and
Emily Azajar (p. 55, Rollo.)." The trial court's decision further provides:

Since she could not fund the other checks (Exhs. B to K), she replaced the same with 19
post-dated checks of her husband Victor Ting and her sister Emily Azajar totaling
P2,450,000.00. They issued the checks as they would take over her furniture business. The
intended partnership of Victor and Emily was aborted as the latter was not allowed to resign
from her teaching post in Naga City. She then replaced the checks issued by Victor and
Emily with her own checks – 23 FEB post-dated checks per list (Exh. 9) prepared by
Suzanne Azajar.

Despite receipt of the replacement checks, complainant refused to return the checks of
Victor and Emily and even filed cases against them.

(p. 56, Rollo.)

Not having borrowed the amount of Nine Hundred Fifty Thousand (P950,000.00) from private
complainant, petitioners may not thus be held liable therefor.

WHEREFORE, premises considered, the instant petition is GRANTED and the assailed decision of
the Court of Appeals dated February 12, 1999 REVERSED and SET ASIDE. Petitioners Victor Ting
"Seng Dee" and Emily Chan-Azajar are hereby ACQUITTED of the charges against them for
violation of Batas Pambansa Blg. 22, for lack of sufficient evidence to prove the offenses charged
beyond reasonable doubt. No special pronouncement is made as to costs.

SO ORDERED.

Hizon v. Court of Appeals, G.R. No. 119619, [December 13, 1996], 333 PHIL 358-382

G.R. No. 119619 December 13, 1996

RICHARD HIZON, SILVERIO GARGAR, ERNESTO ANDAYA, NEMESIO GABO, RODRIGO

ABRERA, CHEUNG TAI FOOK, SHEK CHOR LUK, EFREN DELA PENA, JONEL AURELIO,
GODOFREDO VILLAVERDE, ANGELITO DUMAYBAG, DEOMEDES ROSIL, AMADO
VILLANUEVA, FRANCISCO ESTREMOS, ANGEL VILLAVERDE, NEMESIO CASAMPOL,
RICHARD ESTREMOS, JORNIE DELA PENA, JESUS MACTAN, MARLON CAMPORAZO,
FERNANDO BIRING, MENDRITO CARPO, LUIS DUARTE, JOSEPH AURELIO, RONNIE
JUEZAN, BERNARDO VILLACARLOS, RICARDO SALES, MARLON ABELLA, TEODORO
DELOS REYES, IGNACIO ABELLA, JOSEPH MAYONADO, JANAIRO LANGUYOD, DODONG
DELOS REYES, JOLLY CABALLERO and ROPLANDO ARCENAS, petitioners,
vs.
HONORABLE COURT OF APPEALS and THE PEOPLE OF THE PHILIPPINES, respondents.

PUNO, J.:p

This is a petition for review on certiorari of the decision of the Court of Appeals in CA-G.R. CR No. 15417 affirming the decision of the
Regional Trial Court, Branch 52, Palawan in Criminal Case No. 10429 convicting petitioners of the offense of illegal fishing with the use of
obnoxious or poisonous substance penalized under Presidential Decree (P.D.) No. 704, the Fisheries Decree of 1975.

In an Information dated October 15, 1992, petitioners were charged with a violation of P.D. 704
committed as follows:

That on or about the 30th day of September 1992, at Brgy. San Rafael, Puerto
Princesa City, Philippines and within the jurisdiction of this Honorable Court, the
above-named accused crew members and fishermen of F/B Robinson owned by
First Fishermen Fishing Industries, Inc., represented by Richard Hizon, a domestic
corporation duly organized under the laws of the Philippines, being then the owner,
 crew members and fishermen of F/B Robinson and with the use of said fishing boat,
did then and there wilfully, unlawfully and feloniously the said accused conspiring
and confederating together and mutually helping one another catch, take or gather or
cause to be caught, taken or gathered fish or fishery aquatic products in the coastal
waters of Puerto Princess City, Palawan, with the use of obnoxious or poisonous
substance (sodium cyanide), of more or less one (1) ton of assorted live fishes which
were illegally caught thru the use of obnoxious/poisonous substance (sodium
cyanide). 
1

The following facts were established by the prosecution: In September 1992, the Philippine National
Police (PNP) Maritime Command of Puerto Princesa City, Palawan received reports of illegal fishing
operations in the coastal waters of the city. In response to these reports, the city mayor organized
Task Force Bantay Dagat to assist the police in the detection and apprehension of violators of the
laws on fishing.

On September 30, 1992 at about 2:00 in the afternoon, the Task Force Bantay Dagat reported to the
PNP Maritime Command that a boat and several small crafts were fishing by "muro ami" within the
shoreline of Barangay San Rafael of Puerto Princesa. The police, headed by SPO3 Romulo
Enriquez, and members of the Task Force Bantay Dagat, headed by Benito Marcelo, Jr.,
immediately proceeded to the area and found several men fishing in motorized sampans and a big
fishing boat identified as F/B Robinson within the seven-kilometer shoreline of the city. They boarded
the F/B Robinson and inspected the boat with the acquiescence of the boat captain, Silverio Gargar.
In the course of their inspection, the police saw two foreigners in the captain's deck. SP03 Enriquez
examined their passports and found them to be mere photocopies. The police also discovered a
large aquarium full of live lapu-lapu and assorted fish weighing approximately one ton at the bottom
of the boat.   They checked the license of the boat and its fishermen and found them to be in order.
2

Nonetheless, SP03 Enriquez brought the boat captain, the crew and the fishermen to Puerto
Princesa for further investigation.

At the city harbor, members of the Maritime Command were ordered by SP03 Enriquez to guard the
F/B Robinson. The boat captain and the two foreigners were again interrogated at the PNP Maritime
Command office. Thereafter, an Inspection/Apprehension Report was prepared and the boat, its
crew and fishermen were charged with the following violations:

1. Conducting fishing operations within Puerto Princesa coastal waters without

mayor's permit;

2. Employing excess fishermen on board (Authorized — 26; On board — 36);

3. Two (2) Hongkong nationals on board without original passports. 3

The following day, October 1, 1992, SPO3 Enriquez directed the boat captain to get random
samples of fish from the fish cage of F/B Robinson for laboratory examination. As instructed, the
boat engineer, petitioner Ernesto Andaya, delivered to the Maritime Office four (4) live lapu-lapu fish
inside a plastic shopping bag filled with water. SPO3 Enriquez received the fish and in the presence
of the boat engineer and captain, placed them inside a large transparent plastic bag without water.
He sealed the plastic with heat from a lighter.  4

The specimens were brought to the National Bureau of Investigation (NBI) sub-office in the city for
examination "to determine the method of catching the same for record or evidentiary
purposes."   They were received at the NBI office at 8:00 in the evening of the same day. The
5

receiving clerk, Edna Capicio, noted that the fish were dead and she placed the plastic bag with the
fish inside the office freezer to preserve them. Two days later, on October 3, 1992, the chief of the
NBI sub-office, Onos Mangotara, certified the specimens for laboratory examination at the NBI Head
Office in Manila. The fish samples were to be personally transported by Edna Capicio who was then
scheduled to leave for Manila for her board examination in Criminology.   On October 4, 1992, Ms.
6

Capicio, in the presence of her chief, took the plastic with the specimens from the freezer and placed
them inside two shopping bags and sealed them with masking tape. She proceeded to her ship
where she placed the specimens in the ship's freezer.

Capicio arrived in Manila the following day, October 5, 1992 and immediately brought the specimens
to the NBI Head Office. On October 7, 1992, NBI Forensic Chemist Emilia Rosaldes conducted two
tests on the fish samples and found that they contained sodium cyanide, thus:
 FINDINGS:

Weight of Specimen. . . . . . 1.870 kilograms

Examinations made on the above-mentioned
specimen gave POSITIVE RESULTS to the
test for the presence of SODIUM CYANIDE. . . .

REMARKS:

Sodium Cyanide is a violent poison.  7

In light of these findings, the PNP Maritime Command of Puerto Princesa City filed the complaint at
bar against the owner and operator of the F/B Robinson, the First Fishermen Fishing Industries, Inc.,
represented by herein petitioner Richard Hizon, the boat captain, Silverio Gargar, the boat engineer,
Ernesto Andaya, two other crew members, the two Hongkong nationals and 28 fishermen of the said
boat.

Petitioners were arraigned and they pled not guilty to the charge. As defense, they claimed that they
are legitimate fishermen of the First Fishermen Industries, Inc., a domestic corporation licensed to
engage in fishing. They alleged that they catch fish by the hook and line method and that they had
used this method for one month and a half in the waters of Cuyo Island. They related that on
September 30, 1992 at about 7:00 A.M., they anchored the F/B Robinson in the east of Podiado
Island in Puerto Princesa City. The boat captain and the fishermen took out and boarded their
sampans to fish for their food. They were still fishing in their sampans at 4:00 P.M. when a rubber
boat containing members of the PNP Maritime Command and the Task Force Bantay Dagat
approached them and boarded the F/B Robinson. The policemen were in uniform while the Bantay
Dagat personnel were in civilian clothes. They were all armed with guns. One of the Bantay Dagat
personnel introduced himself as Commander Jun Marcelo and he inspected the boat and the boat's
documents. Marcelo saw the two foreigners and asked for their passports. As their passports were
photocopies, Marcelo demanded for their original. The captain explained that the original passports
were with the company's head office in Manila. Marcelo angrily insisted for the originals and
threatened to arrest everybody. He then ordered the captain, his crew and the fishermen to follow
him to Puerto Princesa. He held the magazine of his gun and warned the captain "Sige, huwag kang
tatakas, kung hindi babarilin ko kayo!"   The captain herded all his men into the boat and followed
8

Marcelo and the police to Puerto Princesa.

They arrived at the city harbor at 7:45 in the evening and were met by members of the media. As
instructed by Marcelo, the members of the media interviewed and took pictures of the boat and the
fishermen. 9

The following day, October 1, 1992, at 8:00 in the morning, Amado Villanueva, one of the fishermen
at the F/B Robinson, was instructed by a policeman guarding the boat to get five (5) fish samples
from the fish cage and bring them to the pier. Villanueva inquired whether the captain knew about
the order but the guard replied he was taking responsibility for it. Villanueva scooped five pieces of
lapu-lapu, placed them inside a plastic bag filled with water and brought the bag to the pier. The boat
engineer, Ernesto Andaya, received the fish and delivered them to the PNP Maritime Office. Nobody
was in the office and Andaya waited for the apprehending officers and the boat captain. Later, one of
the policemen in the office instructed him to leave the bag and hang it on a nail in the wall. Andaya
did as he was told and returned to the boat at 10:00 A.M.  10

In the afternoon of the same day, the boat captain arrived at the Maritime office. He brought along a
representative from their head office in Manila who showed the police and the Bantay Dagat
personnel the original passports of the Hongkong nationals and other pertinent documents of the F/B
Robinson and its crew. Finding the documents in order, Marcelo approached the captain and
whispered to him "Tandaan mo ito, kapitan, kung makakaalis ka dito, magkikita pa rin uli tayo sa
dagat, kung hindi kayo lulubog ay palulutangin ko kayo!" It was then that SP03 Enriquez informed
the captain that some members of the Maritime Command, acting under his instructions, had just
taken five (5) pieces of lapu-lapu from the boat. SP03 Enriquez showed the captain the fish samples.
Although the captain saw only four (4) pieces of lapu-lapu, he did not utter a word of protest.   Under
11

Marcelo's threat, he signed the "Certification" that he received only four (4) pieces of the fish. 
12

Two weeks later, the information was filed against petitioners. The case was prosecuted against
thirty-one (31) of the thirty-five (35) accused. Richard Hizon remained at large while the whereabouts
of Richard Estremos, Marlon Camporazo and Joseph Aurelio were unknown.
On July 9, 1993, the trial court found the thirty one (31) petitioners guilty and sentenced them to
imprisonment for a minimum of eight (8) years and one (1) day to a maximum of nine (9) years and
four (4) months. The court also ordered the confiscation and forfeiture of the F/B Robinson, the 28
sampans and the ton of assorted live fishes as instruments and proceeds of the offense, thus:

WHEREFORE, premises considered, judgment is hereby rendered finding the

accused SILVERIO GARGAR, ERNESTO ANDAYA, NEMESIO GABO, RODRIGO
ABRERA, CHEUNG TAI FOOK, SHEK CHOR LUK, EFREN DELA PENA, JONEL
AURELIO, GODOFREDO VILLAVERDE, ANGELITO DUMAYBAG, DEOMEDES
ROSIL, AMADO VILLANUEVA, FRANCISCO ESTREMOS, ARNEL VILLAVERDE,
NEMESIO CASAMPOL, JORNIE DELA CRUZ, JESUS MACTAN, FERNANDO
BIRING, MENDRITO CARPO, LUIS DUARTE, RONNIE JUEZAN, BERNARDO
VLLLACARLOS, RICARDO SALES, MARLON ABELLA, TEODORO DELOS
REYES, IGNACIO ABELLA, JOSEPH MAYONADO, JANAIRO LANGUYOD,
DODONG DELOS REYES, ROLANDO ARCENAS and JOLLY CABALLERO guilty
beyond reasonable doubt of the crime of Illegal Fishing with the use of obnoxious or
poisonous substance commonly known as sodium cyanide, committed in violation of
section 33 and penalized in section 38 of Presidential Decree No. 704, as amended,
and there being neither mitigating nor aggravating circumstances appreciated and
applying the provisions of the Indeterminate Sentence Law, each of the aforenamed
accused is sentenced to an indeterminate penalty of imprisonment ranging from a
minimum of EIGHT (8) YEARS and ONE (1) DAY to a maximum of NINE (9) YEARS
and FOUR (4) MONTHS and to pay the costs.

Pursuant to the provisions of Article 45, in relation to the second sentence of Article 10 of the
Revised Penal Code, as amended:

a) Fishing Boat (F/B) Robinson;

b) The 28 motorized fiberglass sampans; and

c) The live fishes in the fish cages installed in the F/B Robinson, all of which have
been respectively shown to be tools or instruments and proceeds of the offense, are
hereby ordered confiscated and declared forfeited in favor of the government.

SO ORDERED.  13

On appeal, the Court of Appeals affirmed the decision of the trial court. Hence, this petition.

Petitioners contend that:

THE HONORABLE COURT OF APPEALS ERRED IN HOLDING THAT THE MERE

"POSITIVE RESULTS TO THE TEST FOR THE PRESENCE OF SODIUM
CYANIDE" IN THE FISH SPECIMEN, ALBEIT ILLEGALLY SEIZED ON THE
OCCASION OF A WARRANTLESS SEARCH AND ARREST, IS ADMISSIBLE AND
SUFFICIENT BASIS FOR THE PETITIONERS' CONVICTION OF THE CRIME OF
ILLEGAL FISHING.

II

THE HONORABLE COURT OF APPEALS ERRED IN NOT HOLDING THAT THE

STATUTORY PRESUMPTION OF GUILT UNDER SEC. 33 OF PRESIDENTIAL
DECREE NO. 704 CANNOT PREVAIL AGAINST THE CONSTITUTIONAL
PRESUMPTION OF INNOCENCE, SUCH THAT THE GRAVAMEN OF THE
OFFENSE OF ILLEGAL FISHING MUST STILL BE PROVED BEYOND
REASONABLE DOUBT.

III

THE HONORABLE COURT OF APPEALS ERRED IN NOT REVERSING THE

JUDGMENT OF THE TRIAL COURT AND ACQUITTING THE PETITIONERS.  14
The Solicitor General submitted a "Manifestation in Lieu of Comment" praying for petitioners'
acquittal.  15

The petitioners, with the concurrence of the Solicitor General, primarily question the admissibility of
the evidence against petitioners in view of the warrantless search of the fishing boat and the
subsequent arrest of petitioners. More concretely, they contend that the NBI finding of sodium
cyanide in the fish specimens should not have been admitted and considered by the trial court
because the fish samples were seized from the F/B Robinson without a search warrant.

Our Constitution proscribes search and seizure and the arrest of persons without a judicial
warrant.   As a general rule, any evidence obtained without a judicial warrant is inadmissible for any
16

purpose in any proceeding. The rule is, however, subject to certain exceptions. Some of these
are:  7 (1) a search incident to a lawful of arrest;   (2) seizure of evidence in plain view; (3) search of
1 18

a moving motor vehicle;   and (4) search in violation of customs laws. 

19 20

Search and seizure without search warrant of vessels and aircrafts for violations of customs laws
have been the traditional exception to the constitutional requirement of a search warrant. It is rooted
on the recognition that a vessel and an aircraft, like motor vehicles, can be quickly moved out of the
locality or jurisdiction in which the search warrant must be sought and secured. Yielding to this
reality, judicial authorities have not required a search warrant of vessels and aircrafts before their
search and seizure can be constitutionally effected.  21

The same exception ought to apply to seizures of fishing vessels and boats breaching our fishery
laws. These vessels are normally powered by high-speed motors that enable them to elude arresting
ships of the Philippine Navy, the Coast Guard and other government authorities enforcing our fishery
laws.  22

We thus hold as valid the warrantless search on the F/B Robinson, a fishing boat suspected of
having engaged in illegal fishing. The fish and other evidence seized in the course of the search
were properly admitted by the trial court. Moreover, petitioners failed to raise the issue during trial
and hence, waived
their right to question any irregularity that may have attended the said search and seizure.  23

Given the evidence admitted by the trial court, the next question now is whether petitioners are guilty
of the offense of illegal fishing with the use of poisonous substances. Again, the petitioners, joined
by the Solicitor General, submit that the prosecution evidence cannot convict them.

We agree.

Petitioners were charged with illegal fishing penalized under sections 33 and 38 of P.D. 704   which 24

provide as follows:

Sec. 33. Illegal fishing, illegal possession of explosives intended for illegal fishing;
dealing in illegally caught fish or fishery/aquatic products.— It shall be unlawful for
any person to catch, take or gather or cause to be caught, taken or gathered fish or
fishery/aquatic products in Philippine waters with the use of explosives, obnoxious or
poisonous substance, or by the use of electricity as defined in paragraphs (l), (m)
and (d), respectively, of section 3 hereof: Provided, That mere possession of such
explosives with intent to use the same for illegal fishing as herein defined shall be
punishable as hereinafter provided: Provided, That the Secretary may, upon
recommendation of the Director and subject to such safeguards and conditions he
deems necessary, allow for research, educational or scientific purposes only, the use
of explosives, obnoxious or poisonous substance or electricity to catch, take or
gather fish or fishery/aquatic products in the specified area: Provided, further, That
the use of chemicals to eradicate predators in fishponds in accordance with accepted
scientific fishery practices without causing deleterious effects in neighboring waters
shall not be construed as the use of obnoxious or poisonous substance within the
meaning of this section: Provided, finally, That the use of mechanical bombs for
killing whales, crocodiles, sharks or other large dangerous fishes, may be allowed,
subject to the approval of the Secretary.
 It shall, likewise, be unlawful for any person knowingly to possess, deal in, sell or in
any manner dispose of, for profit, any fish or fishery/aquatic products which have
been illegally caught, taken or gathered.

The discovery of dynamite, other explosives and chemical compounds containing

combustible elements, or obnoxious or poisonous substance, or equipment or device
for electric fishing in any fishing boat or in the possession of a fisherman shall
constitute a presumption that the same were used for fishing in violation of this
Decree, and the discovery in any fishing boat of fish caught or killed by the use of
explosives, obnoxious or poisonous substance or by electricity shall constitute a
presumption that the owner, operator or fisherman were fishing with the use of
explosives, obnoxious or poisonous substance or electricity.

xxx xxx xxx

Sec. 38. Penalties. — (a) For illegal fishing and dealing in illegally caught fish or
fishery/aquatic products. — Violation of Section 33 hereof shall be punished as
follows:

xxx xxx xxx

(2) By imprisonment from eight (8) to ten (10) years, if obnoxious or poisonous
substances are used: Provided, That if the use of such substances results 1) in
physical injury to any person, the penalty shall be imprisonment from ten (10) to
twelve (12) years, or 2) in the loss of human life, then the penalty shall be
imprisonment from twenty (20) years to life or death;

xxx xxx xxx  25

The offense of illegal fishing is committed when a person catches, takes or gathers or
causes to be caught, taken or gathered fish, fishery or aquatic products in Philippine waters
with the use of explosives, electricity, obnoxious or poisonous substances. The law creates a
presumption that illegal fishing has been committed when: (a) explosives, obnoxious or
poisonous substances or equipment or device for electric fishing are found in a fishing boat
or in the possession of a fisherman; or (b) when fish caught or killed with the use of
explosives, obnoxious or poisonous substances or by electricity are found in a fishing boat.
Under these instances, the boat owner, operator or fishermen are presumed to have
engaged in illegal fishing.

Petitioners contend that this presumption of guilt under the Fisheries Decree violates the
presumption of innocence guaranteed by the Constitution.   As early as 1916, this Court has
26

rejected this argument by holding that:  7

2

In some States, as well as in England, there exist what are known as common law
offenses. In the Philippine Islands no act is a crime unless it is made so by statute.
The state having the right to declare what acts are criminal, within certain well-
defined limitations, has the 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.  28

The validity of laws establishing presumptions in criminal cases is a settled matter. It is

generally conceded that the legislature has the power to provide that proof of certain facts
can constitute prima facie evidence of the guilt of the accused and then shift the burden of
proof to the accused provided there is a rational connection between the facts proved and
the ultimate fact presumed.   To avoid any constitutional infirmity, the inference of one from
29

proof of the other must not be arbitrary and unreasonable.   In fine, the presumption must be
30

based on facts and these facts must be part of the crime when committed.  31

The third paragraph of section 33 of P.D. 704 creates a presumption of guilt based on facts proved
and hence is not constitutionally impermissible. It makes the discovery of obnoxious or poisonous
substances, explosives, or devices for electric fishing, or of fish caught or killed with the use of
obnoxious and poisonous substances, explosives or electricity in any fishing boat or in the
possession of a fisherman evidence that the owner and operator of the fishing boat or the fisherman
had used such substances in catching fish. The ultimate fact presumed is that the owner and
operator of the boat or the fisherman were engaged in illegal fishing and this presumption was made
to arise from the discovery of the substances and the contaminated fish in the possession of the
fisherman in the fishing boat. The fact presumed is a natural inference from the fact proved.  32

We stress, however, that the statutory presumption is merely prima

facie.   It can not, under the guise of regulating the presentation of evidence, operate to preclude the
33

accused from presenting his defense to rebut the main fact presumed.   At no instance can the
34

accused be denied the right to rebut the presumption.   thus:

35

The inference of guilt is one of fact and rests upon the common experience of men.
But the experience of men has taught them that an apparently guilty possession may
be explained so as to rebut such an inference and an accused person may therefore
put witnesses on the stand or go on the witness stand himself to explain his
possession, and any reasonable explanation of his possession, inconsistent with his
guilty connection with the commission of the crime, will rebut the inference as to his
guilt which the prosecution seeks to have drawn from his guilty possession of the
stolen goods. 36

We now review the evidence to determine whether petitioners have successfully rebutted this
presumption. The facts show that on November 13, 1992, after the Information was filed in court and
petitioners granted bail, petitioners moved that the fish specimens taken from the F/B Robinson be
reexamined.   7 The trial court granted the motion.   As prayed for, a member of the PNP Maritime
3 38

Command of Puerto Princesa, in the presence of authorized representatives of the F/B Robinson,
the NBI and the local Fisheries Office, took at random five (5) live lapu-lapu from the fish cage of the
boat. The specimens were packed in the usual manner of transporting live fish, taken aboard a
commercial flight and delivered by the same representatives to the NBI Head Office in Manila for
chemical analysis.

On November 23, 1992, Salud Rosales, another forensic chemist of the NBI in Manila conducted
three (3) tests on the specimens and found the fish negative for the presence of sodium
cyanide,   thus:
39

Gross weight of specimen = 3.849 kg.

Examinations made on the above-mentioned specimens gave NEGATIVE RESULTS

to the tests for the presence of SODIUM CYANIDE.  40

The Information charged petitioners with illegal fishing "with the use of obnoxious or poisonous
substance (sodium cyanide), of more or less one (1) ton of assorted live fishes" There was more or
less one ton of fishes in the F/B Robinson's fish cage. It was from this fish cage that the four dead
specimens examined on October 7, 1992 and the five specimens examined on November 23, 1992
were taken. Though all the specimens came from the same source allegedly tainted with sodium
cyanide, the two tests resulted in conflicting findings. We note that after its apprehension, the F/B
Robinson never left the custody of the PNP Maritime Command. The fishing boat was anchored
near the city harbor and was guarded by members of the Maritime Command.   It was later turned
41

over to the custody of the Philippine Coast Guard Commander of Puerto Princesa City.  42

The prosecution failed to explain the contradictory findings on the fish samples and this omission
raises a reasonable doubt that the one ton of fishes in the cage were caught with the use of sodium
cyanide.

The absence of cyanide in the second set of fish specimens supports petitioners' claim that they did
not use the poison in fishing. According to them, they caught the fishes by the ordinary and legal
way, i.e., by hook and line on board their sampans. This claim is buttressed by the prosecution
evidence itself. The apprehending officers saw petitioners fishing by hook and line when they came
upon them in the waters of Barangay San Rafael. One of the apprehending officers, SPO1 Demetrio
Saballuca, testified as follows:

ATTY. TORREFRANCA ON CROSS-EXAMINATION:

 Q: I get your point therefore, that the illegal fishing supposedly
conducted at San Rafael is a moro ami type of fishing [that] occurred
into your mind and that was made to understand by the Bantay Dagat
personnel?

A: Yes, sir.

Q: Upon reaching the place, you and the pumpboat, together with the
two Bantay Dagat personnel were SPO3 Romulo Enriquez and Mr.
Benito Marcelo and SPO1 Marzan, you did not witness that kind of
moro ami fishing, correct?

A: None, sir.

Q: In other words, there was negative activity of moro ami type of

fishing on September 30, 1992 at 4:00 in the afternoon at San
Rafael?

A: Yes, sir.

Q: And what you saw were 5 motorized sampans with fishermen

each doing a hook and line fishing type?

A: Yes, sir. More or less they were five.

Q: And despite the fact you had negative knowledge of this moro ami
type of fishing, SP03 Enriquez together with Mr. Marcelo boarded the
vessel just the same?

A: Yes, sir.

xxx xxx xxx  43

The apprehending officers who boarded and searched the boat did not find any sodium cyanide nor
any poisonous or obnoxious substance. Neither did they find any trace of the poison in the
possession of the fishermen or in the fish cage itself. An Inventory was prepared by the
apprehending officers and only the following items were found on board the boat:

ITEMS QUANTITY REMARKS

F/B Robinson (1) unit operating

engine (1) unit ICE-900-BHP

sampans 28 units fiberglass

outboard motors 28 units operating

assorted fishes more or less 1 ton live

hooks and lines assorted

xxx xxx xxx  44

We cannot overlook the fact that the apprehending officers found in the boat assorted hooks
and lines for catching fish.   For this obvious reason, the Inspection/Apprehension Report
45

prepared by the apprehending officers immediately after the search did not charge
petitioners with illegal fishing, much less illegal fishing with the use of poison or any
obnoxious substance.  46

The only basis for the charge of fishing with poisonous substance is the result of the first NBI
laboratory test on the four fish specimens. Under the circumstances of the case, however, this
finding does not warrant the infallible conclusion that the fishes in the F/B Robinson, or even the
same four specimens, were caught with the use of sodium cyanide.

Prosecution witness SPO1 Bernardino Visto testified that for the first laboratory test, boat engineer
Ernesto Andaya did not only get four (4) samples of fish but actually got five (5) from the fish cage of
the F/B Robinson.   7 The Certification that four (4) fish samples were taken from the boat shows on
4

its face the number of pieces as originally "five (5)" but this was erased with correction fluid and "four
(4)" written over it.   The specimens were taken, sealed inside the plastic bag and brought to Manila
48

by the police authorities in the absence of petitioners or their representative. SP02 Enriquez testified
that the same plastic bag containing the four specimens was merely sealed with heat from a
lighter.   Emilia Rosales, the NBI forensic chemist who examined the samples, testified that when
49

she opened the package, she found the two ends of the same plastic bag knotted.   These 50

circumstances as well as the time interval from the taking of the fish samples and their actual
examination   fail to assure the impartial mind that the integrity of the specimens had been properly
51

safeguarded.

Apparently, the members of the PNP Maritime Command and the Task Force Bantay Dagat were
the ones engaged in an illegal fishing expedition. As sharply observed by the Solicitor General, the
report received by the Task Force Bantay Dagat was that a fishing boat was fishing illegally through
"muro ami" on the waters of San Rafael. "Muro ami" according to SPO1 Saballuca is made with "the
use of a big net with sinkers to make the net submerge in the water with the fishermen surround[ing]
the net."   This method of fishing needs approximately two hundred (200) fishermen to
52

execute.   What the apprehending officers instead discovered were twenty eight (28) fishermen in
53

their sampans fishing by hook and line. The authorities found nothing on the boat that would have
indicated any form of illegal fishing. All the documents of the boat and the fishermen were in order. It
was only after the fish specimens were tested, albeit under suspicious circumstances, that
petitioners were charged with illegal fishing with the use of poisonous substances.

IN VIEW WHEREOF, the petition is granted and the decision of the Court of Appeals in CA-G.R. CR
No. 15417 is reversed and set aside. Petitioners are acquitted of the crime of illegal fishing with the
use of poisonous substances defined under Section 33 of Republic Act No. 704, the Fisheries
Decree of 1975. No costs.

SO ORDERED.

Private Hospitals Association of the Philippines, Inc. v. Medialdea, G.R. No. 234448, [November 6, 2018]

EN BANC
[ G.R. No. 234448, November 06, 2018 ]
PRIVATE HOSPITALS ASSOCIATION OF THE PHILIPPINES, INC. (PHAPI) REPRESENTED
BY ITS PRESIDENT, DR. RUSTICO JIMENEZ, PETITIONER, VS. HON. SALVADOR
MEDIALDEA, EXECUTIVE SECRETARY, AND THE ACTING SECRETARY OF DEPARTMENT
OF HEALTH, RESPONDENTS.

DECISION
TIJAM, J.:
On grounds of denial of substantive due process, repugnancy to the constitutional presumption of innocence,
violation of the equal protection and involuntary servitude clauses, petitioner Private Hospitals Association of the
Philippines, Inc., (PHAPi) - an organization of privately-owned clinics, hospitals, and other health facilities - seeks to
declare as unconstitutional and void the duty imposed upon hospitals, medical practitioners and employees to
prevent actual death or injury under Section 1; the penal provisions under Section 4; the presumption of liability
clause under Section 5; and the reimbursement and tax deduction clause under Sections 7 and 8, all of Republic Act
(R.A.) No. 10932[1] otherwise known as an Act Strengthening the Anti-Hospital Deposit Law.

The Antecedents

In 1984, Batas Pambansa (BP) Bilang 702 entitled An Act Prohibiting the Demand of Deposits or Advance Payments
for the Confinement or Treatment of Patients in Hospitals and Medical Clinics in Certain Cases was enacted. BP 702
was described as a landmark legislative measure that aimed to stop the practice of hospitals and medical clinics of
asking for deposits or advance payments for treatment or confinement of patients in emergency and serious cases.[2]
Essentially, BP 702 makes it unlawful for any director, manager or any other officer of a hospital or medical clinic to
demand any deposit or any other form of advance payment for confinement or treatment in such hospital or medical
clinic in emergency or serious cases.[3] BP 702 penalizes such erring director, manager or any other officer of a
hospital or medical clinic with a fine of not less than one thousand pesos but not more than two thousand pesos or
imprisonment for not less than fifteen days but not more than thirty days, or both such fine and imprisonment.[4]

On August 25, 1997, BP 702 was amended by R.A. No. 8344.[5] R.A. No. 8344 makes it unlawful not only to demand,
but also to request, solicit, and accept any deposit or advance payment as a prerequisite for confinement or medical
treatment in emergency or serious cases. R.A. No. 8344 further makes the refusal to administer medical treatment
and support as dictated by good practice of medicine to prevent death or permanent disability unlawful. In case the
hospital or the medical clinic has no adequate medical capabilities, R.A. No. 8344 outlines the procedure for the
transfer of the patient to a facility where appropriate care can be given.[6] Under a new provision, R.A. No. 8344
allows the transfer of the patient to an appropriate hospital consistent with the latter's needs after the hospital or
medical clinic has administered medical treatment and support.[7]

R.A. No. 8344 also provides the following governing definitions for purposes of the law:

(a) Emergency - a condition or state of a patient wherein based on the objective findings of a prudent medical officer
on duty for the day there is immediate danger and where delay in initial support and treatment may cause loss of life
or cause permanent disability to the patient.

(b) Serious case - refers to a condition of a patient characterized by gravity or danger wherein based on the objective
findings of a prudent medical officer on duty for the day when left unattended to, may cause loss of life or cause
permanent disability to the patient.

(c) Confinement - a state of being admitted in a hospital or medical clinic for medical observation, diagnosis, testing,
and treatment consistent with the capability and available facilities of the hospital or clinic.

(d) Hospital - a facility devoted primarily to the diagnosis, treatment and care of individuals suffering from illness,
disease, injury or deformity, or in need of obstetrical or other medical and nursing care. It shall also be construed as
any institution, building or place where there are facilities and personnel for the continued and prolonged care of
patients.

(e) Emergency treatment and support - any medical or surgical measure within the capability of the hospital or
medical clinic that is administered by qualified health care professionals to prevent the death or permanent disability
of a patient.

(f) Medical clinic - a place in which patients can avail of medical consultation or treatment on an outpatient basis.

(g) Permanent disability - a condition of physical disability as defined under Article 192-C and Article 193-B and C of
Presidential Decree No. 442; as amended, otherwise known as the Labor Code of the Philippines.

(h) Stabilize - the provision of necessary care until such time that the patient may be discharged or transferred to
another hospital or clinic with a reasonable probability that no physical deterioration would result from or occur during
such discharge or transfer.

R.A. No. 8344 also increased the penalties prescribed under BP 702 to imprisonment of not less than six months and
one day but not more than two years and four months, or a fine of not less than twenty thousand pesos, but not more
than one hundred thousand pesos, or both at the discretion of the court. However, if the violation was committed
pursuant to an established hospital or clinic policy or upon the instruction of its management, the director or officer
responsible for the formulation and implementation of such policy shall suffer imprisonment of four to six years, or a
fine of not less than one hundred thousand pesos, but not more than five hundred thousand pesos, or both, at the
court's discretion.[8]

Sensing the need to curb the still prevalent practice of refusing to provide initial medical treatment and support in
emergency or serious cases without the corresponding deposit or advance payment, House Bill No. 5159[9] was
submitted by the House Committee on Health which seeks to increase the penalties for violation of BP 702 as
amended by R.A. No. 8344; expand the definition of "emergency care" to include women in active labor and at the
risk of miscarriage or fetal distress; include reimbursement from the Philippine Health Insurance Corporation
(PhilHealth) for the expenses advanced by hospitals and medical facilities in treating poor and indigent patients; and
mandate the Philippine Charity Sweepstakes Office (PCSO) to provide assistance to poor and marginalized patients
on emergency treatment in hospitals.[10]

This development met similar support from the Senate through Senate Bill No. 1353[11] submitted by its Committees
on Health and Demography, Justice and Human Rights, and Ways and Means. Similar to its lower house counterpart,
Senate Bill No. 1353 aims to increase the penalties for violation of the law; define "basic emergency care"; and
include PhilHealth reimbursement of basic emergency care incurred by the hospital or medical clinic. However,
peculiar to the Senate version is the presumption of liability imposed against the hospital, medical clinic, and the
involved official, medical practitioner, or employee in the event of death, permanent disability, serious impairment of
the health condition of the patient, or injury to or loss of the unborn child proceeding from the denial of admission to
the health facility pursuant to a policy or practice of demanding deposits or advance payments for confinement or
treatment.

A consolidation of Senate Bill No. 1353 and House Bill No. 5159 gave birth to R.A. No. 10932 which was signed into
law on August 3, 2017.

Thus, as it presently stands, R.A. No. 10932 makes it unlawful to request, solicit, demand or accept deposit or
advance payment as a prerequisite not only for confinement or medical treatment but also for administering basic
emergency care.[12] It expands the scope of "basic emergency care" to include medical procedures and treatment
administered to a woman in active labor.[13]

In case a transfer to another hospital is deemed appropriate, R.A. No. 10932 further mandates the local government
unit where the hospital or medical clinic is located to allow free use of its emergency medical vehicle. Moreover, all
hospitals are required to post a notice indicating its classification level and the list of medical services it is authorized
to perform.[14]

R.A. No. 10932 also introduces the creation of a Health Facilities Oversight Board (Board) where complaints against
health facilities for violations of the law shall be initially filed. The Board is given the power to investigate, adjudicate
and impose administrative sanctions including the revocation of the health facility's license.[15]

Further to the matter of penalties, R.A. No. 10932 imposes upon an erring official, medical practitioner or employee of
the hospital or medical clinic the penalty of imprisonment of not less than six (6) months and one (1) day but not more
than two (2) years and four (4) months, or a fine of not less than P100,000.00, but not more than P300,000.00, or
both at the court's discretion. However, when the violation was made pursuant to an established hospital policy or
upon instructions of its management, the penalties are increased as against the director or officer formulating and
implementing such policy to four (4) years to six (6) years, or a fine of not less than P500,000.00, but not more than
P1,000,000.00, or both, without prejudice to an award for damages.[16]

In addition, R.A. No. 10932 introduces the three-strike rule, or when upon 3 repeated violations committed pursuant
.to an established policy or upon instruction of the management, the health facility's license to operate shall be
revoked by the Department of Health (DOH). The law also makes the president, chairman, board of directors, or
trustees and other officers of the health facility solidarily liable for damages.[17]

Apart from the foregoing, R.A. No. 10932 presumes liability against the hospital, medical clinic, and the official,
medical practitioner, or employee involved, in the event of death, permanent disability, serious impairment or
permanent injury to or loss of an unborn child, proceeding from the denial of admission to a health facility pursuant to
a policy of requiring deposits or advance payments for confinement or treatment.[18]

R.A. No. 10932 also mandates that the PhilHealth reimburse the cost of the basic emergency care and transportation
services rendered by the hospital or medical clinic to poor and indigent patients and that the PCSO provide medical
assistance for the basic emergency care needs of the poor and marginalized groups. Expenses incurred in giving
basic emergency care to poor and indigent patients not reimbursed by PhilHealth are allowed to be treated as tax
deductions.[19]

Meanwhile, pending resolution of the instant petition or on April 4, 2018, the DOH issued Administrative Order No.
2018-0012 implementing R.A. No. 10932.

The Arguments for the Petitioner

Petitioner claims locus standi to file the present Petition for Certiorari and Prohibition as it stands to be directly injured
by the implementation of R.A. No. 10932 insofar as the law regulates the conduct of its members and places the
latter's management and staff at the risk of administrative, civil, and criminal sanctions.[20] At any event, petitioner
claims that the issues herein presented specifically on the denial of due process and to equal protection of laws are of
transcendental importance that should allow the present petition to prosper despite the absence of direct injury.[21]

Petitioner further claims that the issues raised in the instant petition are ripe for adjudication given the imminent threat
of the imposition of the unconstitutional duties and the corresponding unconstitutional sanctions under R.A. No.
10932 against petitioner's members with the impending approval of the rules implementing R.A. No. 10932.
[22]
 Petitioner also argues that an allegation that R.A. No. 10932 infringes upon the constitutional rights to due
process, equal protection of laws and the presumption of innocence, is sufficient to invoke the Court's power of
review.[23]

Claiming exception to the doctrine of hierarchy of courts, petitioner also advances the view that direct resort to the
Court is justified given the genuine issues of constitutionality posed by the present petition.[24]

Going into the merits of the petition, petitioner seeks to strike down as unconstitutional R.A. No. 10932 for being
unduly oppressive and thus violative of substantive due process. Elaborating, petitioner argues that Section 1 of BP
702 as amended by R.A. No. 8344 and R.A. No. 10932 imposes upon the proprietor, president, director, manager or
any other officer, medical practitioner or employee of a health care institution the duty to administer basic emergency
care or medical treatment and support as dictated by good practice of medicine to prevent death, or permanent
disability, or in the case of a pregnant woman, permanent injury or loss of her unborn child, or non-institutional
delivery in emergency or serious cases.[25]
Petitioner argues that "basic emergency care" and "emergency treatment and support" as defined under R.A. No.
10932 imposes upon the physician, the hospital, its management and staff the untenable duties to actually
prevent death, permanent disability, permanent injury to or loss of an unborn baby or its non-institutional delivery and
to sufficiently address an emergency situation and in case of a woman in active labor, to ensure the safe delivery of
the baby.[26] Echoing Lucas, et al. v. Dr. Tuaño,[27] petitioner emphasizes that a physician is not an insurer of the good
result of treatment.[28] Petitioner thus argues that the duty imposed by R.A. No. 10932, being predicated on the
achievement of an end that is impossible to guarantee, amounts to a denial of due process.[29]

Further, petitioner aims to strike down the fines imposed under Section 4 for being unjust, excessive, and oppressive
as they are not commensurate to the act or omission that is being penalized.[30] Petitioner also questions the solidary
liability for damages under Section 4 insofar as it generally makes "other officers" of the health facility solidarily liable
with the president, chairman, members of the board of directors or trustees.[31]

The presumption of liability spelled under Section 5 of R.A. No. 10932 is also being assailed for being repugnant to
the constitutional presumption of innocence. It is the contention of petitioner that the presumption of liability clause
allows for a presumption of generalized liability, i.e., administrative, civil and criminal, upon the occurrence of death,
permanent disability and serious impairment of the health condition of the patient or her unborn child after the denial
of the patient's admission due to a hospital policy of demanding deposits or advance payments.[32]

Also, petitioner emphasizes that the presumption of liability clause necessarily presumes that there is, at all times, a
causal connection between the injury and the acts or omissions complained of.[33] Expounding on this argument,
petitioner argues that the offense defined under R.A. No. 10932 involves medical malpractice. As such, the causation
between the injury and the medical action are determinable only through the technical and scientific competence of
physicians and thus, cannot be presumed by law.[34]

Finally, petitioner seeks to strike down as unconstitutional the exclusion of the basic emergency care of
patients not classified as poor, indigent or marginalized from PhilHealth reimbursement, PCSO assistance and tax
deductibility under Sections 7 and 8 of R.A. No. 10932 for being violative of the equal protection clause.

Illustrating its argument, petitioner contends that these provisions would allow a hospital who treats a poor patient to
receive PhilHealth reimbursement, PCSO assistance and tax deduction, and yet the hospital who treats a patient not
classified as poor, indigent or marginalized will not be allowed a similar PhilHealth reimbursement, PCSO assistance
and tax deduction.[35] It is likewise the view of petitioner that the law, insofar as it obliges hospitals, its staff and
management to render services to patients not classified as poor, indigent, or marginalized without the corresponding
reimbursement, assistance and tax deduction, amounts to involuntary servitude.[36]

The Arguments for the Respondents

Respondents Hon. Salvador Medialdea, Executive Secretary, and the Acting Secretary of Department of Health,
through the Office of the Solicitor General (OSG), seek to dismiss the instant petition for being procedurally infirm on
the ground that certiorari and prohibition are proper only against judicial, quasi-judicial, or ministerial act. Like so,
respondents seek a dismissal of the petition for lack of a justiciable controversy in the absence of an actual
governmental act which directly causes or will imminently cause injury to the alleged right of petitioner.
[37]
 Respondents also attacks petitioner's standing to file the present petition for lack of personal stake in the outcome
of the controversy, it being neither a hospital or health facility itself.[38] Further, respondents assert that the issues
raised by petitioner being speculative are not matters of transcendental importance that would justify a disregard of
the rule on locus standi and the doctrine of hierarchy of courts.[39]

Contrary to petitioner's claims, respondents contend that R.A. No. 10932 does not impose upon the hospital, medical
facility, its staff or management the duty to guarantee that death, permanent loss or injury is prevented, neither does
it penalize the failure of the physician or the hospital staff to prevent such occurrences. Rather, respondents argue
that what R.A. No. 10932 prohibits is the act of requesting any form of advance payment as a prerequisite for
administering basic emergency care or medical treatment, or the act of refusing to administer such as dictated by
good practice to prevent death, permanent loss or injury.[40]

Also, respondents maintain that the fines imposed under R.A. No. 10932 are reasonable, and that in any case, the
determination of the propriety of fines for violation of offenses lies within the discretion of the legislature.
[41]
 Respondents add that neither is the solidary liability imposed by law unreasonable because such arises only from
the participatory acts of the directors and officers who are responsible for the formulation and implementation of
policies contrary to the mandates of R.A. No. 10932 and pertains only to damages which may be awarded to the
patient-complainant.[42]

Respondents likewise defend the validity of the presumption of liability clause on the argument that the liability therein
mentioned pertains to the liability for the death, permanent disability, serious impairment, injury or loss of the unborn
child and that such presumption arises only upon prior proof that there was denial of admission to the health facility
and that such denial was made pursuant to a policy of demanding deposits for confinement or treatment.[43]

Addressing the supposed violation of the equal protection clause, respondents maintain that patients classified as
"poor", "indigent", or "marginalized" substantially differ from those who are not categorized as such, hence the
provision on PhilHealth reimbursement, PCSO assistance and tax deduction must be upheld in the face of the equal
protection challenge.[44]

Issues

Before the Court addresses the questions of constitutionality raised against certain provisions of R.A. No. 10932, it is
imperative to first determine whether the Court, in fact, can discharge its power of judicial review. This is, in turn,
determined by addressing the following issues: (a) are petitions for certiorari and prohibition proper to assail the
constitutionality of R.A. No. 10932; (b) is direct resort to the Court proper; (c) has petitioner, as an association of
privately-owned hospitals, clinics and other health facilities, the requisite legal standing; and (c) is the petition ripe for
adjudication.

Ruling of the Court

We dismiss the petition. While the remedies of certiorari and prohibition are proper legal vehicles to assail the
constitutionality of a law, the requirements for the exercise of the Court's judicial review even under its expanded
jurisdiction must nevertheless first be satisfied.

Propriety of Certiorari and Prohibition

Petitioner seeks to declare as unconstitutional certain provisions of R.A. No. 10932 and for this purpose, availed of
the remedy of certiorari and prohibition. Respondents counter that certiorari and prohibition are available only against
judicial, quasi-judicial or ministerial functions and not against legislative acts, as in the instant case.

The rule is settled that the allegations in the complaint and the character of the relief sought determine the nature of
the action and the court that has jurisdiction over it.[45] The present petition specifically alleges that R.A. No. 10932 is
unconstitutional for being violative of substantive due process, the presumption of innocence, and the equal
protection of laws and as such, seeks that the enforcement and implementation thereof be prohibited.

Under Rule 65 of the Rules of Court, the ground for review in certiorari and prohibition is grave abuse of discretion,
and there is grave abuse of discretion when an act is done contrary to the Constitution, the law or jurisprudence or
executed whimsically, capriciously or arbitrarily, out of malice, ill will or personal bias.[46] Petitions for certiorari and
prohibition are thus appropriate remedies to raise constitutional questions.[47]

Grave abuse of discretion as a ground for review does not only appear under Rule 65 of the Rules of Court but also
under Section 1,[48] Article VIII of the Constitution defining judicial power. As constitutionally defined, judicial power
includes not only the duty to settle actual controversies involving rights which are legally demandable and
enforceable, but also, the duty to determine whether or not there has been grave abuse of discretion amounting to
lack or excess of jurisdiction on the part of any branch or instrumentality of the government. Such innovation under
the 1987 Constitution later on became known as the Court's "traditional jurisdiction" and "expanded jurisdiction,"
respectively.[49]

Given the commonality of the ground of grave abuse of discretion, the Court has allowed the use of a Rule 65 petition
to invoke this Court's expanded jurisdiction.[50]

As expressly granted by the Constitution, the Court's expanded jurisdiction when invoked permits a review of acts not
only by a tribunal, board or officer exercising judicial, quasi-judicial or ministerial functions, but also by any branch or
instrumentality of the Government. "Any branch or instrumentality of the Government" necessarily includes the
legislative and the executive, even if they are not exercising judicial, quasi-judicial or ministerial functions.[51]

In Pedro Agcaoili, Jr., et al. v. The Honorable Representative Rodolfo C. Fariñas, et al.,[52] we affirmed the availability
of the extraordinary writs for determining and correcting grave abuse of discretion amounting to lack or excess of
jurisdiction on the part of the legislative and executive branches following Judge Villanueva v. Judicial and Bar
Council,[53] as follows:

With respect to the Court, however, the remedies of certiorari and prohibition are necessarily broader in scope and
reach, and the writ of certiorari or prohibition may be issued to correct errors of jurisdiction committed not only by a
tribunal, corporation, board or officer exercising judicial, quasi-judicial or ministerial functions but also to set right,
undo and restrain any act of grave abuse of discretion amounting to lack or excess of jurisdiction by any branch or
instrumentality of the Government, even if the latter does not exercise judicial, quasi-judicial or ministerial functions.
This application is expressly authorized by the text of the second paragraph of Section 1, supra.

Thus, petitions for certiorari and prohibition are appropriate remedies to raise constitutional issues and to review
and/or prohibit or nullify the acts of legislative and executive officials.[54] (Citation omitted and emphasis ours)

Accordingly, we held as proper remedies the writs of certiorari and prohibition in Samahan ng mga Progresibong
Kabataan (SPARK), et al. v. Quezon City, as represented by Mayor Herbert Bautista, et al.,[55] assailing the
constitutionality of curfew ordinances and in Agcaoili questioning the contempt powers of the Congress in the
exercise of its power of inquiry in aid of legislation. Following this trend in jurisprudence, petitioner therefore correctly
availed of certiorari and prohibition under Rule 65 of the Rules of Court to assail the constitutionality of R.A. No.
10932 and enjoin its enforcement, notwithstanding that these governmental actions do not involve the exercise of
judicial, quasi-judicial or ministerial functions.

Direct Resort to the Court

Jurisdiction over petitions for certiorari and prohibition are shared by this Court, the Court of Appeals, the
Sandiganbayan and the Regional Trial Courts.[56] Since the remedies of certiorari and prohibition are available to
assail the constitutionality of a law, the question as to which court should the petition be properly filed consequently
arises given that the hierarchy of courts "also serves as a general determinant of the appropriate forum for petitions
for the extraordinary writs."[57]

Respondents argue that direct resort to this Court is unjustified and thus violates the doctrine of hierarchy of courts.

Under the doctrine of hierarchy of courts, "recourse must first be made to the lower-ranked court exercising
concurrent jurisdiction with a higher court."[58] As a rule, "direct recourse to this Court is improper because the
Supreme Court is a court of last resort and must remain to be so in order for it to satisfactorily perform its
constitutional functions, thereby allowing it to devote its time and attention to matters within its exclusive jurisdiction
and preventing the overcrowding of its docket."[59]

Nevertheless, we cautioned in The Diocese of Bacolod, et al. v. COMELEC, et al.,[60] that the Supreme Court's role to
interpret the Constitution and act in order to protect constitutional rights when these become exigent is never meant
to be emasculated by the doctrine of hierarchy of courts. As such, this Court possesses full discretionary authority to
assume jurisdiction over extraordinary actions for certiorari filed directly before it for exceptionally compelling
reasons, or if warranted by the nature of the issues clearly and specifically raised in the petition.[61]

As developed by case law, the instances when direct resort to this Court is allowed are enumerated in The Diocese
of Bacolod[62] as follows: (a) when there are genuine issues of constitutionality that must be addressed at the most
immediate time;[63] (b) when the issues involved are of transcendental importance;[64] (c) in cases of first impression;
[65]
 (d) the constitutional issues raised are better decided by the Supreme Court;[66] (e) the time element or exigency in
certain situations;[67] (f) the filed petition reviews an act of a constitutional organ;[68] (g) when there is no other plain,
speedy, and adequate remedy in the ordinary course of law;[69] (h) the petition includes questions that are dictated by
public welfare and the advancement of public policy, or demanded by the broader interest of justice, or the orders
complained of were found to be patent nullities, or the appeal was considered as clearly an inappropriate remedy.[70]

The present petition, while directed against an act of a co-equal branch of the government and concerns a legislative
measure directly affecting the health and well-being of the people, actually presents no prima facie challenge, as
hereunder expounded, as to be so exceptionally compelling to justify direct resort to this Court.

Requisites of Judicial Review

Notwithstanding the propriety of the legal vehicle employed, the Court cannot exercise its power of judicial review,
even under its expanded jurisdiction, when the requisites for the exercise thereof are not satisfied.

"The power of judicial review is the power of the courts to test the validity of executive and legislative acts for their
conformity with the Constitution."[71] When exercised, the judiciary does not arrogate upon it a position superior to that
of the other branches of the government but merely upholds the supremacy of the Constitution.

In Congressman Garcia v. The Executive Secretary,[72] the Court held that, for a proper exercise of its power of
review, certain requisites must be satisfied, namely:

(1) an actual case or controversy calling for the exercise of judicial power; (2) the person challenging the act must
have standing to challenge; he must have a personal and substantial interest in the case such that he has sustained,
or will sustain, direct injury as a result of its enforcement; (3) the question of constitutionality must be raised at the
earliest possible opportunity; and (4) the issue of constitutionality must be the very lis mota of the case.[73]

Arguing the absence of the first and second requisites, respondents seek an outright dismissal of the instant petition.
We agree.

Actual Case or Controversy

"[A]n actual case or controversy is one which involves a conflict of legal rights, an assertion of opposite legal claims,
susceptible of judicial resolution as distinguished from a hypothetical or abstract difference or dispute."[74] To be
justiciable, the case or controversy must present a contrariety of legal rights that can be interpreted and enforced on
the basis of existing law and jurisprudence. Regardless of whether the Court's power of review is invoked under the
traditional or expanded concept, the presence of an actual case or controversy remains a requisite before judicial
power is exercised.[75] However, when the Court's expanded jurisdiction is invoked, the requirement of an actual case
or controversy is satisfied upon a prima facie showing of grave abuse of discretion in the assailed governmental act.
[76]
 Alexander A. Padilla, et al. v. Congress of the Philippines[77] emphasized that for the Court to exercise its power of
judicial review and give due course to a petition for certiorari, the petitioners should set forth their material allegations
to make out a prima facie case for certiorari.
Interrelated with the requirement of an actual case or controversy is the requirement of ripeness. Consistently, a
question is considered ripe for adjudication when the act being challenged has had a direct adverse effect on the
individual or entity challenging it. The question of ripeness asks whether a case involves contingent events that may
not occur as anticipated and whether there is actual injury to the party being suit.[78] Thus, it is required that an act
had been accomplished or performed by either branch of the government and that there is an immediate or
threatened injury to the petitioner as a result of the challenged action before courts may interfere.[79] In Province of
North Cotabato, et al. v. Gov't. of the Rep. Of the Phils. Peace Panel on Ancestral Domain (GRP), et al.,[80] we held
that "[w]hen an act of a branch of government is seriously alleged to have infringed the Constitution, it becomes not
only the right but in fact the duty of the judiciary to settle the dispute."[81]

The allegations set forth in the petition failed to meet the requirement of a prima facie showing of grave abuse of
discretion on the part of the Congress relative to the provisions of R.A. No. 10932. While R.A. No. 10932 and its
implementing rules are accomplished acts of a co-equal branch of the government, the petition is unfortunately bereft
of any allegation that petitioner, nor any of its members, had thereby suffered an actual or direct injury as a result of a
discretion gravely abused. In the absence of an actual and direct injury, any pronouncement by the Court would be
purely advisory or sheer legal opinion, in view of the mere hypothetical scenarios which the instant petition presents.

The challenged law also enjoys the presumption of constitutionality which the Court, at the first instance, cannot
disturb in the absence of a prima facie showing of grave abuse of discretion and, upon delving into the merits, in the
absence of a clearest showing that there was indeed an infraction of the Constitution.[82] If the Court were to invalidate
the questioned law on the basis of conjectures and suppositions, then it would be unduly treading questions of policy
and wisdom not only of the legislature that passed it, but also of the executive which approved it.[83]

Legal Standing

Closely related to the constitutional mandate that the Court settle only actual cases or controversies is the
requirement of legal standing. Invariably, legal standing or locus standi is defined as a personal and substantial
interest in a case such that the party has sustained or will sustain direct injury as a result of the governmental act that
is being challenged.[84]

As a rule, a party is allowed to raise a constitutional question when (1) he can show that he will personally suffer
some actual or threatened injury because of the allegedly illegal conduct of the government; (2) the injury is fairly
traceable to the challenged action; and (3) the injury is likely to be redressed by a favorable action.[85]

Sans doubt, R.A. No. 10932 governs the conduct of hospitals, medical facilities, medical practitioners and employees
inasmuch as the law imposes upon the latter certain obligations and imposes corresponding sanctions in case of
violation. However, petitioner itself, is not a hospital, a medical facility, a medical practitioner or employee, but
an association thereof.

Section 1,[86] Rule 3 of the Rules of Court provides that juridical persons authorized by law may be parties in a civil
action. In turn, Article 44[87] of the Civil Code enumerates the juridical persons having capacity to sue which includes
corporations, partnerships and associations for private interest or purpose to which the law grants a juridical
personality, separate and distinct from that of each shareholder, partner or member. Section 4,[88] Rule 8 of the Rules
of Court mandates that "[f]acts showing the capacity of a party to sue or be sued or the authority of a party to sue or
be sued in a representative capacity or the legal existence of an organized association of persons that is made a
party, must be averred."

Thus, while juridical persons, like an association, are endowed with the capacity to sue or be sued, it must
demonstrate substantial interest that it has sustained or will sustain direct injury. Assuming a hospital is found liable
for violating the provisions of R.A. No. 10932, the liability or direct injury inures not to the petitioner association itself
but to the member-hospital.

To be sure, the rule on standing admits of recognized exceptions: the over breadth doctrine, taxpayer suits, third
party standing and the doctrine of transcendental importance.[89] To fall under the third party exception, an association
filing a case on behalf of its members must not only show that it stands to suffer direct injury, but also that it has been
duly authorized.by its members to represent them or sue in their behalf.[90]

In this case, while petitioner successfully averred that it is a non stock, non-profit organization, existing under the laws
of the Philippines and identified its members being the sole national organization of purely privately owned clinics,
hospitals or other health facilities in the Philippines, dedicated to the management and concerns of private hospitals
in the country,[91] it failed to demonstrate that ample authority had been extended to it by its members to file the
instant petition.

The attached Board Resolutions[92] and Secretary's Certificate[93] merely state that the "members of the [petitioner],
view [R.A. No. 10932] as [unconstitutional] with respect to its penal provisions or Section 4 thereof, the same being
oppressive and confiscatory; and with respect to its provision on 'Presumption of Liability' or Section 5 thereof, which
is utterly against the Constitutional provision on 'Presumption of Innocence'" without authorizing petitioner to file the
necessary petition to question the constitutionality of the law before any court. Petitioner therefore cannot benefit from
the third party exception to the requirement of locus standi.

In view of the foregoing limitations, there is no reason for the Court to take cognizance of the present petition.
WHEREFORE, the Petition is DISMISSED.

SO ORDERED.

Carpio, (Senior Associate Justice), Peralta, Bersamin, Jardeleza, A. Reyes, Jr., and Hernando, JJ., concur.
Del Castillo, J., on official leave.
Perlas-Bernabe, J., Please see Concurring Opinion.
Leonen, J., See separate concurring opinion.
Caguioa, J., See separate concurring.
Gesmundo, J., on official leave.
J. Reyes, Jr., J., on official leave.

NOTICE OF JUDGMENT

Sirs/Mesdames:

Please take notice that on November 6, 2018 a Decision, copy attached herewith, was rendered by the Supreme
Court in the above-entitled case, the original of which was received by this Office on December 12, 2018 at 3:10 p.m.

Very truly yours,

(SGD)

EDGAR O. ARICHETA

  Clerk of Court

[1]
 AN ACT STRENGTHENING THE ANTI-HOSPITAL DEPOSIT LAW BY INCREASING THE PENALTIES FOR THE
REFUSAL OF HOSPITALS AND MEDICAL CLINICS TO ADMINISTER APPROPRIATE INITIAL MEDICAL
TREATMENT AND SUPPORT IN EMERGENCY OR SERIOUS CASES, AMENDING FOR THE PURPOSE BATAS
PAMBANSA BILANG 702, OTHERWISE KNOWN AS "AN ACT PROHIBITING THE DEMAND OF DEPOSITS OR
ADVANCE PAYMENTS FOR THE CONFINEMENT OR TREATMENT OF PATIENTS IN HOSPITALS AND
MEDICAL CLINICS IN CERTAIN CASES", AS AMENDED BY REPUBLIC ACT NO. 8344, AND FOR OTHER
PURPOSES. Approved August 3, 2017.

[2]
 See Explanatory Note of House Bill No. 6341.

[3]
 Section 1. It shall be unlawful for any director, manager or any other officer of a hospital or medical clinic to
demand any deposit or any other form of advance payment for confinement or treatment in such hospital or medical
clinic in emergency or serious cases.

[4]
 Section 2. Any director, manager or any other officer of a hospital or medical clinic who violates Section 1 of this
Act shall be punished by a fine of not less than one thousand pesos but not more than two thousand pesos or
imprisonment for not less than fifteen days but not more than thirty days, or both such fine and imprisonment.

Section 3. Any person convicted under this Act shall not be entitled to probation under the provisions of Presidential
Decree No. 968, as amended, otherwise known as the Probation Law of 1976.

[5]
 AN ACT PENALIZING THE REFUSAL OF HOSPITALS AND MEDICAL CLINICS TO ADMINISTER
APPROPRIATE INITIAL MEDICAL TREATMENT AND SUPPORT IN EMERGENCY OR SERIOUS CASES,
AMENDING FOR THE PURPOSE BATAS PAMBANSA BILANG 702, OTHERWISE KNOWN AS "AN ACT
PROHIBITING THE DEMAND OF DEPOSITS OR ADVANCE PAYMENTS FOR THE CONFINEMENT OR
TREATMENT OF PATIENTS IN HOSPITALS AND MEDICAL CLINICS IN CERTAIN CASES."

[6]
 Section 1. Section 1 of Batas Pambansa Bilang 702 is hereby amended to read as follows:

SECTION 1. In emergency or serious cases, it shall be unlawful for any proprietor, president, director, manager or
any other officer, and/or medical practitioner or employee of a hospital or medical clinic to request, solicit, demand or
accept any deposit or any other form of advance payment as a prerequisite for confinement or medical treatment of a
patient in such hospital or medical clinic or to refuse to administer medical treatment and support as dictated by good
practice of medicine to prevent death or permanent disability: Provided, That by reason of inadequacy of the medical
capabilities of the hospital or medical clinic, the attending physician may transfer the patient to a facility where the
appropriate care can be given, after the patient or his next of kin consents to said transfer and after the receiving
hospital or medical clinic agrees to the transfer: Provided, however, That when the patient is unconscious, incapable
of giving consent and/or unaccompanied, the physician can transfer the patient even without his consent: Provided,
further, That such transfer shall be done only after necessary emergency treatment and support have been
administered to stabilize the patient and after it has been established that such transfer entails less risks than the
patient's continued confinement: Provided, furthermore, That no hospital or clinic, after being informed of the medical
indications for such transfer, shall refuse to receive the patient nor demand from the patient or his next of kin any
deposit or advance payment: Provided, finally, That strict compliance with the foregoing procedure on transfer shall
not be construed as a refusal made punishable by this Act.

[7]
 Section 2. Section 2 of Batas Pambansa Bilang 702 is hereby deleted and in place thereof, new sections 2, 3 and
4 are added, to read as follows:

xxxx

SEC. 3. After the hospital or medical clinic mentioned above shall have administered medical treatment and support,
it may cause the transfer of the patient to an appropriate hospital consistent with the needs of the patient, preferably
to a government hospital, specially in the case of poor or indigent patients.
[8]
 Section 2. Section 2 of Batas Pambansa Bilang 702 is hereby deleted and in place thereof, new sections 2, 3 and
4 are added, to read as follows:

xxxx

SEC. 4. Any official, medical practitioner or employee of the hospital or medical clinic who violates the provisions of
this Act shall, upon conviction by final judgment, be punished by imprisonment of not less than six (6) months and
one (1) day but not more than two (2) years and four (4) months, or a fine of not less than Twenty thousand pesos
(P20,000.00), but not more than One hundred thousand pesos (P100,000.00) or both, at the discretion of the court:
Provided, however, That if such violation was committed pursuant to an established policy of the hospital or clinic or
upon instruction of its management, the director or officer of such hospital or clinic responsible for the formulation and
implementation of such policy shall, upon conviction by final judgment, suffer imprisonment of four (4) to six (6) years,
or a fine of not less than One hundred thousand pesos (P100,000.00), but not more than Five hundred thousand
pesos (P500,000.00) or both, at the discretion of the court.
[9]
 AN ACT STRENGTHENING THE PROVISION OF EMERGENCY HEALTH CARE SERVICE TO PATIENTS,
FURTHER AMENDING FOR THE PURPOSE BATAS PAMBANSA BILANG 702, AS AMENDED, ENTITLED "AN
ACT PROHIBITING THE DEMAND OF DEPOSITS OR ADVANCED PAYMENTS FOR THE CONFINEMENT OR
TREATMENT OF PATIENTS IN HOSPITALS AND MEDICAL CLINICS IN CERTAIN CASES."

[10]
 See Fact Sheet of House Bill No. 5159.

[11]
 AN ACT INCREASING THE PENALTIES FOR THE REFUSAL OF HOSPITALS AND MEDICAL CLINICS TO
ADMINISTER APPROPRIATE INITIAL MEDICAL TREATMENT AND SUPPORT IN EMERGENCY OR SERIOUS
CASES, AMENDING FOR THE PURPOSE BATAS PAMBANSA BILANG 702, OTHERWISE KNOWN AS "AN ACT
PROHIBITING THE DEMAND OF DEPOSITS OR ADVANCE PAYMENTS FOR THE CONFINEMENT OR
TREATMENT OF PATIENTS IN HOSPITALS AND MEDICAL CLINICS IN CERTAIN CASES" AS AMENDED BY
REPUBLIC ACT NO. 8344, AND FOR OTHER PURPOSES.

[12]
 Section 1. Section 1 of Batas Pambansa Bilang 702, as amended, is hereby further amended to read as follows:

Sec. 1. In emergency or serious cases, it shall be unlawful for any proprietor, president, director, manager or any
other officer and/or medical practitioner or employee of a hospital or medical clinic to request, solicit, demand or
accept any deposit or any other form of advance payment as a prerequisite for administering basic emergency care
to any patient, confinement or medical treatment of a patient in such hospital or medical clinic or to refuse to
administer medical treatment and support as dictated by good practice of medicine to prevent death, or permanent
disability, or in the case of a pregnant woman, permanent injury or loss of her unborn child, or noninstitutional
delivery: Provided, That by reason of inadequacy of the medical capabilities of the hospital or medical clinic, the
attending physician may transfer the patient to a facility where the appropriate care can be given, after the patient or
his next of kin consents to said transfer and after the receiving hospital or medical clinic agrees to the
transfer: Provided, however, That when the patient is unconscious, incapable of giving consent and/or
unaccompanied, the physician can transfer the patient even without his consent: Provided, further, That such transfer
shall be done only after necessary emergency treatment and support have been administered to stabilize the patient
and after it has been established that such transfer entails less risks than the patient's continued
confinement: Provided, furthermore, That no hospital or clinic, after being informed of the medical indications for such
transfer, shall refuse to receive the patient nor demand from the patient or his next of kin any deposit or advance
payment: Provided, finally, That strict compliance with the foregoing procedure on transfer shall not be construed as a
refusal made punishable by this Act.
[13]
 Section 2. Section 2 of the same Act, as amended, is hereby further amended to read as follows:
"Sec. 2. For purposes of this Act, the following definitions shall govern:

"x x x x

"(i) 'Basic emergency care' - the response to a situation where there is urgently required medical care and attention,
and shall include procedures required for initial diagnosis, use of equipment and supplies in sufficiently addressing
the emergency situation, considering the welfare of the patient. It also includes the necessary medical procedures
and treatment administered to a woman in active labor to ensure the safe delivery of the newborn.

"(j) 'Noninstitutional delivery' - the delivery of a newborn while in transit, outside of a health facility, after an initial
consultation was done with a health facility."

[14]
 SEC. 3. Section 3 of the same Act, as amended, is hereby further amended to read as follows:

"SEC. 3. After the hospital or medical clinic mentioned above shall have administered medical treatment and support,
it may cause the transfer of the patient to an appropriate hospital consistent with the needs of the patient, especially
in the case of poor or indigent patients.

Where there is no ambulance available for use by the hospital or medical clinic for the emergency transfer of the
patient to a facility where the appropriate care shall be given, the local government unit (LGU) where the hospital or
medical clinic is located must allow the free use of its emergency vehicle to transport the patient to the hospital or
medical clinic where a continuation of care shall be given. The hospital or medical clinic must provide a staff nurse
with advanced cardiovascular life support (ACLS) certification or its equivalent to accompany the patient in the
emergency vehicle.

All hospitals are required to post at their entrance a notice indicating the classification level of the hospital as licensed
by the Department of Health (DOH) and the list of medical services that the hospital is authorized to perform."

[15]
 SEC. 5. New Sections 5, 6, 7 and 8 shall be inserted after Section 4 of Batas Pambansa bilang 702, as amended,
to read as follows:

xxxx

SEC. 6. Health Facilities Oversight Board. - All complaints for violations of this Act against health facilities shall be
filed initially with the Health Facilities Oversight Board under the Health Facilities and Services Regulatory Bureau
(HFSRB) of the [DOH]. The Board shall be composed of a DOH representative with a minimum rank of director to
serve as Chair, a representative from the Philippine Health Insurance Corporation (PhilHealth), a representative from
the Philippine Medical Association (PMA), a representative from private health institutions and three (3)
representatives from non-government organizations (NGOs) advocating for patient's rights and public health, one of
whom should be a licensed physician.

The Board shall investigate the claim of the patient and after adjudication, impose administrative sanctions in
accordance with this Act including the revocation of the health facility's license. On the basis of its own findings, the
Board shall also facilitate the filing of the criminal case in the proper courts. This is without prejudice to the right of the
patient-complainant to directly institute criminal proceedings in the courts.

[16]
 SEC. 4. section 4 of the same Act, as amended, is hereby further amended to read as follows:

SEC. 4. Any official, medical practitioner or employee of the hospital or medical clinic who violates the provisions of
this Act shall, upon conviction by final judgment, be punished by imprisonment of not less than six (6) months and
one (1) day but not more than two (2) years and four (4) months, or a fine of not less than One hundred thousand
pesos (P100,000.00), but not more than Three hundred thousand pesos (P300,000.00 or both, at the discretion of the
court: Provided, however, That if such violation was committed pursuant to an established policy of the hospital or
clinic or upon instruction of its management, the director or officer of such hospital or clinic responsible for the
formulation and implementation of such policy shall, upon conviction by final judgment, suffer imprisonment of four (4)
to six (6) years, or a fine of not less than Five hundred thousand pesos (P500,000.00), but not more than One million
pesos (P1,000,000.00) or both, at the discretion of the court, without prejudice to damages that may be awarded to
the patient-complainant: Provided, further, That upon three (3) repeated violations committed pursuant to an
established policy of the hospital or clinic or upon the instruction of its management, the health facility's license to
operate shall be revoked by the DOH. The president, chairman, board of directors. or trustees, and other officers of
the health facility shall be solidarily liable for damages that may be awarded by the court to the patient-complainant.

[17]
 Id.

[18]
 SEC. 5. New Sections 5, 6, 7 and 8 shall be inserted after section 4 of Batas Pambansa bilang 702, as amended,
to read as follows:

SEC. 5. Presumption of Liability. - In the event of death, permanent disability, serious impairment of the health
condition of the patient-complainant, or in the case of a pregnant woman, permanent injury or loss of her unborn
child, proceeding from the denial of his or her admission to a health facility pursuant to a policy or practice of
demanding deposits or advance payments for confinement or treatment, a presumption of liability shall arise against
the hospital, medical clinic, and the official, medical practitioner, or employee involved.

[19]
 SEC. 5. New Sections 5, 6, 7 and 8 shall be inse1ted after section 4 of Batas Pambansa bilang 702, as amended,
to read as follows:

xxxx

SEC. 7. PhilHealth Reimbursement of Basic Emergency Care. - PhilHealth shall reimburse the cost of basic
emergency care and transportation services incurred by the hospital or medical clinic for the emergency medical
services given to poor and indigent patients. Furthermore, the Philippine Charity Sweepstakes Office (PCSO) shall
provide medical assistance for the basic emergency care needs of the poor and marginalized groups.

[20]
 Rollo, p. 8.

[21]
 Id.

[22]
 Id. at 10.

[23]
 Id. at 10-11.

[24]
 Id. at 11.

[25]
 Id. at 13-14.

[26]
 Id. at 14.

[27]
 604 Phil. 98 (2009).

[28]
 Id. at 125.

[29]
 Rollo, p. 16.

[30]
 Id.

[31]
 Id. at 18.

[32]
 Id. at 20.

[33]
 Id.

[34]
 Id.

[35]
 Id. at 22.

[36]
 Id.

[37]
 Id. at 55.

[38]
 Id. at 56.

[39]
 Id. at 58-59.

[40]
 Id. at 61.

[41]
 Id. at 68.

[42]
 Id. at 71.

[43]
 Id. at 72.

[44]
 Id. at 73-74.

[45]
 Hon. Ermita v. Hon. Aldecoa-Delorino, 666 Phil. 122, 132 (2011).

[46]
 Ocampo, et al. v. Rear Admiral Enriquez, et al., 798 Phil. 227, 294 (2016).

[47]
 Francisco, Jr., et al. v. Toll Regulatory Board, et al., 648 Phil. 54, 86 (2010).

[48]
 Section 1. The judicial power shall be vested in the Supreme Court and in such lower courts as may be
established by law.
Judicial power includes the duty of the courts of justice to settle actual controversies involving rights which are legally
demandable and enforceable, and to determine whether or not there has been a grave abuse of discretion amounting
to lack or excess of jurisdiction on the part of any branch or instrumentality of the Government.

[49]
 See Francisco, Jr. v. The House of Representatives, 460 Phil. 830, 883, 909-910 (2003).

[50]
 Association of Medical Clinics for Overseas Workers, Inc. (AMCOW) v. GCC Approved Medical Centers
Association, Inc., et al., 802 Phil. 116, 139 (2016).

[51]
 Araullo, et al. v. President Benigno S.C. Aquino III, et al., 737 Phil. 457, 531 (2014).

[52]
 G.R. No. 232395, July 3, 2018.

[53]
 757 Phil. 534 (2015).

[54]
 Id. at 544, citing Araullo, et al. v. President Benigno S.C. Aquino III, et al., supra at 531.

[55]
 G.R. No. 225442, August 8, 2017.

[56]
 Section 4 of Rule 65 provides:

SEC. 4. When and where petition filed. - The petition shall be filed not later than sixty (60) days from notice of the
judgment, order or resolution. In case a motion for reconsideration or new trial is timely filed, whether such motion is
required or not, the sixty (60) day period shall be counted from notice of the denial of the said motion.

The petition shall be filed in the Supreme Court or, if it relates to the acts or omissions of a lower court or of a
corporation, board, officer or person, in the Regional Trial Court exercising jurisdiction over the territorial area as
defined by the Supreme Court. It may also be filed in the Court of Appeals whether or not the same is in aid of its
appellate jurisdiction, or in the Sandiganbayan if it is in aid of its appellate jurisdiction. If it involves the acts or
missions of a quasi-judicial agency, unless otherwise provided by law or these rules, the petition shall be filed in and
cognizable only by the Court of Appeals.

No extension of time to file the petition shall be granted except for compelling reason and in no case exceeding
fifteen (15) days.

[57]
 Chamber of Real Estate and Builders Assn., Inc. (CREBA) v. Sec. of Agrarian Reform, 635 Phil. 283, 300 (2010),
citing Heirs of Bertuldo Hinog v. Hon. Melicor, 495 Phil. 422, 432 (2005).

[58]
 Arroyo v. DOJ, et al., 695 Phil. 302, 334 (2012).

[59]
 Dy v. Judge Bibat-Palamos, et al., 717 Phil. 776, 782 (2013).

[60]
 751 Phil. 301 (2015).

[61]
 Id. at 330-331.

[62]
 Supra note 60.

[63]
 Id. at 331.

[64]
 Id. at 332.

[65]
 Id.

[66]
 Id. at 333.

[67]
 Id.

[68]
 Id. at 334.

[69]
 Id.

[70]
 Id. at 334-335.

[71]
 Congressman Garcia v. The Executive Secretary, et al., 602 Phil. 64, 73 (2009).

[72]
 602 Phil. 64 (2009).

[73]
 Id. at 73.

[74]
 Hon. Exec. Sec. Belgica, et al. v. Ochoa, Jr., et al., 721 Phil. 416, 519 (2013).
[75]
 Samahan ng mga Progresibong Kabataan (SPARK), et al., v. Quezon City, as represented by Mayor Herbert
Bautista, et al., supra note 55.

[76]
 Id.

[77]
 G.R. No. 231671, July 25, 2017.

[78]
 Lawyers Against Monopoly and Poverty (LAMP), et al. v. The Secretary of Budget and Management, et al., 686
Phil. 357, 369 (2012).

[79]
 Philippine Constitution Association (PHILCONSA) v. Philippine Government (GPH), G.R. No. 218406, November
29, 2016, 811 SCRA 284, 297.

[80]
 589 Phil. 387 (2008).

[81]
 Id. at 486.

[82]
 See Hon. Drilon v. Mayor Lim, 305 Phil. 146, 150 (1994).

[83]
 ABAKADA GURO Party List (formerly AASJS), et al. v. Hon Purisima, et al., 584 Phil. 246, 268 (2008).

[84]
 Anak Mindanao Party-List Group v. Exec. Sec. Ermita, 558 Phil. 338, 350 (2007).

[85]
 Tolentino v. Commission on Elections, 465 Phil. 385, 402 (2004).

[86]
 SECTION 1. Who may be parties; plaintiff and defendant. - Only natural or juridical persons, or entities authorized
by law may be parties in a civil action. The term "plaintiff" may refer to the claiming party, the counter-claimant, the
cross-claimant, or the third (fourth, etc.) - party plaintiff. The term "defendant" may refer to the original defending
party, the defendant in a counterclaim, the cross-defendant, or the third (fourth, etc.) - party defendant.

[87]
 Art. 44. The following are juridical persons:

(1) The State and its political subdivisions;

(2) Other corporations, institutions and entities for public interest or purpose, created by law; their personality begins
as soon as they have been constituted according to law;

(3) Corporations, partnerships and associations for private interest or purpose to which the law grants a juridical
personality, separate and distinct from that of each shareholder, partner or member.

[88]
 Sec. 4. Capacity. - Facts showing the capacity of a party to sue or be sued or the authority of a party to sue or be
sued in a representative capacity or the legal existence of an organized association of person that is made a party,
must be averred. A party desiring to raise an issue as to the legal existence of any party or the capacity of any party
to sue or be sued in a representative capacity, shall do so by specific denial, which shall include such supporting
particulars as are peculiarly within the pleader's knowledge.

[89]
 White Light Corp., et al. v. City of Manila, 596 Phil. 444, 456 (2009).

[90]
 Pharmaceutical and Health Care Assoc. of the Phils. v. Health Sec. Duque III, 561 Phil. 386, 396 (2007).

[91]
 Rollo, pp. 4-5.

[92]
 Id. at 33-34 and 36-37.

[93]
 Id. at 35.

CONCURRING OPINION

PERLAS-BERNABE, J.:

I concur.

The present Petition for Certiorari and Prohibition filed by petitioner Private Hospitals Association of the Philippines,
Inc. (PHAPi) should be dismissed due to its lack of legal standing, and the absence of an actual case or controversy.

The power of judicial review is the power of the courts to test the validity of the executive and legislative acts if they
conform to the Constitution. Through such power, the judiciary enforces and upholds the supremacy of the
Constitution. However, for a court to exercise this power, certain requirements must first be met, namely:

(1) an actual case or controversy calling for the exercise of judicial power;

(2) the person challenging the act must have "standing" to challenge; he must have a personal and
substantial interest in the case such that he has sustained, or will sustain, direct injury as a result of
its enforcement;

(3) the question of constitutionality must be raised at the earliest possible opportunity; and

(4) the issue of constitutionality must be the very lis mota of the case.[1]
In this case, PHAPi is not a hospital or medical clinic, but only an association of - as its name denotes - private
hospitals. As such, PHAPi is not directly subject to the provisions of Republic Act No. (RA) 10932,[2] and
consequently, does not stand to suffer a real and apparent threat or injury so as to demonstrate its locus standi to file
this petition. To be sure, while it claims that it represents the interests of its member hospitals, records are bereft of
any showing that it was specifically authorized to file this case on their behalf. Hence, PHAPi's conveyed interests,
through the distinct manner of argumentation in the petition, can only be attributed as its own.

Furthermore, there appears to be no actual justiciable controversy that would sanction a review of the assailed
provisions of RA 10932. Among others, PHAPi does not allege that any of its represented hospitals employs the
deposit policy prohibited under RA 10932. Neither does PHAPi claim that a patient was refused admission by virtue
of such policy nor was it shown that a claim has been filed based on the said law. As jurisprudence states, the need
to prove an actual justiciable controversy is not merely an idle procedural requirement, but a clear safeguard to
ensure that the courts do not unduly intrude into the areas specifically reserved to the other branches of government.
[3]
 The Court's exercise of judicial review on a hypothetical and theoretical situation runs the danger of it prematurely
supplanting the wisdom of Congress with its own.

ACCORDINGLY, I vote to DISMISS the petition.

[1]
 Garcia v. Executive Secretary, 602 Phil. 64,73 (2009).

[2]
 Entitled "AN ACT STRENGTHENING THE ANTI-HOSPITAL DEPOSIT LAW BY INCREASING THE PENALTIES
FOR THE REFUSAL OF HOSPITALS AND MEDICAL CLINICS TO ADMINISTER APPROPRIATE INITIAL
MEDICAL TREATMENT AND SUPPORT IN EMERGENCY OR SERIOUS CASES, AMENDING FOR THE
PURPOSE BATAS PAMBANSA BILANG 702, OTHERWISE KNOWN AS 'AN ACT PROHIBITING THE DEMAND OF
DEPOSITS OR ADVANCE PAYMENTS FOR THE CONFINEMENT OR TREATMENT OF PATIENTS IN
HOSPITALS AND MEDICAL CLINICS IN CERTAIN CASES,' AS AMENDED BY REPUBLIC ACT NO. 8344, AND
FOR OTHER PURPOSES," approved on August 3, 2017.

[3]
 See Philippine Constitution Association v. Philippine Government, G.R. Nos. 218406, 218761, 204355, 318407,
and 204354, November 29, 2016, 811 SCRA 284, 296-297.

CONCURRING OPINION

LEONEN, J.:

I concur with the ponencia and add the following observations.

In this Petition for Certiorari and Prohibition under Rule 65 of the Rules of Court, petitioner Private Hospitals
Association of the Philippines, Inc. (PHAPi), represented by its President, Dr. Rustico Jimenez, seeks to question the
constitutionality of particular provisions of Republic Act No. 10932, otherwise known as the Act Strengthening the
Anti-Hospital Deposit Law by Increasing Penalties for Refusal of Hospitals and Clinics to Administer Medical
Treatment in Emergency or Serious Cases.

Petitioner asserts that the case is ripe for adjudication considering that there is an imminent threat that
unconstitutional obligations and sanctions will be imposed on its members because of the impending approval of the
implementing rules of Republic Act No. 10932.[1] It also claims that it has the required locus standi because it stands
to be directly injured by the implementation of Republic Act No. 10932, considering that its members' management
and staff are placed at the risk of administrative, civil, and criminal liabilities.[2] It further argues that in any case, the
absence of a direct injury should not bar this Court from taking cognizance of this case as it raises issues that are of
transcendental importance, particularly on denial of due process, equal protection of laws, and presumption of
innocence.[3]

The ponencia notes that the requisites for this Court's exercise of the power of judicial review is not present in this
case.[4] It found that there is no actual case or controversy, and that petitioner does not have the required locus
standi to file the petition.

It discusses that the requirement of an actual case or controversy is satisfied upon a prima facie showing of grave
abuse of discretion in the governmental act. Likewise, a case is ripe for adjudication if there is an act of the
government and an immediate or threatened injury to petitioner as a result of the act.[5]

The ponencia found that petitioner failed to meet the requirement. It notes that there is no allegation that petitioner or
its members have suffered an actual or direct injury from any grave abuse of discretion. It found that the absence of
the injury will render this Court's opinion as merely advisory.[6]

The ponencia further points out that the law is presumed constitutional and this cannot be overturned in the absence
of any showing of grave abuse of discretion or any infraction of the Constitution.[7] It posits that it would be delving into
questions of policy and wisdom of the executive and legislative departments if it invalidated the law based on
conjectures and suppositions.[8]

As to locus standi, the ponencia notes that Republic Act No. 10932 covers hospitals, medical facilities, medical
practitioners, and employees, but not associations.[9] Thus, in this case, the association is not the one who will be
held liable for any violation of Republic Act No. 10932.[10]

Furthermore, while an association has the capacity to sue or be sued, it must still show a substantial interest such
that it has sustained or will sustain a direct injury.[11] While third-party standing may be invoked as an exception to the
rule, the ponencia notes that petitioner failed to demonstrate that it had been authorized by its members to file the
instant case.[12]

Thus, it did not take cognizance of the present petition.

I concur. This case is indeed not ripe for judicial review.

Canonical for the exercise of judicial review when the constitutionality of a law is being questioned are these
requirements: first, there must be an actual case or controversy involving legal rights that are capable of judicial
determination; second, the parties raising the issue must have locus standi; third, the constitutionality of the law must
be raised at the earliest opportunity; and fourth, resolving the issue on constitutionality must be essential to the
disposition of the case.[13]

There is no actual case or controversy in the case at bar.

The requirement for an actual case or controversy is fundamental. This is based on Article VIII, Section 1 of the 1987
Constitution:

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

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

An actual case or controversy means that there are conflicting legal rights, such that the legal claim of one party is
opposed to the legal claim of another, and it is capable of being resolved by the courts.[14] It is necessary that the
conflicting legal rights must be real and concrete, not merely hypothetical or conjectural.[15]

It is well-established in this jurisdiction that . . . for a court to exercise its power of adjudication, there must be an
actual case or controversy — one which involves a conflict of legal rights, an assertion of opposite legal claims
susceptible of judicial resolution; . . . In other words, the pleadings must show an active antagonistic assertion of a
legal right, on the one hand, and a denial thereof on the other; that is, it must concern a real and not a merely
theoretical question or issue. There ought to be 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.[16] (Citations omitted)

Thus, there must first be a real and material act affecting another, which one party asserts is done within the bounds
allowed by law, but which another contends is injurious to his or her right. If there is yet no such act, or when such
acts are merely conjecture, there is no actual case or controversy. In case of a governmental act, the party asserting
its unconstitutionality must allege the actual act performed by the government that caused it the injury.
In Lozano v. Nograles,[17] this Court explained:

An aspect of the "case-or-controversy" requirement is the requisite of "ripeness". In the United States, courts are
centrally concerned with whether a case involves uncertain contingent future events that may not occur as
anticipated, or indeed may not occur at all. Another approach is the evaluation of the twofold aspect of ripeness: first,
the fitness of the issues for judicial decision; and second, the hardship to the parties entailed by withholding court
consideration. In our jurisdiction, the issue of ripeness is generally treated in terms of actual injury to the plaintiff.
Hence, a question is ripe for adjudication when the act being challenged has had a direct adverse effect on the
individual challenging it. An alternative road to review similarly taken would be to determine whether an action has
already been accomplished or performed by a branch of government before the courts may step in.[18] (Emphasis
supplied, citations omitted)

The requirement of an actual case or controversy is rooted on the respect for the separation of powers of the three
branches of the government. Courts cannot supplant the discretionary acts of the legislative or the executive branch
on the premise that they know of a wiser, more just, or expedient policy or course of action.[19] They may only act in
case the other branches acted outside the bounds of their powers or with grave abuse of discretion amounting to lack
or excess of jurisdiction.

The other reason for requiring an actual case or controversy is to maintain the significance of this Court's role in
making "final and binding construction[s] of law."[20] Courts do not render mere advisory opinions. Judicial decisions
are part of the legal system,[21] and thus, have binding effects on actual persons, places, and things. Ruling on
hypothetical situations with no bearing on any matter will weaken the import of this Court's issuances. In Belgica, et
al. v. Ochoa:[22]

Basic in litigation raising constitutional issues is the requirement that there must be an actual case or controversy.
This Court cannot render an advisory opinion. We assume that the Constitution binds all other constitutional
departments, instrumentalities, and organs. We are aware that in the exercise of their various powers, they do
interpret the text of the Constitution in the light of contemporary needs that they should address. A policy that reduces
this Court to an adviser for official acts by the other departments that have not yet been done would unnecessarily tax
our resources. It is inconsistent with our role as final arbiter and adjudicator and weakens the entire system of the
Rule of Law. Our power of judicial review is a duty to make a final and binding construction of law. This power should
generally be reserved when the departments have exhausted any and all acts that would remedy any perceived
violation of right. The rationale that defines the extent of our doctrines laying down exceptions to our rules on
justiciability are clear: Not only should the pleadings show a convincing violation of a right, but the impact should be
shown to be so grave, imminent, and irreparable that any delayed exercise of judicial review or deference would
undermine fundamental principles that should be enjoyed by the party complaining or the constituents that they
legitimately represent.

The requirement of an "actual case," thus, means that the case before this Court "involves a conflict of legal rights, an
assertion of opposite legal claims susceptible of judicial resolution; the case must not be moot or academic based on
extra-legal or other similar considerations not cognizable by a court of justice." Furthermore, "the controversy needs
to be definite and concrete, bearing upon the legal relations of parties who are pitted against each other due to their
adverse legal interests." Thus, the adverse position of the parties must be sufficient enough for the case to be
pleaded and for this Court to be able to provide the parties the proper relief/s prayed for.

The requirement of an 'actual case' will ensure that this Court will not issue advisory opinions. It prevents us from
using the immense power of judicial review absent a party that can sufficiently argue from a standpoint with real and
substantial interests.[23] (Citations omitted)

Moreover, hypothetical or conjectural situations illicitly widen the courts' discretion such that future parties who
present claims on the law being interpreted may be unduly affected by the limitations set, without affording them the
opportunity to be heard, thus:[24]

An advisory opinion is one where the factual setting is conjectural or hypothetical. In such cases, the conflict will not
have sufficient concreteness or adversariness so as to constrain the discretion of this Court. After all, legal arguments
from concretely lived facts are chosen narrowly by the parties. Those who bring theoretical cases will have no such
limits. They can argue up to the level of absurdity. They will bind the future parties who may have more motives to
choose specific legal arguments. In other words, for there to be a real conflict between the parties, there must exist
actual facts from which courts can properly determine whether there has been a breach of constitutional text.
[25]
 (Emphasis in the original)

Thus, in cases where the constitutionality of a law is being questioned, it is not enough that the law or the regulation
has been passed or is in effect. To rule on the constitutionality of provisions in the law without an actual case is to
decide only the basis of the mere enactment of the statute. This amounts to a ruling on the wisdom of the policy
imposed by the Congress on the subject matter of the law.

In Southern Hemisphere Engagement Network, Inc. v. Anti-Terrorism Council,[26] this Court ruled that it is not enough
that there is & possibility of abuse of the questioned enactment. There must first be an actual act of abuse.

In Republic of the Philippines v. Herminio Harry Roque, et al.,[27] this Court said that the parties presented no actual
case or controversy because they did not show any government action implementing the questioned statute against
them.

In Philippine Bus Operators Association of the Philippines v. Department of Labor and Employment,[28] this Court
ruled that it is not enough that the issuances may result in a diminution of the bus drivers and conductors' income,
considering that the allegations are based on speculation.

In Philippine Press Institute, Inc. v. Commission on Elections,[29] the petitioner in that case did not assert a specific act
committed against it by the Commission on Elections in enforcing or implementing the questioned law. This Court
found that there was no actual case or controversy.

An allegation of grave abuse of discretion amounting to lack or excess of jurisdiction is insufficient.[30] If there is no
exercise of discretion, it could not have been gravely abused.

In the case at bar, petitioner failed to show that any violation of its rights was committed as a consequence of the
enactment of Republic Act No. 10932. The law itself has not been enforced against petitioner or its members. In fact,
petitioner's allegation is that there is a risk or a threat that its members will be obligated and sanctioned by the
enactment of the law. Thus, there is yet no act committed by petitioner showing any breach of the statute, and there
is yet no act of enforcement or sanction against it. There is no injury yet suffered by petitioner. The sanctions they
alleged are still in the realm of imagination.

II

I also agree that petitioner failed to show that it has the required locus standi to file the petition.

As an association which represents private hospitals, petitioner is a third party to the instant case. Thus, before it may
file the petition, it must show that it is compliant with the requisites for third-party standing.

Another requisite for this Court's exercise of judicial review is that the party filing must have locus standi or legal
standing to file the suit, thus:

Legal standing or locus standi is the "right of appearance in a court of justice on a given question." To possess legal
standing, parties must show "a personal and substantial interest in the case such that [they have] sustained or will
sustain direct injury as a result of the governmental act that is being challenged." The requirement of direct injury
guarantees that the party who brings suit has such personal stake in the outcome of the controversy and, in effect,
assures "that concrete adverseness which sharpens the presentation of issues upon which the court depends for
illumination of difficult constitutional questions."

....

Whether a suit is public or private, the parties must have "a present substantial interest," not a "mere expectancy or a
future, contingent, subordinate, or consequential interest." Those who bring the suit must possess their own right to
the relief sought.[31] (Citations omitted)

The party filing must show that it has a substantial interest in the case such that it was or will be directly affected or
injured by the challenged governmental act.

However, this Court has given leeway to petitions filed by parties who have no personal or substantial interest in the
challenged governmental act but nonetheless raise "constitutional issue[s] of critical significance."[32]

The substantiality and directness of the injury is reckoned from the point of view of petitioner. Thus, this Court has
allowed suits to be filed by taxpayers in cases where there is a claim of an unconstitutional tax measure or illegal
disbursement of public funds. Cases filed by voters who show an obvious interest in the validity of the questioned
election law have been allowed. Courts have likewise taken cognizance of cases filed by legislators in petitions where
they claim that their prerogative as legislators have been infringed upon.[33]

In a very limited subset of cases, this Court has allowed a party to bring a suit on behalf of another. However, for this
Court to accept that the third party has the standing to file the case, the following requisites must be present: first, the
party filing the suit "must have suffered an 'injury-in-fact', thus [has] a "sufficiently concrete interest" in the outcome of
the issue in dispute; [second, he or she] must have a close relation to the third party; and [third, the third party is
prevented by] some hindrance . . . to protect his or her own interest."[34]

Associations have been able to file petitions on behalf of its members on the basis of third-party standing.

In Pharmaceutical and Health Care Association of the Philippines v. Secretary of Health,[35] this Court found that an
association "has the legal personality to represent its members because the results of the case will affect their vital
interests,"[36] thus:

This [modern] view fuses the legal identity of an association with that of its members. An association has standing to
file suit for its workers despite its lack of direct interest if its members are affected by the action. An organization has
standing to assert the concerns of its constituents.

....

. . . We note that, under its Articles of Incorporation, the respondent was organized . . . to act as the representative of
any individual, company, entity or association on matters related to the manpower recruitment industry, and to
perform other acts and activities necessary to accomplish the purposes embodied therein. The respondent is, thus,
the appropriate party to assert the rights of its members, because it and its members are in every practical sense
identical . . . The respondent [association] is but the medium through which its individual members seek to make
more effective the expression of their voices and the redress of their grievances.[37] (Citation omitted)

However, associations must sufficiently establish who their members are, that their members authorized them to sue
on their behalf, and that they would be directly injured by the challenged governmental acts.[38]

In Philippine Bus Operators Association of the Philippines vs. Department of Labor and Employment,[39] this Court did
not allow the association to represent its members because it failed to establish the presence of these requirements.
There was no evidence of board resolutions or articles of incorporation showing that it was authorized to file the
petition. It noted that some of the associations even had their certificates of incorporation revoked by the Securities
and Exchange Commission. This Court ruled that it was not enough that they alleged that they were an association
that represented members who would be directly injured by the implementation of a law, thus:

The associations in Pharmaceutical and Health Care Association of the Philippines, Holy Spirit Homeowners
Association, Inc., and The Executive Secretary were allowed to sue on behalf of their members because they
sufficiently established who their members were, that their members authorized the associations to sue on their
behalf, and that the members would be directly injured by the challenged governmental acts.

The liberality of this Court to grant standing for associations or corporations whose members are those who suffer
direct and substantial injury depends on a few factors.

In all these cases, there must be an actual controversy. Furthermore, there should also be a clear and convincing
demonstration of special reasons why the truly injured parties may not be able to sue.

Alternatively, there must be a similarly clear and convincing demonstration that the representation of the association
is more efficient for the petitioners to bring. They must further show that it is more efficient for this Court to hear only
one voice from the association.

In other words, the association should show special reasons for bringing the action themselves rather than as a class
suit, allowed when the subject matter of the controversy is one of common or general interest to many persons. In a
class suit, a number of the members of the class are permitted to sue and to defend for the benefit of all the members
so long as they are sufficiently numerous and representative of the class to which they belong.

In some circumstances similar to those in White Light, the third parties represented by the petitioner would have
special and legitimate reasons why they may not bring the action themselves. Understandably, the cost to patrons in
the White Light case to bring the action themselves—i.e., the amount they would pay for the lease of the motels—will
be too small compared with the cost of the suit. But viewed in another way, whoever among the patrons files the case
even for its transcendental interest endows benefits on a substantial number of interested parties without recovering
their costs. This is the free rider problem in economics. It is a negative externality which operates as a disincentive to
sue and assert a transcendental right.[40]

In Executive Secretary v. The Hon. Court of Appeals,[41] the Asian Recruitment Council Philippine Chapter, Inc. was
found to have standing to file the petition for declaratory relief on behalf of its member recruitment agencies because
it proved through board resolutions that it was authorized to sue on the behalf of its members. It was able to show
that it was the medium used by the members to effectively communicate their grievances.

Allegations of transcendental importance are not enough to allow exceptions to locus standi.

In Francisco v. House of Representatives,[42] this Court enumerated factors that determine if an issue is of

transcendental importance.

There being no doctrinal definition of transcendental importance, the following determinants formulated by former
Supreme Court Justice Florentino P. Feliciano are instructive: (1) the character of the funds or other assets involved
in the case; (2) the presence of a clear case of disregard of a constitutional or statutory prohibition by the public
respondent agency or instrumentality of the government; and (3) the lack of any other party with a more direct and
specific interest in raising the questions being raised.[43] (Citations omitted)

Moreover, there must also be a showing of a "clear or imminent threat to fundamental rights" and of "proper parties
suffering real, actual or more imminent injury,"[44] thus:

In addition to an actual controversy, special reasons to represent, and disincentives for the injured party to bring the
suit themselves, there must be a showing of the transcendent nature of the right involved.

Only constitutional rights shared by many and requiring a grounded level of urgency can be transcendent. For
instance, in The Association of Small Landowners in the Philippines, Inc. v. Secretary of Agrarian Reform, the
association was allowed to file on behalf of its members considering the importance of the issue involved, i.e., the
constitutionality of agrarian reform measures, specifically, of then newly enacted Comprehensive Agrarian Reform
Law.

This Court is not a forum to appeal political and policy choices made by the Executive, Legislative, and other
constitutional agencies and organs. This Court dilutes its role in a democracy if it is asked to substitute its political
wisdom for the wisdom of accountable and representative bodies where there is no unmistakable democratic deficit.
It cannot lose this place in the constitutional order. Petitioners' invocation of our jurisdiction and the justiciability of
their claims must be presented with rigor. Transcendental interest is not a talisman to blur the lines of authority drawn
by our most fundamental law.

....

Again, the reasons cited—the "far-reaching consequences" and "wide area of coverage and extent of effect" of
Department Order No. 118-12 and Memorandum Circular No. 2012-001—are reasons not transcendent considering
that most administrative issuances of the national government are of wide coverage. These reasons are not special
reasons for this Court to brush aside the requirement of legal standing.[45] (Citations omitted)

The petitioner was unable to prove that it was authorized by its members to file the instant case through board
resolutions or through its articles of incorporation; I find, thus, that petitioner does not have the required standing to
file the petition.

ACCORDINGLY, I VOTE to DISMISS the Petition.

 

[1]
 Ponencia, p. 7.

[2]
 Id.

[3]
 Id.

[4]
 Id. at 14.

[5]
 Id. at 15.

[6]
 Id.

[7]
 Id.

[8]
 Id. at 16.

[9]
 Id.

[10]
 Id. at 17.

[11]
 Id. at 16-17.

[12]
 Id. at 17.

[13]
 Levy Macasiano v. National Housing Authority, 296 Phil. 56, 63-64 (1993) [Per C.J. Davide, Jr., En Banc].

[14]
 Information Technology Foundation of the Philippines v. COMELEC, 499 Phil. 281, 304 (2005) [Per C.J.
Panganiban, En Banc].

[15]
 Id. See also Southern Hemisphere Engagement Network v. Anti-Terrorism Council, 646 Phil. 452, 479 (2010) [Per
J. Carpio-Morales, En Banc].

[16]
 Information Technology Foundation of the Philippines v. COMELEC, 499 Phil. 281, 304 (2005) [Per C.J.
Panganiban, En Banc].

[17]
 607 Phil. 334 (2009) [Per C.J. Puno, En Banc].

[18]
 Id. at 341.

[19]
 See Angara v. Electoral Commission, 63 Phil. 139 (1936) [Per J. Laurel, En Banc]; Garcia v. Executive Secretary,
602 Phil. 64 (2009) [Per J. Brion, En Banc].

[20]
 Concurring Opinion of J. Leonen in Belgica v. Ochoa, 721 Phil. 416, 661 (2013) [Per J. Perlas-Bernabe, En Banc].
[21]
 CIVIL CODE, art. 8.

[22]
 721 Phil. 416 (2013) [Per J. Perlas-Bernabe, En Banc].

[23]
 Id. at 661-662.

[24]
 Philippine Bus Operators Association of the Philippines, et al. vs. Department of Labor and Employment, G.R. No.
202275, July 17, 2018 [Per J. Leonen, En Banc].

[25]
 Id. at 25.

[26]
 646 Phil. 452 (2010) [Per J. Carpio-Morales].

[27]
 718 Phil. 294 (2013) [Per J. Perlas-Bernabe, En Banc].

[28]
 G.R. No. 202275, July 17, 2018 [Per J. Leonen, En Banc].

[29]
 Philippine Press Institute, Inc. v. Commission on Elections, 314 Phil. 131 (1995) [Per J. Feliciano, En Banc].
 
[30]
 See Dissenting Opinion of J. Leonen in Spouses Imbong v. Ochoa, Jr., 732 Phil. 1, 554-666 (2014) [Per J.
Mendoza, En Banc].

[31]
 Philippine Bus Operators Association of the Philippines, et al. vs. Department of Labor and Employment, G.R. No.
202275, July 17, 2018 27-28 [Per J. Leonen, En Banc].

[32]
 Funa v. Villar, 686 Phil. 571, 585 (2012) [Per J. Velasco, Jr., En Banc].

[33]
 See Funa v. Villar, 686 Phil. 571 (2012) [Per J. Velasco, Jr., En Banc].

[34]
 White Light Corp., et al. v. City of Manila, 596 Phil. 444, 456 (2009) [Per J. Tinga, En Banc].

[35]
 561 Phil. 386 (2007) [Per J. Austria-Martinez, En Banc].

[36]
 Id. at 396.
 
[37]
 Id. at 395-396.

[38]
 Philippine Bus Operators Association of the Philippines, et al. vs. Department of Labor and Employment, G.R. No.
202275, July 17, 2018 32 [Per J. Leonen, En Banc].

[39]
 G.R. No. 202275, July 17, 2018 [Per J. Leonen, En Banc].

[40]
 Id. at 32-33.

[41]
 473 Phil. 27 (2004) [Per J. Callejo, Sr., Second Division].

[42]
 460 Phil. 830 (2003) [Per J. Carpio-Morales, En Banc].

[43]
 Id. at 899.

[44]
 In Re Supreme Court Judicial Independence v. Judiciary Development Fund, 751 Phil. 30, 44 (2015) [Per J.
Leonen, En Banc].
 
[45]
 Philippine Bus Operators Association of the Philippines, et al. vs. Department of Labor and Employment, G.R. No.
202275, July 17, 2018 33-34 [Per J. Leonen, En Banc].

SEPARATE CONCURRING OPINION

CAGUIOA, J.:

The instant Petition for Certiorari (Petition) filed by Private Hospitals Association of the Philippines, Inc. (PHAPi)
assails the constitutionality of select provisions of Republic Act No. 10932[1] (RA 10932), or the Act Strengthening the
Anti-Hospital Deposit Law, i.e., Sections 1, 4, 5, 7, and 8 of the said law.

I concur with the ponencia that the instant Petition should be dismissed at the first instance because it does not
present an actual case or controversy calling for the exercise of judicial power, and the petitioner has no personal and
substantial interest in the case such that it has sustained, or will sustain, direct injury as a result of its enforcement.

In asking the Court to declare certain provisions of RA 10932 as unconstitutional for supposedly contravening the
Constitution, the petitioner invokes the Court's power of judicial review under Section 4(2), Article VIII of the
Constitution.[2] The power of judicial review refers to the power of the courts to test the validity of executive and
legislative acts for their conformity with the Constitution.[3] Through such power, the judiciary enforces and upholds
the supremacy of the Constitution.[4] For the Court to exercise this power, it is indispensable that certain requirements
must first be met, namely:

(1) an actual case or controversy calling for the exercise of judicial power;

(2) the person challenging the act must have standing to challenge; he must have a personal and
substantial interest in the case such that he has sustained, or will sustain, direct injury as a result of
its enforcement;

(3) the question of constitutionality must be raised at the earliest possible opportunity; and

(4) the issue of constitutionality must be the very lis mota of the case.[5]
The Petition here fails the first two (2) requisites.

There is no actual case or controversy calling for the Court's exercise of judicial power.

An "actual case or controversy" is one which involves a conflict of legal rights, an assertion of opposite legal claims,
susceptible of judicial resolution as distinguished from a hypothetical or abstract difference or dispute.[6] There must
be a contrariety of legal rights that can be interpreted and enforced on the basis of existing law and jurisprudence.[7]

Related to the requisite of an actual case or controversy is the requisite of "ripeness," which means that something
had then been accomplished or performed by either branch before a court may come into the picture, and
the petitioner must allege the existence of an immediate or threatened injury to itself as a result of the
challenged action.[8]

Otherwise stated, an actual case or controversy means an existing case or controversy that is appropriate or ripe for
determination, not conjectural or anticipatory.[9]

The Petition here does not allege that any medical institution or practitioner has actually been held liable under RA
10932. Nor is there even an assertion that an existing action has been filed against any medical institution or
practitioner who violated RA 10932. As well, there is likewise no assertion that any medical institution or practitioner
has actually committed any act violative of RA 10932 that makes such institution or person susceptible to the
liabilities imposed under the said law.

In short, it is apparent that the instant Petition was filed merely in anticipation of a possible breach or infraction of the
law. To emphasize, an actual case or controversy which justifies the Court's exercise of its judicial review power
necessitates an existing case or controversy that is appropriate or ripe for determination, and not merely an
anticipatory controversy.

The petitioner has no locus standi to question the constitutionality of RA 10932.

That is not all. Again, in order for the Court to exercise its power of judicial review, the person or entity challenging the
act must have standing to challenge — he must have a personal and substantial interest in the case such that he
has sustained, or will sustain, direct injury as a result of its enforcement.

Defined as a right of appearance in a court of justice on a given question, locus standi requires that a party alleges
such personal stake in the outcome of the controversy as to assure that concrete adverseness which sharpens the
presentation of issues upon which the court depends for illumination of difficult constitutional questions.[10] Unless a
person has sustained or is in imminent danger of sustaining an injury as a result of an act complained of, such proper
party has no standing.[11]

Applying the foregoing in the instant case, it is crystal clear that petitioner PHAPi has no legal standing to
question the constitutionality of RA 10932 — as it does not stand to sustain any damage or injury of a direct and
personal nature in the implementation of RA 10932.

Under RA 10932, only officials, medical practitioners, and/or medical institutions that actually demand/accept any
form of advance payment as a prerequisite for confinement/medical treatment of a patient in emergency situations or
refuse to administer medical treatment and support as dictated by good practice of medicine to prevent
death/permanent disability are subjected to potential liability under the law.

Emphasis must be placed on the fact that petitioner PHAPi is not a medical institution that administers medical
treatment, being an association with a completely separate juridical personality from its members. With petitioner
PHAPi being a juridical person endowed with a distinct personality of its own, it is clear that any potential liability that
may be imposed upon any of the petitioner's member hospitals, clinics, and facilities will NOT be a liability of
petitioner PHAPi.

Restating the obvious, petitioner PHAPi will sustain no direct and personal injury from the implementation of RA
10932; it has no personal stake in the issues raised in the Petition. Hence, the requisite of locus standi is completely
lacking, warranting the outright dismissal of the instant Petition.

Section 1 of RA 10932 is not violative of the Constitution.

Nevertheless, even if the abovementioned matters were to be swept aside for the sake of liberality, the instant
Petition should nonetheless be dismissed as it is bereft of substantive merit.

The petitioner argues that Section 1[12] of RA 10932 transgresses the Constitution because it purportedly imposes
upon medical institutions and medical practitioners the untenable and impossible duty of actually preventing the death
or permanent disability of a patient, or, in the case of a pregnant woman, permanent injury or loss of her unborn child,
or non-institutional delivery. The petitioner posits the view that the aforementioned provision of the law is violative of
due process as it goes against the jurisprudential doctrine that a physician is not an insurer of the good result of
treatment.[13]

The petitioner's interpretation of RA 10932 is mistaken.

The essence of RA 10932 is to prohibit medical institutions/practitioners from requesting or accepting any deposit or
any other form of payment as a prerequisite for administering basic emergency care, confinement, or medical
treatment of a patient, or to refuse to administer medical treatment and support as dictated by good practice of
medicine to prevent death, or permanent disability, or, in the case of a pregnant woman, permanent injury or loss of
her unborn child, or non-institutional delivery, only in emergency or serious cases and only if the medical institution or
practitioner has adequate medical capabilities to administer treatment.

By reason of inadequacy of the medical capabilities of the hospital or medical clinic, the attending physician may
transfer the patient to a facility where the appropriate care can be given, after the patient or his next of kin consents to
said transfer and after the receiving hospital or medical clinic agrees to the transfer.[14]

Hence, contrary to the specious interpretation of the petitioner, Section 1 of RA 10932 does not mandate whatsoever
that physicians be insurers of the good result of treatment. The law merely imposes on medical
institutions/practitioners the strict duty to administer basic emergency care, as defined under the law, only with
respect to persons in emergency or serious situations, and when the medical institutions/practitioners have the
capability to administer such treatment.

Further, Section 4 of RA 10932 is also not violative of the Constitution.

The petitioner likewise argues that the fines and penalties imposed under Section 4[15] of RA 10932 are
constitutionally infirm becafuse they are supposedly unjust, excessive, and oppressive; the penalties set by the law
are allegedly not commensurate to the act or omission being penalized.

This argument deserves scant consideration.

The penalties as prescribed by statute are essentially and exclusively legislative; the courts should not encroach on
the prerogative of the lawmaking body.[16] As pronounced by the Court early on in United States v. Borromeo,[17] the
fixing of penalties for the violation of statutes is primarily a legislative function, and the courts hesitate to interfere,
unless the fine provided for is so far excessive as to shock the sense of mankind.

In any case, the stern fines and penalties provided by Section 4 of RA 10932 are not at all unjust, excessive, and
oppressive, considering that the violation of the law does not entail mere damage to property. The observance of RA
10932 may very well determine whether a patient experiencing an emergency health situation will survive or perish.
The grave consequences involved cannot be overstated; a patient's life hangs in the balance. Further, the
legislature's desire to impose strict penalties upon violators of RA 10932 is in fealty to the constitutional mandate that
the State shall protect and promote the right to health of the people.[18]

Hence, the petitioner's attempt to assail the constitutionality of Section 4 of RA 10932 must also fall.

Furthermore, Section 5 of RA 10932 likewise does not violate the Constitution.

Section 5 of RA 10932 (Presumption of Liability Clause) states:

SEC. 5. Presumption of Liability. — In the event of death, permanent disability, serious impairment of the health
condition of the patient-complainant, or in the case of a pregnant woman, permanent injury or loss of her unborn
child, proceeding from the denial of his or her admission to a health facility pursuant to a policy or practice of
demanding deposits or advance payments for confinement or treatment, a presumption of liability shall arise against
the hospital, medical clinic, and the official, medical practitioner, or employee involved.

The petitioner finds Section 5, which makes the erring medical institution and/or practitioner prima facie liable for
medical malpractice, unconstitutional on the notion that, in medical malpractice cases, the plaintiff must prove that the
medical practitioner failed to do what a reasonably prudent doctor would have done or did what a reasonably prudent
doctor would not have done. The petitioner adds that medical malpractice must be proven with reasonable medical
probability based on competent expert testimony and that proximate cause of injury/death must be established.

These arguments are mistaken.

Under Section 5 of RA 10932, the presumption of liability on the part of the medical practitioner/institution arises only
when death, permanent disability, serious impairment of the health condition of the patient-complainant, or, in the
case of a pregnant woman, permanent injury or loss of her unborn child, occurs after the denial by the medical
institution/practitioner of the emergency patient's admission to the health facility during an emergency/serious
situation, pursuant to an established policy/practice of demanding deposits/advance payments for confinement or
treatment.

In the context of medical malpractice, Section 5 creates a presumption of negligence on the part of the medical
institution/practitioner when the latter commits a violation of law, i.e., the act of denying the emergency patient's
admission to the health facility during an emergency/serious situation pursuant to an established policy/practice of
demanding deposits/advance payments for confinement or treatment, which RA 10932 considers a violation of law.

The presumption of negligence when a statutory duty has been violated.

While the petitioner posits the view that this is unconstitutional because the plaintiff, in medical malpractice cases,
must first prove that negligence was indeed committed, it should be noted that under Philippine law, the violation of a
statutory duty may be treated either as a circumstance which establishes a presumption of negligence, negligence
per se, or a circumstance which should be considered together with other circumstances as evidence of negligence.
[19]

The Court held in F.F. Cruz and Co., Inc. v. Court of Appeals[20] that the failure of the therein petitioner to construct a
firewall in accordance with certain city ordinances in itself sufficed to support a finding of negligence.

In Cipriano v. Court of Appeals,[21] finding that the failure of the therein petitioner to register and insure his auto
rustproofing shop in accordance with Presidential Decree No. 1572 constituted negligence per se, the Court held that
"[t]here is thus a statutory duty imposed on petitioner and it is for his failure to comply with this duty that he was guilty
of negligence rendering him liable for damages to private respondent."[22]

Hence, creating a presumption of negligence based on the violation of a statutory duty is not legally infirm.

The violation of a statutory duty as the proximate cause of an injury

The petitioner also faults Section 5 of RA 10932 for supposedly presuming that the illegal act of the medical
institution/practitioner, i.e., denying the emergency patient's admission to the health facility during an
emergency/serious situation pursuant to an established policy/practice of demanding deposits/advance payments for
confinement or treatment, is the proximate cause of the injury or death of the patient. The petitioner argues that in
medical malpractice cases, the act or omission complained of must be established as the proximate cause of the
injury or death.

In this respect, the pronouncement of the Court in Teague v. Fernandez,[23] is instructive:

"x x x [I]f the very injury has happened which was intended to be prevented by the statute, it has been held
that violation of the statute will be deemed to be the proximate cause of the injury." x x x

"The generally accepted view is that violation of a statutory duty constitutes negligence, negligence as a matter of
law, or, according to the decisions on the question, negligence per se, for the reason that non-observance of what
the legislature has prescribed as a suitable precaution is failure to observe that care which an ordinarily
prudent man would observe, and, when the state regards certain acts as so liable to injure others as to justify their
absolute prohibition, doing the forbidden act is a breach of duty with respect to those who may be injured thereby; or,
as it has been otherwise expressed, when the standard of care is fixed by law, failure to conform to such
standard is negligence, negligence per se or negligence in and of itself, in the absence of a legal excuse.
According to this view it is immaterial, where a statute has been violated, whether the act or omission constituting
such violation would have been regarded as negligence in the absence of any statute on the subject or whether there
was, as a matter of fact, any reason to anticipate that injury would result from such violation. x x x"[24] (Italics in the
original omitted; emphasis, italics and underscoring supplied)
Otherwise stated, when a statute is created in order to prevent a certain injury, and such injury occurs when the
statute is violated, then the violation of the statute will be deemed to be the proximate cause of the injury.

Applying the foregoing in the instant case, since Section 5 of RA 10932 contemplates a situation wherein death,
permanent disability, serious impairment of the health condition of the patient-complainant, etc. occurs, which are
the very injuries intended to be prevented by the introduction of RA 10932, then the acts violative of RA 10932
will be presumed to be the proximate cause of the death or serious injury.
 
In any case, the Presumption of Liability Clause does not create a conclusive presumption that the defendant is
automatically guilty of medical malpractice. What the provision merely does is to shift the burden to the
defendant to prove that there was another act or event that was the proximate cause of the death/injury.

The presumption of liability recognized under Philippine Law

Under various legal provisions and established legal doctrines, it is well recognized that liability may, at certain times,
be disputably presumed when certain acts have been committed or when a certain set of conditions is present which
has a reasonable or rational connection with the fact presumed.

For instance, the doctrine of res ipsa loquitur is well-recognized in this jurisdiction, wherein in a situation in which the
thing causing the injury complained of is shown to be under the management of the defendant or his servants and the
accident is such as in the ordinary course of things does not happen if those who have its management or control use
proper care, it is presumed, in the absence of sufficient explanation by the defendant, that the accident arose from
want of care of the latter.[25]

As another example, Article 1387 of the Civil Code provides that alienation of property for valuable consideration
made by a person against whom an unsatisfied judgment is outstanding raises a presumption of fraud.[26]

Similarly, under Article 1265 of the Civil Code, whenever a thing is lost in the possession of the debtor, it shall be
presumed that the loss was due to his fault, unless there is proof to the contrary, and without prejudice to the
provisions of Article 1165.

With respect to common carriers, Article 1735 of the Civil Code states that if goods under the care of common
carriers are lost, destroyed or deteriorated, then the common carriers are presumed to have been at fault or to have
acted negligently. In relation to the foregoing, Article 1752 of the Civil Code even dictates that despite the presence of
an agreement limiting the liability of the common carrier in the vigilance over the goods, the common carrier is
nevertheless disputably presumed to have been negligent in case of their loss, destruction or deterioration.

In the same way, according to Article 1756 of the Civil Code, in case of death of or injuries to passengers, common
carriers are presumed to have been at fault or to have acted negligently, unless they prove that they observed
extraordinary diligence.

With respect to motor vehicle mishaps, Article 2185 of the Civil Code provides that unless there is proof to the
contrary, it is presumed that a person driving a motor vehicle has been negligent if at the time of the mishap, he/she
was violating any traffic regulation.

Moreover, under Article 2188 of the Civil Code, there is prima facie presumption of negligence on the part of the
defendant if the death or injury results from his possession of dangerous weapons or substances, such as firearms
and poison, except when the possession or use thereof is indispensable in his occupation or business.

In addition, and as already explained above, it is a settled rule that when a statute is created in order to prevent a
certain injury, and such injury occurred when the statute was violated, the violation of the statute will be deemed to be
the proximate cause of the injury.[27] Jurisprudence has also recognized that the violation of a statutory duty may be
treated either as a circumstance which establishes a presumption of negligence, negligence per se, or a
circumstance which should be considered together with other circumstances as evidence of negligence.[28]

In fact, under Section 3(b), Rule 131 of the Rules of Court, the disputable presumption that an unlawful act was done
with an unlawful intent is sufficient, unless satisfactorily contradicted.

Hence, considering the foregoing provisions of law and established doctrines in jurisprudence providing for the
presumption of liability, the Presumption of Liability Clause under Section 5 of RA 10932 is not at all a novel
provision of law.

Similar to the abovementioned provisions and doctrines on the presumption of liability, Section 5 merely creates a
disputable presumption of liability over the death or injury of a patient on the part of the medical practitioner and/or
institution in a situation wherein a violation of a statutory duty is committed, in which such violation has, at the very
least, a reasonable and rational connection to the death or injury that occurred.

The Presumption of Liability Clause does not violate the constitutional presumption of innocence.

The notion of presuming liability has been so accepted in Philippine law that it has even found application with
respect to the more stringent and rigid concept of criminal liability.
The Court has previously upheld the constitutionality of penal statutes that provide for a prima facie evidence of guilt,
shifting the burden of proof to the accused, despite the elementary rule that the prosecution has the burden of
establishing proof beyond reasonable doubt. Hence, neither can the argument be made that the Presumption of
Liability Clause infringes on the constitutional right to be presumed innocent.

To illustrate, under Article 217 of the Revised Penal Code, the failure of a public officer to have duly forthcoming
public funds or property with which he is chargeable, upon demand by any duly authorized officer, shall be prima
facie evidence that he has put such missing funds or property to personal use.

Also, under Article 315, paragraph 2(d) of the Revised Penal Code, as amended by RA 4885, the drawer of a check
is given three (3) days to make good the said check by depositing the necessary funds to cover the amount thereof;
otherwise, a, prima facie presumption will arise as to the existence of fraud, which is an element of the crime
of estafa.

In Bañares v. Court of Appeals,[29] citing People v. Mingoa,[30] the Court held that, contrary to petitioner PHAPi's theory
on the supposed infringement of the constitutional presumption of innocence, there is no constitutional objection to a
law providing that the presumption of innocence may be overcome by a contrary presumption founded upon the
experience of human conduct:

There is, of course, no constitutional objection to a law providing that the presumption of innocence may be
overcome by a contrary presumption founded upon the experience of human conduct, and enacting what
evidence shall be sufficient to overcome such presumption of innocence. The legislature may provide for prima
facie evidence of guilt of the accused and shift the burden of proof provided there be a rational connection
between the facts proved and the ultimate fact presumed so that the inference of the one from proof of the
others is not unreasonable and arbitrary because of lack of connection between the two in common
experience.[31] (Emphasis and underscoring supplied)

Applying the foregoing to the Presumption of Liability Clause, considering that it envisions a situation wherein a
person who is in extremely urgent need of medical attention is denied treatment by a medical institution/practitioner
due to an illegal policy or practice of demanding deposits/advance payments for confinement or treatment, and such
person dies or is seriously injured immediately thereafter, there is undoubtedly a reasonable connection between the
illegal act committed and the ultimate fact presumed, i.e., liability for the death or injury of the emergency patient.

Such connection is not unreasonable and arbitrary, considering that death or serious injury would be the
rational and logical outcome/consequence when a person experiencing an extremely urgent medical
situation was not given timely medical attention due to a policy or practice expressly prohibited by law.

Finally, Sections 7 and 8 of RA 10932 do not violate the Constitution.

Lastly, the petitioner seeks to declare Sections 7 and 8[32] of RA 10932 unconstitutional because the said provisions,
which provide that PhilHealth reimbursement, Philippine Charity Sweepstakes Office assistance, and tax deductions
shall only cover basic emergency care provided to poor, indigent, or marginalized patients, supposedly violate the
equal protection clause.

The equal protection clause does not call for absolute equality. What it simply requires is equality among equals as
determined according to a valid classification. Indeed, the equal protection clause permits classification.[33]

Such classification, however, to be valid must pass the test of reasonableness. The test has four requisites: (1) The
classification rests on substantial distinctions; (2) It is germane to the purpose of the law; (3) It is not limited to
existing conditions only; and (4) It applies equally to all members of the same class.[34]

First, a belabored discussion is not needed to explain that there are substantial distinctions as to the medical
treatment of poor, indigent, and marginalized patients and that of patients who can very well afford medical treatment.
It is self-explanatory that poor, indigent, and marginalized patients are differently situated as compared to affluent and
well-off patients who have the means to avail themselves of medical treatment. Further, the special treatment of poor,
indigent, and marginalized patients under RA 10932 is very much germane to the purpose of the law. In fact, the
1987 Constitution itself mandates that the State shall adopt an integrated and comprehensive approach to health
development which shall endeavor to make essential goods, health and other social services available to all the
people at affordable cost, wherein there shall be priority for the needs of the underprivileged sick, elderly, disabled,
women, and children.[35] Lastly, it is not limited to existing conditions only and that the questioned proviso .is equally
apply to all members of the same class.

Given the foregoing reasons, I concur with the ponencia and vote to DISMISS the instant Petition.
 

[1]
 AN ACT STRENGTHENING THE ANTI-HOSPITAL DEPOSIT LAW BY INCREASING THE PENALTIES FOR THE
REFUSAL OF HOSPITALS AND MEDICAL CLINICS TO ADMINISTER APPROPRIATE INITIAL MEDICAL
TREATMENT AND SUPPORT IN EMERGENCY OR SERIOUS CASES, AMENDING FOR THE PURPOSE BATAS
PAMBANSA BLLANG 702, OTHERWISE KNOWN AS "AN ACT PROHIBITING THE DEMAND OF DEPOSITS OR
ADVANCE PAYMENTS FOR THE CONFINEMENT OR TREATMENT OF PATIENTS IN HOSPITALS AND
MEDICAL CLINICS IN CERTAIN CASES", AS AMENDED BY REPUBLIC ACT NO. 8344, AND FOR OTHER
PURPOSES.

[2]
 See Garcia v. The Executive Secretary, 602 Phil. 64, 73 (2009).

[3]
 Id. at 73.

[4]
 Id.

[5]
 Francisco, Jr. v. The House of Representatives, 460 Phil. 830, 892 (2003).

[6]
 Ocampo v. Enriquez, 798 Phil. 227, 288 (2016).

[7]
 Id. at 288.

[8]
 Id.

[9]
 Board ofOptometry v. Colet, 328 Phil. 1187, 1206 (1996).

[10]
 Ocampo v. Enriquez, supra note 6, at 289-290.

[11]
 Id. at 290.

[12]
 SECTION 1. In emergency or serious cases, it shall be unlawful for any proprietor, president, director, manager or
any other officer, and/or medical practitioner or employee of a hospital or medical clinic to request, solicit, demand or
accept any deposit or any other form of advance payment as a prerequisite for administering basic emergency care
to any patient, confinement or medical treatment of a patient in such hospital or medical clinic or to refuse to
administer medical treatment and support as dictated by good practice of medicine to prevent death, or permanent
disability, or in the case of a pregnant woman, permanent injury or loss of her unborn child, or noninstitutional
delivery: Provided, That by reason of inadequacy of the medical capabilities of the hospital or medical clinic, the
attending physician may transfer the patient to a facility where the appropriate care can be given, after the patient or
his next of kin consents to said transfer and after the receiving hospital or medical clinic agrees to the
transfer: Provided, however, That when the patient is unconscious, incapable of giving consent and/or
unaccompanied, the physician can transfer the patient even without his consent: Provided, further, That such transfer
shall be done only after necessary emergency treatment and support have been administered to stabilize the patient
and after it has been established that such transfer entails less risks than the patient's continued
confinement: Provided, furthermore, That no hospital or clinic, after being informed of the medical indications for such
transfer, shall refuse to receive the patient nor demand from the patient or his next of kin any deposit or advance
payment: Provided, finally, That strict compliance with the foregoing procedure on transfer shall not be construed as a
refusal made punishable by this Act.

[13]
 See Lucas v. Tuaño, 604 Phil. 98, 125 (2009).

[14]
 RA 10932, Sec. 1.

[15]
 SEC. 4. Any official, medical practitioner or employee of the hospital or medical clinic who violates the provisions
of this Act shall, upon conviction by final judgment, be punished by imprisonment of not less than six (6) months and
one (1) day but not more than two (2) years and four (4) months, or a fine of not less than One hundred thousand
pesos (P100,000.00), but not more than Three hundred thousand pesos (P300,000.00) or both, at the discretion of
the court: Provided, however, That if such violation was committed pursuant to an established policy of the hospital or
clinic or upon instruction of its management, the director or officer of such hospital or clinic responsible for the
formulation and implementation of such policy shall, upon conviction by final judgment, suffer imprisonment of four (4)
to six (6) years, or a fine of not less than Five hundred thousand pesos (P500,000.00), but not more than One million
pesos (P1,000,000.00) or both, at the discretion of the court, without prejudice to damages that may be awarded to
the patient-complainant: Provided, further, That upon three (3) repeated violations committed pursuant to an
established policy of the hospital or clinic or upon the instruction of its management, the health facility's license to
operate shall be revoked by the DOH. The president, chairman, board of directors, or trustees, and other officers of
the health facility shall be solidarily liable for damages that may be awarded by the court to the patient-complainant.

[16]
 People v. Millora, 252 Phil. 105, 122 (1989).

[17]
 23 Phil. 279, 289 (1912).

[18]
 1987 CONSTITUTION, Art. II, Sec. 15.

[19]
 See Añonuevo v. Court of Appeals, 483 Phil. 756, 766-767 (2004).

[20]
 247-A Phil. 51, 56 (1988).
[21]
 331 Phil. 1019 (1996).

[22]
 Id. at 1027.

[23]
 151-A Phil. 648 (1973).

[24]
 Id. at 652.
 
[25]
 Spouses Africa v. Caltex (Phil.), Inc., 123 Phil. 272, 281-282 (1966).

[26]
 See Ramos v. Cho Chun Chac, 54 Phil. 713, 715 (1930).

[27]
 Teague v. Fernandez, supra note 23, at 652.

[28]
 Añonuevo v. Court of Appeals, supra note 19.

[29]
 271 Phil. 886 (1991).

[30]
 92 Phil. 856, 858-859 (1953).

[31]
 Bañares v. Court of Appeals, supra note 29, at 897.

[32]
 SEC. 7. PhilHealth Reimbursement of Basic Emergency Care. — PhilHealth shall reimburse the cost of basic
emergency care and transportation services incurred by the hospital or medical clinic for the emergency medical
services given to poor and indigent patients. Furthermore, the Philippine Charity Sweepstakes Office (PCSO) shall
provide medical assistance for the basic emergency care needs of the poor and marginalized groups.

SEC. 8. Tax Deductions. — Other expenses incurred by the hospital or medical clinic in providing basic emergency
care to poor and indigent patients not reimbursed by PhilHealth shall be tax deductible.

[33]
 Biraogo v. The Philippine Truth Commission of 2010, 651 Phil. 374, 459 (2010).

[34]
 Id. at 459.

[35]
 1987 CONSTITUTION, Art. XIII, Sec. 11.

9. Liberal construction of the rules of evidence

10. Quantum of evidence (weight and sufficiency of evidence)

a) Proof beyond reasonable doubt

b) Preponderance of evidence

Tayao v. Republic, G.R. No. 235682 (Notice), [January 22, 2018])

G.R. No. 201501

REPUBLIC OF THE PHILIPPINES, REPRESENTED BY THE POLLUTION ADJUDICATION

BOARD, Petitioner
vs.
N. DELA MERCED & SONS, INC., Respondent

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

G.R. No. 201658

N. DELA MERCED & SONS, INC., Petitioner

vs.
REPUBLIC OF THE PHILIPPINES, REPRESENTED BY THE POLLUTION ADJUDICATION
BOARD, Respondent

DECISION

SERENO, CJ.:
Before us are consolidated Petitions for Review on Certiorari under Rule 45 of the Rules of Court
assailing the Court of Appeals (CA) Decision  dated 30 June 2011 and Resolution  dated 18 April
1 2

2012 in CA-G.R. SP No. 107626.

The CA upheld the Order of the Department of Environment and Natural Resources-Pollution
Adjudication Board (DENR-PAB) in DENRPAB Case No. NCR-00760-06 to fine N. Dela Merced &
Sons, Inc. (Dela Merced & Sons), for violation of Section 28 of Republic Act No. (R.A.) 9275 (The
Clean Water Act of 2004). The appellate court, however, reduced the fine from ₱3.98 million to
₱2.63 million.

THE FACTS

The Guadalupe Commercial Complex is a commercial building owned and operated by Dela Merced
& Sons.  Situated alongside the Pasig River, the complex operates a wet market and houses
3

eateries or kitchenettes in the same building.4

On 13 July 2006, the Environmental Management Bureau-National Capital Region (EMB-NCR) of

the DENR inspected the Guadalupe Commercial Complex. The inspection team found that Dela
Merced & Sons had violated the following: 1) Section 1 of DENR Administrative Order No. 2004-26
for operating air pollution source installations (generator set) without a permit to operate; and 2)
Section 27(i) of R.A. 9275 for operating a facility that discharged regulated water pollutants without a
discharge permit.

Thus, the EMB-NCR served a notice of violation (NOV)  dated 28 August 2006 upon Dela Merced &
5

Sons, stating the charges and ordering the latter to comply with the requirements.  Dela Merced &
6

Sons requested and was granted an extension of time to comply with the NOV requirements. 7

On 11 October 2006, however, the EMB-NCR conducted another inspection of the Guadalupe
Commercial Complex to monitor Dela Merced & Sons' compliance with R.A. 8749 (The Clean Air
Act of 1999) and R.A. 9275, as well as their respective Implementing Rules and Regulations (IRRs ).
The inspection team collected effluent  sample from the facility, and the results of the laboratory tests
8

showed that the sample collected failed to conform to the DENR Effluent Standards. 9

Consequently, on 6 February 2007, the DENR Secretary, upon the recommendation of the EMB-
NCR, issued a cease and desist order (CDO) to Dela Merced & Sons for violation of R.A. 9275 and
the IRR thereof.  In the same Order, the company was informed that no temporary lifting order
10

(TLO)  shall be issued in its favor, unless it would submit the documents required under the law.
11 12

On 30 March 2007, the EMB-NCR went ahead to partially execute the CDO by sealing the kitchen
sinks of the locators identified as sources of wastewater at the Guadalupe Commercial Complex. On
the other hand, the wet market and the kitchenettes or turo-turo on the ground floor of the building
were only given warnings. 13

On 3 April 2007, Dela Merced & Sons filed a Motion for Reconsideration (MR) of the imposition of
the COO and submitted the required documents for the issuance of a TLO.  The DENR-PAB issued
14

the TLO on 3 July 2007. 15

Meanwhile, on 9 August 2007, the EMB-DENR issued a Certificate of Non-Coverage (CNC) to Dela
Merced & Sons pursuant to Presidential Decree (P.O.) No. 1586 (Philippine Environmental Impact
Statement System).  16

By 14 November 2007, another efficient sampling was conducted. Subsequently, the results were
submitted to the EMB laboratory for analysis and verification. The findings showed that the effluent
conformed to the DENR Effluent Standards.  Thus, the DENR-PAB issued a Notice of Technical
17

Conference to Dela Merced & Sons for a discussion of the imposition of fines during the period of
violation of R.A. 9275. 18

Attached to the notice was an initial computation of the fine in the total amount of ₱3.98 million. The
notice also directed Dela Merced & Sons to submit its position paper regarding the fine.

The fine covered the alleged 398 days that Dela Merced & Sons had violated R.A. 9275. The rate
was ₱10,000 per day of violation in accordance with Sec. 28 of the law. The period covered was
from 12 October 2006- when the collected effluent from the facility failed the DENR Effluent
Standards-to 13 November 2007, which marked the end of the period when, by the next day, the
sampling gathered by the EMB-NCR had already passed the DENR Standards. 19

In its Position Paper,  Dela Merced & Sons prayed that the fine be discarded for being imposed
20

without due process of law. It argued that the fine was violative of Sections 1 and 19(1), Article III of
the Constitution. It also contended that the period from the issuance of the TLO (3 July 2007) up to
the date it had complied with the requirements (13 November 2007) should not be included in the
computation. 21

Following the recommendation of the PAB Committee on Fines, the DENR-PAB issued an
Order  dated 13 November 2008 imposing a fine of ₱3.98 million on Dela Merced & Sons. The latter
22

moved for reconsideration, but its motion was denied in an Order dated 30 January 2009. 23

THE RULING OF THE COURT OF APPEALS

Aggrieved, Dela Merced & Sons filed with the CA a Petition for Review under Rule 43 of the Rules of
Court, with a prayer for the issuance of a Temporary Restraining Order (TRO) and/or Writs of
Preliminary and Mandatory Injunction  .24

In its Resolution  dated 1 March 2010, the CA denied the prayer for the issuance of a TRO and/or
25

Injunction when it found that Dela Merced & Sons had not been deprived of its constitutional right to
due process. The CA also found that the company had failed to show any grave and irreparable
damage or injury that would have been caused, had the DENR-PAB's Orders been executed. 26

As to the main petition, Dela Merced & Sons assailed the DENR-PAB Orders imposing the fine
amounting to P3.98 million and denying the former's MR. Dela Merced & Sons claimed that it was
exempt from the requirements of R.A. 9275 by virtue of the CNC.  It also argued that the imposition
27

of the fine was unconstitutional for being excessive. 28

On 30 June 2011, the CA rendered a Decision  affirming the assailed Orders of the DENR-PAB,
29

except as to the imposable fine which was reduced to ₱2.63 million. According to the appellate
court, the fine should be reduced in view of the EMB-NCR's unreasonable delay in complying with
the order to conduct an effluent sampling of Dela Merced & Sons' Wastewater Treatment Facility. 30

Both parties filed their respective MRs which were both denied in a Resolution  dated 18 April 2012.
31

Hence, they both came to this Court with their respective petitions.

PETITION BEFORE THIS COURT

The DENR-PAB filed a Petition for Review on Certiorari with this Court on 5 June 2012, docketed as
G.R. No. 201501. The petition is contesting the downgraded fine imposed by the CA on Dela Merced
& Sons.  In turn, the latter party filed its own Petition for Review on Certiorari on 8 June 2012,
32

docketed as G.R. No. 201658. The petition is questioning the fine imposed upon it and is contesting
the constitutionality of the provision on the imposition of the fine.  The two petitions have been
33

consolidated. 34

ISSUES

The issues raised by both parties are summarized as follows:

1. Whether Dela Merced & Sons was denied due process.

2. Whether the issuance of a CNC means exemption from compliance with R.A. 9275.

3. Whether Sec. 28 of R.A. 9275 on the imposition of fines is unconstitutional under Section 19(1),
Article III of the Constitution for being excessive.

4. Whether the amount of the fine imposed was correct, assuming that its imposition was proper.

We deny Dela Merced & Sons' petition, but grant that of the DENR-PAB.

Dela Merced & Sons was Not Denied Due Process

Dela Merced & Sons argues that the fine was imposed without due process of law because the
company was "never given an opportunity to present its evidence to dispute the alleged violation of
the law."  It also claims that the DENR-PAB simply entered the former's premises and unilaterally
35

conducted an inspection and thereafter assessed excessive fines without first conducting
conferences or a trial.
36

We are not persuaded.

As for the inspection, the EMB-NCR was only performing its mandated duty under R.A. 9275  and 37

the IRR  thereof when it inspected the premises of the Guadalupe Commercial Complex. Clearly,
38 39

the EMB had legal authority when it conducted the inspection.

The specific claims of denial of due process are belied by the records of the case. We quote with
approval the findings of the CA on this matter:

[The opportunity to be heard] was made completely available to petitioner [Dela Merced & Sons]
who participated in all stages of the administrative proceeding before the DENR-PAB. x x x, [T]he
respondent [PAB] after issuing the notice of violation and possible imposition of fines to the
petitioner, gave it time to comply with the requirements of the environmental laws. The petitioner
even requested for extension of time to comply with the requirements which the respondent granted.
But a subsequent inspection of the facility showed that the petitioner still failed to comply with the
DENR effluent standards despite the extension given by respondent. Thus, the respondent was
compelled to issue a cease and desist order.

xxxx

Upon full compliance of the petitioner with all the requirements, the respondent issued a TLO in its
favor. x x x EMB-NCR conducted another inspection of the facility and found that the effluents x x x
conformed to the DENR Effluent Standards. Thereafter, the respondent invited the petitioner to a
technical conference wherein the latter was instructed to submit a position paper on the amount of
fines to be imposed and gave it a copy of the respondent's initial computation of fines. The petitioner,
in its Position Paper, pleaded that the computation be discarded x x x. After due deliberation of
petitioner's arguments, the respondent DENR-PAB imposed x x x fines x x x. The petitioner moved
for its reconsideration which was denied.  (Emphases supplied)
40

The above findings overwhelmingly show that Dela Merced & Sons was not denied due process. In
a real sense, it was able to take advantage of the available opportunities to explain its side and to
question the acts and orders of the DENR-PAB. In administrative proceedings, a fair and reasonable
opportunity to explain one's side suffices to meet the requirements of due process. 41

It is wrong for Dela Merced & Sons to insist that a trial-type proceeding is necessary. Administrative
due process cannot be fully equated with due process in its strict judicial sense. In the former, a
formal or trial-type hearing is not always necessary, and technical rules of procedure are not strictly
applied.  It is not legally objectionable for an administrative agency to resolve a case based solely
42

on position papers, affidavits or documentary evidence submitted by the parties as is the case here. 43

In any event, whatever procedural defect there may have been in the subject proceedings was cured
when Dela Merced & Sons moved for reconsideration. 44

No Exemption from Compliance with Environmental Laws, Even if Issued a CNC

Dela Merced & Sons contends that it was exempt from complying with the environmental
requirements of R.A. 9275 because it was issued a CNC. 45

This argument deserves scant consideration.

As explained in Special People, Inc. Foundation v. Canda,   the CNC is a certification issued by the
46

EMB certifying that a project is not covered by the Environmental Impact Statement (EIS) System
and that the project proponent is not required to secure an Environmental Compliance Certificate.
The EIS System was established pursuant to P.O. No. 1151, which required all entities to submit an
EIS for projects that would have a significant effect on the environment.47
In 1981, Proclamation No. 2146 was issued, enumerating the areas and types of projects that are
environmentally critical and within the scope of the EIS System. The areas and projects not included
in the enumeration were considered non-critical to the environment and thus, were entitled to a
CNC. 48

This Court notes that the Guadalupe Commercial Complex is not included in the list of
environmentally critical projects or areas under Proclamation No. 2146. As an environmentally non-
critical project, it is not covered by the EIS System and, consequently, a CNC was rightly issued in
its favor.

Nevertheless, the CNC only exempts Dela Merced & Sons from securing an Environmental
Compliance Certificate. It does not exempt it from complying with other environmental laws. Section
5 of P.O. 1586 is clear on this matter:

Section 5. Environmentally Non-Critical Projects. - All other projects, undertakings and areas not
declared by the President as environmentally critical shall be considered as non-critical and shall not
be required to submit an environmental impact statement. The National Environmental Protection
Council, thru the Ministry of Human Settlements may however require noncritical projects and
undertakings to provide additional environmental safeguards as it may deem necessary. (Emphases
supplied)

Based on the law, environmentally non-critical projects such as the Guadalupe Commercial Complex
are still expected to provide additional environmental safeguards as deemed necessary. Hence,
Dela Merced & Sons is still bound to abide by environmental laws such as the Clean Water
Act, even if it possesses a CNC. As held in Leynes v. People,  an entity is not exempted from
49

compliance with applicable environmental laws, rules, and regulations despite the issuance of a
CNC in its name.

The Constitutionality of Section 28 of R.A. 9275 Was Not Properly Questioned

Another main contention of Dela Merced & Sons is that Section 28  of R.A. 9275 violates Section 19
50

(1), Article III of the Constitution, because the former section provides for the imposition of excessive
fines.

We note at the outset that Dela Merced & Sons' attempt to assail the constitutionality of Sec. 28 of
R.A. 9275 constitutes a collateral attack. This is contrary to the rule that issues of constitutionality
must be pleaded directly.  Unless a law is annulled in a direct proceeding, the legal presumption of
51

the law's validity remains.

52

Nevertheless, even if the issue of constitutionality was properly presented, Dela Merced & Sons still
failed to satisfy the fourth requisite for this Court to undertake a judicial review.  Specifically, the
53

issue of constitutionality of Sec. 28 of R.A. 9275 is not the lis mota of this case.

The lis mota requirement means that the petitioner who questions the constitutionality of a law must
show that the case cannot be resolved unless the disposition of the constitutional question is
unavoidable.  Consequently, if there is some other ground (i.e. a statute or law) upon which the
54

court may rest its judgment, that course should be adopted and the question of constitutionality
avoided. 55

In this case, Dela Merced & Sons failed to show that the case cannot be legally resolved unless the
constitutional issue it has raised is resolved. Hence, the presumption of constitutionality of Sec. 28 of
R.A. 9275 stands.

The Fine Imposed Is Not Excessive Under the Constitution

Even if We were to rule on the constitutionality of Sec. 28 of R.A. 9275 despite the procedural
lapses, Dela Merced & Sons' petition would still be denied.

At the outset, Dela Merced & Sons' invocation of Article III, Section 19(1) of the Constitution is
erroneous. The constitutional prohibition on the imposition of excessive fines applies only to criminal
prosecutions.  In contrast, this case involves an administrative proceeding and, contrary to the
56

supposition of Dela Merced & Sons,  the fine imposed is not a criminal penalty. Hence, the
57

proscription under Article III, Section 19 is inapplicable to this case.

Besides, even if the Bill of Rights were applicable, the fines under R.A. 9275 still cannot be classified
as excessive.

For a penalty to be considered obnoxious to the Constitution, it needs to be more than merely being
harsh, excessive, out of proportion, or severe.  To come under the prohibition, the penalty must be
58

flagrantly and plainly oppressive  or so disproportionate to the offense committed as to shock the
59

moral sense of all reasonable persons as to what is right and proper under the circumstances.  Dela 60

Merced & Sons failed to satisfy these jurisprudential standards.

In questioning the constitutionality of the fine, Dela Merced & Sons merely alleges that the amount is
"exorbitant,"  "arbitrary, unconscionable,"  and "too excessive as to cause grave impact on the
61 62

business operations, nay [the] very survival of petitioner as a business entity [and] its employees as
a whole."  These unsubstantiated allegations are not enough to strike down the fine as
63

unconstitutional for being excessive.

Moreover, Sec. 28 of R.A. 9275 cannot be declared unconstitutional simply because the fine
imposed may cause grave impact on Dela Merced & Sons' business operations. Indeed, the
possibility that a law may work hardship does not render it unconstitutional. 64

Also, it should be noted that the basis for the amount of fine imposed by the PAB and the CA (i.e.
₱10,000 per day of violation) is the minimum imposable amount under the law. Since penalties are
prescribed by statute, their formulation is essentially and exclusively legislative. Having no authority
to modify the penalties already prescribed, the courts can only interpret and apply them.  As held
65

in US. v. Borromeo, "[t]he fixing of penalties for the violation of statutes is primarily a legislative
function, and the courts hesitate to interfere, unless the fine provided for is so far excessive as to
shock the sense of mankind." 66

During the deliberations on Senate Bill No. 2115 (which was the origin of R.A. 9275), one of the
senators made the following statement:

The lack of usable, clean water resources is a problem that confronts us today. This is the reason,
Mr. President, this committee thought of submitting this measure as our humble contribution in
finding alternative solutions. x x x

xxxx

This bill is not lacking in incentives and rewards and it has muscle to penalize acts that further
pollute all our water sources as well. We increased the fines so that with strict implementation, we
can curb the damage we continue to inflict, ironically, to our life source. x x x

xxxx

[T]he quality of the nation's water resources is of great interest because it is so integrally linked to a
long-term availability of water that is clean and safe for drinking, recreation and that is suitable for
industry, irrigation and habitat for fish and wildlife.  Emphasis supplied)
67

Clearly, the legislature saw the need to protect and conserve our water resources. To this end, it
formulated rules with concomitant penalties to ensure compliance with the law. We will not interfere
with its wisdom in drafting the law, especially since the presumption of its constitutionality has not
been overturned.

The Fine imposed by the DENR-PAB was Erroneously Reduced by the CA

The DENR-PAB contests the reduction by the CA of the amount of fine the former could impose on
Dela Merced & Sons, an issue that involves a question of fact. Since there is a conflict between the
finding of the CA and that of PAB,  we are constrained to delve into this factual issue.
68

At the rate of ₱l0,000 per day of violation,  the fine was computed by the PAB in the amount of
69

₱3.98 million, which covered the period of 12 October 2006 (when the collected effluent from the
facility failed the DENR standards) to 13 November 2007 (the day before the effluent sampling was
gathered, which eventually passed the DENR standards)-a total of 398 days.
On the other hand, the CA reduced the fine to ₱2.63 million, because the period of violation it
considered covered only 263 days-from 12 October 2006 to 3 July 2007 (the date of issuance of the
TLO). The CA reduced the fine in view of EMB-NCR's "unreasonable delay" in complying with the
order in the TLO to conduct the effluent sampling of the company's Wastewater Treatment Faci1ity. 70

The PAB pointed out that the effluent samples were collected on 14 November 2007, which was still
within the 150-day time frame  prescribed in the TLO.  It claimed that the period of effectivity of the
71 72

TLO was based on the Construction Timetable of the Water Treatment Facility attached to Dela
Merced & Sons' MR filed with the PAB. The timetable provided a period of 150 to 180 days before
completion. 73

Furthermore, it was only through a letter dated 26 November 2007 that PAB was informed by Dela
Merced & Sons that the latter's Permanent Wastewater Treatment Facility had been completed on 9
November 2007 and a trial run conducted on 12 November 2007. 74

Based on the foregoing, it was improper for the CA to indicate the date of issuance of the TLO as the
end of the period of violation. As pointed out by the PAB, Dela Merced & Sons merely submitted
documentary evidence to convince the former of the company's sincere intention to comply with the
DENR standards. Hence, the grant of the request for the issuance of a TLO cannot be equated with
compliance or proof that the company's effluent has already passed the standards. 75

Any delay in conducting the influent and effluent sampling of the Water Treatment Facility cannot be
characterized as unreasonable, especially since the period of sampling was well within the 150-day
period provided in the TLO. Consequently, the amount of fine imposed by DENR-PAB must be
upheld.

A Final Note

The importance of water resources for our existence cannot be overstated. These resources are vital
not only for our individual well-being, but also for the survival of society as a whole. Yet, we have
continued to abuse them, as if they were inexhaustible.

Pollution has been a perennial problem affecting our water resources. In his sponsorship speech for
the Clean Water Bill, one senator cited the Pasig River to illustrate this point. He said, "[i]f we were to
present a body of water that typifies the chronic water pollution problem in the country, nothing leads
us closer than the notoriously polluted Pasig River. x x x Pasig River is considered biologically dead
x x x. [It] is just one of the bodies of water that has been severely prostituted."  This is the same river
76

to which the Guadalupe Commercial Complex has discharged its wastewater. 77

Our legislators saw the need for a concerted effort of the government and society to abate, control,
and prevent the pollution of our country's water resources.  Hence, the Clean Water Act was
78

enacted in the hope that "this vital measure will offer the future generation an abundant supply of
potable water, clean rivers to swim [in], and a better access to safe water for their daily use." 79

All of us benefit from clean water, and we are all responsible for its preservation. Dela Merced &
Sons is no exception. Thus, we should all do our part in the protection and conservation of our water
resources. As the authors of the Clean Water Act have reminded us, we must use our water wisely,
for it is the selfsame prosperity we ought to hand down to our children. 80

WHEREFORE, premises considered, the Petition in G.R. No. 201501 is GRANTED, while that

in G.R. No. 201658 is DENIED. The Ruling of the Court of Appeals in CA-G.R. SP. No. 107626
dated 30 June 2011 and its Resolution on 18 April 2012, are hereby AFFIRMED WITH
MODIFICATION as to the amount of fine imposed.

Following the DENR-PAB's Order dated 13 November 2008 in DENR-PAB Case No. NCR-00760-
06, N. Dela Merced and Sons, Inc. is hereby ORDERED to pay a fine in the amount of ₱3,980,000
(three million nine hundred eighty thousand pesos).

SO ORDERED.

MARIA LOURDES P.A. SERENO

Chief Justice, Chairperson
WE CONCUR:

ANTONIO T. CARPIO
Senior Associate Justice

TERESITA J. LEONARDO-DE CASTRO DIOSDADO M. PERALTA

Associate Justice Associate Justice

MARIANO C. DEL CASTILLO

Associate Justice

CERTIFICATION

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

MARIA LOURDES P.A. SERENO

Chief Justice

Footnotes

 Designated as additional member in lieu of Associate Justice Francis H. Jardeleza per raffle
*

dated 15 January2018.

 Designated as additional member in lieu of Associate Justice Noel Jimenez Tijam per raffle
**

dated 11 December 2017.

 Rollo (G.R. No. 201658), pp. 28-52; penned by Associate Justice Leoncia R. Dimagiba, with
1

Associate Justices Noel G. Tijam (chairperson; now a member of this Court) and Marlene
Gonzales-Sison concurring.

2
 Id. at 53-55

3
 Id. at 8.

4
 Id. at 42.

5
 Id. at 106. NOV-608-203

6
 Id. at 29-30.

7
 Id. at 30-31.

8
 R.A. 9275, Article 2, Sec. 4(m). Effluent means discharges from known source which is
passed into a body of water or land, or wastewater flowing out of a manufacturing plant,
industrial plant including domestic, commercial and recreational facilities.

9
 Rollo (G.R. No. 201658), p. 31.

10
 Id. at 107-109.

 Definition of Terms, Rule II, Sec. 1 (gg), Revised Rules of the Pollution Adjudication Board
11

(PAB)' On Pleading, Practice and Procedure in Pollution Cases, PAB Resolution No. 01,
Series of 2010. "Temporary Lifting Order (TLO)" shall mean an order issued by the Board,
after a satisfactory showing of the respondent's compliance with specified conditions, to
provisionally set aside the effect of a Cease and Desist Order and allow the limited operation
ofa facility or business but only for a specific purpose or for a limited period.

12
 Rollo (G.R. No. 201658), pp. 31-32. These documents are: 1) a comprehensive pollution
control program, including the plans and specifications of the firm's anti-pollution facility,
budget and Gantt Chart of the activities relative thereto, 2) a surety bond equivalent to 25%
of the total cost of the pollution control program, 3) a detailed description of the interim
remedial measure to be instituted to mitigate pollution pending the completion of the pollution
control program, 4) proof of employment of the newly appointed Pollution Control Officer
(PCO) duly accredited by the DENR, and 5) a notarized undertaking by the President of the
firm to comply with the conditions set in the Order.

 Id. at 33.
13

 Id. at 33 and 113-131.

14

 Id. at 132.
15

 Id. at 93.
16

 Id. at 34.
17

 Id. at 134
18

 Id. at 34 and 135.

19

 Id. at 136-140.
20

 Id. at 35.
21

 Id. at 95-97.
22

 Id. at 98-100.
23

 Id. at 72-91
24

 Id. at 175-180, penned by Asociate Justice Ruben C. Ayson and concurred in by Associate
25

Justices Hakim S. Abdulwahid and Normandic B. Pizarro.

 Id. at 177-178. Dela Merced & Sons filed a Motion for Reconsideration, which was
26

denied (see Id. at 181- 184 and 240-243.

 Id. at 85-86.
27

 Id. at 88-89.
28

 Id. at 28-52.
29

 Id. at 51.
30

 Id. at 53-55.
31

 Rollo (G.R. No. 201501), pp.8-30.

32

 Rollo (G.R. No. 201658), pp. 8-27.

33

 Id. at 262-263.
34

 Rollo, (G.R. No. 201658), p. 20.

35

 Id.
36
  Section 14. Discharge Permits. - The Department shall require owners or operators of
37

facilities that discharge regulated effluents pursuant to this Act to secure a permit to
discharge. The discharge permit shall be the legal authorization granted by the Department
to discharge wastewater: Provided, That the discharge permit shall specify among others,
the quantity and quality of effluent that said facilities are allowed to discharge into a particular
water body, compliance schedule and monitoring requirement.

xxxx

Section 23. Requirement of Record-keeping, Authority for Entry to Premises and Access to

Documents. -x x x Pursuant to this Act, the Department, through its authorized
representatives, shall have the right to: (a) enter any premises or to have access to
documents and relevant materials as referred to in the herein preceding paragraph; (b)
inspect any pollution or waste source, control device, monitoring equipment or method
required; and (c) test any discharge. (Emphasis supplied)

 DENR Administrative Order 2005-10; 4.1 Autltorized inspection - means inspection,

38

whether announced or unannounced, conducted at any time by the multi-partite monitoring

teams in relation to their function, or by a Department inspector where the inspector presents
a valid Department inspector's identification duly signed by the Secretary, EMB Director or
EMB Regional Director to enter and inspect a pollution source. Inspections of effluents
discharged outside the facility may be conducted at any time. (Emphasis supplied)

 Rollo (G.R. No. 201658), p. 44.

39

 Id. at 46-48.
40

 PEZA v. Pearl City Manufacturing Corp. 623 Phil. 191, 201 (2009).

41

 Disciplinary Board, Land Transportation Office v. Gutierrez, G.R. No. 224395, 3 July 2017,
42

citing Vivo v. PAGCOR, 723 Phil. 34 (2013).

 See PEZA v. Pearl City Manufacturing Corp. supra, at 204.

43

 See SEC v. Universal Rightfield Property Holdings, Inc., 764 Phil. 267(2015).

44

 Rollo (G.R. No. 201658) p.19.

45

 701 Phil. 365 (2013).

46

 Id. at 380-383.
47

 Id.
48

 G.R. No. 224804, 21 September 2016.

49

50
 Section 28. Fines, Damages and Penalties. - Unless otherwise provided herein, any person
who commits any of the prohibited acts provided in the immediately preceding section or
violates any of the provision of this Act or its implementing rules and regulations, shall be
fined by the Secretary, upon the recommendation of the PAB in the amount of not less than
Ten thousand pesos (P10,000.00) nor more than Two hundred thousand pesos
(₱200,000.00) for every day of violation. x x x x (Emphasis supplied)

 Vivas v. Monetary Board of the Bangko Sentral ng Pilipinas, 716 Phil. 132 (2013).
51

 Id.
52

 Saguisag v. Ochoa, G.R. Nos. 212426 & 212444, 12 January 2016, 779 SCRA 241. The
53

requisites are: (a) there is an actual case or controversy; (b) the petitioner possesses locus
standi; (c) the question of constitutionality is raised at the earliest opportunity; and (d) the
issue of constitutionality is the lis mota of the case.
  Kalipunan ng Damayang Mahihirap, Inc., v. Robredo, 739 Phil. 283.
54

 Id. See also Garcia v. Executive Secretary, 602 Phil. 64 (2009).

55

 Serrano v. NLRC, 387 Phil. 345 (2000).

56

 Rollo (G.R. No. 201658), p.20.

57

 People v. Dionisio, 131 Phil. 408, 411 (1968).

58

 Id.
59

 People v. De la Cruz, 92 Phil. 906, 908 (1953 ).

60

 Rollo (G.R. No. 201658), p.21.

61

 Id. at 24.
62

 Id. at 20.
63

 Victoriano v. Elizalde Rope Workers' Union, 158 Phil. 60 (1974).

64

 People v. Munoz, G.R. Nos. L-38969-70, 9 February 1989.

65

 23 Phil. 279, 289 (1912), citing McMahon v. State, 70 Neb., 722.

66

 I RECORD, SENATE 12TH CONGRESS 2ND REGULAR SESSION 117 (5 August 2002).
67

 See Co v. Vargas, 676 Phil. 463 (2011) citing Development Bank of the Philippines vs.
68

Traders Royal Bank, 642 Phil. 547, 556-557 (2010).

 Section 28 of RA 9275 provides: Fines, Damages and Penalties. - Unless otherwise

69

provided herein, any person who commits any of the prohibited acts provided in the
immediately preceding section or violates any of the provision of this Act or its implementing
rules and regulations, shall be fined by the Secretary, upon the recommendation of the PAB
in the amount of not less than Ten thousand pesos (₱10,000.00) nor more than Two
hundred thousand pesos (₱200,000.00) for every day of violation. xxx (Emphasis supplied)

 Rollo (G.R. No. 201658), pp. 50-51.

70

71
 See Rollo (G.R. No. 201501), p. 154. The TLO states: WHEREFORE, in view of the
foregoing, [PAB] hereby resolves to issue in favor of [Dela Merced & Sons] a Temporary
Lifting Order for a period of one hundred fifty (150) days which shall be reckoned from
receipt hereof. Within the TLO period, the Regional office is hereby instructed to conduct
influent and effluent sampling of [Dela Merced & Son]'s Wastewater Treatment Facility
(WTF) and to transmit to [PAB] the results of laboratory analysis of samples collected within
fifteen (15) days from the termination of the sampling activity.

 Id. at 25.
72

 Id. at 151.
73

 Id. at 155.
74

 Id. at 26-27.
75

 T RECORD, SENATE 12TH CONGRESS 2ND REGULAR SESSION 119 (5 August 2002).
76

 Rollo (G.R. No. 201658), p. 42.

77

 I RECORD, SENATE I 2TH CONGRESS 2ND REGULAR SESSION 119 (5 August 2002).
78
  Id.
79

 I RECORD, SENATE 12TH CONGRESS 2ND REGULAR SESSION 118 (5 August 2002).
80

c) Substantial evidence

d) Clear and convincing evidence

Spouses Manalo v. Roldan-Confesor, G.R. No. 102358, [November 19, 1992], 290 PHIL 311-326)

G.R. No. 102358 November 19, 1992

SPOUSES VICENTE and GLORIA MANALO, petitioners,

vs.
HON. NIEVES ROLDAN-CONFESOR, in her capacity as Undersecretary of Labor and
Employment, JOSE SARMIENTO as POEA Administrator, CAREERS PLANNERS
SPECIALISTS INTERNATIONAL, INC., and SPOUSES VICTOR and ELNORA
FERNANDEZ, respondents.

BELLOSILLO, J.:

The Court views with grave concern the alarming incidents of illegal recruitment which demonstrate
all too clearly that overseas employment has fast developed into a major source not only of much-
needed foreign exchanged but also, for the cunning and the crafty, of easy money.

In response to a newspaper advertisement looking for a couple to work as driver and tutor cum baby
sitter, petitioners Vicente and Gloria Manalo went to Career Planners Specialists International, Inc.
(CPSI), a licensed service contracting firm owned by private respondents, the spouses Victor and
Elnora Fernandez. After the requisite interview and testing, they were hired to work for a family in
Saudi Arabia for a monthly salary of US$350.00 each. According to petitioners, a placement fee of
P40,000.00 was imposed as a precondition for the processing of their papers. They paid only
P30,000.00 in cash and executed a promissory note for the balance. Then they were allowed by
respondent Elnora Fernandez to sign their contract papers but did not issue a receipt for the
placement fee despite demand.

Shortly before boarding their flight to Saudi Arabia, petitioners were handed their contracts.
According to Gloria, she was surprised to discover that her position had been changed to that of
domestic help. However, a CPSI employee assured her that the change was only for the purpose of
facilitating her departure and did not in any way alter her employment as tutor. Incidentally, CPSI
provided petitioners with the Travel Exit Pass (TEP) of Filipino Manpower Services, Inc. (FILMAN), a
duly licensed recruitment agency.

Contrary to the representation of her recruiter, Gloria was actually hired as a domestic help and not
as a tutor, so that after working for only twenty-five (25) days in Jeddah, she returned to Manila.
Soon after, Vicente also resigned from his work and followed her home. He could not stand the
unbearable working conditions of his employment. However, before leaving, he had to execute a
promissory note to cover his plane fare which respondent Victor Fernandez advanced. Vicente also
had to sign a quitclaim in favor of CPSI and his employer.

On 29 February 1988, petitioners sued private respondents before the Philippines Overseas
Employment Administration (POEA) charging them with illegal exaction,   false adverstisement,   and
1 2

violation of other pertinents laws, rules and regulations. They demanded the refund of the amount
exacted from them, plus payment of moral damages and the imposition of administrative sanctions.  3

Private respondents countered: (1) that Gloria applied as domestic help fully aware that she could
not be a tutor since she did not speak Arabic; (2) that the promissory note for P10,000.00 was
required of petitioners because they were hired without paying placement fees; (3) that it was
unlikely for petitioners, who were mature, educated and experienced in overseas work, to part with
P30,000.00 without securing a receipt; (4) that Vicente executed a quitclaim in favor of CPSI duly
authenticated by embassy officials in Saudi Arabia; (5) that there was no impropriety in having the
employment papers of petitioners processed by FILMAN because it was a sister company of CPSI,
and private respondents Victor and Elnora were officers in both agencies.

Private respondents prayed for the disqualification of petitioners from overseas employment, and
sought to recover from them the SR 1,150 plane fare advanced by Victor for Vicente, P10,000.00 as
placement fee evidenced by a promissory note, and attorney's fees.

Mainly, on the basis of the transcripts of petitioners' testimonies in the clarificatory questioning
before the Rizal Provincial Prosecutor in a related criminal case,  the POEA issued its Order of 7
4

May 1990 giving more weight and credence to petitioners' version thus —

After a careful evaluation of the facts and the evidence presented, we are more
inclined to give weight to complainants' posture. Complainants' version of the case
spontaneously presented in their pleadings is, to our mind, more convincing than
respondent's stand. Moreover, the manner by which complainants narrated the
whole incident inspired belief in the allegation that respondent Career is indeed guilty
of illegal exaction. Thus, the actual expenses incurred by herein complainants
computed hereinbelow less the allowable fees of P3,000.00 (P1,500.00 per worker,
respondent being a service contractor) should be returned to them.

Actual Expenses —

P30,000.00 — placement fees

14.00 — application form
300.00 — psychological test
1,400.00 — medical exam
P31,000.00 — total

less 3,000.00 — processing fees at

P1,500.00 per applicant

P28,714.00 — amount to be refunded

It appearing, however, that only respondent Career Planners Specialist(s) Int'l. Inc.,
took part in the collection of the aforesaid amount, the same should be solely held
liable.

We cannot likewise give credence to the Final Quitclaim signed by complainant

Vicente Manalo before he left for the Philippines and presented by respondent as
defense. While its genuineness may not be in question, we believe that it has no
bearing on the issue at bar. The aforesaid Quitclaim deals more with matters
concerning complainants' employment abroad. However, the subject of the instant
claim is the refund of complainants' expenses prior to their deployment to Saudi
Arabia.

On the other hand, we hold FILMAN liable for allowing its document such as the TEP
to be used by other agency. Respondent's defense that there is nothing wrong in this
because FILMAN is a sister company of CAREER does not merit consideration
because such practice is not allowed under the POEA Rules and Regulations. A
check with our records, however, showed that respondent FILMAN had been put in
the list of forever banned agencies effective April 5, 1989.

Anent the claim for moral damages, this Office has no jurisdiction to entertain the
same.

WHEREFORE, . . . the Authority of Career Planners Specialist(s) International is

hereby suspended for four (4) months or in lieu thereof, a fine of P40,000.00 is
hereby imposed for illegal exaction on two counts plus restitution of the amount of
P28,714.00 to herein complainants in both instances.
 Filipino Manpower Services, Inc. is hereby meted a fine of P40,000.00 for two counts
of misrepresentation. Its perpetual disqualification from recruitment activities is
hereby reiterated.

The claim for moral damages is dismissed for lack of jurisdiction.

Respondent Career's counterclaim is likewise dismissed or lack of merit.  5

Private respondents filed a motion for reconsideration and on 4 February 1991, POEA issued a
resolution setting arise its earlier order stating that —

It is worth mentioning at this point that our sole basis for holding respondent Career
liable for illegal exaction was the uncorroborated testimony of the complainants.

As we have consistently held, (the) charge of illegal exaction is a serious charge

which may cause the suspension or cancellation of the authority or license of the
offending agency. Hence, it should be proven and substantiated by a clear and
convincing evidence. Mere allegation of complainant that the agency charged more
than the authorized fee will not suffice to indict the agency for illegal exaction unless
the allegation is supported by other corroborative circumstantial evidence.

Thus, for lack of concrete evidence or proof to support our initial findings, we are
inclined to reconsider the penalty imposed upon respondent.

Foregoing premises, the penalty of suspension imposed upon respondent Career

Planners Specialist(s) International, Inc. pursuant to our Order dated May 7, 1990 is
hereby LIFTED.

Accordingly, the alternative fine of P40,000.00 which was paid under protest by
respondent is hereby ordered refunded to them.  6

Petitioners appealed to the Secretary of Labor. On 5 July 1991, then Undersecretary of Labor Ma.
Nieves Roldan-Confesor (now Secretary of Labor) sustained the reconsideration of POEA. Her
Order reads in part —

We find . . . no cogent reason or sufficient justification to reverse or modify the

assailed Order.

Records reveal that the only basis for holding respondent Career Planners
Specialist(s) International, Inc., liable for illegal exaction, as held in the previous
POEA Order dated May 7, 1990 was the uncorroborated testimony of the
complainants. There was no concrete evidence or proof to support the POEA
Administrator's initial findings.

We take this opportunity to inform the complainants that the charge of illegal exaction
is a serious charge which may cause the suspension or cancellation of the authority
or license of a recruitment agency. Therefore, said charge must be proven and
substantiated by clear and convincing evidence. A mere allegation will not suffice to
find an agency liable for illegal exaction unless said allegation is supported by other
corroborative circumstantial evidence. In this connection, records show that
complainants could not narrate the specific circumstances surrounding their alleged
payment of the amount of P30,000.00. They could not even remember the specific
date when said amount was paid to respondent agency. In addition, when
complainants were separately questioned as to how the money was kept bundled
together prior to being handed to respondent agency for payment, Gloria Manalo
said it was wrapped in a piece of paper while Vicente Manalo said it was placed
inside an envelope.  7

On the charge of petitioners that they were given jobs (driver/domestic help) different from those
advertised by private respondents, the Undersecretary ruled that there was no misrepresentation by
way of false advertisement because it was established that private respondents also caused to be
printed in the same newspaper page a second box looking for a couple driver/domestic help.
In her Order of 9 October 1991, then Undersecretary Ma. Nieves Roldan-Confesor denied
petitioners' motion for reconsideration. 8

In the present recourse, petitioners claim that public respondent POEA committed a fatal jurisdictional error when it resolved private
respondents' motion for reconsideration in violation of Rule V, Book VI of the 1985 POEA Rules and Regulations directing the transmittal of
motions for reconsideration to the National Labor Relations Commission (NLRC) for determination. Consequently, for want of legal
competence to act on said motion, the Order of 4 February 1991, as well as the subsequent orders of public respondent Undersecretary of
Labor dated 5 July 1991 and 9 October 1991, is null and void.

In Aguinaldo Industries Corporation v. Commissioner of Internal Revenue   We ruled — 9

To allow a litigant to assume a different posture when he comes before the court and
challenge the position he had accepted at the administrative level, would be to
sanction a procedure whereby the court — which is supposed
to review administrative determinations — would not review, but determine and
decide for the first time, a question not raised at the administrative forum. This
cannot be permitted, for the same reason that underlies the requirement of prior
exhaustion of administrative remedies to give administrative authorities the prior
opportunity to decide controversies within its competence, and in much the same
way that, on the judicial level, issues not raised in the lower court cannot be raised
for the first time on appeal.

The alleged procedural lapse by respondent POEA was raised by petitioners only before Us,
notwithstanding that such ground was already existing when they appealed to the Secretary of
Labor. Ironically, petitioners now question the jurisdiction of the Secretary of Labor over the appeal
which they themselves elevated to that office. When petitioners filed their motion for reconsideration
with the Undersecretary of Labor, this procedural issue was not even mentioned. Clearly, it would be
the height of unfairness and inequity if We now allow petitioners to backtrack after getting an
unfavorable verdict from public respondents whose authority they themselves involved. In Tijam
v. Sibonghanoy   We said: ". . . we frown upon the "undesirable practice" of a party submitting his
10

case for decision and then accepting the judgment, only if favorable, and attacking it for lack of
jurisdiction, when adverse . . . ."

In this regard, however, We find no procedural infirmity constituting reversible error.

The 1985 POEA Rules and Regulations   is divided into eight (8) Books. Book VI, cited by
11

petitioners, is entitled "Adjudication Rules". The procedure outlined therein relates to the original and
exclusive jurisdiction exercised by POEA through its Adjudication Department "to hear and decide all
cases involving employer-employee relations arising out of or by virtue of a law or contact involving
Filipino workers for overseas employment," involving "[v]iolation of the terms and conditions of
employment . . . . [d]isputes relating to the implementation and interpretation of employment
contracts . . . [m]oney claims of workers against their employers and/or their duly authorized agents
in the Philippines or vice versa . . . . [c]laims for death, disability and other benefits arising out of
employment . . . . and . . . . [v]iolations of our non-compliance with any compromise agreement
entered into by and between the parties in an overseas employment contract."

On the other hand, Book II entitled "Licensing and Regulations" of the 1985 POEA Rules and
Regulations, notably Rule VI cited by private respondents, refers particularly to the procedure for
suspension, cancellation and revocation of Authority or License   through the POEA Licensing and
12

Regulation Office (LRO).

The controversy in the present case centers on the liability of private respondents for illegal exaction,
false advertisement and violation of pertinent laws and rules on recruitment of overseas workers and
the resulting imposition of penalty of suspension of the Authority of respondent CPSI. Quite plainly,
We are not concerned here with employer-employee relations, the procedure of which is outlined in
Book VI; rather, with the suspension or revocation of Authority embodied in Book II.

Evidently, no jurisdictional error was accordingly committed because in cases affecting suspension,
revocation or cancellation of Authority, the POEA has authority under Sec. 18, Rule VI, Book II, to
resolve motions for reconsideration which may thereafter be appealed to the Secretary of Labor.
Section 18, provides: "A motion for reconsideration of an order o suspension (issued by POEA) or an
appeal to the Minister (now Secretary of Labor) from an order cancelling a license or authority may
be entertained only when filed with the LRO within ten (10) working days from the service of the
order or decision" (parenthesis supplied).
Petitioners also argue that public respondents gravely abused their discretion when they violated
petitioners' right to administrative due process by requiring clear and convincing evidence to
establish the charge illegal exaction. This point is well taken. There was grave abuse of discretion.

In the administrative proceedings for cancellation, revocation or suspension of Authority or License,

no rule requires that testimonies of complainants be corroborated by documentary evidence, if the
charge of unlawful exaction is substantially proven. All administrative determinations require only
substantial proof and not clear and convincing evidence as erroneously contended by pubic
respondents.

Clear and convincing proof is ". . . more than mere preponderance, but not to extent of such certainty
as is required beyond reasonable doubt as in criminal cases . . ."   while substantial evidence ". . .
13

consists of more than a mere scintilla of evidence but may be somewhat less than a
preponderance . . . ."   Consequently, in the hierarchy of evidentiary values, We find proof beyond
14

reasonable doubt at the highest level, followed by clear and convincing evidence, preponderance of
evidence, and substantial evidence, in that order.

That the administrative determination of facts may result in the suspension or revocation of the
authority of CPSI does not require a higher degree of proof. The proceedings are administrative, and
the consequent imposition of suspension/revocation of Authority/License does not make the
proceedings criminal. Moreover, the sanctions are administrative and, accordingly, their infliction
does not give rise to double jeopardy when a criminal action is instituted for the same act.

Thus We held in Atlas Consolidated Mining and Development Corporation v. Factoran, Jr.   — 15

. . . it is sufficient that administrative findings of fact are supported by evidence, or

negatively stated, it is sufficient that findings of fact are not shown to be unsupported
by evidence. Substantial evidence is all that is needed to support an administrative
finding of fact, and substantial evidence is such relevant evidence as a reasonable
mind might accept as adequate to support a conclusion (Ang Tibay v. Court of
Industrial Relations, 69 Phil. 635, 642; Police Commission v. Lood, 127 SCRA 762
[1984].

The POEA, after assessing the evidence of both parties, found that private respondents collected
from petitioners P30,000.00 as placement fees; consequently, it ruled that there was illegal exaction.
Surprisingly, without altering its findings of fact, POEA reconsidered its order. It held that
uncorroborated testimonies were not enough to conclude that illegal exaction was committed,
particularly so that this might result in the suspension or revocation of respondents' authority to
engage in recruitment activities. The premise that testimonies of petitioners should be supported by
some other form of evidence is, to say the least, fallacious. In Castillo v. Court of Appeals,   where
16

the appellate court reversed the findings of fact of the trial court by requiring a higher degree of
proof, We held —

. . . we find no strong and cogent reason which justifies the appellate court's
deviation from the findings and conclusions of the trial court. As pointed out in
Hernandez v. Intermediate Appellate Court (189 SCRA 758 [1990]), in agrarian
cases, all that is required is mere substantial evidence. Hence, the agrarian court's
findings of fact which went beyond the minimum evidentiary support demanded by
law, that is, supported by substantial evidence, are final and conclusive and cannot
be reversed by the appellate tribunal.

The seeming discrepancy in the statements of the witnesses (one saying the money was wrapped in
paper, the other, that the money was in an envelope; neither testified on the specific date of the
exaction), refers only to minor details. Perhaps it would be different if the variance refers to essential
points, e.g., whether the amount of P30,000.00 was actually paid by petitioners to private
respondents. Consequently, whether the money was wrapped in paper, or placed in an envelope, or
unwrapped or whether the parties could not recall when there payment was effected is unimportant.
After all, the money could have been wrapped in paper and placed in the envelope, or placed in the
envelope without being wrapped, or wrapped with use of an unpasted envelope that appeared to be
the envelope itself. In either case, petitioners, could have viewed them differently; but the difference
is ultimately inconsequential. The crucial point to consider is that the petitioners categorically and
unequivocally testified that respondents collected from them the amount of P30,000.00 as their
placement fees and that they paid the amount demanded. In this regard, it may be worth to
emphasize that only substantial evidence, not necessarily clear and convincing evidence, is
required. Moreover, when confronted with conflicting assertions, the rule that "as between a positive
and categorical testimony which has a ring of truth on one hand, and a bare denial on the other, the
former is generally held to prevail . . . ."   applies.
17

But even on the supposition that there was no payment of P30,000.00, it cannot be denied that
private respondents required petitioners to execute a promissory note for P10,000.00 purportedly
because petitioners were hired without paying placement fees. The mere charging of P10,000.00,
standing alone, is enough to hold private respondents answerable for illegal exaction because the
allowable amount to be collected per contract worker according to respondent POEA was only
P1,500.00, or P3,000.00 for both petitioners.

WHEREFORE, the petition is GRANTED. The challenged Orders of respondent Undersecretary of

Labor dated 5 July 1991 and 9 October 1991, as well as the Resolution of respondent POEA dated 4
February 1991, having been issued with grave abuse of discretion amounting to lack or excess of
jurisdiction are SET ASIDE, and the original Order of respondent POEA dated 7 May 1990 is
ordered REINSTATED and AFFIRMED.

SO ORDERED.

Cruz, Padilla and Griño-Aquino, JJ., concur.

Footnotes

1 Charging or accepting, directly or indirectly, any amount greater than that specified
in the schedule of allowable fees (Art. 34, par. [a], P.D. 442, as amended, known as
the Labor Code of the Philippines); imposing or accepting, directly or indirectly, any
amount of money, goods or services, or any fee or bond in excess of what is
prescribed by the POEA (Sec. 2, par. [a], Rule VI, Book II, 1985 POEA Rules and
Regulations).

2 Engaging in act(s) of misrepresentation, such as publication or advertisement of

false or deceptive notices or information in relation to the recruitment and placement
of worker (Sec. 2, par. [b], Ibid.).

3 Petition, Annex "A", Rollo, p. 30.

4 I.S. No. 88-647, "Gloria Manalo v. Victor Fernandez and Elnora Fernandez", and
I.S. No. 88-718, "Vicente Manalo v. Victor Manalo v. Victor Fernandez and Elnora
Fernandez", both for estafa/illegal recruitment.

5 Petition, Annex "E", Rollo, pp. 122-124.

6 Petition, Annex "G", Rollo, pp. 133-134.

7 Petition, Annex "I", Rollo, pp. 138-139.

8 Petition, Annex "K", Rollo, p. 166.

9 No. L-29790, 25 February 1982; 112 SCRA 136, 140.

10 No. L-21450, 15 April 1968, 23 SCRA 29, 36, citing a number of related cases.

11 The 1985 POEA Rules and Regulations was then in effect during the proceedings
before POEA. However, it is now superseded by the 1991 POEA Rules and
Regulations promulgated 31 May 1991.

12 "Authority" is a document issued by the Minister (now Secretary of Labor) to a

private recruitment entity authorized to deploy its own workers for its project
overseas (Sec. 1, par. [d], Rule II Book I, 1985 POEA Rules and Regulations.
"License" is a document issued by the Minister (now Secretary of Labor) to an
agency authorizing it to recruit and hire Filipino workers for overseas employment
(Sec. 1, par. [q], Ibid. Public respondent POEA appears to confuse Authority with
License, for while POEA refers to CPSI, a licensed service contractor, what it
suspended actually was the Authority of CPSI.

13 Black's Law Dictionary, 5th Ed., p. 227, citing Fred C. Walker C. Walker Agency,

Inc. v. Lucas, 215 Va. 535, 211 S.E. 2d 88, 92.

14 Ibid., p. 1281, citing Marker v. Finch, D.C. Del., 322 F. Supp. 905, 910.

15 G. R. No. 75501, 15 September 1987; 154 SCRA 49, 54.

16 G. R. No. 98028, 27 January 1992; 205 SCRA 529, 535.

17 People v. Caballes, G. R. Nos. 93437-45, 12 July 1991; 199 SCRA 152, 167.