MEANING OF PROPERTY
The in violation of the state constitution or of the act shall
TERRACE et al. v. THOMPSON, Attorney General of
Washington.
TERRACE et al.
v.
THOMPSON, Attorney General of Washington.
No. 29.
Argued April 23, 24, 1923.
Decided Nov. 12, 1923.
Mr. James B. Howe, of Seattle, Wash., for appellants.
[Argument of Counsel from pages 198-204
intentionally omitted]
Mr. Lindsay L. Thompson, of Olympia, Wash., for
appellee.
[Argument of Counsel from pages 205-211
intentionally omitted]
Mr. Justice BUTLER delivered the opinion of the
Court.
1 motion and entered a decree of dismissal on the
Appellants brought this suit to enjoin the Attorney
General of Washington from enforcing the Anti-Alien
Land Law of that state (chapter 50, Laws 1921), on
the grounds that it is in conflict with the due process
and equal protection clauses of the Fourteenth
Amendment, with the treaty between the United
States and Japan, and with certain provisions of the
Constitution of the state.
2 not own, take, have or hold the legal or equitable title,
The appellants are residents of Washington.
Terraces are citizens of the United States and of
Washington. Nakatsuka was born in Japan of
Japanese parents and is a subject of the emperor of
Japan. The Terraces are the owners of a tract of land
in King county which is particularly adapted to raising
vegetables, and which for a number of years had
been devoted to that and other agricultural purposes.
The complaint alleges that Nakatsuka is a capable
farmer and will be a desirable tenant of the land, that
the Terraces desire to lease their land to him for the
period of five years, that he desires to accept such
lease, and that the lease would be made but for the
act complained of; and it is alleged that the defendant,
as Attorney General, has threatened to and will take
steps to enforce the act against the appellants if they
enter into such lease, and will treat the leasehold
interest as forfeited to the state, and will prosecute the
appellants criminally for violation of the act; that the
act is so drastic and the penalties attached to its
violation are so great that neither of the appellants
may make the lease even to test the constitutionality
of the act; and that, unless the court shall determine
its validity in this suit, the appellants will be compelled
to submit to it, whether valid or invalid, and thereby
will be deprived of their property without due process
of law and denied the equal protection of the laws.
3
The Attorney General made a motion to dismiss the
amended complaint upon the ground that it did not
state any matters of equity or facts sufficient to entitle
the appellants to relief. The District Court granted the
merits. The case is here on appeal from that decree.
4
Section 331 of article 2 of the Constitution of
Washington prohibits the ownership of land by aliens
other than those who in good faith have declared
intention to become citizens of the United States,
except in certain instances not here involved. The
act2 provides in substance that any such alien shall
or right to any benefit of any land as defined in the
act, and that land conveyed to or for the use of aliens
thereby be forfeited to the state, and it is made a
gross misdemeanor, punishable by fine or
imprisonment or both, knowingly to transfer land or
the right to the control, possession or use of land to
such an alien. It is also made a gross misdemeanor
for any such alien having title to such land or the
control, possession or use thereof, to refuse to
disclose to the Attorney General or the prosecuting
attorney the nature and extent of his interest in the
land. The Attorney General and the prosecuting
attorneys of the several counties are charged with the
enforcement of the act.
5
1. The Attorney General questions the jurisdiction of
the court to grant equitable relief even if the statute be
unconstitutional. He contends that the appellants have
a plain, adequate and speedy remedy at law; that the
case involves but a single transaction, and that, if the
proposed lease is made, the only remedy which the
state has, so far as civil proceedings are concerned,
is an escheat proceeding in which the validity of the
law complained of may be finally determined; that an
acquittal of the Terraces of the criminal offense
created by the statute would protect them from further
prosecution, and that Nakatsuka is liable criminally
only upon his failure to disclose the fact that he holds
an interest in the land.
6
The unconstitutionality of a state law is not of itself
ground for equitable relief in the courts of the United
States. That a suit in equity does not lie where there is
a plain adequate and complete remedy at law is so
well understood as not to require the citation of
authorities. But the legal remedy must be as
complete, practical and efficient as that which equity
could afford. Boise Artesian Water Co. v. Boise
City, 213 U. S. 276, 281, 29 Sup. Ct. 426, 53 L. Ed.
796; Walla Walla v. Walla Walla Water Co., 172 U. S.
1, 11, 12, 19 Sup. Ct. 77, 43 L. Ed. 341. Equity
jurisdiction will be exercised to enjoin the threatened
enforcement of a state law which contravenes the
federal Constitution wherever it is essential in order
effectually to protect property rights and the rights of
persons against injuries otherwise irremediable; and
in such a case a person, who is an officer of the state
is clothed with the duty of enforcing its laws and who
threatens and is about to commence proceedings,
either civil or criminal, to enforce such a law against
parties affected, may be enjoined from such action by
a Federal court of equity. 7
The Terraces' property rights in the land include the
right to use, lease and dispose of it for lawful
purposes (Buchanan v. Warley, 245 U. S. 60, 74, 38
Sup. Ct. 16, 62 L. Ed. 149, L. R. A. 1918C, 210, Ann.
Cas. 1918A, 1201), and the Constitution protects
these essential attributes of property (Holden v.
Hardy, 169 U. S. 366, 391, 18 Sup. Ct. 383, 42 L. Ed.
780), and also protects Nakatsuka in his right to earn
a livelihood by following the ordinary occupations of
life (Truax v. Raich, supra; Meyer v. State of
Nebraska, 262 U. S. 390, 43 Sup. Ct. 625, 67 L. Ed.
1042). If, as claimed, the state act is repugnant to the
due process and equal protection clauses of
the Fourteenth Amendment, then its enforcement will
deprive the owners of their right to lease their land to
Nakatsuka, and deprive him of his right to pursue the
occupation of farmer, and the threat to enforce it
constitutes a continuing unlawful restriction upon and
infringement of the rights of appellants, as to which
they have no remedy at law which is as practical,
efficient or adequate as the remedy in equity. And
assuming, as suggested by the Attorney General, that
after the making of the lease the validity of the law
might be determined in proceedings to declare a
forfeiture of the property to the state or in criminal
proceedings to punish the owners, it does not follow
that they may not appeal to equity for relief. No action
at law can be initiated against them until after the
consummation of the proposed lease. The threatened
enforcement of the law deters them. In order to obtain
a remedy at law, the owners, even if they would take
the risk of fine, imprisonment and loss of property
must continue to suffer deprivation of their right to
dispose of or lease their land to any such alien until
one is found who will join them in violating the terms
of the enactment and take the risk of forfeiture.
Similarly Nakatsuka must continue to be deprived of
his right to follow his occupation as farmer until a land
owner is found who is willing to make a forbidden
transfer of land and take the risk of punishment. The
owners have an interest in the freedom of the alien,
and he has an interest in their freedom, to make the
lease. The state act purports to operate directly upon
the consummation of the proposed transaction
between them, and the threat and purpose of the
Attorney General to enforce the punishments and
forfeiture prescribed prevents each from dealing with
the other. Truax v. Raich, supra. They are not obliged
to take the risk of prosecution, fines and imprisonment
and loss of property in order to secure an adjudication
of their rights. The complaint presents a case in which
equitable relief may be had, if the law complained of is
shown to be in contravention of the federal
Constitution.
8
2. Is the act repugnant to the due process clause or
the equal protection clause of the Fourteenth
Amendment?
9
Appellants contend that the act contravenes the due
process clause in that it prohibits the owners from
making lawful disposition or use of their land, and
makes it a criminal offense for them to lease it to the
alien, and prohibits him from following the occupation
of farmer; and they contend that it is repugnant to the
equal protection clause in that aliens are divided into
two classes,—those who may and those who may not
become citizens, one class being permitted, while the
other is forbidden, to own and as defined.
10
Alien inhabitants of a state, as well as all other
persons within its jurisdiction, may invoke the
protection of these clauses. Yick Wo v. Hopkins, 118
U. S. 356, 369, 6 Sup. Ct. 1064, 30 L. Ed. 220; Truax
v. Raich, supra, 239 U. S. 39, 36 Sup. Ct. 7, 60 L. Ed.
131, L. R. A. 1916D, 545 Ann. Cas. 1917B, 283.
The Fourteenth Amendment, as against the arbitrary
and capricious or unjustly discriminatory action of the
state, protects the owners in their right to lease and
dispose of their land for lawful purposes and the alien
resident in his right to earn a living by following
ordinary occupations of the community, but it does not
take away from the state those powers of police that
were reserved at the time of the adoption of the
Constitution. Barbier v. Connolly. And in the exercise
of such powers the state has wide discretion in
determining its own public policy and what measures
are necessary for its own protection and properly to
promote the safety, peace and good order of its
people.
11
And, while Congress has exclusive jurisdiction over
immigration, naturalization and the disposal of the
public domain, each state, in the absence of any
treaty provision to the contrary, has power to deny to
aliens the right to own land within its borders.
Hauenstein v. Lynham, 100 U. S. 483, 484, 488, 25 L.
Ed. 628; Blythe v. Hinckley, 180 U. S. 333, 340, 21
Sup. Ct. 390, 45 L. Ed. 557; Mr. Justice Field,
speaking for this court (Phillips v. Moore, 100 U. S.
208, at page 212, 25 L. Ed. 603), said:
12
'By the common law, an alien cannot acquire real
property by operation of law, but may take it by act of
the grantor, and hold it until office found; that is, until
the fact of alienage is authoritatively established by a
public officer, upon an inquest held at the instance of
the government.'3
13
State legislation applying alike and equally to all
aliens, withholding from them the right to own land,
cannot be said to be capricious or to amount to an
arbitrary deprivation of liberty or property, or to
transgress the due process clause.
14
This brings us to a consideration of appellants'
contention that the act contravenes the equal
protection clause. That clause secures equal
protection to all in the enjoyment of their rights under
like circumstances. In re Kemmler, supra; Giozza v.
Tiernan, 148 U. S. 657, 662, 13 Sup. Ct. 721, 37 L.
Ed. 599. But this does not forbid every distinction in
the law of a state between citizens and aliens resident
therein. In Truax v. Corrigan, 257 U. S. 312, at page
337, 42 Sup. Ct. 124, at page 131 (66 L. Ed. 254), this
court said:
15
'In adjusting legislation to the need of the people of a
state, the legislature has a wide discretion and it may
be fully conceded that perfect uniformity of treatment
of all persons is neither practical nor desirable, that
classification of persons is constantly necessary. * * *
Classification is the most inveterate of our reasoning
processes. We can scarcely think or speak without
consciously or unconsciously exercising it. It must
therefore obtain in and determine legislation; but it
must regard real resemblances and real differences
between things, and persons, and class them in
accordance with thier pertinence to the purpose in
hand.'
16
The rights, privileges and duties of aliens differ widely
from those of citizens; and those of alien declarants
differ substantially from those of nondeclarants.
Formerly in many of the states the right to vote and
hold office was extended to declarants, and many
important offices have been held by them. But these
rights have not been granted to nondeclarants. By
various acts of Congress,4 declarants have been
made liable to military duty, but no act has imposed
that duty on nondeclarants. The fourth paragraph of
article 1 of the treaty (37 Stat. 1504), invoked by the
appellants, provides that the citizens or subjects of
each shall be exempt in the territories of the other
from compulsory military service either on land or sea,
in the regular forces, or in the national guard, or in the
militia; also from all contributions imposed in lieu of
personal service, and from all forced loans or military
exactions or contributions. The alien's formally
declared bona fide intention to renounce forever all
allegiance and fidelity to the sovereignty to which he
lately has been a subject, and to become a citizen of
the United States and permanently reside
therein5 markedly distinguishes him from an ineligible
alien or an eligible alien who has not so declared.
17 a state law withholding from aliens the privilege of
land ownership as defined in the act. We agree with
the court below (274 Fed. 841, 846) that:
By the statute in question all aliens who have not in
good faith declared intention to become citizens of the
United States, as specified in section 1(a), are called 19
'aliens,' and it is provided that they shall not 'own'
'land,' as defined in clauses (d) and (b) of section 1
'It is obvious that one who is not a citizen and cannot
respectively. The class so created includes all, but is
become one lacks an interest in, and the power to
not limited to, aliens not eligible to become citizens.
effectually work for the welfare of, the state, and, so
Eligible aliens who have not declared their intention to
lacking, the state may rightfully deny him the right to
become citizens are included, and the act provides
own and lease real estate within its boundaries. If one
that unless declarants be admitted to citizenship
incapable of citizenship may lease or own real estate,
within seven years after the declaration is made, bad
it is within the realm of possibility that every foot of
faith will be presumed. This leaves the class permitted
land within the state might pass to the ownership or
so to own land made up of citizens and aliens who
possession of noncitizens.'
may, and who intend to, become citizens, and who in
good faith have made the declaration required by the
naturalization laws. The inclusion of good faith 20
declarants in the same class with citizens does not
unjustly discriminate against aliens who are ineligible
And we think it is clearly within the power of the state
or against eligible aliens who have failed to declare
to include nondeclarant eligible aliens and ineligible
their intention. The classification is based on eligibility
aliens in the same prohibited class. Reasons
and purpose to naturalize. Eligible aliens are free
supporting discrimination against aliens who may but
white persons and persons of African nativity or
who will not naturalize are obvious.
descent.6 Congress is not trammeled, and it may
grant or withhold the privilege of naturalization upon
any grounds or without any reason, as it sees fit. But it 21
is not to be supposed that its acts defining eligibility
are arbitrary or unsupported by reasonable
Truax v. Raich, supra, does not support the
consideration of public policy.
appellants' contention. In that case the court held to
be repugnant to the Fourteenth Amendment an act of
18 the Legislature of Arizona making it a criminal offense
for an employer of more than five workers at any one
time, regardless of kind or class of work, or sex of
The state properly may assume that the
workers, to employ less than 80 per cent. qualified
considerations upon which Congress made such
electors or native-born citizens of the United States. In
classification are substantial and reasonable.
the opinion it was pointed out that the legislation there
Generally speaking, the natives of European countries
in question did not relate to the devolution of real
are eligible. Japanese, Chinese and Malays are not.
property, but that the discrimination was imposed
Appellants' contention that the state act discriminates
upon the conduct of ordinary private enterprise
arbitrarily against Nakatsuka and other ineligible
covering the entire field of industry with the exception
aliens because of their race and color is without
of enterprises that were relatively very small. It was
foundation. All persons of whatever color or race who
said that the right to work for a living in the common
have not declared their intention in good faith to
occupations of the community is a part of the freedom
become citizens are prohibited from so owning
which it was the purpose of the Fourteenth
agricultural lands. Two classes of aliens inevitably
Amendment to secure.
result from the naturalization laws those who may and
those who may not become citizens. The rule
established by Congress on this subject, in and of 22
itself, furnishes a reasonable basis for classification in
In the case before us, the thing forbidden is very
different. It is not an opportunity to earn a living in
common occupations of the community, but it is the
privilege of owning or controlling agricultural land
within the state. The quality and allegiance of those
who own, occupy and use the farm lands within its
borders are matters of highest importance and affect
the safety and power of the state itself.
23
The Terraces, who are citizens, have no right
safeguarded by the Fourteenth Amendment to lease
their land to aliens lawfully forbidden to take or have
such lease. The state act is not repugnant to the
equal protection clause and does not contravene
the Fourteenth Amendment.
24
3. The state act, in our opinion, is not in conflict with
the treaty7 between the United States and Japan. The
preamble declares it to be 'a treaty of commerce and
navigation,' and indicates that it was entered into for
the purpose of establishing the rules to govern
commercial intercourse between the countries.
25
The only provision that relates to owning or leasing
land is in the first paragraph of article 1, which is as
follows:
26
'The citizens or subjects of each of the high
contracting parties shall have liberty to enter, travel
and reside in the territories of the other to carry on
trade, wholesale and retail, to own or lease and
occupy houses, manufactories, warehouses and
shops, to employ agents of their choice, to lease land
for residential and commercial purposes, and
generally to do anything incident to or necessary for
trade upon the same terms as native citizens or
subjects, submitting themselves to the laws and
regulations there established.'
27 But if the language left the meaning of its provisions
doubtful or obscure, the circumstances of the making
of the treaty, as set forth in the opinion of the District
For the purpose of bringing Nakatsuka within the
Court (supra, 274 Fed. 844, 845), would resolve all
protection of the treaty, the amended complaint
doubts against the appellants' contention. The letter of
alleges that, in addition to being a capable farmer, he
Secretary of State Bryan to Viscount Chinda, July 16,
is engaged in the business of trading, wholesale and
1913, shows that, in accordance with the desire of
retail, in farm products and shipping the same in
Japan, the right to own land was not conferred. And it
intrastate, interstate and foreign commerce, and,
appears that the right to lease land for other than
instead of purchasing such farm products, he has
residential and commercial purposes was deliberately
produced, and desires to continue to produce, his own
withheld by substituting the words of the treaty, 'to
farm products for the purpose of selling them in such
lease land for residential and commercial purposes,'
wholesale and retail trade, and if he is prevented from
for a more comprehensive clause contained in an
leasing land for the purpose of producing farm
earlier draft of the instrument, namely, 'to lease land
products for such trade he will be prevented from
for residential, commercial, industrial, manufacturing
engaging in trade and the incidents to trade, as he is
and other lawful purposes.'
authorized to do under the treaty.
30
28
4. The act complained of is not repugnant to section
To prevail on this point, appellants must show conflict
33 of article 2 of the state Constitution.
between the state act and the treaty. Each state, in
the absence of any treaty provision conferring the
right may enact laws prohibiting aliens from owning 31
land within its borders. Unless the right to own or
lease land is given by the treaty, no question of
That section provides that 'the ownership of lands by
conflict can arise. We think that the treaty not only
aliens * * * is prohibited in this state. * * *' Appellants
contains no provision giving Japanese the right to own
assert that the proposed lease of farm land for five
or lease land for agricultural purposes, but, when
years is not 'ownership,' and is not prohibited by that
viewed in the light of the negotiations leading up to its
clause of the state Constitution and cannot be
consummation, the language shows that the high
forbidden by the state Legislature. That position is
contracting parties respectively intended to withhold a
untenable. In State v. O'Connell, 121 Wash. 542, 209
treaty grant of that right to the citizens or subjects of
Pac. 865, a suit for the purpose of escheating to the
either in the territories of the other. The right to 'carry
state an undivided one-half interest in land, or the
on trade' or 'to own or lease and occupy houses,
proceeds thereof, held in trust for the benefit of an
manufactories, warehouses and shops,' or 'to lease
alien, a subject of the British empire, decided since
land for residential and commercial purposes,' or 'to
this appeal was taken, the Supreme Court of
do anything incident to or necessary for trade' cannot
Washington held that the statute in question did not
be said to include the right to own or lease or to have
contravene this provision of the Constitution of that
any title to or interest in land for agricultural purposes.
state. The question whether or not a state statute
The enumeration of rights to own or lease for other
conflicts with the Constitution of the state is settled by
specified purposes impliedly negatives the right to
the decision of its highest court. Carstairs v.
own or lease land for these purposes. A careful
Cochran, 193 U. S. 10, 16, 24 Sup. Ct. 318, 48 L. Ed.
reading of the treaty suffices in our opinion to negative
596. This court 'is without authority to review and
the claim asserted by appellant that it conflicts with
revise the construction affixed to a state statute as to
the state act.
a state matter by the court of last resort of the state.'
Quong Ham Wah Co. v. Industrial Commission, 255
29 U. S. 445, 448, 41 Sup. Ct. 373, 374 (65 L. Ed. 723),
and cases cited.
32
The decree of the District Court is affirmed.
33
Mr. Justice McREYNOLDS and Mr. Justice
BRANDEIS think there is no justiciable question
involved and that the case should have been
dismissed on that ground.
34
Mr. Justice SUTHERLAND took no part in the
consideration or decision of this case.
1 property:
Section 33. The ownership of lands by aliens, other
than those who in good faith have declared their
intention to become citizens of the United States, is
prohibited in this state, except where acquired by
inheritance, under mortgage or in good faith in the
ordinary course of justice in the collection of debts;
and all conveyances of lands hereafter made to any
alien directly or in trust for such alien, shall be void:
Provided, that the provisions of this section shall not
apply to lands containing valuable deposits of
minerals, metals, iron, coal, or fire clay, and the
necessary land for mills and machinery to be used in
the development thereof and the manufacture of the
products therefrom. Every corporation, the majority of
the capital stock of which is owned by aliens, shall be
considered an alien for the purposes of this
prohibition.
2 of the sovereign.' See also 1 Cooley's Blackstone (4th
Section 1. In this act, unless the context otherwise
requires.
(a) 'Alien' does not include an alien who has in good
faith declared his intention to become a citizen of the
United States, but does include all other aliens and all
corporations and other organized groups of persons a
majority of whose capital stock is owned or controlled
by aliens or a majority of whose members are aliens; Art. 416. The following things are deemed to be personal
property:
(b) 'Land' does not include lands containing valuable
deposits of minerals, metals, iron, coal or fire clay or (1) Those movables susceptible of appropriation which
are not included in the preceding article;
the necessary land for mills and machinery to be used
in the development thereof and the manufacture of
the products therefrom, but does include every other (2) Real property which by any special provision of law is
kind of land and every interest therein and right to the considered as personal property;
control, possession, use, enjoyment, rents, issues or
profits thereof. * * * (3) Forces of nature which are brought under control by
science; and
(d) To 'own' means to have the legal or equitable title
to or the right to any benefit of; (4) In general, all things which can be transported from
place to place without impairment of the real property to
which they are fixed. (335a)
(e) 'Title' includes every kind of legal or equitable title.
***
Art. 417. The following are also considered as personal
Section 2. An alien shall not own land or take or hold
title thereto. No person shall take or hold land or title (1) Obligations and actions which have for their object
to land for an alien. Land now held by or for aliens in movables or demandable sums; and
violation of the constitution of the state is forfeited to
and declared to be the property of the state. Land (2) Shares of stock of agricultural, commercial and
hereafter conveyed to or for the use of aliens in industrial entities, although they may have real
violation of the constitution or of this act shall thereby
be forfeited to and become the property of the state. estate. (336a)
3 Republic of the Philippines
SUPREME COURT
Manila
In Fairfax's Devisee v. Hunter's Lessee, 7 Cranch,
603, 609, 619, 620 (3 L. Ed. 453), it was said, per
THIRD DIVISION
Story, J.: 'It is clear by the common law, that an alien
can take lands by purchase, though not by descent; or
in other words he cannot take by the act of law, but he G.R. No. 77859 May 25, 1988
may by the act of the party. * * * In the language of the
ancient law, the alien has the capacity to take, but not
to hold lands, and they may be seized into the hands CENTURY TEXTILE MILLS, INC. and ALFREDO T.
ESCAÑO, petitioners,
Ed.) 315, *372; 2 Kent's Commentaries (14th Ed.) 80, vs.
*54. NATIONAL LABOR RELATIONS COMMISSION,
HON. LABOR ARBITER FELIPE P. PATI, and
EDUARDO CALANGI, respondents.
CHAPTER 2
Melanio L. Zoreta for petitioners.
MOVABLE PROPERTY
The Solicitor General for public respondent.
Alfonso P. Ancheta, Jr. for private respondent.
FELICIANO, J.:
Since 13 December 1974, private respondent
Eduardo Calangi had been employed at the factory of
petitioner Century Textile Mills, Inc. where he worked
initially as an apprentice and later on as a machine
operator in the Finishing Department. Effective 10
June 1983, however, petitioner Corporation, acting
through its company officers, 1 placed him under
preventive suspension and, on 27 July 1983,
completely terminated his services with the company.
Private respondent Calangi was accused of having
masterminded a criminal plot against Melchor Meliton
and Antonio Santos, two of his supervisors at his
place of work.
The events that led to private respondent's dismissal
are as follows:
desire to avenge themselves upon Meliton and
Santos, both of whom had instigated their (i.e., 3 years 903.60
Torrena's and private respondent's) suspension from
work several times in the past. 4 These circumstances d)
moved petitioner Corporation preventively to suspend Vacatio
Torrena and private respondent Calangi, and n and
eventually to dismiss them from its employ. Sick
Additionally, criminal charges for attempted murder
Leave 627.00
were filed against these two employees with the
of 15
Office of the Provincial Fiscal of Rizal.
days
each
On 11 October 1983, private respondent Calangi filed
a Complaint 5 for illegal dismissal (docketed as Case
Exempl
No. NLRC-NCR-10-4518-83) with the Arbitration
ary
Branch, National Capital Region, of the then Ministry
damag
of Labor and Employment. Among other things,
es
private respondent alleged in his complaint that
"[p]rior to his preventive suspension neither the
company nor any of its officers furnished him [with] a Attorne
copy of their charges, if any, nor afforded him the y's fees
opportunity to answer the same and defend himself."
Hence, private respondent claimed entitlement to the TOTAL
following:

According to Rodolfo Marin (a factory co-worker of A. A prayer for "such other reliefs and remedies
private respondent Calangi), at around 12:15 a.m. on Moral consequent upon the premises" was likewise set out
4 June 1983 and within company premises, he damag in the complaint.
chanced upon "Gatchie" Torrena (a machine operator es
at petitioner's factory) and noticed the latter mixing In a Decision 6 dated 16 August 1984, the Labor
some substance with the drinking water contained in a Actual Arbiter dismissed private respondent's Complaint. The
pitcher from which Meliton and Santos regularly damag Labor Arbiter found that not only was the evidence
drank. Before anyone could take a drink from the es against private respondent Calangi "so overwhelming"
pitcher, Marin reported what he had observed to and "sufficient enough" to justify his dismissal, but that
Meliton who, in turn, informed Santos of the same. a) P6,520 private respondent had himself failed inexplicably to
Soon after, Meliton and Santos took possession of the Wages .80 deny or controvert the charges against him.
pitcher of water and filed a formal report of the for 3
incident with company management. 2 The contents of years
the pitcher were subsequently brought to and An appeal was brought by private respondent Calangi
analyzed by chemists at the Philippine Constabulary before the public respondent National Labor Relations
b) 3, Commission, which agency, on 3 December 1985,
Crime Laboratory at Camp Crame, Quezon City who ECOLA 841.60
found the presence of a toxic chemical rendered a Decision, 7 the dispositive portion of which
for 3 reads:
(formaldehyde) therein. 3 years

In the police investigation that followed, Torrena c) 13th WHEREFORE, with all the
confessed that private respondent Calangi personally month foregoing considerations, let the
instructed him, and he agreed, to place formaldehyde pay for appealed decision dated 27
in the pitcher of water. Torrena also admitted that he August 1984 be, as it is hereby
and private respondent were then motivated by a REVERSED. Accordingly,
 complainant's dismissal is hereby
declared to be illegal, and
consequently, respondents
[petitioners] are hereby ordered
to reinstate Eduardo Calangi to
his former or equivalent position
without loss of seniority and other
benefits, with full backwages from
27 July 1983 until he is actually
reinstated.
SO ORDERED.
Petitioner Corporations' Motion for Reconsideration
was denied on 4 April 1986. Sometime in November
of 1986, the Labor Arbiter issued a writ of execution
directing petitioners to pay private respondent Calangi
the amount of P54,747.74 representing the latter's
backwages, 13th month pay, living allowance, and
vacation and sick leave — i.e., actual damages.
The present Petition for certiorari with Preliminary
Injunction or Restraining Order was filed with this
Court on 3 April 1987. The Court issued a Temporary
Restraining Orders 8 on 8 April 1987 and, on 24
August 1987, issued a Resolution 9 giving due course
to the Petition and directing the parties to submit their
respective memoranda.
Public respondent Commission found that private union and
respondent Calangi was effectively denied his right to the
due process in that, prior to his preventive suspension management
and the termination of his services, he had not been .
given the opportunity either to affirm or refute the
charges proferred against him by petitioner
Be guided accordingly.
Corporation. Petitioners allege however that private
respondent Calangi had been previously informed of
and given the chance to answer the company's MANAGEMENT
accusations against him, but that he had "kept silent"
all the while. The following Memorandum issued by
(SGD.) Jovencio G. Tolentino
petitioner's Personnel Manager on 10 June 1983
(Calangi's first day of preventive suspension) was
cited in this connection: Personnel Manager
MEMO: TO ALL CONCERNED Petitioners contend that the above Memorandum
"clearly shows that prior investigation and consultation
with the union was made," and "will therefore negate
SUBJ.: Under Preventive
the theory of respondents that respondent Calangi
Suspension Employees. Please
was not afforded the chance to present his side for
be advised that the following
the memo itself speaks otherwise."
employees are under preventive
suspension (indefinite) namely:
The procedure that an employer wishing to terminate
the services of an employee must follow, is spelled
1. Eduardo Calangi--effective
out in the Labor Code:
June 10, 1983
ART. 278. Miscellaneous
2. Gatchie Torrena--effective
provisions. —
June 10, 1983

The Petition at bar raises the following issues for xxx xxx xxx
GROUND
consideration: (1) whether or not private respondent
Calangi was illegally dismissed from his job as
machine operator; and (2) assuming he was illegally However, the employer shall
Policy Instruction No. 10 of the
dismissed, whether or not petitioner Corporation can fumish the worker whose
New Labor Code of the
be ordered legally (a) to reinstate private respondent employment is sought to be
Philippines, Revised Edition
Calangi to his former position in the company, with full terminated a written notice
1982.
backwages and without loss of seniority rights and containing a statement of the
other benefits, considering that such relief had not causes for termination and shall
NOTE: afford the latter ample
been sought by private respondent in his complaint,
Decision opportunity to be heard and to
and (b) to pay private respondent an amount for
about the defend himself with the
actual damages in excess of what had been claimed
indebtedness assistance of his representative if
by the latter in his Complaint.
suspension he so desires in accordance with
of concerned company rules and regulations
We sustain the ruling of public respondent employees promulgated pursuant to
Commission that private respondent Calangi had was reached guidelines set by the
been dismissed without just cause from his after the [Department] of Labor and
employment by petitioner Corporation. meeting Employment. Any decision taken
between the by the employer shall be without
 prejudice to the right of the
worker to contest the validity and
legality of his dismissing by filing
a complaint with the regional
branch of the National Labor
Relations Commission. The
burden of proving that the
termination was for a valid or
authorized cause shall rest on
the employer. The [Department]
may suspend the effects of the
termination pending resolution of
the case in the event of a prima
facie finding by the Ministry that
the termination may cause a
serious labor dispute or is in
implementation of a mass lay-off.
xxx xxx xxx
(Emphasis supplied)
Rule XIV, Book V of the Rules and Regulations
Implementing the Labor Code reiterates the above
requirements:
xxx xxx xxx
Sec. 2. Notice of dismissal.
— Any employer who seeks to
dismiss a worker shall furnish him
a written notice stating the
particular acts or omission
constituting the grounds for his
dismissal. In case of
abandomment of work, the notice
shall be served at the worker's
last known address.
xxx xxx xxx
Sec. 5. Answer and hearing. —
The worker may answer the
allegations stated against him in
the notice of dismissal within a
reasonable period from receipt of
such notice. The employer shall
afford the worker ample
opportunity to be heard and to
defend himself with the
assistance of his representative,
if he so desires.
SEC. 6. Decision to dismiss.
— The employer shall
immediately notify a worker in
writing of a decision to dismiss
him stating clearly the reasons
therefor.
xxx xxx xxx
(Emphasis supplied)
The twin requirements of notice and hearing
constitute essential elements of due process in cases
of employee dismissal: the requirement of notice is
intended to inform the employee concerned of the
employer's intent to dismiss and the reason for the
proposed dismissal; upon the other hand, the
requirement of hearing affords the employee an
opportunity to answer his employer's charges against
him and accordingly to defend himself therefrom
before dismissal is effected. Neither of these two
requirements can be dispensed with without running
afoul of the due process requirement of the 1987
Constitution.
The record of this case is bereft of any indication that
a hearing or other gathering was in fact held where
private respondent Calangi was given a reasonable
opportunity to confront his accuser(s) and to defend
against the charges made by the latter. Petitioner
Corporation's "prior consultation" with the labor union
with which private respondent Calangi was affiliated,
was legally insufficient. So far as the record shows,
neither petitioner nor the labor union actually advised
Calangi of the matters at issue. The Memorandum of
petitioner's Personnel Manager certainly offered no
helpful particulars. It is important to stress that the
rights of an employee whose services are sought to
be terminated to be informed beforehand of his
proposed dismissal (or suspension) as well as of the
reasons therefor, and to be afforded an adequate
opportunity to defend himself from the charges
levelled against him, are rights personal to the
employee. Those rights were not satisfied by
petitioner Corporation's obtaining the consent of or
consulting with the labor union; such consultation or
consent was not a substitute for actual observance of
those rights of private respondent Calangi. The
employee can waive those rights, if he so chooses,
but the union cannot waive them for him. That the
private respondent simply 'kept silent" all the while, is
not adequate to show an effective waiver of his rights.
Notice and opportunity to be heard must be accorded
by an employer even though the employee does not
affirmatively demand them.
Investigation of the alleged attempt to poison the
drinking water of the two (2) supervisors of the private
respondent was conducted by the Cainta police
authorities. These authorities interrogated and took
the sworn statements of Messrs. Marin, Torrena,
Meliton and Santos who, in one way or another, had
been involved in such incident. Petitioners argue that
the decision to place private respondent Calangi
under preventive suspension and subsequently to
terminate his services was arrived at only after the
incident complained of, and Mr. Calangi, had been
investigated by the company. There is, once again,
nothing in the record to show that private respondent
Calangi been interrogated by the Cainta police
authorities or by anyone else; indeed, it appears that
practically everybody, save Calangi, was so
interrogated by the police. If petitioner Corporation did
notify and investigate private respondent and did hold
a hearing, petitioners have succeeded in keeping
such facts off the record. It needs no documentation,
but perhaps it should be stressed, that this Court can
act only on the basis of matters which have been
submitted in evidence and made part of the record.
Additionally, the Court notes that the application filed
by petitioner Corporation with the Ministry of Labor
and Employment for clearance to suspend or
terminate the services of Mr. Calangi, cited as ground
therefor "[Calangi's] frustrated plan to poison Mr.
Antonio Santos and Mr. Melchor Meliton last June 5,
1983." This ground, so far as can be gathered from
the allegations of petitioners in their pleadings and
from the evidence of record, both in the public
respondent Commission and in this Court, is
anchored mainly, if not wholly on Mr. Torrena's sworn
statement, given to the Cainta police authorities, that
both he (Torrena) and private respondent had
conspired with each other to inflict physical harm upon
the persons of Messrs. Meliton and Santos. A finding
of private respondent's participation in the alleged
criminal conspiracy cannot, however, be made to rest
solely on the unilateral declaration of Mr. Torrena
himself a confirmed "co-conspirator." Such declaration
must be corroborated by other competent and
convincing evidence. In. the absence of such other
evidence, Mr. Torrena's "confession" implicating Mr.
Calangi must be received with considerable caution.
The very least that petitioner Corporation should have
done was to confront private respondent with
Torrena's sworn statement; the record does not show
that petitioner Corporation did so. The burden of
showing the existence of a just cause for terminating
the services of private respondent Calangi lay on the
petitioners. Petitioners have not discharged that
burden.
It remains only to note that the criminal complaint for
attempted murder against Mr. Calangi was dismissed
by the Provincial Fiscal of Rizal. 10
Coming now to the second issue raised by petitioners
in their Pleadings, Article 280 of the Labor Code, as
amended states:
Art. 280. -Security of Tenure. —
In case of regular employment,
the employer shall not terminate
the services of an employee
except for a just cause or when
authorized by this Title. An
employee who is unjustly
dismissed from work shall be
entitled to reinstatement without
loss of seniority rights and to his
backwages computed from the
time his compensation was
withheld from him up to the time
of his reinstatement. (Emphasis
supplied)
We have held in the past that both reinstatement,
without loss of seniority rights, and payment of
backwages are the normal consequences of a finding
that an employee has been illegaly dismissed, and SO ORDERED.
which remedies together make the dismissed
employee whole. 11 A finding of illegal dismissal
having been correctly made in this case by public
respondent Commission, private respondent is, as a
matter of right, entitled to receive both types of relief
made available in Article 280 of the Labor Code, as
amended. It matters not that private respondent
Calangi had omitted in his complaint filed in Case No.
NLRC-NCR-10-4518-83 a claim for reinstatement
without loss of seniority rights for he is entitled to such
relief as the facts alleged and proved warrant. 12
In view of the finding of illegal dismissal in this case,
petitioner Corporation is liable to private respondent
Calangi for payment of the latter's backwages for
three (3) years, without qualification and deduction.
Considering the circumstances of this case, however,
the Court beheves that reinstatement of private
respondent to his former position—or to any other
equivalent position in the company — will not serve
the best interests of the parties involved. Petitioner
Corporation should not be compelled to take back in
its fold an employee who, at least in the minds of his
employers, poses a significant threat to the lives and
safety of company workers. Consequently, we hold
that private respondent should be given his separation
pay in lieu of such reinstatement. The amount of
separation pay shall be equal to private respondent's
one-half (1/2) month's salary for every year of service,
to be computed from 13 December 1974 (date of first
employment) until 10 June 1986 (three years after
date of illegal dismissal). 13
WHEREFORE, the Petition for certiorari is
DISMISSED. The Temporary Restraining Order and
the Resolutions issued on 8 April 1987 and 24 August
1987, respectively, by the Court in this case are
WITHDRAWN. The Decision of public rAshville
respondent Commission in Case No. NLRC-NCR-10-
4518-83 is hereby AFFIRMED, subject the the
modifications that petitioners shall pay private
respondent Calangi: (a) three (3) years backwages
without qualification or deduction, and (b) separation
pay, computed as above indicated, in lieu of
reinstatement. No pronouncement as to costs.
DUE PROCESS
Substantive due process involves determining
whether a law is fair or if it violates constitutional
protections. Procedural due process is the method of
government action or how the law is carried out.
Substantive due process requires the intrinsic validity
of the law in interfering with the rights of the person to
his life, liberty, or property, while procedural due
process consists of the two basic rights of notice and
hearing, as well as the guarantee of being heard by
an impartial and competent tribunal.Sep 2, 2022
Republic of the Philippines
SUPREME COURT
Manila
EN BANC
G.R. No. L-11390 March 26, 1918
EL BANCO ESPAÑOL-FILIPINO, plaintiff-appellant,
vs.
VICENTE PALANCA, administrator of the estate of
Engracio Palanca Tanquinyeng, defendant-
appellant.
Aitken and DeSelms for appellant.
Hartigan and Welch for appellee.
STREET, J.:
This action was instituted upon March 31, 1908, by "El
Banco Espanol-Filipino" to foreclose a mortgage upon
various parcels of real property situated in the city of
Manila. The mortgage in question is dated June 16,
1906, and was executed by the original defendant
herein, Engracio Palanca Tanquinyeng y Limquingco,
as security for a debt owing by him to the bank. Upon
March 31, 1906, the debt amounted to P218,294.10
and was drawing interest at the rate of 8 per centum
per annum, payable at the end of each quarter. It
appears that the parties to this mortgage at that time
estimated the value of the property in question at
P292,558, which was about P75,000 in excess of the
indebtedness. After the execution of this instrument against him by default. Upon July 3, 1908, a decision
by the mortgagor, he returned to China which appears was rendered in favor of the plaintiff. In this decision it
to have been his native country; and he there died, was recited that publication had been properly made
upon January 29, 1810, without again returning to the in a periodical, but nothing was said about this notice
Philippine Islands. having been given mail. The court, upon this
occasion, found that the indebtedness of the
defendant amounted to P249,355. 32, with interest
As the defendant was a nonresident at the time of the
from March 31, 1908. Accordingly it was ordered that
institution of the present action, it was necessary for
the defendant should, on or before July 6, 1908,
the plaintiff in the foreclosure proceeding to give
deliver said amount to the clerk of the court to be
notice to the defendant by publication pursuant to
applied to the satisfaction of the judgment, and it was
section 399 of the Code of Civil Procedure. An order
declared that in case of the failure of the defendant to
for publication was accordingly obtained from the
satisfy the judgment within such period, the mortgage
court, and publication was made in due form in a
property located in the city of Manila should be
newspaper of the city of Manila. At the same time that
exposed to public sale. The payment contemplated in
the order of the court should deposit in the post office
said order was never made; and upon July 8, 1908,
in a stamped envelope a copy of the summons and
the court ordered the sale of the property. The sale
complaint directed to the defendant at his last place of
took place upon July 30, 1908, and the property was
residence, to wit, the city of Amoy, in the Empire of
bought in by the bank for the sum of P110,200. Upon
China. This order was made pursuant to the following
August 7, 1908, this sale was confirmed by the court.
provision contained in section 399 of the Code of Civil
Procedure:
About seven years after the confirmation of this sale,
or to the precise, upon June 25, 1915, a motion was
In case of publication, where the residence
made in this cause by Vicente Palanca, as
of a nonresident or absent defendant is
administrator of the estate of the original defendant,
known, the judge must direct a copy of the
Engracio Palanca Tanquinyeng y Limquingco,
summons and complaint to be forthwith
wherein the applicant requested the court to set aside
deposited by the clerk in the post-office,
the order of default of July 2, 1908, and the judgment
postage prepaid, directed to the person to
rendered upon July 3, 1908, and to vacate all the
be served, at his place of residence
proceedings subsequent thereto. The basis of this
application, as set forth in the motion itself, was that
Whether the clerk complied with this order does not the order of default and the judgment rendered
affirmatively appear. There is, however, among the thereon were void because the court had never
papers pertaining to this case, an affidavit, dated April acquired jurisdiction over the defendant or over the
4, 1908, signed by Bernardo Chan y Garcia, an subject of the action.
employee of the attorneys of the bank, showing that
upon that date he had deposited in the Manila post-
At the hearing in the court below the application to
office a registered letter, addressed to Engracio
vacate the judgment was denied, and from this action
Palanca Tanquinyeng, at Manila, containing copies of
of the court Vicente Planca, as administrator of the
the complaint, the plaintiff's affidavit, the summons,
estate of the original defendant, has appealed. No
and the order of the court directing publication as
other feature of the case is here under consideration
aforesaid. It appears from the postmaster's receipt
than such as related to the action of the court upon
that Bernardo probably used an envelope obtained
said motion.
from the clerk's office, as the receipt purports to show
that the letter emanated from the office.
The case presents several questions of importance,
which will be discussed in what appears to be the
The cause proceeded in usual course in the Court of
sequence of most convenient development. In the first
First Instance; and the defendant not having
part of this opinion we shall, for the purpose of
appeared, judgment was, upon July 2, 1908, taken
argument, assume that the clerk of the Court of First
Instance did not obey the order of the court in the
matter of mailing the papers which he was directed to
send to the defendant in Amoy; and in this connection
we shall consider, first, whether the court acquired the
necessary jurisdiction to enable it to proceed with the
foreclosure of the mortgage and, secondly, whether
those proceedings were conducted in such manner as
to constitute due process of law.
The word "jurisdiction," as applied to the faculty of
exercising judicial power, is used in several different,
though related, senses since it may have reference
(1) to the authority of the court to entertain a particular
kind of action or to administer a particular kind of
relief, or it may refer to the power of the court over the
parties, or (2) over the property which is the subject to
the litigation.
The sovereign authority which organizes a court
determines the nature and extent of its powers in
general and thus fixes its competency or jurisdiction
with reference to the actions which it may entertain
and the relief it may grant.
Jurisdiction over the person is acquired by the
voluntary appearance of a party in court and his
submission to its authority, or it is acquired by the
coercive power of legal process exerted over the
person.
Jurisdiction over the property which is the subject of
the litigation may result either from a seizure of the
property under legal process, whereby it is brought
into the actual custody of the law, or it may result from
the institution of legal proceedings wherein, under
special provisions of law, the power of the court over
the property is recognized and made effective. In the
latter case the property, though at all times within the
potential power of the court, may never be taken into
actual custody at all. An illustration of the jurisdiction
acquired by actual seizure is found in attachment
proceedings, where the property is seized at the
beginning of the action, or some subsequent stage of
its progress, and held to abide the final event of the
litigation. An illustration of what we term potential
jurisdiction over the res, is found in the proceeding to
register the title of land under our system for the
registration of land. Here the court, without taking
actual physical control over the property assumes, at
the instance of some person claiming to be owner, to
exercise a jurisdiction in rem over the property and to
adjudicate the title in favor of the petitioner against all
the world.
In the terminology of American law the action to
foreclose a mortgage is said to be a proceeding quasi
in rem, by which is expressed the idea that while it is
not strictly speaking an action in rem yet it partakes of
that nature and is substantially such. The expression
"action in rem" is, in its narrow application, used only
with reference to certain proceedings in courts of
admiralty wherein the property alone is treated as
responsible for the claim or obligation upon which the
proceedings are based. The action quasi rem differs
from the true action in rem in the circumstance that in
the former an individual is named as defendant, and
the purpose of the proceeding is to subject his interest
therein to the obligation or lien burdening the property.
All proceedings having for their sole object the sale or
other disposition of the property of the defendant,
whether by attachment, foreclosure, or other form of
remedy, are in a general way thus designated. The
judgment entered in these proceedings is conclusive
only between the parties.
In speaking of the proceeding to foreclose a mortgage
the author of a well known treaties, has said:
Though nominally against person, such
suits are to vindicate liens; they proceed
upon seizure; they treat property as
primarily indebted; and, with the
qualification above-mentioned, they are
substantially property actions. In the civil
law, they are styled hypothecary actions,
and their sole object is the enforcement of
the lien against the res; in the common law,
they would be different in chancery did not
treat the conditional conveyance as a mere
hypothecation, and the creditor's right ass
an equitable lien; so, in both, the suit is real
action so far as it is against property, and
seeks the judicial recognition of a property
debt, and an order for the sale of
the res. (Waples, Proceedings In Rem. sec.
607.)
It is true that in proceedings of this character, if the
defendant for whom publication is made appears, the
action becomes as to him a personal action and is
conducted as such. This, however, does not affect the
proposition that where the defendant fails to appear
the action is quasi in rem; and it should therefore be
considered with reference to the principles governing
actions in rem.
There is an instructive analogy between the
foreclosure proceeding and an action of attachment,
concerning which the Supreme Court of the United
States has used the following language:
If the defendant appears, the cause
becomes mainly a suit in personam, with
the added incident, that the property
attached remains liable, under the control of
the court, to answer to any demand which
may be established against the defendant
by the final judgment of the court. But, if
there is no appearance of the defendant,
and no service of process on him, the case
becomes, in its essential nature, a
proceeding in rem, the only effect of which
is to subject the property attached to the
payment of the defendant which the court
may find to be due to the plaintiff. (Cooper
vs. Reynolds, 10 Wall., 308.)
In an ordinary attachment proceeding, if the defendant
is not personally served, the preliminary seizure is to,
be considered necessary in order to confer jurisdiction
upon the court. In this case the lien on the property is
acquired by the seizure; and the purpose of the
proceedings is to subject the property to that lien. If a
lien already exists, whether created by mortgage,
contract, or statute, the preliminary seizure is not
necessary; and the court proceeds to enforce such
lien in the manner provided by law precisely as
though the property had been seized upon
attachment. (Roller vs. Holly, 176 U. S., 398, 405; 44
L. ed., 520.) It results that the mere circumstance that
in an attachment the property may be seized at the
inception of the proceedings, while in the foreclosure
suit it is not taken into legal custody until the time
comes for the sale, does not materially affect the
fundamental principle involved in both cases, which is
that the court is here exercising a jurisdiction over the
property in a proceeding directed essentially in rem.
Passing now to a consideration of the jurisdiction of
the Court of First Instance in a mortgage foreclosure,
it is evident that the court derives its authority to
entertain the action primarily from the statutes
organizing the court. The jurisdiction of the court, in
this most general sense, over the cause of action is
obvious and requires no comment. Jurisdiction over
the person of the defendant, if acquired at all in such
an action, is obtained by the voluntary submission of
the defendant or by the personal service of process
upon him within the territory where the process is
valid. If, however, the defendant is a nonresident and,
remaining beyond the range of the personal process
of the court, refuses to come in voluntarily, the court
never acquires jurisdiction over the person at all. Here
the property itself is in fact the sole thing which is
impleaded and is the responsible object which is the
subject of the exercise of judicial power. It follows that
the jurisdiction of the court in such case is based
exclusively on the power which, under the law, it
possesses over the property; and any discussion
relative to the jurisdiction of the court over the person
of the defendant is entirely apart from the case. The
jurisdiction of the court over the property, considered
as the exclusive object of such action, is evidently
based upon the following conditions and
considerations, namely: (1) that the property is
located within the district; (2) that the purpose of the
litigation is to subject the property by sale to an
obligation fixed upon it by the mortgage; and (3) that
the court at a proper stage of the proceedings takes
the property into custody, if necessary, and expose it
to sale for the purpose of satisfying the mortgage
debt. An obvious corollary is that no other relief can
be granted in this proceeding than such as can be
enforced against the property.
We may then, from what has been stated, formulated
the following proposition relative to the foreclosure
proceeding against the property of a nonresident
mortgagor who fails to come in and submit himself
personally to the jurisdiction of the court: (I) That the
jurisdiction of the court is derived from the power
which it possesses over the property; (II) that
jurisdiction over the person is not acquired and is
nonessential; (III) that the relief granted by the court
must be limited to such as can be enforced against
the property itself.
It is important that the bearing of these propositions
be clearly apprehended, for there are many
expressions in the American reports from which it
might be inferred that the court acquires personal
jurisdiction over the person of the defendant by
publication and notice; but such is not the case. In
truth the proposition that jurisdiction over the person
of a nonresident cannot be acquired by publication
and notice was never clearly understood even in the
American courts until after the decision had been
rendered by the Supreme Court of the United States
in the leading case of Pennoyer vs. Neff (95 U. S.
714; 24 L. ed., 565). In the light of that decision, and
of other decisions which have subsequently been
rendered in that and other courts, the proposition that
jurisdiction over the person cannot be thus acquired
by publication and notice is no longer open to
question; and it is now fully established that a
personal judgment upon constructive or substituted
service against a nonresident who does not appear is
wholly invalid. This doctrine applies to all kinds of
constructive or substituted process, including service
by publication and personal service outside of the
jurisdiction in which the judgment is rendered; and the
only exception seems to be found in the case where
the nonresident defendant has expressly or impliedly
consented to the mode of service. (Note to Raher vs.
Raher, 35 L. R. A. [N. S. ], 292; see also 50 L .R. A.,
585; 35 L. R. A. [N. S.], 312
The idea upon which the decision in Pennoyer vs.
Neff (supra) proceeds is that the process from the
tribunals of one State cannot run into other States or
countries and that due process of law requires that
the defendant shall be brought under the power of the
court by service of process within the State, or by his
voluntary appearance, in order to authorize the court
to pass upon the question of his personal liability. The
doctrine established by the Supreme Court of the
United States on this point, being based upon the
constitutional conception of due process of law, is
binding upon the courts of the Philippine Islands.
Involved in this decision is the principle that in
proceedings in rem or quasi in rem against a
nonresident who is not served personally within the
state, and who does not appear, the relief must be
confined to the res, and the court cannot lawfully
render a personal judgment against him. (Dewey vs.
Des Moines, 173 U. S., 193; 43 L. ed., 665; Heidritter
vs. Elizabeth Oil Cloth Co., 112 U. S., 294; 28 L. ed.,
729.) Therefore in an action to foreclose a mortgage
against a nonresident, upon whom service has been
effected exclusively by publication, no personal
judgment for the deficiency can be entered. (Latta vs.
Tutton, 122 Cal., 279; Blumberg vs. Birch, 99 Cal.,
416.)
It is suggested in the brief of the appellant that the
judgment entered in the court below offends against
the principle just stated and that this judgment is void
because the court in fact entered a personal judgment
against the absent debtor for the full amount of the
indebtedness secured by the mortgage. We do not so
interpret the judgment.
In a foreclosure proceeding against a nonresident
owner it is necessary for the court, as in all cases of
foreclosure, to ascertain the amount due, as
prescribed in section 256 of the Code of Civil
Procedure, and to make an order requiring the
defendant to pay the money into court. This step is a
necessary precursor of the order of sale. In the
present case the judgment which was entered
contains the following words:
Because it is declared that the said
defendant Engracio Palanca Tanquinyeng y
Limquingco, is indebted in the amount of
P249,355.32, plus the interest, to the
'Banco Espanol-Filipino' . . . therefore said
appellant is ordered to deliver the above
amount etc., etc.
This is not the language of a personal judgment.
Instead it is clearly intended merely as a compliance
with the requirement that the amount due shall be
ascertained and that the evidence of this it may be
observed that according to the Code of Civil
Procedure a personal judgment against the debtor for
the deficiency is not to be rendered until after the
property has been sold and the proceeds applied to
the mortgage debt. (sec. 260).
The conclusion upon this phase of the case is that
whatever may be the effect in other respects of the
failure of the clerk of the Court of First Instance to mail
the proper papers to the defendant in Amoy, China,
such irregularity could in no wise impair or defeat the
jurisdiction of the court, for in our opinion that
jurisdiction rest upon a basis much more secure than
would be supplied by any form of notice that could be
given to a resident of a foreign country.
Before leaving this branch of the case, we wish to
observe that we are fully aware that many reported
cases can be cited in which it is assumed that the
question of the sufficiency of publication or notice in a
case of this kind is a question affecting the jurisdiction
of the court, and the court is sometimes said to
acquire jurisdiction by virtue of the publication. This
phraseology was undoubtedly originally adopted by
the court because of the analogy between service by
the publication and personal service of process upon
the defendant; and, as has already been suggested,
prior to the decision of Pennoyer vs. Neff (supra) the
difference between the legal effects of the two forms
of service was obscure. It is accordingly not surprising
that the modes of expression which had already been
molded into legal tradition before that case was
decided have been brought down to the present day.
But it is clear that the legal principle here involved is
not effected by the peculiar language in which the
courts have expounded their ideas.
We now proceed to a discussion of the question
whether the supposed irregularity in the proceedings
was of such gravity as to amount to a denial of that
"due process of law" which was secured by the Act of
Congress in force in these Islands at the time this
mortgage was foreclosed. (Act of July 1, 1902, sec.
5.) In dealing with questions involving the application
of the constitutional provisions relating to due process
of law the Supreme Court of the United States has
refrained from attempting to define with precision the
meaning of that expression, the reason being that the
idea expressed therein is applicable under so many
diverse conditions as to make any attempt ay precise
definition hazardous and unprofitable. As applied to a
judicial proceeding, however, it may be laid down with
certainty that the requirement of due process is
satisfied if the following conditions are present,
namely; (1) There must be a court or tribunal clothed
with judicial power to hear and determine the matter
before it; (2) jurisdiction must be lawfully acquired
over the person of the defendant or over the property
which is the subject of the proceeding; (3) the
defendant must be given an opportunity to be heard;
and (4) judgment must be rendered upon lawful
hearing.
Passing at once to the requisite that the defendant
shall have an opportunity to be heard, we observe
that in a foreclosure case some notification of the
proceedings to the nonresident owner, prescribing the
time within which appearance must be made, is
everywhere recognized as essential. To answer this
necessity the statutes generally provide for
publication, and usually in addition thereto, for the
mailing of notice to the defendant, if his residence is
known. Though commonly called constructive, or
substituted service of process in any true sense. It is
merely a means provided by law whereby the owner
may be admonished that his property is the subject of
judicial proceedings and that it is incumbent upon him
to take such steps as he sees fit to protect it. In
speaking of notice of this character a distinguish
master of constitutional law has used the following
language:
. . . if the owners are named in the
proceedings, and personal notice is
provided for, it is rather from tenderness to
their interests, and in order to make sure
that the opportunity for a hearing shall not
be lost to them, than from any necessity
that the case shall assume that form.
(Cooley on Taxation [2d. ed.], 527, quoted
in Leigh vs. Green, 193 U. S., 79, 80.)
It will be observed that this mode of notification does
not involve any absolute assurance that the absent
owner shall thereby receive actual notice. The
periodical containing the publication may never in fact
come to his hands, and the chances that he should
discover the notice may often be very slight. Even
where notice is sent by mail the probability of his
receiving it, though much increased, is dependent
upon the correctness of the address to which it is
forwarded as well as upon the regularity and security
of the mail service. It will be noted, furthermore, that
the provision of our law relative to the mailing of
notice does not absolutely require the mailing of
notice unconditionally and in every event, but only in
the case where the defendant's residence is known. In
the light of all these facts, it is evident that actual
notice to the defendant in cases of this kind is not,
under the law, to be considered absolutely necessary.
The idea upon which the law proceeds in recognizing
the efficacy of a means of notification which may fall
short of actual notice is apparently this: Property is
always assumed to be in the possession of its owner,
in person or by agent; and he may be safely held,
under certain conditions, to be affected with
knowledge that proceedings have been instituted for
its condemnation and sale.
It is the duty of the owner of real estate,
who is a nonresident, to take measures that
in some way he shall be represented when
his property is called into requisition, and if
he fails to do this, and fails to get notice by
the ordinary publications which have usually
been required in such cases, it is his
misfortune, and he must abide the
consequences. (6 R. C. L., sec. 445 [p.
450]).
It has been well said by an American court:
If property of a nonresident cannot be
reached by legal process upon the
constructive notice, then our statutes were
passed in vain, and are mere empty
legislative declarations, without either force,
or meaning; for if the person is not within
the jurisdiction of the court, no personal
judgment can be rendered, and if the
judgment cannot operate upon the property,
then no effective judgment at all can be
rendered, so that the result would be that
the courts would be powerless to assist a
citizen against a nonresident. Such a result
would be a deplorable one. (Quarl vs.
Abbett, 102 Ind., 233; 52 Am. Rep., 662,
667.)
It is, of course universally recognized that the
statutory provisions relative to publication or other
form of notice against a nonresident owner should be
complied with; and in respect to the publication of
notice in the newspaper it may be stated that strict
compliance with the requirements of the law has been
held to be essential. In Guaranty Trust etc. Co. vs.
Green Cove etc., Railroad Co. (139 U. S., 137, 138), it
was held that where newspaper publication was made
for 19 weeks, when the statute required 20, the
publication was insufficient.
With respect to the provisions of our own statute,
relative to the sending of notice by mail, the
requirement is that the judge shall direct that the
notice be deposited in the mail by the clerk of the
court, and it is not in terms declared that the notice
must be deposited in the mail. We consider this to be
of some significance; and it seems to us that, having
due regard to the principles upon which the giving of
such notice is required, the absent owner of the
mortgaged property must, so far as the due process
of law is concerned, take the risk incident to the
possible failure of the clerk to perform his duty,
somewhat as he takes the risk that the mail clerk or
the mail carrier might possibly lose or destroy the
parcel or envelope containing the notice before it
should reach its destination and be delivered to him.
This idea seems to be strengthened by the
consideration that placing upon the clerk the duty of
sending notice by mail, the performance of that act is
put effectually beyond the control of the plaintiff in the
litigation. At any rate it is obvious that so much of
section 399 of the Code of Civil Procedure as relates
to the sending of notice by mail was complied with
when the court made the order. The question as to
what may be the consequences of the failure of the
record to show the proof of compliance with that
requirement will be discussed by us further on.
The observations which have just been made lead to
the conclusion that the failure of the clerk to mail the
notice, if in fact he did so fail in his duty, is not such
an irregularity, as amounts to a denial of due process
of law; and hence in our opinion that irregularity, if
proved, would not avoid the judgment in this case.
Notice was given by publication in a newspaper and
this is the only form of notice which the law
unconditionally requires. This in our opinion is all that
was absolutely necessary to sustain the proceedings.
It will be observed that in considering the effect of this
irregularity, it makes a difference whether it be viewed
as a question involving jurisdiction or as a question
involving due process of law. In the matter of
jurisdiction there can be no distinction between the
much and the little. The court either has jurisdiction or
it has not; and if the requirement as to the mailing of
notice should be considered as a step antecedent to
the acquiring of jurisdiction, there could be no escape
from the conclusion that the failure to take that step
was fatal to the validity of the judgment. In the
application of the idea of due process of law, on the
other hand, it is clearly unnecessary to be so rigorous.
The jurisdiction being once established, all that due
process of law thereafter requires is an opportunity for
the defendant to be heard; and as publication was
duly made in the newspaper, it would seem highly
unreasonable to hold that failure to mail the notice
was fatal. We think that in applying the requirement of
due process of law, it is permissible to reflect upon the
purposes of the provision which is supposed to have
been violated and the principle underlying the
exercise of judicial power in these proceedings. Judge
in the light of these conceptions, we think that the
provision of Act of Congress declaring that no person
shall be deprived of his property without due process
of law has not been infringed.
In the progress of this discussion we have stated the
two conclusions; (1) that the failure of the clerk to
send the notice to the defendant by mail did not
destroy the jurisdiction of the court and (2) that such
irregularity did not infringe the requirement of due
process of law. As a consequence of these
conclusions the irregularity in question is in some
measure shorn of its potency. It is still necessary,
however, to consider its effect considered as a simple
irregularity of procedure; and it would be idle to
pretend that even in this aspect the irregularity is not
grave enough. From this point of view, however, it is
obvious that any motion to vacate the judgment on the
ground of the irregularity in question must fail unless it
shows that the defendant was prejudiced by that
irregularity. The least, therefore, that can be required
of the proponent of such a motion is to show that he
had a good defense against the action to foreclose
the mortgage. Nothing of the kind is, however, shown
either in the motion or in the affidavit which
accompanies the motion.
An application to open or vacate a judgment because
of an irregularity or defect in the proceedings is
usually required to be supported by an affidavit
showing the grounds on which the relief is sought,
and in addition to this showing also a meritorious
defense to the action. It is held that a general
statement that a party has a good defense to the
action is insufficient. The necessary facts must be
averred. Of course if a judgment is void upon its face
a showing of the existence of a meritorious defense is
not necessary. (10 R. C. L., 718.)
The lapse of time is also a circumstance deeply
affecting this aspect of the case. In this connection we
quote the following passage from the encyclopedic
treatise now in course of publication:
Where, however, the judgment is not void
on its face, and may therefore be enforced
if permitted to stand on the record, courts in
many instances refuse to exercise their
quasi equitable powers to vacate a
judgement after the lapse of the term ay
which it was entered, except in clear cases,
to promote the ends of justice, and where it
appears that the party making the
application is himself without fault and has
acted in good faith and with ordinary
diligence. Laches on the part of the
applicant, if unexplained, is deemed
sufficient ground for refusing the relief to
which he might otherwise be entitled.
Something is due to the finality of
judgments, and acquiescence or
unnecessary delay is fatal to motions of this
character, since courts are always reluctant
to interfere with judgments, and especially
where they have been executed or
satisfied. The moving party has the burden
of showing diligence, and unless it is shown
affirmatively the court will not ordinarily
exercise its discretion in his favor. (15 R. C.
L., 694, 695.)
It is stated in the affidavit that the defendant, Engracio
Palanca Tanquinyeng y Limquingco, died January 29,
1910. The mortgage under which the property was
sold was executed far back in 1906; and the
proceedings in the foreclosure were closed by the
order of court confirming the sale dated August 7,
1908. It passes the rational bounds of human credulity
to suppose that a man who had placed a mortgage
upon property worth nearly P300,000 and had then
gone away from the scene of his life activities to end
his days in the city of Amoy, China, should have long
remained in ignorance of the fact that the mortgage
had been foreclosed and the property sold, even
supposing that he had no knowledge of those
proceedings while they were being conducted. It is
more in keeping with the ordinary course of things that
he should have acquired information as to what was
transpiring in his affairs at Manila; and upon the basis
of this rational assumption we are authorized, in the
absence of proof to the contrary, to presume that he
did have, or soon acquired, information as to the sale
of his property.
The Code of Civil Procedure, indeed, expressly
declares that there is a presumption that things have
happened according to the ordinary habits of life (sec.
334 [26]); and we cannot conceive of a situation more
appropriate than this for applying the presumption
thus defined by the lawgiver. In support of this
presumption, as applied to the present case, it is
permissible to consider the probability that the
defendant may have received actual notice of these
proceedings from the unofficial notice addressed to
him in Manila which was mailed by an employee of
the bank's attorneys. Adopting almost the exact words
used by the Supreme Court of the United States in
Grannis vs. Ordeans (234 U. S., 385; 58 L. ed., 1363),
we may say that in view of the well-known skill of
postal officials and employees in making proper
delivery of letters defectively addressed, we think the
presumption is clear and strong that this notice
reached the defendant, there being no proof that it
was ever returned by the postal officials as
undelivered. And if it was delivered in Manila, instead
of being forwarded to Amoy, China, there is a
probability that the recipient was a person sufficiently
interested in his affairs to send it or communicate its
contents to him.
Of course if the jurisdiction of the court or the
sufficiency of the process of law depended upon the
mailing of the notice by the clerk, the reflections in
which we are now indulging would be idle and
frivolous; but the considerations mentioned are
introduced in order to show the propriety of applying
to this situation the legal presumption to which
allusion has been made. Upon that presumption,
supported by the circumstances of this case, ,we do
not hesitate to found the conclusion that the
defendant voluntarily abandoned all thought of saving
his property from the obligation which he had placed
upon it; that knowledge of the proceedings should be
imputed to him; and that he acquiesced in the
consequences of those proceedings after they had
been accomplished. Under these circumstances it is
clear that the merit of this motion is, as we have
already stated, adversely affected in a high degree by
the delay in asking for relief. Nor is it an adequate
reply to say that the proponent of this motion is an
administrator who only qualified a few months before
this motion was made. No disability on the part of the
defendant himself existed from the time when the
foreclosure was effected until his death; and we
believe that the delay in the appointment of the
administrator and institution of this action is a
circumstance which is imputable to the parties in
interest whoever they may have been. Of course if the
minor heirs had instituted an action in their own right
to recover the property, it would have been different.
It is, however, argued that the defendant has suffered
prejudice by reason of the fact that the bank became
the purchaser of the property at the foreclosure sale
for a price greatly below that which had been agreed
upon in the mortgage as the upset price of the
property. In this connection, it appears that in article
nine of the mortgage which was the subject of this
foreclosure, as amended by the notarial document of
July 19, 1906, the parties to this mortgage made a
stipulation to the effect that the value therein placed
upon the mortgaged properties should serve as a
basis of sale in case the debt should remain unpaid
and the bank should proceed to a foreclosure. The
upset price stated in that stipulation for all the parcels
involved in this foreclosure was P286,000. It is said in
behalf of the appellant that when the bank bought in
the property for the sum of P110,200 it violated that
stipulation.
It has been held by this court that a clause in a
mortgage providing for a tipo, or upset price, does not
prevent a foreclosure, nor affect the validity of a sale
made in the foreclosure proceedings. (Yangco vs.
Cruz Herrera and Wy Piaco, 11 Phil. Rep., 402;
Banco-Español Filipino vs. Donaldson, Sim and Co., 5
Phil. Rep., 418.) In both the cases here cited the
property was purchased at the foreclosure sale, not
by the creditor or mortgagee, but by a third party.
Whether the same rule should be applied in a case
where the mortgagee himself becomes the purchaser
has apparently not been decided by this court in any
reported decision, and this question need not here be
considered, since it is evident that if any liability was
incurred by the bank by purchasing for a price below
that fixed in the stipulation, its liability was a personal
liability derived from the contract of mortgage; and as
we have already demonstrated such a liability could
not be the subject of adjudication in an action where
the court had no jurisdiction over the person of the
defendant. If the plaintiff bank became liable to
account for the difference between the upset price
and the price at which in bought in the property, that
liability remains unaffected by the disposition which
the court made of this case; and the fact that the bank
may have violated such an obligation can in no wise
affect the validity of the judgment entered in the Court
of First Instance.
In connection with the entire failure of the motion to
show either a meritorious defense to the action or that
the defendant had suffered any prejudice of which the
law can take notice, we may be permitted to add that
in our opinion a motion of this kind, which proposes to
unsettle judicial proceedings long ago closed, can not
be considered with favor, unless based upon grounds
which appeal to the conscience of the court. Public
policy requires that judicial proceedings be upheld.
The maximum here applicable is non quieta movere.
As was once said by Judge Brewer, afterwards a
member of the Supreme Court of the United States:
Public policy requires that judicial
proceedings be upheld, and that titles
obtained in those proceedings be safe from
the ruthless hand of collateral attack. If
technical defects are adjudged potent to
destroy such titles, a judicial sale will never
realize that value of the property, for no
prudent man will risk his money in bidding
for and buying that title which he has
reason to fear may years thereafter be
swept away through some occult and not
 readily discoverable defect. (Martin vs.
Pond, 30 Fed., 15.)
In the case where that language was used an attempt
was made to annul certain foreclosure proceedings on
the ground that the affidavit upon which the order of
publication was based erroneously stated that the
State of Kansas, when he was in fact residing in
another State. It was held that this mistake did not
affect the validity of the proceedings.
In the preceding discussion we have assumed that
the clerk failed to send the notice by post as required
by the order of the court. We now proceed to consider
whether this is a proper assumption; and the
proposition which we propose to establish is that there
is a legal presumption that the clerk performed his
duty as the ministerial officer of the court, which
presumption is not overcome by any other facts
appearing in the cause.
In subsection 14 of section 334 of the Code of Civil
Procedure it is declared that there is a presumption
"that official duty has been regularly performed;" and
in subsection 18 it is declared that there is a
presumption "that the ordinary course of business has
been followed." These presumptions are of course in
no sense novelties, as they express ideas which have
always been recognized. Omnia presumuntur rite et
solemniter esse acta donec probetur in contrarium.
There is therefore clearly a legal presumption that the
clerk performed his duty about mailing this notice; and
we think that strong considerations of policy require
that this presumption should be allowed to operate
with full force under the circumstances of this case. A
party to an action has no control over the clerk of the
court; and has no right to meddle unduly with the
business of the clerk in the performance of his duties.
Having no control over this officer, the litigant must
depend upon the court to see that the duties imposed
on the clerk are performed.
Other considerations no less potent contribute to
strengthen the conclusion just stated. There is no
principle of law better settled than that after
jurisdiction has once been required, every act of a
court of general jurisdiction shall be presumed to have
been rightly done. This rule is applied to every
judgment or decree rendered in the various stages of was void for lack of jurisdiction. But the Supreme
the proceedings from their initiation to their completion Court of the United States said:
(Voorhees vs. United States Bank, 10 Pet., 314; 35 U.
S., 449); and if the record is silent with respect to any
The court which made the decree . . . was a
fact which must have been established before the
court of general jurisdiction. Therefore
court could have rightly acted, it will be presumed that
every presumption not inconsistent with the
such fact was properly brought to its knowledge. (The
record is to be indulged in favor of its
Lessee of Grignon vs. Astor, 2 How., 319; 11 L. ed.,
jurisdiction. . . . It is to be presumed that the
283.)
court before making its decree took care of
to see that its order for constructive service,
In making the order of sale [of the real state on which its right to make the decree
of a decedent] the court are presumed to depended, had been obeyed.
have adjudged every question necessary to
justify such order or decree, viz: The death
It is true that in this case the former judgment was the
of the owners; that the petitioners were his
subject of collateral , or indirect attack, while in the
administrators; that the personal estate was
case at bar the motion to vacate the judgment is direct
insufficient to pay the debts of the
proceeding for relief against it. The same general
deceased; that the private acts of
presumption, however, is indulged in favor of the
Assembly, as to the manner of sale, were
judgment of a court of general jurisdiction, whether it
within the constitutional power of the
is the subject of direct or indirect attack the only
Legislature, and that all the provisions of
difference being that in case of indirect attack the
the law as to notices which are directory to
judgment is conclusively presumed to be valid unless
the administrators have been complied with.
the record affirmatively shows it to be void, while in
. . . The court is not bound to enter upon the
case of direct attack the presumption in favor of its
record the evidence on which any fact was
validity may in certain cases be overcome by proof
decided. (Florentine vs. Barton, 2 Wall.,
extrinsic to the record.
210; 17 L. ed., 785.) Especially does all this
apply after long lapse of time.
The presumption that the clerk performed his duty and
that the court made its decree with the knowledge that
Applegate vs. Lexington and Carter County Mining
the requirements of law had been complied with
Co. (117 U. S., 255) contains an instructive discussion
appear to be amply sufficient to support the
in a case analogous to that which is now before us. It
conclusion that the notice was sent by the clerk as
there appeared that in order to foreclose a mortgage
required by the order. It is true that there ought to be
in the State of Kentucky against a nonresident debtor
found among the papers on file in this cause an
it was necessary that publication should be made in a
affidavit, as required by section 400 of the Code of
newspaper for a specified period of time, also be
Civil Procedure, showing that the order was in fact so
posted at the front door of the court house and be
sent by the clerk; and no such affidavit appears. The
published on some Sunday, immediately after divine
record is therefore silent where it ought to speak. But
service, in such church as the court should direct. In a
the very purpose of the law in recognizing these
certain action judgment had been entered against a
presumptions is to enable the court to sustain a prior
nonresident, after publication in pursuance of these
judgment in the face of such an omission. If we were
provisions. Many years later the validity of the
to hold that the judgment in this case is void because
proceedings was called in question in another action.
the proper affidavit is not present in the file of papers
It was proved from the files of an ancient periodical
which we call the record, the result would be that in
that publication had been made in its columns as
the future every title in the Islands resting upon a
required by law; but no proof was offered to show the
judgment like that now before us would depend, for its
publication of the order at the church, or the posting of
continued security, upon the presence of such
it at the front door of the court-house. It was insisted
affidavit among the papers and would be liable at any
by one of the parties that the judgment of the court
moment to be destroyed by the disappearance of that
piece of paper. We think that no court, with a proper
regard for the security of judicial proceedings and for
the interests which have by law been confided to the
courts, would incline to favor such a conclusion. In our
opinion the proper course in a case of this kind is to
hold that the legal presumption that the clerk
performed his duty still maintains notwithstanding the
absence from the record of the proper proof of that
fact.
In this connection it is important to bear in mind that
under the practice prevailing in the Philippine Islands
the word "record" is used in a loose and broad sense,
as indicating the collective mass of papers which
contain the history of all the successive steps taken in
a case and which are finally deposited in the archives
of the clerk's office as a memorial of the litigation. It is
a matter of general information that no judgment roll,
or book of final record, is commonly kept in our courts
for the purpose of recording the pleadings and
principal proceedings in actions which have been
terminated; and in particular, no such record is kept in
the Court of First Instance of the city of Manila. There
is, indeed, a section of the Code of Civil Procedure
which directs that such a book of final record shall be
kept; but this provision has, as a matter of common
knowledge, been generally ignored. The result is that
in the present case we do not have the assistance of
the recitals of such a record to enable us to pass upon
the validity of this judgment and as already stated the
question must be determined by examining the
papers contained in the entire file.
But it is insisted by counsel for this motion that the
affidavit of Bernardo Chan y Garcia showing that upon
April 4, 1908, he sent a notification through the mail
addressed to the defendant at Manila, Philippine
Islands, should be accepted as affirmative proof that
the clerk of the court failed in his duty and that,
instead of himself sending the requisite notice through
the mail, he relied upon Bernardo to send it for him.
We do not think that this is by any means a necessary
inference. Of course if it had affirmatively appeared
that the clerk himself had attempted to comply with
this order and had directed the notification to Manila
when he should have directed it to Amoy, this would
be conclusive that he had failed to comply with the
exact terms of the order; but such is not this case.
That the clerk of the attorneys for the plaintiff
erroneously sent a notification to the defendant at a SEC. 113. Upon such terms as may be just
mistaken address affords in our opinion very slight the court may relieve a party or legal
basis for supposing that the clerk may not have sent representative from the judgment, order, or
notice to the right address. other proceeding taken against him through
his mistake, inadvertence, surprise, or
excusable neglect; Provided, That
There is undoubtedly good authority to support the
application thereof be made within a
position that when the record states the evidence or
reasonable time, but in no case exceeding
makes an averment with reference to a jurisdictional
six months after such judgment, order, or
fact, it will not be presumed that there was other or
proceeding was taken.
different evidence respecting the fact, or that the fact
was otherwise than stated. If, to give an illustration, it
appears from the return of the officer that the An additional remedy by petition to the Supreme
summons was served at a particular place or in a Court is supplied by section 513 of the same Code.
particular manner, it will not be presumed that service The first paragraph of this section, in so far as
was also made at another place or in a different pertinent to this discussion, provides as follows:
manner; or if it appears that service was made upon a
person other than the defendant, it will not be
When a judgment is rendered by a Court of
presumed, in the silence of the record, that it was
First Instance upon default, and a party
made upon the defendant also (Galpin vs. Page, 18
thereto is unjustly deprived of a hearing by
Wall., 350, 366; Settlemier vs. Sullivan, 97 U. S., 444,
fraud, accident, mistake or excusable
449). While we believe that these propositions are
negligence, and the Court of First Instance
entirely correct as applied to the case where the
which rendered the judgment has finally
person making the return is the officer who is by law
adjourned so that no adequate remedy
required to make the return, we do not think that it is
exists in that court, the party so deprived of
properly applicable where, as in the present case, the
a hearing may present his petition to the
affidavit was made by a person who, so far as the
Supreme Court within sixty days after he
provisions of law are concerned, was a mere
first learns of the rendition of such
intermeddler.
judgment, and not thereafter, setting forth
the facts and praying to have judgment set
The last question of importance which we propose to aside. . . .
consider is whether a motion in the cause is
admissible as a proceeding to obtain relief in such a
It is evident that the proceeding contemplated in this
case as this. If the motion prevails the judgment of
section is intended to supplement the remedy
July 2, 1908, and all subsequent proceedings will be
provided by section 113; and we believe the
set aside, and the litigation will be renewed,
conclusion irresistible that there is no other means
proceeding again from the date mentioned as if the
recognized by law whereby a defeated party can, by a
progress of the action had not been interrupted. The
proceeding in the same cause, procure a judgment to
proponent of the motion does not ask the favor of
be set aside, with a view to the renewal of the
being permitted to interpose a defense. His purpose is
litigation.
merely to annul the effective judgment of the court, to
the end that the litigation may again resume its
regular course. The Code of Civil Procedure purports to be a
complete system of practice in civil causes, and it
contains provisions describing with much fullness the
There is only one section of the Code of Civil
various steps to be taken in the conduct of such
Procedure which expressly recognizes the authority of
proceedings. To this end it defines with precision the
a Court of First Instance to set aside a final judgment
method of beginning, conducting, and concluding the
and permit a renewal of the litigation in the same
civil action of whatever species; and by section 795 of
cause. This is as follows:
the same Code it is declared that the procedure in all
civil action shall be in accordance with the provisions
of this Code. We are therefore of the opinion that the
remedies prescribed in sections 113 and 513 are
exclusive of all others, so far as relates to the opening
and continuation of a litigation which has been once
concluded.
The motion in the present case does not conform to
the requirements of either of these provisions; and the
consequence is that in our opinion the action of the
Court of First Instance in dismissing the motion was
proper.
If the question were admittedly one relating merely to
an irregularity of procedure, we cannot suppose that
this proceeding would have taken the form of a motion
in the cause, since it is clear that, if based on such an
error, the came to late for relief in the Court of First
Instance. But as we have already seen, the motion
attacks the judgment of the court as void for want of
jurisdiction over the defendant. The idea underlying
the motion therefore is that inasmuch as the judgment
is a nullity it can be attacked in any way and at any
time. If the judgment were in fact void upon its face,
that is, if it were shown to be a nullity by virtue of its
own recitals, there might possibly be something in
this. Where a judgment or judicial order is void in this
sense it may be said to be a lawless thing, which can
be treated as an outlaw and slain at sight, or ignored
wherever and whenever it exhibits its head.
But the judgment in question is not void in any such
sense. It is entirely regular in form, and the alleged
defect is one which is not apparent upon its face. It
follows that even if the judgment could be shown to be
void for want of jurisdiction, or for lack of due process
of law, the party aggrieved thereby is bound to resort
to some appropriate proceeding to obtain relief. Under
accepted principles of law and practice, long
recognized in American courts, a proper remedy in
such case, after the time for appeal or review has
passed, is for the aggrieved party to bring an action to
enjoin the judgment, if not already carried into effect;
or if the property has already been disposed of he
may institute suit to recover it. In every situation of this
character an appropriate remedy is at hand; and if
property has been taken without due process, the law
concedes due process to recover it. We accordingly
old that, assuming the judgment to have been void as
alleged by the proponent of this motion, the proper
remedy was by an original proceeding and not by
motion in the cause. As we have already seen our
Code of Civil Procedure defines the conditions under
which relief against a judgment may be productive of
conclusion for this court to recognize such a
proceeding as proper under conditions different from
those defined by law. Upon the point of procedure
here involved, we refer to the case of People vs.
Harrison (84 Cal., 607) wherein it was held that a
motion will not lie to vacate a judgment after the lapse
of the time limited by statute if the judgment is not
void on its face; and in all cases, after the lapse of the
time limited by statute if the judgment is not void on its
face; and all cases, after the lapse of such time, when
an attempt is made to vacate the judgment by a
proceeding in court for that purpose an action
regularly brought is preferable, and should be
required. It will be noted taken verbatim from the
California Code (sec. 473).
The conclusions stated in this opinion indicate that the
judgment appealed from is without error, and the
same is accordingly affirmed, with costs. So ordered.
Separate Opinions
MALCOLM, J., dissenting:
I dissent. It will not make me long to state my reasons.
An immutable attribute — the fundamental idea — of
due process of law is that no man shall be
condemned in his person or property without notice
and an opportunity of being heard in his defense.
Protection of the parties demands a strict and an
exact compliance with this constitutional provision in
our organic law and of the statutory provisions in
amplification. Literally hundreds of precedents could
be cited in support of these axiomatic principles.
Where as in the instant case the defendant received
no notice and had no opportunity to be heard,
certainly we cannot say that there is due process of
law. Resultantly, "A judgment which is void upon its
face, and which requires only an inspection of the
judgment roll to demonstrate its want of vitality is a
dead limb upon the judicial tree, which should be
lopped off, if the power so to do exists. It can bear no
fruit to the plaintiff, but is a constant menace to the
defendant." (Mills vs. Dickons, 6 Rich [S. C.], 487.)
DOCTRINE
Jurisdiction over the property which is the subject of the
litigation may result either from a seizure of the property
under legal process, where it is brought into actual custody
of the law, or may result from the institution of legal
proceedings which gives the court has power over the
property under special provisions of the law.
FACTS
Engracio Palanca entered into a mortgage agreement with
Plaintiff-Appellee El Banco Español, secured by various
parcels of real property. After the execution of the
agreement, Engacio left the Philippines for China where he
lived and died. Thereafter, the mortgage defaulted,
prompting the Plaintiff-Appellee to institute an action for
foreclosure of the mortgaged property before the Court of
First Instance (CFI). Since Engracio was a non-resident at
the time of the action, the Plaintiff-Appellee made the
necessary notice by publication, and deposited in the post
office a copy of the summons and complaint to Engracio’s
last known residence. The action proceeded before the CFI
with Engracio failing to appear. As such, a judgment by
default was rendered in favor of Plaintiff-Appellee,
ordering Engracio to deliver the amount of the mortgage.
Failure to comply shall result in the public sale of the
mortgaged property. The payment was never made. Thus,
the CFI ordered the sale of the mortgaged property.
After seven (7) years, Defendant-Appellant Vicente
Palanca, the administrator of the estate of Engracio, filed a
motion to set aside the order of the CFI on the ground that
it never acquired jurisdiction over Engracio or over the
subject of the action. The CFI denied the motion; hence, the
present Petition.
ISSUE
Whether or not the CFI acquired jurisdiction over the action
for foreclosure.
RULING
YES. The Supreme Court held that jurisdiction over the
property which is the subject of the litigation may result
either from a seizure of the property under legal process,
where it is brought into actual custody of the law, or may
result from the institution of legal proceedings which gives
the court has power over the property under special
provisions of the law. An example of the latter
is jurisdiction over the res whereby the court assumes to
exercise jurisdiction in rem over the property, and to
adjudicate the title in favor of the petitioner against all the
world, without even taking actual physical control over the
property. Further, in an action to foreclose a mortgage
against a non-resident, the relief must be confined to the res
and not against the person himself.
In the present case, the mortgaged property is the sole thing
which is impleaded and is the responsible object which is
the subject of the exercise of judicial power. The
jurisdiction of the CFI is based exclusively on the power
which it possesses over the property under the law on land
registration.
DISPOSITIVE PORTION
Judgment appealed is AFFIRMED.
CaseDig: El Banco Espanol vs. Palanca
G.R. No. L-11390; March 26, 1918
Posted by: Rianne Fernandez
FACTS:
cases is vested with the power to subject property to
the obligation created by the mortgage. In such case
Engracio Palanca was indebted to El Banco and he personal jurisdiction over the non-resident defendant
had his parcel of land as security to his debt which is non-essential and in fact cannot be acquired.
amounted to 218, 294. 10 Php while his property was
worth 75, 000 Php more than what he owed. Due to Email ThisBlogThis!Share to TwitterShare to
his failure to pay, El Banco executed an instrument to FacebookShare to Pinterest
mortgage the former's property. However, Engracio
left for Amoy, China and eventually died there. The Ang Tibay v. CIR, 69 Phil 635 (1940)
mortgagor then instituted foreclosure proceeding but
since defendant is a non-resident, it was necessary to
give notice by publication. The Clerk of Court was also 10/28/2020
directed to send copy of the summons to the
0 COMMENTS
defendant's last known address but it was not shown
whether the Clerk complied with this requirement.
Nevertheless, after publication in a newspaper of the
City of Manila, the cause proceeded and judgment by Ang Tibay v. CIR, 69 Phil 635 (1940)
default was rendered. The decision was likewise
published and afterwards sale by public auction was
held with the bank as the highest bidder and the same
was confirmed by the court. However, about seven FACTS:
years after the confirmation of this sale, a motion was
made by Vicente Palanca, as administrator of the
estate of the original defendant, wherein he requested
the court to set aside the order of default and the
judgment, and to vacate all the proceedings
subsequent thereto. On the ground that the order of  Toribio Teodoro, owner of Ang Tibay, a leather
default and the judgment rendered thereon were void
because the court had never acquired jurisdiction over company which supplies the Philippine Army,
the defendant or over the subject of the action.
averred that a number of his employees were
temporarily laid off due to alleged shortage of
ISSUE:
leather soles.
Whether or not the court acquired jurisdiction over
the defendant and the subject matter or the action.
 On the other hand, the National Labor Union,
Inc prayed for the vacation of the judgement
HELD:
rendered by the majority of this Court and the
Where the defendant in a mortgage foreclosure lives
outside of the country and refuses to appear or remanding of the case to the Court of Industrial
otherwise submit himself to the authority of the court,
the jurisdiction of the latter is limited to the Relations for a new trial, contended that:
mortgaged property, with respect to which
jurisdiction of the court is based upon the fact that the  The reason for employees lay off is
property is located within the district and that the
court, under the provisions of law applicable in such entirely false and unsupported by the
 records of the BOC and the Books of admission would necessarily mean the accordance with, the provisions of Commonwealth Act No.

Accounts of native dealers in leather. modification and reversal of the judgment 103 (section 1).

 The supposed lack of leather rendered therein. The SC had occasion to point out that the Court of

materials was but a sched to Industrial Relations is not narrowly constrained by

systematically prevent the forfeiture ISSUE: Whether or not the National Labor Union Inc, was technical rules of procedure, and the Act requires it to "act

of the bond with the Philippine deprived of due process according to justice and equity and substantial merits of the

Army, despite the breach of contract case, without regard to technicalities or legal forms and

RULING: shall not be bound by any technicalities or legal forms and

 The National Worker’s Brotherhood
YES. The SC concluded that the Court of Industrial shall not be bound by any technical rules of legal evidence
registered employee’s union
Relations is a special court whose functions are specifically but may inform its mind in such manner as it may deem
dominated by Teodoro is illegal for
stated in the law of its creation (Commonwealth Act No. just and equitable." (Section 20, Commonwealth Act No.
its existence and functions.
103). Unlike a court of justice which is essentially passive, 103.)
 Teodoro was guilty of unfair labor
acting only when its jurisdiction is invoked and deciding
practice for discriminating against
only cases that are presented to it by the parties litigant, the Further the SC enumerated the requisites of administrative
the NLU Inc. and unjustly favoring
function of the Court of Industrial Relations, as will appear due process embodied as primary rights:
the National Worker’s Brotherhood
from perusal of its organic law, is more active, affirmative 1. The right to a hearing, which includes the right of the
 Ang Tibay, has filed an opposition both to the
and dynamic. It not only exercises judicial or quasi-judicial party interested or affected to present his own case and
motion for reconsideration of the respondent
functions in the determination of disputes between submit evidence in support thereof.
National Labor Union, Inc.
employers and employees but its functions in the
 The case then reached the CIR and eventually
determination of disputes between employers and
elevated to the SC, but a motion for new trial by 2. the tribunal must consider the evidence presented
employees but its functions are far more comprehensive
the NLU contending there were inaccessible 3. The decision must have something to support itself
and expensive. It has jurisdiction over the entire
documents which could not be offered in the 4. the evidence must be "substantial"
Philippines, to consider, investigate, decide, and settle any
CIR. That these documents, which NLU have 5. The decision must be rendered on the evidence
question, matter controversy or dispute arising between,
now attached as exhibits are of such far- presented at the hearing, or at least contained in the record
and/or affecting employers and employees or laborers, and
reaching importance and effect that their and disclosed to the parties affected
regulate the relations between them, subject to, and in

6. The CIR or any of its judges, therefore, must act on
its or his own independent consideration of the law and
facts of the controversy, and not simply accept the views of
a subordinate in arriving at a decision.
7. The CIR should, in all controversial questions, render
its decision in such a manner that the parties to the
proceeding can know the various issues involved, and the
reasons for the decision rendered.
The Court held that the motion for a new trial should be
and the same is hereby granted, and the entire record of this
case shall be remanded to the Court of Industrial Relations,
with instruction that it reopen the case, receive all such
evidence as may be relevant and otherwise proceed in
accordance with the requirements set forth here in above.
Republic of the Philippines
SUPREME COURT
Manila
EN BANC
G.R. No. L-46496 February 27, 1940
ANG TIBAY, represented by TORIBIO TEODORO,
manager and propietor, and
NATIONAL WORKERS
BROTHERHOOD, petitioners,
vs.
THE COURT OF INDUSTRIAL RELATIONS and
NATIONAL LABOR UNION, INC., respondents.
Office of the Solicitor-General Ozaeta and Assistant
Attorney Barcelona for the Court of Industrial
Relations.
Antonio D. Paguia for National Labor Unon.
Claro M. Recto for petitioner "Ang Tibay".
Jose M. Casal for National Workers' Brotherhood.
LAUREL, J.:
The Solicitor-General in behalf of the respondent
Court of Industrial Relations in the above-entitled case
has filed a motion for reconsideration and moves that,
for the reasons stated in his motion, we reconsider the
following legal conclusions of the majority opinion of
this Court:
1. Que un contrato de trabajo, asi individual
como colectivo, sin termino fijo de duracion
o que no sea para una determinada,
termina o bien por voluntad de cualquiera
de las partes o cada vez que ilega el plazo
fijado para el pago de los salarios segun
costumbre en la localidad o cunado se
termine la obra;
2. Que los obreros de una empresa fabril,
que han celebrado contrato, ya individual
ya colectivamente, con ell, sin tiempo fijo, y
que se han visto obligados a cesar en sus
tarbajos por haberse declarando paro
forzoso en la fabrica en la cual tarbajan,
dejan de ser empleados u obreros de la
misma;
3. Que un patrono o sociedad que ha
celebrado un contrato colectivo de trabajo
con sus osbreros sin tiempo fijo de duracion
y sin ser para una obra determiminada y
que se niega a readmitir a dichos obreros
que cesaron como consecuencia de un
paro forzoso, no es culpable de practica
injusta in incurre en la sancion penal del
articulo 5 de la Ley No. 213 del
Commonwealth, aunque su negativa a
readmitir se deba a que dichos obreros
pertenecen a un determinado organismo
obrero, puesto que tales ya han dejado
deser empleados suyos por terminacion del
contrato en virtud del paro.
The respondent National Labor Union, Inc., on the
other hand, prays for the vacation of the judgement
rendered by the majority of this Court and the
remanding of the case to the Court of Industrial
Relations for a new trial, and avers:
1. That Toribio Teodoro's claim that on
September 26, 1938, there was shortage of
leather soles in ANG TIBAY making it
necessary for him to temporarily lay off the
members of the National Labor Union Inc.,
is entirely false and unsupported by the
records of the Bureau of Customs and the
Books of Accounts of native dealers in
leather.
2. That the supposed lack of leather
materials claimed by Toribio Teodoro was
but a scheme to systematically prevent the
forfeiture of this bond despite the breach of
his CONTRACT with the Philippine Army.
3. That Toribio Teodoro's letter to the
Philippine Army dated September 29, 1938,
(re supposed delay of leather soles from the
States) was but a scheme to systematically
prevent the forfeiture of this bond despite
the breach of his CONTRACT with the
Philippine Army.
4. That the National Worker's Brotherhood
of ANG TIBAY is a company or employer
union dominated by Toribio Teodoro, the
existence and functions of which are illegal.
(281 U.S., 548, petitioner's printed
memorandum, p. 25.)
5. That in the exercise by the laborers of
their rights to collective bargaining, majority
rule and elective representation are highly
essential and indispensable. (Sections 2
and 5, Commonwealth Act No. 213.)
6. That the century provisions of the Civil
Code which had been (the) principal source
of dissensions and continuous civil war in
Spain cannot and should not be made
applicable in interpreting and applying the
salutary provisions of a modern labor
legislation of American origin where the
industrial peace has always been the rule.
 7. That the employer Toribio Teodoro was
guilty of unfair labor practice for
discriminating against the National Labor
Union, Inc., and unjustly favoring the
National Workers' Brotherhood.
8. That the exhibits hereto attached are so
inaccessible to the respondents that even
with the exercise of due diligence they
could not be expected to have obtained
them and offered as evidence in the Court
of Industrial Relations.
9. That the attached documents and
exhibits are of such far-reaching importance
and effect that their admission would
necessarily mean the modification and
reversal of the judgment rendered herein.
The petitioner, Ang Tibay, has filed an opposition both
to the motion for reconsideration of the respondent
National Labor Union, Inc.
In view of the conclusion reached by us and to be
herein after stead with reference to the motion for a
new trial of the respondent National Labor Union, Inc.,
we are of the opinion that it is not necessary to pass
upon the motion for reconsideration of the Solicitor-
General. We shall proceed to dispose of the motion
for new trial of the respondent labor union. Before
doing this, however, we deem it necessary, in the
interest of orderly procedure in cases of this nature, in
interest of orderly procedure in cases of this nature, to
make several observations regarding the nature of the
powers of the Court of Industrial Relations and
emphasize certain guiding principles which should be
observed in the trial of cases brought before it. We
have re-examined the entire record of the
proceedings had before the Court of Industrial
Relations in this case, and we have found no
substantial evidence that the exclusion of the 89
laborers here was due to their union affiliation or
activity. The whole transcript taken contains what
transpired during the hearing and is more of a record
of contradictory and conflicting statements of
opposing counsel, with sporadic conclusion drawn to
suit their own views. It is evident that these
statements and expressions of views of counsel have
no evidentiary value.
The Court of Industrial Relations is a special court
whose functions are specifically stated in the law of its
creation (Commonwealth Act No. 103). It is more an
administrative than a part of the integrated judicial
system of the nation. It is not intended to be a mere
receptive organ of the Government. Unlike a court of
justice which is essentially passive, acting only when
its jurisdiction is invoked and deciding only cases that
are presented to it by the parties litigant, the function
of the Court of Industrial Relations, as will appear
from perusal of its organic law, is more active,
affirmative and dynamic. It not only exercises judicial
or quasi-judicial functions in the determination of
disputes between employers and employees but its
functions in the determination of disputes between
employers and employees but its functions are far
more comprehensive and expensive. It has
jurisdiction over the entire Philippines, to consider,
investigate, decide, and settle any question, matter
controversy or dispute arising between, and/or
affecting employers and employees or laborers, and
regulate the relations between them, subject to, and in
accordance with, the provisions of Commonwealth Act
No. 103 (section 1). It shall take cognizance or
purposes of prevention, arbitration, decision and
settlement, of any industrial or agricultural dispute
causing or likely to cause a strike or lockout, arising
from differences as regards wages, shares or
compensation, hours of labor or conditions of tenancy
or employment, between landlords and tenants or
farm-laborers, provided that the number of
employees, laborers or tenants of farm-laborers
involved exceeds thirty, and such industrial or
agricultural dispute is submitted to the Court by the
Secretary of Labor or by any or both of the parties to
the controversy and certified by the Secretary of labor
as existing and proper to be by the Secretary of Labor
as existing and proper to be dealth with by the Court
for the sake of public interest. (Section 4, ibid.) It shall,
before hearing the dispute and in the course of such
hearing, endeavor to reconcile the parties and induce
them to settle the dispute by amicable agreement.
(Paragraph 2, section 4, ibid.) When directed by the
President of the Philippines, it shall investigate and
study all industries established in a designated
locality, with a view to determinating the necessity and
fairness of fixing and adopting for such industry or
locality a minimum wage or share of laborers or
tenants, or a maximum "canon" or rental to be paid by
the "inquilinos" or tenants or less to landowners.
(Section 5, ibid.) In fine, it may appeal to voluntary
arbitration in the settlement of industrial disputes; may
employ mediation or conciliation for that purpose, or
recur to the more effective system of official
investigation and compulsory arbitration in order to
determine specific controversies between labor and
capital industry and in agriculture. There is in reality
here a mingling of executive and judicial functions,
which is a departure from the rigid doctrine of the
separation of governmental powers.
In the case of Goseco vs. Court of Industrial Relations
et al., G.R. No. 46673, promulgated September 13,
1939, we had occasion to joint out that the Court of
Industrial Relations et al., G. R. No. 46673,
promulgated September 13, 1939, we had occasion to
point out that the Court of Industrial Relations is not
narrowly constrained by technical rules of procedure,
and the Act requires it to "act according to justice and
equity and substantial merits of the case, without
regard to technicalities or legal forms and shall not be
bound by any technicalities or legal forms and shall
not be bound by any technical rules of legal evidence
but may inform its mind in such manner as it may
deem just and equitable." (Section 20,
Commonwealth Act No. 103.) It shall not be restricted
to the specific relief claimed or demands made by the
parties to the industrial or agricultural dispute, but may
include in the award, order or decision any matter or
determination which may be deemed necessary or
expedient for the purpose of settling the dispute or of
preventing further industrial or agricultural disputes.
(section 13, ibid.) And in the light of this legislative
policy, appeals to this Court have been especially
regulated by the rules recently promulgated by the
rules recently promulgated by this Court to carry into
the effect the avowed legislative purpose. The fact,
however, that the Court of Industrial Relations may be
said to be free from the rigidity of certain procedural
requirements does not mean that it can, in justifiable
cases before it, entirely ignore or disregard the
fundamental and essential requirements of due
process in trials and investigations of an
administrative character. There are primary rights
which must be respected even in proceedings of this
character:
(1) The first of these rights is the right to a
hearing, which includes the right of the
party interested or affected to present his
own case and submit evidence in support
thereof. In the language of Chief Hughes,
in Morgan v. U.S., 304 U.S. 1, 58 S. Ct.
773, 999, 82 Law. ed. 1129, "the liberty and
property of the citizen shall be protected by
the rudimentary requirements of fair play.
(2) Not only must the party be given an
opportunity to present his case and to
adduce evidence tending to establish the
rights which he asserts but the
tribunal must consider the evidence
presented. (Chief Justice Hughes in Morgan
v. U.S. 298 U.S. 468, 56 S. Ct. 906, 80 law.
ed. 1288.) In the language of this court
in Edwards vs. McCoy, 22 Phil., 598, "the
right to adduce evidence, without the
corresponding duty on the part of the board
to consider it, is vain. Such right is
conspicuously futile if the person or persons
to whom the evidence is presented can
thrust it aside without notice or
consideration."
(3) "While the duty to deliberate does not
impose the obligation to decide right, it does
imply a necessity which cannot be
disregarded, namely, that of having
something to support it is a nullity, a place
when directly attached." (Edwards vs.
McCoy, supra.) This principle emanates
from the more fundamental is contrary to
the vesting of unlimited power anywhere.
Law is both a grant and a limitation upon
power.
(4) Not only must there be some evidence
to support a finding or conclusion (City of
Manila vs. Agustin, G.R. No. 45844,
promulgated November 29, 1937, XXXVI O.
G. 1335), but the evidence must be
"substantial." (Washington, Virginia and
Maryland Coach Co. v. national labor
Relations Board, 301 U.S. 142, 147, 57 S.
Ct. 648, 650, 81 Law. ed. 965.) It means
such relevant evidence as a reasonable
mind accept as adequate to support a
conclusion." (Appalachian Electric Power v.
National Labor Relations Board, 4 Cir., 93
F. 2d 985, 989; National Labor Relations
Board v. Thompson Products, 6 Cir., 97 F.
2d 13, 15; Ballston-Stillwater Knitting Co. v.
National Labor Relations Board, 2 Cir., 98
F. 2d 758, 760.) . . . The statute provides
that "the rules of evidence prevailing in
courts of law and equity shall not be
controlling.' The obvious purpose of this and
similar provisions is to free administrative
boards from the compulsion of technical
rules so that the mere admission of matter
which would be deemed incompetent inn
judicial proceedings would not invalidate the
administrative order. (Interstate Commerce
Commission v. Baird, 194 U.S. 25, 44, 24
S. Ct. 563, 568, 48 Law. ed. 860; Interstate
Commerce Commission v. Louisville and
Nashville R. Co., 227 U.S. 88, 93 33 S. Ct.
185, 187, 57 Law. ed. 431; United States v.
Abilene and Southern Ry. Co. S. Ct. 220,
225, 74 Law. ed. 624.) But this assurance
of a desirable flexibility in administrative
procedure does not go far as to justify
orders without a basis in evidence having
rational probative force. Mere
uncorroborated hearsay or rumor does not
constitute substantial evidence.
(Consolidated Edison Co. v. National Labor
Relations Board, 59 S. Ct. 206, 83 Law. ed.
No. 4, Adv. Op., p. 131.)"
(5) The decision must be rendered on the
evidence presented at the hearing, or at
least contained in the record and disclosed
to the parties affected. (Interstate
Commence Commission vs. L. & N. R. Co.,
227 U.S. 88, 33 S. Ct. 185, 57 Law. ed.
431.) Only by confining the administrative
tribunal to the evidence disclosed to the
parties, can the latter be protected in their
right to know and meet the case against
them. It should not, however, detract from
their duty actively to see that the law is
enforced, and for that purpose, to use the
authorized legal methods of securing
evidence and informing itself of facts
material and relevant to the controversy.
Boards of inquiry may be appointed for the
purpose of investigating and determining
the facts in any given case, but their report
and decision are only advisory. (Section 9,
Commonwealth Act No. 103.) The Court of
Industrial Relations may refer any industrial
or agricultural dispute or any matter under
its consideration or advisement to a local
board of inquiry, a provincial fiscal. a justice
of the peace or any public official in any part
of the Philippines for investigation, report
and recommendation, and may delegate to
such board or public official such powers
and functions as the said Court of Industrial
Relations may deem necessary, but such
delegation shall not affect the exercise of
the Court itself of any of its powers.
(Section 10, ibid.)
(6) The Court of Industrial Relations or any
of its judges, therefore, must act on its or
his own independent consideration of the
law and facts of the controversy, and not
simply accept the views of a subordinate in
arriving at a decision. It may be that the
volume of work is such that it is literally
Relations personally to decide all
controversies coming before them. In the
United States the difficulty is solved with the
enactment of statutory authority authorizing
examiners or other subordinates to render
final decision, with the right to appeal to
board or commission, but in our case there
is no such statutory authority.
(7) The Court of Industrial Relations should,
in all controversial questions, render its
decision in such a manner that the parties
to the proceeding can know the various
issues involved, and the reasons for the
decision rendered. The performance of this
duty is inseparable from the authority
conferred upon it.
In the right of the foregoing fundamental principles, it
is sufficient to observe here that, except as to the
alleged agreement between the Ang Tibay and the
National Worker's Brotherhood (appendix A), the
record is barren and does not satisfy the thirst for a
factual basis upon which to predicate, in a national
way, a conclusion of law.
This result, however, does not now preclude the
concession of a new trial prayed for the by respondent
National Labor Union, Inc., it is alleged that "the
supposed lack of material claimed by Toribio Teodoro
was but a scheme adopted to systematically
discharged all the members of the National Labor
Union Inc., from work" and this avernment is desired
to be proved by the petitioner with the "records of the
Bureau of Customs and the Books of Accounts of
native dealers in leather"; that "the National Workers
Brotherhood Union of Ang Tibay is a company or
employer union dominated by Toribio Teodoro, the
existence and functions of which are illegal."
Petitioner further alleges under oath that the exhibits
attached to the petition to prove his substantial
avernments" are so inaccessible to the respondents
that even within the exercise of due diligence they
could not be expected to have obtained them and
offered as evidence in the Court of Industrial
Relations", and that the documents attached to the
petition "are of such far reaching importance and
effect that their admission would necessarily mean the
modification and reversal of the judgment rendered
herein." We have considered the reply of Ang Tibay
and its arguments against the petition. By and large,
after considerable discussions, we have come to the
conclusion that the interest of justice would be better
served if the movant is given opportunity to present at
the hearing the documents referred to in his motion
and such other evidence as may be relevant to the
main issue involved. The legislation which created the
Court of Industrial Relations and under which it acts is
new. The failure to grasp the fundamental issue
involved is not entirely attributable to the parties
adversely affected by the result. Accordingly, the
motion for a new trial should be and the same is
hereby granted, and the entire record of this case
shall be remanded to the Court of Industrial Relations,
with instruction that it reopen the case, receive all
such evidence as may be relevant and otherwise
proceed in accordance with the requirements set forth
hereinabove. So ordered.
Avanceña, C. J., Villa-Real, Imperial, Diaz,
Concepcion and Moran, JJ., concur.
Republic of the Philippines
SUPREME COURT
Manila
EN BANC
G.R. Nos. 90660-61 January 21, 1991
UTE PATEROK, petitioner-appellant,
vs.
BUREAU OF CUSTOMS and HON. SALVADOR N.
MISON, respondents-appellees.
Untalan, Trinidad, Razon, Santos & Associate Law
Offices for petitioner-appellant.
SARMIENTO, J.:
Before us is a special civil action for certiorari filed by
Ute Paterok the petitioner herein, seeking the
annulment of the decision1 rendered by the public
respondent, the Bureau of Customs, through its
Commissioner, the Hon. Salvador N. Mison,
approving the order2 of forfeiture issued by the District
Collector of Customs against the shipment of one (1)
unit of Mercedes Benz of the petitioner in favor of the
government.
The antecedent facts are as follows:
In March 1986, the petitioner shipped from Germany
to the Philippines two (2) containers, one with used
household goods and the other with two (2) used
automobiles (one Bourgetti and one Mercedes Benz
450 SLC). The first container was released by the
Bureau of Customs and later on, the Bourgetti car,
too. The Mercedes Benz, however, remained under
the custody of the said Bureau.
In December 1987, after earnest efforts to secure the
release of the said Mercedes Benz, the petitioner
received a notice3 of hearing from the legal officer of
the Manila International Container Port, Bureau of
Customs informing the former that seizure
proceedings were being initiated against the said
Mercedes Benz for violation of Batas Pambansa Blg.
73 in relation to Section 2530(F) of the Tariff and
Customs Code of the Philippines (TCCP), as
amended, and Central Bank Circular (CBC) 1069.
While the said case was pending, the petitioner
received only on April, 1988, a letter4 informing her
that a decision ordering the forfeiture of her Mercedes
Benz had been rendered on December 16, 1986 by
the District Collector of Customs. The petitioner had
not been informed that a separate seizure case was
filed on the same Mercedes Benz in question before
the said District Collector, an office likewise under the
Bureau of Customs.
The petitioner later found out that on November 13,
1986, a Notice of Hearing set on December 2, 1986,
concerning the said Mercedes Benz, was posted on
the bulletin board of the Bureau of Customs at Port
Area, Manila.
The petitioner, thereafter, filed a motion for new
trial5 before the Collector of Customs, Port of Manila,
but the latter, in an order6 dated May 30, 1988, denied
the same, invoking the failure of the former to appear
in the said hearing despite the posting of the notice on
the bulletin board.
Moreover, the Collector of Customs contended that a
reopening of the case was an exercise in futility
considering that the forfeited property, a Mercedes
Benz 450 SLC, had an engine displacement of more
than 2800 cubic centimeters and therefore was under
the category of prohibited importation pursuant to B.P.
Blg. 73.
Subsequently, the petitioner filed a petition for
review7 with the Department of Finance, which petition
the latter referred to the public respondent. The
petitioner likewise addressed a letter8 to the Hon.
Cancio Garcia, the Assistant Executive Secretary for
Legal Affairs, Office of the President, Malacañang,
requesting the latter's assistance for a speedy
resolution of the said petition.
Finally, the public respondent rendered a decision on
September 22, 1989 affirming the previous order of
the Collector of Customs for the Forfeiture of the
Mercedes Benz in question in favor of the
government.
Hence, this petition for certiorari alleging that:
III-1. THE RESPONDENT-APPELLEE
(Bureau of Customs) ERRED IN THE
RULING THAT A NOTICE OF HEARING
POSTED IN [sic] THE BULLETIN BOARD
IS SUFFICIENT NOTICE AND FAILURE
OF PETITIONER-APPELLANT TO
APPEAR CAUSED HER DECLARATION
IN DEFAULT;
III-2. ERRED IN RULING THAT THEIR
OFFICE WAS LEFT WITH NO
ALTERNATIVE BUT TO FORFEIT THE
SHIPMENT AS MANDATED BY BATAS
PAMBANSA BLG. 73;
III-3. ERRED IN RULING THAT THE
RESPONDENT OF OFFICE FINDS THE
RE-OPENING OF THE CASE AN
EXERCISE IN FUTILITY AND THAT
THERE IS NO POINT IN DISTURBING
THE DECISION DECREEING THE
FORFEITURE OF THE SHIPMENT.9
As regards the first assignment of error, we agree with
the petitioner that a notice of hearing posted on the
bulletin board of the public respondent in a forfeiture
proceeding where the owner of the alleged prohibited
article is known does not constitute sufficient
compliance with proper service of notice and
procedural due process.
Time and again, the Court has emphasized the
imperative necessity for administrative agencies to
observe the elementary rules of due process.10 And
no rule is better established under the due process
clause of the Constitution than that which requires
notice and opportunity to be heard before any person
can be lawfully deprived of his rights.11
In the present case, although there was a notice of
hearing posted on the bulletin board, the said
procedure is premised on the ground that the party or
owner of the property in question is unknown. This is
clear from the provisions of the TCCP relied upon by
the public respondent, namely, Sections 2304 and
2306, captioned "Notification of Unknown Owner and
"Proceedings in Case of Property Belonging to
Unknown Parties," respectively, wherein the posting
of the notice of hearing on the bulletin board is
specifically allowed.
But in the case at bar, the facts evidently show that
the petitioner could not have been unknown. The
petitioner had previous transactions with the Bureau
of Customs and in fact, the latter had earlier released
the first container consisting of household goods and
the Bourgetti car to the former at her address (as
stated in the Bill of Lading). Moreover, there was a
similar seizure case12 that had been instituted by the
Manila International Container Port, docketed as S.I.
No. 86-224, covering the same Mercedes Benz in
question and involving the same owner, the petitioner
herein.
If only the public respondents had exercised some
reasonable diligence to ascertain from their own
records the identity and address of the petitioner as
the owner and the consignee of the property in
question, the necessary information could have been
easily obtained which would have assured the
sending of the notice of hearing properly and legally.
Then, the petitioner would have been afforded the
opportunity to be heard and to present her defense
which is the essence of procedural due process. But
the public respondent regrettably failed to perform
such basic duty.
Notwithstanding the procedural infirmity
aforementioned, for which the Court expresses its
rebuke, the petition nonetheless can not be granted.
This brings us to the second and third assignments of
error raised by the petitioner.
Batas Pambansa Blg. 73, a law intended to promote
energy conservation, provides that:
Sec. 3. Towards the same end and to
develop a more dynamic and effective
program for the rational use of energy, the
following acts are hereby prohibited:
(a) The importation, manufacture or
assembling of gasoline-powered passenger
motor cars with engine displacement of
over 2,800 cubic centimeters or Kerbweight
exceeding 1,500 kilograms, including
accessories.13
The petitioner does not dispute the fact that the motor
car in question, a Mercedes Benz 450 SLC, has an
engine displacement of over 2,800 cubic centimeters
which clearly falls within the prohibited importation
specified in the law aforequoted and as such, is liable
for seizure and forfeiture by the public respondents.
On the other hand, the petitioner claims that the said
prohibition involves only "direct" and not 'indirect"
importation as when both the shipper and the
consignee are one and the same person which is the
case at bar. Be that as it may, the law is clear and
when it does not make any distinction on the term
"importation", we likewise must not distinguish. "Ubi
lex non distinguit nec nos distinguiere debemus."
Finally, the petitioner invokes Sec. 2307 of the TCCP,
as amended by Executive Order No. 38, dated August
6, 1986, which provides an alternative in lieu of the
forfeiture of the property in question, that is, the
payment of fine or redemption of the forfeited
property. But the last paragraph of the said section, as
amended, categorically states that:
Redemption of forfeited property shall not
be allowed in any case where the
importation is absolutely prohibited or
where the surrender of the property to the
person offering to redeem the same would
be contrary to law. (Emphasis ours)14
Inasmuch as it would be contrary to law, i.e., B.P. Blg.
73, to allow the petitioner to redeem the Mercedes
Benz in question, there is therefore no alternative, as
correctly claimed by the public respondents, but to
forfeit the same.
We can not agree with the proposition that the
Collector of Customs is authorized to release the
motor vehicle in question to the petitioner which, in
effect, would absolve the latter from any liability.
In the matter of disposing of contrabands, Section
2609(c) of the Tariff and Customs Code specifically
provides that the prerogative of the Collector of
Customs is not the release of the contraband like the
Mercedes Benz in question but its sale, which
presupposes a prior custody pursuant to forfeiture and
seizure proceedings as in the case at bar.
As thus worded:
Sec. 2609. Disposition of Contraband.
— Article of prohibited importation or
exportation, known as contraband, shall, in
the absence of special provision, be dealt
with as follows:
xxx xxx xxx
(c) Other contraband of
commercial value and capable of
legitimate use may be sold under
such restrictions as will insure its
use for legitimate purposes
only . . .
There is nothing in the Code that authorizes the
Collector to release the contraband in favor of an
importer.1âwphi1 The Code, on the other hand, is
clear that the thing may be disposed of by sale alone
"under such restrictions as will insure its use for
legitimate purposes." To be sure, the restrictions to be
prescribed by the Collector must coincide with the
purpose underlying Batas Blg. 73, that is, to conserve
energy. Hence, he can not allow its use (after sale), in
this case a Mercedes Benz with an engine
displacement of more than 2,800 cubic centimeters,
that would set at naught that purpose. He must make
sure that the engine is changed before it is allowed to
ply Philippine soil.
In all cases, forfeiture is a must.
WHEREFORE, the petition for certiorari is
DISMISSED. No costs.
SO ORDERED.
Fernan, C.J., Narvasa, Melencio-Herrera, Gutierrez,
Jr., Cruz, Paras, Feliciano, Gancayco, Bidin, Grino-
Aquino, Medialdea and Regalado, JJ., concur.
The Lawphil Project - Arellano Law Foundation
Separate Opinions
PADILLA, J., dissenting:
I am constrained to dissent from the, as usual, well-
written decision of Mr. Justice Sarmiento. The
reasons for my dissent are as follows:
The decision states:
"The petitioner does not dispute the fact that the
motor car in question, a Mercedes Benz 450 SLC, has
an engine displacement of over 2,800 cubic
centimeters which clearly falls within the prohibited
importation specified in the law aforequoted and as
such, is liable for seizure and forfeiture by the public
respondents." (pp. 6-7, decision) The law relied upon
is Section 3(a) of BP 73 which provides:
Sec. 3. Towards the same end and to
develop a more dynamic and effective
program for the rational use of energy, the
following acts are hereby prohibited:
(a) The importation, manufacture or
assembling of gasoline-powered passenger
motor cars with engine displacement of
over 2,800 cubic centimeters or Kerbweight
exceeding 1,500 kilograms, including
accessories.
But, Sec. 11 of the same BP 73 provides that:
Any person who willfully violates any
provision of Section three hereof or any rule
or regulation promulgated pursuant to the
authority granted in this Act shall, upon
conviction, be punished by a fine of not less
than one thousand pesos but not more than
five thousand pesos, or by imprisonment of
not less than one month nor more than one
year, or both, in the discretion of the
court: Provided, That if the violation is
committed by a juridical person, the penalty
herein provided shall be imposed on the
official and/or employee thereof responsible
for the violation: Provided, further, That if
the violation is committed by a government
official or employee including those in
government-owned or controlled
corporations, he shall, in addition to the
penalty provided above, be subject to
disciplinary administrative proceedings and
penalties: Provided, finally, That any
passenger motor vehicle manufactured or
assembled in violation of Section 3(a)
hereof shall, after proper proceedings, be
confiscated and forfeited in favor of the
Government. (Emphasis supplied.)
It would thus appear that, under the forequoted
provisions of Sec. 11 of BP 73, only passenger motor
vehicles manufactured or assembled in violation of
Section 3(a) thereof shall be confiscated and forfeited
in favor of the Government.
The Mercedes Benz in the case at bar, having been
admittedly imported, but not manufactured or
assembled in violation of Sec. 3(a) of BP 73, is not,
therefore, subject to confiscation and forfeiture in
favor of the Government.
On the other hand, Sec. 2609 of the Tariff and
Customs Code provides:
Sec. 2609. Disposition of Contraband. —
Article of prohibited importation or
exportation, known as contraband, shall, in
the absence of special provision, be dealt
with as follows:
xxx xxx xxx
c. Other contraband of commercial value
and capable of legitimate use may be sold
under such restrictions as will insure its use
for legitimate purposes only; but if the thing
is unfit for use or the Collector is of the
opinion that, if sold, it would be used for
unlawful purposes, it shall be destroyed in
such manner as the Collector shall direct.
(Emphasis supplied)
The questioned Mercedes Benz is decidedly of
commercial value and capable of legitimate use,
which may be sold under such restrictions as will
insure its use for a legitimate purpose, by changing its
engine with an engine with a displacement of not
more than 2,800 cubic centimeters or the vehicle may
be ordered re-exported to Germany.
In short, the petitioner may be criminally prosecuted
for the act of importing the subject motor vehicle but,
at the same time, the vehicle may be released to her
subject to such restrictions and conditions as may be
imposed by the Collector of Customs, one of which
should be the changing of the engine of the vehicle
with an engine with a displacement of not more than
2,800 cubic centimeters or that the vehicle may be
ordered re-exported to Germany at the expense of
petitioner-importer.
Ute Paterok vs. Bureau of Customs
on 7:00 AM in Case Digests, Taxation
0 Court ruled that the petition cannot be granted.
193 SCRA 132 (1991)
o Seizure and forfeiture proceedings: requirement
of notice
FACTS:
In March 1986, petitioner shipped from Germany to the
Philippines two containers, one with used household goods
and the other two used automobiles (one Bourgetti and one
Mercedes Benz). The first container and the Bourgetti car
were released by the BOC, but not the Mercedes Benz,
which remained in custody of the Bureau.
Petitioner then received a notice of hearing, informing him
that seizure proceedings were being initiated against the
said Mercedes Benz. While this case was pending,
petitioner received a letter from the District Collector of
Customs, informing her that a decision ordering the
forfeiture of her Mercedes Benz had been rendered.
Petitioner did not know that the same Mercedes Benz was
subject to two different forfeiture proceedings. He only
found out later that the Notice of Hearing for the forfeiture
proceedings before the District Collector was posted on the
bulletin board of the BOC, at Port Area, Manila.
ISSUE:
o Whether or not the posting on the bulletin board
of the public respondent was sufficient
compliance with proper service of notice and
procedural due process
o Whether or not seizure and forfeiture was proper
in the instant case
HELD:
The Court held that there was no sufficient compliance with
requirement of notice and hearing under the due process
clause. But notwithstanding the procedural infirmity, the
The seizure and forfeiture proceedings was based on a
violation of B.P. 73, specifically a law that promotes
energy conservation and prohibits the importation,
manufacture or assembling of gasoline-powered passenger
motor cars with engine displacement of over 2,800 cubic
centimeters.
The Mercedes Benz subject of this case has an engine
displacement of over 2,800 cubic centimeters, which
clearly falls within the prohibited importation and as such,
is liable for seizure and forfeiture by the public
respondents.
G.R. No. 150732 - TOMAS G. VELASQUEZ, ET
AL. v. HELEN B. HERNANDEZ
EN BANC
[G.R. NO. 150732 : August 31, 2004]
TOMAS G. VELASQUEZ, Officer-In-Charge,
Office of the School Superintendent, DECS
- Division of Abra; MARIETTA BERSALONA,
Chairperson, DECS - Fact Finding
Committee; EDUARDO RUPERTO, JOAQUIN
PILIEN and LUZ CURBI, Members, DECS -
Fact Finding
Committee, Petitioners v. HELEN B.
HERNANDEZ, Respondent.
[G.R. NO. 151095 : August 31, 2004]
CIVIL SERVICE
COMMISSION, Petitioner, v. HELEN B.
HERNANDEZ, Respondent.
 DECISION
TINGA, J.:
Subject of the consolidated petitions is
the Decision of the Court of Appeals in CA-G.R.
SP No. 61081, entitled Helen B. Hernandez v.
Tomas G. Velasquez, promulgated on 07
November 2001.1 The
assailed Decision annulled and set aside the
twin resolutions issued by the Civil Service
Commission (CSC for brevity), in
Administrative Case No. 97-45 filed against
respondent Hernandez. The CSC, in
its Resolution No. 00-1375 dated 13 June
2000, found respondent Hernandez guilty of
dishonesty and grave misconduct and ordered
her dismissal from the service, with all the
accessory penalties including her perpetual
disqualification from holding public office.
In Resolution No. 00-2064 dated 07
September 2000, the CSC denied respondent's
motion for reconsideration of Resolution No.
00-1375.
Stripped of non-essentials, the following are
the factual antecedents:
In a letter dated 25 September 1996, the
Assistant Schools Division Superintendent of
the DECS-CAR, (Cordillera Administrative
Region) sent a letter to petitioner (in G.R. No.
150732) Tomas G. Velasquez, informing him of
the alleged infractions committed by
respondent, Helen B. Hernandez, such as
soliciting, accepting, and receiving sums of
money, in exchange for transfer or promotion
of complainant teachers. Acting on the letter,
petitioner Velasquez convened a fact-finding
committee to determine the veracity of the
alleged violations of respondent and to render
a formal report and recommendation.
On 26 September 1996, the Committee
composed of members assigned at the DECS-
Division of Abra, summoned to a meeting the
teachers who have grievances against
respondent. Based on the sworn statements of
the teachers, namely: Elena Princena, Myrna
Bayabos, Mildred Millare, Ofrina Benabese,
Emilia Beralde, Ruby Bringas, Regina Potolin,
spouses Ernesto Callena, Jr. and Ma. Louisa
Callena, Irene Bermudez, Francisco Castillo,
Elizabeth Castillo, Maribel Medrano, Benigna
Bulda, Irenea Viado, Cecilia Turqueza,
Catherine Badere, Rosalinda Bilgera, Nardita
Tuscano, Henry Bisquera, Melba Linggayo, and
Maritess Navarro, it appears that respondent
demanded and/or received money in various
amounts from the teachers in consideration of
their appointment, promotion, and transfer
from one school to another.
On 15 November 1996, the Committee issued
an Investigation Report recommending the
filing of administrative and criminal complaints
against respondent. On 14 March 1997, a
formal charge for Grave Misconduct, Conduct
Grossly Prejudicial to the Best Interest of the
Service, Abuse of Authority, and Violation of
Section 22 (k) Omnibus Rules Implementing
Book V of E.O. 292 and other related laws was
filed against respondent.
On 24 March 1997, respondent filed
her Answer to the charges. In the main, she
contended that the charges are brazen
fabrications and falsehoods made by parties
with ulterior motives which are designed to
harass her in a systematic campaign to
discredit her. Respondent likewise alleged that
the preparation and taking of the statements of
the supposed 23 counts of irregularity leveled
against her were attended by coercion and
fraud.
Meanwhile, the Office of the Provincial
Prosecutor of Abra issued a Resolution in I.S.
No. 97-003 entitled, "People of the Philippines
v. Helen Hernandez, et.al." This Resolution,
which arose from the sworn complaints filed by
the complaining teachers, indicted respondent
and a certain Luzviminda de la Cruz for
violation of Section 3(b), Republic Act No. 3019
otherwise known as the Anti-Graft and Corrupt
Practices Act. The Resolution of the Provincial
Prosecutor was affirmed with modification by
the Office of the Deputy Ombudsman for Luzon
in its Review Action dated 6 November 1997.
Under the modified indictment, respondent and
dela Cruz were charged with direct bribery.
However, upon motion filed by respondent and
her co-accused, the Office of the Deputy
Ombudsman in its Order dated 24 February
1998, reconsidered and set aside its Review
Action dated 6 November 1997, and ordered
the withdrawal of Informations for direct
bribery filed against respondent and de la Cruz.
After due proceedings, the CSC
issued Resolution No. 00-1375, dated 13 June
2000, finding respondent guilty of the charges
against her and ordering her dismissal from
the service. The motion for reconsideration
filed by respondent was denied by the CSC in
its Resolution No. 00-2064 dated 7 September
2000.
Respondent appealed to the Court of Appeals
raising the following issues:
1) Whether or not the CSC erred in assuming
jurisdiction and/or in rendering judgment
adverse to her;
2) Whether or not the CSC erred in rendering
judgment against her in violation of her right
to due process in administrative proceedings;
3) Whether or not the CSC erred in its
appreciation of the evidence on record and;
4) Whether or not the CSC erred in imposing
the penalty of dismissal.2
The appellate court, in its now
assailed Decision, reversed the resolutions of
the CSC. It opined that when petitioners filed a
formal charge against respondent, it was
incumbent upon them to inform the Civil
Service Commission that another case was
filed before the Office of the Deputy
Ombudsman for Luzon considering that the
facts and circumstances from which both
complaints stem are the same. Citing Section
13 (1) of Article XI of the 1987 Constitution,
and Section 19 and 21 of Republic Act No.
6770, the appellate court added that the CSC
and the Office of the Ombudsman have
concurrent original jurisdiction over
administrative cases filed against any
government employee. Thus, it ruled that the
effects of res judicataor litis pendentia may not
be avoided by varying the designation of the
parties, changing the form of the action, or
adopting a different mode of presenting one's
case.
Anent the issue of violation of respondent's
right to due process, the appellate court
stressed that it is not enough that the twin
requisites of notice and hearing be present. It
is important that the tribunal hearing the case
must be unbiased; indeed, if the government
official or employee under investigation is not
afforded the opportunity to present his case
before a fair, independent, and impartial
tribunal, the hearing would be futile.
Considering that the composition of the fact-
finding Committee is in question, the appellate
court concluded that it cannot properly be said
that there was a fair and impartial hearing of
the petitioner's case.
The appellate court also ruled that petitioner
failed to discharge the burden of proving by
substantial evidence the averments of the
complaint because it appears that some
affiants who executed sworn statements to
support the charges against respondent later
retracted their statements and executed new
statements, alleging that they were merely
induced to testify against respondent. It also ADMINISTRATIVE DUE PROCESS WAS
noted that some of the complaining teachers VIOLATED.
even failed to appear in the investigation to
confirm their respective sworn statements. The
III.
appellate court, therefore, annulled and set
aside the Resolutions of the CSC and ordered
the payment of backwages to respondent. THE COURT OF APPEALS GRAVELY ERRED IN
DECLARING THAT THE EVIDENCE AGAINST
THE RESPONDENT WAS INSUFFICIENT.
Separate appeals via Petition for Review were
filed before this Court by petitioner Velasquez,
IV.
in his capacity as Officer-in Charge, Office of
the School Superintendent, DECS-Division of
Abra (G.R. No.150732) and the Civil Service THE COURT OF APPEALS GRAVELY ERRED IN
Commission (G.R. No. 151095), assailing the ORDERING THE REINSTATEMENT OF THE
decision of the appellate court. The two RESPONDENT AND THE PAYMENT OF HER
petitions were ordered consolidated in BACKWAGES.3
a Resolution of this Court dated 25 June 2002.
G.R. No. 150732, assigned to the Third
On the other hand, the following issues were
Division of this Court, was ordered
raised by the CSC in G.R. No. 151095:
consolidated with G.R. No. 151095, an En
Banc case even if the first mentioned petition
has a lower docket number considering that I.
both cases involve resolutions of the Civil
Service Commission.
WHETHER OR NOT THE FORMAL CHARGE
SHOULD CONTAIN A CERTIFICATE AGAINST
The issues in both petitions are substantially FORUM SHOPPING;
the same.
II.
In G.R. No. 150732, petitioner raised the
following issues:
WHETHER OR NOT THE CSC ERRED IN
RENDERING JUDGMENT AGAINST
I. RESPONDENT IN VIOLATION OF THE LATTER'S
RIGHT TO DUE PROCESS IN ADMINISTRATIVE
THE COURT OF APPEALS GRAVELY ERRED IN PROCEEDINGS;
DECLARING THAT THE FORMAL CHARGE
WHICH WAS FILED BY THE CSC AGAINST THE III.
RESPONDENT SHOULD CONTAIN A
CERTIFICATION OF NON-FORUM SHOPPING.
WHETHER OR NOT THE CSC ERRED IN ITS
APPRECIATION OF THE EVIDENCE ON RECORD
II. AND FINDING RESPONDENT GUILTY OF THE
OFFENSES CHARGED.4
THE COURT OF APPEALS GRAVELY ERRED IN
DECLARING THAT RESPONDENT'S RIGHT TO In both cases, petitioners asseverate that
under Section 21 of the Uniform Rules of
Procedure in the Conduct of Administrative
Investigations (CSC Resolution No. 99-1936,
dated 31 August 1999), it is the complaint and
the not the formal charge which should contain
a certification of non-forum shopping. The
Office of the Solicitor General strongly argues
that the formal charge was filed, not by the
complaining teachers or the DECS Fact-Finding
Committee, but by the CSC-CAR and it would
thus be unnecessary to require a certification
of non-forum shopping considering that the
CSC is the sole arbiter of all contests relating
to the Civil Service and it would be absurd for
the CSC-CAR to file the same administrative
case against respondent in another forum. The
OSG adds that there was no need for the CSC-
CAR to inform the CSC about the criminal
action for Direct Bribery in OMB-1-96-2757
because the said action was not filed by the
CSC-CAR.
The CSC on the other hand, argues that what
was filed with the Office of the Ombudsman is
a criminal case and while the facts therein may
be similar to the pending administrative case,
the Office of the Ombudsman and the CSC will
not rule on the same cause of action or grant
the same relief. According to the CSC, there is
no possibility of having conflicting decisions as
the two cases are distinct from each other.
Petitioners dispute the Court of Appeals' finding
that respondent's right to administrative due
process was violated. Respondent can hardly
be said to have been deprived of due process
as she was given the chance to answer the
charges, to submit countervailing evidence,
and to cross-examine the witnesses against
her. The mere fact that respondent questioned
the impartiality of the fact finding committee
will not automatically result in a denial of due
process because what matters is that
respondent had actively participated in the
proceedings against her. Petitioners add that
respondent's culpability was not based solely
on the report of the fact-finding committee,
but also on the evidence submitted by the
respondent which, unfortunately, was found In support of the appellate court's Decision,
wanting. respondent maintains that it correctly ruled
that there was no fair and impartial hearing of
her case before the fact-finding committee.
Succinctly, petitioners argue that the appellate
She contends that the integrity of the fact-
court erred in holding that the evidence they
finding committee is questionable considering
presented to establish the culpability of the
that the chairperson of the committee is a
respondent is insufficient. The finding is based
relative of one of the complainant teachers,
merely on the retraction of the sworn
Ms. Immaculada Bringas, who incidentally
statements of some three teachers and the
would be the next in rank if she is ousted from
failure of three others to appear during the
her position. Finally, she adds that petitioners
formal investigation. Petitioners stress that a
are urging this Court to review the factual
majority of the complainant teachers remained
findings of the appellate court which cannot be
consistent in their claim that respondent
done in the instant petition which must raise
actually and directly received from them
only questions of law.
various amounts of money in exchange for
their appointment, promotion, or transfer.
They add that the dismissal of the criminal The Court rules for the petitioners.
action against respondent in OMB-1-96-2757
cannot be treated as a bar to the
CSC Resolution No. 95-3099 dated 9 May 1995
administrative case primarily because
(Further Amended by CSC Resolution No. 99-
administrative liability is distinct from penal
1936, dated 31 August 1999), amending
liability. In conclusion, petitioners fault the
Section 4 of CSC Resolution No. 94-0521,
appellate court for reversing the factual
Series of 1994, provides:
findings of the CSC, ordering the reinstatement
of respondent, and awarding backwages in her
favor. "Section 4. Complaint in Writing and Under
Oath - No complaint against a civil servant
shall be given due course, unless the same is
Upon the other hand, respondent would have
in writing and under oath.
the Court sustain the Decision of the appellate
court exonerating her of all the charges in the
administrative case. Citing CSC Resolution No. The complaint should be written in a clear,
95-3099, respondent argues that even on the simple and concise language and in a
assumption that a certificate of non-forum systematic manner as to apprise the civil
shopping is not necessary in the formal charge, servant concerned of the nature and cause of
petitioners nevertheless failed to show that the the accusation against him and to enable him
complaint filed by the teachers contained the to intelligently prepare his defense or answer.
required certification of non-forum shopping.
She theorizes that since it is the CSC-CAR The complaint shall also contain the following:
which filed the formal charge against her, it
would be difficult to imagine that the CSC will
make a turn around and take a position (a) xxx xxx xxx xxx
contrary to its earlier findings that a prima
faciecase against her exists. Respondent insists (b) xxx xxx xxx xxx
that to allow the CSC to exercise jurisdiction
over the case would be similar to allowing one
person to act as prosecutor and judge at the (c) xxx xxx xxx xxx
same time.
(d) a statement that no other administrative
action or complaint against the same party
involving the same acts or omissions and
issues, has been filed before another agency or
administrative tribunal. In the absence of any
one of the requirements therein stated, the
complaint shall be dismissed. (Underscoring
supplied)cralawlibrary
The appellate court placed much reliance on
the above-quoted provision of CSC Resolution
No. 95-3099 in relation to Section 5, Rule 7 of
the 1997 Rules of Civil Procedure, when it
ruled that it was incumbent upon petitioner (in
G.R. No. 150732) to inform that another case
was filed before the Office of the Deputy
Ombudsman for Luzon. Strikingly, the
appellate court failed to state in
its Decision the person or entity which
petitioner must notify of the pending case with
the Ombudsman. The appellate court then
cited a litany of cases on forum shopping and
concluded that petitioner's failure to state in
the formal charge that there is no other action
or complaint pending against herein
respondent constitutes a violation of the rule
against forum shopping that merited the
dismissal of the complaint. It ratiocinated that
since the facts and circumstances from which
both complaints stem from are the same,
petitioners should have attached in their
complaint the certificate of non-forum
shopping. Inconsistently, however, the
appellate court was quick to add that the cause
of action in the CSC and the Office of the
Deputy Ombudsman are distinct; nevertheless,
it said that in order to obviate the risk of
violating the rule, petitioners should have
attached the certification against non-forum
shopping.
The Court finds the above disquisition
unsound.
Forum shopping consists of filing of multiple
suits involving the same parties for the same
cause of action, either simultaneously or
successively, for the purpose of obtaining a
favorable judgment.5 It may also consist in a
party against whom an adverse judgment has
been rendered in one forum, seeking another
and possibly favorable opinion in another
forum other than by appeal or special civil
action of certiorari .6
The most important factor in determining the
existence of forum shopping is the vexation
caused the courts and parties-litigants by a
party who asks different courts to rule on the
same or related causes or grant the same or
substantially the same reliefs. A party,
however, cannot be said to have sought to
improve his chances of obtaining a favorable
decision or action where no unfavorable
decision has ever been rendered against him in
any of the cases he has brought before the
courts.7
In not a few cases, this Court has laid down
the yardstick to determine whether a party
violated the rule against forum shopping as
where the elements of litis pendentia are
present or where a final judgment in one case
will amount to res judicatain the other.8 Stated
differently, there must be between the two
cases (a) identity of parties; (b) identity of
rights asserted and reliefs prayed for, the relief
being founded on the same facts; and (c) that
the identity of the two preceding particulars is
such that any judgment rendered in the other
action will, regardless of which party is
successful, amount to res judicata in the action
under consideration.9
It is significant to note that the action filed
before the CSC-CAR is administrative in
nature, dealing as it does with the proper
administrative liability, if any, which may have
been incurred by respondent for the
commission of the acts complained of. In stark
contrast, the case filed before the Office of the
Deputy Ombudsman for Luzon, which
incidentally was not initiated by herein
petitioners but by the complainant teachers,
deals with the criminal accountability of the
respondent for violation of the Anti-Graft and
Corrupt Practices Act. Unmistakably, the rule
on forum shopping would find no proper
application since the two cases although based
on the same essential facts and circumstances
do not raise identical causes of action and
issues.10 It would, therefore, be absurd to
require the certification of forum shopping to
be attached to the formal charge filed before
the CSC, for the evil sought to be curbed by
the proscription against forum shopping is
simply not extant in the instant case.
On the issue of her having been denied
administrative due process, the Court likewise
finds respondent's claim untenable.
The essence of due process is that a party be
afforded a reasonable opportunity to be heard
and to present any evidence he may have in
support of his defense or simply an opportunity
to be heard;11 or as applied to administrative
proceedings, an opportunity to seek a
reconsideration of the action of ruling
complained of.12 One may be heard, not solely
by verbal presentation but also, and perhaps
even many times more creditably than oral
argument, through pleadings. Technical rules
of procedure and evidence are not even strictly
applied to administrative proceedings, and
administrative due process cannot be fully
equated to due process in its strict judicial
sense.13
In fact in Pefianco v. Moral ,14 the Court had
the occasion to rule that a respondent in an
administrative case is not entitled to be
informed of the findings and recommendations
of any investigating committee created to
inquire into charges filed against him - he is
entitled only to the administrative decision
based on substantial evidence made of record,
and a reasonable opportunity to meet the
charges and the evidence presented against
him during the hearing of the investigation
committee. It is the administrative resolution,
not the investigation report, which should be
the basis of any further remedies that the
losing party in an administrative case might
wish to pursue.
Respondent had been amply accorded the
opportunity to be heard. She was required to
answer the formal charge against her and
given the chance to present evidence in her
behalf. She actively participated in the
proceedings and even cross-examined the
witnesses against her. Clearly, based on the
above jurisprudential pronouncements the
appellate court's finding that respondent was
denied due process is utterly without basis.
Administrative proceedings are governed by
the "substantial evidence rule."15 A finding of
guilt in an administrative case would have to
be sustained for as long as it is supported by
substantial evidence that the respondent has
committed the acts stated in the complaint or
formal charge. As defined, substantial evidence
is such relevant evidence as a reasonable mind
may accept as adequate to support a
conclusion.16 This is different from the quantum
of proof required in criminal proceedings which
necessitates a finding of guilt of the accused
beyond reasonable doubt. The Ombudsman, in
ordering the withdrawal of the criminal
complaints against respondent was simply
saying that there is no evidence sufficient to
establish her guilt beyond reasonable doubt
which is a condition sine qua non for
conviction. Ergo, the dismissal of the criminal
case will not foreclose administrative action
against respondent.
In the instant case, this Court is of the view
that the sworn complaints of the twenty
remaining complainants coupled with their
positive testimonies in the proceedings below,
more than adequately complies with the
standard of proof required in administrative
cases. The desistance executed by three (3)
out of the twenty-three(23) original
complainants is of no moment since
administrative actions cannot be made to
depend upon the will of every complainant who
may, for one reason or another, condone a
detestable act.17
All told, the Court holds that respondent's guilt
in the administrative case has been sufficiently
established and pursuant to existing Civil
Service Rules and Regulations,18 her dismissal
from the service is warranted.
WHEREFORE, the instant consolidated
petitions are hereby GRANTED. The
assailed Decision of the Court of Appeals is
hereby REVERSED and SET ASIDE. Costs
against the respondent.
SO ORDERED.
G.R. No. 166809 - ATTY. ROMEO L. ERECE v.
LYN B. MACALINGAY, ET AL.
EN BANC
[G.R. NO. 166809 : April 22, 2008]
ATTY. ROMEO L. ERECE, Petitioner, v. LYN
B. MACALINGAY, JOCELYN BASTIAN,
LYMAN B. SALVADOR, BIENVENIDO L.
REANO, BRIGIDA CECILIA R. ABRATIQUE,
JEAN CORTEZ-MARZAN, FRANCISCO M.
BILOG, ROSA P. ESPIRITU, ROLANDO
EBREO, YANIE A. PITLONGAY, and
VIRGILIO MAGPOC, Respondents.
DECISION
AZCUNA, J.:
This is a Petition for Review on Certiorari 1 of
the Decision of the Court of Appeals (CA)
promulgated on January 7, 2005 affirming the
Decision of the Civil Service Commission (CSC)
which found petitioner Atty. Romeo L. Erece
guilty of dishonesty and conduct prejudicial to
the best interest of the service.
The facts are as follows:
Petitioner is the Regional Director of the
Commission on Human Rights (CHR) Region I,
whose office is located in San Fernando City,
La Union. Respondent employees of the CHR
Region I filed an Affidavit-Complaint dated
October 2, 1998 against petitioner alleging that
he denied them the use of the office vehicle
assigned to petitioner, that petitioner still
claimed transportation allowance even if he
was using the said vehicle, and that he
certified that he did not use any government
vehicle, when in fact he did, in order to collect
transportation allowance.
The Affidavit-Complaint reads:
xxx
4. That on September 10, 1998, we, Atty. Lynn
Macalingay and Mr. Lyman Salvador were
denied the use of the office vehicle as
evidenced by the hereto attached copy of our
denied Itinerary of Travel marked as Annex 'B';
5. That on August 5, 1998, I, Brigida Abratique
requested for the use of the government
vehicle but the same was denied by Atty. Erece
for the reason that we would be using the
same to Teachers Camp as evidenced by a
copy of the denied trip ticket with the marginal
notes of Atty. Erece hereto attached as Annex
'C';
6. That on May 29, 1998, the request of
Brigida Cecilia Abratique and Francisco Bilog to
use the vehicle within the City for field work
purposes was again denied by Atty. Erece as
he will accordingly use the same;
7. That on April 20, 1998, a proposed trip was
likewise postponed by Atty. Erece on the
ground that he will be using the vehicle as
evidenced by a copy of the proposed Itinerary
of Travel with marginal note of Atty. Erece xxx;
8. That on April, 1997, I, Atty. Jocelyn Bastian
requested for the use of the vehicle as I
need[ed] to go to the Benguet Provincial Jail
but I was instructed to commute because he
will use the vehicle. To my dismay, I found him
still in the office when I returned from the
Provincial Jail;
9. That such denials of the use of the vehicle
are not isolated cases but were just a few of
the numerous instances of conflicts of
schedules regarding the use of the government
vehicle and where we found ourselves always
at the losing end because we are the
subordinate employees;
xxx
13. That Atty. Erece regularly receives and
liquidates his Representation and
Transportation Allowances (RATA) which at
present is in the amount of FOUR THOUSAND
PESOS (P4,000.00), the payroll of such and its
liquidation could be made available upon
request by an authority to the Resident Auditor
but his liquidations for the month of April 1998
and September 1998 [are] hereto attached 5. That I have issued a guideline that the
xxx; official vehicle will not be used for the
Mountain Provinces and Halsema
Highway/Mountain Trail because of the poor
14. That despite regular receipt of his RATA,
road condition and to prevent breakdown and
Atty. Erece still prioritizes himself in the use of
early deterioration of same xxx;
the office vehicle to the detriment of the public
service;
6. That Atty. Lynn B. Macalingay, one of the
complainants had gone to Mt. Province to
15. That to compound things, he certifies in his
attend the Provincial Peace and Order Council
monthly liquidation of his RATA that 'HE DID
meetings, conduct jail visitations and follow-up
NOT USE ANY GOVERNMENT VEHICLE FOR THE
cases on many occasions using the regular bus
SAID MONTH' xxx which is a big lie because as
trips in the spirit of the policy as mentioned in
already stated, he is the regular user of the
paragraph 4 xxx;
government vehicle issued to CHR, Region I;
7. That all employees had used the vehicle on
16. That I, Rolando C. Ebreo, the disbursing
official business without exception, all
officer of the Regional Field Office hereby
complainants included xxx;
attest to the fact that no deductions in the
RATA of Atty. Romeo L. Erece was ever done in
connection with his regular use of the 8. On September 10, 1998, Atty. Lynn
government vehicle x x x."2 Macalingay and Lyman Salvador had the use of
the vehicle disapproved for the reasons
conforming to paragraph 4 xxx;
The CSC-Cordillera Administrative Region
issued an Order dated October 9, 1998,
directing petitioner to comment on the 9. On August 5, 1998, Atty. Erece disapproved
complaint. the use of vehicle for use of Brigida Abratique
because:
In compliance, petitioner countered, thus:
'a) The vehicle was available since July 30,
1998 for use in Happy Hallow but not utilized
xxx
earlier xxx;
4. In relation to paragraphs 2-D, 2-E and 2-G
b) On August 6, 1998, a DECS-CHR Seminar
above cited, it is among the duties as per
on Use Human Rights Exemplar was held at the
management supervisory function of the
Teacher's Camp Baguio City and the vehicle
Regional HR Director to approve use or non-
was used to transport HR materials, overhead
use of the official vehicle of the Region as it
projector and for the overall use of the seminar
was memorandum receipted to him and the
upon the request of the Public Information and
non-approval of the use of the same if it is not
Education Office, Central Office, Commission
arbitrary and for justifiable reasons; said
on Human Rights through Susan Nuguid of
function of approval and disapproval rests on
CHR, Manila;
the Regional Human Rights Director and that
function is not merely ministerial;
xxx
d) That Mrs. Abratique and Co. were asked to
explain the unreasonable delay to attend to the
case of Cherry Esteban which was subject of
the disapproved travel;'
10. On April 20, 1998, the itinerary of travel of
Lyman Salvador was RESCHEDULED from April
22 & 23, 1998 to April 23 & 24, 1998 as the
vehicle was used by Atty. Erece on an
important travel to Manila upon order of no
less than the Honorable Chairperson, Aurora
Navarette-Reciña of Commission on Human
Rights xxx;
xxx
12. As to the use of the vehicle by the Regional
HR Director, same shall be subject to the
allowance/disallowance of the COA Resident
Auditor, likewise the Regional HR Director in all
his travels outside Baguio City, he does not
claim bus and taxi fares per certification of
Danilo Balino, the Administrative Officer
Designate and Mr. Rolando Ebreo, the Cash
Disbursing Officer, Annex 'Z';
13. In many cases, Atty. Romeo L. Erece has
to maintain the vehicle including car washing
thereof, garage parking at his residence to
maintain and upkeep the vehicle and same is
still in premium condition to the satisfaction of
the office at no extra cost to the Commission;
xxx
15. In support thereof, we move to dismiss this
case as pure question on supervisory and
management prerogative, which is reserved for
the Office Head and a harassment move by
disgruntled employees who are counter-
charged hereof;
16. Annexes 'E' and 'F' of the complaint [are]
misplaced and misleading because a clear and
cognate reading of same does not reflect that I 3. That he certified in his monthly liquidation of
checked/marked the use of government vehicle his RATA that he did not use any government
in the certification and as such no dishonesty is vehicle for the corresponding month, which is
involved; the documents speak for themselves. not true because he is the regular user of the
x x x Annex 'E' is for the month of April, 1998 government vehicle issued to CHR-Region I.
where the check marks are clear. On Annex 'F'
of the complaint, no reference is made as to
The foregoing facts and circumstances indicate
the fact that I did not use the government
that government service has been prejudiced
vehicle, if so, no allegation as to when I did
by the acts of Erece.
use same for my personal use."3
WHEREFORE, Romeo L. Erece is hereby
After a fact-finding investigation, the CSC
formally charged with Dishonesty and Grave
Proper in CSC Resolution No. 99-1360 dated
Misconduct. Accordingly, he is given five (5)
July 1, 1999 charged petitioner with
days from receipt hereof to submit his Answer
Dishonesty and Grave Misconduct for using a
under oath and affidavits of his witnesses, if
government vehicle in spite of his receipt of
any, to the Civil Service Commission-Cordillera
the monthly transportation allowance and for
Administrative Region (CSC-CAR). On his
certifying that he did not use any government
Answer, he should indicate whether he elects a
vehicle, when in fact, he did, in order to
formal investigation or waives his right thereto.
receive the transportation allowance.
Any Motion to Dismiss, request for clarification
or Bills of Particulars shall not be entertained
Pertinent portions of the formal charge read: by the Commission. Any of these pleadings
interposed by the respondent shall be
considered as an Answer and shall be
1. That despite the regular receipt of Erece of
evaluated as such. Likewise, he is advised of
his monthly Representation and Transportation
his right to the assistance of counsel of his
Allowance (RATA) in the amount of P4,000.00,
choice.4
he still prioritizes himself in the use of the
office vehicle (Tamaraw FX) in spite of the
directive from the Central Office that he cannot After a formal investigation of the case, the
use the service vehicle for official purposes and CSC issued Resolution No. 020124, dated
at the same time receive his transportation January 24. 2002, finding petitioner guilty of
allowance; dishonesty and conduct prejudicial to the best
interest of the service and penalizing him with
dismissal from the service.
2. That Erece did not comply with the directive
of the Central Office addressed to all Regional
Human Rights Directors, as follows: 'to Petitioner filed a Petition for Review of the CSC
regularize your receipt of the transportation Resolution with the CA.
allowance component of the RATA to which you
are entitled monthly, you are hereby directed
In the Decision promulgated on January 7,
to immediately transfer to any of your staff,
2005, the CA upheld the CSC Resolution, the
preferably one of your lawyers, the
dispositive portion of which reads:
memorandum receipt of the vehicle(s) now still
in your name;'
WHEREFORE, in view of the foregoing, the
petition is DENIED and the assailed
Resolutions of the Civil Service Commission are
hereby AFFIRMED.5
Hence, this petition.
Petitioner raises these issues:
1. Whether or not the Court of Appeals erred in
ruling that petitioner was not denied due
process despite the admitted facts that
respondents failed to identify and testify on
their Affidavit-Complaint and that petitioner
was denied of his right to cross-examine
respondents on their Affidavit-Complaint.
2. Whether or not the Court of Appeals was
correct in adopting in toto the conclusions of
the CSC although they were based on mere
assumptions.
Petitioner contends that he was denied due
process as he was not afforded the right to
cross-examine his accusers and their
witnesses. He stated that at his instance, in
order to prevent delay in the disposition of the
case, he was allowed to present evidence first
to support the allegations in his Counter-
Affidavit. After he rested his case, respondents
did not present their evidence, but moved to
submit their position paper and formal offer of
evidence, which motion was granted by the
CSC over his (petitioner's) objection.
Respondents then submitted their Position
Paper and Formal Offer of Exhibits.
Petitioner submits that although he was
allowed to present evidence first, it should not
be construed as a waiver of his right to cross-
examine the complainants. Although the order
of presentation of evidence was not in
conformity with the procedure, still petitioner
should not be deemed to have lost his right to
cross-examine his accusers and their
witnesses. This may be allowed only if he
expressly waived said right.
The Court agrees with the CA that petitioner
was not denied due process when he failed to
cross-examine the complainants and their
witnesses since he was given the opportunity
to be heard and present his evidence. In
administrative proceedings, the essence of due
process is simply the opportunity to explain
one's side.6
Velez v. De Vera7 held:
Due process of law in administrative cases is
not identical with "judicial process" for a trial in
court is not always essential to due process.
While a day in court is a matter of right in
judicial proceedings, it is otherwise in
administrative proceedings since they rest
upon different principles. The due process
clause guarantees no particular form of
procedure and its requirements are not
technical. Thus, in certain proceedings of
administrative character, the right to a notice
or hearing are not essential to due process of
law. The constitutional requirement of due
process is met by a fair hearing before a
regularly established administrative agency or
tribunal. It is not essential that hearings be
had before the making of a determination if
thereafter, there is available trial and tribunal
before which all objections and defenses to the
making of such determination may be raised
and considered. One adequate hearing is all
that due process requires. . . .
The right to cross-examine is not an
indispensable aspect of due process. Nor is
an actual hearing always essential. . . . 8
Next, petitioner contends that the CA erred in
adopting in toto the conclusions of the CSC.
Petitioner contends that the conclusion of the
CSC proceeded from the premise that the
petitioner was using the subject vehicle as his
service vehicle, which he disputes, because he
did not use the vehicle regularly. The evidence
showed that the service vehicle was being used
by the employees of the regional office for
official purposes. He argues that although the
service vehicle is still in his name, it should not
be concluded that it is assigned to him as his
service vehicle, thus disqualifying him from
receiving transportation allowance.
The Court is not persuaded. The pertinent
conclusion of the CSC referred to by petitioner
reads:
At the outset, it must be stated that the
entitlement to transportation allowance by
certain officials and employees pursuant to RA
6688 presupposes that they are not assigned
government vehicles. This was clarified by the
Supreme Court in the case of Aida Domingo v.
COA, G.R. No. 112371, October 7, 1998, where
it ruled, as follows:
'The provision of law in point is found in
Section 28 of Republic Act 6688, otherwise
known as the General Appropriations Act of
1989, to wit:
Sec. 28. Representation and Transportation
Allowances. ... The transportation allowance
herein authorized shall not be granted to
officials who are assigned a government
vehicle or use government motor
transportation, except as may be approved by
the President of the Philippines. Unless
otherwise provided by law, no amount
appropriated in this Act shall be used to pay for
representation and/or transportation
allowances, whether commutable or
reimbursable, which exceed the rates
authorized under this Section. Previous
administrative authorization not consistent with
the rates and conditions herein specified shall
no longer be valid and payment shall not be
allowed.
 xxx
In the case of Bustamante v. Commission on
Audit, 216 SCRA 134, decided by this Court on
November 27, 1992, COA also disallowed the
claim for transportation allowance of the legal
counsel of National Power Corporation because
he was already issued a government vehicle.
Involving the circular aforementioned and
almost the same facts as in this case, it was
therein held that COA Circular No. 75-6 is
categorical in prohibiting the use of
government vehicles by officials receiving
transportation allowance and in stressing that
the use of government motor vehicle and claim
for transportation allowance are mutually
exclusive and incompatible.
The issue need no longer be belabored for no
less than this Court ruled in the aforesaid case
that a government official, to whom a motor
vehicle has been assigned, cannot, at the same
time, claim transportation allowance.
(Underscoring supplied)cralawlibrary
It is clear from the records that Director
Edmundo S. Ancog, CHR-Central office (Field
Operations office), issued a Memorandum
dated February 27, 1998, addressed to all CHR
Regional Directors in respect to Transportation
Allowance. The Memorandum states that
transportation allowance shall not be granted
to Regional Directors whenever a government
vehicle or use of government motor
transportation is already assigned to them. It
further emphasized that should they want to
"avail regularization of their RATA," the
Regional Directors must immediately transfer
the vehicle to any of their staff/lawyer.
Records show that Erece was issued a
government vehicle since August 10, 1997 and
he did not transfer the vehicle to any of his
staff. Notwithstanding this fact and the said
memorandum, he received transportation
allowance particularly for the months of April
and September 1998, as reflected in the No costs.
Certification/s signed by him. This clearly
resulted in undue prejudice to the best interest
SO ORDERED.
of the service.
Republic of the Philippines
The foregoing facts logically lead to the SUPREME COURT
conclusion that the act of Erece in certifying Manila
that he has not used any government vehicle
and consequently collecting Transportation
Allowance despite the fact that a government FIRST DIVISION
vehicle was assigned to him constitutes the
offenses of Dishonesty and Conduct Prejudicial
to the Best Interest of the Service.9
G.R. No. 128508 February 1, 1999
The above conclusion,as well as the
Memorandum dated February 27, 1998 issued DANIEL G. FAJARDO, petitioner,
by Director Ancog to the CHR Regional vs.
Directors, are both very clear. Once a vehicle is COURT OF APPEALS, HON. FLORENTINO P.
assigned to a regional director, like petitioner, PEDRONIO, in his capacity as Presiding Judge,
he is no longer entitled to transportation Regional Trial Court, Branch 31, Iloilo City;
allowance unless he assigns the vehicle to PEOPLE OF THE PHILIPPINES and STATION
another staff/lawyer. Since petitioner did not COMMANDER OF ILOILO CITY, respondent.
assign the subject vehicle assigned to him to
someone else, he is not entitled to
transportation allowance.
PARDO, J.:
Contrary to the argument of petitioner, there is
no qualification that the assigned vehicle
should be for the exclusive use of the service The case is an appeal via certiorari taken by petitioner
vehicle of the regional director alone to from a decision of the Court of Appeals that denied
disqualify him from receiving transportation due course to his motion for probation in Criminal
Case No. 14196 of the Regional Trial Court, Branch
allowance.
31, Iloilo City, arising from his conviction of violation of
Batas Pambansa Bilang 22, for which he was
Since the records show that petitioner collected sentenced to imprisonment of eight (8) months.
transportation allowance even if a government
vehicle had been assigned to him, the CA did We deny the petition.
not err in sustaining the decision of the CSC
finding petitioner guilty of dishonesty and
On May 26, 1988, the Regional Trial Court, Branch
conduct prejudicial to the best interest of the
service and penalizing him with dismissal from 33, Iloilo City, convicted petitioner of violation of Batas
Pambansa Bilang 22, and sentenced him to suffer the
the service.
penalty of eight (8) months imprisonment and to pay
the costs, in Criminal Case No. 14196. He appealed
WHEREFORE, the petition is denied. The to the Court of Appeals. 1 By decision promulgated on
Decision of the Court of Appeals promulgated February 27, 1990, the Court of Appeals affirmed the
conviction.
on January 7, 2005 is AFFIRMED.
On August 20, 1990, the Supreme Court denied a
petition for review on certiorari of the conviction. 2
Upon the remand of the record to the lower court, on
June 2, 1995, petitioner filed a motion for probation
contending that he was eligible for probation because
at the time he committed the offense in 1981, an
accused who had appealed his conviction was still
qualified to apply for probation and that the law that
barred an application for probation of an accused who
had interposed an appeal was ex post facto in its
application, and, hence, not applicable to him.
On January 5, 1996, the trial court denied petitioner's
motion for probation.
On July 29, 1996, petitioner filed with the Court of
Appeals a petition for certiorari to annul the lower
court's denial of his application for probation. 3 On
November 12, 1996, the Court of Appeals denied due
course to the petition. 4
Hence, this appeal. 5
At issue in this case is whether petitioner could qualify
to apply for probation under Presidential Decree No.
968 since he had appealed from his conviction in
1988, after Presidential Decree No. 1990 amending
Presidential Decree No. 968, became effective in
1986, providing that "no application for probation shall
be entertained or granted if the defendant has
perfected the appeal from the judgment of
conviction." 6 Petitioner maintains the view that
Presidential Decree No. 1990, issued on October 5,
1985, is null and void on the ground that at that time
President Ferdinand E. Marcos could no longer
exercise legislative powers as the Batasan Pambansa
was functioning and exercising sole legislative
powers.
The contention is without merit. At that time, President
Marcos was vested with legislative powers
concurrently with the Batasan Pambansa. 7
Consequently, Presidential Decree No. 1990, is valid.
Presidential Decree No. 1990, enacted on October 5,
1985, "was printed in Volume 81 of the Official
Gazette dated December 30, 1985 but said issue was WHEREFORE, the Court DENIES the petition for
released for circulation only on July 1, 1986; hence, P review on certiorari of the decision of the Court of
D 1990 became effective after fifteen (15) days from Appeals in CA-G.R. SP No. 41447. Costs against
July 1, 1986, in accordance with Article 2 of the Civil petitioner.
Code, or on July 16, 1986." 8 It is not ex post facto in
its application. The law applies only to accused
SO ORDERED.
convicted after its effectivity. 9 An ex post facto law is
one that punishes an act as a crime which was
innocent at the time of its commission. 10 Presidential Davide, Jr., C.J., Melo and Martinez, JJ., concur.
Decree No. 1990, like the Probation Law that it
amends, is not penal in character. 11 It may not be
Kapunan, J., took no part.
considered as an ex post facto law. 12
At the time of the commission of the offense charged
Fajardo vs. CA Case Digest
—violation of Batas Pambansa Bilang 22—in 1981,
petitioner could have appealed if convicted and still
availed himself of probation. However, petitioner was 0
convicted on May 26, 1988, and he appealed. At that
time, petitioner no longer had the option to appeal and
still apply for probation if unsuccessful in the
Facts:
appeal. 13 Presidential Decree No. 1990 was then in
full effect. Hence, he could no longer apply for
probation since he had appealed.
In 1981, Fajardo was charged with violation of BP 22. At
On October 13, 1997, the Solicitor
General 14 submitted a manifestation positing the view the time he committed the offense, PD No. 968 allows an
that petitioner's application for probation may still be
accused who appeals his conviction to still apply for
considered because when petitioner committed the
offense in 1981, he could avail himself of probation
probation.
since the law as it stood at that time provided that an
accused convicted of a crime may apply for probation
even if he had appealed the conviction. 15 We do not
share his view. The case he cited is a Court of
In 1988, the trial court convicted Fajardo of the crime
Appeals decision, and, hence, not a precedent. What
is more, it is inapplicable because there, the
charged and sentenced him to suffer the penaltyPD No.
accused's conviction became final on October 14,
1985. Presidential Decree No. 1990 although enacted
968, became effective (in 1986), providing that no
on October 5, 1985, was published in the Official
Gazette on December 30, 1985, 16 and, hence, was
application for probation shall be entertained or granted if
not yet applicable at the time the accused was finally
convicted. Regrettably, the Solicitor General has cited
the defendant has perfected the appeal from the judgment
a Court of Appeals decision that is inapplicable to this
case because the facts were not similar.
of conviction. Fajardo, however, still appealed his
conviction.
We find it unnecessary to resolve the other issues that
petitioner has raised questioning the constitutionality
and wisdom of Presidential Decree No. 1990,
amending the probation law.
When he lost the appeal, he filed motion for probation

before the trial court contending that he was eligible for
probation because at the time he committed the offense in
1981, an accused who had appealed his conviction was still
qualified to apply for probation and that the law that barred
an application for probation of an accused who had
interposed an appeal was ex post facto in its application and
hence, not applicable to him. The trial court
denied Fajardo’s motion for probation and so did CA.
Issue:
Whether P.D. 1990 is an ex post facto law.
Held:
It is not ex post facto in its application. The law applies
only to accused convicted after its effectivity. An ex post
facto law is one that punishes an act as a crime which was
innocent at the time of its commission. Presidential Decree
No. 1990, like the Probation Law that it amends, is not
penal in character. It may not be considered as an ex post
facto law.
At the time of the commission of the offense charged--
violation of Batas Pambansa Bilang 22--in 1981, petitioner
could have appealed if convicted and still availed himself
of probation. However, petitioner was convicted on May
26, 1988, and he appealed. At that time, petitioner no
longer had the option to appeal and still apply for probation
if unsuccessful in the appeal. Presidential Decree No. 1990
was then in full effect. Hence, he could no longer apply for
probation since he had appealed. Fajardo vs. Court of
Appeals, G.R. No. 128508. February 1, 1999
EN BANC
A.M. No. RTJ-97-1390 & A.M. No. RTJ-98-
1411. August 5, 1998
CESAR B. MERIS, complainant, vs. JUDGE
CARLOS C. OFILADA, Respondent.
FRANCISCO R. HERNANDEZ, complainant,
vs. JUDGE CARLOS C.
OFILADA, respondent.
DECISION
PER CURIAM
JUDGE CARLOS C. OFILADA of the Regional
Trial Court, Branch 15, Malolos, Bulacan, was
charged with various administrative offenses
contained in two (2) separate complaints, in
addition to several others previously filed
against him, as will be discussed hereunder.
A.M. No. RTJ-1390
On 16 May 1996 respondent Judge issued
Search Warrant No. 20-M-96 against a certain
Thomas Jay of Lalakhan, Sta. Maria, Bulacan,
for illegal possession of 3,000 board feet of
narra lumber valued more or less at
P360,000.00 in violation of Sec. 68, PD 705, as
amended by EO 277, otherwise known as
the Revised Forestry Code of the Philippines.
The warrant was served immediately the
following day. On 20 May 1996 EIIB Operation
Officer Baltazar B. Dulalia filed a Return,
Compliance and Inventory (re search warrant).
On 21 May 1996 Thomas Jay filed a Motion to
Quash Search Warrant No. 20-M-96 on the
ground that the facts charged did not
constitute an offense and that the warrant
contained averments which if true would make
up legal excuses or justifications. Appended to
the motion were photocopies of the following
documents: (a) Certificate of Transport
Agreement issued by CENRO, Bayombong,
Nueva Viscaya, dated 22 January 1996, re
conveyance of the narra lumber (Annex
"4");1 (b) Certificate of Lumber Origin issued
by CENRO, Bayombong, Nueva Viscaya, in
favor of Remitans Enterprises, 12 Agueda St.,
Project 8, Q.C., for 11,754 bd. ft. = 27.71 cu.
M. under Auxiliary Invoice No. 180795 and
Official Receipt No. 4529171 dated 22 January
1996 issued by DENR-CENRO, Bayongbong,
Nueva Voscaya (annexes "5" and "5-1");2 (c)
Certificate of Registration of Business Name
No. 0298450 issued by the Department of
Trade and industry, NCR, on 26 September
1955, for TJ Furniture owned by Tomas Jay
(Annex "1");3 (d) Mayor's Permit No. 16840
issued by the Office of the City Mayor of Manila
on 18 January 1996 (Annex "2");4 (e) Delivery
Receipt for narra lumber dated 21 March 1996
issued by Remitans Enterprises to TJ Furniture
(Annex "3");5 and, (f) Tally Sheets of narra
lumber (Annexes "7", "7-1", "7-2" and "7-
3").6cräläwvirtualibräry
The motion to quash was set for hearing on 31
May 1996 at 8:30 in the morning. However, on
21 May 1996 Jay, through his counsel, Atty.
Romeo Y. De Jesus, moved to have the hearing
advanced to 28 May 1996 on the ground that,
according to him, he was informed that "the
calendar of the Court is not available;"
consequently, he requested for 28 May 1996 at
8:30 in the morning, undertaking at the same
time to "notify the parties concerned." But
counsel for respondent, despite his
undertaking, failed to notify complainant Cesar
B. Meris, Regional Director, EIIB, who as a
result failed to appear on 28 May 1996.
On 27 May 1996 Atty. Salome T. Cansino,
Special Counsel of the Department of Justice,
filed an opposition to the motion to quash the
search warrant contending that (a) the pieces
of narra lumber seized were not covered by
any legal documents required by the Revised
Forestry Code of the Philippines; (b) the
documents submitted by Jay did not cover the
lumber seized; and, (c) a criminal complaint
had already been filed against Jay by the DENR
for Illegal Possession of Forest Products in
violation of Sec. 68, PD 705, as amended by
EO 277.
On 28 May 1996, despite the opposition of the
special counsel of the Department of Justice,
respondent Judge granted the motion to quash
and ordered the immediate release of the narra
lumber seized from Thomas Jay. The
explanation of respondent was that the pieces
of lumber seized were owned by a legitimate
enterprise and covered by proper documents,
emphasizing that he took into consideration
not only the opposition of the Department of
Justice but also the deteriorating condition of
the pieces of lumber which were already long
exposed to the elements.
On 5 June 1996 complainant, in his capacity as
Regional Director for Region III of EIIB, wrote
a letter to Chief Justice Andres R. Narvasa
which is textually quoted hereunder -
THE HONORABLE ANDRES R. NARVASA
Chief Justice
Supreme Court
Sir:
I wish to report to HIS HONOR about the
actuation of Honorable Judge Carlos Ofilada,
regional trial Court, Branch 15, Malolos,
Bulacan which is prejudicial to the interest of
the government by issuing an Order of Release
of Seized/Confiscated Narra Lumber with a
commercial value of P150,000.00 by virtue of
Search Warrant No. 20-M-96 for violation of
Section 68, PD 705 as amended by Executive
Order No. 277 without hearing of the case on
the merits.
Records show that respondent/owner of seized
narra lumber thru Counsel filed a Motion to
Quash Search Warrant before the Court and
set the case for hearing on May 31, 1996 at
8:30 in the morning.
It is sad to note, however, Honorable Judge
Carlos Ofilada quashed the Search Warrant on
May 28, 1996 motu propio and ordered the
release of seized narra lumber to the
respondent herein, which is two (2) days prior
to the scheduled hearing, May 31, 1996.
That Economic intelligence and Investigation
Bureau (EIIB) Region III represented by the
Regional Director ATTY. CESAR B. MERIS as
Counsel attended the scheduled hearing of the
Motion to Quash on May 31, 1996 but sad to
note Judge Ofilada already quashed to Search
Warrant No. 20-M-96 on May 28, 1996 without
affording a day in Court on the part of the
Government. Attached hereto are xerox copies
of Search Warrant No. 20-M-96, application for
Search Warrant, marked as Annex "A" and "B,"
Motion to Quash filed by respondent thru
counsel marked as ANNEX "C," Court Order
Quashing Search Warrant No. 20-M-96 dated
May 28, 1996 marked as ANNEX "D," Motion
for reconsideration marked as ANNEX "E."
May I request your Honor to look into the
matter with the aim in view to enhance the
good image of the Judiciary. Likewise, to
encourage the public to report erring Judges to
Supreme Court and not to the media xxxx
V
ery respectfully yours,
ATTY. CESAR B. MERIS
Regional Director, Counsel for EIIB3
Cabanatuan City
On 3 July 1996 Regional Director Cesar B.
Meris, who was also acting as counsel for EIIB,
filed an Answer (actually an opposition to the
motion to quash search warrant). On 10 July
1996 he filed his motion for reconsideration (of
the order quashing the search warrant) where
he claimed that he attended the hearing on the
motion to quash previously scheduled on 31
May 1996 only to be informed that respondent
Judge had already quashed the search warrant
on 28 May 1996 even without the presence of
either the complainant EIIB Regional Director
or the Special Counsel representing the
Government. His motion for reconsideration
and that of Special Counsel Salome T. Cansino,
who protested the hearing of the motion
without proper service and notice, were denied
by respondent Judge.
Complainant claims that by ordering the
release of the confiscated narra lumber without
hearing the case on the merits and without
affording the prosecution a day in court,
respondent Judge committed rave abuse of
authority prejudicial to the interest of the
Government. Section 5, Rule 15, of the Rules
of Court states-
Sec. 5. Contents of notice. - The notice shall
directed to the parties concerned, and shall
state the time and place for the hearing of the
motion.7cräläwvirtualibräry
A perusal of the request for advanced resetting
of the motion to quash search warrant would
show that although it stated the time and date
of hearing, it failed to comply with Sec. 5 of
Rule 15 as the notice was addressed only to
the clerk of court and not to the parties
concerned as required.8 Neither was there
proof of service of the motion on the adverse
party despite the undertaking of counsel for
movant to notify the public prosecutor of the
request as required by Sec. 6 of Rule 15 -
Sec. 6. Proof of service, to filed with motion. -
No motion shall be acted upon by the court,
without proof of service of the notice thereof,
except when the court is satisfied that the
rights of te adverse party or parties are not
affected.9cräläwvirtualibräry
In Manakil v. Revilla10 we held that the court
will not act on the motion if there is no proper
notice and/or proof of service of the notice on
the adverse party. It is nothing but a useless
piece of paper filed with the court. It is not
motion. It presents no question which the court
could decide. The court has no reason to
consider it and the clerk had no right to receive
it without that compliance with the rules. Harsh
as they may seem, these rules were introduced
to avoid a capricious change of mind in order
to provide due process to both parties and
ensure impartiality in the trial.
Due process demands proper obedience to
procedural rules especially when the subject
matter of motion to quash is search warrant.
Since searches are in derogation of the
inviolable right of the people to be secure in
their persons, houses, papers and effects, 11 it
necessarily follows that the applicant should
rely on the strength of his evidence to support
the application or the subsequent legal custody
of the seized articles. Otherwise, upon prima
facie proof that the movant for the quashal of
the warrant was the owner of the seized
lumber and that he lawfully acquired them, he
is entitled to the quashal of the search warrant
and the restoration to him of the seized
articles.12 It is clear therefore that the
exception in Sec. 6, Rule 15, of the Rules of
Court cannot apply in a motion to quash search
warrant. For without the proper notice of
hearing and proof of service thereof, the rights
of either party will be adversely affected.
Moreover, the ground invoked by movant was
that the warrant charged no offense. The
fundamental test in considering motion to
quash on this ground is whether the facts
alleged, if hypothetically admitted, will
establish the essential elements of the offense
as defined by the law.13cräläwvirtualibräry
A cursory examination of the search warrant
will disclose that the essential elements of the
offense charge are sufficiently alleged. It is not
right; therefore, to resolve the charges at the
very outset without any notice of hearing, or to
hear the motion ex parte. The issues require a
fuller examination especially since a criminal
complaint had already been filed in court. The
prosecution, too, must be given its day in court
- the burden of proof thereof being placed
squarely on its shoulders. A prudent judge
would, in the absence of the opposing party in
the hearing of a motion as pivotal as a motion
to quash, inquire from the other party or verify
from the records the proof of service of notice
rather than proceed with the hearing. This is
but an elementary notion of fair play. He
should not rely on a party's undertaking to
notify the adverse party of a scheduled
hearing. The judge must demand what the rule
requires, i.e., proof of such notice on the
adverse party, otherwise, a contentious
motion, as the motion to quash in the case
before respondent Judge, should be considered
a mere scrap of paper which should not have
even been received for filing.
Respondent's culpability is further compounded
by his misrepresentation in the order he issued
on 14 August 1996 (denying the motion of the
public prosecutor for reconsideration) that he
was on extended leave of absence from 29 May
1996 to 22 July 1996 when the records show
that he actually applied for leave only from 29
May 1996 to 3 July 1996 (not up to 22 July
1996).
A.M. No. RTJ-981411
On 18 April 1994 an Information for murder
was filed with the Regional Trial Court of
Bulacan against four (4) accused, namely,
Rolando Garcia, Lopito Gumasing, Eric
Gumasing and Eduardo Gumasing. The
Information stated that all the accused were at
large. No bail was recommended. On 22 April
1994 warrants of arrest were issued against
the four (4) accused.
On 7 June 1995, or more than one (1) year
that the accused remained at large, Atty.
Eufrocio Marquez appeared before the trail
court as counsel for the accused and submitted
a "Motion to Voluntarily Surrender the Accused
with Motion to Bail" praying that the accused
be allowed to post bail in the amount of
P10,000.00 each in cash. At the bottom of
page 2 of the motion, the public prosecutor
manifested in writing that he was submitting
the matter to the sound discretion of the court
provided that the bail be increased to P15,000
in cash for each accused.
On 16 June 1995 respondent Judge granted
the motion and allowed the four (4) accused to
post bail in the amount of P10,000.00 each.
After the accused had posted bail, respondent
Judge lifted the warrant of arrest and set the
arraignment on 16 August 1995.
At the hearing of 17 July 1995, which does not
appear on record to have been previously
scheduled, respondent Judge issued an order
citing as grounds for the grant of bail (a)
voluntary surrender of the accused; (b) no
evidence was presented by the public
prosecutor that the evidence of guilt was
strong; (c) the public prosecutor did not object
to the granting of bail; and, (d) the
complainant, wife of the victim, had submitted
an affidavit of desistance. The four (4) accused
were later arraigned, and the affidavit of
desistance executed by the complainant was
marked during the pre-trial.
After the prosecution rested, the defense
manifested its intention to file demurrer to
evidence. In an order dated 20 January 1997,
respondent Judge gave the accused five (5)
days within which to file the intended demurrer
and the prosecution the same period to
comment thereon.
In an order dated 30 January 1997 respondent
Judge admitted the demurrer filed by the
accused and submitted the same for resolution
there being no comment from the public
prosecutor.
On 20 February 1997 respondent Judge
granted the demurrer to evidence and
acquitted all four (4) accused for failure of the
prosecution to establish their guilt beyond
reasonable doubt. Consequently, on 19 March
1997 respondent Judge ordered the release of
the cash bond posted by the accused for their
provisional liberty.
Francisco R. Hernandez, uncle of the deceased
victim, filed a complaint-affidavit before this
Court charging respondent Judge with
knowingly rendering unjust orders and for
improperly granting bail, manifest bias and
partiality in favor of the accused in the conduct
of the proceedings. After respondent Judge
filed his comment to the complaint, we
referred the case to Associate Justice Fermin A.
Martin Jr. of the Court of Appeals for
investigation, report and recommendation.
In his report dated 1 June 1998 Justice Martin
found respondent Judge guilty of gross
incompetence and recommended that he be
meted the penalty of suspension for six (6)
months with stern warning that commission of
similar offense in the future would be dealt
with more severely.
The actuations of respondent Judge in Crim.
Case No. 1441-M-94 showed his utter
disregard of the rules and settled jurisprudence
thus constituting gross ignorance of the law. In
granting the motion for application of bail
which did not contain a notice of hearing
directed to the parties and where the accused
had never been placed under the custody of
the court, respondent Judge again
demonstrated his lack of knowledge and
understanding of the basic principles of law
and procedures. A perusal of the Motion to
Voluntarily Surrender the Accused with Motion
to Bail shows that the notice of hearing was
directly solely to the clerk of court and did not
contain a place and time of hearing. A motion
that does not meet the requirements of Secs. 4
and 5 of Rule 15 of the Rules of Court,
particularly that the notice be directed to the
parties concerned and stating the time and
place for the hearing of the motion, is a
worthless piece of paper which the clerk of
court has no right to receive and the court has
no authority to act upon.14cräläwvirtualibräry
The records shows that respondents Judge had
not been as zealous as he should been
observing the standard and fundamental
procedure mandated by the Rules of Court in
criminal cases. In granting bail to the four (4)
accused who were at large, respondent Judge
violated the rule that bail is unavailing to the
accused who has not voluntarily surrendered or
to one who has yet to be placed under legal
custody.15cräläwvirtualibräry
The refusal of the prosecution to adduce
evidence that the guilt of the accused was
strong or its failure to interpose an objection to
the motion for bail was not a justifiable reason
for respondent Judge to grant bail. It is still
mandatory for the court to conduct a hearing
and ask searching and clarificatory
questions16 for the purpose of determining the
existence of a strong evidence against the
accused.17 On the face of his orders dated 16
June 199518 July 199519 which granted bail to
the accused, respondent Judge did not make
any finding that the evidence against the
accused was not strong as to warrant the grant
of bail. Hence, the order should not be
sustained or given any semblance of validity. 20
Conclusion
The unseemly haste with which respondent
Judge granted the motions filed y the accused
(a) to quash search warrant ex parte in A.M.
No. RTJ-98-1411 and (b) for bail in A.M. No.
RTJ-97- 1390 and (b) for bail in A.M. No. RTJ-
981411 is indicative of his patent injustice,
partiality, nay, his gross ignorance of the law
bordering on incompetence. It should be
mentioned that respondent Judge was
previously charged with eight (8) other
administrative cases ranging from gross
ignorance of the law, grave abuse of authority
and discretion , incompetence, dishonesty,
dereliction of duty, misconduct, conduct
unbecoming of a judge, oppression and direct
bribery. Although seven (7) of the eighth (8)
cases were dismissed without hearing for
various reasons, in Santos v. Ofilada,21 the
Court through Senior Associate Justice Florence
D. Regalado found the same respondent Judge
to have whimsically and arbitrarily granted bail
in Crim. Case No. 1433-M-94 for murder and in
Crim. Case No. 1434-M-94 for illegal
possession of firearm without notice to the
prosecution in both cases, for which he was
fined P20,000.00 and sternly warned that a
repetition of the same or similar acts in the
future would definitely warrant a more severe
sanction. Those administrative cases are also
enumerated in the Report and
Recommendation of the Office of the Court
Administrator dated 15 July 1996 thus-
It is also worthy to inform the Honorable Court
that there are at least eight (8) administrative
complaints filed against herein respondents
Judge charging him with gross ignorance of the
law, grave abuse of authority and discretion,
incompetence, dishonesty, dereliction of duty,
misconduct, conduct unbecoming (of a Judge),
oppression and direct bribery (RTJ-90-588,
RTJ-91-639, RTJ-92-882, RTJ-93-1040, RTJ-
93-1219, RTJ-94-1250, RTJ-94-1267 and RTJ-
94-1281). However , these complaints were
subsequently dismissed by this Court. But in
RTJ-94-1217 respondent Judge was charged
with incompetence, gross ignorance of the law,
oppression and grave misconduct relative to
criminal cases filed before this Court wherein
he granted bail to the accused without hearing.
In the Resolution of the Court En Banc dated
June 16, 1995, the Court imposed on Judge
Carlos C. Ofilada a FINE of P20,000.00 with aw
STERN WARNING that a repetition of the same
or similar acts in the future shall be dealt with
more seriously.
It may also be worth to mention that on 17
March 1998 another sworn administrative
complaint was filed before this Court against
respondent Judge for gross ignorance of the Court judge of Malolos, Bulacan, and to turn
law and conduct unbecoming of a member of over all records and property responsibilities to
the bench.22 Thereafter, in an endorsement the Clerk of Court of that court who shall issue
dated 14 April 1998 by Deputy Ombudsman for that corresponding receipt thereof.
Luzon Jesus P. Guerrero, another complaint
which was filed with the Ombudsman against
SO ORDERED.
respondent Judge for violation of the Anti Graft
and Corrupt Practices Act and Art. 315 of the
Revised Penal Code was referred to this Court Narvasa Chief Justice, Regalado, Davide,
for appropriate action.23 Respondent has yet to Jr., Romero, Bellosillo, Melo, Puno, Vitug,
submit his comments on both charges against Kapunan, Mendoza, Panganiban, Martinez,
him. Quisumbing and Purisima, JJ., concur.
SECOND DIVISION
Be that as it may, this Court finds that
respondent Judge has failed to conduct himself
in a manner that will justify his continued stay
in the judiciary. The Code of Judicial Conduct
enjoins a judge to perform his official duties
[A.M. No. MTJ-01-1377. June 17, 2004]
competently, honestly , with diligence and
impartially. Regretfully, respondent Judge is
found miserably short of the standards set for
appropriate judicial conduct, which leaves the
Court no choice but to cut short his MERIAM BALAGTAS, complainant, vs. OLEGARIO
membership in and terminate his official R. SARMIENTO, JR. Judge, MTCC,
relations with the judiciary. Branch 2 Cebu City, respondent.
ACCORDINGLY, the Court finds respondents DECISION
JUDGE CARLOS C. OFILADA of the Regional
TINGA, J.:
Trial Court, Branch 15, Malolos, Bulacan,
GUILTY in A.M. No. RTJ-97-1390 for grave
abuse of authority and evident partiality, and The essence of due process is the right to be
in A.M. No. RTJ-98-1411, for gross heard. Therefore, every motion which may prejudice
incompetence, ignorance of the law and the rights of a party should be set for hearing. The
intendment of the law will never be achieved if notice
evident partially, all prejudicial to the interest
is not served, such as in this case.
of the Government and the judicial service.
These being his second and third offenses,
On November 27, 1998, the Office of the Court
respondent is ordered DISMISSED immediately
Administrator (OCA) received the sworn Letter-
from the service with forfeiture of all his Complaint[1] of Ms. Meriam Balagtas (Balagtas) dated
retirement benefits and leave credits with November 11, 1998 accusing Judge Olegario R.
prejudice to his reemployment in any public Sarmiento, Jr., MTCC, Branch 2, Cebu City, of
office including any government owned or knowingly rendering an unjust interlocutory order,
controlled corporation. gross ignorance of the law and serious irregularities in
the performance of judicial duties in connection with
JUDGE CARLOS C. OFILADA is directed to Criminal Cases Nos. 82863-R and 83186-R, entitled
“People of the Philippines versus Hermann Peith,” for
immediately cease and desist from performing
violation of B.P. 22.
the functions of the Office of Regional Trial
 Balagtas was the private complainant in the
aforementioned criminal cases.
In the Letter-Complaint she submitted, Balagtas
alleges that on May 25, 1998, accused Hermann
Peith (Peith) filed an Urgent Ex-Parte Motion to Leave
for Abroad[2] which was granted by the respondent
judge on the same day it was filed without notice to
her or the prosecution.[3] Moreover, as shown in
the Order[4] dated May 25, 1998, the respondent judge
granted the motion simply because Peith executed
a Deed of Real Estate Mortgage covering the value of
the bounced checks.
Consequently, Balagtas filed an Urgent Motion
for Reconsideration of the Order Dated May 25,
1998 dated May 26, 1998, arguing that the fact that
Peith executed a Deed of Real Estate Mortgage to
secure the payment of the checks is of no
consequence, the cases being criminal in nature.
[5]
Besides, Peith cannot own real properties in
the Philippines since he is a foreigner.[6]
The respondent judge denied the motion for
reconsideration in his Order[7] dated May 28, 1998.
Balagtas then filed a Motion for the Inhibition of
Judge Olegario Sarmiento[8] dated August 24,
1998 on grounds of bias and partiality. She claimed
therein that she filed a Motion for the Issuance of a
Hold Departure Order against Peith which the
respondent judge did not act upon. However, in a
move evincing bias in favor of Peith, the respondent
judge granted his Urgent Ex-Parte Motion to Leave
for Abroad.
The respondent judge granted the motion for
inhibition in his Order[9] dated August 31, 1998. In the
same Order, he stated that he cannot act upon
Balagtas’ Motion for the Issuance of a Hold Departure
Order against Peith since he is prohibited from doing
so by Circular No. 39-97 of the Supreme Court which
limits such authority to criminal cases within the
jurisdiction of second level courts. Moreover,
Balagtas had already foreclosed Peith’s property and
the value of the bounced checks had already been
satisfied. He further remarked that “[H]erein judge is
responsibly informed that the herein parties have had
a special personal relationship only that accused
married another woman. This Court does not want to
be an instrument of the misgivings, sourgrapings and
importunings of complainant.”[10]
Balagtas now asserts that the respondent
judge’s Orders dated May 25, 1998 and August 31,
1998 are unjust and amount to gross ignorance of the
law. She also claims that the respondent judge
committed serious irregularities in the performance of
his duties.
Balagtas essentially contends that the
respondent judge should not have allowed Peith to
leave the country since, as the accused in two
criminal cases, he is not only liable for the amount of
the checks that bounced but also for the imposable
penalty for violation of the Bouncing Checks
Law. She likewise objects to what she claims to be
derogatory remarks made by the respondent judge
against her in his Order of August 31, 1998.
In his Letter-Comment[11] dated May 24, 1999,
the respondent judge explains that he allowed Peith to
leave the country for one month to avail of his
retirement benefits in Switzerland for the following
reasons: (a) Peith has properties, family and a
reputation to maintain in Cebu City; (b) he was
appreciative of Peith’s gesture of asking permission to
travel because Peith need not have done so; (c) he
was hoping that Peith can bring in money to pay his
obligation under the checks; (d) Peith had already
been arraigned; hence, he may be tried in
absentia; and (e) Peith executed a Deed of Real
Estate Mortgage in favor of Balagtas to secure the
payment of his obligation. Besides, Balagtas had
allegedly already foreclosed Peith’s property and the
value of the bounced checks had already been
satisfied.
The respondent judge also claims that the case
is already before another judge since he inhibited
himself from hearing the cases in
his Order dated August 31, 1998. Lastly, the
respondent judge avers that Balagtas “can push
through with her personal agenda of vendetta without
unnecessarily dragging” him into it once Peith sets
foot on Philippine soil.[12] He further states that he
“cannot act as ‘Berdugo’ for complainant’s personal ill
motive and selfish interest.”[13]
In her Letter-Reply[14] dated June 26, 1999,
Balagtas insists that had she been notified of Peith’s
motion, she could have opposed the motion with the
following points, to wit: Peith has no legal wife but
only a live-in-partner in Cebu; as a foreigner, Peith
cannot own real property anywhere in the Philippines;
and the value of the mortgaged real estate is not
sufficient to satisfy Peith’s monetary obligation. She
adds that the respondent judge delved into irrelevant
issues when he stated in his August 31,
1998 Order that he was “informed that the herein
parties have had a special personal relationship only
that the accused married another woman.”[15]
In a Resolution[16] dated September 17, 2001,
the Court referred the complaint to Executive Judge
Galicano C. Arriesgado of RTC, Cebu City for
investigation, report and recommendation. During the
pendency of the investigation, Judge Pampio A.
Abarintos took over from Judge Arriesgado as
Executive Judge. Thus, Judges Abarintos and
Arriesgado conducted the investigation with 1st Vice
Executive Judge Isaias P. Dicdican.
The investigating judges submitted their report
and recommendation[17] dated August 1, 2003 to the
OCA finding as follows: (1) as a first level court judge,
the respondent is not authorized to issue hold
departure orders as this power is vested in a Regional
Trial Court judge; (2) Balagtas erred in filing
her Motion for the Issuance of a Hold Departure
Order against Peith before the respondent judge’s
court, hence, she is not entirely blameless; (3) upon
the inhibition of the respondent judge, the cases were
transferred to MTCC, Branch 5, Cebu City, presided
over by Judge Oscar D. Andrino, who rendered a
judgment on the cases on November 11, 2002; and
(4) Peith was acquitted but was ordered to indemnify
Balagtas for the face value of the checks with interest
thereon. In view of these findings, the investigating
judges recommend that the charges against the
respondent judge be dismissed and the case
considered closed and terminated.
In its Memorandum[18] dated March 16, 2004,
the OCA sustains with modification the findings and
recommendation of the investigating judges. The
OCA notes that since Peith was charged with two
counts of violation of B.P. 22, which is under the
exclusive jurisdiction of first level courts and not
among the criminal cases covered by Circular No. 39-
97 dated June 19, 1997 of this Court where hold
departure orders may be issued, the respondent
judge may not deny his Urgent Ex-parte Motion to
Leave for Abroad or grant Balagtas’ Motion for
Issuance of a Hold Departure Order against him. The
OCA, therefore, recommends the dismissal of the
case against the respondent judge but admonishes
him to refrain from resorting to insulting and offensive
language in his future judicial actions.
The Court agrees that the remark of the
respondent judge in his Order dated August 31, 1998,
aside from being totally irrelevant, was improper,
offensive and uncalled for. He insinuated that the
reason for Balagtas’ filing of criminal cases against
Peith was she was incensed for being dumped by the
latter in favor of another woman. The respondent
judge repeated his tirade against Balagtas in
his Letter-Comment[19] dated May 24, 1999 where he
stated that Balagtas has a “personal agenda of
vendetta” against Peith and that she was motivated by
“personal ill motive and selfish interest.”
The respondent judge deserves the sternest
reproof for making these remarks. Judges should
refrain from expressing irrelevant opinions in their
decisions which may only reflect unfavorably upon
their competence and the propriety of their judicial
actuations.[20] Moreover, intemperate speech detracts
from the equanimity and judiciousness that should be
the constant hallmarks of a dispenser of justice.[21]
The Court, however, deviates from the
conclusion of both the OCA and the investigating
judges that the respondent judge should not be held
liable for gross ignorance of the law.
The OCA and the investigating judges
overlooked the fact that when Peith requested
permission to leave for abroad on May 25, 1998, the
latter filed a motion without the required notice to the
parties. The Urgent Ex-Parte Motion to Leave for
Abroad attached as Annex “A” to the Letter-
Complaint even states that the motion was to be
submitted for resolution of the court “without further
argument.”[22] This was never denied by the
respondent judge.
Considering the litigious nature of Peith’s
motion and the fact that the criminal and civil aspects
of the cases were simultaneously instituted, the public
prosecutor and the private offended party should have
been notified, failing which, the respondent judge language in his future judicial actions, with a
should not have acted upon the motion. WARNING that a repetition of the same or similar acts
will be dealt with more severely.
The Rules of Court is explicit on this point. [23] A
motion without notice of hearing is pro forma, a mere SO ORDERED.
scrap of paper. It presents no question which the
court could decide. The court has no reason to Puno, (Chairman), Quisumbing, and Callejo,
consider it and the clerk has no right to receive it. The Sr., JJ., concur.
rationale behind the rule is plain: unless the movant Austria-Martinez, J., on leave.
sets the time and place of hearing, the court will be
unable to determine whether the adverse party agrees
or objects to the motion, and if he objects, to hear him
on his objection. The objective of the rule is to avoid
a capricious change of mind in order to provide due
process to both parties and to ensure impartiality in
the trial.[24]
In granting Peith’s Urgent Ex-Parte Motion to
Leave for Abroad, the respondent judge violated a
basic and fundamental constitutional principle, due
process. When the law is elementary, not to be
aware of it constitutes gross ignorance thereof. After
all, judges are expected to have more than just a SECOND DIVISION
modicum of acquaintance with the statutes and
procedural rules.[25] Hence, the respondent judge is
G.R. No. 115324 February 19, 2003
guilty of gross ignorance of the law.
Gross ignorance of the law is classified as a PRODUCERS BANK OF THE PHILIPPINES (now
serious charge[26] for which any of the following FIRST INTERNATIONAL BANK), petitioner,
sanctions may be imposed: (a) dismissal from service vs.
with forfeiture of benefits and disqualification from HON. COURT OF APPEALS AND FRANKLIN
reinstatement or appointment to any public office VIVES, respondents.
including a government-owned or controlled
corporation; (b) suspension for three to six months
without salary and benefits; or (c) a fine of not less DECISION
than P20,000.00 but not more than P40,000.00.
[27]
However, in the case of De Jesus v. Obnamia, Jr. CALLEJO, SR., J.:
[28]
where the respondent judge failed to ensure
compliance with the three (3)-day notice rule, the
Court ordered him to pay a fine of Three Thousand This is a petition for review on certiorari of the
Pesos (P3,000.00) with a warning that a repetition of Decision1 of the Court of Appeals dated June 25, 1991
the same or similar acts will be dealt with more in CA-G.R. CV No. 11791 and of its Resolution2 dated
severely. This Court finds the respondent judge herein May 5, 1994, denying the motion for reconsideration
similarly situated. of said decision filed by petitioner Producers Bank of
the Philippines.
ACCORDINGLY, respondent Judge Olegario R.
Sarmiento, Jr., Presiding Judge of the Municipal Trial
Court in Cities, Branch 2, Cebu City, is hereby Sometime in 1979, private respondent Franklin Vives
ordered to pay a FINE in the amount of THREE was asked by his neighbor and friend Angeles
THOUSAND PESOS (P3,000.00) and ADMONISHED Sanchez to help her friend and townmate, Col. Arturo
to refrain from resorting to insulting and offensive Doronilla, in incorporating his business, the Sterela
Marketing and Services ("Sterela" for brevity).
Specifically, Sanchez asked private respondent to
deposit in a bank a certain amount of money in the
bank account of Sterela for purposes of its
incorporation. She assured private respondent that he
could withdraw his money from said account within a
month’s time. Private respondent asked Sanchez to
bring Doronilla to their house so that they could
discuss Sanchez’s request.3
On May 9, 1979, private respondent, Sanchez,
Doronilla and a certain Estrella Dumagpi, Doronilla’s
private secretary, met and discussed the matter.
Thereafter, relying on the assurances and
representations of Sanchez and Doronilla, private
respondent issued a check in the amount of Two
Hundred Thousand Pesos (₱200,000.00) in favor of
Sterela. Private respondent instructed his wife, Mrs.
Inocencia Vives, to accompany Doronilla and
Sanchez in opening a savings account in the name of
Sterela in the Buendia, Makati branch of Producers
Bank of the Philippines. However, only Sanchez, Mrs.
Vives and Dumagpi went to the bank to deposit the
check. They had with them an authorization letter
from Doronilla authorizing Sanchez and her
companions, "in coordination with Mr. Rufo Atienza,"
to open an account for Sterela Marketing Services in
the amount of ₱200,000.00. In opening the account,
the authorized signatories were Inocencia Vives
and/or Angeles Sanchez. A passbook for Savings
Account No. 10-1567 was thereafter issued to Mrs.
Vives.4
Subsequently, private respondent learned that Sterela
was no longer holding office in the address previously
given to him. Alarmed, he and his wife went to the
Bank to verify if their money was still intact. The bank
manager referred them to Mr. Rufo Atienza, the
assistant manager, who informed them that part of the
money in Savings Account No. 10-1567 had been
withdrawn by Doronilla, and that only ₱90,000.00
remained therein. He likewise told them that Mrs.
Vives could not withdraw said remaining amount
because it had to answer for some postdated checks
issued by Doronilla. According to Atienza, after Mrs.
Vives and Sanchez opened Savings Account No. 10-
1567, Doronilla opened Current Account No. 10-0320
for Sterela and authorized the Bank to debit Savings
Account No. 10-1567 for the amounts necessary to
cover overdrawings in Current Account No. 10-0320.
In opening said current account, Sterela, through interest at the legal rate from the filing of the
Doronilla, obtained a loan of ₱175,000.00 from the complaint until the same is fully paid;
Bank. To cover payment thereof, Doronilla issued
three postdated checks, all of which were dishonored.
(b) the sum of ₱50,000.00 for moral
Atienza also said that Doronilla could assign or
damages and a similar amount for
withdraw the money in Savings Account No. 10-1567
exemplary damages;
because he was the sole proprietor of Sterela.5
(c) the amount of ₱40,000.00 for attorney’s
Private respondent tried to get in touch with Doronilla
fees; and
through Sanchez. On June 29, 1979, he received a
letter from Doronilla, assuring him that his money was
intact and would be returned to him. On August 13, (d) the costs of the suit.
1979, Doronilla issued a postdated check for Two
Hundred Twelve Thousand Pesos (₱212,000.00) in
SO ORDERED.8
favor of private respondent. However, upon
presentment thereof by private respondent to the
drawee bank, the check was dishonored. Doronilla Petitioner appealed the trial court’s decision to the
requested private respondent to present the same Court of Appeals. In its Decision dated June 25, 1991,
check on September 15, 1979 but when the latter the appellate court affirmed in toto the decision of the
presented the check, it was again dishonored.6 RTC.9 It likewise denied with finality petitioner’s motion
for reconsideration in its Resolution dated May 5,
1994.10
Private respondent referred the matter to a lawyer,
who made a written demand upon Doronilla for the
return of his client’s money. Doronilla issued another On June 30, 1994, petitioner filed the present petition,
check for ₱212,000.00 in private respondent’s favor arguing that –
but the check was again dishonored for insufficiency
of funds.7
I.
Private respondent instituted an action for recovery of
sum of money in the Regional Trial Court (RTC) in THE HONORABLE COURT OF APPEALS ERRED IN
Pasig, Metro Manila against Doronilla, Sanchez, UPHOLDING THAT THE TRANSACTION BETWEEN
Dumagpi and petitioner. The case was docketed as THE DEFENDANT DORONILLA AND
RESPONDENT VIVES WAS ONE OF SIMPLE LOAN
Civil Case No. 44485. He also filed criminal actions
AND NOT ACCOMMODATION;
against Doronilla, Sanchez and Dumagpi in the RTC.
However, Sanchez passed away on March 16, 1985
while the case was pending before the trial court. On II.
October 3, 1995, the RTC of Pasig, Branch 157,
promulgated its Decision in Civil Case No. 44485, the
THE HONORABLE COURT OF APPEALS ERRED IN
dispositive portion of which reads:
UPHOLDING THAT PETITIONER’S BANK
MANAGER, MR. RUFO ATIENZA, CONNIVED WITH
IN VIEW OF THE FOREGOING, judgment is hereby THE OTHER DEFENDANTS IN DEFRAUDING
rendered sentencing defendants Arturo J. Doronila, PETITIONER (Sic. Should be PRIVATE
Estrella Dumagpi and Producers Bank of the RESPONDENT) AND AS A CONSEQUENCE, THE
Philippines to pay plaintiff Franklin Vives jointly and PETITIONER SHOULD BE HELD LIABLE UNDER
severally – THE PRINCIPLE OF NATURAL JUSTICE;
(a) the amount of ₱200,000.00, III.
representing the money deposited, with
THE HONORABLE COURT OF APPEALS ERRED IN
ADOPTING THE ENTIRE RECORDS OF THE
REGIONAL TRIAL COURT AND AFFIRMING THE
JUDGMENT APPEALED FROM, AS THE FINDINGS
OF THE REGIONAL TRIAL COURT WERE BASED
ON A MISAPPREHENSION OF FACTS;
IV.
THE HONORABLE COURT OF APPEALS ERRED IN
DECLARING THAT THE CITED DECISION IN
SALUDARES VS. MARTINEZ, 29 SCRA 745,
UPHOLDING THE LIABILITY OF AN EMPLOYER
FOR ACTS COMMITTED BY AN EMPLOYEE IS
APPLICABLE;
V.
THE HONORABLE COURT OF APPEALS ERRED IN
UPHOLDING THE DECISION OF THE LOWER
COURT THAT HEREIN PETITIONER BANK IS
JOINTLY AND SEVERALLY LIABLE WITH THE
OTHER DEFENDANTS FOR THE AMOUNT OF
P200,000.00 REPRESENTING THE SAVINGS
ACCOUNT DEPOSIT, P50,000.00 FOR MORAL
DAMAGES, P50,000.00 FOR EXEMPLARY
DAMAGES, P40,000.00 FOR ATTORNEY’S FEES
AND THE COSTS OF SUIT.11
Private respondent filed his Comment on September
23, 1994. Petitioner filed its Reply thereto on
September 25, 1995. The Court then required private
respondent to submit a rejoinder to the reply.
However, said rejoinder was filed only on April 21,
1997, due to petitioner’s delay in furnishing private
respondent with copy of the reply12 and several
substitutions of counsel on the part of private
respondent.13 On January 17, 2001, the Court
resolved to give due course to the petition and
required the parties to submit their respective
memoranda.14 Petitioner filed its memorandum on
April 16, 2001 while private respondent submitted his
memorandum on March 22, 2001.
Petitioner contends that the transaction between
private respondent and Doronilla is a simple loan
(mutuum) since all the elements of a mutuum are
present: first, what was delivered by private and neither may it be held liable for moral and
respondent to Doronilla was money, a consumable exemplary damages as well as attorney’s fees.20
thing; and second, the transaction was onerous as
Doronilla was obliged to pay interest, as evidenced by
Private respondent, on the other hand, argues that the
the check issued by Doronilla in the amount of
transaction between him and Doronilla is not a
₱212,000.00, or ₱12,000 more than what private
mutuum but an accommodation,21 since he did not
respondent deposited in Sterela’s bank
actually part with the ownership of his ₱200,000.00
account.15 Moreover, the fact that private respondent
and in fact asked his wife to deposit said amount in
sued his good friend Sanchez for his failure to recover
the account of Sterela so that a certification can be
his money from Doronilla shows that the transaction
issued to the effect that Sterela had sufficient funds
was not merely gratuitous but "had a business angle"
for purposes of its incorporation but at the same time,
to it. Hence, petitioner argues that it cannot be held
he retained some degree of control over his money
liable for the return of private respondent’s
through his wife who was made a signatory to the
₱200,000.00 because it is not privy to the transaction
savings account and in whose possession the savings
between the latter and Doronilla.16
account passbook was given.22
It argues further that petitioner’s Assistant Manager,
He likewise asserts that the trial court did not err in
Mr. Rufo Atienza, could not be faulted for allowing
finding that petitioner, Atienza’s employer, is liable for
Doronilla to withdraw from the savings account of
the return of his money. He insists that Atienza,
Sterela since the latter was the sole proprietor of said
petitioner’s assistant manager, connived with
company. Petitioner asserts that Doronilla’s May 8,
Doronilla in defrauding private respondent since it was
1979 letter addressed to the bank, authorizing Mrs.
Atienza who facilitated the opening of Sterela’s
Vives and Sanchez to open a savings account for
current account three days after Mrs. Vives and
Sterela, did not contain any authorization for these
Sanchez opened a savings account with petitioner for
two to withdraw from said account. Hence, the
said company, as well as the approval of the authority
authority to withdraw therefrom remained exclusively
to debit Sterela’s savings account to cover any
with Doronilla, who was the sole proprietor of Sterela,
overdrawings in its current account.23
and who alone had legal title to the savings
account.17 Petitioner points out that no evidence other
than the testimonies of private respondent and Mrs. There is no merit in the petition.
Vives was presented during trial to prove that private
respondent deposited his ₱200,000.00 in Sterela’s
At the outset, it must be emphasized that only
account for purposes of its incorporation.18 Hence,
questions of law may be raised in a petition for review
petitioner should not be held liable for allowing
filed with this Court. The Court has repeatedly held
Doronilla to withdraw from Sterela’s savings
that it is not its function to analyze and weigh all over
account.1a\^/phi1.net
again the evidence presented by the parties during
trial.24 The Court’s jurisdiction is in principle limited to
Petitioner also asserts that the Court of Appeals erred reviewing errors of law that might have been
in affirming the trial court’s decision since the findings committed by the Court of Appeals.25 Moreover,
of fact therein were not accord with the evidence factual findings of courts, when adopted and
presented by petitioner during trial to prove that the confirmed by the Court of Appeals, are final and
transaction between private respondent and Doronilla conclusive on this Court unless these findings are not
was a mutuum, and that it committed no wrong in supported by the evidence on record.26 There is no
allowing Doronilla to withdraw from Sterela’s savings showing of any misapprehension of facts on the part
account.19 of the Court of Appeals in the case at bar that would
require this Court to review and overturn the factual
findings of that court, especially since the conclusions
Finally, petitioner claims that since there is no
of fact of the Court of Appeals and the trial court are
wrongful act or omission on its part, it is not liable for
the actual damages suffered by private respondent,
not only consistent but are also amply supported by
the evidence on record.
No error was committed by the Court of Appeals when
it ruled that the transaction between private
respondent and Doronilla was a commodatum and not
a mutuum. A circumspect examination of the records
reveals that the transaction between them was a
commodatum. Article 1933 of the Civil Code
distinguishes between the two kinds of loans in this
wise:
By the contract of loan, one of the parties delivers to
another, either something not consumable so that the
latter may use the same for a certain time and return
it, in which case the contract is called a commodatum;
or money or other consumable thing, upon the
condition that the same amount of the same kind and
quality shall be paid, in which case the contract is
simply called a loan or mutuum.
Commodatum is essentially gratuitous.
Simple loan may be gratuitous or with a stipulation to
pay interest.
In commodatum, the bailor retains the ownership of
the thing loaned, while in simple loan, ownership
passes to the borrower.
The foregoing provision seems to imply that if the
subject of the contract is a consumable thing, such as
money, the contract would be a mutuum. However,
there are some instances where a commodatum may
have for its object a consumable thing. Article 1936 of
the Civil Code provides:
Consumable goods may be the subject of
commodatum if the purpose of the contract is not the
consumption of the object, as when it is merely for
exhibition.
Thus, if consumable goods are loaned only for
purposes of exhibition, or when the intention of the
parties is to lend consumable goods and to have the
very same goods returned at the end of the period
agreed upon, the loan is a commodatum and not a
mutuum.
The rule is that the intention of the parties thereto
shall be accorded primordial consideration in
determining the actual character of a contract.27 In
case of doubt, the contemporaneous and subsequent
acts of the parties shall be considered in such
determination.28
As correctly pointed out by both the Court of Appeals
and the trial court, the evidence shows that private
respondent agreed to deposit his money in the
savings account of Sterela specifically for the purpose
of making it appear "that said firm had sufficient
capitalization for incorporation, with the promise that
the amount shall be returned within thirty (30)
days."29 Private respondent merely "accommodated"
Doronilla by lending his money without consideration,
as a favor to his good friend Sanchez. It was however
clear to the parties to the transaction that the money
would not be removed from Sterela’s savings account
and would be returned to private respondent after
thirty (30) days.
Doronilla’s attempts to return to private respondent
the amount of ₱200,000.00 which the latter deposited
in Sterela’s account together with an additional
₱12,000.00, allegedly representing interest on the
mutuum, did not convert the transaction from a
commodatum into a mutuum because such was not
the intent of the parties and because the additional
₱12,000.00 corresponds to the fruits of the lending of
the ₱200,000.00. Article 1935 of the Civil Code
expressly states that "[t]he bailee in commodatum
acquires the use of the thing loaned but not its fruits."
Hence, it was only proper for Doronilla to remit to
private respondent the interest accruing to the latter’s
money deposited with petitioner.
Neither does the Court agree with petitioner’s
contention that it is not solidarily liable for the return of
private respondent’s money because it was not privy
to the transaction between Doronilla and private
respondent. The nature of said transaction, that is,
whether it is a mutuum or a commodatum, has no
bearing on the question of petitioner’s liability for the
return of private respondent’s money because the
factual circumstances of the case clearly show that
petitioner, through its employee Mr. Atienza, was
partly responsible for the loss of private respondent’s
money and is liable for its restitution.
Petitioner’s rules for savings deposits written on the
passbook it issued Mrs. Vives on behalf of Sterela for
Savings Account No. 10-1567 expressly states that—
"2. Deposits and withdrawals must be made by the
depositor personally or upon his written authority duly
authenticated, and neither a deposit nor a withdrawal
will be permitted except upon the production of the
depositor savings bank book in which will be entered
by the Bank the amount deposited or withdrawn."30
Said rule notwithstanding, Doronilla was permitted by
petitioner, through Atienza, the Assistant Branch
Manager for the Buendia Branch of petitioner, to
withdraw therefrom even without presenting the
passbook (which Atienza very well knew was in the
possession of Mrs. Vives), not just once, but several
times. Both the Court of Appeals and the trial court
found that Atienza allowed said withdrawals because
he was party to Doronilla’s "scheme" of defrauding
private respondent:
XXX
But the scheme could not have been executed
successfully without the knowledge, help and
cooperation of Rufo Atienza, assistant manager and
cashier of the Makati (Buendia) branch of the
defendant bank. Indeed, the evidence indicates that
Atienza had not only facilitated the commission of the
fraud but he likewise helped in devising the means by
which it can be done in such manner as to make it
appear that the transaction was in accordance with
banking procedure.
To begin with, the deposit was made in defendant’s
Buendia branch precisely because Atienza was a key
officer therein. The records show that plaintiff had
suggested that the ₱200,000.00 be deposited in his
bank, the Manila Banking Corporation, but Doronilla
and Dumagpi insisted that it must be in defendant’s
branch in Makati for "it will be easier for them to get a
certification". In fact before he was introduced to
plaintiff, Doronilla had already prepared a letter
addressed to the Buendia branch manager
authorizing Angeles B. Sanchez and company to
open a savings account for Sterela in the amount of
₱200,000.00, as "per coordination with Mr. Rufo
Atienza, Assistant Manager of the Bank x x x" (Exh.
1). This is a clear manifestation that the other
defendants had been in consultation with Atienza from
the inception of the scheme. Significantly, there were
testimonies and admission that Atienza is the brother-
in-law of a certain Romeo Mirasol, a friend and
business associate of Doronilla.1awphi1.nét
Then there is the matter of the ownership of the fund.
Because of the "coordination" between Doronilla and
Atienza, the latter knew before hand that the money
deposited did not belong to Doronilla nor to Sterela.
Aside from such foreknowledge, he was explicitly told
by Inocencia Vives that the money belonged to her
and her husband and the deposit was merely to
accommodate Doronilla. Atienza even declared that
the money came from Mrs. Vives.
Although the savings account was in the name of
Sterela, the bank records disclose that the only ones
empowered to withdraw the same were Inocencia
Vives and Angeles B. Sanchez. In the signature card
pertaining to this account (Exh. J), the authorized
signatories were Inocencia Vives &/or Angeles B.
Sanchez. Atienza stated that it is the usual banking
procedure that withdrawals of savings deposits could
only be made by persons whose authorized
signatures are in the signature cards on file with the
bank. He, however, said that this procedure was not
followed here because Sterela was owned by
Doronilla. He explained that Doronilla had the full
authority to withdraw by virtue of such ownership. The
Court is not inclined to agree with Atienza. In the first
place, he was all the time aware that the money came
from Vives and did not belong to Sterela. He was also
told by Mrs. Vives that they were only accommodating
Doronilla so that a certification can be issued to the
effect that Sterela had a deposit of so much amount to
be sued in the incorporation of the firm. In the second
place, the signature of Doronilla was not authorized in
so far as that account is concerned inasmuch as he
had not signed the signature card provided by the
bank whenever a deposit is opened. In the third place,
neither Mrs. Vives nor Sanchez had given Doronilla
the authority to withdraw.
Moreover, the transfer of fund was done without the
passbook having been presented. It is an accepted
practice that whenever a withdrawal is made in a
savings deposit, the bank requires the presentation of
the passbook. In this case, such recognized practice
was dispensed with. The transfer from the savings
account to the current account was without the
submission of the passbook which Atienza had given
to Mrs. Vives. Instead, it was made to appear in a
certification signed by Estrella Dumagpi that a
duplicate passbook was issued to Sterela because
the original passbook had been surrendered to the
Makati branch in view of a loan accommodation
assigning the savings account (Exh. C). Atienza, who
undoubtedly had a hand in the execution of this
certification, was aware that the contents of the same
are not true. He knew that the passbook was in the
hands of Mrs. Vives for he was the one who gave it to
her. Besides, as assistant manager of the branch and
the bank official servicing the savings and current
accounts in question, he also was aware that the
original passbook was never surrendered. He was
also cognizant that Estrella Dumagpi was not among
those authorized to withdraw so her certification had
no effect whatsoever.
The circumstance surrounding the opening of the
current account also demonstrate that Atienza’s active
participation in the perpetration of the fraud and
deception that caused the loss. The records indicate
that this account was opened three days later after
the ₱200,000.00 was deposited. In spite of his
disclaimer, the Court believes that Atienza was
mindful and posted regarding the opening of the
current account considering that Doronilla was all the
while in "coordination" with him. That it was he who
facilitated the approval of the authority to debit the
savings account to cover any overdrawings in the
current account (Exh. 2) is not hard to comprehend.
Clearly Atienza had committed wrongful acts that had
resulted to the loss subject of this case. x x x.31
Under Article 2180 of the Civil Code, employers shall
be held primarily and solidarily liable for damages
caused by their employees acting within the scope of
their assigned tasks. To hold the employer liable
under this provision, it must be shown that an
employer-employee relationship exists, and that the
employee was acting within the scope of his assigned
task when the act complained of was
committed.32 Case law in the United States of America
has it that a corporation that entrusts a general duty to
its employee is responsible to the injured party for
damages flowing from the employee’s wrongful act
done in the course of his general authority, even
though in doing such act, the employee may have
failed in its duty to the employer and disobeyed the
latter’s instructions.33
There is no dispute that Atienza was an employee of
petitioner. Furthermore, petitioner did not deny that
Atienza was acting within the scope of his authority as
Assistant Branch Manager when he assisted Doronilla
in withdrawing funds from Sterela’s Savings Account
No. 10-1567, in which account private respondent’s
money was deposited, and in transferring the money
withdrawn to Sterela’s Current Account with petitioner.
Atienza’s acts of helping Doronilla, a customer of the
petitioner, were obviously done in furtherance of
petitioner’s interests34 even though in the process,
Atienza violated some of petitioner’s rules such as
those stipulated in its savings account passbook.35 It
was established that the transfer of funds from
Sterela’s savings account to its current account could
not have been accomplished by Doronilla without the
invaluable assistance of Atienza, and that it was their
connivance which was the cause of private
respondent’s loss.
The foregoing shows that the Court of Appeals
correctly held that under Article 2180 of the Civil
Code, petitioner is liable for private respondent’s loss
and is solidarily liable with Doronilla and Dumagpi for
the return of the ₱200,000.00 since it is clear that
petitioner failed to prove that it exercised due
diligence to prevent the unauthorized withdrawals
from Sterela’s savings account, and that it was not
negligent in the selection and supervision of Atienza.
Accordingly, no error was committed by the appellate
court in the award of actual, moral and exemplary
damages, attorney’s fees and costs of suit to private
respondent.
WHEREFORE, the petition is hereby DENIED. The
assailed Decision and Resolution of the Court of
Appeals are AFFIRMED.
SO ORDERED.
Bellosillo, (Chairman), Mendoza, Quisumbing and
Austria-Martinez, JJ., concur.
FIRST DIVISION
[G.R. No. 136726. September 24, 2003.]
PANFILO V. VILLARUEL, JR., Petitioner, v.
REYNALDO D. FERNANDO, MODESTO
ABARCA, JR. and MARILOU M.
CLEOFAS, Respondents.
DECISION
CARPIO, J.:
The Case
This petition for review on certiorari 1 seeks to
reverse the Decision 2 of the Court of Appeals
in CA-G.R. SP No. 48233 3 dated 30
September 1998 denying due course to the
petition for certiorari 4 filed by Panfilo V.
Villaruel, Jr. and the Resolution dated 3
December 1998 denying the motion for
reconsideration.
The Facts
Petitioner Panfilo V. Villaruel, Jr. ("petitioner")
is the former Assistant Secretary of the Air
Transportation Office ("ATO"), Department of
Transportation and Communication ("DOTC").
Respondents Reynaldo D. Fernando, Modesto
E. Abarca, Jr. ("Abarca"), and Marilou M.
Cleofas are the Chief, Chief Administrative
Assistant, and Administrative Assistant,
respectively, of the Civil Aviation Training
Center ("CATC"). The CATC is an adjunct
agency of the ATO tasked to train air traffic
controllers, airway communicators and related
civil aviation personnel for the local aviation
industry as well as for the Southeast Asian and
Pacific region.
Petitioner issued a memorandum dated 27
April 1995 addressed to the respondents,
detailing them to the Office of DOTC
Undersecretary Primitivo C. Cal effective 2 May
1995.chanrob1es virtua1 1aw 1ibrary
On 29 April 1995, respondents wrote to DOTC
Secretary Jesus B. Garcia and Undersecretary
Josefina T. Lichauco through petitioner
requesting for reconsideration of the detail
order.
On 7 May 1995, in compliance with the detail
order, respondents reported to the Office of
Undersecretary Cal at DOTC.
Without acting on respondents’ request for
reconsideration, petitioner issued a
memorandum on 19 July 1995 addressed to
Abarca placing him under "preventive
suspension" for 90 days without pay pending
investigation for alleged grave misconduct.
On 10 August 1995, respondents requested
Secretary Garcia to lift the detail order and to
order their return to their mother unit since
more than 90 days had already lapsed.
Respondents also sought the intervention of
the Ombudsman in their case. As a result, the
Ombudsman inquired from Secretary Garcia
the action taken on respondents’ request for
reconsideration of the detail order.
On 22 November 1995, Secretary Garcia
replied to the Ombudsman that he had issued
a memorandum dated 9 November 1995
directing petitioner to recall respondents to
their mother unit. Secretary Garcia declared
that the law does not sanction the continuous
detail of respondents.
Despite repeated demands by respondents,
petitioner failed and refused to reinstate
respondents to their mother unit.
On 24 January 1996, respondents filed a
Petition for Mandamus and Damages with
Prayer for a Preliminary Mandatory Injunction
against petitioner with the Regional Trial Court
of Pasay City docketed as Civil Case No. 96-
0139. Respondents prayed for the
following:chanrob1es virtual 1aw library
PRAYER
WHEREFORE, premises considered, petitioners
herein respectfully pray of this Honorable Court
that:chanrob1es virtual 1aw library
1. Pending the determination of the merits of
this petition, a writ of preliminary mandatory
injunction be issued ex parte directing
respondent Panfilo V. Villaruel, Jr., to recall the
petitioners herein within twenty four (24)
hours from receipt hereof to their mother unit,
the Civil Aviation Training Center, Air
Transportation Office, DOTC, and to forthwith
allow them to assume, perform and discharge
the functions, duties and responsibilities
inherent, appurtenant and incident to their
respective offices.
2. After hearing on the merits, judgment be
rendered confirming the writ of preliminary
mandatory injunction earlier issued by this
Honorable Court and declaring the same
permanent, and ordering the respondent
Panfilo Villaruel, Jr., to pay petitioners herein
the following damages, to wit:chanrob1es
virtual 1aw library
a) to pay petitioner Reynaldo D. Fernando the
amount of P50,000 as actual and
compensatory damages;
b) to pay petitioners herein moral, exemplary
and temperate damages, in such amounts as
may hereafter be proven in the course of trial,
which petitioners herein are leaving to the
sound discretion of this Honorable Court to
determine and adjudge;
c) to pay petitioners herein attorney’s fees in
the amount of P100,000;
d) to pay petitioners herein the costs of suit.
Petitioners herein pray for such other and
further relief as may be just and equitable in
the premises. 5
On 23 February 1996, the trial court granted
respondents’ prayer for a preliminary
mandatory injunction.
Meanwhile, Judge Aurora Navarette-Reciña of
the trial court was appointed Chairman of the
Commission on Human Rights. Consequently,
the case was re-raffled and assigned to Branch
231 of the Regional Trial Court, Pasay City. 6
On 12 April 1996, the trial court issued an
order modifying the 23 February 1996 order of
Judge Reciña. The trial court issued a writ of
preliminary mandatory injunction ordering
petitioner to comply with the 9 November 1995
order of Secretary Garcia directing petitioner to
recall respondents to their mother unit until
further orders by the trial court.
For petitioner’s continued failure to comply
with the writ of preliminary injunction,
respondents moved to cite petitioner in
contempt. Respondents also moved to declare
petitioner in default for not filing an answer
within the period prescribed in the trial court’s
order of 26 January 1996.
On 28 May 1996, the trial court granted the
motion and declared petitioner guilty of indirect
contempt. The trial court issued a bench
warrant against petitioner.
Petitioner, through the Office of the Solicitor
General ("OSG"), filed a special civil action
for certiorari with the Court of Appeals 7
assailing the trial court’s order finding
petitioner guilty of indirect contempt. The case
was docketed as CA-G.R. SP No. 41263.
Meanwhile, the trial court declared petitioner in
default for his failure to file an answer to the
petition for mandamus and damages.
Accordingly, respondents adduced their
evidence ex-parte before the Clerk of Court.
On 11 July 1996, the trial court rendered a
Decision the dispositive portion of which
reads:chanrob1es virtual 1aw library
Wherefore, considering the foregoing premises,
judgment is hereby rendered in favor of the
petitioners and against the respondent
declaring mandamus permanent and thereby
ordering respondent Panfilo V. Villaruel, Jr., to
pay the following:chanrob1es virtual 1aw
library
(1) One hundred thousand pesos
(P100,000.00) each as moral damages;
(2) Twenty five thousand pesos (P25,000.00)
each as exemplary damages;
(3) Twenty five thousand pesos (P25,000.00)
each as temperate damages, and;
(4) Fifty thousand pesos (P50,000.00) as
attorney’s fees.
SO ORDERED. 8
Aggrieved, Petitioner, represented by the OSG,
appealed to the Court of Appeals. The appeal
was docketed as CA-G.R. SP No. 42447. 9 With
the filing of the appeal, the Court of Appeals
granted respondents’ motion for the dismissal
of the petition for certiorari in CA-G.R. SP No.
41263 for being moot and academic.
The Court of Appeals granted the OSG a non-
extendible extension until 13 December 1996
within which to file petitioner’s memorandum.
However, the OSG failed to file the
memorandum. Subsequently, Solicitor
Restituto Tuando, Jr. who was handling the
case was appointed Regional Trial Court judge
of Dumaguete City. The case was re-assigned
to Assistant Solicitor Luciano Joson, Jr. On 13
March 1997, the Court of Appeals issued a
Resolution dismissing petitioner’s appeal for
failure to file the required memorandum. The
OSG, through Assistant Solicitor Luciano Joson,
Jr., filed a Motion for Reconsideration, but the
Court of Appeals denied the same. The
Resolution became final and executory on 14
June 1997.
Consequently, the respondents filed a Motion
for Execution with the trial court. Although
served a copy of the motion for execution, the
OSG did not file any opposition.
Acting on the motion for execution, the trial
court issued a Writ of Execution on 22
September 1997. On 3 February 1998, the
Sheriff issued Notice of Sheriff’s Sale setting on
23 February 1998 the sale of petitioner’s real
property covered by Transfer Certificate of Title
No. 83030.
On 17 February 1998, Petitioner, through his
new counsel, 10 filed a Motion to Quash the
Writ of Execution and to Suspend Sheriff’s
Sale. In his motion, petitioner alleged that the
trial court’s decision never became final and
executory as the trial court deprived him of his
right to due process. Petitioner claimed that
the OSG failed to file petitioner’s memorandum
in CA-G.R. SP No. 42447 resulting in the
dismissal of his appeal. Furthermore, petitioner
alleged that the OSG failed to inform him of
the dismissal of his appeal and of the trial
court’s order granting respondents’ motion for
execution. Petitioner further asserted that the
Resolution of the Ombudsman in OMB-ADM 0-
96-0090 11 superseded the decision of the trial
court. The Ombudsman’s Resolution approved
the following recommendation of the reviewing
Assistant Ombudsman:chanrob1es virtual 1aw
library
PREMISES CONSIDERED, respondent
MODESTO ABARCA, JR., is hereby found
GUILTY of violation of Section 7(d) of Republic
Act 6713, for which the penalty of Suspension
Without Pay for Six (6) Months is hereby
recommended pursuant to Section 10(b), Rule
III of Administrative Order No. 07, in relation
to Section 25(2) of Republic Act No. 6770.
It is also respectfully recommended that the
charge against respondents REYNALDO
FERNANDO and MARY LOU CLEOFAS be
DISMISSED. 12
On 23 February 1998, the trial court issued an
Order quashing the Writ of Execution because
the Sheriff failed to follow Section 9, Rule 39 of
the Rules of Court. The trial court, however,
issued an Alias Writ of Execution. Petitioner
filed a Motion for Reconsideration but the trial
court denied the same on 28 April 1998.
Dissatisfied with the trial court’s orders,
petitioner filed a special civil action
for certiorari with the Court of Appeals
docketed as CA-G.R. SP No. 48233 assailing
the execution of the trial court’s decision of 11
July 1996. The Court of Appeals denied due
course to the petition for certiorari and
dismissed the same in the Decision dated 30
September 1998. Petitioner moved for
reconsideration but the appellate court denied
the motion in a Resolution of 3 December
1998.
Hence, the instant petition.
The Ruling of the Court of Appeals
Petitioner raised before the Court of Appeals
the following issues:chanrob1es virtual 1aw
library
1. THE TRIAL COURT’S DECISION DATED JULY
11, 1996 IS VOID FOR LACK OF DUE PROCESS
AND COULD NOT HAVE BECOME FINAL AND
EXECUTORY.
2. SUPERVENING FACTS AND
CIRCUMSTANCES HAVE TRANSPIRED WHICH
RENDERED EXECUTION OF THE JUDGMENT
UNJUST AND INEQUITABLE. 13
On the first issue, the Court of Appeals ruled
that the negligence of the OSG could not
relieve petitioner of the effects of such
negligence and prevent the decision of the trial
court from becoming final and executory. In
short, the OSG’s negligence binds petitioner.
The Court of Appeals admonished petitioner for
his failure to ascertain periodically from the
OSG or from the Court of Appeals the status of
his appeal. The appellate court cited Reyes v.
Court of Appeals, 14 which held that it is the
duty of a party litigant to make inquiries to his
counsel on matters concerning his case. A
party litigant bears the responsibility of
contacting his lawyer periodically to apprise
himself of the progress of the case. A lawyer’s
negligence binds a party litigant who must
suffer the consequences of such negligence.
The Court of Appeals further held that there
was no proof that the OSG failed to inform
petitioner of the dismissal of his appeal.
On the second issue, the Court of Appeals
concurred with the trial court’s ruling that the
nature of the case before the Ombudsman is
different from the case before the trial court.
The former deals with a violation of Republic
Act No. 6713 ("RA 6713") 15 punished with
suspension from office while the latter deals
with an ultra vices act punished with damages.
The appellate court ruled that the findings of
the Ombudsman had nothing to do with the
findings of the trial court, as the two forums
are separate and distinct from each other.
Moreover, the Court of Appeals opined that
petitioner failed to prove that the trial court
committed grave abuse of discretion to warrant
the writ of certiorari. The appellate court ruled
that the trial court acted in accord with law and
prevailing jurisprudence in issuing the
questioned orders.
The Issues
Petitioner presents the following issues for
resolution of this Court: 16
1. Whether the award of moral, exemplary and
temperate damages to respondents has legal
basis.
2. Whether the trial court correctly ruled that
the negligence of the OSG could not relieve
petitioner of the effects of such negligence and
prevent the decision of the trial court from
becoming final and executory.
3. Whether petitioner was denied of his right to
due process when the appellate court
dismissed his appeal for failure of the OSG to
file the memorandum.
4. Whether the resolution of the Ombudsman
finding Modesto Abarca, Jr. guilty of violating
Section 7 of RA 6713 rendered the execution of
the trial court’s decision unjust and inequitable.
The main issue to resolve is whether the Court
of Appeals erred in dismissing the petition
for certiorari assailing the trial court’s orders
dated 23 February 1998 and 28 April 1998.
Resolving this issue necessarily determines the
validity of the questioned orders. This in turn
resolves the questions of whether the trial
court denied petitioner of his right to due
process and whether the Ombudsman’s
resolution rendered the execution of the trial
court’s decision unjust and inequitable.
We can no longer resolve the issue regarding
the validity and reasonableness of the award of
damages for three reasons. First, the decision
of the trial court dated 11 July 1996 is already
final and executory. Second, the petition
for certiorari filed by petitioner was simply a
direct consequence of the trial court’s issuance
of the writ of execution and notice of sheriff’s
sale. In other words, petitioner merely
questioned the execution of the trial court’s
decision in his petition for certiorari. Third,
petitioner did not raise the issue of the validity
and reasonableness of the award of damages
before the Court of Appeals. 17
The Court’s Ruling
The petition has no merit.
We begin by pointing out that petitioner failed
to allege the essential requisites under Section
1, Rule 65 of the Rules of Court for a petition
for certiorari to prosper. Specifically, petitioner
never alleged that the trial court acted without
or in excess of its jurisdiction in issuing the
questioned orders. Neither did petitioner allege
that the trial court gravely abused its discretion
amounting to lack or excess of jurisdiction, and
there is no appeal, or any plain, speedy, and
adequate remedy in the ordinary course of law.
In other words, there is no issue that the trial
court committed grave abuse of discretion
amounting to lack or excess of jurisdiction in
handing down the questioned orders. On this
score alone, the dismissal of the petition
for certiorari before the Court of Appeals is in
order. However, in disposing of the instant
case, we shall still resolve the principal issues
raised by petitioner.
No Denial of Petitioner’s Right to Due Process
Petitioner essentially contends that the
judgment of the trial court in Civil Case No. 96-
0139 is void for lack of due process. Petitioner
alleges that the trial court never gave him the
chance to be heard and to submit his evidence.
Petitioner, formerly represented by the OSG,
failed to file an answer to respondents’ petition
for mandamus and damages. Consequently,
the trial court declared petitioner in default.
While the OSG filed a notice of appeal of the
judgment by default, it failed to file with the
Court of Appeals the required memorandum
resulting in the dismissal of the appeal. In
petitioner’s words, the OSG "virtually
abandoned" 18 his case. Petitioner argues that
the inexcusable negligence of the OSG did not
bind him and prevented the decision of the trial
court from becoming final and executory.
We do not agree.
Due process, in essence, is simply an
opportunity to be heard 19 and this
opportunity was not denied petitioner.
Throughout the proceedings in the trial court
as well as in the Court of Appeals, petitioner
had the opportunity to present his side but he
failed to do so. Clearly, petitioner’s former
counsel, the OSG, was negligent. This
negligence, however, binds petitioner. The trial
and appellate courts correctly ruled that the
negligence of the OSG could not relieve
petitioner of the effects such negligence 20 and
prevent the decision of the trial court from
becoming final and executory.
In Villa Rhecar Bus v. De la Cruz, 21 which
petitioner himself cited, the Court
ruled:chanrob1es virtual 1aw library
It is unfortunate that the lawyer of the
petitioner neglected his responsibilities to his
client. This negligence ultimately resulted in a
judgment adverse to the client. Be that as it
may, such mistake binds the client. the herein
petitioner. As a general rule, a client is bound
by the mistakes of his counsel. Only when the
application of the general rule would result in
serious injustice should an exception thereto
be called for. Under the circumstances
obtaining in this case, no undue prejudice
against the petitioner has been satisfactorily
demonstrated. At most, there is only an
unsupported claim that the petitioner had been
prejudiced by the negligence of its counsel,
without an explanation to that effect.
(Emphasis supplied)
In the present case, there was no proof that
petitioner suffered serious injustice to exempt
him from the general rule that the negligence
of the counsel binds the client. Petitioner did
not even attempt to refute the respondents’
allegations in the petition for mandamus and
damages.
Moreover, petitioner is not entirely blameless
for the dismissal of his appeal. After the OSG’s
failure to file the answer to the petition for
mandamus and damages and to have the order
declaring petitioner in default lifted, petitioner
should have already replaced the OSG with
another lawyer. However, petitioner still
retained the services of the OSG, despite its
apparent lack of interest in petitioner’s case,
until the trial court’s decision became final. In
Salva v. Court of Appeals, 22 the Court
declared:chanrob1es virtual 1aw library
Respondent’s reliance on Legarda is inapropos.
Notably, the decision in said case was not yet
final in 1991. The private respondent therein
then filed a timely motion for reconsideration.
In granting the motion for reconsideration, the
Court en banc held:chanrob1es virtual 1aw
library
x x x
Neither Cathay nor Cabrera should be made to
suffer for the gross negligence of Legarda’s
counsel. If she may be said to be ‘innocent’
because she was ignorant of the acts of
negligence of her counsel, with more reason
are respondents truly ‘innocent.’ . . . In this
case, it was not respondents, but Legarda, who
misjudged and hired the services of the lawyer
who practically abandoned her case and who
continued to retain him even after his proven
apathy and negligence."cralaw virtua1aw
library
At any rate, we find that respondent Governor
Sato, as well as the Province of Occidental
Mindoro which she represents, were not denied
their day in court. Responsive pleadings were
filed before the lower courts, and respondent
was given all the opportunities to prove her
case. Her chosen counsel did not diligently
exhaust all legal remedies to advance
respondent’s cause, yet respondent did not
terminate his services. She was aware of the
repeated negligence of her counsel and cannot
now complain of counsel’s errors. Hence, there
is no justifiable reason to exempt her from the
general rule that clients should suffer the
consequences of the negligence, mistake or
lack of competence of the counsel whom they
themselves hired and had the full authority to
fire at any time and replace with another even
without justifiable reason. (Emphasis supplied)
Furthermore, petitioner cannot now complain
of the OSG’s errors. Petitioner should have
taken the initiative of making periodic inquiries
from the OSG and the appellate court about
the status of his case. 23 Litigants represented
by counsel should not expect that all they need
to do is sit back, relax and await the outcome
of their case. 24 To agree with petitioner’s
stance would enable every party to render
inutile any adverse order or decision through
the simple expedient of alleging negligence on
the part of his counsel. 25 The Court will not
countenance such ill-founded argument which
contradicts long-settled doctrines of trial and
procedure. 26
The Ombudsman’s Resolution Does Not Render
the Execution of the Trial Court’s Decision
Unjust and Inequitable
Petitioner contends that the Ombudsman’s
Resolution finding Abarca guilty of violating
Section 7(d) of RA 6713 superseded the trial
court’s decision finding petitioner liable for
damages. Petitioner insists that the
Ombudsman’s resolution rendered the
execution of the trial court’s decision unjust
and inequitable.
We are not persuaded.
Settled is the rule that a judgment that has
acquired finality becomes immutable and
unalterable and may no longer be modified in
any respect except only to correct clerical
errors or mistakes. 27 True, this rule admits of
certain exceptions. One of these exceptions is
whenever circumstances transpire after the
finality of the decision rendering its execution
unjust and inequitable. 28 This, however, is
not the case here. In the present case, the
Ombudsman issued his Resolution prior to the
finality of the trial court’s decision. The
Ombudsman issued his Resolution on 22
January 1997 while the trial court’s decision
became final and executory on 14 June 1997.
Therefore, the resolution of the Ombudsman is
not a supervening event to warrant the stay of
the execution of the decision of the trial court.
Furthermore, the resolution of the Ombudsman
finding Abarca guilty of violating Section 7(d)
of RA 6713 did not and could not supersede
the decision of the trial court holding petitioner
liable for damages. The action filed by the
petitioner before the Ombudsman is completely
different from the action instituted by
respondents before the trial court. The two
actions, which are clearly separate and distinct
from each other, presented two different
causes of action. Petitioner’s cause of action
arose from respondents’ alleged violation of
certain provisions of RA 6713 whereas
respondents’ cause of action resulted from
petitioner’s refusal to recall respondents to
their mother unit at CATC. In the
administrative case before the Ombudsman,
the issue was whether respondents were guilty
of violating RA 6713. In contrast, the issue in
the civil action before the trial court was
whether respondents were entitled to the
issuance of the writ of mandamus and
damages.
The findings of the Ombudsman did not render
the execution of the trial court’s decision
unjust and inequitable. The resolution of the
Ombudsman finding Abarca guilty of violating
Section 7(d) of RA 6713 did not state that
petitioner had a valid reason to detail
respondents to the Office of Undersecretary
Cal. In fact, the Ombudsman dismissed the
charges against Reynaldo Fernando and Mary
Lou Cleofas. Thus, the trial court correctly
awarded damages to respondents. Contrary to
petitioner’s contention, awarding damages to
respondents does not amount to rewarding
respondents for their alleged wrongdoing. The
award merely compensates respondents for
petitioner’s own unlawful acts. Clearly illegal
were petitioner’s acts of unjustifiably detailing
respondents to the office of DOTC
Undersecretary Cal and refusing to comply with
the 9 November 1995 directive of Secretary
Garcia to recall immediately respondents to
their mother unit.
WHEREFORE, we DENY the instant petition.
The Decision of the Court of Appeals in CA G.R.
SP No. 48233 dated 30 September 1998 and
the Resolution dated 3 December 1998 are
AFFIRMED. No costs.
SO ORDERED.
Davide, Jr., C.J., Vitug and Ynares-
Santiago, JJ., concur.
Azcuna J., is on leave.
Republic of the Philippines
SUPREME COURT
Manila
FIRST DIVISION
G.R. No. 77656 August 31, 1987
ROBERTO ANTONIO, DIONISIO BENSION,
CONRADA CHAN, MARINO CUMLAT, VICENTE
DIMACUHA, PROCOPIO ESPEJON, RODRIGO
FORBES, MANITO FUENTES, ET AL., petitioners,
vs.
THE HONORABLE COURT OF APPEALS,
SPECIAL ELEVENTH DIVISION, HON. ANTONIA C.
MACANDOG, in her capacity as then presiding
judge of the Regional Trial Court of Caloocan City,
Branch CXX and ALICIA BILAN, respondents.
GANCAYCO, J:
This is a petition for certiorari and mandamus with a
prayer for a writ of preliminary injunction. It seeks to
annul the Resolution of the Court of
Appeals 1 promulgated on March 10, 1987 which
denied the admission of the petitioners' Motion for
Reconsideration of the decision 2 earlier rendered.
Also, it prays that a writ of preliminary injunction be
immediately issued to restrain the respondent
Regional Trial Court in Caloocan City, Branch CXX,
from implementing its Order dated March 6, 1987,
which issued a writ of execution in accordance with
the Court of Appeals decision on the case, thereby
asking that said court be directed to defer or stay the
execution pending the resolution of this petition and
an annulment case allegedly appealed with the Court
of Appeals.
The petitioners are lessees of an apartment building
located in No. 121, 2nd Street, 9th Avenue, Caloocan
City. This property was foreclosed by the Government
Service Insurance System (GSIS) after its original
owner failed to pay back his loan.
After due notice to the petitioners and all others
concerned, the property was sold to the private
respondent at a public bidding held on July 29, 1982.
It appears, petitioners deliberately did not participate
in the said bidding because they believed that, as
tenants therein, they have priority in law to acquire the
property. Their thinking was that their participation
would be deemed a waiver of their right to question
the act of the GSIS in selling the property and would
adversely affect their offer to buy the same.
The award or sale of the property to the private
respondent was duly approved by the GSIS Board of
Trustees in its Resolution No. 772 adopted on August
20, 1982. It was then certified that the possession and
administration of the property had been transferred to
the private respondent A conditional deed of sale was
executed in favor of private respondent by the GSIS
stating that for all intents and purposes, the private
respondent is the owner of the property.
The GSIS advised the petitioners that they should
now pay their rent and arrearages to the private
respondent. But despite repeated written demands,
the petitioners failed and refused to settle their
accounts.
After a barangay conciliation proceeding proved futile,
the private respondent filed a complaint for ejectment
against the petitioners with the Metropolitan Trial
Court in that locality. Said court rendered judgment on
January 8, 1985, ordering the petitioners to vacate the
premises occupied by them and to pay certain
amounts as damages.
Not satisfied therewith, the petitioners appealed to the
respondent Regional Trial Court which, on August 20,
1985, rendered a decision affirming in toto the
judgment of the Metropolitan Trial Court.
The petitioners then filed a petition for review on
certiorari with the respondent Court of Appeals. This
case was docketed as CA-G.R. SP No. 07828.
On December 5, 1986, the respondent Court of
Appeals rendered a decision dismissing the petitioner
for review. Later an entry of judgment dated February
3, 1987, was duly certified thereupon by the Clerk of
Court attesting to the fact that the judgment became
final and executory as of January 22, 1987. The
records of the case were consequently, remanded to
the respondent Regional Trial Court on February 11,
1987.
On February 23, 1987, the petitioners, through their
new counsel, filed an "Appearance And Motion For
Leave To Admit Motion For Reconsideration, together
with the Motion For Reconsideration With Prayer For
Issuance Of Temporary Restraining Order," with the
respondent Court of Appeals. They moved that the
respondent Court of Appeals admit their motion for
reconsideration, which was obviously filed beyond the
reglementary period for filing the same, alleging that
their counsel of record abandoned them and migrated
to the United States without at least informing them
that a decision was rendered against them.
The petitioners' motion was denied by the respondent
Court of Appeals in the Resolution dated March 10,
1987, now put in issue. It is hereunder reproduced,
thus:
Now before this Court is an
Appearance and Motion for
Leave to Admit Motion for
Reconsideration' filed by
petitioners in the above-entitled
case on February 23, 1987 on the
ground that their former counsel
Atty. Funelas had abandoned the
case and is now abroad, together
with the corresponding Motion
For Reconsideration With Prayer
for Issuance of Temporary
Restraining Order.
Considering that the decision
sought to be reconsidered dated
December 5, 1986 had become
final, entry of judgment having
been issued on February 3, 1987
and the records remanded to the
court a quo on February 11,
1987, for which reason the said
decision has become final and
this Court has become bereft of
jurisdiction to act thereupon, the
abovementioned Motions are
hereby noted. Parenthetically,
and merely for purposes of
record, it is observed that counsel
of record of petitioners is the law
office Funelas, Perez and
 Associates and not Atty. Funelas
alone. Therefore, the fact that
Atty. Funelas has abandoned the
case and is now abroad is not a
valid ground for the late filing of
the motion for reconsideration. 3
Earlier, on March 6, 1987, the respondent Regional
Trial Court issued an order 4 for a writ of execution to
be issued against the petitioners for the enforcement
of the decision in CA-G.R. No. 07828.
Henceforth, the petitioners, believing that they were
deprived of their day in court when the respondent
Court of Appeals denied their motion for
reconsideration, instituted this petition.
As their initial argument in this petition and as
contained in their "Appearance And Motion For Leave
To Admit Motion For Reconsideration," the petitioners
maintain that they were deprived of their day in court-
equivalent to a denial of due process of law-when
their motion for reconsideration was refused due
course by the respondent Court of Appeals. They
alleged that their counsel at that time, Atty. Pitty A.
Funelas, virtually abandoned them by leaving abroad
without at least notifying them. So when the Court of
Appeals decision was rendered and a copy was sent
to Atty. Funelas, no notice thereof was ever received
by the petitioners. The petitioners only had knowledge
of the judgment against them after it was eventually
entered in the Book of Entries Of Judgments for being
final and executory.
A certain Romeo S. Obligar, representing himself as
the former messenger of Atty. Funelas, executed an
affidavit on February 19, 1987 stating among others
that while getting the mails from the Post Office last
January 6, 1987, for his new employer, he received
the decision in CA-G.R. SP No. 07828; that since the
records of that case was with Atty. Funelas, he was
not able to contact the petitioners herein; and that he
forgot all about said decision until a secretary
informed him that the petitioners were verifying the
said case when they happened to visit the office of his
new employer.
We agree with the Court of Appeals in denying the
petitioners' motion for reconsideration. It is well-settled
that after the lapse of fifteen (1 5) days from notice of
judgment, the same becomes final and the Court of
Appeals loses, jurisdiction over the case. And the
subsequent filing of a motion for reconsideration
cannot disturb the finality of the judgment nor restore
jurisdiction which had already been lost. 5 The court a
quo cannot decide the case anew. decision rendered
anew notwithstanding the finality of the original one is
null and void. 6
In this case, the messenger, Mr. Obligar, received a
copy of the decision on January 6, 1987. This
decision became final and executory on January 22,
1987. Thus, the motion for reconsideration filed by the
petitioners on February 23, 1987, could not be acted
upon on the merits and could only be noted by the
respondent Court of Appeals. It was properly denied.
The negligence attributed by the petitioners to their
then counsel, Atty. Funelas, is not excusable. Clear
and as it can be seen from the pleadings filed that the
petitioners' counsel of record is the law office of
Funelas Perez and Associates and not Atty. Funelas
alone. Atty. Funelas signed the documents in his
capacity as the representative of the said law firm.
The respondent Court of Appeals made this same
observation in its questioned resolution.
In an attempt to belie the preceding observation, the
petitioners submitted to this Court another affidavit
executed by Mr. Obligar dated March 17, 1987. This
affidavit stated that the law firm of Funelas, Perez and
Associates was actually composed of only Atty.
Funelas; that Atty. Perez was only a partner in name,
never handled any case of the law office, and did not
actually report in said office; that there were no
associates of Atty. Funelas; and that said law firm was
dissolved in August, 1986. This affidavit has no
evidentiary value. It was executed and submitted after
the questioned resolution was already promulgated.
Hence, it could not have affected or influenced the
adjudication of the said resolution.
It is safe to presume that a law firm which registered
and represented itself as such, with at least two
named partners, is composed of at least two lawyers.
And if it is true that this law office was earlier
dissolved, the winding up process is presumed to
have been performed in a regular manner, with all the
obligations properly accounted for. Very concrete
evidence must be presented in order that these
presumptions may be rebutted.
At most, the affidavit must be classified as a mere
afterthought and a futile attempt to contradict the
findings of the respondent Court of Appeals.
Recently, this Court laid down a ruling that is
applicable to this case. It reads:
When a party appears by
attorney in an action or
proceeding all court, all notices
required to be given therein must
be given to their attorney and not
to the client. Hence, a notice
given to the client and not to his
attorney is not a notice in law.
The rule in this jurisdiction is that
the client is bound by the
negligence or failings of counsel.
It is the duty of an attorney to
himself and to his clients to
invariably adopt a system
whereby he can be sure of
receiving promptly all judicial
notices during his absence from
his address of record. The
attorney must so arrange matters
that communications sent by mail
addressed to his office or
residence, may reach him
promptly. ... 7
In the motion for reconsideration, the sole issue
presented for reconsideration was a mere
amplification of one argument already passed upon by
the respondent Court of Appeals in its decision.
On January 18, 1983 before the ejectment case was
instituted, the petitioners filed a complaint in the then
Court of First Instance to annul the award in a public
auction of the leased premises by the GSIS to the
private respondent for they claimed that as tenants
therein, they have the priority in law over the same.
The court, in a decision rendered on January 28,
1985, dismissed the case for lack of a cause of action.
Now, this case is allegedly pending appeal in the
Court of Appeals.
The issue, thus, advanced in the motion for
reconsideration is whether the pendency of an
annulment case of an award in public auction is
prejudicial to an ejectment suit as to warrant the
suspension of the latter proceeding.
We quote with approval the holding of the respondent
Court of Appeals on this matter, thus:
The pendency of an action for
title filed by the defendants (now
petitioners) with the Regional
Trial Court does not have the
effect of removing the ejectment
case from the jurisdiction of the
Metropolitan Trial Court. The rule
is well- settled that an action for
ownership or annulment of title is
not a bar to an action for forcible
entry and detainer (Alviar, et al.
vs. Pampolina, et al., 84 Phil. 45,
at p. 47; Padilla vs. de Jesus, et
al., 95 Phil. 688, at p. 691; Aguilar
vs. Cabrera, et al., 74 Phil. 658,
at p. 868.) 8
In an ejectment case, the issue is possession, while in
an annulment case the issue is
ownership. 9 Therefore, an ejectment case can very
well proceed independently of an annulment case.
The only recognized exception to the preceding
doctrine is the situation wherein the question of
possession is so intertwined with the question of
ownership to the effect that the question of
possession cannot be resolved without resolving the
question of ownership. This case at bar does not fall
within the exception. Accordingly, the petitioners'
position that this ejectment proceeding should be
suspended in deference to an annulment proceeding
presently pending in another forum must necessarily
be rejected.
The order of the respondent Regional Trial Court for
the issuance of a writ of execution was because the
decision in the ejectment case had already become
final and executory. Its implementation cannot be
stayed.
WHEREFORE, the instant petition for certiorari and
mandamus with preliminary injunction is hereby
DISMISSED for lack of merit. With costs against
petitioners. This is immediately executory.
Teehankee, C.J., Narvasa and Cruz, JJ., concur.
Paras, J., took no part.
Republic of the Philippines
SUPREME COURT
Manila
EN BANC
G.R. Nos. 79690-707 October 7, 1988
ENRIQUE A. ZALDIVAR, petitioner,
vs.
THE HONORABLE SANDIGANBAYAN and
HONORABLE RAUL M. GONZALEZ, claiming to be
and acting as Tanodbayan-Ombudsman under the
1987 Constitution, respondents.
G.R. No. 80578 October 7, 1988
ENRIQUE A. ZALDIVAR, petitioner,
vs.
HON. RAUL M. GONZALEZ, claiming to be and
acting as Tanodbayan-Ombudsman ombudsman
under the 1987 Constitution, respondent.
PER CURIAM:
The following are the subjects of this Resolution:
1) a Motion, dated 9 February 1988, to Cite in
Contempt filed by petitioner Enrique A. Zaldivar
against public respondent Special Prosecutor
(formerly Tanodbayan) Raul M. Gonzalez, in
connection with G.R. Nos. 79690-707 and G.R. No.
80578. and 2) a Resolution of this Court dated 2
May 1988 requiring respondent Hon. Raul
Gonzalez to show cause why he should not be
punished for contempt and/or subjected to
administrative sanctions for making certain public
statements.
I
The pertinent facts are as follows:
Petitioner Zaldivar is one of several defendants in
Criminal Cases Nos.
12159-12161 and 12163-12177 (for violation of the
Anti-Graft and Corrupt Practices Act) pending
before the Sandiganbayan. The Office of the
Tanodbayan conducted the preliminary
investigation and filed the criminal informations in
those cases (originally TBP Case No. 86-00778).
On 10 September 1987, petitioner filed with this
Court a Petition for Certiorari, Prohibition and
mandamus (G.R. Nos. 79690-707) naming as
respondents both the Sandiganbayan and Hon.
Raul M. Gonzalez. Among other things, petitioner
assailed: (1) the 5 February 1987 Resolution 1 of
the "Tanodbayan" recommending the filing of
criminal informations against petitioner Zaldivar
and his co-accused in TBP Case No. 86-00778;
and (2) the 1 September 1987 Resolution 2 of the
Sandiganbayan in Criminal Cases Nos. 12159-
12161 and 1216312177 denying his Motion to
Quash the criminal informations filed in those
cases by the "Tanodbayan." In this respect,
petitioner alleged that respondent Gonzalez, as
Tanodbayan and under the provisions of the 1987
Constitution, was no longer vested with power
and authority independently to investigate and to
institute criminal cases for graft and corruption
against public officials and employees, and hence
that the informations filed in Criminal Cases Nos.
12159-12161 and 12163-12177 were all null and
void.
On 11 September 1987, this Court issued a
Resolution, which read:
G.R. Nos. 79690-707 (Enrique
A. Zaldivar vs. The Honorable
Sandiganbayan and Honorable
Raul M. Gonzalez, Claiming To
Be and Acting as Tanodbayan-
Ombudsman under the 1987
Constitution ).—Acting on the
special civil action for
certiorari, prohibition and
mandamus under Rule 65 of
the Rules of Court, with urgent
motion for preliminary
elimination injunction, the
Court Resolved, without giving
due course to the petition, to
require the respondents to
COMMENT thereon, within ten
(10) days from notice.
The Court further Resolved to
ISSUE a TEMPORARY
RESTRAINING ORDER,
effective immediately and
continuing until further orders
from this Court, ordering
respondent Sandiganbayan to
CEASE and DESIST from
hearing and trying Criminal
Cases Nos. 12159 to 12161 and
12163 to 12177 insofar as
petitioner Enrique Zaldivar is
concerned and from hearing
and resolving the Special
Prosecutor's motion to
suspend dated September 3,
1987.
The parties later filed their respective pleadings.
Petitioner Zaldivar filed with this Court a second
Petition for certiorari and Prohibition (G.R. No.
80578) on 19 November 1987, initially naming only
Hon. Raul M. Gonzalez as respondent. That Acting on the manifestation with
Petition assailed the 24 September 1987 motion to treat the
Resolution 3 of the "Tanodbayan" in TBP Case No. Sandiganbayan as party-
87- 01304 recommending that additional criminal respondent, the Court Resolved
charges for graft and corruption be filed against to (a) Consider IMPLEADED the
petitioner Zaldivar and five (5) other individuals. Once Sandiganbayan as party
again, petitioner raised the argument of the respondent; and (b) In pursuance
Tanodbayan's lack of authority under the 1987 of and supplementing the
Constitution to file such criminal cases and to Temporary Restraining Order of
investigate the same. Petitioner also moved for the November 24, 1987 "ordering
consolidation of that petition with G.R. No. 79690-707. respondent Hon. Raul M.
Gonzalez to CEASE and DESIST
from further acting in TBP Case
In a Resolution dated 24 November 1987, 4 this Court,
No. 87-01304 entitled,
without giving due course to the second petition: (1)
"Commission on Audit vs. Gov.
required respondent Gonzalez to submit a comment
Enrique Zaldivar, et al." and
thereon: and (2) issued a temporary restraining order
particularly, from filing the
"ordering respondent Hon. Raul M. Gonzalez to
criminal information consequent
CEASE and DESIST from further acting in TBP Case
thereof and from conducting
No. 87-01394 ... and particularly, from filing the
preliminary investigation therein"
criminal information consequent thereof and from
ISSUE a TEMPORARY
conducting preliminary investigation therein." In a
RESTRAINING ORDER effective
separate resolution of the same date, 5 G.R. Nos.
immediately and continuing until
79690-707 and G.R. No. 80578 were ordered
further orders from this Court,
consolidated by the Court.
ordering respondents Hon. Raul
M. Gonzalez and Sandiganbayan
In the meantime, however, on 20 November 1987 or to CEASE and DESIST from
four (4) days prior to issuance by this Court of a further acting in Criminal Case
temporary restraining order in G.R. No. 80578, the No. 12570, entitled, "People of
Office of the Tanodbayan instituted Criminal Case No. the Philippines vs. Enrique M.
12570 6 with the Sandiganbayan which issued on 23 Zaldivar, et al." and from
November 1987 an Order of Arrest 7 for petitioner enforcing the order of arrest
Zaldivar and his co-accused in Criminal Case No. issued by the Sandiganbayan in
12570. Upon Motion 8 of petitioner Zaldivar, this Court said case.
issued the following Resolution on 8 December 1987:
The Solicitor General filed a Comment 9 on the
G.R. No. 80578 (Enrique A. petition in G.R. No. 80578, and we required the
Zaldivar vs. Hon. Raul M. petitioner to submit a Reply 10 thereto.
Gonzalez and Sandiganbayan).
The motion filed by the Solicitor
General for respondents for an
extension of thirty (30) days from
the expiration of the original
period within which to file
comment on the petition for
certiorari and prohibition with
prayer for a writ of preliminary
injunction or restraining order is
GRANTED.
On 9 February 1988, petitioner Zaldivar filed with the
Court a Motion to Cite in Contempt 11 directed at
respondent Gonzalez. The Motion cited as bases the
acts of respondent Gonzalez in: (1) having caused the
filing of the information against petitioner in Criminal
Case No. 12570 before the Sandiganbayan; and (2)
issuing certain allegedly contemptuous statements to
the media in relation to the proceedings in G.R. No.
80578. In respect of the latter, petitioner annexed to
his Motion a photocopy of a news article, reproduced
here in toto, which appeared in the 30 November
1987 issue of the "Philippine Daily Globe:"
Tanod Scores SC for Quashing
Graft Case
TANODBAYAN Justice Raul M.
Gonzalez said yesterday the
Supreme Court order stopping
him from investigating graft cases
involving Antique Gov. Enrique
Zaldivar can aggravate the
thought that affluent persons "an
prevent the progress of a trial."
What I am afraid of (with the
issuance of the order) is that it
appears that while rich and
influential persons get favorable
actions from the Supreme Court,
it is difficult for an ordinary litigant
to get his petition to be given due
course. Gonzalez told the Daily
Globe in an exclusive interview.
Gonzalez said the high tribunal's
order '"eightens the people's
apprehension over the justice
system in this country, especially
because the people have been
thinking that only the small fly can
get it while big fishes go scot-
free."
Gonzalez was reacting to an
order issued by the tribunal last
week after Zaldivar petitioned the
court to stop the Tanodbayan
from investigating graft cases
filed against him.
Zaldivar had charged that
Gonzalez was biased in his
investigations because the latter
wanted to help promote the
political fortunes of a friend from
Antique, lawyer Bonifacio
Alentajan.
Acting on Zaldivar's petition, the
high court stopped Gonzalez from
investigating a graft charge
against the governor, and from
instituting any complaint with the
Sandiganbayan.
While President Aquino had been
prodding me to prosecute graft
cases even if they involve the
high and mighty, the Supreme
Court had been restraining
me. Gonzalez said.
In accordance with the
President's order, Gonzalez said
he had filed graft cases against
two "very powerful" officials of the
Aquino government-
Commissioner Quintin Doromal of
the Presidential Commission on
Good Government and Secretary
Jiamil I.M. Dianlan of the Office of
Muslim Affairs and Cultural
Communities.
While I don't wish to discuss the
merits of the Zaldivar petition
before the Supreme Court, I am a
little bit disturbed that (the order)
can aggravate the thinking of
some people that affluent
persons can prevent the progress
of a trial, he said.
He disclosed that he had a talk
with the Chief Executive over the
weekend and that while she
symphatizes with local officials
who are charged in court during
election time, 'She said that it
might be a disservice to the
people and the voters who are
entitled to know their candidates.
Gonzalez said that while some
cases filed against local officials
during election time could be
mere harassment suits, the
Constitution makes it a right of
every citizen to be informed of the
character of tile candidate, who
should be subject to scrutiny.
(Emphasis supplied)
Acting on petitioner's Motion to Cite in Contempt, the
Court on 16 February 1988 required respondent
Gonzalez "to COMMENT on aforesaid Motion within
ten (10) days from notice." 12 On 27 April 1988, the
Court rendered its Decision 13 (per curiam) in the
Consolidated Petitions. The dispositive portion thereof
read:
WHEREFORE, We hereby:
(1) GRANT the consolidated
petitions filed by petitioner
Zaldivar and hereby NULLIFY the
criminal informations filed against
him in the Sandiganbayan; and
(2) ORDER respondent Raul
Gonzalez to cease and desist
from conducting investigations
and filing criminal cases with the
Sandiganbayan or otherwise
exercising the powers and
functions of the Ombudsman.
SO ORDERED.
A Motion for Reconsideration 14 was filed by
respondent Gonzalez the next day, 28 April 1988. In
his Motion, respondent Gonzalez, after having argued
the legal merits of his position, made the following
statements totally unrelated to any legal issue raised
either in the Court's Decision or in his own Motion:
1. That he "ha(d) been
approached twice by a leading
member of the court ... and he
was asked to 'go slow on Zaldivar
and 'not to be too hard on him;' "
2. That he "was approached and
asked to refrain from investigating
the COA report on illegal
disbursements in the Supreme
Court because 'it will embarass
the Court;" and
3. That "(i)n several instances,
the undersigned respondent was
called over the phone by a
leading member of the Court and
was asked to dismiss the cases
against (two Members of the
Court)."
Respondent Gonzalez also attached three (3)
handwritten notes 15 which he claimed were sent by
"some members of this Honorable Court, interceeding
for cases pending before this office (i.e., the
Tanodbayan)." He either released his Motion for
Reconsideration with facsimiles of said notes to the
press or repeated to the press the above extraneous
statements: the metropolitan papers for the next
several days carried long reports on those statements
and variations and embellishments thereof On 2 May
1988, the Court issued the following Resolution in the
Consolidated Petitions:
G.R. No. 79690-707 (Enrique
Zaldivar vs. The Hon.
Sandiganbayan, et al. G.R. No.
80578 (Enrique A. Zaldivar vs.
Hon. Raul M. Gonzalez, etc).
1. Acting on the Motion for
Reconsideration filed by
respondent Gonzalez under date
of April 28, 1988, the Court
Resolved to REQUIRE the
petitioner to COMMENT thereon
within ten (10) days from notice
hereof.
2. It appearing that respondent
Raul M. Gonzalez has made
public statements to the media
which not only deal with
matters subjudice but also appear
offensive to and disrespectful of
the Court and its individual
members and calculated, directly
or indirectly, to bring the Court
into disrepute, discredit and
ridicule and to denigrate and
degrade the administration of
justice, the Court Resolved to
require respondent Gonzalez to
explain in writing within ten (10)
days from notice hereof, why he
should not be punished for
contempt of court and/or
subjected to administrative
sanctions for making such public
statements reported in the media,
among others, in the issues of the
"Daily Inquirer," the "Journal," the
"Manila Times," the "Philippine
Star," the "Manila Chronicle" the
"Daily Globe" and the "Manila
Standard" of April 29 and 30, and
May 1, 1988, to wit:
(a) That the Court resolution in
question is merely "an offshoot of
the position he had taken that the
SC Justices cannot claim
immunity from suit or
investigation by government
prosecutors or motivated by a
desire to stop him 'from
investigating cases against some
of their proteges or friends;"
(b) That no less than six of the
members of the Court "interceded
for and on behalf of persons with
pending cases before the
Tanodbayan," or sought "to
pressure him to render decisions
favorable to their colleagues and
friends;"
(c) That attempts were made to
influence him to go slow on
Zaldivar and not to be too hard on
him and to refrain from
investigating the Commission on
Audit report on illegal
disbursements in the Supreme
Court because it will embarass
the Court;
(d) That there were also attempts
to cause the dismissal of cases
against two Associate Justices;
and
(e) That the Court had dismissed
judges' without rhyme or reason'
and disbarred lawyers 'without
due process.
3. It further appearing that three
(3) affidavits relative to the
purpose of and circumstances
attendant upon the notes written
to said public respondent by three
(3) members of the Court have
since been submitted to the Court
and now form part of its official
records, the Court further
Resolved to require the Clerk of
Court to ATTACH to this
Resolution copies of said sworn
statements and the annexes
thereto appended, and to
DIRECT respondent Gonzalez
also to comment thereon within
the same period of ten (10) days.
 4. It finally appearing that notice
of the Resolution of February 16,
1988 addressed to respondent
Gonzalez was misdelivered and
therefore not served on him, the
Court Resolved to require the
Clerk of Court to CAUSE
SERVICE of said Resolution on
the respondent and to REQUIRE
the latter to comply therewith.
Respondent Gonzalez subsequently filed with this
Court on 9 May 1988 an Omnibus Motion for
Extension and Inhibition 16 alleging, among other
things: that the above quoted 2 May 1988 Resolution
of the Court "appears to have overturned that
presumption [of innocence] against him:" and that "he
gravely doubts whether that 'cold neutrality [of an
impartial judge] is still available to him" there being
allegedly "at least 4 members of this Tribunal who will
not be able to sit in judgment with substantial sobriety
and neutrality." Respondent Gonzalez closed out his
pleading with a prayer that the four (4) Members of
the Court Identified and referred to there by him inhibit
themselves in the deliberation and resolution of the
Motion to Cite in Contempt.
On 19 May 1988 17 after receipt of respondent's
Supplemental Motion for Reconsideration. 18 this
Court in an extended per curiam Resolution 19 denied
the Motion and Supplemental Motion for
Reconsideration. That denial was made "final and
immediately executory.
Respondent Gonzalez has since then filed the
following pleadings of record:
1. Manifestation with
Supplemental Motion to
Inhibition 20 dated 23 May 1988;
2. Motion to Transfer
Administrative Proceedures to the
Integrated Bar of the
Philippines 21 dated 20 May 1988
3. Urgent Motion for Additional
Extension of Time to File
Explanation Ex Abundante
Cautelam, 22 dated 26 May 1988;
4. Urgent Ex-Parte Omnibus
Motion
(a) For Extension of Time
(b) For Inhibition and
(c) For Transfer of Administrative
Proceedings to the IBP, Under
Rule 139-B 23 dated 4 June 1988
(with Annex "A;" 24 an anonymous
letter dated 27 May 1988 from the
alleged Concerned Employees of
the Supreme Court and
addressed to respondent):
5. Ex-Parte Manifestation 25 dated
7 June 1988;
6. Urgent Ex-Parte Motion for
Reconsideration 26 1988; and
7. Urgent Ex-Parte Manifestation
with Motion 27 member 1988.
In compliance with the 2 May 1988 Resolution of this
Court quoted earlier, respondent Gonzalez submitted
on 17 June 1988 an Answer with Explanation and
Comment 28 offering respondent's legal arguments
and defenses against the contempt and disciplinary
charges presently pending before this Court. Attached
to that pleading as Annex "A" thereof was
respondent's own personal
Explanation/Compliance 29 second explanation called
"Compliance," 30 with annexes, was also submitted by
respondent on 22 July 1988.
II
We begin by referring to the authority of the Supreme
Court to discipline officers of the court and members
of the Bar. The Supreme Court, as regulator and
guardian of the legal profession, has plenary
disciplinary authority over attorneys. The authority to
discipline lawyers stems from the Court's
constitutional mandate to regulate admission to the
practice of law, which includes as well authority to
regulate the practice itself of
law. 31 Quite apart from this constitutional mandate,
the disciplinary authority of the Supreme Court over
members of the Bar is an inherent power incidental to
the proper administration of justice and essential to an
orderly discharge of judicial functions. 32 Moreover,
the Supreme Court has inherent power to punish for
contempt, to control in the furtherance of justice the
conduct of ministerial officers of the Court including
lawyers and all other persons connected in any
manner with a case before the Court. 33 The power to
punish for contempt is "necessary for its own
protection against an improper interference with the
due administration of justice," "(it) is not dependent
upon the complaint of any of the parties litigant. 34
There are, in other words, two (2) related powers
which come into play in cases like that before us here;
the Court's inherent power to discipline attorneys and
the contempt power. The disciplinary authority of the
Court over members of the Bar is broader than the
power to punish for contempt. Contempt of court may
be committee both by lawyers and non-lawyers, both
in and out of court. Frequently, where the contemnor
is a lawyer, the contumacious conduct also
constitutes professional misconduct which calls into
play the disciplinary authority of the Supreme
Court. 35 Where the respondent is a lawyer, however,
the Supreme Court's disciplinary authority over
lawyers may come into play whether or not the
misconduct with which the respondent is charged also
constitutes contempt of court. The power to punish for
contempt of court does not exhaust the scope of
disciplinary authority of the Court over lawyers. 36 The
disciplinary authority of the Court over members of the
Bar is but corollary to the Court's exclusive power of
admission to the Bar. A lawyer is not merely a
professional but also an officer of the court and as
such, he is called upon to share in the task and
responsibility of dispensing justice and resolving
disputes in society. Any act on his part which visibly
tends to obstruct, pervert, or impede and degrade the
administration of justice constitutes both professional
misconduct calling for the exercise of disciplinary
action against him, and contumacious conduct
warranting application of the contempt power.
It is sometimes asserted that in the exercise of the
power to punish for contempt or of the disciplinary
authority of the Court over members of the Bar, the
Court is acting as offended party, prosecutor and
arbiter at one and the same time. Thus, in the present
case, respondent Gonzalez first sought to get some
members of the Court to inhibit themselves in the
resolution of this case for alleged bias and prejudice
against him. A little later, he in effect asked the whole
Court to inhibit itself from passing upon the issues
involved in this proceeding and to pass on
responsibility for this matter to the Integrated Bar of
the Philippines, upon the ground that respondent
cannot expect due process from this Court, that the
Court has become incapable of judging him impartially
and fairly. Respondent Gonzalez misconceives the
nature of the proceeding at bar as well as the function
of the members of the Court in such proceeding.
Respondent's contention is scarcely an original one.
In In Re Almacen, 37 then Associate (later Chief)
Justice Fred Fruiz Castro had occasion to deal with
this contention in the following lucid manner:
xxx xxx xxx
It is not accurate to say, nor is it
an obstacle to the exercise of our
authority in the premises, that, as
Atty. Almacen would have it
appear, the members of the
Court are the 'complainants,
prosecutors and judges' all rolled
up into one in this instance. This
is an utter misapprehension, if not
a total distortion, not only of the
nature of the proceeding at hand
but also of our role therein.
Accent should be laid on the fact
that disciplinary proceedings like
the present are sui generis.
Neither purely civil nor purely
criminal, this proceeding is not—
and does not involve—a trial of
an action or a suit, but is rather
an investigation by the Court into
the conduct of its officers. Not
being intended to inflict
punishment, it is in no sense a
criminal prosecution. Accordingly,
there is neither a plaintiff nor a
prosecutor therein. It may be
initiated by the Court motu
proprio. Public interest is its
primary objective, and the real
question for determination is
whether or not the attorney is still
a fit person to be allowed the
privileges as such. Hence, in the
exercise of its disciplinary
powers, the Court merely calls
upon a member of the Bar to
account for his actuations as an
officer of the Court with the end
in view of preserving the purity of
the legal profession and the
property and honest
administration of justice by
purging the profession of
members who by their
misconduct have proved
themselves no longer worthy to
be entrusted with the duties and
responsibilities pertaining to the
office of an attorney. In such
posture, there can thus be no
occasion to speak of a
complainant or a prosecutor.
Undeniably, the members of the
Court are, to a certain degree,
aggrieved parties. Any tirade
against the Court as a body is
necessarily and inextricably as
much so against the individual
members thereof But in the
exercise of its disciplinary
powers, the Court acts as an
entity separate and distinct from
the individual personalities of its
members. Consistently with the
intrinsic nature of a collegiate
court, the individual members act
not as such individuals but only
as a duly constituted court. The
distinct individualities are lost in
the majesty of their office. So
that, in a very real sense, if there
be any complainant in the case at
bar, it can only be the Court itself,
not the individual members
thereof—as well as the people
themselves whose rights,
fortunes and properties, nay,
even lives, would be placed at
grave hazard should the
administration of justice be
threatened by the retention in the
Bar of men unfit to discharge the
solemn responsibilities of
membership in the legal
fraternity.
Finally, the power to exclude
persons from the practice of law
is but a necessary incident of the
power to admit persons to said
practice. By constitutional
precept, this power is vested
exclusively in this Court. This
duty it cannot abdicate just as
much as it cannot unilaterally
renounce jurisdiction legally
invested upon it. So that even if it
be conceded that the members
collectively are in a sense the
aggrieved parties, that fact alone
does not and cannot disqualify
them from the exercise of the
power because public policy
demands that they, acting as a
Court, exercise the power in all
cases which call for disciplinary
action. The present is such a
case. In the end, the imagined
anomaly of the merger in one
entity of the personalities of
complainant, prosecutor and
judge is absolutely inexistent.
xxx xxx xxx. 38
It should not be necessary for the members of this
Court expressly to disclaim any bias or prejudice
against the respondent that would prevent them from
acting in accordance with the exacting requirements
of their oaths of office. It also appears to the Court
that for all the members to inhibit themselves from
sitting on this case is to abdicate the responsibility
with which the Constitution has burdened them.
Reference of complaints against attorneys either to
the Integrated Bar of the Philippines or to the Solicitor
General is not mandatory upon the Supreme Court;
such reference to the Integrated Bar of the Philippines
or to the Solicitor General is certainly not an exclusive
procedure under the terms of Rule 139-B of the
Revised Rules of Court, especially where the charge
consists of acts done before the Supreme Court.
There is no need for further investigation of facts in
the present case for it is not substantially disputed by
respondent Gonzalez that he uttered or wrote certain
statements attributed to him. In any case, respondent
has had the amplest opportunity to present his
defense; his defense is not that he did not make the
statements ascribed to him but that those statements
give rise to no liability on his part, having been made
in the exercise of his freedom of speech. The issues
which thus need to be resolved here are issues of law
and of basic policy and the Court, not any other
agency, is compelled to resolve such issues.
III
It is necessary to become very explicit as to what
respondent Gonzalez was saying in his statements
set out above. Respondent has not denied making the
above statements; indeed, he acknowledges that the
newspaper reports of the statements attributed to him
are substantially correct. 39
Respondent Gonzalez was in effect saying, firstly, that
the Supreme Court deliberately rendered an
erroneous or wrong decision when it rendered its per
curiam Decision dated 27 April 1988 in G.R. Nos.
79690-707 and 80578. That decision according to
respondent Gonzalez, was issued as an act of
retaliation by the Court against him for the position he
had taken "that the (Supreme Court) Justices cannot
claim immunity from suit or investigation by
government prosecutors," and in order to stop
respondent from investigating against "some of (the)
proteges or friends (of some Supreme Court
Justices)." The Court cannot, of course, and will not
debate the correctness of its Decision of 27 April 1988
and of its Resolution dated 19 May 1988 (denying
respondent Gonzalez Motion for Reconsideration) in
the consolidated Zaldivar cases. Respondent
Gonzalez, and anyone else for that matter, is free
intellectually to accept or not to accept the reasoning
of the Court set out in its per curiam Decision and
Resolution in the consolidated Zaldivar cases. This
should not, however, obscure the seriousness of the
assault thus undertaken by respondent against the
Court and the appalling implications of such assault
for the integrity of the system of administration of
justice in our country. Respondent has said that the
Court rendered its Decision and Resolution without
regard to the legal merits of the Zaldivar cases and
had used the judicial process to impose private
punishment upon respondent for positions he had
taken (unrelated to the Zaldivar cases) in carrying out
his duties. It is very difficult to imagine a more serious
affront to, or a greater outrage upon, the honour and
dignity of this Court than this. Respondent's statement
is also totally baseless. Respondent's statements
were made in complete disregard of the fact that his
continuing authority to act as Tanodbayan or
Ombudsman after the effectivity of the 1987
Constitution, had been questioned before this Court
as early as 10 September 1987 in the Petition for
Certiorari, Prohibition and mandamus filed against
him in these consolidated Petitions 40 that is, more
than seven (7) months before the Court rendered its
Decision. Respondent also ignores the fact that one
day later, this Court issued a Temporary Restraining
Order effective immediately ordering
the Sandiganbayan to cease and desist from hearing
the criminal cases filed against petitioner Zaldivar by
respondent Gonzalez. Respondent also disregards
the fact that on 24 November 1987, upon the filing of
a second Petition for certiorari for Prohibition by Mr.
Zaldivar, the Court issued a Temporary Restraining
Order this time requiring the respondent to cease and
desist from further acting in TBP Case No. 87-0934.
Thus, the decision finally reached by this Court in
April 1988 on the constitutional law issue pending
before the Court for the preceding eight (8) months,
could scarcely have been invented as a reprisal
simply against respondent.
A second charge that respondent Gonzalez hurled
against members of the Supreme Court is that they
have improperly Id pressured" him to render decisions
favorable to their "colleagues and friends," including
dismissal of "cases" against two (2) members of the
Court. This particularly deplorable charge too is
entirely baseless, as even a cursory examination of
the contents of the handwritten notes of three (3)
members of this Court addressed to respondent
(which respondent attached to his Motion for
Reconsideration of the Decision of this Court of 27
April 1988 in the consolidated Petitions) win show. It
is clear, and respondent Gonzalez does not pretend
otherwise, that the subject matters of the said notes
had no relation at all to the issues in G.R. Nos. 79690-
707 and 80578. This charge appears to have been
made in order to try to impart some substance (at
least in the mind of respondent) to the first accusation
made by respondent that the Court had deliberately
rendered a wrong decision to get even with
respondent who had, with great fortitude, resisted
"pressure" from some members of the Court. Once
again, in total effect, the statements made by
respondent appear designed to cast the Court into
gross disrepute, and to cause among the general
public scorn for and distrust in the Supreme Court
and, more generally, the judicial institutions of the
Republic.
Respondent Gonzalez has also asserted that the
Court was preventing him from prosecuting "rich and
powerful persons," that the Court was in effect
discrimination between the rich and powerful on the
one hand and the poor and defenseless upon the
other, and allowing "rich and powerful" accused
persons to go "scot-free" while presumably allowing or
affirming the conviction of poor and small offenders.
This accusation can only be regarded as calculated to
present the Court in an extremely bad light. It may be
seen as intended to foment hatred against the
Supreme Court; it is also suggestive of the divisive
tactics of revolutionary class war.
Respondent, finally, assailed the Court for having
allegedly "dismissed judges 'without rhyme or reason'
and disbarred lawyers 'without due process.'" The
Court notes that this last attack is not without relation
to the other statements made by respondent against
the Court. The total picture that respondent clearly
was trying to paint of the Court is that of an
"unjudicial" institution able and willing to render
"clearly erroneous" decisions by way of reprisal
against its critics, as a body that acts arbitrarily and
capriciously denying judges and lawyers due process
of law. Once again, the purport of respondent's attack
against the Court as an institution unworthy of the
people's faith and trust, is unmistakable. Had
respondent undertaken to examine the records 'of the
two (2) judges and the attorney he later Identified in
one of his Explanations, he would have discovered
that the respondents in those administrative cases
had ample opportunity to explain their side and submit
evidence in support thereof. 41 He would have also
found that there were both strong reasons for and an
insistent rhyme in the disciplinary measures there
administered by the Court in the continuing effort to
strengthen the judiciary and upgrade the membership
of the Bar. It is appropriate to recall in this connection
that due process as a constitutional precept does not,
always and in all situations, require the trial-type
proceeding, 42 that the essence of due process is to
be found in the reasonable opportunity to be heard
and to submit any evidence one may have in support
of one's defense. 43 "To be heard" does not only mean
verbal arguments in court; one may be heard also
through pleadings. Where opportunity to be heard,
either through oral arguments or pleadings, is
accorded, there is no denial of procedural due
process. 44
As noted earlier, respondent Gonzalez was required
by the Court to explain why he should not be
punished for contempt and/or subjected to
administrative discipline for making the statements
adverted to above. In his subsequent pleadings where
he asked the full Court to inhibit itself and to transfer
the administrative proceedings to the Integrated Bar
of the Philippines, respondent made, among others,
the following allegations:
(a) That the Members of the
Court "should inhibit [themselves]
in the contempt and
administrative charges against
the respondent, in the light of the
manifest prejudice and anger
they hold against respondent as
shown in the language of the
resolution on the Motion for
Reconsideration;"
(b) That "the entire membership
of the court has already lost that
'cold neutrality of an impartial
judge' [to] be able to allow
fairness and due process in the
contempt citation as well as in the
possible administrative charge;
(c) That "respondent honestly
feels that this court as angry and
prejudiced as it is, respondent
has no china man's chance to get
fair hearing in the contempt and
possible administrative charges;"
(d) That one must consider "the
milieu before this Tribunal with,
perhaps passion and obfuscation
running riot;"
(e) That respondent, "after having
been castigated with
such venom by the entire Court in
its decision denying the Motion
for Reconsideration, does not
have confidence in the
impartiality of the entire Court"
and that he "funds it extremely
difficult to believe that the
members of this Tribunal can still
act with unbiased demeanor
towards him;" and
(f) That "the Tribunal is
determined to disbar [respondent]
without due process" and that a
specified Member of the Court
"has been tasked to be
the ponente, or at least prepare
the decision." (Underscoring in
the original)
Thus, instead of explaining or seeking to mitigate his
statements earlier made, respondent sought to heap
still more opprobrium upon the Court, accusing it of
being incapable of judging his acts and statements
justly and according to law. Once again, he paints this
Court as a body not only capable of acting without
regard to due process but indeed determined so to
act. A grand design to hold up this Court to public
scorn and disrespect as an unworthy tribunal, one
obfuscated by passion and anger at respondent,
emerges once more. It is very difficult for members of
this Court to understand how respondent Gonzalez
could suppose that judges on the highest tribunal of
the land would be ready and willing to violate their
most solemn oath of office merely to gratify any
imagined private feelings aroused by respondent. The
universe of the Court revolves around the daily
demands of law and justice and duty, not around
respondent nor any other person or group of persons.
Whether or not the statements made by respondent
Gonzalez may reasonably be regarded by this Court
as contumacious or as warranting exercise of the
disciplinary authority of this Court over members of
the Bar, may best be assayed by examining samples
of the kinds of statements which have been held in
our jurisdiction as constituting contempt or otherwise
warranting the exercise of the Court's authority.
1. In Montecillo v. Gica, 45 Atty. Quirico del Mar as
counsel for Montecillo, who was accused in a slander
case, moved to reconsider a decision of the Court of
Appeals in favor of the complainant with a veiled
threat that he should interpose his next appeal to the
President of the Philippines. In his Motion for
Reconsideration, he referred to the provisions of the
Revised Penal Code on "knowingly rendering an
unjust judgment," and "judgment rendered through
negligence" and implied that the Court of Appeals had
allowed itself to be deceived. Atty. del Mar was held
guilty of contempt of court by the Court of Appeals. He
then sued the three (3) justices of the Court of
Appeals for damages before the Court of First
Instance of Cebu, seeking to hold them liable for their
decision in the appealed slander case. This suit was
terminated, however, by compromise agreement after
Atty. del Mar apologized to the Court of Appeals and
the justices concerned and agreed to pay moral
damages to the justices. Atty. del Mar some time later
filed with this Court a Petition for Review on certiorari
of a decision of the Court of Appeals in a slander
case. This Court denied the Petition for Review. Atty.
del Mar then filed a Motion for Reconsideration and
addressed a letter to the Clerk of the Supreme Court
asking for the names of the justices of this Court who
had voted in favor of and those who had voted against
his Motion for Reconsideration. After his Motion for
Reconsideration was denied for lack of merit, Atty. del
Mar filed a Manifestation in this Court saying:
The Court suspended Atty. del Mar, "until further
orders," from the practice of law saying:
I can at this time reveal to you
that, had your Clerk of Court
furnished me with certified true
copies of the last two Resolutions
of the Supreme Court confirming
the decision of the Court of
Appeals in the case
entitled Francisco M. Gica vs.
Jorge Montecillo, I would have
filed against the Justices
supporting the same, civil and
criminal suits as I did to the
Justices of the Court of
Appeals who, rewarding the
abhorent falsification committed
by Mr. Gica, reversed for him the
decisions of the City Court and
the Court of First Instance of
Cebu, not with a view to
obtaining a favorable judgment
therein but for the purpose of
exposing to the people the
corroding evils extant in our
Government, so that they may
well know them and work for their
extermination. (60 SCRA at
240;emphasis supplied)
Counsel was asked to explain why he should not be
administratively dealt with for making the above
statements. In his additional explanation, Atty. del Mar
made the following statements:
... Graft, corruption and injustice
are rampant in and outside of the
Government. It is this state of
things that convinced me that all
human efforts to correct and/or
reform the said evils will be
fruitless and, as stated in my
manifestation to you, I have
already decided to retire from a
life of militancy to a life of
seclusion, leaving to God the
filling up deficiencies. (60 SCRA
at 242)
... Respondent is utilizing what
exists in his mind as state of
graft, corruption and injustice
allegedly rampant in and outside
of the government as justification
for his contemptuous statements.
In other words, he already
assumed by his own
contemptuous utterances that
because there is an alleged
existence of rampant corruption,
graft and injustice in and out of
the government, We, by Our act
in G.R. No. L-36800, are among
the corrupt, the grafters and
those allegedly committing
injustice. We are at a complete
loss to follow respondent del
Mar's logic ...
xxx xxx xxx
To aged brethren of the bar it
may appear belated to remind
them that second only to the duty
of maintaining allegiance to the
Republic of the Philippines and to
support the Constitution and
obey the laws of the Philippines,
is the duty of all attorneys to
observe and maintain the respect
due to the courts of justice and
judicial officers (Sec. 20 (b) Rule
138, Rules of Court). But We do
remind them of said duty to
emphasize to their younger
brethren its paramount
importance. A lawyer must
always remember that he is an
officer of the court exercising a
high privilege and serving in the
noble mission of administering
justice.
xxx xxx xxx.
As already stated, the decision of
the Court of Appeals in C.A G.R.
No. 46504-R was based on its
evaluation of the evidence on
only one specific issue. We in
turn denied in G.R. No. L-36800
the petition for review on
certiorari of the decision because
We found no reason for
disturbing the appellate court's
finding and conclusion. In both
instances, both the Court of
Appeals and this Court exercised
judicial discretion in a case under
their respective jurisdiction. The
intemperate and imprudent act of
respondent del Mar in resorting
to veiled threats to make both
Courts reconsider their respective
stand in the decision and the
resolution that spelled disaster for
his client cannot be anything but
pure contumely for aid tribunals.
It is manifest that respondent del
Mar has scant respect for the two
highest Court of the land when
on the flimsy ground of alleged
error in deciding a case, he
proceeded to challenge the
integrity of both Courts by
claiming that they knowingly
rendered unjust judgment. In
short, his allegation is that they
acted with intent and malice, if
not with gross ignorance of the
law, in disposing of the case of
his client.
xxx xxx xxx
 ... To those who are in the
practice of law and those who in
the future will choose to enter this
profession, We wish to point to
this case as a reminder for them
to imprint in their hearts and
minds that an attorney owes it to
himself to respect the courts of
justice and its officers as a fealty
for the stability of our democratic
institutions. (60 SCRA at 242-
247: emphasis supplied)
2. In Surigao Mineral Reservation Board v.
Cloribel, 46 four (4) members of the bar, acting as
counsel for MacArthur International Minerals
Company were required by this Court to explain
certain statements made in MacArthur's third Motion
for Reconsideration:
d. ...; and I the Supreme Court I
has overlooked the applicable law
due to the mis-representation and
obfuscation of the petitioners'
counsel. (Last sentence, par. 1,
Third Motion for Reconsideration
dated Sept. 10, 1968).
e. ... Never has any civilized
democratic tribunal ruled that
such a gimmick (referring to the
"right to reject any and all bids")
can be used by vulturous
executives to cover up and
excuse losses to the public, a
government agency or just plain
fraud ... and it is thus difficult, in
the light of our upbringing and
schooling, even under many of
the incumbent justices, that the
Honorable Supreme Court
intends to create a decision that
in effect does precisely that in a
most absolute manner. (Second
sentence, par. 7, Third Motion for
Reconsideration dated Sept. 10,
1968). (31 SCRA at 6)
They were also asked to explain the statements made decision
in their Motion to Inhibit filed on 21 September 1968 (31 SCRA at 6-7)
asking
Another attorney entered his appearance as new
Mr. Chief Justice Roberto counsel for MacArthur and filed a fourth Motion for
Concepcion and Mr. Justice Fred Reconsideration without leave of court, which Motion
Ruiz Castro to inhibit themselves contained the following paragraphs:
from considering, judging and
resolving the case or any issue or
4. The said decision is illegal
aspect thereof retroactive to
because it was penned by the
January 11, 1967. The motion
Honorable Chief Justice Roberto
charges "It that the brother of the
Concepcion when in fact he was
Honorable Associate Justice
outside the borders of the
Castro is a vice-president of the
Republic of the Philippines at the
favored party who is the chief
time of the Oral Argument of the
beneficiary of the false,
above-entitled case—which
erroneous and illegal decision
condition is prohibited by the New
dated January 31, 1968" and
Rules of Court—Section 1, Rule
the ex-parte preliminary injunction
51, and we quote: "Justices; who
rendered in the above-entitled
may take part—... . Only those
case, the latter in effect
members present when any
prejudging and predetermining
matter is submitted for oral
this case even before the joining
argument will take part in its
of an issue. As to the Chief
consideration and
Justice, the motion states [t]hat
adjudication ... ." This
the son of the Honorable Chief
requirement is especially
Justice Roberto Concepcion was
significant in the present instance
given a significant appointment in
because the member who
the Philippine Government by the
penned the decision was the very
President a short time before the
member who was absent for
decision of July 31, 1968 was
approximately four months or
rendered in this case. The
more. This provision also applies
appointment referred to was as
to the Honorable Justices Claudio
secretary of the newly-created
Teehankee and Antonio Barredo.
Board of Investments. The motion
presents a lengthy discourse on
judicial ethics, and makes a xxx xxx xxx
number of side comments
projecting what is claimed to be
6. That if the respondent
the patent wrongfulness of the
MacArthur International Minerals
July 31, 1968 decision. It
Company abandons its quest for
enumerates "incidents" which,
justice in the Judiciary of the
according to the motion, brought
Philippine Government, it will
about respondent MacArthur's
inevitably either raise the graft
belief that unjudicial prejudice
and corruption of Philippine
had been caused it and that there
Government officials in the
was 'unjudicial favoritism' in favor
bidding of May 12, 1965, required
of 'petitioners, their appointing
by the Nickel Law to determine
authority and a favored party
the operator of the Surigao nickel
directly benefited by the said
 deposits, to the World Court on
grounds of deprivation of justice
and confiscation of property
and/or to the United States
Government, either its executive
or judicial branches or both, on
the grounds of confiscation of
respondent's proprietary vested
rights by the Philippine
Government without either
compensation or due process of
law and invoking the
Hickenlooper Amendment
requiring the cutting off of all aid
and benefits to the Philippine
Government, including the sugar
price premium, amounting to
more than fifty million dollars
annually, until restitution or
compensation is made.
(31 SCRA at 10-11)
Finding their explanations unsatisfactory, the Court,
speaking through Mr. Justice Sanchez, held three (3)
attorneys guilty of contempt:
1. We start with the case of Atty.
Vicente L. Santiago. In his third
motion for reconsideration, we,
indeed, find language that is not
to be expected of an officer of the
courts. He pictures petitioners as
'vulturous executives.' He speaks
of this Court as a 'civilized,
democratic tribunal,' but by
innuendo would suggest that it is
not.
In his motion to inhibit, his first
paragraph categorizes our
decision of July 31, 1968 as
'false, erroneous and illegal' in a
presumptuous manner. He then
charges that the ex parte
preliminary injunction we issued
in this case prejudiced and
predetermined the case even
before the joining of an issue. He
accuses in a reckless manner
two justices of this Court for being
interested in the decision of this
case: Associate Justice Fred Ruiz
Castro, because his brother is the
vice president of the favored
party who is the chief beneficiary
of the decision, and Chief Justice
Roberto Concepcion, whose son
was appointed secretary of the
newly-created Board of
Investments, 'a significant
appointment in the Philippine
Government by the President, a
short time before the decision of
July 31, 1968 was rendered.' In
this backdrop, he proceeds to
state that 'it would seem that the
principles thus established [the
moral and ethical guidelines for
inhibition of any judicial authority
by the Honorable Supreme Court
should first apply to itself.' He
puts forth the claim that lesser
and further removed conditions
have been known to create
favoritism, only to conclude that
there is no reason for a belief that
the conditions obtaining in the
case of the Chief Justice and
Justice Castro would be less
likely to engender favoritism and
prejudice for or against a
particular cause or party.' Implicit
in this at least is that the Chief
Justice and Justice Castro are
insensible to delicadeza, which
could make their actuation
suspect. He makes it plain in the
motion that the Chief Justice and
Justice Castro not only were not
free from the appearance of
impropriety but did arouse
suspicion that their relationship
did affect their judgment. He
points out that courts must be
above suspicion at all times like
Ceasar's wife, warns that loss of
confidence for the Tribunal or a
member thereof should not be
allowed to happen in our country,
'although the process has already
begun.
xxx xxx xxx
What is disconcerting is that Atty.
Santiago's accusations have no
basis in fact and in law. The slur
made is not limited to the Chief
Justice and Mr. Justice Castro. It
sweepingly casts aspersion on
the whole court. For, inhibition is
also asked if, we repeated any
other justices who have received
favors or benefits directly or
indirectly from any of the
petitioners or any members of
any board-petitioner or their
agents or principals, including the
president.' The absurdity of this
posture is at once apparent. For
one thing, the justices of this
Court are appointed by the
President and in that sense may
be considered to have each
received a favor from the
President. Should these justices
inhibit themselves every time a
case involving the Administration
crops up? Such a thought may
not certainly be entertained. The
consequence thereof would be to
paralyze the machinery of this
Court. We would in fact, be
wreaking havoc on the tripartite
system of government operating
in this country. Counsel is
presumed to know this. But why
the unfounded charge? There is
the not too-well concealed effort
on the part of a losing litigant's
attorney to downgrade this Court.
The mischief that stems from all
of the foregoing gross disrespect
is easy to discern. Such
disrespect detracts much from
the dignity of a court of justice.
Decidedly not an expression of
faith, counsel's words are This is a clear attempt to Court [was) not only blind, but also deaf and dumb."
intended to create an influence or bend the blind of this Atty. Almacen vowed to argue the cause of his client
atmosphere of distrust, of Court to decide the case' in its "in the people's forum" so that "the people may know
disbelief. favor. A notice of appeal to the of this silent injustice committed by this Court' and that
World Court has even been "whatever mistakes, wrongs and injustices that were
embodied in Meads return. There committed [may] never be repeated." Atty. Almacen
xxx xxx xxx
is a gross inconsistency between released to the press the contents of his Petition and
the appeal and the move to on 26 September 1967, the "Manila Times" published
The precepts, the teachings, the reconsider the decision. An statements attributed to him as follows:
injunctions just recited are not appeal from a decision
unfamiliar to lawyers. and presupposes that a party has
Vicente Raul Almacen, in an
yet, this Court finds in the already abandoned any move to
unprecedented petition, said he
language of Atty. Santiago a style reconsider that decision. And
did not expose the
that undermines and degrades yet, it would appear that the
tribunal's 'unconstitutional and
the administration of justice. The appeal to the World Court is
obnoxious' practice of arbitrarily
stricture in Section 3 (d) of Rule being dangled as a threat to
denying petitions or appeals
71 of the Rules against improper effect a change of the decision of
without any reason.
conduct tending to degrade the this Court. Such act has no
administration of justice is thus aboveboard explanation.
transgressed. Atty. Santiago is Because of the tribunal's 'short-
guilty of contempt of court. cut justice.' Almacen deplored,
xxx xxx xxx
his client was condemned to pay
P120,000, without knowing why
xxx xxx xxx
The dignity of the Court, he lost the case.
experience teaches, can never
Third. The motion contained an be protected where infraction of
xxx xxx xxx
express threat to take the case to ethics meets with complacency
the World Court and/or the United rather than punishment. The
States government. It must be people should not be given cause There is no use continuing his
remembered that respondent to break faith with the belief that law practice, Almacen said in this
MacArthur at that time was still a judge is the epitome of honor petition, 'where our Supreme
trying to overturn the decision of amongst men. To preserve its Court is composed of men who
this Court of July 31, 1968. In dignity, a court of justice should are calloused to our pleas of
doing so, unnecessary not yield to the assaults of justice, who ignore without
statements were in ejected. More disrespect. Punctilio of honor, we reason their own applicable
specifically, the motion prefer to think, is a standard of decisions and commit culpable
announced that McArthur 'will behavior so desirable in a lawyer violations of the Constitution with
inevitably ... raise the graft and pleading a cause before a court impunity.'
corruption of the Philippine of justice. (31 SCRA at 13-23;
government officials in the emphasis supplied)
xxx xxx xxx
bidding of May 12, 1965 ... to the
World Court' and would invoke
3. In In re Almacen, supra, Atty. Vicente Raul
'the Hickenlooper Amendment He expressed the hope that by
Almacen, in protest against what he asserted was "a
requiring the cutting off of all aid divesting himself of his title by
great injustice committed against his client by the
and benefits to the Philippine which he earns his living, the
Supreme Court," filed a Petition to Surrender Lawyer's
Government, including the sugar present members of the Supreme
Certificate of Title. He alleged that his client was
price premium, amount to more Court 'will become responsible to
deeply aggrieved by this Court's "unjust judgment,"
than fifty million dollars all cases brought to its attention
and had become "one of the sacrificial victims before
annually ... without discrimination, and will
the altar of hypocrisy," saying that "justice as
purge itself of those
administered by the present members of the Supreme
 unconstitutional and obnoxious
"lack of merit' or "denied
resolutions. (31 SCRA at 565566;
emphasis supplied)
Atty. Almacen was required by this Court to show
cause why disciplinary action should not be taken
against him. His explanation, which in part read:
xxx xxx xxx
The phrase, Justice is blind is
symbolized in paintings that can
be found in all courts and
government offices. We have
added only two more symbols,
that it is also deaf and dumb.
Deaf in the sense that no
members of this Court has ever
heard our cries for charity,
generosity, fairness,
understanding, sympathy and for
justice; dumb in the sense, that
inspire of our beggings,
supplications, and pleadings to
give us reasons why our appeals
has been DENIED, not one word
was spoken or given ... We refer
to no human defect or ailment in
the above statement. We only
described the impersonal state of
Things and nothing more.
xxx xxx xxx
As we have stated, we have lost
our faith and confidence in the
members of this Court and for
which reason we offered to
surrender our lawyer's certificate,
IN TRUST ONLY. Because what
has been lost today may be
regained tomorrow. As the offer
was intended as our self-imposed
sacrifice, then we alone may
decide as to when we must end
our self- sacrifice. If we have to
choose between forcing
ourselves to have faith and not want Verzosa and Reyes
confidence in the members of the repeated again and again, killed
Court but disregard our in the premises of the Supreme
Constitution and to uphold the Court and in those of the City Hall
Constitution and be condemned of Manila. Educated people
by the members of this Court, should keep their temper under
there is no choice, we must control at all times! But justice
uphold the latter. (31 SCRA at should be done to all concerned
572; emphasis supplied) to perpetuate the very life of
Democracy on the face of the
earth. (14 SCRA at 810;
was found by the Court to be "undignified and cynical"
emphasis supplied)
and rejected. The Court indefinitely suspended
Almacen from the practice of law holding, through Mr.
Justice Fred Ruiz Castro, that Almacen had exceeded The Court considered the above statements as
the boundaries of "fair criticism." derogatory to the dignity of the Court and required
counsel to show cause why administrative action
should not be taken against him. Counsel later
4. In Paragas V. Cruz, 47 Counsel, whose Petition for
explained that he had merely related factual events
Ceriorari ran was dismissed by this Court, made the
(i.e., the killing of Verzosa and Reyes) and to express
following statements in his Motion for
his desire to avoid repetition of such acts. The Court,
Reconsideration:
through Mr. Justice J.B.L. Reyes, found these
explanations unsatisfactory and the above statements
The petitioner respectfully prays contumacious.
for a reconsideration of the
resolution of this Honorable Court
dated April 20,1966 on the
ground that it constitutes a
violation of Section 14 of Rule 11
2 of the Rules of Court
promulgated by this very Hon.
Supreme Court, and on the
further ground that it is likewise a
violation of the most important
right in the Bill of Rights of the
Constitution of the Philippines, a
culpable violation which is a
ground for impeachment.
... The rule of law in a democracy
should always be upheld and
protected by all means, because
the rule of law creates and
preserves peace and order and
gives satisfaction and
contentment to all concerned. But
when the laws and the rules are
violated, the victims resort,
sometimes, to armed force and to
the ways of the cavemen We do
... The expressions contained in
the motion for reconsideration ...
are plainly contemptuous and
disrespectful, and reference to
the recent killing of two
5. In In re Sotto, 48 a newspaper reporter, Mr. Angel
employees is but a covert threat
Parazo, invoking the Press Freedom Law, refused to
upon the members of the
divulge the source of the news item which carried his
Court. ... That such threats and
by-line and was sent to jail for so refusing. Atty.
disrespectful language contained
Vicente Sotto, a senator and author of said law,
in a pleading filed in courts are
caused the publication of the following item in a
constitutive of direct contempt
number of daily newspapers in Manila:
has been repeatedly
decided (Salcedo vs. Hernandez,
61 Phil. 724; People vs.
Venturanza, 52 Off. Gaz. 769;
Medina vs. Rivera, 66 Phil. 151;
De Joya vs. Court of First
Instance of Rizal, 1, 9785,
September 19,1956; Sison vs.
Sandejas L- 9270, April 29,1959;
Lualhati vs. Albert, 57 Phil.
86). What makes the present
case more deplorable is that the
guilty party is a member of the
bar; for, as remarked in People
vs. Carillo, 77 Phil. 580-
Counsel should conduct himself
towards the judges who try his
cases with that courtesy all have
a right to expect. As an officer of
the court, it is his sworn and
moral duty to help build and not
destroy unnecessarily that high
esteem and regard towards the
courts so essential to the proper
administration of justice.
It in light and plausible that an
attorney in defending the cause
and rights of his client, should do
so with all the fervor and energy
of which he is capable, but it is
not, and never will be so, for him
to exercise said right by resorting
to intimidation or proceeding
without the propriety and respect
which the dignity of the courts
require. (Salcedo vs.
Hernandez, [In re Francisco], 61
Phil. 729)' (1 4 SCRA at 811-812;
emphasis supplied)
As author of the Press Freedom
Law (Republic Act No. 53),
interpreted by the Supreme Court
in the case of Angel Parazo,
reporter of a local daily, who now
has to suffer 30 days
imprisonment, for his refusal to
divulge the source of a news
published in his paper, I regret to
say that our High Tribunal has
not only erroneously interpreted
said law, but that it is once more
putting in evidence the
incompetency or narrow
mindedness of the majority of its
members. In the wake of so
many blunders and injustices
deliberately committed during
these last years, I believe that the
only remedy to put an end to so
much evil, is to change the
members of the Supreme
Court. To this effect, I announce
that one of the first measures,
which I will introduce in the
coming congressional sessions,
will have as its object the
complete reorganization of the
Supreme Court. As it is now
constituted, the Supreme Court
of today constitutes a constant
peril to liberty and democracy. It
need be said loudly, very loudly,
so that even the deaf may hear:
The Supreme Court of today is a
far cry from the impregnable
bulwark of Justice of those
memorable times of Cayetano
Arellano, Victorino Mapa, Manuel
Araullo and other learned jurists
who were the honor and glory of
the Philippine Judiciary. (82 Phil.
at 597-598; emphasis supplied)
In finding Atty. Sotto in contempt,
despite his avowals of good faith
and his invocation of the
constitutional guarantee of free
speech and in requiring him to
show cause why he should not be
disbarred, the Court, through Mr.
Justice Feria, said-
To hurl the false charge that this
Court has been for the last years
committing deliberately so many
blunders and injustices that is to
say, that it has been deciding in
favor of one party knowing that
the law and justice is on the part
of the adverse party and not on
the one in whose favor the
decision was rendered, in many
cases decided during the last
years, would tend necessarily to
undermine the coincidence of the
people in the honesty and
integrity of the members of this
Court, and consequently to lower
and degrade the administration of
justice by this Court. The
Supreme Court of the Philippines
is, under the Constitution, the last
bulwark to which the Filipino
people may repair to obtain relief
for their grievances or protection
of their rights when these are
trampled upon, and if the people
lose their confidence in the
honesty and integrity of the
members of this Court and
believe that they cannot expect
justice therefrom, they might be
driven to take the law into their
hands, and disorder and perhaps
chaos might be the result. As a
 member of the bar and an officer
of the courts Atty. Vicente Sotto,
like any other, is in duty bound to
uphold the dignity and authority
of this Court, to which he owes
fidelity according to the oath he
has taken as such attorney, and
not to promote distrust in the
administration of justice. Respect
to the courts guarantees the
stability of other institutions,
When required by the Court to show cause why he
which without such guaranty
should not be declared in contempt, Atty. Francisco
would be resting on a very shaky
responded by saying that it was not contempt to tell
foundation. (82 Phil. at 601-602;
the truth. Examining the statements made above, the
emphasis supplied)
Court held:
6. In Salcedo v. Hernandez, 49 Atty. Vicente Francisco
filed a Motion before the Supreme Court which
contained the following paragraph (in translation):
We should like frankly and
respectfully to make it of record
that the resolution of this court,
denying our motion for
reconsideration, is absolutely
erroneous and constitutes an
outrage to the rights of the
petitioner Felipe Salcedo and a
mockery of the popular will
expressed at the polls in the
municipality of Tiaong, Tayabas.
We wish to exhaust all the means
within our power in order that this
error may be corrected by the
very court which has committed
it, because we should not want
that some citizen, particularly
some voter of the municipality of
Tiaong, Tayabas, resort to the
press publicly to denounce, as he
has a right to do, the judicial
outrage of which the herein
petitioner has been the victim,
and because it is our utmost
desire to safeguard the prestige
of this honorable court and of
each and every member thereof
in the eyes of the public. But, at
the same time we wish to state
sincerely that erroneous
decisions like these, which the
affected party and his thousands
of voters will necessarily consider
unjust, increase the proselytes of
sakdalism and make the public
lose confidence in the
administration of justice. (61 Phil.
at 726; emphasis supplied)
... [they] disclose, in the opinion
of this court, an inexcusable
disrespect of the authority of the
court and an intentional contempt
of its dignity, because the court is
thereby charged with no less
than having proceeded in utter
disregard of the laws, the rights
of the parties, and of the
untoward consequences, or with
having abused its power and
mocked and flouted the rights of
Attorney Vicente J. Francisco's
client, because the acts of
outraging and mocking from
which the words 'outrage' and
mockery' used therein are
derived, means exactly the same
as all these, according to the
Dictionary of the Spanish
Language published by the
Spanish Academy (Dictionary of
the Spanish Language, 15th ed.,
pages 132-513).
The insertion of the phrases in
question in said motion of
Attorney Vicente J. Francisco, for
many years a member of the
Philippine bar, was neither
justified nor in the least
necessary, because in order to
call the attention of the court in a
special way to the essential
points relied upon in his argument
and to emphasize the force
thereof, the many reasons stated
in his said motion were sufficient
and the phrases in question were
superfluous. In order to appeal to
reason and justice, it is highly
improper and amiss to make
trouble and resort to threats, as
Attorney Vicente J. Francisco has
done, because both means are
annoying and good practice can
ever sanction them by reason of
their natural tendency to disturb
and hinder the free exercise of a
serene and impartial judgment,
particularly in judicial matters, in
the consideration of questions
submitted for resolution.
There is no question that said
paragraph of Attorney Vicente J.
Francisco's motion contains a
more or less veiled threat to the
court because it is insinuated
therein, after the author shows
the course which the voters of
Tiaong should follow in case he
fails in his attempt, that they will
resort to the press for the
purpose of denouncing, what he
claims to be a judicial outrage of
which his client has been the
victim; and because he states in
a threatening manner with the
intention of predisposing the
mind of the reader against the
court, thus creating an
atmosphere of prejudices against
it in order to make it odious in the
public eye, that decisions of the
nature of that referred to in his
motion to promote distrust in the
administration of justice and
increase the proselytes
of sakdalism a movement with
seditious and revolutionary
tendencies the activities of which,
as is of public knowledge,
 occurred in this country a few 1) In re Wenceslao Laureta, 148 Supreme Court. Respondent's statements, especially
days ago. This cannot mean SCRA 382 (1987); the charge that the Court deliberately rendered an
otherwise than contempt of the erroneous and unjust decision in the Consolidated
dignity of the court and Petitions, necessarily implying that the justices of this
2) Borromeo v. Court of
disrespect of the authority thereof Court betrayed their oath of office, merely to wreak
appeals, 87 SCRA 67 (1978);
on the part of Attorney Vicente J. vengeance upon the respondent here, constitute the
Francisco, because he presumes grossest kind of disrespect for the Court. Such
that the court is so devoid of the 3) Rheem of the Philippines v. statements very clearly debase and degrade the
sense of justice that, if he did not Ferrer, 20 SCRA 441 (1967); Supreme Court and, through the Court, the entire
resort to intimidation, it would system of administration of justice in the country. That
maintain its error notwithstanding respondent's baseless charges have had some
4) Malolos v. Reyes, 1 SCRA 559
the fact that it may be proven, impact outside the internal world of subjective intent,
(1961);
with good reasons, that it has is clearly demonstrated by the filing of a complaint for
acted erroneously. impeachment of thirteen (13) out of the then fourteen
5) De Joya, et al. v. Court of First (14) incumbent members of this Court, a complaint
Instance of Rizal, Pasay City the centerpiece of which is a repetition of the
As a member of the bar and an
Branch, 99 Phil. 907 (1956); appalling claim of respondent that this Court
officer of this court, Attorney
deliberately rendered a wrong decision as an act of
Vicente J. Francisco, as any
reprisal against the respondent.
attorney, is in duty bound to 6) People v. Venturanza, et
uphold its dignity and authority al., 98 Phil. 211 (1956);
and to defend its integrity, not IV
only because it had conferred
upon him the high privilege, not a 7) In re Suzano A. Velasquez,
per curiam Resolution The principal defense of respondent Gonzalez is that
right (Malcolm, Legal Ethics, 158
(unreported), Promulgated 29 he was merely exercising his constitutional right of
and 160), of being what he now
April 1955; free speech. He also invokes the related doctrines of
is: a priest of justice (In re
qualified privileged communications and fair criticism
Thatcher, 80 Ohio St., Rep., 492,
in the public interest.
669), but also because in so 8) Cornejo v. Tan, 85 Phil. 772
doing, he neither creates nor (1950);
promotes distrust in the Respondent Gonzalez is entitled to the constitutional
administration of justice, and guarantee of free speech. No one seeks to deny him
prevents anybody from harboring 9) People v. Carillon, 77 Phil. 572 that right, least of all this Court. What respondent
and encouraging discontent (1946); seems unaware of is that freedom of speech and of
which, in many cases, is the expression, like all constitutional freedoms, is not
source of disorder, thus 10) Intestate Estate of Rosario absolute and that freedom of expression needs on
undermining the foundation upon 0lba; Contempt Proceedings occasion to be adjusted to and accommodated with
which rests that bulwark called against Antonio Franco, 67 Phil. the requirements of equally important public interests.
judicial power to which those who 312 (1939); and One of these fundamental public interests is the
are aggrieved turn for protection maintenance of the integrity and orderly functioning of
and relief (61 Phil. at 727-728; the administration of justice. There is no antinomy
emphasis supplied) 11) Lualhati v. Albert, 57 Phil. 86 between free expression and the integrity of the
(1932). system of administering justice. For the protection and
maintenance of freedom of expression itself can be
It should not be supposed that the six (6) cases above
Considering the kinds of statements of lawyers secured only within the context of a functioning and
discussed exhaust our case law on this matter. In the
discussed above which the Court has in the past orderly system of dispensing justice, within the
following cases, among others, the Supreme Court
penalized as contemptuous or as warranting context, in other words, of viable independent
punished for contempt or administratively disciplined
application of disciplinary sanctions, this Court is institutions for delivery of justice which are accepted
lawyers who had made statements not very different
compelled to hold that the statements here made by by the general community. As Mr. Justice Frankfurter
from those made in the cases discussed above:
respondent Gonzalez clearly constitute contempt and put it:
call for the exercise of the disciplinary authority of the
 ... A free press is not to be
preferred to an independent
judiciary, nor an independent
judiciary to a free press. Neither
has primacy over the other; both
are indispensable to a free
society. The freedom of the press
in itself presupposes an
independent judiciary through
which that freedom may, if
necessary be vindicated. And one
of the potent means for assuring
judges their independence is a
free press. 50
Mr. Justice Malcolm of this Court expressed the same
thought in the following terms:
The Organic Act wisely
guarantees freedom of speech
and press. This constitutional
right must be protected in its
fullest extent. The Court has
heretofore given evidence of its
tolerant regard for charges under
the Libel Law which come
dangerously close to its
violation. We shall continue in this
chosen path. The liberty of the
citizens must be preserved in all
of its completeness. But license
or abuse of liberty of the press
and of the citizens should not be
confused with liberty ill its true
sense. As important as is the
maintenance of an unmuzzled
press and the free exercise of the
rights of the citizens is the
maintenance of the
independence of the
Judiciary. Respect for the
Judiciary cannot be had if
persons are privileged to scorn a
resolution of the court adopted for
good purposes, and if such
persons are to be permitted by
subterranean means to diffuse
inaccurate accounts of
confidential proceedings to the
embarassment of the parties and
the courts. 51 (Emphasis supplied)
Only slightly (if at all) less important is the public
interest in the capacity of the Court effectively to
prevent and control professional misconduct on the
part of lawyers who are, first and foremost,
indispensable participants in the task of rendering
justice to every man. Some courts have held,
persuasively it appears to us, that a lawyer's right of
free expression may have to be more limited than that
of a layman. 52
It is well to recall that respondent Gonzalez, apart
from being a lawyer and an officer of the court, is also
a Special Prosecutor who owes duties of fidelity and
respect to the Republic and to this Court as the
embodiment and the repository of the judicial power in
the government of the Republic. The responsibility of
the respondent "to uphold the dignity and authority of
this Court' and "not to promote distrust in the
administration of justice 53 is heavier than that of a
private practicing lawyer.
Respondent Gonzalez claims to be and he is, of
course, entitled to criticize the rulings of this Court, to
point out where he feels the Court may have lapsed
into error. Once more, however, the right of criticism is
not unlimited. Its limits were marked out by Mr. Justice
Castro in In re Almacen which are worth noting
But it is the cardinal condition of
all such criticism that it shall be
bonafide and shall not spill over
the walls of decency and
propriety. A wide chasm exists
between fair criticism, on the one
hand, and abuse and slander of
courts and the judges thereof, on
the other. Intemperate and unfair
criticism is a gross violation of the
duty of respect to courts. It is
such a misconduct that subjects
a lawyer to disciplinary action.
The lawyer's duty to render
respectful subordination to the
courts is essential to the orderly
administration of justice. Hence,
in the assertion of their clients'
rights, lawyers even those gifted
with superior intellect are
enjoined to rein up their tempers.
xxx xxx xxx 54
(Emphasis supplied)
The instant proceeding is not addressed to the fact
that respondent has criticized the Court; it is
addressed rather to the nature of that criticism or
comment and the manner in which it was carried out.
Respondent Gonzalez disclaims an intent to attack
and denigrate the Court. The subjectivities of the
respondent are irrelevant so far as characterization of
his conduct or misconduct is concerned. He will not,
however, be allowed to disclaim the natural and plain
import of his words and acts. 55 It is upon the other
hand, not irrelevant to point out that respondent
offered no apology in his two (2) explanations and
exhibited no repentance. 56
Respondent Gonzalez also defends himself
contending that no injury to the judiciary has been
shown, and points to the fact that this Court denied
his Motion for Reconsideration of its per
curiam Decision of 27 April 1988 and reiterated and
amplified that Decision in its Resolution of 19 May
1988. In the first place, proof of actual damage
sustained by a court or the judiciary in general is not
essential for a finding of contempt or for the
application of the disciplinary authority of the Court.
Insofar as the Consolidated Petitions are concerned,
this Court after careful review of the bases of its 27
April 1988 Decision, denied respondent's Motion for
Reconsideration thereof and rejected the public
pressures brought to bear upon this Court by the
respondent through his much publicized acts and
statements for which he is here being required to
account. Obstructing the free and undisturbed
resolution of a particular case is not the only species
of injury that the Court has a right and a duty to
prevent and redress. What is at stake in cases of this
kind is the integrity of the judicial institutions of the
country in general and of the Supreme Court in
particular. Damage to such institutions might not be
quantifiable at a given moment in time but damage
there will surely be if acts like those of respondent
Gonzalez are not effectively stopped and countered.
The level of trust and confidence of the general public
in the courts, including the court of last resort, is not
easily measured; but few will dispute that a high level
of such trust and confidence is critical for the stability
of democratic government.
Respondent Gonzalez lastly suggests that
punishment for contempt is not the proper remedy in
this case and suggests that the members of this Court
have recourse to libel suits against him. While the
remedy of libel suits by individual members of this
Court may well be available against respondent
Gonzalez, such is by no means an exclusive remedy.
Moreover, where, as in the instant case, it is not only
the individual members of the Court but the Court
itself as an institution that has been falsely attacked,
libel suits cannot be an adequate remedy. 57
The Court concludes that respondent Gonzalez is
guilty both of contempt of court in facie curiae and of
gross misconduct as an officer of the court and
member of the Bar.
ACCORDINGLY, the Court Resolved to SUSPEND
Atty. Raul M. Gonzalez from the practice of law
indefinitely and until further orders from this Court, the
suspension to take effect immediately.
Let copies of this Resolution be furnished
the Sandiganbayan, the Ombudsman, the Secretary
of Justice, the Solicitor General and the Court of
Appeals for their information and guidance.
Fernan C.J., Narvasa, Melencio-Herrera, Gutierrez,
Jr., Cruz, Paras, Feliciano, Gancayco, Padilla, Bidin,
Sarmiento, Cortes, Griño-Aquino, Medialdea and
Regalado, JJ., concur.
Republic of the Philippines
SUPREME COURT
Manila
THIRD DIVISION
G.R. No. 152991 July 21, 2008
ALBERTO P. OXALES, Petitioner,
vs.
UNITED LABORATORIES, INC., Respondent.
DECISION
REYES, R.T., J.:
HOW should a private company retirement plan for
employees be implemented vis-à-vis The Retirement
Pay Law (Republic Act No. 7641)?
Papaano ipapatupad ang isang plano ng
pribadong kompanya para sa pagreretiro ng mga
empleyado sa harap ng Batas ng Pagbabayad sa
Pagreretiro (Batas Republika Blg. 7641)?
We address the concern in this appeal by certiorari of
the Decision1 of the Court of Appeals (CA) affirming
the Resolution2 and Decision3 of the Labor Arbiter and
the National Labor Relations Commission (NLRC),
respectively, dismissing petitioner Alberto P. Oxales’
complaint for additional retirement benefits, recovery
of the cash equivalent of his unused sick leaves,
damages, and attorney’s fees, against respondent
United Laboratories, Inc. (UNILAB).
The Facts
Sometime in 1959, UNILAB established the United
Retirement Plan (URP).4 The plan is a comprehensive
retirement program aimed at providing for retirement,
resignation, disability, and death benefits of its
members. An employee of UNILAB becomes a
member of the URP upon his regularization in the
company. The URP mandates the compulsory
retirement of any member-employee who reaches the
age of 60.
Both UNILAB and the employee contribute to the
URP. On one hand, UNILAB provides for the account
of the employee an actuarially-determined amount to
Trust Fund A. On the other hand, the employee chips
in 2½% of his monthly salary to Trust Fund B. Upon
retirement, the employee gets both amounts standing
in his name in Trust Fund A and Trust Fund B.
As retirement benefits, the employee receives (1)
from Trust Fund A a lump sum of 1½ month’s pay per
year of service "based on the member’s last or
terminal basic monthly salary,"5 and (2) whatever the
employee has contributed to Trust Fund B, together
with the income minus any losses incurred. The URP
excludes commissions, overtime, bonuses, or extra
compensations in the computation of the basic salary
for purposes of retirement.
Oxales joined UNILAB on September 1, 1968. He was
compulsorily retired by UNILAB when he reached his
60th birthday on September 7, 1994, after having
rendered service of twenty-five (25) years, eleven (11)
months, and six (6) days. He was then Director of
Manufacturing Services Group.
In computing the retirement benefits of Oxales based
on the 1½ months for every year of service under the
URP, UNILAB took into account only his basic
monthly salary. It did not include as part of the salary
base the permanent and regular bonuses, reasonable
value of food allowances, 1/12 of the 13th month pay,
and the cash equivalent of service incentive leave.
Thus, Oxales received from Trust Fund A
₱1,599,179.00, instead of ₱4,260,255.70. He also
received ₱176,313.06, instead of ₱456,039.20 as
cash equivalent of his unused sick leaves. Lastly, he
received ₱397,738.33 from his contributions to Trust
Fund B. In sum, Oxales received the total amount
of ₱2,173,230.39 as his retirement benefits.
On August 21, 1997, Oxales wrote UNILAB, claiming
that he should have been paid ₱1,775,907.23 more in
retirement pay and unused leave credits. He insisted
that his bonuses, allowances and 13th month pay
should have been factored in the computation of his
retirement benefits.6
On September 9, 1997, UNILAB wrote7 back and
reminded Oxales about the provision of the URP
excluding any commissions, overtime, bonuses or
extra compensations in the computation of the basic
salary of the retiring employee.
Disgruntled, Oxales filed a complaint with the Labor
Arbiter for (1) the correct computation of his
retirement benefits, (2) recovery of the cash
equivalent of his unused sick leaves, (3) damages,
and (4) attorney’s fees. He argued that in the
computation of his retirement benefits, UNILAB
should have included in his basic pay the following, to
wit: (a) cash equivalent of not more than five (5) days
service incentive leave; (b) 1/12th of 13th month pay;
and (c) all other benefits he has been receiving.
Efforts were exerted for a possible amicable
settlement. As this proved futile, the parties were
required to submit their respective pleadings and
position papers.
Labor Arbiter, NLRC and CA Dispositions
On June 30, 1998, Labor Arbiter Romulus A. Protasio
rendered a decision dismissing the complaint, thus:
WHEREFORE, premises considered, judgment is
hereby rendered dismissing the instant complaint for
lack of merit.
SO ORDERED.8
The Labor Arbiter held that the URP clearly excludes
commission, overtime, bonuses, or other extra
compensation. Hence, the benefits asked by Oxales
to be included in the computation of his retirement
benefits should be excluded.9
The Arbiter also held that the inclusion of the fringe
benefits claimed by Oxales would put UNILAB in
violation of the terms and conditions set forth by the
Bureau of Internal Revenue (BIR) when it approved
the URP as a tax-qualified plan. More, any
overpayment of benefits would adversely affect the
actuarial soundness of the plan. It would also expose
the trustees of the URP to liabilities and prejudice the
other employees. Worse, the BIR might even
withdraw the tax exemption granted to the
URP.10 Lastly, the Labor Arbiter opined that the URP
precludes the application of the provisions of R.A. No.
7641.11
Oxales appealed to the NLRC. On February 8, 1999,
the NLRC affirmed the decision of the Labor Arbiter,
disposing as follows:
WHEREFORE, in view thereof, the instant appeal is
hereby dismissed for lack of merit and the appealed
decision is ordered affirmed.
SO ORDERED.12
The NLRC ruled that the interpretation by Oxales of
R.A. No. 7641 is selective. He only culled the
provisions that are beneficial to him, putting in grave
doubt the sincerity of his motives. For instance, he
claims that the value of the food benefits and other
allowances should be included in his monthly salary
as multiplicand to the number of his years of service
with UNILAB. At the same time, however, he does not
intend to reduce the 1½ month salary as multiplier
under the URP to ½ under R.A. No. 7641.13
The NLRC agreed with the Labor Arbiter that the
provisions of R.A. No. 7641 do not apply in view of the
URP. The NLRC also took into account the fact that
the benefits granted to Oxales by virtue of the URP
was even higher than what R.A. No. 7641 requires.14
His motion for reconsideration having been denied,
Oxales filed with the CA a petition for certiorari under
Rule 65.
In a decision promulgated on April 12, 2002, the CA
dismissed the petition. The CA ruled that the petition
of Oxales calls for a review of the factual findings of
the Labor Arbiter as affirmed by the NLRC. It is not
the normal function of the CA in a special civil action
for certiorari to inquire into the correctness of the
evaluation of the evidence by the Labor Arbiter. Its
authority is confined only to issues of jurisdiction or
grave abuse of discretion.15
Just like the Labor Arbiter and the NLRC, the CA also
held that R.A. No. 7641 is applicable only in the
absence of a retirement plan or agreement providing
for the retirement benefits of employees in an
establishment.16
Finally, the CA denied the claim of Oxales to moral
and exemplary damages. According to the appellate
court, he failed to prove the presence of bad faith or
fraud on the part of UNILAB. His mere allegations of
having suffered sleepless nights, serious anxiety, and
mental anguish are not enough. No premium should
be placed on the right to litigate.17
Left with no other option, Oxales filed the present
recourse under Rule 45 of the 1997 Rules of Civil
Procedure.18
Issues
In his Memorandum,19 Oxales raises the following
issues for Our disposition, to wit:
1. WHETHER OR NOT THE COURT OF
APPEALS SERIOUSLY ERRED IN NOT
FINDING THAT ACCORDING TO
PREVAILING JURISPRUDENCE, SUCH
ERRORS IN THE COMPUTATION OF
RETIREMENT BENEFITS OF
PETITIONER SHOULD BE CORRECTED
IN A SPECIAL ACTION FOR
CERTIORARI;
2. WHETHER OR NOT THE COURT OF
APPEALS SERIOUSLY ERRED IN NOT
FINDING THAT THE NLRC COMMITTED
GRAVE ABUSE OF DISCRETION IN
INCORRECTLY INTERPRETING THE
URP TO EXCLUDE SEVERAL
REMUNERATIONS FROM THE SAID
SALARY BASE;
3. WHETHER OR NOT THE COURT OF
APPEALS SERIOUSLY ERRED AND
COMMITTED GRAVE ABUSE OF
DISCRETION IN TOTALLY IGNORING
THE ISSUE AND IN NOT FINDING THAT
THE NLRC COMMITTED GRAVE ABUSE
OF DISCRETION IN INCORRECTLY
INTERPRETING THE URP TO EXCLUDE
PERMANENT AND REGULAR
ALLOWANCES FROM THE SALARY
BASE FOR COMPUTING RETIREMENT
BENEFITS OF PETITIONER;
4. WHETHER OR NOT THE COURT OF
APPEALS SERIOUSLY ERRED IN NOT
FINDING THAT THE NLRC COMMITTED
GRAVE ABUSE OF DISCRETION IN
INCORRECTLY INTERPRETING THE
URP TO EXCLUDE PERMANENT AND
REGULAR REMUNERATIONS
MISLABELED AS BONUSES FROM THE
SALARY BASE FOR COMPUTING THE
RETIREMENT BENEFITS OF THE
PETITIONER;
5. WHETHER OR NOT THE COURT OF
APPEALS ERRED IN NOT FINDING THAT
THE NLRC COMMITTED GRAVE ABUSE
OF DISCRETION IN INCORRECTLY
INTERPRETING THE URP TO EXCLUDE
ONE TWELFTH (1/12th) OF THE
STATUTORY THIRTEENTH MONTH PAY
FROM THE SALARY BASE FOR
COMPUTING RETIREMENT BENEFITS;
6. WHETHER OR NOT THE COURT OF
APPEALS SERIOUSLY ERRED IN THE
INTERPRETATION OF R.A. NO.
7641 WHEN IT CONCLUDED THAT THE
SAID LAW IS APPLICABLE ONLY IN THE
ABSENCE OF RETIREMENT PLAN OR
AGREEMENT PROVIDING FOR THE
RETIREMENT BENEFITS OF
EMPLOYEES IN AN ESTABLISHMENT;
7. WHETHER OR NOT THE COURT OF
APPEALS SERIOUSLY ERRED IN NOT
FINDING THAT THE DEFINITION OF
"SALARY" UNDER THE IMPLEMENTING
RULES OF R.A. NO. 7641 SHOULD BE
INTERPRETED TO INCLUDE THE
PERMANENT AND REGULAR
REMUNERATIONS OF PETITIONER IN
THE SALARY BASE FOR COMPUTING
RETIREMENT BENEFITS;
8. WHETHER OR NOT THE LABOR
ARBITER, THE NLRC, AND COURT OF
APPEALS COMMITTED GRAVE ABUSE
OF DISCRETION IN IGNORING AND NOT
RESOLVING THE ISSUES REGARDING
PETITIONER’S UNPAID CASH
EQUIVALENT OF THE UNUSED SICK
LEAVE CREDITS;
9. WHETHER OR NOT THE COURT OF
APPEALS SERIOUSLY ERRED IN NOT
RULING THAT THE NLRC GRAVELY
ABUSED ITS DISCRETION IN ITS
FAILURE TO PROPERLY INTERPRET
THE URP IN DETERMINING THE
EMPLOYMENT PERIOD OF PETITIONER
FOR THE PURPOSE OF COMPUTING
RETIREMENT BENEFITS;
10. WHETHER OR NOT THE COURT OF
APPEALS SERIOUSLY ERRED IN NOT
RULING THAT THE NLRC COMMITTED
GRAVE ABUSE OF DISCRETION IN NOT
REINSTATING THE MEDICAL
RETIREMENT BENEFITS OF
PETITIONER;
11. WHETHER OR NOT THE COURT OF
APPEALS SERIOUSLY ERRED AND
GRAVELY ABUSED ITS DISCRETION IN
TOTALLY AND ARBITRARILY IGNORING
THE ISSUE AND IN NOT FINDING THAT
THE NLRC COMMITTED GRAVE ABUSE
OF DISCRETION IN RENDERING A
DECISION IN VIOLATION OF THE
CONSTITUTIONAL REQUIREMENTS
WHICH IN EFFECT DENIED
PETITIONER’S RIGHT TO DUE
PROCESS;
12. WHETHER OR NOT THE COURT OF
APPEALS SERIOUSLY ERRED AND
GRAVELY ABUSED ITS DISCRETION IN
LIKEWISE RENDERING A DECISION IN
VIOLATION OF THE CONSTITUTIONAL
REQUIREMENT THAT DECISIONS
SHOULD EXPRESS CLEARLY AND
DISTINCTLY THE FACTS OF THE CASE
AND THE LAW ON WHICH IT IS BASED;
13. WHETHER OR NOT THE COURT OF
APPEALS SERIOUSLY ERRED IN NOT
GRANTING MORAL AND EXEMPLARY
DAMAGES AND ATTORNEY’S FEES TO
PETITIONER;
14. WHETHER OR NOT THE SUPREME
COURT SHOULD GRANT PETITIONER
UNPAID RETIREMENT PAY, UNPAID
CASH EQUIVALENT OF UNUSED LEAVE
CREDITS, REINSTATEMENT OF
MEDICAL BENEFITS, MORAL AND
EXEMPLARY DAMAGES, AND
ATTORNEY’S FEES.20 (Underscoring
supplied)
The issues posed by Oxales may be compressed as
follows: first, whether in the computation of his
retirement and sick leave benefits, UNILAB should
have factored such benefits like bonuses, cash and
meal allowances, rice rations, service incentive
leaves, and 1/12 of the 13th month pay; second,
whether R.A. No. 7641 is applicable for purposes of
computing his retirement benefits; and third, whether
UNILAB is liable for moral damages, exemplary
damages, and attorney’s fees.
Our Ruling
The clear language of the URP should be
respected.
A retirement plan in a company partakes the nature
of a contract, with the employer and the employee as
the contracting parties. It creates a contractual
obligation in which the promise to pay retirement
benefits is made in consideration of the continued
faithful service of the employee for the requisite
period.21
The employer and the employee may establish such
stipulations, clauses, terms, and conditions as they
may deem convenient.22 In Allgeyer v.
Louisiana,23 New York Life Ins. Co. v.
Dodge,24 Coppage v. Kansas,25 Adair v. United
States,26 Lochner v. New York,27 and Muller v.
Oregon,28 the United States Supreme Court held that
the right to contract about one’s affair is part and
parcel of the liberty of the individual which is protected
by the "due process of law" clause of the Constitution.
The obligations arising from the agreement between
the employer and the employee have the force of law
between them and should be complied with in good
faith.29 However, though the employer and the
employee are given the widest latitude possible in the
crafting of their contract, such right is not absolute.
There is no such thing as absolute freedom of
contract. A limitation is provided for by the law itself.
Their stipulations, clauses, terms, and conditions
should not be contrary to law, morals, good customs,
public order, or public policy.30 Indeed, the law
respects the freedom to contract but, at the same
time, is very zealous in protecting the contracting
parties and the public in general. So much so that the
contracting parties need not incorporate the existing
laws in their contract, as the law is deemed written in
every contract. Quando abest, proviso parties, adest
proviso legis. When the provision of the party is
lacking, the provision of the law supplies it. Kung may
kulang na kondisyon sa isang kasunduan, ang
batas ang magdaragdag dito.
Viewed from the foregoing, We rule that Oxales is not
entitled to the additional retirement benefits he is
asking. The URP is very clear: "basic monthly salary"
for purposes of computing the retirement pay is "the
basic monthly salary, or if daily[,] means the basic rate
of pay converted to basic monthly salary of the
employee excluding any commissions, overtime,
bonuses, or extra compensations."31 Inclusio unius est
exclusio alterius. The inclusion of one is the exclusion
of others. Ang pagsama ng isa, pagpwera naman sa
iba.
The URP is not contrary to law, morals, good
customs, public order, or public policy to merit its
nullification. We, thus, sustain it. At first blush, the
URP seems to be disadvantageous to the retiring
employee because of the exclusion of commissions,
overtime, bonuses, or extra compensations in the
computation of the basic monthly salary. However, a employment contract providing for retirement benefits
close reading of its provisions would reveal otherwise. for an employee; or (2) there is a collective bargaining
We quote with approval the explanation of the NLRC agreement or other applicable employment contract
in this regard, viz.: providing for retirement benefits for an employee, but
it is below the requirements set for by law. The
reason for the first situation is to prevent the absurd
x x x the United Retirement Plan of the
situation where an employee, who is otherwise
respondent [Unilab] has a one and one-half months
deserving, is denied retirement benefits by the
salary for every year of service as the basis of
nefarious scheme of employers in not providing for
entitlement. Under the new law, only one-half month
retirement benefits for their employees. The reason
of the retiree’s salary inclusive however, of not more
for the second situation is expressed in the latin
than five (5) days of service incentive leave and one-
maxim pacta privata juri publico derogare non
twelfth (1/12) of the 13th month pay are used as the
possunt. Private contracts cannot derogate from the
bases in the retirement benefits computation.
public law. Ang kasunduang pribado ay hindi
makasisira sa batas publiko. Five (5) reasons support
Mathematically speaking therefore, this conclusion.
complainant’s [Oxales] benefits received amounting to
₱1,599,179.00 under Trust Fund A together with the
First, a plain reading of the Retirement Pay Law. R.A.
cash equivalent of his unused leaves which has an
No. 7641 originated from the House of
amount of ₱176,313.06 and his contribution in the
Representatives as House Bill 317 which was later
Trust Fund B amounting to ₱397,738.33 are way
consolidated with Senate Bill 132. It was approved on
above the entitlement he could have received under
December 9, 1992 and took effect on January 7,
Republic Act 7641, otherwise known as the New
1993.38 Amending Article 287 of the Labor Code, it
Retirement Law.32 (Underscoring supplied)
provides as follows:
Both law33 and jurisprudence34 mandate that if the
Art. 287. Retirement. – Any employee may be retired
terms of a contract are clear and leave no doubt upon
upon reaching the retirement age established in the
the intention of the contracting parties, the literal
collective bargaining agreement or other applicable
meaning of its stipulations shall control. Thus, if the
employment contract.
terms of a writing are plain and unambiguous, there is
no room for construction, since the only purpose of
judicial construction is to remove doubt and In case of retirement, the employee shall be entitled to
uncertainty.35 Only where the language of a contract is receive such retirement benefits as he may have
ambiguous and uncertain that a court may, under earned under existing laws and any collective
well-established rules of construction, interfere to bargaining agreement and other agreements:
reach a proper construction and make certain that Provided, however, that an employee’s retirement
which in itself is uncertain.36 Where the language of a benefits under any collective bargaining and other
contract is plain and unambiguous, its meaning agreements shall not be less than those provided
should be determined without reference to extrinsic herein.
facts or aids.37
R.A. No. 7641 does not apply in view of the URP
which gives to the retiring employee more than
what the law requires; the supporting cases cited
by Oxales are off-tangent.
R.A. No. 7641, otherwise known as "The Retirement
Pay Law," only applies in a situation where (1) there is
no collective bargaining agreement or other applicable
In the absence of a retirement plan or agreement
providing for retirement benefits of employees in the
establishment, an employee upon reaching the age of
sixty (60) years or more, but not beyond sixty-five (65)
years which is hereby declared the compulsory
retirement age, who has served at least five (5) years
in the said establishment, may retire and shall be
entitled to retirement pay equivalent to at least one-
half (1/2) month salary for every year of service, a
fraction of at least six (6) months being considered as
one whole year.
Unless the parties provide for broader inclusions, the
term ‘one-half (1/2) month salary shall mean fifteen
(15) days plus one-twelfth (1/12) of the 13th month
pay and the cash equivalent of not more than five (5)
days of service incentive leaves. (Underscoring
supplied)
Second, the legislative history of the Retirement Pay
Law. It may be recalled that R.A. No. 7641 traces
back its history in the case of Llora Motors, Inc. v.
Drilon.39 In this case, the Court held that the then
Article 287 of the Labor Code40 and its Implementing
Rules41 may not be the source of an employee’s
entitlement to retirement pay absent the presence of a
collective bargaining agreement or voluntary company
policy that provides for retirement benefits for the
employee.42
Third, the legislative intent of the Retirement Pay
Law. A reading of the explanatory note of
Representative Alberto S. Veloso would show why
Congress sought to pass the Retirement Pay Law:
many employers refuse or neglect to adopt a
retirement plan for their employees because of the
absence of any legal compulsion for them to do so,
thus:
When the Labor Code came into effect in 1974,
retirement pay had, as a matter of course, been
granted to employees in the private sector when they
reach the age of sixty (60) years. This had practically
been the rule observed by employers in the country
pursuant to the rules and regulations issued by the
then Minister of Labor and Employment to implement
the provisions of the Labor Code, more particularly,
where there is no provision for the same in the
collective bargaining agreement or retirement plan of
the establishment.1avvphil
At present, however, such benefit of retirement pay is
no longer available where there is no collective
agreement thereon or any retirement plan at all. This
is so because, in a decision of the Supreme Court
(Llora Motors vs. Drilon and NLRC, et al., G.R. No.
82895, November 7, 1989), it was held that the grant
of such benefit under the rules implementing the
Labor Code is not supported by any express provision
of the Labor Code itself. In short, there is no specific
statutory basis for the grant of retirement benefits for
employees in the private sector reaching the age of
60 years.
Since the time of such nullification by the Supreme
Court of said implementing rules on retirement pay for
private sector employees, many employers simply
refuse or neglect to adopt any retirement plan for their
workers, obviously emboldened by the thought that,
after said ruling, there is no longer any legal
compulsion to grant such retirement benefits. In our
continuous quest to promote social justice, unfair
situations like this, productive of grievance or irritants
in the labor-management relations, must immediately
be corrected or remedied by legislation.
(Underscoring supplied)
Fourth, the title of the Retirement Pay Law. The
complete title of R.A. No. 7641 is "An Act Amending
Article 287 of Presidential Decree No. 442, As
Amended, Otherwise Known as the Labor Code of the
Philippines, By Providing for Retirement Pay to
Qualified Private Sector in the Absence of Any
Retirement Plan in the Establishment." Res ipsa
loquitur. The thing speaks for itself. Isang bagay na
nangungusap na sa kanyang sarili.
Fifth, jurisprudence. In Oro Enterprises, Inc. v.
National Labor Relations Commission,43 the Court
held that R.A. No. 7641 "is undoubtedly a social
legislation. The law has been enacted as a labor
protection measure and as a curative statute that –
absent a retirement plan devised by, an agreement
with, or a voluntary grant from, an employer – can
respond, in part at least, to the financial well-being of
workers during their twilight years soon following their
life of labor."44
In Pantranco North Express, Inc. v. National Labor
Relations Commission,45 the Court held that Article
287 of the Labor Code "makes clear the intention and
spirit of the law to give employers and employees a
free hand to determine and agree upon the terms and
conditions of retirement,"46 and that the law "presumes
that employees know what they want and what is
good for them absent any showing that fraud or
intimidation was employed to secure their consent
thereto."47
Lastly, in Brion v. South Philippine Union Mission of
the Seventh Day Adventist Church,48 the Court ruled
that a reading of Article 287 of the Labor Code would
reveal that the "employer and employee are free to
stipulate on retirement benefits, as long as these do
not fall below floor limits provided by law."49
We are aware of the several cases cited by Oxales to
support his claim that the computation of his
retirement benefits should not have been limited to
the basic monthly salary as defined by the URP.
However, these cases negate, rather than support, his
claim.
In Villena v. National Labor Relations
Commission,50 the "compulsory retirement" of Villena
was, in fact, an illegal dismissal in disguise. Thus, the
Court ordered the Batangas, Laguna, Tayabas Bus
Co. to pay Villena "his full backwages, allowances,
and other benefits for a period of three (3) years after
his illegal dismissal on April 24, 1987, until he reached
the compulsory retirement age plus his retirement
benefits equivalent to his gross monthly pay,
allowances and other benefits for every year of
service up to age sixty (60), which is the normal
retirement age for him."51
The distinction between Villena with the instant case
is readily apparent. The Court used the regular
compensation of Villena in computing his retirement
benefits because the provision of the CBA for rank-
and-file employees is inapplicable to him, being a
managerial employee. The Villena case was also
decided before the passage of R.A. No. 7641.
In Planters Products, Inc. v. National Labor Relations
Commission,52 the petitioning employees were given
termination benefits based on their basic salary.
However, Planters Products, Inc. had integrated the
allowances of its remaining employees into their basic
salary. Thus, it was the basic salary that increased.
Also, it was the basic salary as increased (not the
basic salary and allowances) which still formed the
basis for the computation of the termination benefits
of the remaining employees of the company. The
Court held that fairness demanded that the terminated
employees receive the same treatment.53 Clearly,
such situation is absent here.
In Manuel L. Quezon University v. National Labor
Relations Commission,54 the issue raised was whether
respondents are entitled to the retirement benefits
provided for under R.A. No. 7641, even if petitioner
has an existing valid retirement plan. The Court held
that the coverage of the law "applies to
establishments with existing collective bargaining or
other agreements or voluntary retirement plans whose
benefits are less than those prescribed under the
proviso in question."55
Admittedly, this Court held in the case of Songco v.
National Labor Relations Commission56 that not only
the basic salary but also the "allowances" (like
transportation and emergency living allowances) and
"earned sales commissions" should be taken into
consideration in computing the backwages and
separation pay of the employee. However, a closer
examination of the case would show that the
CBA57 between Zuellig and F.E. Zuellig Employees
Association, in which Songco was a member, did not
contain an explicit definition of what salary is. Neither
was there any inclusions or exclusions in the
determination of the salary of the employee. Here, the
URP has an explicit provision excluding any
commissions, overtime, bonuses, or extra
compensations for purposes of computing the basic
salary of a retiring employee. Too, the Songco case
was decided before the passage of R.A. No. 7641.
Clearly then, R.A. No. 7641 does not apply because
the URP grants to the retiring employee more than
what the law gives. Under the URP, the employee
receives a lump sum of 1½ pay per year of service,
compared to the minimum ½ month salary for every
year of service set forth by R.A. No. 7641.
Oxales is trying to have the best of both worlds. He
wants to have his cake and eat it too: the 1½ months
formula under the URP, and the inclusion of the value
of food benefits and other allowances he was entitled
to as employee of UNILAB with his monthly salary as
the multiplicand of his number of years in the service.
This he should not be permitted to do, lest a grave
injustice is caused to UNILAB, and its past and future
retirees.
We agree with the NLRC observation on this score:
As an illustration, Complainant claims that his monthly
salary as the multiplicand of his number of years in
the service should include the value of the food
benefits and other allowances he was entitled while in
the employ of respondent. However, he did not even,
by implication, intend to reduce the 1½ month salary
as multiplier under the URP to ½ under the law he
invoked. This is a sign of covetousness, unfair both to
the employer and those employees who have earlier
retired under said plan.58
Oxales is not entitled to the reinstatement of his
medical benefits, which are not part of the URP.
Corollarily, he is not also entitled to moral
damages, exemplary damages, and attorney’s
fees.
Oxales claims that UNILAB unilaterally revoked his
medical benefits, causing him humiliation and anxiety.
This, he argues, entitles him to moral damages,
exemplary damages, plus attorney’s fees.
We cannot agree. The records bear out that after
Oxales retired from UNILAB, he chose to join a rival
company, Lloyds Laboratories, Inc. As UNILAB
correctly puts it, "[i]f any employer can legally and
validly do the supreme act of dismissing a disloyal
employee for having joined or sympathized with a rival
company, with more reason may it do the lesser act of
merely discontinuing a benefit unilaterally given to an
already-retired employee."59 As a retired employee,
Oxales may not claim a vested right on these medical
benefits. A careful examination of the URP would
show that medical benefits are not included in the
URP.
Indeed, while there is nothing wrong in the act of
Oxales in joining a rival company after his retirement,
justice and fair play would dictate that by doing so, he
cannot now legally demand the continuance of his
medical benefits from UNILAB. To rule otherwise
would result in an absurd situation where Oxales
would continue to receive medical benefits from
UNILAB while working in a rival company. We note
that these medical benefits are merely unilaterally
given by UNILAB to its retired employees.
We are not unaware of this Court’s pronouncement
in Brion v. South Philippine Union Mission of the
Seventh Day Adventist Church.60 However, Oxales’
plight differs from Brion because the URP does not
expressly cover medical benefits to retirees. In
contrast, the retired employee in Brion had acquired a
vested right to the withheld benefits.
The claim of Oxales to moral damages, exemplary
damages, and attorney’s fees must also be denied for
want of basis in law or jurisprudence. On this score,
We echo the pronouncement of the Court in Audion v.
Electric Co., Inc. v. National Labor Relations
Commission,61 to wit:
Moral and exemplary damages are recoverable only
where the dismissal of an employee was attended by
bad faith or fraud, or constituted an act oppressive to
labor, or was done in a manner contrary to morals,
good customs or public policy. The person claiming
moral damages must prove the existence of bad faith
by clear and convincing evidence for the law always
presumes good faith. It is not enough that one merely
suffered sleepless nights, mental anguish, serious
anxiety as the result of the actuations of the other
party. Invariably, such action must be shown to have
been willfully done in bad faith or with ill motive, and
bad faith or ill motive under the law cannot be
presumed but must be established with clear and
convincing evidence. Private respondent predicated
his claim for such damages on his own allegations of
sleepless
nights and mental anguish, without establishing bad RUBEN T. REYES ROGER C. SMITH, RUFINO B. JOAQUIN,
faith, fraud or ill motive as legal basis therefor. Associate Justice NOLASCO L. DIAZ, and RUFINO
IBE, Petitioners, v. SANDIGANBAYAN
Private respondent not being entitled to award of WE CONCUR: (SECOND DIVISION), PEOPLE OF THE
moral damages, an award of exemplary damages is PHILIPPINES, and the KILUSANG BAYAN
likewise baseless. Where the award of moral and SA PAGLILINGKOD NG MGA MAGTITINDA
CONSUELO YNARES-SANTIAGO SA BAGONG PAMILIHANG BAYAN NG
exemplary damages is eliminated, so must the award
Associate Justice
for attorney’s fees be deleted. Private respondent has MUNTINLUPA, INC.,
Chairperson
not shown that he is entitled thereto pursuant to Art. (KBMBPM), Respondents.
2208 of the Civil Code.62 (Citations omitted)
LEONARDO A. MA. ALICIA AUSTRIA-
Here, there was no dismissal, as Oxales was retired QUISUMBING* MARTINEZ
by UNILAB by virtue of the URP. He was also paid his Associate Justice Associate Justice DECISION
complete retirement benefits.
ADOLFO S. AZCUNA**
Epilogue Associate Justice PURISIMA, J.:

It is not disputed that Oxales has worked tirelessly for ATTESTATION

UNILAB. For one thing, he has spent a considerable
amount of years with the company. For another, he
has contributed much to its growth and expansion.
However, even as We empathize with him in his time
of great need, it behooves Us to interpret the law
according to what it mandates.
We reiterate the time-honored principle that the law, in
protecting the rights of the laborer, authorizes neither
oppression nor self-destruction of the employer. While
the Constitution is committed to the policy of social
justice and the protection of the working class,
management also has its own rights, which are
entitled to respect and enforcement in the interest of
fair play. Out of its concern for those with less
privilege in life, this Court has inclined more often than
not toward the employee and upheld his cause with
his conflicts with the employer. Such favorable
treatment, however, has not blinded the Court to rule
that justice is in every case for the deserving. Justice
should be dispensed in the light of the established
facts and applicable law and doctrine.63
WHEREFORE, the appealed Decision is AFFIRMED.
No costs.
SO ORDERED.
I attest 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.
CONSUELO YNARES-SANTIAGO
Associate Justice
Chairperson
CERTIFICATION
Pursuant to Section 13, Article VIII of the Constitution
and the Division Chairperson’s Attestation, I certify
that the conclusions in the above Decision had been
reached in consultation before the case was assigned
to the writer of the opinion of the Court’s Division.
REYNATO S. PUNO
Chief Justice
THIRD DIVISION
[G.R. No. 122058. May 5, 1999.]
IGNACIO R. BUNYE, JAIME R. FRESNEDI,
CARLOS G. TENSUAN, ROMAN E. NIEFES,
Docketed as Criminal Case No. 13966 before
the Second Division 1 of the Sandiganbayan,
the Amended Information charging the herein
petitioners with a violation of Section 3,
paragraph (e) of R.A. No. 3019, 2
alleges:jgc:chanrobles.com.ph
"That on or about August 1988, in the
Municipality of Muntinlupa, Metro Manila,
Philippines, and within the jurisdiction of this
Honorable Court, the above-named accused all
public officers being the Mayor (Ignacio R.
Bunye), Vice Mayor (Jaime D. Fresnedi),
Municipal Attorney (Victor C. Aguinaldo),
Municipal Councilors (Carlos C. Tensuan,
Alejandro L. Martinez, Epifanio A. Espeleta, Rey
E. Bulay, Lucio B. Constantino, Roman E.
Niefes, Nemesio Q. Mozo, Rufino J. Joaquin,
Nolasco L. Diaz and Roger C. Smith, Barangay
Chairman of Putatan (Rufino Ibe) and
Barangay Chairman of Alabang (Nestor
Santos), all in the municipality of Muntinlupa,
Metro Manila, said accused while in the
performance of their official functions in
conspiracy with one another and taking
advantage of their official positions, did then
and there wilfully, unlawfully, and feloniously
enact Kapasiyahan Bilang 45 on August 1,
1988, and on the basis thereof, forcibly took
possession of the New Public Market in
Alabang, Muntinlupa, Metro Manila, and
thereafter took over the operation and
management of the aforesaid public market
starting August 19, 1988, despite the fact that,
there was a valid and subsisting lease contract
executed on September 2, 1985 for a term of
25 years, renewable for another 25 years,
between the Municipality of Muntinlupa, Metro
Manila, represented by the former Municipal
Mayor Santiago Carlos, Jr. and the Kilusang
Bayan sa Paglilingkod ng mga Magtitinda sa
Bagong Pamilihang Bayan ng Muntinlupa, Inc.
(Kilusang Magtitinda, for brevity), a
Cooperative, represented by its General
Manager then, Amado G. Perez, and despite
also the warnings from COA Chairman
Domingo and MMMC Governor Cruz ‘that
appropriate legal steps be taken by the MMC
toward the rescission/annulment of the
contract . . . to protect the interest of the
Government,’ and ‘. . . to evaluate thoroughly
and study further the case to preclude possible
damages of financial liabilities which the Court
may adjudge against that municipality as an
off-shoot of the case, which forcible take-over
had caused undue injury to the aforesaid
Cooperative members, and in effect, the herein
accused themselves, unwarranted benefits,
advantage or preference in the discharge of
their official functions as aforesaid, through
evident bad faith or gross inexcusable
negligence, considering that, the Cooperative
members had introduced improvements,
including the construction of the ‘KBS’ Building,
RR Section-Phases I and II, asphalting of the
roads surrounding the market place, and for
the purpose, the cooperative had invested
Thirteen Million Four Hundred Seventy Nine
Thousand Nine Hundred Pesos
(P13,479,900.00) in connection therewith,
which had been deposited in trust to the
Municipal Government, and in consideration
thereof, the cooperative was extended the
above long term lease to manage and operate
the public market and to pay a monthly rental
of P35,000.00 only — said offense having been
committed by the accused in their performance
of official duties." 3chanrobles lawlibrary :
rednad
On July 24,1992, petitioners interposed a
Motion to Dismiss, 4 placing reliance on the
September 23, 1991 Decision 5 of the Court of
Appeals in CA-G.R. SP No. 16930 6 "that
unless and until declared to be unconstitutional
and expressly annulled" Resolution No. 45 7
"deserves the presumption of constitutionality
and therefore is entitled to obedience and
respect." 8
On September 23, 1992, the respondent court
denied petitioners’ motion to dismiss on the
ground that the C.A. Decision cited by movants
did not touch squarely on the constitutionality
of the subject Resolution No. 45. 9
After trial on the merits, the Sandiganbayan
came out with its July 26, 1995 Decision, 10
finding petitioners guilty of a violation of the
Anti-graft and Corrupt Practices Act and
sentencing them, thus:jgc:chanrobles.com.ph
"WHEREFORE, judgment is hereby rendered
finding accused Ignacio Bunye y Rivera, Jaime
Fresnedi y de la Rosa, Victor Aguinaldo y
Duliabi, Carlos Tensuan y Gutierrez, Roman
Niefes y Esporlas, Nemesio Mozo y Rillana,
Rufino Joaquin y Bunye, Nolasco Diaz y
Lampito, Roger Smith y de la Cruz and Rufino
Ibe y Lacanilao GUILTY beyond reasonable
doubt as co-principals in the violation of
Section 3, paragraph (e) of Republic Act No.
3019, as amended, otherwise known as the
Anti-Graft and Corrupt Practices Act, and each
of them are hereby sentenced to suffer the
indeterminate penalty of imprisonment ranging
from SIX (6) YEARS and ONE (1) MONTH, as
the minimum, to TEN (10) YEARS and ONE (1)
DAY, as the maximum, to indemnify, jointly
and severally, the offended party, the Kilusang
Bayan sa Paglilingkod Ng Mga Magtitinda ng
Bagong Pamilihang Bayan ng Muntinlupa, Inc.
(KBMBPM) in the amount of P13,479,900.00 as
actual damages, and to pay their proportionate
share of the costs of this
action.chanroblesvirtual|awlibrary
x x x
SO ORDERED."cralaw virtua1aw library
With the denial of their Motion for
Reconsideration, 11 petitioners found their way
to this Court via the present Petition for Review
on Certiorari anchored on the following
submissions:chanrob1es virtual 1aw library
I.
WITH ALL DUE RESPECT, THE HONORABLE
COURT’S DECISION PROCEEDS FROM THE
GRAVELY ERRONEOUS PREMISE THAT A
COURT ACTION IS NECESSARY IN REVOKING
AND CANCELLING THE LEASE CONTRACT
DATED 02 SEPTEMBER 1985 (EXHIBIT ‘D-5’)
DESPITE THE FACT THAT IT IS INDUBITABLY A
VOID CONTRACT;
II.
WITH ALL DUE RESPECT, THE HONORABLE
COURT SHOULD HAVE RENDERED A
JUDGMENT OF ACQUITTAL SINCE
KAPASIYAHAN BILANG 45 (EXHIBIT ‘K’ and ‘K-
1’) HAS NOT BEEN DECLARED
UNCONSTITUTIONAL WHICH IS THEREFORE
ENTITLED TO OBEDIENCE AND RESPECT;
THUS, ALL OFFICIAL ACTS DONE PURSUANT
THERETO, SUCH AS THE CHALLENGED ACTS
OF THE ACCUSED-MOVANTS, ARE VALID AND
LEGAL.
III.
WITH ALL DUE RESPECT, THE RECORDS SHOW
THAT THE ACCUSED-MOVANTS DID NOT
VIOLATE SECTION 3, PARAGRAPH (E) OF
REPUBLIC ACTS NO. 3019, AS AMENDED (THE
ANTI-GRAFT AND CORRUPT PRACTICES ACT),
SINCE ELEMENTS OF THE OFFENSE HAVE NOT
BEEN ESTABLISHED.
A. THE ACCUSED-MOVANTS DID NOT COMMIT
ANY PROHIBITED ACTS.
B. NO UNDUE INJURY WAS CAUSED TO ANY
PARTY.
C. NO UNWARRANTED BENEFITS, ADVANTAGE
OR PREFERENCE WAS GIVEN TO ANY PARTY.
D. THE ACCUSED-MOVANTS DID NOT ACT
WITH MANIFEST PARTIALITY, EVIDENT BAD
FAITH OR GROSS INEXCUSABLE NEGLIGENCE.
E. THE ACCUSED-MOVANTS CLEARLY ACTED
IN GOOD FAITH IN REVOKING AND
CANCELLING THE LEASE CONTRACT DATED 02
SEPTEMBER 1985 (EXHIBIT ‘D-5’) AND IN
IMPLEMENTING KAPASIYAHAN BILANG 45
(EXHIBITS ‘K’ AND ‘K-1’).
IV.
WITH ALL DUE RESPECT, THERE IS NO BASIS
IN HOLDING THE ACCUSED-MOVANTS LIABLE
FOR ACTUAL DAMAGES.chanroblesvirtual|
awlibrary
To support its verdict of conviction under
scrutiny, the Sandiganbayan
ratiocinated:jgc:chanrobles.com.ph
"Stripped to its barest essentials, the actuation
projected by the evidence on record is very
much akin to a contract of leasehold with a
definite term and fixed consideration, but
which the landlord unilaterally decided to
revoke and cancel and thereafter physically
take over the leased premises. In wanton
disregard of existing laws on obligations and
contracts, he bypasses the courts wherein the
legal issue as to whether or not such
revocation or cancellation is justified should be
judicially determined.
In the case at bar, the situation is very much
worse, aggravated by the accused’s wilful and
deliberate disregard of pertinent legal advice
and directives of the Metro Manila Commission
and the Commission on Audit to take the
necessary legal steps to rescind the contract of
lease and which course of action was even
prescribed in the grant of authority to accused
Bunye in Kapasiyahan Bilang No. 45. Thus, the
conspiracy to take over the management and
operation of the new public market was
initiated by the enactment of Resolution No. 45
on August 1, 1988, followed by the forcible
take-over of the leased premises on August 19,
1988. In the implementation of the conspiracy,
the accused acted clearly in evident bad faith,
if not with gross inexcusable negligence, totally
ignoring the rights of the officers and members
of the KBMBPM arising out of a valid and
subsisting lease contract which had not been
bilaterally cancelled or judicially rescinded and
which acts caused undue injury to said
cooperative and its members." 12
Gleanable from the aforecited ratiocination by
respondent court is the crucial factual issue of
whether or not the unilateral revocation of
subject lease contract was effected with
evident bad faith?chanrobles virtual lawlibrary
On September 2, 1985, a lease contract
denominated as Contract To Manage and
Operate the New Muntinlupa Public Market 13
was entered into by the Municipal Government
of Muntinlupa, represented by the then Mayor
Santiago V. Carlos, Jr., and the Kilusang Bayan
sa Panglilingkod ng mga Magtitinda ng Bagong
Pamilihang Bayan ng Muntinlupa, Inc.,
(KBMBPM), represented by its former General
Manager Amado G. Perez.
The said contract stipulated, among
others:jgc:chanrobles.com.ph
"That the term of this Contract shall be for
TWENTY FIVE (25) years to commence on
September 2, 1985 renewable for another
twenty five (25) years unless sooner
terminated and/or rescinded by the mutual
agreement of the parties;
That the GOVERNMENT and the COOPERATIVE
have agreed that the latter shall pay unto the
former a monthly consideration of THIRTY FIVE
THOUSAND (P35,000.00) PESOS, Philippine
Currency, payable in advance within the first
five (5) days of every month, provided that the
consideration herein agreed shall be increased
by ten percent (10%) each year during the
first five years only;
That the GOVERNMENT shall assist the
COOPERATIVE in the maintenance of peace
and order and in such other facilities as may be
necessary and requested by the latter for the
effective management and operation of the
market;
That the COOPERATIVE shall at all times and at
its exclusive expense maintain the
following:chanrob1es virtual 1aw library
1. Health and sanitation of the market in
accordance with existing laws and rules and
regulations and those which the GOVERNMENT
shall promulgate from time to time;
2. Payment of electric bills;
3. Security problems and orderliness with the
market premises;
4. Payment of monthly dues as herein before
mentioned; and
5. As the sole spokesman and representative of
the market vendors in the New Muntinlupa
Public Market, to adapt such rules and
regulations not contrary to existing laws and
regulations for the successful operation and
management of the market." cralawnad
Section 149, paragraph (3) of Batas Pambansa
Blg. 337, 14 the law in force at the time of the
execution of subject contract,
provides:jgc:chanrobles.com.ph
"When any ferry, market, or slaughterhouse
belonging to a municipality is to be leased to a
private party, it shall be awarded to the
highest bidder for a period of not less than one
year but not exceeding five years. The lease
may be reviewed for a period not exceeding
the original lease and under such terms as the
sangguniang bayan may impose."cralaw
virtua1aw library
Explicit in the aforecited provision of law is the
requirement of public bidding before a
government contract may be awarded, and the
term of the contract is not to exceed five (5)
years.
The term of twenty-five (25) years of the lease
contract involved violates Section 149,
paragraph (3) of B.P. Blg. 337. In Spouses
Terrado v. Court of Appeals, 15 the Court
held:jgc:chanrobles.com.ph
"Neither can the Municipality grant the
exclusive privilege of fishing for a period more
than five (5) years, whereas in the instant
case, the period granted the Manager-
Administrator was for twenty-five (25) years,
renewable for another twenty-five (25) years.
x x x the monthly income of the public market
Since Ordinance No. 8 granted fishery
privileges exclusively to the private respondent
without the benefit of public bidding and for a
period exceeding (5) years, the said ordinance
and the contract of management executed in
accordance therewith were null and void ab
initio . . . ." chanrobles virtual lawlibrary
It may be argued that "fishery" is entirely
different or distinct from "market" to warrant
the application of the laws regulating the
former to the latter. In the case of Municipality
of San Luis v. Ventura, 16 this Court
ruled:jgc:chanrobles.com.ph
". . . [W]hen the council grants the exclusive
privilege of fishery or the right to conduct a
fish-breeding ground to any private property, it
should do so through a public auction, letting it
to the highest bidder, in the same manner as is
being done in exploiting a ferry, a market, or a
slaughterhouse belonging to the
municipality."cralaw virtua1aw library
In its assailed Resolution, the respondent
Sandiganbayan concluded that the absence of
public bidding did not render the lease contract
in question null and void because "the
KBMBPM, being a duly-registered cooperative
under P.D. No. 175, [it] is exempted from
bidding requirements pursuant to Regulation
No. 40 of Letter of Implementation (LOI) No.
23. . ." 17
But there is tenability in petitioners’ submission
that subject lease contract was grossly
disadvantageous to the government. For
instance, the monthly rental paid thereunder
by the KBMBPM to the Municipal government of
Muntinlupa amounted to a measly five percent
(5%) of the total monthly income of KBMBPM.
The lease contract stipulated for a monthly
rental of Thirty-Five Thousand (P35,000.00)
Pesos only although records show that in 1987,
contracted for was no less than Seven Hundred
Thousand (P700,000.00) Pesos. While the said
contract had a provision for a ten (10%)
percent increase in the rental each year during
the first five (5) years, the same contract was
silent on any increase of the rent during its
remaining twenty (20) years. The Court not
being unmindful of economic realities, such as
inflation and the depreciation of the Philippine
peso which diminish the purchasing value of
the local currency, it perceives that the
projected monthly rental of P51,243.50 18 in
1990 would have been greatly reduced by year
2015, when the lease contract would have
ended if not earlier rescinded. Indeed, the
rescinded lease contract was grossly
disadvantageous to the Municipality of
Muntinlupa, which later metamorphosed into a
metropolis.chanrobles law library
What is more, too evident to be overlooked is
the failure of KBMBPM to comply with the
contractual stipulations under the Health and
Sanitation Clause 19 of subject lease contract.
In open court, Accused Ignacio Bunye
(petitioner here)
testified:jgc:chanrobles.com.ph
"x x x
ATTY. ALAMPAY :chanrob1es virtual 1aw library
Q: The other portion of Exhibit 2 that you said
upon review, you concluded disadvantageous
to the government was the provision thereof
marked as Exhibit 2-c to the effect that the
Perez Cooperative undertook to maintain the
health and sanitation facilities of the public
market. What specifically did you find to be
irregular or compelling of redress against this
provision?
WITNESS (MAYOR BUNYE):chanrob1es virtual
1aw library
A: One thing, the garbage are not collected on
a regular basis and in our several ocular
inspection, we found there were maggots
under the pile of garbage and we also found
out, there was sno (sic) sufficient ventilation in
the market so much so that the odor inside the
market sticks to the clothes of the persons
inside the market and when you go out, you
smell like fish and also we found out that the
supply of water was inadequate. There was no
running water in the wet section as a result of
which, the wet section is always muddy and
the remnants of the fish, the scales, the
intestines of the fish are found on the floor.
There was also no adequate safeguard as far
as fire exits are concerned and there was only
one toilet and it was . . .

Q: Now, after the municipality took over the
management and operation thereof specifically
the Interim Market Commission, What did you
do interim about these problems in the health
and sanitation?
A: We took necessary corrective measures as
far as water problemis (sic) concerned, the
Interim Market Commission directed this over-
head water tank, the IMC provided this over-
head water tank and the IMC bought high
speed spray so that the wet market floor could
be washed on a regular basis and in order to
improve the ventilation, the commission
installed over-head fans and blowers so the
stale could be removed regularly and toilets
were constructed so that there was regular
water rinsing and we provided regular persons
to maintain this. We provided fire . . .
[extinguishers] to safeguard safety against
fire. We caused the assignment of one
municipal fire truck in the immediate vicinity
and lastly, we have this parking area which
was provided for the market goers."
20chanrobles virtualawlibrary
chanrobles.com:chanrobles.com.ph
In a letter 21 dated March 14, 1988, former
COA Chairman Eufemio C. Domingo
wrote:jgc:chanrobles.com.ph
". . . [W]e recommend that immediate
appropriate legal steps be taken by the Metro
Manila Commission (MMC) toward the
rescission/annulment of the contract in
question to protect the interest of the
Government."cralaw virtua1aw library
The response of then Chairman of Metro Manila
Commission Elfren S. Cruz was to the following
effect: 22
". . . [T]his commission hereby grants the
authority to that Municipality to take the
necessary legal steps for the
cancellation/rescission of above cited contract
and make representation, with KBMBPM for the
immediate transfer/take-over of the
possession, management and operation of the
New Muntinlupa Market to the Municipal
Government of Muntinlupa. . . . ."cralaw
virtua1aw library
In finding and concluding that the accused
(petitioners here) acted in evident bad faith in
the implementation of the aforesaid directives,
the respondent court equated "legal steps" to
"legal actions" so much so that the failure of
petitioners to sue the Cooperative for the
rescission of subject contract was adjudged by
the Sandiganbayan as non-compliance with the
said directives of the Metro Manila Commission
(MMC) and Commission on Audit
(COA).chanroblesvirtuallawlibrary
The aforementioned directives of MMC and
COA could not be taken as instruction for the
bringing of an action against the KBMBPM for
the rescission of subject lease contract.
Contrary to the conclusion reached by the
respondent court, petitioners did not ignore or
disregard the said directives of MMC and COA.
As regards the finding a quo that the
revocation or rescission of subject contract was
effected sans any notice, suffice it to invite
attention that prior to the symbolic and
ceremonial take-over of the new public market
of Muntinlupa by the petitioners herein, a lot of
posters 23 announcing the intention of the
Municipality of Muntinlupa to take over the
management and operation of the New
Muntinlupa Public Market, were posted in the
vicinity of the market place, where the officers
of KBMBPM were then holding office. Moreover,
having actively participated in the public
hearing on the enactment and implementation
of Resolution No. 45, Mr. Amado Perez, the
General Manager of KBMBPM at the time, had
actual knowledge of the impending take-over
24 of the Muntinlupa public market by the local
government. Undoubtedly, KBMBPM was duly
notified of such development and could not
validly feign any denial of their right to due
process.
Section 3, paragraph (e) of Republic Act No.
3019, provides:jgc:chanrobles.com.ph
"Corrupt Practices of Public Officers — In
addition to acts or omissions of public officers
already penalized by existing law, the following
shall constitute corrupt practices of any public
officer and are hereby declared to be
unlawful:chanrob1es virtual 1aw library
x x x
(e) Causing any undue injury to any party,
including the Government, or giving any
private party any unwarranted benefits,
advantage or preference in the discharge of his
official administrative or judicial functions
through manifest partiality, evident bad faith
or gross inexcusable negligence. This provision
shall apply to officers and employees of offices
or government corporations charged with the
grant of licenses or permits or other
concessions." chanrobles.com:cralaw:red
In Domingo Ingco, Et. Al. v. Sandiganbayan,
25 this court held that the elements of the
offense charged are as follows:chanrob1es
virtual 1aw library
1. That the accused are public officers or
private persons charged in conspiracy with
them;
2. That said public officers commit the
prohibited acts during the performance of their
official duties or in relation to their public
positions;
3. That they cause undue injury to any party,
whether the Government or a private party;
4. That such injury is caused by giving
unwarranted benefits, advantage or preference
to such parties; and
5. That the public officers have acted with
manifest partiality, evident bad faith or gross
inexcusable negligence.chanroblesvirtual|
awlibrary
That conviction must be based on evidence
beyond reasonable doubt is a well-entrenched
principle and doctrine in this jurisdiction.
Pursuant thereto, all elements of the
accusation must be proved beyond reasonable
doubt. Failure or inability of the prosecution to
substantiate any of the elements of the offense
charged is fatal to the cause of the People; it
renders inevitable the acquittal of the accused.
That petitioners are public officers within legal
contemplation is beyond cavil. But are the
other elements of the offense complained of
attendant?
As regards the amount of P13,479,000.00
allegedly received by the government of
Muntinlupa from the market vendors, there is
no clear evidence as to its exact nature. While
Mr. Amado Perez, former General Manager of
KBMBPM, testified that the said amount of
P13,479,000.00 was collected as a trust fund,
26 the said witness failed to produce any
documentary evidence on the matter because
according to him, no receipt therefor was
issued. Then, on the witness stand, Mrs.
Nayesda Ponzones, Chair of the Board of
Directors of KBMBPM, theorized that subject
amount represented" [advanced] payment of
the stalls they (vendors) want to get . . ." 27
Records on hand reveal, however, that the
contract for the management and operation of
the New Muntinlupa Public Market was awarded
to "the same KBMBPM but with a new set of
duly elected officers." 28 Thus, as it can be
gleaned unerringly that the business interest of
the stallholders concerned has never been
adversely affected, and no market vendor was
displaced or prevented from operating in the
New Muntinlupa Public Market, as a result of
the implementation of the challenged
Resolution No. 45, it stands to reason and
conclude that no undue injury was caused by
the petitioners herein to subject market
vendors or to the respondent KBMBPM. In light
of the foregoing, there is no therefore
sustainable basis or ground for requiring the
Municipality (now City) of Muntinlupa to
reimburse the aforesaid amount of
P13,479,000.00 supposedly collected from the
market vendors involved. Consequently, the
P13,479,000.00 awarded below for actual
damages in favor of respondent KBMBPM
cannot be upheld.chanrobles virtual lawlibrary
Absent any undue damage or injury suffered
by the KBBPM by reason of the enactment and
implementation of Resolution No. 45, the
fourth element of the offense charged is
wanting.
All things studiedly viewed in proper
perspective and it appearing that the
inculpatory facts and circumstances are
capable of two or more interpretations, one of
which is consistent with the innocence of the
accused and the other consistent with their
guilt, we are of the irresistible finding and
conclusion that the evidence cannot hurdle the
test of moral certainty required for conviction.
(People of the Philippines v. Danny Godoy,
G.R. Nos. 115908-09, December 6, 1995, 250
SCRA 676, 704-705; People of the Philippines
v. Pedro Pagaura y Ticling, G.R. No. 95353,
January 28, 1997, 267 SCRA 17, 25)
To the fore, once again, is what Alfonso El
Sabio said long time ago, as quoted by the late
Justice Conrado V. Sanchez in People v. Nicolas
Cunanan, Et Al., No. L-17599, April 24, 1967,
19 SCRA 769, 784: "Mas vale que queden sin
castigar diez reos presuntos, que se castigue
uno inocente." chanrobles virtual lawlibrary
WHEREFORE, the Petition is GRANTED, the
judgment of conviction rendered by the
Sandiganbayan in Criminal Case No. 13966 is
SET ASIDE and for want of evidence to prove
their guilt beyond reasonable doubt, the
petitioners, IGNACIO R. BUNYE, JAIME R.
FRESNEDI, CARLOS G. TENSUAN, ROMAN E.
NIEFES, ROGER C. SMITH, RUFINO B.
JOAQUIN, NOLASCO L. DIAZ, and RUFINO IBE,
are hereby ACQUITTED of the offense charged.
With costs de oficio.
SO ORDERED.
Romero and Gonzaga-Reyes, JJ., concur.
Vitug, J., I concurs in the result. I am not
morally convinced that petitioners have acted
with manifest partiality, evident bad faith or
gross inexcusable negligence.
Panganiban, J., I concur but only on the
grounds that the prosecution failed to prove
(1) undue injury and (2) manifest partiality,
evident bad faith or gross inexcusable
negligence on petitioners’ part.
Republic of the Philippines
SUPREME COURT
Manila
EN BANC
G.R. No. 85439 January 13, 1992
KILUSANG BAYAN SA PAGLILINGKOD NG MGA
MAGTITINDA NG BAGONG PAMILIHANG BAYAN
NG MUNTINLUPA, INC. (KBMBPM), TERESITA A.
FAJARDO, NADYESDA B. PONSONES, MA. FE V.
BOMBASE, LOIDA D. LUCES, MARIO S.
FRANCISCO, AMADO V. MANUEL and ROLANDO
G. GARCIA, incumbent members of the Board,
AMADO G. PEREZ and MA. FE V. BOMBASE,
incumbent General Manager and Secretary-
Treasurer, respectively, petitioners,
vs.
HON. CARLOS G. DOMINGUEZ, Secretary of
Agriculture, Regional Director of Region IV of the
Department of Agriculture ROGELIO P.
MADRIAGA, RECTO CORONADO and Municipal
Mayor IGNACIO R. BUNYE, both in his capacity as
Municipal Mayor of Muntinlupa, Metro Manila and
as Presiding Officer of Sangguniang Bayan ng
Muntinglupa, and JOHN DOES, respondents.
G.R. No. 91927 January 13, 1992
IGNACIO R. BUNYE, JAIME R. FRESNEDI,
CARLOS G. TENSUAN, VICTOR E. AGUINALDO,
ALEJANDRO I. MARTINEZ, EPIFANIO A.
ESPELETA, REY E. BULAY, LUCIO B.
CONSTANTINO, ROMAN E. NIEFES, NEMESIO O.
MOZO, ROGER SMITH, RUFINO B. JOAQUIN,
NOLASCO I. DIAZ, RUFINO IBE and NESTOR
SANTOS, petitioners,
vs.
THE SANDIGANBAYAN, THE OMBUDSMAN and
ROGER C. BERBANO, Special Prosecutor
III, respondents.
Jose O. Villanueva and Roberto B. Romanillos for
petitioners in G.R. No. 85439.
Alampay & Manhit Law Offices for petitioners in G.R.
No. 91927.
DAVIDE, JR., J.:
These cases have been consolidated because they
are closely linked with each other as to factual
antecedents and issues.
The first case, G.R. No. 85439 (hereinafter referred to
as the Kilusang Bayan case), questions the validity of
the order of 28 October 1988 of then Secretary of
Agriculture Hon. Carlos G. Dominguez which ordered:
(1) the take-over by the Department of Agriculture of
the management of the petitioner Kilusang Bayan sa
Paglilingkod Ng Mga Magtitinda ng Bagong
Pamilihang Bayan ng Muntilupa, Inc. (KBMBPM)
pursuant to the Department's regulatory and
supervisory powers under Section 8 of P.D. No. 175,
as amended, and Section 4 of Executive Order No.
13, (2) the creation of a Management Committee
which shall assume the management of KBMBPM
upon receipt of the order, (3) the disbandment of the
Board of Directors, and (4) the turn over of all assets,
properties and records of the KBMBPM the
Management Committee.
The second case. G.R. No. 91927 (hereinafter
referred to as the Bunye case), seeks the nullification
of the Resolution of 4 January 1990 of the
Sandiganbayan admitting the Amended Information
against petitioners in Criminal Case No. 13966 and
denying their motion to order or direct preliminary
investigation, and its Resolution of 1 February 1990
denying the motion to reconsider the former.
The procedural and factual antecedents are not
disputed.
On 2 September 1985, the Municipal Government of
Muntinlupa (hereinafter, Municipality), Metro Manila,
thru its then Mayor Santiago Carlos, Jr., entered into a
contract with the KILUSANG BAYAN SA
PAGLILINGKOD NG MGA MAGTITINDA SA
BAGONG PAMILIHANG BAYAN NG MUNTINLUPA,
INC. (KBMBPM) represented by its General Manager,
Amado Perez, for the latter's management and
operation of the new Muntinlupa public market. The
contract provides for a twenty-five (25) year term
commencing on 2 September 1985, renewable for a
like period, unless sooner terminated and/or
rescinded by mutual agreement of the parties, at a
monthly consideration of Thirty-Five Thousand Pesos
(P35,000) to be paid by the KBMBPM within the first
five (5) days of each month which shall, however, be
increased by ten percent (10%) each year during the
first five (5) years only. 1
The KBMBPM is a service cooperative organized by
and composed of vendors occupying the New
Muntinlupa Public Market in Alabang, Muntinlupa,
Metro Manila pursuant to Presidential Decree No. 175
and Letter of Implementation No. 23; its articles of
incorporation and by-laws were registered with the
then Office of the Bureau of Cooperatives
Development (thereafter the Bureau of Agricultural
Cooperatives Development or BACOD and now the
Cooperative Development Authority). 2
Following his assumption into office as the new mayor
succeeding Santiago Carlos, Jr., petitioner Ignacio
Bunye, claiming to be particularly scandalized by the
"virtual 50-year term of the agreement, contrary to the
provision of Section 143, paragraph 3 of Batas
Pambansa Blg. 337," and the "patently inequitable
rental," directed a review of the aforesaid
contract. 3 He sought opinions from both the
Commission on Audit and the Metro Manila
Commission (MMC) on the validity of the instrument.
In separate letters, these agencies urged that
appropriate legal steps be taken towards its
rescission. The letter of Hon. Elfren Cruz of the MMC
even granted the Municipality authority "to take the
necessary legal steps for the cancellation/recission of
the above cited contract and make representations
with KBMBPM for the immediate transfer/takeover of
the possession, management and operation of the
New Muntinlupa Market to the Municipal Government
of Muntinlupa." 4
Consequently, upon representations made by Bunye
with the Municipal Council, the latter approved on 1
August 1988 Resolution No. 45 abrogating the
contract. To implement this resolution, Bunye,
together with his co-petitioners and elements of the
Capital Command of the Philippine Constabulary,
proceeded, on 19 August 1986, to the public market
and announced to the general public and the
stallholders thereat that the Municipality was taking
over the management and operation of the facility,
and that the stallholders should henceforth pay their
market fees to the Municipality, thru the Market
Commission, and no longer to the KBMBPM. 5
On 22 August 1988, the KBMBPM filed with Branch
13 of the Regional Trial Court of Makati a complaint
for breach of contract, specific performance and
damages with prayer for a writ of preliminary
injunction against the Municipality and its officers,
which was docketed as Civil Case No. 88-1702. 6 The
complaint was premised on the alleged illegal take-
over of the public market effected "in excess of his
(Bunye's) alleged authority" and thus "constitutes
breach of contract and duty as a public official."
The writ applied for having been denied, 7 the
KBMBPM officers resisted the attempts of Bunye and
company to complete the take-over; they continued
holding office in the KBS building, under their 1988, and to implement the same, by taking over and WHEREAS, the interest of the
respective official capacities. The matter having been assuming the management of KBMBPM, disbanding public so demanding it is evident
elevated to this Court by way of certiorari, 8 We the then incumbent Board of Directors for that and urgently necessary that the
remanded the same to the Court of Appeals which purpose and excluding and prohibiting the General KBMBPM MUST BE PLACED
docketed it as C.A.-G.R. No. L-16930. 9 Manager and the other officers from exercising their UNDER MANAGEMENT TAKE-
lawful functions as such. 14 The Order of the Secretary OVER of the Department of
reads as follows: 15 Agriculture in order to preserve
On 26 August 1988, Amado Perez filed with the Office
the financial interest of the
of the Ombudsman a letter-complaint charging Bunye
members of the cooperative and
and his co-petitioners with oppression, harassment, ORDER
to enhance the cooperative
abuse of authority and violation of the Anti-Graft and
development program of the
Corrupt Practices Act 10 for taking over the
WHEREAS, the KILUSANG government;
management and operation of the public market from
BAYAN SA PAGLILINGKOD NG
KBMBPM. 11
MGA MAGTITINDA NG
WHEREAS, it is ordered that the
BAGONG PAMILIHANG BAYAN
Department of Agriculture in the
In a subpoena dated 7 October 1988, prosecutor NG MUNTINLUPA, INC.,
exercise of its regulatory and
Mothalib C. Onos of the Office of the Special (KBMBPM), Alabang, Muntinlupa,
supervisory powers under
Prosecutor directed Bunye and his co-petitioners to Metro Manila is a Cooperative
Section 8 of PD 175, as
submit within ten (10) days from receipt thereof registered under the provisions of
amended, and Section 4 of
counter-affidavits, affidavits of their witnesses and Presidential Decree No. 175, as
Executive Order No. 113, take
other supporting documents. 12 The subpoena and amended;
over the management of
letter-complaint were received on 12 October 1988.
KBMBPM under the following
WHEREAS, the Department of directives:
On 20 October 1988, two (2) days before the Agriculture is empowered to
expiration of the period granted to file said regulate and supervise
1. THAT a
documents, Bunye, et al. filed by mail an urgent cooperatives registered under the
Management
motion for extension of "at least fifteen (15) days from provisions of Presidential Decree
Committee is
October 22, 1988" within which to comply 13 with the No. 175, as amended;
hereby
subpoena.
created
WHEREAS, the general composed of
Thereafter, the following transpired which membership of the KBMBPM has the following:
subsequently gave rise to these petitions: petitioned the Department of
Agriculture for assistance in the
a) Reg. Dir.
removal of the members of the
G.R. No. 85439 or OIC RD —
Board of Directors who were not
DA Region
elected by the general
IV
In the early morning of 29 October 1988, a Saturday, membership of said cooperative;
respondent Madriaga and Coronado, allegedly
accompanied by Mayor Bunye and the latters' heavily b) Atty.
WHEREAS, the on-going
armed men, both in uniform and in civilian clothes, Rogelio P.
financial and management audit
together with other civilians, namely: Romulo Bunye Madriaga —
of the Department of Agriculture
II, Alfredo Bunye, Tomas Osias, Reynaldo Camilon, BACOD
auditors show (sic) that the
Benjamin Taguibao, Benjamin Bulos and other
management of the KBMBPM is
unidentified persons, allegedly through force, violence
not operating that cooperative in c) Mr. Recto
and intimidation, forcibly broke open the doors of the
accordance with PD. 175, LOI Coronado —
offices of petitioners located at the second floor of the
No. 23, the Circulars issued by KBMBPM
KBS Building, new Muntinlupa Public Market,
DA/BACOD and the provisions of
purportedly to serve upon petitioners the Order of
the by-laws of KBMBPM;
respondent Secretary of Agriculture dated 28 October
d) Mrs. herein election of a
Nadjasda created; new set of
Ponsones — Board of
KBMBPM Director (sic).
4. THAT the
Management
e) One (1) Committee is This Order takes effect
from the hereby immediately and shall continue to
Municipal empowered be in force until the members of
Government to the Board of Directors shall have
of Muntinlupa promulgate been duly elected and qualified.
to be rules of
designated procedure to
Done this 28th day of October,
by the govern its
1988 at Quezon City.
Sangguniang workings as
Pambayan a body;
ng As claimed by petitioners, the Order served on them
Muntinlupa; was not written on the stationary of the Department,
5. THAT the
does not bear its seal and is a mere xerox copy.
Management
2. THAT the Committee
Management shall submit The so-called petition upon which the Order is based
Committee to the appears to be an unverified petition dated 10 October
shall, upon undersigned 1988 signed, according to Mayor Bunye, 16 by 371
receipt of this thru the members of the KBMBPM.
Order, Director of
assume the BACOD
On 2 November 1988, petitioners filed the petition in
management monthly
this case alleging, inter alia, that:
of KBMBPM; reports on
the
operations of (a) Respondent Secretary acted
3. THAT the
KBMBPM; without or in excess of jurisdiction
present
in issuing the Order for he
Board of
arrogated unto himself a judicial
Directors is 6. THAT the
function by determining the
hereby Management
alleged guilt of petitioners on the
disbanded Committee
strength of a mere unverified
and the shall call a
petition; the disbandment of the
officers and General
Board of Directors was done
Manager of Assembly of
without authority of law since
the KBMBPM all registered
under Letter of Implementation
are hereby members of
No. 23, removal of officers,
directed to the KBMBPM
directors or committee members
turnover all within Ninety
could be done only by the
assets, (90) days
majority of the members entitled
properties from date of
to vote at an annual or special
and records this Order to
general assembly and only after
of the decide such
an opportunity to be heard at said
KBMBPM to matters
assembly.
the affecting the
Management KBMBPM,
Committee including the
 (b) Respondent Secretary acted
in a capricious, whimsical,
arbitrary and despotic manner, so
patent and gross that it amounted
to a grave abuse of discretion.
(c) The Order is a clear violation
of the By-Laws of KBMBPM and
is likewise illegal and unlawful for
it allows or tolerates the violation
of the penal provisions under
paragraph (c), Section 9 of P.D.
No. 175.
(d) The Order is a clear violation
of the constitutional right of the
individual petitioners to be
heard. 17
They pray that upon the filing of the petition,
respondents, their agents, representatives or persons
acting on their behalf be ordered to refrain, cease and
desist from enforcing and implementing the
questioned Order or from excluding the individual
petitioners from the exercise of their rights as such
officers and, in the event that said acts sought to be
restrained were already partially or wholly done, to
immediately restore the management and operation of
the public market to petitioners, order respondents to
vacate the premises and, thereafter, preserve
the status quo; and that, finally, the challenged Order
be declared null and void.
In the Resolution of 9 October 1988, 18 We required
the respondents to Comment on the petition. Before
any Comment could be filed, petitioners filed on 2
January 1989 an Urgent Ex-Parte Motion praying that
respondent Atty. Rogelio Madriaga, who had
assumed the position of Chairman of the
Management Committee, be ordered to stop and/or
cancel the scheduled elections of the officers of the
KBMBPM on 6 January 1989 and, henceforth, desist
from scheduling any election of officers or Members of
the Board of Directors thereof until further orders on
the Court. 19 The elections were, nevertheless, held
and a new board of directors was elected. So, on 19
January 1989, petitioners filed a supplemental
motion 20 praying that respondent Madriaga and the
"newly elected Board of Directors be ordered to cease
and desist from assuming, performing or exercising
powers as such, and/or from removing or replacing
the counsels of petitioners as counsels for KBMBPM
and for Atty. Fernando Aquino, Jr., to cease and
desist from unduly interfering with the affairs and
business of the cooperative."
Respondent Bunye, by himself, filed his Comment on
23 January 1989. 21 He denies the factual allegations
in the petition and claims that petitioners failed to
exhaust administrative remedies. A reply thereto was
filed by petitioners on 7 February 1989. 22
Respondent Recto Coronado filed two (2) Comments.
The first was filed on 6 February 1989 23 by his
counsel, Atty. Fernando Aquino, Jr., and the second,
which is for both him and Atty. Madriaga, was filed by
the latter on 10 February 1989. 24
On 20 February 1989, petitioners filed a Reply to the
first Comment of Coronado 25 and an Ex-Parte Motion
for the immediate issuance of a cease and desist
order 26 praying that the so-called new directors and
officers of KBMBPM, namely: Tomas M. Osias,
Ildefonso B. Reyes, Paulino Moldez, Fortunato M.
Medina, Aurora P. del Rosario, Moises Abrenica, and
Lamberto Casalla, be ordered to immediately cease
and desist from filing notices of withdrawals or
motions to dismiss cases filed by the Cooperative now
pending before the courts, administrative offices and
the Ombudsman and Tanodbayan, and that if such
motions or notices were already filed, to immediately
withdraw and desist from further pursuing the same
until further orders of this Court. The latter was
precipitated by the Resolution No. 19 of the "new"
board of directors withdrawing all cases filed by its
predecessors against Bunye, et al., and more
particularly the following cases: (a) G.R. No. 85439
(the instant petition), (b) Civil Case No. 88-1702, (c)
OSP Case No. 88-2110 before the Ombudsman, (d)
IBP Case No. 88-0119 before the Tanodbayan, and
Civil Case No. 88-118 for Mandamus. 27
On 1 March 1989, We required the Solicitor General
to file his Comment to the petition and the urgent
motion for the immediate issuance of a cease and
desist order. 28
A motion to dismiss the instant petition was filed on 30
March 1989. 29 On 19 April 1989, We resolved to
dismiss the case and consider it closed and
terminated. 30 Thereupon, after some petitioners filed
a motion for clarification and reconsideration, We set
aside the dismissal order and required the new
directors to comment on the Opposition to Motion to
Dismiss filed by the former. 31
The new board, on 14 June 1989, prayed that its
Manifestation of 6 June 1989 and Opposition dated 9
June 1989, earlier submitted it response to petitioners'
motion for reconsideration of the order dismissing the
instant petition, be treated as its Comment. 32 Both
parties then continued their legal fencing, serving
several pleadings on each other.
In Our Resolution of 9 August 1989, 33 We gave the
petition due course and required the parties to submit
their respective Memoranda.
On 14 August 1989, petitioners filed an urgent ex-
parte motion for the immediate issuance of a cease
and desist order 34 in view of the new board's plan to
enter into a new management contract; the motion
was noted by this Court on 23 August 1989. A
second ex-parte motion, noted on 18 October 1989,
was filed on 19 September 1989 asking this court to
consider the "Invitation to pre-qualify and bid" for a
new contract published by respondent Bunye. 35
In a belated Comment 36 for the respondent Secretary
of Agriculture filed on 22 September 1989, the Office
of the Solicitor General asserts that individual
petitioners, who were not allegedly elected by the
members or duly designated by the BACOD Director,
have no right or authority to file this case; the assailed
Order of the Secretary was issued pursuant to P.D.
No. 175, more particularly Section 8 thereof which
authorizes him "(d) to suspend the operation or cancel
the registration of any cooperative after hearing and
when in its judgment and based on findings, such
cooperative is operating in violation of this Decree,
rules and regulations, existing laws as well as the by-
laws of the cooperative itself;" the Order is reasonably
necessary to correct serious flaws in the cooperative
and provide interim measures until election of regular
members to the board and officers thereof; the
elections conducted on 6 January 1989 are valid; and
that the motion to dismiss filed by the new board of
directors binds the cooperative. It prays for the
dismissal of the petition.
Respondent Secretary of Agriculture manifested on
22 September 1989 that he is adopting the Comment
submitted by the Office of the Solicitor General as his
memorandum; 37 petitioners and respondents
Coronado and Madriaga filed their separate
Memoranda on 6 November 1989; 38 while the new
board of directors submitted its Memorandum on 11
December 1989. 39
The new KBMBPM board submitted additional
pleadings on 16 February 1990 which it deemed
relevant to the issues involved herein. Reacting,
petitioners filed a motion to strike out improper and
inadmissible pleadings and annexes and sought to
have the pleaders cited for contempt. Although We
required respondents to comment, the latter did not
comply.
Nevertheless, a manifestation was filed by the same
board on 25 February 1991 40 informing this Court of
the holding, on 9 January 1991, of its annual general
assembly and election of its board of directors for
1991. It then reiterates the prayer that the instant
petition be considered withdrawn and dismissed.
Petitioners filed a counter manifestation alleging that
the instant petition was already given due course on 9
August 1989. 41 In its traverse to the counter
manifestation, the new board insists that it "did not
derive authority from the October 28, 1988 Order, the
acts of the Management Committee, nor (sic) from the
elections held in (sic) January 6, 1989," but rather
from the members of the cooperative who elected
them into office during the elections.
Petitioners filed a rejoinder asserting that the election
of new directors is not a supervening event
independent of the main issue in the present petition
and that to subscribe to the argument that the issues
in the instant petition became moot with their
assumption into office is to reward a wrong done.
G. R. NO. 91927
Petitioners claim that without ruling on their 20 Consequently, Bunye, et al. were served arrest
October 1988 motion for an extension of at last 15 warrants issued by the Sandiganbayan. Detained at
days from 22 October 1988 within which to file their the NBI on 9 October 1989, they claim to have
counter-affidavits, which was received by the Office of discovered only then the existence of documents
the Special Prosecutor on 3 November 1988, Special recommending and approving the filing of the
Prosecutor Onos promulgated on 11 November 1988 complaint and a memorandum by special prosecutor
a Resolution finding the evidence on hand sufficient to Bernardita G. Erum proposing the dismissal of the
establish a prima facie case against respondents same. 51
(herein petitioners) and recommending the filing of the
corresponding information against them before the
Arraignment was set for 18 October 1989. 52
Sandiganbayan. 42 Petitioners also claim that they
submitted their counter-affidavits on 9 November
1988. 43 However, on 14 October 1989, petitioners filed with
the Sandiganbayan an "Omnibus Motion to Remand
to the Office of the Ombudsman; to Defer Arraignment
In their motion dated 2 December 1988, petitioners
and to Suspend Proceedings." 53
move for a reconsideration of the above
Resolution, 44 which was denied by Onos 45 in his 18
January 1989 Order. The information against the Subsequently, through new counsel, petitioners filed
petitioners was attached to this order. on 17 October 1989 a Consolidated Manifestation and
Supplemental Motion 54 praying, inter alia, for the
quashal of the information on the ground that they
Upon submission of the records for his approval, the
were deprived of their right to a preliminary
Ombudsman issued a first indorsement on 4 April
investigation and that the information did not charge
1989 referring to "Judge Gualberto J. de la Llana,
an offense.
Acting Director , IEO/RSSO, this Office, the within
records of OSP Case No. 88-02110 . . . for further
preliminary investigation . . ." 46 The Sandiganbayan issued an order on 18 October
1989 deferring arraignment and directing the parties
to submit their respective memoranda, 55 which
Thereafter, on 28 April 1989, Bunye and company
petitioners complied with on 2 November 1989. 56 On
received a subpoena from de la Llana requiring them
16 November 1989, special Prosecutor Berbano filed
to appear before the latter on 25 April 1989, 47 submit
a motion to admit amended
a report and file comment. After being granted an
information. 57
extension, Bunye and company submitted their
comment on 18 May 1989. 48
On 17 November 1989, the Sandiganbayan handed
down a Resolution 58 denying for lack of merit the
On 22 August 1989, de la Llana recommended the
Omnibus Motion to Remand the Case To The Office
filing of an information for violation of section 3 (e) of
of the Ombudsman, to Defer Arraignment and to
the Anti-Graft and Corrupt Practices Act. 49 The case
Suspend Proceedings. Petitioners then filed a motion
was referred to special prosecuting officer Jose
to order a preliminary investigation 59 on the basis of
Parentela, Jr. who, in his Memorandum 50 to the
the introduction by the amended information of new,
Ombudsman through the Acting Special Prosecutor,
material and substantive allegations, which the
likewise urged that an information be filed against
special prosecutor opposed, 60 thereby precipitating a
herein petitioners. On 3 October 1989, the
rejoinder filed by petitioners. 61
Ombudsman signed his conformity to the
Memorandum and approved the 18 January
information prepared by Onos, which was then filed On 4 January 1990, the Sandiganbayan handed down
with the Sandiganbayan. a Resolution 62 admitting the Amended Information
and denying the motion to direct preliminary
investigation. Their motion to reconsider this
Resolution having been denied in the Resolution of 1
February 1990, 63 petitioners filed the instant petition
on 12 February 1990.
Petitioners claim that respondent Sandiganbayan
acted without or in excess of jurisdiction or with
manifest grave abuse of discretion amounting to lack
of jurisdiction in denying petitioners their right to
preliminary investigation and in admitting the
Amended Information.
They then pray that: (a) the 4 January and 1 February
1990 Resolutions of the Sandiganbayan, admitting the
amended information and denying the motion for
reconsideration, respectively, be annulled; (b) a writ
be issued enjoining the Sandiganbayan from
proceeding further in Criminal Case No. 13966; and
(c) respondents be enjoined from pursuing further
actions in the graft case.
We required the respondents to Comment on the
petition.
On 21 February 1990, petitioners' counsel filed a
motion to drop Epifanio Espeleta and Rey E. Dulay as
petitioners, 64 and in the Comment they filed on 30
March 1990, in compliance with Our Resolution of 1
March 1990, they state that they do not interpose any
objection to the motion.
On 20 March 1990, the Office of the Solicitor General
moved that it be excused from filing comment for the
respondents as it cannot subscribe to the position
taken by the latter with respect to the questions of law
involved. 65 We granted this motion in the resolution of
8 May 1990.
Respondent Berbano filed his comment on 10
September 1991 and petitioners replied on 20
December 1990; Berbano subsequently filed a
Rejoinder thereto on 11 January 1991. 66 The
Sandiganbayan then filed a manifestation proposing
that it be excused from filing comment as its position
on the matters in issue is adequately stated in the
resolutions sought to be annulled. 67 On 7 March
1991, We resolved to note the manifestation and
order the instant petition consolidated with G.R. No.
85439.
The present dispute revolves around the validity of the
antecedent proceedings which led to the filing of the
original information on 18 January 1989 and the
amended information afterwards.
THE ISSUES AND THEIR RESOLUTION
1. G. R. No. 85439.
As adverted to in the introductory portion of this
Decision, the principal issue in G.R. No. 85439 is the
validity of the 28 October 1988 Order of respondent
Secretary of Agriculture. The exordium of said Order
unerringly indicates that its basis is the alleged
petition of the general membership of the KBMBPM
requesting the Department for assistance "in the
removal of the members of the Board of Directors who
were not elected by the general membership" of the
cooperative and that the "ongoing financial and
management audit of the Department of Agriculture
auditors show (sic) that the management of the
KBMBPM is not operating that cooperative in
accordance with P.D. 175, LOI 23, the Circulars
issued by DA/BACOD and the provisions and by-laws
of KBMBPM." It is also professed therein that the
Order was issued by the Department "in the exercise
of its regulatory and supervisory powers under
Section 8 of P.D. 175, as amended, and Section 4 of
Executive Order No. 113."
Respondents challenge the personality of the
petitioners to bring this action, set up the defense of
non-exhaustion of administrative remedies, and assert
that the Order was lawfully and validly issued under
the above decree and Executive Order.
We find merit in the petition and the defenses
interposed do not persuade Us.
Petitioners have the personality to file the instant
petition and ask, in effect, for their reinstatement as
Section 3, Rule 65 of the Rules of Court, defining an
action for mandamus, permits a person who has been
excluded from the use and enjoyment of a right or
office to which he is entitled, to file suit. 68 Petitioners,
as ousted directors of the KBMBPM, are questioning
precisely the act of respondent Secretary in
disbanding the board of directors; they then pray that
this Court restore them to their prior stations.
As to failure to exhaust administrative remedies, the
rule is well-settled that this requirement does not
apply where the respondent is a department secretary
whose acts, as an alter ego of the President, bear the
implied approval of the latter, unless actually
disapproved by him. 69 This doctrine of qualified
political agency ensures speedy access to the courts
when most needed. There was no need then to
appeal the decision to the office of the President;
recourse to the courts could be had immediately.
Moreover, the doctrine of exhaustion of administrative
remedies also yields to other exceptions, such as
when the question involved is purely legal, as in the
instant case, 70 or where the questioned act is patently
illegal, arbitrary or oppressive. 71 Such is the claim of
petitioners which, as hereinafter shown, is correct.
And now on the validity of the assailed Order.
Regulation 34 of Letter of Implementation No. 23
(implementing P.D. No. 175) provides the procedure
for the removal of directors or officers of cooperatives,
thus:
An elected officer, director or
committee member may be
removed by a vote of majority of
the members entitled to vote at
an annual or special general
assembly. The person involved
shall have an opportunity to be
heard.
A substantially identical provision, found in Section
17, Article III of the KBMBPM's by-laws, reads:
Sec. 17. Removal of Directors
and Committee Members. — Any
elected director or committee
member may be removed from
office for cause by a majority vote
 of the members in good standing
present at the annual or special
general assembly called for the
purpose after having been given
the opportunity to be heard at the
assembly.
Under the same article are found the requirements for
the holding of both the annual general assembly and
a special general assembly.
Indubitably then, there is an established procedure for
the removal of directors and officers of cooperatives.
It is likewise manifest that the right to due process is
respected by the express provision on the opportunity
to be heard. But even without said provision,
petitioners cannot be deprived of that right.
The procedure was not followed in this case.
Respondent Secretary of Agriculture arrogated unto
himself the power of the members of the KBMBPM
who are authorized to vote to remove the petitioning
directors and officers. He cannot take refuge under
Section 8 of P.D. No. 175 which grants him authority
to supervise and regulate all cooperatives. This
section does not give him that right.
An administrative officer has only such powers as are
expressly granted to him and those necessarily
implied in the exercise thereof. 72 These powers
should not be extended by implication beyond what
may to necessary for their just and reasonable
execution. 73
Supervision and control include only the authority to:
(a) act directly whenever a specific function is
entrusted by law or regulation to a subordinate; (b)
direct the performance of duty; restrain the
commission of acts; (c) review, approve, reverse or
modify acts and decisions of subordinate officials or
units; (d) determine priorities in the execution of plans
and programs; and (e) prescribe standards,
guidelines, plans and programs. Specifically,
administrative supervision is limited to the authority of
the department or its equivalent to: (1) generally
oversee the operations of such agencies and insure
that they are managed effectively, efficiently and
economically but without interference with day-to-day
activities; (2) require the submission of reports and
cause the conduct of management audit, performance
evaluation and inspection to determine compliance
with policies, standards and guidelines of the
department; (3) take such action as may be
necessary for the proper performance of official
functions, including rectification of violations, abuses
and other forms of mal-administration; (4) review and
pass upon budget proposals of such agencies but
may not increase or add to them. 74
The power to summarily disband the board of
directors may not be inferred from any of the
foregoing as both P.D. No. 175 and the by-laws of the
KBMBPM explicitly mandate the manner by which
directors and officers are to be removed. The
Secretary should have known better than to disregard
these procedures and rely on a mere petition by the
general membership of the KBMBPM and an on-going
audit by Department of Agriculture auditors in
exercising a power which he does not have, expressly
or impliedly. We cannot concede to the proposition of
the Office of the Solicitor General that the Secretary's
power under paragraph (d), Section 8 of P.D. No. 175
above quoted to suspend the operation or cancel the
registration of any cooperative includes the "milder
authority of suspending officers and calling for the
election of new officers." Firstly, neither suspension
nor cancellation includes the take-over and ouster of
incumbent directors and officers, otherwise the law
itself would have expressly so stated. Secondly, even
granting that the law intended such as postulated,
there is the requirement of a hearing. None was
conducted.
Likewise, even if We grant, for the sake of argument,
that said power includes the power to disband the
board of directors and remove the officers of the
KBMBPM, and that a hearing was not expressly
required in the law, still the Order can be validly
issued only after giving due process to the affected
parties, herein petitioners.
Due process is guaranteed by the Constitution 75 and
extends to administrative proceedings. In the
landmark case of Ang Tibay vs. Court of Industrial
Relations, 76 this Court, through Justice Laurel, laid
down the cardinal primary requirements of due
process in administrative proceedings, foremost of
which is the right to a hearing, which includes the right
to present one's case and submit evidence in support
thereof. The need for notice and the opportunity to be
heard is the heart of procedural due process, be it in
either judicial or administrative
proceedings. 77 Nevertheless, a plea of a denial of
procedural due process does not lie where a defect
consisting in an absence of notice of hearing was
thereafter cured by the aggrieved party himself as
when he had the opportunity to be heard on a
subsequent motion for reconsideration. This is
consistent with the principle that what the law
prohibits is not the absence of previous notice but the
absolute absence thereof and lack of an opportunity
to be heard. 78
In the instant case, there was no notice of a hearing
on the alleged petition of the general membership of
the KBMBPM; there was, as well, not even a
semblance of a hearing. The Order was based solely
on an alleged petition by the general membership of
the KBMBPM. There was then a clear denial of due
process. It is most unfortunate that it was done after
democracy was restored through the peaceful people
revolt at EDSA and the overwhelming ratification of a
new Constitution thereafter, which preserves for the
generations to come the gains of that historic struggle
which earned for this Republic universal admiration.
If there were genuine grievances against petitioners,
the affected members should have timely raise these
issues in the annual general assembly or in a special
general assembly. Or, if such a remedy would be
futile for some reason or another, judicial recourse
was available.
Be that as it may, petitioners cannot, however, be
restored to their positions. Their terms expired in
1989, thereby rendering their prayer for reinstatement
moot and academic. Pursuant to Section 13 of the by-
laws, during the election at the first annual general
assembly after registration, one-half plus one (4) of
the directors obtaining the highest number of votes
shall serve for two years, and the remaining directors
(3) for one year; thereafter, all shall be elected for a
term of two years. Hence, in 1988, when the board
was disbanded, there was a number of directors
whose terms would have expired the next year (1989)
and a number whose terms would have expired two
years after (1990). Reversion to the status
quo preceding 29 October 1988 would not be feasible
in view of this turn of events. Besides, elections were
held in 1990 and 1991. 79 The affairs of the
cooperative are presently being managed by a new
board of directors duly elected in accordance with the
cooperative's by-laws.
2. G. R. No. 91927.
The right of an accused to a preliminary investigation
is not among
the rights guaranteed him in the Bill of Rights. As
stated in Marcos, et al. vs. Cruz, 80 "the preliminary
investigation in criminal cases is not a creation of the
Constitution; its origin is statutory and it exists and the
right thereto can be invoked when so established and
granted by law. It is so specifically granted by
procedural law. 81 If not waived, absence thereof may
amount to a denial of due process. 82 However, lack
of preliminary investigation is not a ground to quash or
dismiss a complaint or information. Much less does it
affect the court's jurisdiction. In People
vs. Casiano, 83 this Court ruled:
Independently of the foregoing,
the absence of such investigation
[preliminary] did not impair the
validity of the information or
otherwise render it defective.
Much less did it affect the
jurisdiction of the court of first
instance over the present case.
Hence, had the defendant-
appellee been entitled to another
preliminary investigation, and had
his plea of not guilty upon
arraignment not implied a waiver
of said right, the court of first
instance should have, either
conducted such preliminary
investigation, or ordered the
Provincial Fiscal to make it, in
pursuance of section 1687 of the
Revised Administrative Code (as
amended by Republic Act No.
732), or remanded the record for
said investigation to the justice of
the peace court, instead of
dismissing the case as it did in
the order appealed from.
This doctrine was thereafter reiterated or affirmed in
several case. 84
In the instant case, even if it is to be conceded for
argument's sake that there was in fact no preliminary
investigation, the Sandiganbayan, per Doromal
vs. Sandiganbayan, 85 "should merely suspend or
hold in abeyance proceedings upon the questioned
Amended Information and remand the case to the
Office of the Ombudsman for him to conduct a
preliminary investigation."
It is Our view, however, that petitioners were not
denied the right to preliminary investigation. They,
nevertheless, insist that the preliminary investigation
conducted by the Office of the Special Prosecutor
existed more in form than in substance. This is
anchored on the failure by prosecutor Onos to
consider the counter-affidavits filed by petitioners. The
same sin of omission is ascribed to Acting Director de
la Llana who purportedly failed to consider the
comments submitted by the petitioners pursuant to a
subpoena dated 13 April 1989. The failure of special
prosecutor Berbano to conduct a preliminary
investigation before amending the information is also
challenged.
It is finally urged that the Sandiganbayan completely
disregarded the "glaring anomaly that on its face the
Information filed by the Office of the Special
Prosecutor" was prepared and subscribed on 18
January 1989, while the records indicate that the
preliminary investigation was concluded on 3 October
1989.
In his Comment, respondent Berbano dispassionately
traces the genesis of the criminal information filed
before the Sandiganbayan. His assessment that a
preliminary investigation sufficient in substance and
manner was conducted prior to the filing of the
information reflects the view of the Sandiganbayan,
maintained in both the 17 November 1989 and 4
January 1990 resolutions, that there was compliance
with the requirements of due process.
Petitioners were provided a reasonable period within
which to submit their counter-affidavits; they did not
avail of the original period; they moved for an
extension of at least fifteen (15) days from 22 October
1988. Despite the urgency of its nature, the motion
was sent by mail. The extension prayed for was good
up to 6 November 1988. But, as admitted by them,
they filed the Counter-Affidavits only on 9 November
1988. Yet, they blamed prosecutor Onos for
promulgating the 11 November 1989 Resolution and
for, allegedly, not acting on the motion. Petitioners
then should not lay the blame on Onos; they should
blame themselves for presuming that the motion
would be granted.
This notwithstanding, petitioners were able to file a
Motion for Reconsideration on 13 December 1988
requesting that the reviewing prosecutor consider the
belatedly filed documents; 86 thus, there is the
recommendation of prosecutor Bernardita Erum
calling for the dismissal of the charges on 2 March
1989, which, however, was not sustained upon
subsequent review. The Sandiganbayan, in its 17
November 1989 Resolution, succinctly summed up
the matter when it asserted that "even granting, for
the sake of argument, that prosecutor Onos . . . failed
to consider accused-movants' counter-affidavits, such
defect was cured when a "Motion for Reconsideration"
was filed, and
which . . . de la Llana took into account upon review."
It may not then be successfully asserted that the
counter-affidavits were not considered by the
Ombudsman in approving the information. Perusal of
the factual antecedents reveals that a second
investigation was conducted upon the "1st
Indorsement" of the Ombudsman of 4 April 1989. As a
result, subpoenas were issued and comments were
asked to be submitted, which petitioners did, but only
after a further extension of fifteen (15) days from the
expiration of the original deadline. From this
submission the matter underwent further review.
Moreover, in the 18 January 1989 Order of prosecutor
Onos, there was an ample discussion of the defenses
raised by the petitioners in their counter-affidavits,
thus negating the charge that the issues raised by
them were not considered at all. 87
It is indisputable that the respondents were not remiss CONCLUSION
in their duty to afford the petitioners the opportunity to
contest the charges thrown their way. Due process
WHEREFORE, judgment is hereby rendered:
does not require that the accused actually file his
counter-affidavits before the preliminary investigation
is deemed completed. All that is required is that he be 1. GRANTING the petition in G.R. No. 85439;
given the opportunity to submit such if he is so declaring null and void the challenged Order of 28
minded. 88 October 1988 of the respondent Secretary of
Agriculture; but denying, for having become moot and
academic, the prayer of petitioners that they be
In any event, petitioners did in fact, although
restored to their positions in the KBMBPM.
belatedly, submit their counter-affidavits and as a
result thereof, the prosecutors concerned considered
them in subsequent reviews of the information, 2. DISMISSING, for lack of merit, the petition in G.R.
particularly in the re-investigation ordered by the No. 91927.
Ombudsman.
No pronouncement as to costs.
And now, as to the protestation of lack of preliminary
investigation prior to the filing of the Amended
IT IS SO ORDERED.
Information. The prosecution may amend the
information without leave of court before
arraignment, 89 and such does not prejudice the
accused. 90 Reliance on the pronouncements
in Doromal vs. Sandiganbayan 91 is misplaced as
what obtained therein was the preparation of an
entirely new information as contrasted with mere
amendments introduced in the amended information,
which also charges petitioners with violating Section 3
(e) of the Anti-Graft Law.

In Gaspar vs. Sandiganbayan, 92 We held that there is

no rule or law requiring the Tanodbayan to conduct
another preliminary investigation of a case under
review by it. On the contrary, under P.D. No. 911, in
relation to Rule 12, Administrative Order No. VII, the
Tanodbayan may, upon review, reverse the findings
of the investigator and thereafter "where he finds
a prima facie case, to cause the filing of an
information in court against the respondent, based on
the same sworn statements or evidence submitted,
without the necessity of conducting another
preliminary investigation."

Respondent Sandiganbayan did not then commit any

grave abuse of discretion in respect to its Resolutions
of 4 January 1990 and 1 February 1990.

The petition then must fail.