G.R. No.

189158

JAMES IENT and MAHARLIKA SCHULZE, Petitioners,

vs.
TULLETT PREBON (PHILIPPINES), INC., Respondent.

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

JAMES IENT and MAHARLIKA SCHULZE, Petitioners,

vs.
TULLETT PREBON (PHILIPPINES), INC., Respondent.

DECISION

LEONARDO-DE CASTRO, J.:

In these consolidated Petitions for Review under Rule 45 of the Rules of Court, petitioners James A. Ient (Ient) and Maharlika C.
Schulze (Schulze) assail the Court of Appeals Decision 1 dated August 12, 2009 in CA-G.R. SP No. 109094, which affirmed the
Resolutions dated April 23, 20092 and May 15, 20093 of the Secretary of Justice in LS. No. 08-J-8651. The Secretary of Justice,
through the Resolutions dated April 23, 2009 and May 15, 2009, essentially ruled that there was probable cause to hold petitioners,
in conspiracy with certain former directors and officers of respondent Tullet Prebon (Philippines), Inc. (Tullett), criminally liable for
violation of Sections 31 and 34 in relation to Section 144 of the Corporation Code.

From an assiduous review of the records, we find that the relevant factual and procedural antecedents for these petitions can be
summarized as follows:

Petitioner lent is a British national and the Chief Financial Officer of Tradition Asia Pacific Pte. Ltd. (Tradition Asia) in
Singapore.4 Petitioner Schulze is a Filipino/German who does Application Support for Tradition Financial Services Ltd. in London
(Tradition London). 5 Tradition Asia and Tradition London are subsidiaries of Compagnie Financiere Tradition and are part of the
"Tradition Group." The Tradition Group is allegedly the third largest group of Inter-dealer Brokers (IDB) in the world while the
corporate organization, of which respondent Tullett is a part, is supposedly the second largest. In other words, the Tradition Group
and Tullett are competitors in the inter-dealer broking business. IDBs purportedly "utilize the secondary fixed income and foreign
exchange markets to execute their banks and their bank customers' orders, trade for a profit and manage their exposure to risk,
including credit, interest rate and exchange rate risks." In the Philippines, the clientele for IDBs is mainly comprised of banks and
financial institutions.6

Tullett was the first to establish a business presence in the Philippines and had been engaged in the inter-dealer broking business or
voice brokerage here since 1995. 7 Meanwhile, on the part of the Tradition Group, the needs of its Philippine clients were previously
being serviced by Tradition Asia in Singapore. The other IDBs in the Philippines are Amstel and Icap. 8

Sometime in August 2008, in line with Tradition Group's motive of expansion and diversification in Asia, petitioners lent and Schulze
were tasked with the establishment of a Philippine subsidiary of Tradition Asia to be known as Tradition Financial Services
Philippines, Inc. (Tradition Philippines). 9 Tradition Philippines was registered with the Securities and Exchange Commission (SEC) on
September 19, 200810 with petitioners lent and Schulze, among others, named as incorporators and directors in its Articles of
Incorporation. 11

On October 15, 2008, Tullett, through one of its directors, Gordon Buchan, filed a Complaint-Affidavit12 with the City Prosecution
Office of Makati City against the officers/employees of the Tradition Group for violation of the Corporation Code. Impleaded as
respondents in the Complaint-Affidavit were petitioners lent and Schulze, Jaime Villalon (Villalon), who was formerly President and
Managing Director of Tullett, Mercedes Chuidian (Chuidian), who was formerly a member of Tullett's Board of Directors, and other
John and Jane Does. Villalon and Chuidian were charged with using their former positions in Tullett to sabotage said company by
orchestrating the mass resignation of its entire brokering staff in order for them to join Tradition Philippines. With respect to
Villalon, Tullett claimed that the former held several meetings between August 22 to 25, 2008 with members ofTullett's Spot Desk
and brokering staff in order to convince them to leave the company. Villalon likewise supposedly intentionally failed to renew the
contracts of some of the brokers. On August 25, 2008, a meeting was also allegedly held in Howzat Bar in Makati City where
petitioners and a lawyer of Tradition Philippines were present. At said meeting, the brokers of complainant Tullett were purportedly
induced, en masse, to sign employment contracts with Tradition Philippines and were allegedly instructed by Tradition Philippines'
lawyer as to how they should file their resignation letters.

Complainant also claimed that Villalon asked the brokers present at the meeting to call up Tullett's clients to inform them that they
had already resigned from the company and were moving to Tradition Philippines. On August 26, 2008, Villalon allegedly informed
Mr. Barry Dennahy, Chief Operating Officer of Tullett Prebon in the Asia-Pacific, through electronic mail that all of Tullett's brokers
had resigned. Subsequently, on September 1, 2008, in another meeting with lent and Tradition Philippines' counsel, indemnity
contracts in favor of the resigning employees were purportedly distributed by Tradition Philippines. According to Tullett,
respondents Villalon and Chuidian (who were still its directors or officers at the times material to the Complaint-Affidavit) violated
Sections 31 and 34 of the Corporation Code which made them criminally liable under Section 144. As for petitioners lent and
Schulze, Tullett asserted that they conspired with Villalon and Chuidian in the latter's acts of disloyalty against the company. 13

Villalon and Chuidian filed their respective Counter-Affivadits.14

Villalon alleged that frustration with management changes in Tullett Prebon motivated his personal decision to move from Tullett
and accept the invitation of a Leonard Harvey (also formerly an executive of Tullett) to enlist with the Tradition Group. As a courtesy
to the brokers and staff, he informed them of his move contemporaneously with the tender of his resignation letter and claimed
that his meetings with the brokers was not done in bad faith as it was but natural, in light of their long working relationship, that he
share with them his plans. The affidavit of Engelbert Wee should allegedly be viewed with great caution since Wee was one of those
who accepted employment with Tradition Philippines but changed his mind and was subsequently appointed Managing Director
(Villalon's former position) as a prize for his return. Villalon further argued that his resignation from Tullett was done in the exercise
of his fundamental rights to the pursuit of life and the exercise of his profession; he can freely choose to avail of a better life by
seeking greener pastures; and his actions did not fall under any of the prohibited acts under Sections 31 and 34 of the Corporation
Code. It is likewise his contention that Section 144 of the Corporation Code applies only to violations of the Corporation Code which
do not provide for a penalty while Sections 31 and 34 already provide for the applicable penalties for violations of said provisions -
damages, accounting and restitution. Citing the Department of Justice (DOJ) Resolution dated July 30, 2008 in UCPB v.
Antiporda, Villalon claimed that the DOJ had previously proclaimed that Section 31 is not a penal provision of law but only the basis
of a cause of action for civil liability. Thus, he concluded that there was no probable cause that he violated the Corporation Code nor
was the charge of conspiracy properly substantiated. 15

Chuidian claimed that she left Tullett simply to seek greener pastures. She also insisted the complaint did not allege any act on her
part that is illegal or shows her participation in any conspiracy. She merely exercised her right to exercise her chosen profession and
pursue a better life. Like Villalon, she stressed that her resignation from Tullett and subsequent transfer to Tradition Philippines did
not fall under any of the prohibited acts under Sections 31 and 34. Section 144 of the Corporation Code purportedly only applies to
provisions of said Code that do not provide for any penalty while Sections 31 and 34 already provide for the penalties for their
violation - damages, accounting and restitution. In her view, that Section 34 provided for the ratification of the acts of the erring
corporate director, trustee or office evinced legislative intent to exclude violation of Section 34 from criminal prosecution. She
argued that Section 144 as a penal provision should be strictly construed against the State and liberally in favor of the accused and
Tullett has failed to substantiate its charge of bad faith on her part. 16

In her Counter-Affidavit, 17 petitioner Schulze denied the charges leveled against her. She pointed out that the Corporation Code is
not a "special law" within the contemplation of Article 10 18 of the Revised Penal Code on the supplementary application of the
Revised Penal Code to special laws since said provision purportedly applies only to "special penal laws." She further argued that
"[s]ince the Corporation Code does not expressly provide that the provisions of the Revised Penal Code shall be made to apply
suppletorily, nor does it adopt the nomenclature of penalties of the Revised Penal Code, the provisions of the latter cannot be made
to apply suppletorily to the former as provided for in the first sentence of Article 10 of the Revised Penal Code."19 Thus, she
concluded that a charge of conspiracy which has for its basis Article 8 of the Revised Penal Code cannot be made applicable to the
provisions of the Corporation Code.

Schulze also claimed that the resignations of Tullett's employees were done out of their own free will without force, intimidation or
pressure on her and Ient's part and were well within said employees' right to "free choice of employment."20

For his part, petitioner lent alleged in his Counter-Affidavit that the charges against him were merely filed to harass Tradition
Philippines and prevent it from penetrating the Philippine market. He further asserted that due to the highly specialized nature of
the industry, there has always been a regular flow of brokers between the major players. He claimed that Tradition came to the
Philippines in good faith and with a sincere desire to foster healthy competition with the other brokers. He averred that he never
forced anyone to join Tradition Philippines and the Tullett employees' signing on with Tradition Philippines was their voluntary act
since they were discontented with the working environment in Tullett. Adopting a similar line of reasoning as Schulze, lent believed
that the Revised Penal Code could not be made suppletorily applicable to the Corporation Code so as to charge him as a conspirator.
According to lent, he merely acted within his rights when he offered job opportunities to any interested person as it was within the
employees' rights to change their employment, especially since Article 23 of the Universal Declaration of Human Rights (of which the
Philippines is a signatory) provides that "everyone has the right to work, to free choice of employment, to just and favorable
conditions of work and to protection against unemployment."21 He also denounced the Complaint-Affidavit and the affidavits of
Tullett employees attached thereto as self-serving or as an exaggeration/twisting of the true events. 22

In a Consolidated Reply-Affidavit23 notarized on January 22, 2009, Tullett argued that Villalon, Chuidian, Schulze, and lent have
mostly admitted the acts attributed to them in the Complaint-Affidavit and only attempted to characterize said acts as "normal,"
"innocent" or "customary." It was allegedly evident from the Counter-Affidavits that the resignation of Tullett's employees was an
orchestrated plan and not simply motivated by their seeking "greener pastures." Purported employee movements in the industry
between the major companies are irrevelant since such movements are subject to contractual obligations. Tullett likewise denied
that its working environment was stringent and "weird." Even assuming that Villalon and Chuidian were dissatisfied with their
employment in Tullett, this would supposedly not justify nor exempt them from violating their duties as Tullett's officers/directors.
There was purportedly no violation of their constitutional rights to liberty or to exercise their profession as such rights are not
unbridled and subject to the laws of the State. In the case of Villalon and Chuidian, they had to comply with their duties found in
Sections 31 and 34 of the Corporation Code. Tullett asserts that Section 144 applies to the case at bar since the DOJ Resolution
in UCPB is not binding as it applies only to the parties therein and it likewise involved facts different from the present case. Relying
on Home Insurance Company v. Eastern Shipping Lines, 24 Tullett argued that Section 144 applies to all other violations of the
Corporation Code without exception. Article 8 of the Revised Penal Code on conspiracy was allegedly applicable to the Corporation
Code as a special law with a penal provision. 25

In a Supplemental Complaint-Affidavit26 likewise notarized on January 22, 2009, Tullett included Leonard James Harvey (Harvey) in
the case and alleged that it learned of Harvey's complicity through the Counter-Affidavit of Villalon. Tullett claimed that Harvey, who
was Chairman of its Board of Directors at the time material to the Complaint, also conspired to instigate the resignations of its
employees and was an indispensable part of the sabotage committed against it.

In his Rejoiner-Affidavit,27 lent vehemently denied that there was a pre-arranged plan to sabotage Tullett. According to lent, Gordon
Buchan of Tullett thought too highly of his employer to believe that the Tradition Group's purpose in setting up Tradition Philippines
was specifically to sabotage Tullett. He stressed that Tradition Philippines was set up for legitimate business purposes and Tullett
employees who signed with Tradition did so out of their own free will and without any force, intimidation, pressure or inducement
on his and Schulze' s part. All he allegedly did was confirm the rumors that the Tradition Group was planning to set up a Philippine
office. Echoing the arguments of Villalon and Chuidian, lent claimed that (a) there could be no violation of Sections 31 and 34 of the
Corporation as these sections refer to corporate acts or corporate opportunity; (b) Section 144 of the same Code cannot be applied
to Sections 31 and 34 which already contains the penalties or remedies for their violation; and (c) conspiracy under the Revised
Penal Code cannot be applied to the Sections 31 and 34 of the Corporation Code.

In a Resolution28 dated February 17, 2009, State Prosecutor Cresencio F. Delos Trinos, Jr. (Prosecutor Delos Trinos), Acting City
Prosecutor of Makati City, dismissed the criminal complaints. He reasoned that:

It is our considered view that the acts ascribed [to] respondents Villalon and Chuidian did not constitute any of the prohibited acts of
directors or trustees enunciated under Section 31. Their cited actuations certainly did not involve voting for or assenting to patently
unlawful acts of [Tullett] nor could the same be construed as gross negligence or bad faith in directing the affairs of [Tullett]. There is
also no showing that they acquired any personal or pecuniary interest in conflict with their duty as directors of [Tullett]. Neither was
there a showing that they attempted to acquire or acquired, in violation of their duty as directors, any interest adverse to [Tullett] in
respect [to] any matter which has been reposed in them in confidence.

xxxx

The issue that respondent Villalon informed the brokers of his plan to resign from [Tullett] and to subsequently transfer to Tradition
is not in dispute. However, we are unable to agree that the brokers were induced or coerced into resigning from [Tullett] and
transferring to Tradition themselves.x x x As the record shows, Mr. Englebert Wee and the six (6) members of the broking staff who
stand as [Tullett]'s witnesses, also initially resigned from [Tullett] and transferred to Tradition but backed out from their contract of
employment with Tradition and opted to remain with [Tullett].
Even assuming ex gratia argumenti that the brokers were induced by the respondents or anyone of them to leave their employment
with [Tullett], such inducement may only give rise to civil liability for damages against the respondents but no criminal liability would
attach on them. x x x.

On the alleged inducements of clients of [Tullett] to transfer to Tradition, there is no showing that clients of [Tullett] actually
transferred to Tradition. Also, the allegation that respondents orchestrated the mass resignation of employees of [Tullett] to destroy
or shut down its business and to eliminate it from the market in order that Tradition could take its place is baseless and speculative.
Significantly, it is noted that despite the resignations of respondents Villalon and Chuidian and the majority of the broking staff and
their subsequent transfer to Tradition, the business of [Tullet] was not destroyed or shut down. [Tullett] was neither eliminated from
the market nor its place in the market taken by Tradition. x x x

In the same vein, the "corporate opportunity doctrine" enunciated under Section 34 does not apply herein and cannot be rightfully
raised against respondents Villalon and Chuidian. Under Section 34, a director of a corporation is prohibited from competing with
the business in which his corporation is engaged in as otherwise he would be guilty of disloyalty where profits that he may realize
will have to go to the corporate funds except if the disloyal act is ratified. Suffice it to say that their cited acts did not involve any
competition with the business of [Tullett]. 29

On the issue of conspiracy, Prosecutor Delos Trinos found that since Villalon and Chuidian did not commit any acts in violation of
Sections 31 and 34 of the Corporation Code, the charge of conspiracy against Schulze and lent had no basis. As for Harvey, said
Resolution noted that he was similarly situated as Villalon and Chuidian; thus, the considerations in the latter's favor were applicable
to the former. 30 Lastly, on the applicability of Section 144 to Sections 31 and 34, Prosecutor Delos Trinos relied on the reasoning in
the DOJ Resolution dated July 30, 2008 in UCPB v. Antiporda issued by then Secretary of Justice Raul M. Gonzalez, to wit:

We maintain and reiterate the ratiocination of the Secretary of Justice in United Coconut Planters Bank vs. Tirso Antiporda, et al., I.S.
No. 2007-633 promulgated on July 30, 2008, thus - "It must be noted that Section 144 covers only those provisions 'not otherwise
specifically penalized therein. ' In plain language, this means that the penalties under Section 144 apply only when the other
provisions of the Corporation Code do not yet provide penalties for non-compliance therewith. "

A reading of Sections 31 and 34 shows that penalties for violations thereof are already provided therein. Under Section 31, directors
or trustees are made liable for damages that may result from their fraudulent or illegal acts. Also, directors, trustees or officers who
attempt to acquire or acquire any interest adverse to the corporation will have to account for the profits which otherwise would
have accrued to the corporation. Section 34, on the other hand, penalizes directors who would be guilty of disloyalty to the
corporation by accounting to the corporation all profits that they may realize by refunding the same.31

Consequently, Tullett filed a petition for review with the Secretary of Justice to assail the foregoing resolution of the Acting City
Prosecutor of Makati City. In a Resolution32 dated April 23, 2009, then Secretary of Justice Raul M. Gonzalez reversed and set aside
Prosecutor Delos Trinos's resolution and directed the latter to file the information for violation of Sections 31 and 34 in relation to
Section 144 of the Corporation Code against Villalon, Chuidian, Harvey, Schulze, and lent before the proper court. As can be gleaned
from the April 23, 2009 Resolution, the Secretary of Justice ruled that:

It is evident from the case at bar that there is probable cause to indict respondents Villalon, Chuidian and Harvey for violating
Section 31 of the Corporation Code. Indeed, there is prima facie evidence to show that the said respondents acted in bad faith in
directing the affairs of complainant. Undeniably, respondents Villalon, Chuidian and Harvey occupied positions of high responsibility
and great trust as they were members of the board of directors and corporate officers of complainant. x x x As such, they are
required to administer the corporate affairs of complainant for the welfare and benefit of the stockholders and to exercise the best
care, skill and judgment in the management of the corporate business and act solely for the interest of the corporation.

xxxx

Respondents Villalon and Chuidian acted with dishonesty and in fraud. They went to the extent of having their several meetings
away from complainant's office so as to secretly entice and induce all its brokers to transfer to Tradition. Respondents Villalon and
Chuidian did not entice merely one or two employees of complainant but admittedly, the entire broking staff of the latter. This act
would lead to the sure collapse of complainant. x x x.

Further, respondents Villalon and Chuidian acquired personal and pecuniary interest in conflict with their duties as directors of
complainant. Respondents Villalon and Chuidian committed the acts complained of in order to transfer to Tradition, to have a higher
salary and position and bring the clients and business of complainant with them. The fact that Tradition is not yet incorporated at
that time is of no consequence.

Moreover, respondents Villalon and Chuidian violated Section 34 of the Corporation Code when they acquired business opportunity
adverse to that of complainant. When respondents Villalon and Chuidian told the brokers of complainant to convince their clients to
transfer their business to Tradition, the profits of complainant which rightly belonging to it will be transferred to a competitor
company to be headed by respondents.

The provision of Section 144 of the Corporation Code is also applicable in the case at bar as the penal provision provided therein is
made applicable to all violations of the Corporation Code, not otherwise specifically penalized. Moreover, the factual milieu of the
case entitled "Antiporda, et al., IS No. 2007-633" is inapplicable as the facts of the above-entitled case is different.

xxxx

As for respondent Harvey's probable indictment, aside from not submitting his counter-affidavit, the counter-affidavit of respondent
Villalon showed that he is also liable as such since the idea to transfer the employment of complainant's brokers was broached by
him.

Anent respondents lent and Schulze, record revealed that they conspired with respondents Villalon and Chuidian when they actively
participated in the acts complained of. They presented the employment contracts and indemnity agreements with the brokers of
complainant in a series of meetings held with respondents Villalon and Chuidian. Respondent lent signed the contracts as CFO of
Tradition Asia and even confirmed the transfer of respondent Villalon to Tradition. Respondent Schulze admitted that the purpose of
her sojourn in the Philippines was to assist in the formation of Tradition. Thus, it is clear that their role in the acts complained of
were instrumental for respondents Villalon and Chuidian to violate their duties and responsibilities as directors and officers of
complainant.33

Ient and Schulze moved for reconsideration of the foregoing Resolution by the Secretary of Justice. Meanwhile, on May 14, 2009,
two Informations, one for violation of Section 31 and another for violation of Section 34, were filed by Prosecutor Delos Trinos with
the Metropolitan Trial Court of Makati City. In a Resolution dated May 15, 2009, the Secretary of Justice denied the motion for
reconsideration filed by petitioners. Unsatisfied with this tum of events, petitioners lent and Schulze brought the matter to the Court
of Appeals via a petition for certiorari under Rule 65 which was docketed as CA-G.R. SP No. 109094.

In a Decision dated August 12, 2009, the Court of Appeals affirmed the Secretary of Justice's Resolutions dated April 23, 2009 and
May 15, 2009, after holding that:

Respondent Secretary correctly stressed that Sections 31 and 34 must be read in the light of the nature of the position of a director
and officer of the corporation as highly imbued with trust and confidence. Petitioners' rigid interpretation of clear-cut instances of
liability serves only to undermine the values of loyalty, honesty and fairness in managing the affairs of the corporation, which the
law vested on their position. Besides, this Court can hardly deduce abuse of discretion on the part of respondent Secretary in
considering a conflict of interest scenario from petitioners' act of advancing the interest of an emerging competitor in the field
rather than fiercely protecting the business of their own company. As aptly pointed out by the private respondent, the issue is not
the right of the employee brokers to seek greener pastures or better employment opportunities but the breach of fiduciary duty
owed by its directors and officers.

In the commentary on the subject of duties of directors and controlling stockholders under the Corporation Code, Campos
explained:

"Fiduciary Duties; Conflict of Interest

"A director, holding as he does a position of trust, is a fiduciary of the corporation. As such, in case of conflict of his interest with
those of the corporation, he cannot sacrifice the latter without incurring liability for his disloyal act. The fiduciary duty has many
ramifications, and the possible conflict-of-interest situations are almost limitless, each possibility posing different
problems. There will be cases where a breach of trust is clear. Thus, where a director converts for his own use funds or property
belonging to the corporation, or accepts material benefits for exercising his powers in favor of someone seeking to do business with
the corporation, no court will allow him to keep the profit he derives from his wrongdoing. In many other cases, however, the line of
demarcation between the fiduciary relationship and a director's personal right is not easy to define. The Code has attempted at
least to lay down general rules of conduct and although these serve as guidelines for directors to follow, the determination as to
whether in a given case the duty of loyalty has been violated has ultimately to be decided by the court on the case's own merits."
x x x.

Prescinding from the above, We agree with the Secretary of Justice that the acts complained of in this case establish a prima
facie case for violation of Sec. 31 such that the accused directors and officers of private respondent corporation are probably guilty
of breach of bad faith in directing the affairs of the corporation. The breach of fiduciary duty as such director and corporate office
(sic) are evident from their participation in recruiting the brokers employed in the corporation, inducing them to accept employment
contracts with the newly formed firm engaged in competing business, and securing these new hires against possible breach of
contract complaint by the corporation through indemnity contracts provided by Tradition Philippines. Clearly, no grave abuse of
discretion was committed by the respondent Secretary in reversing the city prosecutor's dismissal of the criminal complaint and
ordering the filing of the corresponding information against the accused, including herein petitioners.

As to petitioners' contention that conspiracy had not been established by the evidence, suffice it to state that such stance is belied
by their own admission of the very acts complained of in the Complaint-Affidavit, the defense put up by them consists merely in
their common argument that no crime was committed because private respondent's brokers had the right to resign and transfer
employment if they so decide.

It bears to reiterate that probable cause is such set of facts and circumstances which would lead a reasonably discreet and prudent
man to believe that the offense charged in the Information or any offense included therein has been committed by the person
sought to be arrested. In determining probable cause, the average man weighs the facts and circumstances without resorting to the
calibrations of the rules of evidence of which he has no technical knowledge. He relies on common sense. Thus, a finding of probable
cause does not require an inquiry into whether there is sufficient evidence to procure a conviction. It is enough that it is believed
that the act or omission complained of constitutes the offense charged. Precisely, there is a trial for the reception of evidence of the
prosecution in support of the charge.

Finally, the Court finds no merit in the argument of petitioners that Sec. 144 is not applicable since Sec. 31 already provides for
liability for damages against the guilty director or corporate officer.

"SEC. 144. Violations of the Code. - Violations of any of the provisions of this Code or its amendments not otherwise specifically
penalized therein shall be punished by a fine of not less than one thousand (1,000.00) pesos but not more than ten thousand
(10,000.00) pesos or by imprisonment for not less than thirty (30) days but not more than five (5) years, or both, in the discretion
of the court. If the violation is committed by a corporation, the same may, after notice and hearing, be dissolved in appropriate
proceedings before the Securities and Exchange Commission; Provided, That such dissolution shall not preclude the institution of
appropriate action against the director, trustee or officer of the corporation responsible for the said violation; Provided, further, That
nothing in this section shall be construed to repeal the other causes for dissolution of a corporation provided in this Code." x x x.

"Damages" as the term is used in Sec. 31 cannot be deemed as punishment or penalty as this appears in the above-cited criminal
provision of the Corporation Code. Such "damage" implies civil, rather than, criminal liability and hence does not fall under those
provisions of the Code which are not "specifically penalized" with fine or imprisonment. 34

In light of the adverse ruling of the Court of Appeals, petitioners lent and Schulze filed separate petitions for review with this
Court.1wphi1 After requiring further pleadings from the parties, the Court directed the parties to submit their memoranda to
consolidate their positions on the issues.

At the outset, it should be noted that respondent Tullett interposed several procedural objections which we shall dispose of first.

Anent respondent's contentions that the present petitions (assailing the issuances of the Secretary of Justice on the question of
probable cause) had become moot and academic with the filing of the Informations in the trial court and that under our ruling
in Advincula v. Court of Appeals35the filing of a petition for certiorari with the appellate court was the improper remedy as findings of
the Secretary of Justice on probable cause must be respected, we hold that these cited rules are not inflexible.

In Yambot v. Tuquero,36we observed that under exceptional circumstances, a petition for certiorari assailing the resolution of the
Secretary of Justice (involving an appeal of the prosecutor's ruling on probable cause) may be allowed, notwithstanding the filing of
an information with the trial court. We reiterated the doctrine in Ching v. Secretary of Justice37that the acts of a quasi-judicial officer
may be assailed by the aggrieved party through a petition for certiorari and enjoined (a) when necessary to afford adequate
protection to the constitutional rights of the accused; (b) when necessary for the orderly administration of justice; (c) when the acts
of the officer are without or in excess of authority; (d) where the charges are manifestly false and motivated by the lust for
vengeance; and (e) when there is clearly no prima facie case against the accused.

In the case at bar, it is unsettling to perceive a seeming lack of uniformity in the rulings of the Secretary of Justice on the issue of
whether a violation of Section 31 entails criminal or only civil liability and such divergent actions are explained with a terse
declaration of an alleged difference in factual milieu and nothing further. Such a state of affairs is not only offensive to principles of
fair play but also anathema to the orderly administration of justice. Indeed, we have held that where the action of the Secretary of
Justice is tainted with arbitrariness, an aggrieved party may seek judicial review via certiorari on the ground of grave abuse of
discretion. 38

We likewise cannot give credit to respondent's claim of mootness. The "moot and academic" principle is not a magical formula that
can automatically dissuade the courts in resolving a case. 39 The Court will not hesitate to resolve the legal and constitutional issues
raised to formulate controlling principles to guide the bench, the bar, and the public, particularly on a question capable of repetition,
yet evading review.40

As for the assertion that the present petitions are dismissible due to forum shopping since they were filed during the pendency of
petitioners' motion to quash and their co-accused's motion for judicial determination of probable cause with the trial court, we hold
that there is no cause to dismiss these petitions on such ground.

Forum shopping is an act of a party, against whom an adverse judgment or order has been rendered in one forum, of seeking and
possibly getting a favorable opinion in another forum, other than by appeal or special civil action for certiorari. It may also involve
the institution of two or more actions or proceedings grounded on the same cause on the supposition that one or the other court
would make a favorable disposition.41 There is no forum shopping where the suits involve different causes of action or different
reliefs. 42

Jurisprudence explains that:

A motion to quash is the mode by which an accused assails, before entering his plea, the validity of the criminal complaint or the
criminal information filed against him for insufficiency on its face in point of law, or for defect apparent on the face of the
Information. The motion, as a rule, hypothetically admits the truth of the facts spelled out in the complaint or information. The rules
governing a motion to quash are found under Rule 117 of the Revised Rules of Court. Section 3 of this Rule enumerates the grounds
for the quashal of a complaint or information. x x x.43 (Citation omitted.)

On the other hand, the action at bar is a review on certiorari of the assailed Court of Appeals decision wherein the main issue is
whether or not the Secretary of Justice committed grave abuse of discretion in reversing the City Prosecutor's dismissal of the
criminal complaint. These consolidated petitions may proceed regardless of whether or not there are grounds to quash the criminal
information pending in the court a quo.

Neither do we find relevant the pendency of petitioners' co-accused's motion for judicial determination of probable cause before
the trial court. The several accused in these consolidated cases had a number of remedies available to them and they are each free
to pursue the remedy which they deem is their best option. Certainly, there is no requirement that the different parties in a case
must all choose the same remedy. We have held that even assuming separate actions have been filed by different parties involving
essentially the same subject matter, no forum shopping is committed where the parties did not resort to multiple judicial
remedies.44 In any event, we have stated in the past that the rules on forum shopping are not always applied with inflexibility. 45

As a final point on the technical aspects of this case, we reiterate here the principle that in the exercise of the Courts equity
jurisdiction, procedural lapses may be disregarded so that a case may be resolved on its merits. 46Indeed, where strong
considerations of substantive justice are manifest in a petition, the strict application of the rules of procedure may be relaxed.47 This
is particularly true in these consolidated cases where legal issues of first impression have been raised.

We now proceed to rule upon the parties' substantive arguments.

The main bone of disagreement among the parties in this case is the applicability of Section 144 of the Corporation Code to Sections
31 and 34 of the same statute such that criminal liability attaches to violations of Sections 31 and 34. For convenient reference, we
quote the contentious provisions here:
SECTION 31. Liability of Directors, Trustees or Officers. - Directors or trustees who willfully and knowingly vote for or assent to
patently unlawful acts of the corporation or who are guilty of gross negligence or bad faith in directing the affairs of the corporation
or acquire any personal or pecuniary interest in conflict with their duty as such directors or trustees shall be liable jointly and
severally for all damages resulting therefrom suffered by the corporation, its stockholders or members and other persons.

When a director, trustee or officer attempts to acquire or acquires, in violation of his duty, any interest adverse to the corporation in
respect of any matter which has been reposed in him in confidence, as to which equity imposes a disability upon him to deal in his
own behalf, he shall be liable as a trustee for the corporation and must account for the profits which otherwise would have accrued
to the corporation.

SECTION 34. Disloyalty of a Director. - Where a director, by virtue of his office, acquires for himself a business opportunity which
should belong to the corporation, thereby obtaining profits to the prejudice of such corporation, he must account to the latter for all
such profits by refunding the same, unless his act has been ratified by a vote of the stockholders owning or representing at least
two-thirds (2/3) of the outstanding capital stock. This provision shall be applicable, notwithstanding the fact that the director risked
his own funds in the venture.

SECTION 144. Violations of the Code. - Violations of any of the provisions of this Code or its amendments not otherwise specifically
penalized therein shall be punished by a fine of not less than one thousand (1,000.00) pesos but not more than ten thousand
(10,000.00) pesos or by imprisonment for not Jess than thirty (30) days but not more than five (5) years, or both, in the discretion
of the court. If the violation is committed by a corporation, the same may, after notice and hearing, be dissolved in appropriate
proceedings before the Securities and Exchange Commission: Provided, That such dissolution shall not preclude the institution of
appropriate action against the director, trustee or officer of the corporation responsible for said violation: Provided, further, That
nothing in this section shall be construed to repeal the other causes for dissolution of a corporation provided in this Code.

Petitioners posit that Section 144 only applies to the provisions of the Corporation Code or its amendments "not otherwise
specifically penalized" by said statute and should not cover Sections 31 and 34 which both prescribe the "penalties" for their
violation; namely, damages, accounting and restitution of profits. On the other hand, respondent and the appellate court have taken
the position that the term "penalized" under Section 144 should be interpreted as referring to criminal penalty, such as fine or
imprisonment, and that it could not possibly contemplate "civil" penalties such as damages, accounting or restitution.

As Section 144 speaks, among others, of the imposition of criminal penalties, the Court is guided by the elementary rules of
statutory construction of penal provisions. First, in all criminal prosecutions, the existence of criminal liability for which the accused
is made answerable must be clear and certain. We have consistently held that "penal statutes are construed strictly against the State
and liberally in favor of the accused. When there is doubt on the interpretation of criminal laws, all must be resolved in favor of the
accused. Since penal laws should not be applied mechanically, the Court must determine whether their application is consistent with
the purpose and reason of the law."48

Intimately related to the in dubio pro reo49principle is the rule of lenity. The rule applies when the court is faced with two possible
interpretations of a penal statute, one that is prejudicial to the accused and another that is favorable to him. The rule calls for the
adoption of an interpretation which is more lenient to the accused. 50

In American jurisprudence, there are two schools of thought regarding the application of the rule of lenity. Justice David Souter,
writing for the majority in United States v. R.L.C.,51refused to resort to the rule and held that lenity is reserved "for those situations
in which a reasonable doubt persists about a statute's intended scope even after resort to 'the language and structure, legislative
history, and motivating policies' of the statute." Justice Antonin Scalia, although concurring in part and concurring in the judgment,
argued that "it is not consistent with the rule of lenity to construe a textually ambiguous penal statute against a criminal defendant
on the basis of legislative history... The rule of lenity, in my view, prescribes the result when a criminal statute is ambiguous: The
more lenient interpretation must prevail."52 In other words, for Justice Scalia, textual ambiguity in a penal statute suffices for the
rule of lenity to be applied. Although foreign case law is merely persuasive authority and this Court is not bound by either legal
perspective expounded in United States v. R.L.C., said case provides a useful framework in our own examination of the scope and
application of Section 144.

After a meticulous consideration of the arguments presented by both sides, the Court comes to the conclusion that there is textual
ambiguity in Section 144; moreover, such ambiguity remains even after an examination of its legislative history and the use of other
aids to statutory construction, necessitating the application of the rule of lenity in the case at bar.
Respondent urges this Court to strictly construe Section 144 as contemplating only penal penalties. However, a perusal of Section
144 shows that it is not a purely penal provision. When it is a corporation that commits a violation of the Corporation Code, it may
be dissolved in appropriate proceedings before the Securities and Exchange Commission. The involuntary dissolution of an erring
corporation is not imposed as a criminal sanction,53 but rather it is an administrative penalty.

The ambivalence in the language of Section 144 becomes more readily apparent in comparison to the penal provision 54 in Republic
Act No. 8189 (The Voter's Registration Act of 1996), which was the subject of our decision in Romualdez v. Commission on
Elections.55In that case, we upheld the constitutionality of Section 45(j) of Republic Act No. 8189 which made any violation of said
statute a criminal offense. It is respondent's opinion that the penal clause in Section 144 should receive similar treatment and be
deemed applicable to any violation of the Corporation Code. The Court cannot accept this proposition for there are weighty reasons
to distinguish this case from Romualdez.

We find it apropos to quote Sections 45 and 46 of Republic Act No. 8189 here:

SECTION 45. Election Qffense. - The following shall be considered election offenses under this Act:

a) to deliver, hand over, entrust or give, directly or indirectly, his voter's identification card to another in consideration of money or
other benefit or promise; or take or accept such voter's identification card, directly or indirectly, by giving or causing the giving of
money or other benefit or making or causing the making of a promise therefor;

b) to fail, without cause, to post or give any of the notices or to make any of the reports required under this Act;

c) to issue or cause the issuance of a voter's identification number to cancel or cause the cancellation thereof in violation of the
provisions of this Act; or to refuse the issuance of registered voters their voter's identification card;

d) to accept an appointment, to assume office and to actually serve as a member of the Election Registration Board although
ineligible thereto; to appoint such ineligible person knowing him to be ineligible;

e) to interfere with, impede, abscond for purposes of gain or to prevent the installation or use of computers and devices and the
processing, storage, generation and transmission of registration data or information;

f) to gain, cause access to, use, alter, destroy, or disclose any computer data, program, system software, network, or any computer-
related devices, facilities, hardware or equipment, whether classified or declassified;

g) failure to provide certified voters and deactivated voters list to candidates and heads or representatives of political parties upon
written request as provided in Section 30 hereof;

h) failure to include the approved application form for registration of a qualified voter in the book of voters of a particular precinct
or the omission of the name of a duly registered voter in the certified list of voters of the precinct where he is duly registered
resulting in his failure to cast his vote during an election, plebiscite, referendum, initiative and/or recall. The presence of the form or
name in the book of voters or certified list of voters in precincts other than where he is duly registered shall not be an excuse hereof;

i) The posting of a list of voters outside or at the door of a precinct on the day of an election, plebiscite, referendum, initiative
and/or recall and which list is different in contents from the certified list of voters being used by the Board of Election Inspectors;
and

j) Violation of any of the provisions of this Act.

SECTION 46. Penalties. - - Any person found guilty of any Election offense under this Act shall be punished with imprisonment of not
less than one (1) year but not more than six (6) years and shall not be subject to probation. In addition, the guilty party shall be
sentenced to suffer disqualification to hold public office and deprivation of the right of suffrage. If he is a foreigner, he shall be
deported after the prison term has been served. Any political party found guilty shall be sentenced to pay a fine of not less than One
hundred thousand pesos (100,000) but not more than Five hundred thousand pesos (500,000).
The crux of the Court's ruling in Romualdez is that, from the wording of Section 450), there is a clear legislative intent to treat as an
election offense any violation of the provisions of Republic Act No. 8189. For this reason, we do not doubt that Section 46
contemplates the term "penalty" primarily in the criminal law or punitive concept of the term.

There is no provision in the Corporation Code using similarly emphatic language that evinces a categorical legislative intent to treat
as a criminal offense each and every violation of that law. Consequently, there is no compelling reason for the Court to construe
Section 144 as similarly employing the term "penalized" or "penalty" solely in terms of criminal liability.

In People v. Temporada, 56 we held that in interpreting penal laws, "words are given their ordinary meaning and that any reasonable
doubt about the meaning is decided in favor of anyone subjected to a criminal statute." Black's Law Dictionary recognizes the
numerous conceptions of the term penalty and discusses in part that it is "[a]n elastic term with many different shades of meaning;
it involves idea of punishment, corporeal or pecuniary, or civil or criminal, although its meaning is generally confined to pecuniary
punishment."57 Persuasively, in Smith v. Doe,58the U.S. Supreme Court, interpreting a statutory provision that covers both punitive
and non-punitive provisions, held that:

The location and labels of a statutory provision do not by themselves transform a civil remedy into a criminal one. In 89
Firearms, the Court held a forfeiture provision to be a civil sanction even though the authorizing statute was in the criminal code.
The Court rejected the argument that the placement demonstrated Congress' "intention to create an additional criminal sanction,"
observing that "both criminal and civil sanctions may be labeled 'penalties.'" (Emphasis supplied.)

Giving a broad and flexible interpretation to the term "penalized" in Section 144 only has utility if there are provisions in the
Corporation Code that specify consequences other than "penal" or "criminal" for violation of, or non-compliance with, the tenets of
the Code. Petitioners point to the civil liability prescribed in Sections 31 and 34. Aside from Sections 31 and 34, we consider these
provisions of interest:

SECTION 21. Corporation by Estoppel. - All persons who assume to act as a corporation knowing it to be without authority to do so
shall be liable as general partners for all debts, liabilities and damages incurred or arising as a result thereof: Provided,
however, That when any such ostensible corporation is sued on any transaction entered by it as a corporation or on any tort
committed by it as such, it shall not be allowed to use as a defense its lack of corporate personality.

One who assumes an obligation to an ostensible corporation as such, cannot resist performance thereof on the ground that there
was in fact no corporation.

SECTION 22. Effects of non-use of corporate charter and continuous inoperation of a corporation. - If a corporation does not formally
organize and commence the transaction of its business or the construction of its works within two (2) years from the date of its
incorporation, its corporate powers cease and the corporation shall be deemed dissolved. However, if a corporation has
commenced the transaction of its business but subsequently becomes continuously inoperative for a period of at least five (5) years,
the same shall be a ground for the suspension or revocation of its corporate franchise or certificate of incorporation.

This provision shall not apply if the failure to organize, commence the transaction of its business or the construction of its works, or
to continuously operate is due to causes beyond the control of the corporation as may be determined by the Securities and
Exchange Commission.

SECTION 65. Liability of directors for watered stocks. - Any director or officer of a corporation consenting to the issuance of stocks
for a consideration less than its par or issued value or for a consideration in any form other than cash, valued in excess of its fair
value, or who, having knowledge thereof, does not forthwith express his objection in writing and file the same with the corporate
secretary, shall be solidarily liable with the stockholder concerned to the corporation and its creditors for the difference between
the fair value received at the time of issuance of the stock and the par or issued value of the same.

SECTION 66. Interest on unpaid subscriptions. - Subscribers for stock shall pay to the corporation interest on all unpaid
subscriptions from the date of subscription, if so required by, and at the rate of interest fixed in, the by-laws. If no rate of interest is
fixed in the bylaws, such rate shall be deemed to be the legal rate.

SECTION 67. Payment of balance of subscription. - Subject to the provisions of the contract of subscription, the board of directors of
any stock corporation may at any time declare due and payable to the corporation unpaid subscriptions to the capital stock and may
collect the same or such percentage of said unpaid subscriptions, in either case with interest accrued, if any, as it may deem
necessary.
Payment of any unpaid subscription or any percentage thereof, together with the interest accrued, if any, shall be made on the date
specified in the contract of subscription or on the date stated in the call made by the board. Failure to pay on such date shall render
the entire balance due and payable and shall make the stockholder liable for interest at the legal rate on such balance, unless a
different rate of interest is provided in the by-laws, computed from such date until full payment. If within thirty (30) days from the
said date no payment is made, all stocks covered by said subscription shall thereupon become delinquent and shall be subject to
sale as hereinafter provided, unless the board of directors orders otherwise.

SECTION 74. Books to be kept; stock transfer agent. - Every corporation shall, at its principal office, keep and carefully preserve a
record of all business transactions, and minutes of all meetings of stockholders or members, or of the board of directors or trustees,
in which shall be set forth in detail the time and place of holding the meeting, how authorized, the notice given, whether the
meeting was regular or special, if special its object, those present and absent, and every act done or ordered done at the meeting.
Upon the demand of any director, trustee, stockholder or member, the time when any director, trustee, stockholder or member
entered or left the meeting must be noted in the minutes; and on a similar demand, the yeas and nays must be taken on any motion
or proposition, and a record thereof carefully made. The protest of any director, trustee, stockholder or member on any action or
proposed action must be recorded in full on his demand.

The records of all business transactions of the corporation and the minutes of any meeting shall be open to the inspection of any
director, trustee, stockholder or member of the corporation at reasonable hours on business days and he may demand, in writing,
for a copy of excerpts from said records or minutes, at his expense.

Any officer or agent of the corporation who shall refuse to allow any director, trustee, stockholder or member of the corporation
to examine and copy excerpts from its records or minutes, in accordance with the provisions of this Code, shall be liable to such
director, trustee, stockholder or member for damages, and in addition, shall be guilty of an offense which shall be punishable
under Section 144 of this Code: Provided, That if such refusal is pursuant to a resolution or order of the board of directors or
trustees, the liability under this section for such action shall be imposed upon the directors or trustees who voted for such refusal:
and Provided, further, That it shall be a defense to any action under this section that the person demanding to examine and copy
excerpts from the corporation's records and minutes has improperly used any information secured through any prior examination of
the records or minutes of such corporation or of any other corporation, or was not acting in good faith or for a legitimate purpose in
making his demand.

Stock corporations must also keep a book to be known as the "stock and transfer book", in which must be kept a record of all stocks
in the names of the stockholders alphabetically arranged; the installments paid and unpaid on all stock for which subscription has
been made, and the date of payment of any installment; a statement of every alienation, sale or transfer of stock made, the date
thereof, and by and to whom made; and such other entries as the by-laws may prescribe. The stock and transfer book shall be kept
in the principal office of the corporation or in the office of its stock transfer agent and shall be open for inspection of any director or
stockholder of the corporation at reasonable hours on business days.

No stock transfer agent or one engaged principally in the business of registering transfer of stocks in behalf of a stock corporation
shall be allowed to operate in the Philippines unless he secures a license from the Securities and Exchange Commission and pays a
fee as may be fixed by the Commission, which shall be renewed annually: Provided, That a stock corporation is not precluded from
performing or making transfer of its own stocks, in which case all the rules and regulations imposed on stock transfer agents, except
the payment of a license fee herein provided, shall be applicable.

Section 22 imposes the penalty of involuntary dissolution for non-use of corporate charter. The rest of the above-quoted provisions,
like Sections 31 and 34, provide for civil or pecuniary liabilities for the acts covered therein but what is significant is the fact that, of
all these provisions that provide for consequences other than penal, only Section 74 expressly states that a violation thereof is
likewise considered an offense under Section 144. If respondent and the Court of Appeals are correct, that Section 144 automatically
imposes penal sanctions on violations of provisions for which no criminal penalty was imposed, then such language in Section 74
defining a violation thereof as an offense would have been superfluous. There would be no need for legislators to clarify that, aside
from civil liability, violators of Section 7 4 are exposed to criminal liability as well. We agree with petitioners that the lack of specific
language imposing criminal liability in Sections 31 and 34 shows legislative intent to limit the consequences of their violation to the
civil liabilities mentioned therein. Had it been the intention of the drafters of the law to define Sections 31 and 34 as offenses, they
could have easily included similar language as that found in Section 74.

If we were to employ the same line of reasoning as the majority in United States v. R.L.C., would the apparent ambiguities in the text
of the Corporation Code disappear with an analysis of said statute's legislative history as to warrant a strict interpretation of its
provisions? The answer is a negative.
In his sponsorship speech of Cabinet Bill (C.B.) No. 3 (the bill that was enacted into the Corporation Code), then Minister Estelito
Mendoza highlighted Sections 31 to 34 as among the significant innovations made to the previous statute (Act 1459 or the
Corporation Law), thusly:

There is a lot of jurisprudence on the liability of directors, trustees or officers for breach of trust or acts of disloyalty to the
corporation. Such jurisprudence is not, of course, without any ambiguity of dissent. Sections 31, 32, 33 and 34 of the code indicate in
detail prohibited acts in this area as well as consequences of the performance of such acts or failure to perform or discharge the
responsibility to direct the affairs of the corporation with utmost fidelity. 50

Alternatively stated, Sections 31 to 34 were introduced into the Corporation Code to define what acts are covered, as well as the
consequences of such acts or omissions amounting to a failure to fulfil a director's or corporate officer's fiduciary duties to the
corporation. A closer look at the subsequent deliberations on C.B. No. 3, particularly in relation to Sections 31 and 34, would show
that the discussions focused on the civil liabilities or consequences prescribed in said provisions themselves. We quote the pertinent
portions of the legislative records:

On Section 31

(Period of Sponsorship, December 4, 1979 Session)

MR. LEGASPI. x x x.

In Section 31 page 22, it seems that the proviso is to make the directors or the trustees who willfully and knowingly vote for or
assent to patently unlawful act or guilty of gross negligence or bad faith in directing the affairs of the corporation would
be solidarily liable with the officers concerned.

Now, would this, Your Honor, not discourage the serving of competent people as members of the Board of Directors, considering
that they might feel that in the event things would do badly against the corporation, they might be held liable personally for acts
which should be attributed only to the corporation?

MR. MENDOZA. Your Honor will note that the directors or trustees who are held liable must be proven to have acted willfully and
knowingly, or if not willfully and knowingly, it must be proven that they acted with gross negligence or bad faith. It must also be
demonstrated that the acts done were patently unlawful. So, the requirement for liability is somewhat serious to the point of: in my
opinion, being extreme. It will be noted that this provision does not merely require assenting to patently unlawful acts. It does not
merely require being negligent. The provision requires that they assent to patently unlawful acts willfully and with knowledge of the
illegality of the act.

Now, it might be true, as Your Honor suggested, that some persons will be discouraged or disinclined to agree to serve the Board of
Directors because of this liability. But at the same time this provision - Section 31 - is really no more than a consequence of the
requirement that the position of membership in the Board of Directors is a position of high responsibility and great trust. Unless a
provision such as this is included, then that requirement of responsibility and trust will not be as meaningful as it should be. For after
all, directors may take the attitude that unless they themselves commit the act, they would not be liable. But the responsibility of a
director is not merely to act properly. The responsibility of a director is to assure that the Board of Directors, which means his
colleagues acting together, does not act in a manner that is unlawful or to the prejudice of the corporation because of personal or
pecuniary interest of the directors.60 (Emphases supplied.)

(Period of Amendments, March 11, 1980 Session)

MR. MILLORA. On line 16, Section 31, referring to the phrase "patently unlawful acts." Before J introduce my proposed amendment
to delete the word "patently" is there a reason for placing this adjective before the word "unlawful", Your Honor?

MR. ABELLO. Probably the one who prepared this original draft of Cabinet Bill No. 3 wanted to make sure that a director or trustee is
not [made] liable for an act that is not clearly unlawful, so he used a better word than "clearly," he used the word "patently."

MR. MILLORA. So, in that case, Your Honor, a director may not be liable for certain unlawful acts. Is that right, Your Honor?
MR. ABELLO. Yes, if it is not patently unlawful. Precisely, the use of the word "patently" is also to give some kind of protection to
the directors or trustees. Because if you will hold the directors or trustees responsible for everything, then no one will serve as
director or trustee of any corporation. But, he is made liable so long as he willfully and knowingly votes for or assent to patently
unlawful acts of the corporation. So it is also to protect the director [or] trustees from liability for acts that was not patently
unlawful.

MR. MILLORA. With that explanation, Your Honor, I will not proceed with my proposed amendment.61

On Section 34

(Period of Sponsorship, November 5, 1979 Session)

MR. NUEZ. x x x

May I go now to page 24, Section 34.

"Disloyalty of a Director -- Where a director by virtue of his office acquires for himself a business opportunity which should belong to
the corporation thereby obtaining profits to the prejudice of the corporation, he must account to the latter for all such profits,
unless his act has been ratified by a vote of the stockholders owning or representing at least two-thirds (2/3) of the outstanding
capital stock. This provision shall be applicable notwithstanding the fact that the director risked his own funds in the venture."

My question, Your Honor, is: is this not the so-called corporate opportunity doctrine found in the American jurisprudence?

MR. MENDOZA. Yes, Mr. Speaker, as I stated many of the changes that have been incorporated in the Code were drawn from
jurisprudence on the matter, but even jurisprudence on several matters or several issues relating to the Corporation Code are
sometimes ambiguous, sometimes controversial. In order, therefore, to clarify those issues, what was done was to spell out in
statutory language the rule that should be applied on those matters and one of such examples is Section 34.

MR. NUEZ. Does not His Honor believe that to codify this particular document into law may lead to absurdity or confusion as the
cited doctrine is subject to many qualifications depending on the peculiar nature of the case?

Let us suppose that there is a business opportunity that the corporation did not take advantage of or was not interested in. Would
you hold the director responsible for acquiring the interest despite the fact that the corporation did not take advantage of or was
not interested in that particular business venture? Does not His Honor believe that this should be subject to qualifications and
should be dealt with on a case-to-case basis depending on the circumstances of the case?

MR. MENDOZA. If a director is prudent or wise enough, then he can protect himself in such contingency. If he is aware of a business
opportunity, he can make it known to the corporation, propose it to the corporation, and allow the corporation to reject it, after
which he, certainly, may avail of it without risk of the consequences provided for in Section 34.

MR. NUEZ. I see. So that the position of Your Honor is that the matter should be communicated to the corporation, the matter of
the director acquiring the business opportunity should be communicated to the corporation and that if it is not communicated to
the corporation, the director will be responsible. Is that the position of His Honor?

MR. MENDOZA. In my opinion it must not only be made known to the corporation; the corporation must be formally advised and if
he really would like to be assured that he is protected against the consequences provided for in Section 34, he should take such
steps whereby the opportunity is clearly presented to the corporation and the corporation has the opportunity to decide on
whether to avail of it or not and then let the corporation reject it, after which then he may avail of it. Under such circumstances I do
not believe he would expose himself to the consequences provided for under Section 34.

Precisely, the reason we have laid down this ruling in statutory language is that for as long as the rule is not clarified there will be
ambiguity in the matter. And directors of corporations who may acquire knowledge of such opportunities would always be risking
consequences not knowing how the courts will later on decide such issues. But now with the statutory rule, any director who
comes to know of an opportunity that may be available to the corporation would be aware of the consequences in case he avails
of' that opportunity without giving the corporation the privilege of deciding beforehand on whether to take advantage of it or not.
MR. NUEZ. Let us take the case of a corporation where, from all indications, the corporation was aware of this business
opportunity and despite this fact, Your Honor, and the failure of the director to communicate the venture to the corporation, the
director entered into the business venture. Is the director liable, Your Honor, despite the fact that the corporation has knowledge,
Your Honor, from all indications, from all facts, from all circumstances of the case, the corporation is aware?

MR. MENDOZA. First of all, to say that a corporation has knowledge is itself a point that can be subject of an argument. When does a
corporation have knowledge - when its president comes to know of the fact, when its general manager knows of the fact, when one
or two of the directors know of that fact, when a majority of the directors come to know of that fact? So that in itself is a matter of
great ambiguity, when one says it has knowledge.

That is why when I said that a prudent director, who would assure that he does not become liable under Section 34, should not
only be sure that the corporation has official knowledge, that is, the Board of Directors, but must take steps, positive steps, which
will demonstrate that the matter or opportunity \Vas brought before the corporation for its decision whether to avail of it or not,
and the corporation rejected it.

So, under those circumstances narrated by Your Honor, it is my view that the director will be liable, unless his acts are ratified later
by the vote of stockholders holding at least 2/3 of the outstanding capital stock.

MR. NUEZ. Your Honor has already raised the possible complications that may arise out of this particular provision. My question is:
how can we remedy the situation? Is there a necessity, Your Honor, of a formal notice to the corporation that it should be placed in
the agenda, in a meeting or a special 01 regular meeting of the corporation that such a business venture exists, that the corporation
should take advantage of this business venture before a director can be held not responsible for acquiring this business venture?

MR. MENDOZA. Well, I believe, as I have stated, Mr. Speaker, that is what a prudent director should do. If he does not wish to be in
any way handicapped in availing of business opportunities, he should, to the same degree, be circumspect in accepting directorships
in corporations. If he wants to be completely free to avail of any opportunity which may come his way, he should not accept the
position of director in any corporation which he may anticipate may be dealing in a business in connection with which he may
acquire a certain interest.

The purpose of all these provisions is to assure that directors or corporations constantly not only constantly remember
but actually are imposed with certain positive obligations that at least would assure that they will discharge their responsibilities
with utmost fidelity. 62

(December 5, 1979 Session)

MR. CAMARA. Thank you, Your Honor. May we go to page 24, lines 1 to 20, Section 34 - Disloyalty of a director.

Your Honor, it is provided that a director, who by virtue of his office acquires for himself a business opportunity which should belong
to the corporation thereby obtaining profits to the prejudice of such corporation, must account to the corporation for all such profits
unless his act has been ratified by a vote of the stockholders owning or representing at least two-thirds (2/3) of the outstanding
capital stock.

However, Your Honor, the right to ratification would serve to defeat the intention of this provision. This is possible if the director or
officer is the controlling stockholder.

It is, therefore, suggested, Your Honor, that the twenty per cent (20%) stockholding limit be applied here in which case, over twenty
per cent limit, said director or officer is disallowed to participate in the ratification. And this is precisely the point I was driving at in
the previous section, Your Honor.

MR. ABELLO. Your Honor, I see the point that Your Honor has raised and that will be considered by the committee at an appropriate
time.

MR. CAMARA. Thank you, Your Honor.

Further, under the same provision, it is not clear as to what "account to the corporation" means or what it includes. Is the
offender liable for the profits in favor of the corporation?
MR. ABELLO. Yes, that is what it means.

MR. CAMARA. Or he be merely made to account?

MR. ABELLO. Well, Your Honor, when the law says "'He must account to the latter for an such profits," that means that he is liable
to the corporation for such profits.

MR. CAMARA. Who gets the profits then, Your Honor?

MR. ABELLO. The corporation itself.

MR. CAMARA. The corporation?

MR. ABELLO. Correct.

MR. CAMARA. Thank you, Your Honor.

Supposing under the same section, Your Honor, the director took the opportunity after resigning as director or officer? It is
suggested, Your Honor, that this should be clarified because the resigning director can take the opportunity of this transaction
before he resigns.

MR. ABELLO. If Your Honor refers to the fact that he took that opportunity while he was a director, Section 34, would apply. But if
the action was made after his resignation as a director of the corporation, then Section 34 would not apply. 63

(Period of Amendments, March 11, 1980 Session)

MR. CAMARA. This is on Section 34, page 24, line 15, I propose to insert between the word "profits'' and the comma (,) the words BY
REFUNDING THE SAME. So that the first sentence, lines 11 to 18 of said section, as modified, shall read as follows:

"SEC. 34. Disloyalty of a director. - Where a director by virtue of his office acquires for himself a business opportunity which should
belong to the corporation thereby obtaining profits to the prejudice of such corporation, he must account to the latter for all such
profits BY REFUNDING THE SAME, unless his act has been ratified by a vote of the stockholders owning or representing at least two-
thirds (2/3) of the outstanding capital stock."

The purpose of this amendment, Mr. Speaker, is to clarify as to what to account to the corporation.

MR. ABELLO. Mr. Speaker, the committee accepts the amendment. 64 (Emphases and underscoring supplied.)

Verily, in the instances that Sections 31 and 34 were taken up on the floor, legislators did not veer away from the civil consequences
as stated within the four comers of these provisions. Contrasted with the interpellations on Section 74 (regarding the right to inspect
the corporate records), the discussions on said provision leave no doubt that legislators intended both civil and penal liabilities to
attach to corporate officers who violate the same, as was repeatedly stressed in the excerpts from the legislative record quoted
below:

On Section 74:

(Period of Sponsorship, December 10, 1979 Session)

MR. TUPAZ. x x x I guess, Mr. Speaker, that the distinguished sponsor has in mind a particular situation where a minority shareholder
is one of the thousands of shareholders. But I present a situation, Your Honor, where the minority is 49% owner of a corporation and
here comes this minority shareholder wanting, but a substantial minority, and yet he cannot even have access to the records of this
corporation over which he owns almost one-half because, precisely, of this particular provision of law.65

MR. MENDOZA. He will not have access if the grounds expressed in the proviso are present. It must also be noted, Mr. Speaker, that
the provision before us would, let us say, make it very difficult for corporate officers to act unreasonably because they are not
only subject to a suit which would compel them to allow the access to corporate records, they are also liable for damages and are
in fact guilty of a penal act under Section 143.66

MR. TUPAZ. That is correct, Your Honor.

MR. MENDOZA. So that when corporate officers deny access to a shareholder, they do so under very serious consequences. If they
should err in making that decision and it is demonstrated that they have erred deliberately, they expose themselves
to damages and even to certain penal sanctions.

xxxx

As I said, Your Honor, I think it is fair enough to assume that persons do not act deliberately in bad faith, that they do not act
deliberately to expose themselves to damages, or to penal sanctions. In the ultimate, I would agree that certain decisions may be
unnecessarily harsh and prejudicial. But by and large, I think, the probabilities are in favor of a decision being reasonable and in
accord with the interest of the corporation.67 (Emphases and underscoring supplied.)

Quite apart that no legislative intent to criminalize Sections 31 and 34 was manifested in the deliberations on the Corporation Code,
it is noteworthy from the same deliberations that legislators intended to codify the common law concepts of corporate opportunity
and fiduciary obligations of corporate officers as found in American jurisprudence into said provisions. In common law, the remedies
available in the event of a breach of director's fiduciary duties to the corporation are civil remedies. If a director or officer is found to
have breached his duty of loyalty, an injunction may be issued or damages may be awarded. 68 A corporate officer guilty of fraud or
mismanagement may be held liable for lost profits. 69 A disloyal agent may also suffer forfeiture of his compensation. 70 There is
nothing in the deliberations to indicate that drafters of the Corporation Code intended to deviate from common law practice and
enforce the fiduciary obligations of directors and corporate officers through penal sanction aside from civil liability. On the contrary,
there appears to be a concern among the drafters of the Corporation Code that even the imposition of the civil sanctions under
Section 31 and 34 might discourage competent persons from serving as directors in corporations.

In Crandon v. United States,71the U.S. Supreme Court had the occasion to state that:

In determining the meaning of the statute, we look not only to the particular statutory language, but to the design of the statute
as a whole and to its object and policy. Moreover, because the governing standard is set forth in a criminal statute, it is appropriate
to apply the rule of lenity in resolving any ambiguity in the ambit of the statute's coverage. To the extent that the language or
history of [the statute] is uncertain, this "time-honored interpretive guideline" serves to ensure both that there is fair warning of the
boundaries of criminal conduct and that legislatures, not courts, define criminal liability. (Citations omitted; emphases supplied.)

Under the circumstances of this case, we are convinced to adopt a similar view. For this reason, we take into account the avowed
legislative policy in the enactment of the Corporation Code as outlined in the Sponsorship Speech of Minister Mendoza:

Cabinet Bill No. 3 is entitled "The Corporation Code of the Philippines." Its consideration at this time in the history of our nation
provides a fitting occasion to remind that under our Constitution the economic system known as "free enterprise" is recognized
and protected. We acknowledge as a democratic republic that the individual must be free and that as a free man - "free to choose
his work and to retain the fruits of his labor" - he may best develop his capabilities and will produce and supply the economic needs
of the nation.

xxxx

The formation and organization of private corporations, and I underscore private corporations as distinguished from corporations
owned or controlled by the government or any subdivision or instrumentality thereof, gives wider dimensions to free enterprise or
free trade. For not only is the right of individuals to organize collectively recognized; the collective organization is vested with a
juridical personality distinct from their own. Thus "the skill, dexterity, and judgment" of a nation's labor force need not be
constricted in their application to those of an individual or that which he alone may assemble but to those of a collective
organization.

While a code, such as the proposed code now before us, may appear essentially regulatory in nature, it does not, and is not
intended, to curb or stifle the use of the corporate entity as a business organization. Rather, the proposed code recognizes the
value, and seeks to inspire confidence in the value of the corporate vehicle in the economic life of society. 72 (Emphases supplied.)
The Corporation Code was intended as a regulatory measure, not primarily as a penal statute. Sections 31 to 34 in particular were
intended to impose exacting standards of fidelity on corporate officers and directors but without unduly impeding them in the
discharge of their work with concerns of litigation. Considering the object and policy of the Corporation Code to encourage the use
of the corporate entity as a vehicle for economic growth, we cannot espouse a strict construction of Sections 31 and 34 as penal
offenses in relation to Section 144 in the absence of unambiguous statutory language and legislative intent to that effect.

When Congress intends to criminalize certain acts it does so in plain, categorical language, otherwise such a statute would be
susceptible to constitutional attack. As earlier discussed, this can be readily seen from the text of Section 450) of Republic Act No.
8189 and Section 74 of the Corporation Code.

We stress that had the Legislature intended to attach penal sanctions to Sections 31 and 34 of the Corporation Code it could have
expressly stated such intent in the same manner that it did for Section 74 of the same Code.

At this point, we dispose of some related arguments raised in the pleadings. We do not agree with respondent Tullett that previous
decisions of this Court have already settled the matter in controversy in the consolidated cases at bar. The declaration of the Court
in Home Insurance Company v. Eastern Shipping Lines73that "[t]he prohibition against doing business without first securing a license
[under Section 133] is now given penal sanction which is also applicable to other violations of the Corporation Code under the
general provisions of Section 144 of the Code" is unmistakably obiter dictum. We explained in another case:

An obiter dictum has been defined as an opinion expressed by a court upon some question of law that is not necessary in the
determination of the case before the court. It is a remark made, or opinion expressed, by a judge, in his decision upon a cause by the
way, that is, incidentally or collaterally, and not directly upon the question before him, or upon a point not necessarily involved in
the determination of the cause, or introduced by way of illustration, or analogy or argument. It does not embody the resolution or
determination of the court, and is made without argument, or full consideration of the point. It lacks the force of an adjudication,
being a mere expression of an opinion with no binding force for purposes of res judicata.74(Emphasis supplied.)

The issue in the Home Insurance Company case was whether or not a foreign corporation previously doing business here without a
license has the capacity to sue in our courts when it had already acquired the necessary license at the time of the filing of the
complaints. The Court ruled in the affirmative. The statement regarding the supposed penal sanction for violation of Section 133 of
the Corporation Code was not essential to the resolution of the case as none of the parties was being made criminally liable under
Section 133.

As for respondent's allusion to Genuino v. National Labor Relations Commission, 75 we find the same unavailing. Genuino involved
the appeal of an illegal dismissal case wherein it was merely mentioned in the narration of facts that the employer-bank also filed
criminal complaints against its dismissed corporate officers for alleged violation of Section 31 in relation to Section 144 of the
Corporation Code. The interpretation of said provisions of the Corporation Code in the context of a criminal proceeding was not at
issue in that case.

As additional support for its contentions, respondent cites several opinions of the SEC, applying Section 144 to various violations of
the Corporation Code in the imposition of graduated fines. In respondent's view, these opinions show a consistent administrative
interpretation on the applicability of Section 144 to the other provisions of the Corporation Code and allegedly render absurd
petitioners' concern regarding the "over-criminalization" of the Corporation Code. We find respondent's reliance on these SEC
opinions to be misplaced. As petitioners correctly point out, the fines imposed by the SEC in these instances of violations of the
Corporation Code are in the nature of administrative fines and are not penal in nature. Without ruling upon the soundness of the
legal reasoning of the SEC in these opinions, we note that these opinions in fact support the view that even the SEC construes
"penalty" as used in Section 144 as encompassing administrative penalties, not only criminal sanctions. In all, these SEC issuances
weaken rather than strengthen respondent's case.

With respect to the minutiae of other arguments cited in the parties' pleadings, it is no longer necessary for the Court to pass upon
the same in light of our determination that there is no clear, categorical legislative intent to define Sections 31 and 34 as offenses
under Section 144 of the Corporation Code. We likewise refrain from resolving the question on the constitutionality of Section 144
of the Corporation Code. It is a long standing principle in jurisprudence that "courts will not resolve the constitutionality of a law, if
the controversy can be settled on other grounds. The policy of the courts is to avoid ruling on constitutional questions and to
presume that the acts of the political departments are valid, absent a clear and unmistakable showing to the contrary." 76
WHEREFORE, the consolidated petitions are GRANTED. The Decision dated August 12, 2009 of the Court of Appeals in CA-G.R. SP
No. 109094 and the Resolutions dated April 23, 2009 and May 15, 2009 of the Secretary of Justice in I.S. No. 08-J-8651
are REVERSED and SET ASIDE.

SO ORDERED.

TERESITA J. LEONARDO-DE CASTRO

Associate Justice

WE CONCUR:

MARIA LOURDES P.A. SERENO

Chief Justice
Chairperson

MARIANO C. DEL CASTILLO FRANCIS H. JARDELEZA*

Associate Justice Associate Justice

ALFREDO BENJAMIN S. CAGUIOA

Associate Justice

CERTIFICATION

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

MARIA LOURDES P.A. SERENO

Chief Justice
 Republic of the Philippines
SUPREME COURT
Manila

SECOND DIVISION

G.R. No. 96132 June 26, 1992

ORIEL MAGNO, petitioner,

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

PARAS, J.:

This is an appeal by certiorari under Rule 45 of the Revised Rules of Court, from the decision* of the respondent Court of Appeals
which affirmed in toto the decision of the Regional Trial Court of Quezon City, Branch 104 finding the accused petitioner, guilty of
violations of Batas Pambansa Blg. 22, in Criminal Cases Q-35693 to 35696 before they were elevated on appeal to the respondent
appellate Court under CA-G.R. CR No. 04889.

The antecedent facts and circumstances of the four (4) counts of the offense charged, have been clearly illustrated, in the Comment
of the Office of the Solicitor General as official counsel for the public respondent, thus:

Petitioner was in the process of putting up a car repair shop sometime in April 1983, but a did not have complete equipment that
could make his venture workable. He also had another problem, and that while he was going into this entrepreneurship, he lacked
funds with which to purchase the necessary equipment to make such business operational. Thus, petitioner, representing Ultra
Sources International Corporation, approached Corazon Teng, (private complainant) Vice President of Mancor Industries
(hereinafter referred to as Mancor) for his needed car repair service equipment of which Mancor was a distributor, (Rollo, pp. 40-41)

Having been approached by petitioner on his predicament, who fully bared that he had no sufficient funds to buy the equipment
needed, the former (Corazon Teng) referred Magno to LS Finance and Management Corporation (LB Finance for brevity) advising its
Vice-President, Joey Gomez, that Mancor was willing and able to supply the pieces of equipment needed if LS Finance could
accommodate petitioner and provide him credit facilities. (Ibid., P. 41)

The arrangement went through on condition that petitioner has to put up a warranty deposit equivalent to thirty per centum (30%)
of the total value of the pieces of equipment to be purchased, amounting to P29,790.00. Since petitioner could not come up with
such amount, he requested Joey Gomez on a personal level to look for a third party who could lend him the equivalent amount of
the warranty deposit, however, unknown to petitioner, it was Corazon Teng who advanced the deposit in question, on condition
that the same would be paid as a short term loan at 3% interest (Ibid., P. 41)

The specific provision in the Leasing Agreement, reads:

1.1. WARRANTY DEPOSIT Before or upon delivery of each item of Equipment, the Lessee shall deposit with the
Lessor such sum or sums specified in Schedule A to serve as security for the faithful performance of its obligations.

This deposit shall be refunded to the Lessee upon the satisfactory completion of the entire period of Lease, subject
to the conditions of clause 1.12 of this Article. (Ibid., p. 17)

As part of the arrangement, petitioner and LS Finance entered into a leasing agreement whereby LS Finance would lease the garage
equipments and petitioner would pay the corresponding rent with the option to buy the same. After the documentation was
completed, the equipment were delivered to petitioner who in turn issued a postdated check and gave it to Joey Gomez who,
unknown to the petitioner, delivered the same to Corazon Teng. When the check matured, Petitioner requested through Joey
Gomez not to deposit the check as he (Magno) was no longer banking with Pacific Bank.

To replace the first check issued, petitioner issued another set of six (6) postdated checks. Two (2) checks dated July 29, 1983 were
deposited and cleared while the four (4) others, which were the subject of the four counts of the aforestated charges subject of the
petition, were held momentarily by Corazon Teng, on the request of Magno as they were not covered with sufficient funds. These
checks were a) Piso Bank Check Nos. 006858, dated August 15, 1983, 006859 dated August 28, 1983 and 006860 dated September
15, 1983, all in the amount of P5,038.43 and No. 006861 dated September 28, 1983, in the amount of P10,076.87. (Ibid., pp. 42 &
43).

Subsequently, petitioner could not pay LS Finance the monthly rentals, thus it pulled out the garage equipments. It was then on this
occasion that petitioner became aware that Corazon Teng was the one who advanced the warranty deposit. Petitioner with his wife
went to see Corazon Teng and promised to pay the latter but the payment never came and when the four (4) checks were deposited
they were returned for the reason "account closed." (Ibid., p. 43)

After joint trial before the Regional Trial Court of Quezon City, Branch 104, the accused-petitioner was convicted for violations of BP
Blg. 22 on the four (4) cases, as follows:

. . . finding the accused-appellant guilty beyond reasonable doubt of the offense of violations of B.P. Blg. 22 and
sentencing the accused to imprisonment for one year in each Criminal Case Nos. Q-35693, Q-35695 and Q-35696
and to pay to complainant the respective amounts reflected in subject checks. (Ibid., pp. 25, 27)

Reviewing the above and the affirmation of the above-stated decision of the court a quo, this Court is intrigued about the outcome
of the checks subject of the cases which were intended by the parties, the petitioner on the one hand and the private complainant
on the other, to cover the "warranty deposit" equivalent to the 30% requirement of the financing company. Corazon Teng is one of
the officers of Mancor, the supplier of the equipment subject of the Leasing Agreement subject of the high financing scheme
undertaken by the petitioner as lessee of the repair service equipment, which was arranged at the instance of Mrs. Teng from the
very beginning of the transaction.

By the nature of the "warranty deposit" amounting to P29,790.00 corresponding to 30% of the "purchase/lease" value of the
equipments subject of the transaction, it is obvious that the "cash out" made by Mrs. Teng was not used by petitioner who was just
paying rentals for the equipment. It would have been different if petitioner opted to purchase the pieces of equipment on or about
the termination of the lease-purchase agreement in which case he had to pay the additional amount of the warranty deposit which
should have formed part of the purchase price. As the transaction did not ripen into a purchase, but remained a lease with rentals
being paid for the loaned equipment, which were pulled out by the Lessor (Mancor) when the petitioner failed to continue paying
possibly due to economic constraints or business failure, then it is lawful and just that the warranty deposit should not be charged
against the petitioner.

To charge the petitioner for the refund of a "warranty deposit" which he did not withdraw as it was not his own account, it having
remained with LS Finance, is to even make him pay an unjust "debt", to say the least, since petitioner did not receive the amount in
question. All the while, said amount was in the safekeeping of the financing company, which is managed, supervised and operated
by the corporation officials and employees of LS Finance. Petitioner did not even know that the checks he issued were turned over
by Joey Gomez to Mrs. Teng, whose operation was kept from his knowledge on her instruction. This fact alone evoke suspicion that
the transaction is irregular and immoral per se, hence, she specifically requested Gomez not to divulge the source of the "warranty
deposit".

It is intriguing to realize that Mrs. Teng did not want the petitioner to know that it was she who "accommodated" petitioner's
request for Joey Gomez, to source out the needed funds for the "warranty deposit". Thus it unfolds the kind of transaction that is
shrouded with mystery, gimmickry and doubtful legality. It is in simple language, a scheme whereby Mrs. Teng as the supplier of the
equipment in the name of her corporation, Mancor, would be able to "sell or lease" its goods as in this case, and at the same time,
privately financing those who desperately need petty accommodations as this one. This modus operandi has in so many instances
victimized unsuspecting businessmen, who likewise need protection from the law, by availing of the deceptively called "warranty
deposit" not realizing that they also fall prey to leasing equipment under the guise of a lease-purchase agreement when it is a
scheme designed to skim off business clients.

This maneuvering has serious implications especially with respect to the threat of the penal sanction of the law in issue, as in this
case. And, with a willing court system to apply the full harshness of the special law in question, using the "mala prohibitia" doctrine,
the noble objective of the law is tainted with materialism and opportunism in the highest, degree.

This angle is bolstered by the fact that since the petitioner or lessee referred to above in the lease agreement knew that the amount
of P29,790.00 subject of the cases, were mere accommodation-arrangements with somebody thru Joey Gomez, petitioner did not
even attempt to secure the refund of said amount from LS Finance, notwithstanding the agreement provision to the contrary. To
argue that after the termination of the lease agreement, the warranty deposit should be refundable in full to Mrs. Teng by petitioner
when he did not cash out the "warranty deposit" for his official or personal use, is to stretch the nicety of the alleged law (B.P. No,
22) violated.

For all intents and purposes, the law was devised to safeguard the interest of the banking system and the legitimate public checking
account user. It did not intend to shelter or favor nor encourage users of the system to enrich themselves through manipulations
and circumvention of the noble purpose and objective of the law. Least should it be used also as a means of jeopardizing honest-to-
goodness transactions with some color of "get-rich" scheme to the prejudice of well-meaning businessmen who are the pillars of
society.

Under the utilitarian theory, the "protective theory" in criminal law, "affirms that the primary function of punishment is the
protective (sic) of society against actual and potential wrongdoers." It is not clear whether petitioner could be considered as having
actually committed the wrong sought to be punished in the offense charged, but on the other hand, it can be safely said that the
actuations of Mrs. Carolina Teng amount to that of potential wrongdoers whose operations should also be clipped at some point in
time in order that the unwary public will not be failing prey to such a vicious transaction (Aquino, The Revised Penal Code, 1987
Edition, Vol. I, P. 11)

Corollary to the above view, is the application of the theory that "criminal law is founded upon that moral disapprobation . . . of
actions which are immoral, i.e., which are detrimental (or dangerous) to those conditions upon which depend the existence and
progress of human society. This disappropriation is inevitable to the extent that morality is generally founded and built upon a
certain concurrence in the moral opinions of all. . . . That which we call punishment is only an external means of emphasizing moral
disapprobation the method of punishment is in reality the amount of punishment," (Ibid., P. 11, citing People v. Roldan Zaballero, CA
54 O.G. 6904, Note also Justice Pablo's view in People v. Piosca and Peremne, 86 Phil. 31).

Thus, it behooves upon a court of law that in applying the punishment imposed upon the accused, the objective of retribution of a
wronged society, should be directed against the "actual and potential wrongdoers." In the instant case, there is no doubt that
petitioner's four (4) checks were used to collateralize an accommodation, and not to cover the receipt of an actual "account or credit
for value" as this was absent, and therefore petitioner should not be punished for mere issuance of the checks in question. Following
the aforecited theory, in petitioner's stead the "potential wrongdoer", whose operation could be a menace to society, should not be
glorified by convicting the petitioner.

While in case of doubt, the case should have been resolved in favor of the accused, however, by the open admission of the appellate
court below, oven when the ultimate beneficiary of the "warranty deposit" is of doubtful certainty, the accused was convicted, as
shown below:

Nor do We see any merit in appellant's claim that the obligation of the accused to complainant had been
extinguished by the termination of the leasing agreement by the terms of which the warranty deposit advanced
by complainant was refundable to the accused as lessee and that as the lessor L.S. Finance neither made any
liquidation of said amount nor returned the same to the accused, it may he assumed that the amount was already
returned to the complainant. For these allegations, even if true, do not change the fact, admitted by appellant and
established by the evidence, that the four checks were originally issued on account or for value. And as We have
already observed, in order that there may be a conviction under the from paragraph of Section 2 of B.P. Blg 22
with respect to the element of said offense that the check should have been made and issued on account or for
value it is sufficient, all the other elements of the offense being present, that the check must have been drawn
and issued in payment of an obligation.

Moreover, even granting, arguendo, that the extinguishment, after the issuance of the checks, of the obligation in
consideration of which the checks were issued, would have resulted in placing the case at bar beyond the purview
of the prohibition in Section 1 of BP Blg. 22, there is no satisfactory proof that there was such an extinguishment in
the present case. Appellee aptly points out that appellant had not adduced any direct evidence to prove that the
amount advanced by the complainant to cover the warranty deposit must already have been returned to her.
(Rollo, p. 30)

It is indubitable that the respondent Court of Appeals even disregarded the cardinal rule that the accused is presumed innocent until
proven guilty beyond reasonable doubt. On the contrary, the same court even expected the petitioner-appellant to adduce evidence
to show that he was not guilty of the crime charged. But how can be produce documents showing that the warranty deposit has
already been taken back by Mrs. Teng when she is an officer of Mancor which has interest in the transaction, besides being
personally interested in the profit of her side-line. Thus, even if she may have gotten back the value of the accommodation, she
would still pursue collecting from the petitioner since she had in her possession the checks that "bounced".

That the court a quo merely relied on the law, without looking into the real nature of the warranty deposit is evident from the
following pronouncement:

And the trail court concluded that there is no question that the accused violated BP Blg. 22, which is a special
statutory law, violations of which are mala prohibita. The court relied on the rule that in cases of mala prohibita,
the only inquiry is whether or not the law had been violated, proof of criminal intent not being necessary for the
conviction of the accused, the acts being prohibited for reasons of public policy and the defenses of good faith and
absence of criminal intent being unavailing in prosecutions for said offenses." (Ibid., p. 26)

The crux of the matter rests upon the reason for the drawing of the postdated checks by the petitioner, i.e., whether they were
drawn or issued "to apply on account or for value", as required under Section 1 of B.P. Blg, 22. When viewed against the following
definitions of the catch-terms "warranty" and "deposit", for which the postdated checks were issued or drawn, all the more, the
alleged crime could not have been committed by petitioner:

a) Warranty A promise that a proposition of fact is true. A promise that certain facts are truly as they are
represented to be and that they will remain so: . . . (Black's Law Dictionary, Fifth Edition, (1979) p. 1423)

A cross-reference to the following term shows:

Fitness for Particular Purpose:

Where the seller at the time of contracting has reason to know any particular purpose for which the goods are
required and that the buyer is relying on the seller's skill or judgment to select or furnish suitable goods, there is,
unless excluded or modified, an implied warranty that the goods shall be fit for such purpose, (Ibid., p. 573)

b) Deposit: Money lodged with a person as an earnest or security for the performance of some contract, to be
forfeited if the depositor fails in his undertaking. It may be deemed to be part payment and to that extent may
constitute the purchaser the actual owner of the estate.

To commit to custody, or to lay down; to place; to put. To lodge for safe- keeping or as a pledge to intrust to the
care of another.

The act of placing money in the custody of a bank or banker, for safety or convenience, to be withdrawn at the will
of the depositor or under rules and regulations agreed on. Also, the money so deposited, or the credit which the
depositor receives for it. Deposit, according to its commonly accepted and generally understood among bankers
and by the public, includes not only deposits payable on demand and for which certificates, whether interest-
bearing or not, may be issued, payable on demand, or on certain notice or at a fixed future time. (Ibid., pp. 394-
395)

Furthermore, the element of "knowing at the time of issue that he does not have sufficient funds in or credit with the drawee bank
for the payment of such check in full upon its presentment, which check is subsequently dishonored by the drawee bank for
insufficiency of funds or credit or would have been dishonored for the same reason . . . is inversely applied in this case. From the
very beginning, petitioner never hid the fact that he did not have the funds with which to put up the warranty deposit and as a
matter of fact, he openly intimated this to the vital conduit of the transaction, Joey Gomez, to whom petitioner was introduced by
Mrs. Teng. It would have been different if this predicament was not communicated to all the parties he dealt with regarding the
lease agreement the financing of which was covered by L.S. Finance Management.

WHEREFORE, the appealed decision is REVERSED and the accused-petitioner is hereby ACQUITTED of the crime charged.

SO ORDERED.
 EN BANC
[G.R. No. 148560. November 19, 2001]
JOSEPH EJERCITO ESTRADA, petitioner, vs. SANDIGANBAYAN (Third Division) and PEOPLE OF THE PHILIPPINES, respondents.

DECISION
BELLOSILLO, J.:

JOHN STUART MILL, in his essay On Liberty, unleashes the full fury of his pen in defense of the rights of the individual from the
vast powers of the State and the inroads of societal pressure. But even as he draws a sacrosanct line demarcating the limits on
individuality beyond which the State cannot tread - asserting that "individual spontaneity" must be allowed to flourish with very
little regard to social interference - he veritably acknowledges that the exercise of rights and liberties is imbued with a civic
obligation, which society is justified in enforcing at all cost, against those who would endeavor to withhold fulfillment. Thus he says -

The sole end for which mankind is warranted, individually or collectively, in interfering with the liberty of action of any of their
number, is self-protection. The only purpose for which power can be rightfully exercised over any member of a civilized community,
against his will, is to prevent harm to others.

Parallel to individual liberty is the natural and illimitable right of the State to self-preservation. With the end of maintaining the
integrity and cohesiveness of the body politic, it behooves the State to formulate a system of laws that would compel obeisance to
its collective wisdom and inflict punishment for non-observance.
The movement from Mill's individual liberalism to unsystematic collectivism wrought changes in the social order, carrying with
it a new formulation of fundamental rights and duties more attuned to the imperatives of contemporary socio-political ideologies. In
the process, the web of rights and State impositions became tangled and obscured, enmeshed in threads of multiple shades and
colors, the skein irregular and broken. Antagonism, often outright collision, between the law as the expression of the will of the
State, and the zealous attempts by its members to preserve their individuality and dignity, inevitably followed. It is when individual
rights are pitted against State authority that judicial conscience is put to its severest test.
Petitioner Joseph Ejercito Estrada, the highest-ranking official to be prosecuted under RA 7080 (An Act Defining and Penalizing
the Crime of Plunder),[1] as amended by RA 7659,[2] wishes to impress upon us that the assailed law is so defectively fashioned that it
crosses that thin but distinct line which divides the valid from the constitutionally infirm. He therefore makes a stringent call for this
Court to subject the Plunder Law to the crucible of constitutionality mainly because, according to him, (a) it suffers from the vice of
vagueness; (b) it dispenses with the "reasonable doubt" standard in criminal prosecutions; and, (c) it abolishes the element of mens
rea in crimes already punishable under The Revised Penal Code, all of which are purportedly clear violations of the fundamental
rights of the accused to due process and to be informed of the nature and cause of the accusation against him.
Specifically, the provisions of the Plunder Law claimed by petitioner to have transgressed constitutional boundaries are Secs. 1,
par. (d), 2 and 4 which are reproduced hereunder:

Section 1. x x x x (d) "Ill-gotten wealth" means any asset, property, business, enterprise or material possession of any person within
the purview of Section Two (2) hereof, acquired by him directly or indirectly through dummies, nominees, agents, subordinates
and/or business associates by any combination or series of the following means or similar schemes:

(1) Through misappropriation, conversion, misuse, or malversation of public funds or raids on the public treasury;

(2) By receiving, directly or indirectly, any commission, gift, share, percentage, kickbacks or any other form of pecuniary benefit from
any person and/or entity in connection with any government contract or project or by reason of the office or position of the public
office concerned;

(3) By the illegal or fraudulent conveyance or disposition of assets belonging to the National Government or any of its subdivisions,
agencies or instrumentalities, or government owned or controlled corporations and their subsidiaries;

(4) By obtaining, receiving or accepting directly or indirectly any shares of stock, equity or any other form of interest or participation
including the promise of future employment in any business enterprise or undertaking;
(5) By establishing agricultural, industrial or commercial monopolies or other combinations and/or implementation of decrees and
orders intended to benefit particular persons or special interests; or

(6) By taking advantage of official position, authority, relationship, connection or influence to unjustly enrich himself or themselves at
the expense and to the damage and prejudice of the Filipino people and the Republic of the Philippines.

Section 2. Definition of the Crime of Plunder, Penalties. - Any public officer who, by himself or in connivance with members of his
family, relatives by affinity or consanguinity, business associates, subordinates or other persons, amasses, accumulates or acquires ill-
gotten wealth through a combination or series of overt or criminal acts as described in Section 1 (d) hereof, in the aggregate
amount or total value of at least fifty million pesos (P50,000,000.00) shall be guilty of the crime of plunder and shall be punished by
reclusion perpetua to death. Any person who participated with the said public officer in the commission of an offense contributing to
the crime of plunder shall likewise be punished for such offense. In the imposition of penalties, the degree of participation and the
attendance of mitigating and extenuating circumstances as provided by the Revised Penal Code shall be considered by the court. The
court shall declare any and all ill-gotten wealth and their interests and other incomes and assets including the properties and shares
of stocks derived from the deposit or investment thereof forfeited in favor of the State (underscoring supplied).

Section 4. Rule of Evidence. - For purposes of establishing the crime of plunder, it shall not be necessary to prove each and every
criminal act done by the accused in furtherance of the scheme or conspiracy to amass, accumulate or acquire ill-gotten wealth, it
being sufficient to establish beyond reasonable doubt a pattern of overt or criminal acts indicative of the overall unlawful scheme
or conspiracy (underscoring supplied).

On 4 April 2001 the Office of the Ombudsman filed before the Sandiganbayan eight (8) separate Informations, docketed as: (a)
Crim. Case No. 26558, for violation of RA 7080, as amended by RA 7659; (b) Crim. Cases Nos. 26559 to 26562, inclusive, for violation
of Secs. 3, par. (a), 3, par. (a), 3, par. (e) and 3, par. (e), of RA 3019 (Anti-Graft and Corrupt Practices Act), respectively; (c) Crim.
Case No. 26563, for violation of Sec. 7, par. (d), of RA 6713 (The Code of Conduct and Ethical Standards for Public Officials and
Employees); (d) Crim. Case No. 26564, for Perjury (Art. 183 of The Revised Penal Code); and, (e) Crim. Case No. 26565, for Illegal Use
Of An Alias (CA No. 142, as amended by RA 6085).
On 11 April 2001 petitioner filed an Omnibus Motion for the remand of the case to the Ombudsman for preliminary
investigation with respect to specification "d" of the charges in the Information in Crim. Case No. 26558; and, for
reconsideration/reinvestigation of the offenses under specifications "a," "b," and "c" to give the accused an opportunity to file
counter-affidavits and other documents necessary to prove lack of probable cause. Noticeably, the grounds raised were only lack of
preliminary investigation, reconsideration/reinvestigation of offenses, and opportunity to prove lack of probable cause. The
purported ambiguity of the charges and the vagueness of the law under which they are charged were never raised in that Omnibus
Motion thus indicating the explicitness and comprehensibility of the Plunder Law.
On 25 April 2001 the Sandiganbayan, Third Division, issued a Resolution in Crim. Case No. 26558 finding that "a probable cause
for the offense of PLUNDER exists to justify the issuance of warrants for the arrest of the accused." On 25 June 2001 petitioner's
motion for reconsideration was denied by the Sandiganbayan.
On 14 June 2001 petitioner moved to quash the Information in Crim. Case No. 26558 on the ground that the facts
alleged therein did not constitute an indictable offense since the law on which it was based was unconstitutional for vagueness, and
that the Amended Information for Plunder charged more than one (1) offense. On 21 June 2001 the Government filed its Opposition
to the Motion to Quash, and five (5) days later or on 26 June 2001 petitioner submitted his Reply to the Opposition. On 9 July 2001
the Sandiganbayan denied petitioner's Motion to Quash.
As concisely delineated by this Court during the oral arguments on 18 September 2001, the issues for resolution in the instant
petition for certiorari are: (a) The Plunder Law is unconstitutional for being vague; (b) The Plunder Law requires less evidence for
proving the predicate crimes of plunder and therefore violates the rights of the accused to due process; and, (c) Whether Plunder as
defined in RA 7080 is a malum prohibitum, and if so, whether it is within the power of Congress to so classify it.
Preliminarily, the whole gamut of legal concepts pertaining to the validity of legislation is predicated on the basic principle that
a legislative measure is presumed to be in harmony with the Constitution. [3] Courts invariably train their sights on this fundamental
rule whenever a legislative act is under a constitutional attack, for it is the postulate of constitutional adjudication. This strong
predilection for constitutionality takes its bearings on the idea that it is forbidden for one branch of the government to encroach
upon the duties and powers of another. Thus it has been said that the presumption is based on the deference the judicial branch
accords to its coordinate branch - the legislature.
If there is any reasonable basis upon which the legislation may firmly rest, the courts must assume that the legislature is ever
conscious of the borders and edges of its plenary powers, and has passed the law with full knowledge of the facts and for the
purpose of promoting what is right and advancing the welfare of the majority. Hence in determining whether the acts of the
legislature are in tune with the fundamental law, courts should proceed with judicial restraint and act with caution and
forbearance. Every intendment of the law must be adjudged by the courts in favor of its constitutionality, invalidity being a measure
of last resort. In construing therefore the provisions of a statute, courts must first ascertain whether an interpretation is fairly
possible to sidestep the question of constitutionality.
In La Union Credit Cooperative, Inc. v. Yaranon [4] we held that as long as there is some basis for the decision of the court, the
constitutionality of the challenged law will not be touched and the case will be decided on other available grounds. Yet the force of
the presumption is not sufficient to catapult a fundamentally deficient law into the safe environs of constitutionality. Of course,
where the law clearly and palpably transgresses the hallowed domain of the organic law, it must be struck down on sight lest the
positive commands of the fundamental law be unduly eroded.
Verily, the onerous task of rebutting the presumption weighs heavily on the party challenging the validity of the statute. He
must demonstrate beyond any tinge of doubt that there is indeed an infringement of the
constitution, for absent such a showing, there can be no finding of unconstitutionality. A doubt, even if well-founded, will hardly
suffice. As tersely put by Justice Malcolm, "To doubt is to sustain."[5] And petitioner has miserably failed in the instant case to
discharge his burden and overcome the presumption of constitutionality of the Plunder Law.
As it is written, the Plunder Law contains ascertainable standards and well-defined parameters which would enable the
accused to determine the nature of his violation. Section 2 is sufficiently explicit inits description of the acts, conduct and conditions
required or forbidden, and prescribes the elements of the crime with reasonable certainty and particularity. Thus -

1. That the offender is a public officer who acts by himself or in connivance with members of his family, relatives by affinity or
consanguinity, business associates, subordinates or other persons;

2. That he amassed, accumulated or acquired ill-gotten wealth through a combination or series of the following overt or criminal
acts: (a) through misappropriation, conversion, misuse, or malversation of public funds or raids on the public treasury; (b) by
receiving, directly or indirectly, any commission, gift, share, percentage, kickback or any other form of pecuniary benefits from any
person and/or entity in connection with any government contract or project or by reason of the office or position of the public officer;
(c) by the illegal or fraudulent conveyance or disposition of assets belonging to the NationalGovernment or any of its subdivisions,
agencies or instrumentalities of Government owned or controlled corporations or their subsidiaries; (d) by obtaining, receiving or
accepting directly or indirectly any shares of stock, equity or any other form of interest or participation including the promise of
future employment in any business enterprise or undertaking; (e) by establishing agricultural, industrial or commercial monopolies or
other combinations and/or implementation of decrees and orders intended to benefit particular persons or special interests; or (f) by
taking advantage of official position, authority, relationship, connection or influence to unjustly enrich himself or themselves at the
expense and to the damage and prejudice of the Filipino people and the Republic of the Philippines; and,

3. That the aggregate amount or total value of the ill-gotten wealth amassed, accumulated or acquired is at least P50,000,000.00.

As long as the law affords some comprehensible guide or rule that would inform those who are subject to it what conduct
would render them liable to its penalties, its validity will be sustained. It must sufficiently guide the judge in its application; the
counsel, in defending one charged with its violation; and more importantly, the accused, in identifying the realm of the proscribed
conduct. Indeed, it can be understood with little difficulty that what the assailed statute punishes is the act of a public officer in
amassing or accumulating ill-gotten wealth of at least P50,000,000.00 through a series or combination of acts enumerated in Sec. 1,
par. (d), of the Plunder Law.
In fact, the amended Information itself closely tracks the language of the law, indicating with reasonable certainty the various
elements of the offense which petitioner is alleged to have committed:

"The undersigned Ombudsman, Prosecutor and OIC-Director, EPIB, Office of the Ombudsman, hereby accuses former PRESIDENT OF
THE REPUBLIC OF THE PHILIPPINES, Joseph Ejercito Estrada, a.k.a. 'ASIONG SALONGA' and a.k.a. 'JOSE VELARDE,' together with Jose
'Jinggoy' Estrada, Charlie 'Atong' Ang, Edward Serapio, Yolanda T. Ricaforte, Alma Alfaro, JOHN DOE a.k.a. Eleuterio Tan OR Eleuterio
Ramos Tan or Mr. Uy, Jane Doe a.k.a. Delia Rajas, and John DOES & Jane Does, of the crime of Plunder, defined and penalized under
R.A. No. 7080, as amended by Sec. 12 of R.A. No. 7659, committed as follows:

That during the period from June, 1998 to January 2001, in the Philippines, and within the jurisdiction of this Honorable Court,
accused Joseph Ejercito Estrada, THEN A PRESIDENT OF THE REPUBLIC OF THE PHILIPPINES, by
himself AND/OR in CONNIVANCE/CONSPIRACY with his co-accused, WHO ARE MEMBERS OF HIS FAMILY, RELATIVES BY AFFINITY
OR CONSANGUINITY, BUSINESS ASSOCIATES, SUBORDINATES AND/OR OTHER PERSONS, BY TAKING UNDUE ADVANTAGE OF HIS
OFFICIAL POSITION, AUTHORITY, RELATIONSHIP, CONNECTION, OR INFLUENCE, did then and there willfully, unlawfully and
criminally amass, accumulate and acquire BY HIMSELF, DIRECTLY OR INDIRECTLY, ill-gotten wealth in the aggregate amount
or TOTAL VALUE of FOUR BILLION NINETY SEVEN MILLION EIGHT HUNDRED FOUR THOUSAND ONE HUNDRED SEVENTY THREE
PESOS AND SEVENTEEN CENTAVOS (P4,097,804,173.17), more or less, THEREBY UNJUSTLY ENRICHING HIMSELF OR THEMSELVES
AT THE EXPENSE AND TO THE DAMAGE OF THE FILIPINO PEOPLE AND THE REPUBLIC OF THE PHILIPPINES, through ANY OR
A combination OR A series of overt OR criminal acts, OR SIMILAR SCHEMES OR MEANS, described as follows:

(a) by receiving OR collecting, directly or indirectly, on SEVERAL INSTANCES, MONEY IN THE AGGREGATE AMOUNT OF FIVE
HUNDRED FORTY-FIVE MILLION PESOS (P545,000,000.00), MORE OR LESS, FROM ILLEGAL GAMBLING IN THE FORM OF GIFT,
SHARE, PERCENTAGE, KICKBACK OR ANY FORM OF PECUNIARY BENEFIT, BY HIMSELF AND/OR in connection with co-
accused CHARLIE 'ATONG' ANG, Jose 'Jinggoy' Estrada, Yolanda T. Ricaforte, Edward Serapio, AND JOHN DOES AND JANE DOES, in
consideration OF TOLERATION OR PROTECTION OF ILLEGAL GAMBLING;

(b) by DIVERTING, RECEIVING, misappropriating, converting OR misusing DIRECTLY OR INDIRECTLY, for HIS OR THEIR
PERSONAL gain and benefit, public funds in the amount of ONE HUNDRED THIRTY MILLION PESOS (P130,000,000.00), more or less,
representing a portion of the TWO HUNDRED MILLION PESOS (P200,000,000.00) tobacco excise tax share allocated for the
province of Ilocos Sur under R.A. No. 7171, by himself and/or in connivance with co-accused Charlie 'Atong' Ang, Alma Alfaro, JOHN
DOE a.k.a. Eleuterio Ramos Tan or Mr. Uy, Jane Doe a.k.a. Delia Rajas, AND OTHER JOHN DOES & JANE DOES; (italic supplied).

(c) by directing, ordering and compelling, FOR HIS PERSONAL GAIN AND BENEFIT, the Government Service Insurance System
(GSIS) TO PURCHASE 351,878,000 SHARES OF STOCKS, MORE OR LESS, and the Social Security System (SSS), 329,855,000 SHARES
OF STOCK, MORE OR LESS, OF THE BELLE CORPORATION IN THE AMOUNT OF MORE OR LESS ONE BILLION ONE HUNDRED TWO
MILLION NINE HUNDRED SIXTY FIVE THOUSAND SIX HUNDRED SEVEN PESOS AND FIFTY CENTAVOS (P1,102,965,607.50) AND
MORE OR LESS SEVEN HUNDRED FORTY FOUR MILLION SIX HUNDRED TWELVE THOUSAND AND FOUR HUNDRED FIFTY PESOS
(P744,612,450.00), RESPECTIVELY, OR A TOTAL OF MORE OR LESS ONE BILLION EIGHT HUNDRED FORTY SEVEN MILLION FIVE
HUNDRED SEVENTY EIGHT THOUSAND FIFTY SEVEN PESOS AND FIFTY CENTAVOS (P1,847,578,057.50); AND BY COLLECTING OR
RECEIVING, DIRECTLY OR INDIRECTLY, BY HIMSELF AND/OR IN CONNIVANCE WITH JOHN DOES AND JANE DOES, COMMISSIONS
OR PERCENTAGES BY REASON OF SAID PURCHASES OF SHARES OF STOCK IN THE AMOUNT OF ONE HUNDRED EIGHTY NINE
MILLION SEVEN HUNDRED THOUSAND PESOS (P189,700,000.00) MORE OR LESS, FROM THE BELLE CORPORATION WHICH BECAME
PART OF THE DEPOSIT IN THE EQUITABLE-PCI BANK UNDER THE ACCOUNT NAME 'JOSE VELARDE;'

(d) by unjustly enriching himself FROM COMMISSIONS, GIFTS, SHARES, PERCENTAGES, KICKBACKS, OR ANY FORM OF PECUNIARY
BENEFITS, IN CONNIVANCE WITH JOHN DOES AND JANE DOES, in the amount of MORE OR LESS THREE BILLION TWO HUNDRED
THIRTY THREE MILLION ONE HUNDRED FOUR THOUSAND ONE HUNDRED SEVENTY THREE PESOS AND SEVENTEEN CENTAVOS
(P3,233,104,173.17) AND DEPOSITING THE SAME UNDER HIS ACCOUNT NAME 'JOSE VELARDE' AT THE EQUITABLE-PCI BANK."

We discern nothing in the foregoing that is vague or ambiguous - as there is obviously none - that will confuse petitioner in his
defense. Although subject to proof, these factual assertions clearly show that the elements of the crime are easily understood and
provide adequate contrast between the innocent and the prohibited acts. Upon such unequivocal assertions, petitioner is
completely informed of the accusations against him as to enable him to prepare for an intelligent defense.
Petitioner, however, bewails the failure of the law to provide for the statutory definition of the
terms "combination" and "series" in the key phrase "a combination or series of overt or criminal acts" found in Sec. 1, par. (d), and
Sec. 2, and the word "pattern" in Sec. 4. These omissions, according to petitioner, render the Plunder Law unconstitutional for being
impermissibly vague and overbroad and deny him the right to be informed of the nature and cause of the accusation against him,
hence, violative of his fundamental right to due process.
The rationalization seems to us to be pure sophistry. A statute is not rendered uncertain and void merely because general
terms are used therein, or because of the employment of terms without defining them; [6] much less do we have to define every
word we use. Besides, there is no positive constitutional or statutory command requiring the legislature to define each and every
word in an enactment. Congress is not restricted in the form of expression of its will, and its inability to so define the words
employed in a statute will not necessarily result in the vagueness or ambiguity of the law so long as the legislative will is clear, or at
least, can be gathered from the whole act, which is distinctly expressed in the Plunder Law.
Moreover, it is a well-settled principle of legal hermeneutics that words of a statute will be interpreted in their natural, plain
and ordinary acceptation and signification,[7] unless it is evident that the legislature intended a technical or special legal meaning to
those words.[8] The intention of the lawmakers - who are, ordinarily, untrained philologists and lexicographers - to use statutory
phraseology in such a manner is always presumed. Thus, Webster's New Collegiate Dictionary contains the following commonly
accepted definition of the words "combination" and "series:"
Combination - the result or product of combining; the act or process of combining. To combine is to bring into such close relationship
as to obscure individual characters.

Series - a number of things or events of the same class coming one after another in spatial and temporal succession.

That Congress intended the words "combination" and "series" to be understood in their popular meanings is pristinely evident
from the legislative deliberations on the bill which eventually became RA 7080 or the Plunder Law:

DELIBERATIONS OF THE BICAMERAL COMMITTEE ON JUSTICE, 7 May 1991

REP. ISIDRO: I am just intrigued again by our definition of plunder. We say THROUGH A COMBINATION OR SERIES OF OVERT OR
CRIMINAL ACTS AS MENTIONED IN SECTION ONE HEREOF.Now when we say combination, we actually mean to say, if there are two
or more means, we mean to say that number one and two or number one and something else are included, how about a series of the
same act? For example, through misappropriation, conversion, misuse, will these be included also?

REP. GARCIA: Yeah, because we say a series.

REP. ISIDRO: Series.
REP. GARCIA: Yeah, we include series.
REP. ISIDRO: But we say we begin with a combination.
REP. GARCIA: Yes.
REP. ISIDRO: When we say combination, it seems that -
REP. GARCIA: Two.
REP. ISIDRO: Not only two but we seem to mean that two of the enumerated means not twice of one enumeration.
REP. GARCIA: No, no, not twice.
REP. ISIDRO: Not twice?
REP. GARCIA: Yes. Combination is not twice - but combination, two acts.
REP. ISIDRO: So in other words, thats it. When we say combination, we mean, two different acts. It cannot be a repetition of the
same act.
REP. GARCIA: That be referred to series, yeah.
REP. ISIDRO: No, no. Supposing one act is repeated, so there are two.
REP. GARCIA: A series.
REP. ISIDRO: Thats not series. Its a combination. Because when we say combination or series, we seem to say that two or more, di
ba?
REP. GARCIA: Yes, this distinguishes it really from ordinary crimes. That is why, I said, that is a very good suggestion because if it is
only one act, it may fall under ordinary crime but we have here a combination or series of overt or criminal acts. So x x x x
REP. GARCIA: Series. One after the other eh di....
SEN. TANADA: So that would fall under the term series?
REP. GARCIA: Series, oo.
REP. ISIDRO: Now, if it is a combination, ano, two misappropriations....
REP. GARCIA: Its not... Two misappropriations will not be combination. Series.
REP. ISIDRO: So, it is not a combination?
REP. GARCIA: Yes.
REP. ISIDRO: When you say combination, two different?
 REP. GARCIA: Yes.
SEN. TANADA: Two different.
REP. ISIDRO: Two different acts.
REP. GARCIA: For example, ha...
REP. ISIDRO: Now a series, meaning, repetition...
DELIBERATIONS ON SENATE BILL NO. 733, 6 June 1989
SENATOR MACEDA: In line with our interpellations that sometimes one or maybe even two acts may already result in such
a big amount, on line 25, would the Sponsor consider deleting the words a series of overt or, to read, therefore: or
conspiracy COMMITTED by criminal acts such as. Remove the idea of necessitating a series. Anyway, the criminal acts are in
the plural.
SENATOR TANADA: That would mean a combination of two or more of the acts mentioned in this.
THE PRESIDENT: Probably two or more would be....
SENATOR MACEDA: Yes, because a series implies several or many; two or more.
SENATOR TANADA: Accepted, Mr. President x x x x
THE PRESIDENT: If there is only one, then he has to be prosecuted under the particular crime. But when we say acts of plunder
there should be, at least, two or more.
SENATOR ROMULO: In other words, that is already covered by existing laws, Mr. President.
Thus when the Plunder Law speaks of "combination," it is referring to at least two (2) acts falling under different categories of
enumeration provided in Sec. 1, par. (d), e.g., raids on the public treasury in Sec. 1, par. (d), subpar. (1), and fraudulent conveyance
of assets belonging to the National Government under Sec. 1, par. (d), subpar. (3).
On the other hand, to constitute a series" there must be two (2) or more overt or criminal acts falling under the same category
of enumeration found in Sec. 1, par. (d), say, misappropriation, malversation and raids on the public treasury, all of which fall under
Sec. 1, par. (d), subpar. (1). Verily, had the legislature intended a technical or distinctive meaning for "combination" and "series," it
would have taken greater pains in specifically providing for it in the law.
As for "pattern," we agree with the observations of the Sandiganbayan [9] that this term is sufficiently defined in Sec. 4, in
relation to Sec. 1, par. (d), and Sec. 2 -

x x x x under Sec. 1 (d) of the law, a 'pattern' consists of at least a combination or series of overt or criminal acts enumerated in
subsections (1) to (6) of Sec. 1 (d). Secondly, pursuant to Sec. 2 of the law, the pattern of overt or criminal acts is directed towards a
common purpose or goal which is to enable the public officer to amass, accumulate or acquire ill-gotten wealth. And thirdly, there
must either be an 'overall unlawful scheme' or 'conspiracy' to achieve said common goal. As commonly understood, the term 'overall
unlawful scheme' indicates a 'general plan of action or method' which the principal accused and public officer and others conniving
with him follow to achieve the aforesaid common goal. In the alternative, if there is no such overall scheme or where the schemes or
methods used by multiple accused vary, the overt or criminal acts must form part of a conspiracy to attain a common goal.

Hence, it cannot plausibly be contended that the law does not give a fair warning and sufficient notice of what it seeks to
penalize. Under the circumstances, petitioner's reliance on the "void-for-vagueness" doctrine is manifestly misplaced. The doctrine
has been formulated in various ways, but is most commonly stated to the effect that a statute establishing a criminal offense must
define the offense with sufficient definiteness that persons of ordinary intelligence can understand what conduct is prohibited by
the statute. It can only be invoked against that specie of legislation that is utterly vague on its face, i.e., that which cannot be
clarified either by a saving clause or by construction.
A statute or act may be said to be vague when it lacks comprehensible standards that men of common intelligence must necessarily
guess at its meaning and differ in its application. In such instance, the statute is repugnant to the Constitution in two (2) respects - it
violates due process for failure to accord persons, especially the parties targeted by it, fair notice of what conduct to avoid; and, it
leaves law enforcers unbridled discretion in carrying out its provisions and becomes an arbitrary flexing of the Government
muscle.[10] But the doctrine does not apply as against legislations that are merely couched in imprecise language but which
nonetheless specify a standard though defectively phrased; or to those that are apparently ambiguous yet fairly applicable to certain
types of activities. The first may be "saved" by proper construction, while no challenge may be mounted as against the second
whenever directed against such activities.[11] With more reason, the doctrine cannot be invoked where the assailed statute is clear
and free from ambiguity, as in this case.
The test in determining whether a criminal statute is void for uncertainty is whether the language conveys a sufficiently
definite warning as to the proscribed conduct when measured by common understanding and practice. [12] It must be stressed,
however, that the "vagueness" doctrine merely requires a reasonable degree of certainty for the statute to be upheld - not absolute
precision or mathematical exactitude, as petitioner seems to suggest. Flexibility, rather than meticulous specificity, is permissible as
long as the metes and bounds of the statute are clearly delineated. An act will not be held invalid merely because it might have been
more explicit in its wordings or detailed in its provisions, especially where, because of the nature of the act, it would be impossible
to provide all the details in advance as in all other statutes.
Moreover, we agree with, hence we adopt, the observations of Mr. Justice Vicente V. Mendoza during the deliberations of the
Court that the allegations that the Plunder Law is vague and overbroad do not justify a facial review of its validity -

The void-for-vagueness doctrine states that "a statute which either forbids or requires the doing of an act in terms so vague that
men of common intelligence must necessarily guess at its meaning and differ as to its application, violates the first essential of due
process of law."[13] The overbreadth doctrine, on the other hand, decrees that "a governmental purpose may not be achieved by
means which sweep unnecessarily broadly and thereby invade the area of protected freedoms."[14]

A facial challenge is allowed to be made to a vague statute and to one which is overbroad because of possible "chilling effect" upon
protected speech. The theory is that "[w]hen statutes regulate or proscribe speech and no readily apparent construction suggests
itself as a vehicle for rehabilitating the statutes in a single prosecution, the transcendent value to all society of constitutionally
protected expression is deemed to justify allowing attacks on overly broad statutes with no requirement that the person making the
attack demonstrate that his own conduct could not be regulated by a statute drawn with narrow specificity." [15] The possible harm to
society in permitting some unprotected speech to go unpunished is outweighed by the possibility that the protected speech of
others may be deterred and perceived grievances left to fester because of possible inhibitory effects of overly broad statutes.

This rationale does not apply to penal statutes. Criminal statutes have general in terrorem effect resulting from their very existence,
and, if facial challenge is allowed for this reason alone, the State may well be prevented from enacting laws against socially harmful
conduct. In the area of criminal law, the law cannot take chances as in the area of free speech.

The overbreadth and vagueness doctrines then have special application only to free speech cases. They are inapt for testing the
validity of penal statutes. As the U.S. Supreme Court put it, in an opinion by Chief Justice Rehnquist, "we have not recognized an
'overbreadth' doctrine outside the limited context of the First Amendment."[16] In Broadrick v. Oklahoma,[17] the Court ruled that
"claims of facial overbreadth have been entertained in cases involving statutes which, by their terms, seek to regulate only spoken
words" and, again, that "overbreadth claims, if entertained at all, have been curtailed when invoked against ordinary criminal laws
that are sought to be applied to protected conduct." For this reason, it has been held that "a facial challenge to a legislative act is the
most difficult challenge to mount successfully, since the challenger must establish that no set of circumstances exists under which
the Act would be valid."[18] As for the vagueness doctrine, it is said that a litigant may challenge a statute on its face only if it is vague
in all its possible applications. "A plaintiff who engages in some conduct that is clearly proscribed cannot complain of the vagueness
of the law as applied to the conduct of others."[19]

In sum, the doctrines of strict scrutiny, overbreadth, and vagueness are analytical tools developed for testing "on their faces"
statutes in free speech cases or, as they are called in American law, First Amendment cases. They cannot be made to do service
when what is involved is a criminal statute. With respect to such statute, the established rule is that "one to whom application of a
statute is constitutional will not be heard to attack the statute on the ground that impliedly it might also be taken as applying to
other persons or other situations in which its application might be unconstitutional." [20] As has been pointed out, "vagueness
challenges in the First Amendment context, like overbreadth challenges typically produce facial invalidation, while statutes found
vague as a matter of due process typically are invalidated [only] 'as applied' to a particular defendant."[21] Consequently, there is no
basis for petitioner's claim that this Court review the Anti-Plunder Law on its face and in its entirety.

Indeed, "on its face" invalidation of statutes results in striking them down entirely on the ground that they might be applied to
parties not before the Court whose activities are constitutionally protected. [22] It constitutes a departure from the case and
controversy requirement of the Constitution and permits decisions to be made without concrete factual settings and in sterile
abstract contexts.[23] But, as the U.S. Supreme Court pointed out in Younger v. Harris[24]

[T]he task of analyzing a proposed statute, pinpointing its deficiencies, and requiring correction of these deficiencies before the
statute is put into effect, is rarely if ever an appropriate task for the judiciary.The combination of the relative remoteness of the
controversy, the impact on the legislative process of the relief sought, and above all the speculative and amorphous nature of the
required line-by-line analysis of detailed statutes, . . . ordinarily results in a kind of case that is wholly unsatisfactory for deciding
constitutional questions, whichever way they might be decided.

For these reasons, "on its face" invalidation of statutes has been described as "manifestly strong medicine," to be
employed "sparingly and only as a last resort,"[25] and is generally disfavored.[26] In determining the constitutionality of a statute,
therefore, its provisions which are alleged to have been violated in a case must be examined in the light of the conduct with which
the defendant is charged.[27]

In light of the foregoing disquisition, it is evident that the purported ambiguity of the Plunder Law, so tenaciously claimed and
argued at length by petitioner, is more imagined than real. Ambiguity, where none exists, cannot be created by dissecting parts and
words in the statute to furnish support to critics who cavil at the want of scientific precision in the law. Every provision of the law
should be construed in relation and with reference to every other part. To be sure, it will take more than nitpicking to overturn the
well-entrenched presumption of constitutionality and validity of the Plunder Law. A fortiori, petitioner cannot feign ignorance of
what the Plunder Law is all about. Being one of the Senators who voted for its passage, petitioner must be aware that the law was
extensively deliberated upon by the Senate and its appropriate committees by reason of which he even registered his affirmative
vote with full knowledge of its legal implications and sound constitutional anchorage.
The parallel case of Gallego v. Sandiganbayan[28] must be mentioned if only to illustrate and emphasize the point that courts
are loathed to declare a statute void for uncertainty unless the law itself is so imperfect and deficient in its details, and is susceptible
of no reasonable construction that will support and give it effect. In that case, petitioners Gallego and Agoncillo challenged the
constitutionality of Sec. 3, par. (e), of The Anti-Graft and Corrupt Practices Act for being vague. Petitioners posited, among others,
that the term "unwarranted" is highly imprecise and elastic with no common law meaning or settled definition by prior judicial or
administrative precedents; that, for its vagueness, Sec. 3, par. (e), violates due process in that it does not give fair warning or
sufficient notice of what it seeks to penalize.Petitioners further argued that the Information charged them with three (3) distinct
offenses, to wit: (a) giving of "unwarranted" benefits through manifest partiality; (b) giving of "unwarranted" benefits through
evident bad faith; and, (c) giving of "unwarranted" benefits through gross inexcusable negligence while in the discharge of their
official function and that their right to be informed of the nature and cause of the accusation against them was violated because
they were left to guess which of the three (3) offenses, if not all, they were being charged and prosecuted.
In dismissing the petition, this Court held that Sec. 3, par. (e), of The Anti-Graft and Corrupt Practices Act does not suffer from
the constitutional defect of vagueness. The phrases "manifest partiality," "evident bad faith," and "gross and inexcusable
negligence" merely describe the different modes by which the offense penalized in Sec. 3, par. (e), of the statute may be committed,
and the use of all these phrases in the same Information does not mean that the indictment charges three (3) distinct offenses.

The word 'unwarranted' is not uncertain. It seems lacking adequate or official support; unjustified; unauthorized (Webster, Third
International Dictionary, p. 2514); or without justification or adequate reason (Philadelphia Newspapers, Inc. v. US Dept. of Justice,
C.D. Pa., 405 F. Supp. 8, 12, cited in Words and Phrases, Permanent Edition, Vol. 43-A 1978, Cumulative Annual Pocket Part, p. 19).

The assailed provisions of the Anti-Graft and Corrupt Practices Act consider a corrupt practice and make unlawful the act of the
public officer in:

x x x 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, x x x (Section 3 [e], Rep. Act 3019, as
amended).

It is not at all difficult to comprehend that what the aforequoted penal provisions penalize is the act of a public officer, in the
discharge of his official, administrative or judicial functions, in giving any private party benefits, advantage or preference which is
unjustified, unauthorized or without justification or adequate reason, through manifest partiality, evident bad faith or gross
inexcusable negligence.

In other words, this Court found that there was nothing vague or ambiguous in the use of the term "unwarranted" in Sec. 3,
par. (e), of The Anti-Graft and Corrupt Practices Act, which was understood in its primary and general acceptation. Consequently, in
that case, petitioners' objection thereto was held inadequate to declare the section unconstitutional.
On the second issue, petitioner advances the highly stretched theory that Sec. 4 of the Plunder Law circumvents the immutable
obligation of the prosecution to prove beyond reasonable doubt the predicate acts constituting the crime of plunder when it
requires only proof of a pattern of overt or criminal acts showing unlawful scheme or conspiracy -
SEC. 4. Rule of Evidence. - For purposes of establishing the crime of plunder, it shall not be necessary to prove each and every criminal
act done by the accused in furtherance of the scheme or conspiracy to amass, accumulate or acquire ill-gotten wealth, it being
sufficient to establish beyond reasonable doubt a pattern of overt or criminal acts indicative of the overall unlawful scheme or
conspiracy.

The running fault in this reasoning is obvious even to the simplistic mind. In a criminal prosecution for plunder, as in all other
crimes, the accused always has in his favor the presumption of innocence which is guaranteed by the Bill of Rights, and unless the
State succeeds in demonstrating by proof beyond reasonable doubt that culpability lies, the accused is entitled to an
acquittal.[29] The use of the"reasonable doubt" standard is indispensable to command the respect and confidence of the community
in the application of criminal law. It is critical that the moral force of criminal law be not diluted by a standard of proof that leaves
people in doubt whether innocent men are being condemned. It is also important in our free society that every individual going
about his ordinary affairs has confidence that his government cannot adjudge him guilty of a criminal offense without convincing a
proper factfinder of his guilt with utmost certainty. This "reasonable doubt" standard has acquired such exalted stature in the realm
of constitutional law as it gives life to the Due Process Clause which protects the accused against conviction except upon proof
beyond reasonable doubt of every fact necessary to constitute the crime with which he is charged. [30] The following exchanges
between Rep. Rodolfo Albano and Rep. Pablo Garcia on this score during the deliberations in the floor of the House of
Representatives are elucidating -

DELIBERATIONS OF THE HOUSE OF REPRESENTATIVES ON RA 7080, 9 October 1990

MR. ALBANO: Now, Mr. Speaker, it is also elementary in our criminal law that what is alleged in the information must be proven
beyond reasonable doubt. If we will prove only one act and find him guilty of the other acts enumerated in the information,
does that not work against the right of the accused especially so if the amount committed, say, by falsification is less
than P100 million, but the totality of the crime committed is P100 million since there is malversation, bribery, falsification of
public document, coercion, theft?
MR. GARCIA: Mr. Speaker, not everything alleged in the information needs to be proved beyond reasonable doubt. What is
required to be proved beyond reasonable doubt is every element of the crime charged. For example, Mr. Speaker, there is
an enumeration of the things taken by the robber in the information three pairs of pants, pieces of jewelry. These need not
be proved beyond reasonable doubt, but these will not prevent the conviction of a crime for which he was charged just
because, say, instead of 3 pairs of diamond earrings the prosecution proved two. Now, what is required to be proved beyond
reasonable doubt is the element of the offense.
MR. ALBANO: I am aware of that, Mr. Speaker, but considering that in the crime of plunder the totality of the amount is very
important, I feel that such a series of overt criminal acts has to be taken singly. For instance, in the act of bribery, he was
able to accumulate only P50,000 and in the crime of extortion, he was only able to accumulate P1 million. Now, when we
add the totality of the other acts as required under this bill through the interpretation on the rule of evidence, it is just one
single act, so how can we now convict him?
MR. GARCIA: With due respect, Mr. Speaker, for purposes of proving an essential element of the crime, there is a need to prove
that element beyond reasonable doubt. For example, one essential element of the crime is that the amount involved is P100
million. Now, in a series of defalcations and other acts of corruption in the enumeration the total amount would be P110
or P120 million, but there are certain acts that could not be proved, so, we will sum up the amounts involved in those
transactions which were proved. Now, if the amount involved in these transactions, proved beyond reasonable doubt,
is P100 million, then there is a crime of plunder (underscoring supplied).
It is thus plain from the foregoing that the legislature did not in any manner refashion the standard quantum of proof in the
crime of plunder. The burden still remains with the prosecution to prove beyond any iota of doubt every fact or element necessary
to constitute the crime.
The thesis that Sec. 4 does away with proof of each and every component of the crime suffers from a dismal misconception of
the import of that provision. What the prosecution needs to prove beyond reasonable doubt is only a number of acts sufficient to
form a combination or series which would constitute a pattern and involving an amount of at least P50,000,000.00. There is no need
to prove each and every other act alleged in the Information to have been committed by the accused in furtherance of the overall
unlawful scheme or conspiracy to amass, accumulate or acquire ill-gotten wealth. To illustrate, supposing that the accused is
charged in an Information for plunder with having committed fifty (50) raids on the public
treasury. The prosecution need not prove all these fifty (50) raids, it being sufficient to prove by pattern at least two (2) of the raids
beyond reasonable doubt provided only that they amounted to at least P50,000,000.00.[31]
A reading of Sec. 2 in conjunction with Sec. 4, brings us to the logical conclusion that "pattern of overt or criminal acts
indicative of the overall unlawful scheme or conspiracy" inheres in the very acts of accumulating, acquiring or amassing hidden
wealth. Stated otherwise, such pattern arises where the prosecution is able to prove beyond reasonable doubt the predicate acts as
defined in Sec. 1, par. (d). Pattern is merely a by-product of the proof of the predicate acts. This conclusion is consistent with reason
and common sense. There would be no other explanation for a combination or series of
overt or criminal acts to stash P50,000,000.00 or more, than "a scheme or conspiracy to amass, accumulate or acquire ill gotten
wealth." The prosecution is therefore not required to make a deliberate and conscious effort to prove pattern as it necessarily
follows with the establishment of a series or combination of the predicate acts.
Relative to petitioner's contentions on the purported defect of Sec. 4 is his submission that "pattern" is "a very important
element of the crime of plunder;" and that Sec. 4 is "two pronged, (as) it contains a rule of evidence and a substantive element of
the crime," such that without it the accused cannot be convicted of plunder -
JUSTICE BELLOSILLO: In other words, cannot an accused be convicted under the Plunder Law without applying Section 4 on the
Rule of Evidence if there is proof beyond reasonable doubt of the commission of the acts complained of?
ATTY. AGABIN: In that case he can be convicted of individual crimes enumerated in the Revised Penal Code, but not plunder.
JUSTICE BELLOSILLO: In other words, if all the elements of the crime are proved beyond reasonable doubt without applying
Section 4, can you not have a conviction under the Plunder Law?
ATTY. AGABIN: Not a conviction for plunder, your Honor.
JUSTICE BELLOSILLO: Can you not disregard the application of Sec. 4 in convicting an accused charged for violation of the Plunder
Law?
ATTY. AGABIN: Well, your Honor, in the first place Section 4 lays down a substantive element of the law x x x x
JUSTICE BELLOSILLO: What I said is - do we have to avail of Section 4 when there is proof beyond reasonable doubt on the acts
charged constituting plunder?
ATTY. AGABIN: Yes, your Honor, because Section 4 is two pronged, it contains a rule of evidence and it contains a substantive
element of the crime of plunder. So, there is no way by which we can avoid Section 4.
JUSTICE BELLOSILLO: But there is proof beyond reasonable doubt insofar as the predicate crimes charged are concerned that you
do not have to go that far by applying Section 4?
ATTY. AGABIN: Your Honor, our thinking is that Section 4 contains a very important element of the crime of plunder and that
cannot be avoided by the prosecution.[32]
We do not subscribe to petitioner's stand. Primarily, all the essential elements of plunder can be culled and understood from
its definition in Sec. 2, in relation to Sec. 1, par. (d), and "pattern" is not one of them. Moreover, the epigraph and opening clause of
Sec. 4 is clear and unequivocal:
SEC. 4. Rule of Evidence. - For purposes of establishing the crime of plunder x x x x
It purports to do no more than prescribe a rule of procedure for the prosecution of a criminal case for plunder. Being a purely
procedural measure, Sec. 4 does not define or establish any substantive right in favor of the accused but only operates in
furtherance of a remedy. It is only a means to an end, an aid to substantive law. Indubitably, even without invoking Sec. 4, a
conviction for plunder may be had, for what is crucial for the prosecution is to present sufficient evidence to engender that moral
certitude exacted by the fundamental law to prove the guilt of the accused beyond reasonable doubt. Thus, even granting for the
sake of argument that Sec. 4 is flawed and vitiated for the reasons advanced by petitioner, it may simply be severed from the rest of
the provisions without necessarily resulting in the demise of the law; after all, the existing rules on evidence can supplant Sec. 4
more than enough. Besides, Sec. 7 of RA 7080 provides for a separability clause -

Sec. 7. Separability of Provisions. - If any provisions of this Act or the application thereof to any person or circumstance
is held invalid, the remaining provisions of this Act and the application of such provisions to other persons or circumstances shall not
be affected thereby.

Implicit in the foregoing section is that to avoid the whole act from being declared invalid as a result of the nullity of some of its
provisions, assuming that to be the case although it is not really so, all the provisions thereof should accordingly be treated
independently of each other, especially if by doing so, the objectives of the statute can best be achieved.
As regards the third issue, again we agree with Justice Mendoza that plunder is a malum in se which requires proof of criminal
intent. Thus, he says, in his Concurring Opinion -
x x x Precisely because the constitutive crimes are mala in se the element of mens rea must be proven in a prosecution for
plunder. It is noteworthy that the amended information alleges that the crime of plunder was committed "willfully, unlawfully and
criminally." It thus alleges guilty knowledge on the part of petitioner.

In support of his contention that the statute eliminates the requirement of mens rea and that is the reason he claims the statute is
void, petitioner cites the following remarks of Senator Taada made during the deliberation on S.B. No. 733:

SENATOR TAADA . . . And the evidence that will be required to convict him would not be evidence for each and every individual
criminal act but only evidence sufficient to establish the conspiracy or scheme to commit this crime of plunder. [33]

However, Senator Taada was discussing 4 as shown by the succeeding portion of the transcript quoted by petitioner:

SENATOR ROMULO: And, Mr. President, the Gentleman feels that it is contained in Section 4, Rule of Evidence, which, in the
Gentleman's view, would provide for a speedier and faster process of attending to this kind of cases?

SENATOR TAADA: Yes, Mr. President . . .[34]

Senator Taada was only saying that where the charge is conspiracy to commit plunder, the prosecution need not prove each and
every criminal act done to further the scheme or conspiracy, it being enough if it proves beyond reasonable doubt a pattern of overt
or ciminal acts indicative of the overall unlawful scheme or conspiracy. As far as the acts constituting the pattern are concerned,
however, the elements of the crime must be proved and the requisite mens rea must be shown.

Indeed, 2 provides that -

Any person who participated with the said public officer in the commission of an offense contributing to the crime of plunder shall
likewise be punished for such offense. In the imposition of penalties, the degree of participation and the attendance of mitigating
and extenuating circumstances, as provided by the Revised Penal Code, shall be considered by the court.

The application of mitigating and extenuating circumstances in the Revised Penal Code to prosecutions under the Anti-Plunder Law
indicates quite clearly that mens rea is an element of plunder since the degree of responsibility of the offender is determined by his
criminal intent. It is true that 2 refers to "any person who participates with the said public officer in the commission of an offense
contributing to the crime of plunder." There is no reason to believe, however, that it does not apply as well to the public officer as
principal in the crime. As Justice Holmes said: "We agree to all the generalities about not supplying criminal laws with what they
omit, but there is no canon against using common sense in construing laws as saying what they obviously mean." [35]

Finally, any doubt as to whether the crime of plunder is a malum in se must be deemed to have been resolved in the affirmative by
the decision of Congress in 1993 to include it among the heinous crimes punishable by reclusion perpetua to death. Other heinous
crimes are punished with death as a straight penalty in R.A. No. 7659. Referring to these groups of heinous crimes, this Court held
in People v. Echegaray:[36]

The evil of a crime may take various forms. There are crimes that are, by their very nature, despicable, either because life was
callously taken or the victim is treated like an animal and utterly dehumanized as to completely disrupt the normal course of his or
her growth as a human being . . . . Seen in this light, the capital crimes of kidnapping and serious illegal detention for ransom
resulting in the death of the victim or the victim is raped, tortured, or subjected to dehumanizing acts; destructive arson resulting in
death; and drug offenses involving minors or resulting in the death of the victim in the case of other crimes; as well as murder, rape,
parricide, infanticide, kidnapping and serious illegal detention, where the victim is detained for more than three days or serious
physical injuries were inflicted on the victim or threats to kill him were made or the victim is a minor, robbery with homicide, rape or
intentional mutilation, destructive arson, and carnapping where the owner, driver or occupant of the carnapped vehicle is killed or
raped, which are penalized by reclusion perpetua to death, are clearly heinous by their very nature.

There are crimes, however, in which the abomination lies in the significance and implications of the subject criminal acts in the
scheme of the larger socio-political and economic context in which the state finds itself to be struggling to develop and provide for
its poor and underprivileged masses. Reeling from decades of corrupt tyrannical rule that bankrupted the government and
impoverished the population, the Philippine Government must muster the political will to dismantle the culture of corruption,
dishonesty, greed and syndicated criminality that so deeply entrenched itself in the structures of society and the psyche of the
populace. [With the government] terribly lacking the money to provide even the most basic services to its people, any form of
misappropriation or misapplication of government funds translates to an actual threat to the very existence of government, and in
turn, the very survival of the people it governs over. Viewed in this context, no less heinous are the effects and repercussions of
crimes like qualified bribery, destructive arson resulting in death, and drug offenses involving government officials, employees or
officers, that their perpetrators must not be allowed to cause further destruction and damage to society.

The legislative declaration in R.A. No. 7659 that plunder is a heinous offense implies that it is a malum in se. For when the acts
punished are inherently immoral or inherently wrong, they are mala in se[37]and it does not matter that such acts are punished in a
special law, especially since in the case of plunder the predicate crimes are mainly mala in se. Indeed, it would be absurd to treat
prosecutions for plunder as though they are mere prosecutions for violations of the Bouncing Check Law (B.P. Blg. 22) or of an
ordinance against jaywalking, without regard to the inherent wrongness of the acts.

To clinch, petitioner likewise assails the validity of RA 7659, the amendatory law of RA 7080, on constitutional grounds. Suffice
it to say however that it is now too late in the day for him to resurrect thislong dead issue, the same having been eternally consigned
by People v. Echegaray[38] to the archives of jurisprudential history. The declaration of this Court therein that RA 7659 is
constitutionally valid stands as a declaration of the State, and becomes, by necessary effect, assimilated in the Constitution now as
an integral part of it.
Our nation has been racked by scandals of corruption and obscene profligacy of officials in high places which have shaken its
very foundation. The anatomy of graft and corruption has become more elaborate in the corridors of time as unscrupulous people
relentlessly contrive more and more ingenious ways to bilk the coffers of the government. Drastic and radical measures are
imperative to fight the increasingly sophisticated, extraordinarily methodical and economically catastrophic looting of the national
treasury. Such is the Plunder Law, especially designed to disentangle those ghastly tissues of grand-scale corruption which, if left
unchecked, will spread like a malignant tumor and ultimately consume the moral and institutional fiber of our nation. The Plunder
Law, indeed, is a living testament to the will of the legislature to ultimately eradicate this scourge and thus secure society against the
avarice and other venalities in public office.
These are times that try men's souls. In the checkered history of this nation, few issues of national importance can equal the
amount of interest and passion generated by petitioner's ignominious fall from the highest office, and his eventual prosecution and
trial under a virginal statute. This continuing saga has driven a wedge of dissension among our people that may linger for a long
time. Only by responding to the clarion call for patriotism, to rise above factionalism and prejudices, shall we emerge triumphant in
the midst of ferment.
PREMISES CONSIDERED, this Court holds that RA 7080 otherwise known as the Plunder Law, as amended by RA 7659, is
CONSTITUTIONAL. Consequently, the petition to declare the law unconstitutional is DISMISSED for lack of merit.
SO ORDERED.
 Republic of the Philippines
SUPREME COURT
Manila

EN BANC

G.R. No. L-45127 May 5, 1989

PEOPLE OF THE PHILIPPINES, represented by the Provincial Fiscal of Leyte, petitioner,

vs.
HON. JUDGE AUXENCIO C. DACUYCUY, CELESTINO S. MATONDO, SEGUNDINO A, CAVAL and CIRILO M. ZANORIA, respondents.

The Office of the Solicitor General for petitioner.

Adelino B. Sitoy for private respondents.

REGALADO, J.:

Involved in this special civil action is the unique situation, to use an euphemistic phrase, of an alternative penal sanction of
imprisonment imposed by law but without a specification as to the term or duration thereof.

As a consequence of such legislative faux pas or oversight, the petition at bar seeks to set aside the decision of the then Court of
First Instance of Leyte, Branch IV, dated September 8,1976, 1 penned by herein respondent judge and granting the petition
for certiorari and prohibition with preliminary injunction filed by herein private respondents and docketed therein as Civil Case No.
5428, as well as his resolution of October 19, 1976 2 denying the motions for reconsideration filed by the parties therein. Subject of
said decision were the issues on jurisdiction over violations of Republic Act No. 4670, otherwise known as the Magna Carta for Public
School Teachers, and the constitutionality of Section 32 thereof.

In a complaint filed by the Chief of Police of Hindang, Leyte on April 4, 1975, herein private respondents Celestino S. Matondo,
Segundino A. Caval and Cirilo M. Zanoria, public school officials of Leyte, were charged before the Municipal Court of Hindang, Leyte
in Criminal Case No. 555 thereof for violation of Republic Act No. 4670. The case was set for arraignment and trial on May 29, 1975.
At the arraignment, the herein private respondents, as the accused therein, pleaded not guilty to the charge. Immediately
thereafter, they orally moved to quash the complaint for lack of jurisdiction over the offense allegedly due to the correctional nature
of the penalty of imprisonment prescribed for the offense. The motion to quash was subsequently reduced to writing on June 13,
1975. 3 On August 21, 1975, the municipal court denied the motion to quash for lack of merit. 4 On September 2, 1975, private
respondents filed a motion for the reconsideration of the aforesaid denial order on the same ground of lack of jurisdiction, but with
the further allegation that the facts charged do not constitute an offense considering that Section 32 of Republic Act No. 4670 is null
and void for being unconstitutional. In an undated order received by the counsel for private respondents on October 20,1975, the
motion for reconsideration was denied. 5

On October 26, 1975, private respondents filed a petitions 6 for certiorari and prohibition with preliminary injunction before the
former Court of First Instance of Leyte, Branch VIII, where it was docketed as Civil Case No. B-622, to restrain the Municipal Judge,
Provincial Fiscal and Chief of Police of Hindang, Leyte from proceeding with the trial of said Criminal Case No. 555 upon the ground
that the former Municipal Court of Hindang had no jurisdiction over the offense charged. Subsequently, an amended
petition 7 alleged the additional ground that the facts charged do not constitute an offense since the penal provision, which is
Section 32 of said law, is unconstitutional for the following reasons: (1) It imposes a cruel and unusual punishment, the term of
imprisonment being unfixed and may run to reclusion perpetua; and (2) It also constitutes an undue delegation of legislative power,
the duration of the penalty of imprisonment being solely left to the discretion of the court as if the latter were the legislative
department of the Government.

On March 30, 1976, having been advised that the petition of herein private respondents was related to Criminal Case No. 1978 for
violation of Presidential Decree No. 442 previously transferred from Branch VIII to Branch IV of the erstwhile Court of First Instance
of Leyte, Judge Fortunate B. Cuna of the former branch transferred the said petition to the latter branch for further proceedings and
where it was subsequently docketed therein as Civil Case No. 5428. 8 On March 15, 1976, the petitioner herein filed an opposition to
the admission of the said amended petitions 9but respondent judge denied the same in his resolution of April 20, 1976. 10 On August
2, 1976, herein petitioner filed a supplementary memorandum in answer to the amended petition. 11

On September 8, 1976, respondent judge rendered the aforecited challenged decision holding in substance that Republic Act No.
4670 is valid and constitutional but cases for its violation fall outside of the jurisdiction of municipal and city courts, and remanding
the case to the former Municipal Court of Hindang, Leyte only for preliminary investigation.

As earlier stated, on September 25, 1976, petitioner filed a motion for reconsideration. 12 Likewise, private respondents filed a
motion for reconsideration of the lower court's decision but the same was limited only to the portion thereof which sustains the
validity of Section 32 of Republic Act No. 4670. 13 Respondent judge denied both motions for reconsideration in a resolution dated
October 19, 1976. 14

The instant petition to review the decision of respondent judge poses the following questions of law: (1) Whether the municipal and
city courts have jurisdiction over violations of Republic Act No. 4670; and (2) Whether Section 32 of said Republic Act No. 4670 is
constitutional.

We shall resolve said queries in inverse order, since prior determination of the constitutionality of the assailed provision of the law
involved is necessary for the adjudication of the jurisdictional issue raised in this petition.

1. The disputed section of Republic Act No. 4670 provides:

Sec. 32. Penal Provision. A person who shall wilfully interfere with, restrain or coerce any teacher in the exercise
of his rights guaranteed by this Act or who shall in any other manner commit any act to defeat any of the
provisions of this Act shall, upon conviction, be punished by a fine of not less than one hundred pesos nor more
than one thousand pesos, or by imprisonment, in the discretion of the court. (Emphasis supplied).

Two alternative and distinct penalties are consequently imposed, to wit: (a) a fine ranging from P100.00 to P1,000.00; or (b)
imprisonment. It is apparent that the law has no prescribed period or term for the imposable penalty of imprisonment. While a
minimum and maximum amount for the penalty of fine is specified, there is no equivalent provision for the penalty of
imprisonment, although both appear to be qualified by the phrase "in the discretion of the court.

Private respondents contend that a judicial determination of what Congress intended to be the duration of the penalty of
imprisonment would be violative of the constitutional prohibition against undue delegation of legislative power, and that the
absence of a provision on the specific term of imprisonment constitutes that penalty into a cruel and unusual form of punishment.
Hence, it is vigorously asserted, said Section 32 is unconstitutional.

The basic principle underlying the entire field of legal concepts pertaining to the validity of legislation is that in the enactment of
legislation a constitutional measure is thereby created. In every case where a question is raised as to the constitutionality of an act,
the court employs this doctrine in scrutinizing the terms of the law. In a great volume of cases, the courts have enunciated the
fundamental rule that there is a presumption in favor of the constitutionality of a legislative enactment. 15

It is contended that Republic Act No. 4670 is unconstitutional on the ground that the imposable but indefinite penalty of
imprisonment provided therein constitutes a cruel and unusual punishment, in defiance of the express mandate of the Constitution.
This contention is inaccurate and should be rejected.

We note with approval the holding of respondent judge that

The rule is established beyond question that a punishment authorized by statute is not cruel or unusual or
disproportionate to the nature of the offense unless it is a barbarous one unknown to the law or so wholly
disproportionate to the nature of the offense as to shock the moral sense of the community. Based on the
principle, our Supreme Court has consistently overruled contentions of the defense that the punishment of fine or
imprisonment authorized by the statute involved is cruel and unusual. (Legarda vs. Valdez, 1 Phil. 146; U.S. vs. Pico,
18 Phil. 386; People vs. Garay, 2 ACR 149; People vs. Estoista 93 Phil. 647; People vs. Tiu Ua. 96 Phil. 738; People
vs. Dionisio, 22 SCRA 1299). The language of our Supreme Court in the first of the cases it decided after the last
world war is appropriate here:
 The Constitution directs that 'Excessive fines shall not be imposed, nor cruel and unusual
punishment inflicted.' The prohibition of cruel and unusual punishments is generally aimed at the
form or character of the punishment rather than its severity in respect of duration or amount,
and apply to punishments which never existed in America, or which public sentiment has
regarded as cruel or obsolete (15 Am. Jur., p. 172), for instance there (sic) inflicted at the
whipping post, or in the pillory, burning at the stake, breaking on the wheel, disemboweling, and
the like (15 Am. Jur. Supra, Note 35 L.R.A. p. 561). Fine and imprisonment would not thus be
within the prohibition.' (People vs. de la Cruz, 92 Phil. 906). 16

The question that should be asked, further, is whether the constitutional prohibition looks only to the form or nature of the penalty
and not to the proportion between the penalty and the crime.

The answer thereto may be gathered from the pronouncement in People vs. Estoista, 17 where an "excessive" penalty was upheld as
constitutional and was imposed but with a recommendation for executive clemency, thus:

... If imprisonment from 5 to 10 years is out of proportion to the present case in view of certain circumstances, the
law is not to be declared unconstitutional for this reason. The constitutionality of an act of the legislature is not to
be judged in the light of exceptional cases. Small transgressors for which the heavy net was not spread are, like
small fishes, bound to be caught, and it is to meet such a situation as this that courts are advised to make a
recommendation to the Chief Executive for clemency or reduction of the penalty...

That the penalty is grossly disproportionate to the crime is an insufficient basis to declare the law unconstitutional on the ground
that it is cruel and unusual. The fact that the punishment authorized by the statute is severe does not make it cruel or unusual. 18 In
addition, what degree of disproportion the Court will consider as obnoxious to the Constitution has still to await appropriate
determination in due time since, to the credit of our legislative bodies, no decision has as yet struck down a penalty for being "cruel
and unusual" or "excessive."

We turn now to the argument of private respondents that the entire penal provision in question should be invalidated as an 49
"undue delegation of legislative power, the duration of penalty of imprisonment being solely left to the discretion of the court as if
the lattter were the legislative department of the government."

Petitioner counters that the discretion granted therein by the legislature to the courts to determine the period of imprisonment is a
matter of statutory construction and not an undue delegation of legislative power. It is contended that the prohibition against
undue delegation of legislative power is concerned only with the delegation of power to make laws and not to interpret the same. It
is also submitted that Republic Act No. 4670 vests in the courts the discretion, not to fix the period of imprisonment, but to choose
which of the alternative penalties shall be imposed.

Respondent judge sustained these theses of petitioner on his theory that "the principle of separation of powers is not violated by
vesting in courts discretion as to the length of sentence or amount of fine between designated limits in sentencing persons
convicted of crime. In such instance, the exercise of judicial discretion by the courts is not an attempt to use legislative power or to
prescribe and create a law but is an instance of the administration of justice and the application of existing laws to the facts of
particular cases." 19 What respondent judge obviously overlooked is his own reference to penalties "between designated limits."

In his commentary on the Constitution of the United States, Corwin wrote:

.. At least three distinct ideas have contributed to the development of the principle that legislative power cannot
be delegated. One is the doctrine of separation of powers: Why go to the trouble of separating the three powers of
government if they can straightway remerge on their own motion? The second is the concept of due process of
laws which precludes the transfer of regulatory functions to private persons. Lastly, there is the maxim of agency
"Delegata potestas non potest delegari." 20

An apparent exception to the general rule forbidding the delegation of legislative authority to the courts exists in cases where
discretion is conferred upon said courts. It is clear, however, that when the courts are said to exercise a discretion, it must be a mere
legal discretion which is exercised in discerning the course prescribed by law and which, when discerned, it is the duty of the court to
follow. 21
So it was held by the Supreme Court of the United States that the principle of separation of powers is not violated by vesting in
courts discretion as to the length of sentence or the amount of fine between designated limits in sentencing persons convicted of a
crime. 22

In the case under consideration, the respondent judge erronneously assumed that since the penalty of imprisonment has been
provided for by the legislature, the court is endowed with the discretion to ascertain the term or period of imprisonment. We cannot
agree with this postulate. It is not for the courts to fix the term of imprisonment where no points of reference have been provided
by the legislature. What valid delegation presupposes and sanctions is an exercise of discretion to fix the length of service of a term
of imprisonment which must be encompassed within specific or designated limits provided by law, the absence of which designated
limits well constitute such exercise as an undue delegation, if not-an outright intrusion into or assumption, of legislative power.

Section 32 of Republic Act No. 4670 provides for an indeterminable period of imprisonment, with neither a minimum nor a
maximum duration having been set by the legislative authority. The courts are thus given a wide latitude of discretion to fix the term
of imprisonment, without even the benefit of any sufficient standard, such that the duration thereof may range, in the words of
respondent judge, from one minute to the life span of the accused. Irremissibly, this cannot be allowed. It vests in the courts a
power and a duty essentially legislative in nature and which, as applied to this case, does violence to the rules on separation of
powers as well as the non-delegability of legislative powers. This time, the preumption of constitutionality has to yield.

On the foregoing considerations, and by virtue of the separability clause in Section 34 of Republic Act No. 4670, the penalty of
imprisonment provided in Section 32 thereof should be, as it is hereby, declared unconstitutional.

It follows, therefore, that a ruling on the proper interpretation of the actual term of imprisonment, as may have been intended by
Congress, would be pointless and academic. It is, however, worth mentioning that the suggested application of the so-called rule or
principle of parallelism, whereby a fine of P1,000.00 would be equated with one year of imprisonment, does not merit judicial
acceptance. A fine, whether imposed as a single or as an alternative penalty, should not and cannot be reduced or converted into a
prison term; it is to be considered as a separate and independent penalty consonant with Article 26 of the Revised Penal Code. 23 It is
likewise declared a discrete principal penalty in the graduated scales of penalties in Article 71 of said Code. There is no rule for
transmutation of the amount of a fine into a term of imprisonment. Neither does the Code contain any provision that a fine when
imposed in conjunction with imprisonment is subordinate to the latter penalty. In sum, a fine is as much a principal penalty as
imprisonment. Neither is subordinate to the other. 24

2. It has been the consistent rule that the criminal jurisdiction of the court is determined by the statute in force at the time of the
commencement of the action. 25

With the deletion by invalidation of the provision on imprisonment in Section 32 of Republic Act No. 4670, as earlier discussed, the
imposable penalty for violations of said law should be limited to a fine of not less than P100.00 and not more than P1,000.00, the
same to serve as the basis in determining which court may properly exercise jurisdiction thereover. When the complaint against
private respondents was filed in 1975, the pertinent law then in force was Republic Act No. 296, as amended by Republic Act No.
3828, under which crimes punishable by a fine of not more than P 3,000.00 fall under the original jurisdiction of the former
municipal courts. Consequently, Criminal Case No. 555 against herein private respondents falls within the original jurisdiction of the
Municipal Trial Court of Hindang, Leyte.

WHEREFORE, the decision and resolution of respondent judge are hereby REVERSED and SET ASIDE. Criminal Case No. 555 filed
against private respondents herein is hereby ordered to be remanded to the Municipal Trial Court of Hindang, Leyte for trial on the
merits.

SO ORDERED.
 SECOND DIVISION
[G.R. No. 125359. September 4, 2001]
ROBERTO S. BENEDICTO and HECTOR T. RIVERA, petitioners, vs. THE COURT OF APPEALS, HON. GUILLERMO L. LOJA, SR.,
PRESIDING JUDGE, REGIONAL TRIAL COURT OF MANILA, BRANCH 26, and PEOPLE OF THE PHILIPPINES, respondents.

DECISION
QUISUMBING, J.:

Assailed in this petition is the consolidated decision rendered on May 23, 1996, by the Court of Appeals in CA-G.R. SP No.
35928 and CA-G.R. SP No. 35719. CA-G.R. SP No. 35928 had affirmed the order dated September 6, 1994, of the Regional Trial Court,
Manila, Branch 26, insofar as it denied petitioners respective Motions to Quash the Informations in twenty-five (25) criminal cases
for violation of Central Bank Circular No. 960. Therein included were informations involving: (a) consolidated Criminal Cases Nos. 91-
101879 to 91-101883 filed against Mrs. Imelda R. Marcos, Roberto S. Benedicto, and Hector T. Rivera; (b) consolidated Criminal
Cases Nos. 91-101884 to 91-101892 filed against Mrs. Marcos and Benedicto; and (c) Criminal Cases Nos. 92-101959 to 92-101969
also against Mrs. Marcos and Benedicto. Note, however, that the Court of Appeals already dismissed Criminal Case No. 91-101884.
The factual antecedents of the instant petition are as follows:
On December 27, 1991, Mrs. Imelda Marcos and Messrs. Benedicto and Rivera were indicted for violation of Section 10 of
Circular No. 960[1] in relation to Section 34[2] of the Central Bank Act (Republic Act No. 265, as amended) in five Informations filed
with the Regional Trial Court of Manila. Docketed as Criminal Cases Nos. 91-101879 to 91-101883, the charge sheets alleged that the
trio failed to submit reports of their foreign exchange earnings from abroad and/or failed to register with the Foreign Exchange
Department of the Central Bank within the period mandated by Circular No. 960. Said Circular prohibited natural and juridical
persons from maintaining foreign exchange accounts abroad without prior authorization from the Central Bank. [3] It also required all
residents of the Philippines who habitually earned or received foreign currencies from invisibles, either locally or abroad, to report
such earnings or receipts to the Central Bank. Violations of the Circular were punishable as a criminal offense under Section 34 of the
Central Bank Act.
That same day, nine additional Informations charging Mrs. Marcos and Benedicto with the same offense, but involving
different accounts, were filed with the Manila RTC, which docketed these as Criminal Cases Nos. 91-101884 to 91-101892. The
accusatory portion of the charge sheet in Criminal Case No. 91-101888 reads:

That from September 1, 1983 up to 1987, both dates inclusive, and for sometime thereafter, both accused, conspiring and
confederating with each other and with the late President Ferdinand E. Marcos, all residents of Manila, Philippines, and within the
jurisdiction of this Honorable Court, did then and there wilfully, unlawfully and feloniously fail to submit reports in the prescribed
form and/or register with the Foreign Exchange Department of the Central Bank within 90 days from October 21, 1983 as required
of them being residents habitually/customarily earning, acquiring or receiving foreign exchange from whatever source or from
invisibles locally or from abroad, despite the fact they actually earned interests regularly every six (6 ) months for the first two years
and then quarterly thereafter for their investment of $50-million, later reduced to $25-million in December 1985, in Philippine-
issued dollar denominated treasury notes with floating rates and in bearer form, in the name of Bank Hofmann, AG, Zurich,
Switzerland, for the benefit of Avertina Foundation, their front organization established for economic advancement purposes with
secret foreign exchange account Category (Rubric) C.A.R. No. 211 925-02 in Swiss Credit Bank (also known as SKA) in Zurich,
Switzerland, which earned, acquired or received for the accused Imelda Romualdez Marcos and her late husband an interest of
$2,267,892 as of December 16, 1985 which was remitted to Bank Hofmann, AG, through Citibank, New York, United States of
America, for the credit of said Avertina account on December 19, 1985, aside from the redemption of $25 million (one-half of the
original $50-M) as of December 16, 1985 and outwardly remitted from the Philippines in the amounts of $7,495,297.49 and
$17,489,062.50 on December 18, 1985 for further investment outside the Philippines without first complying with the Central Bank
reporting/registering requirements.

CONTRARY TO LAW.[4]

The other charge sheets were similarly worded except the days of the commission of the offenses, the name(s) of the alleged
dummy or dummies, the amounts in the foreign exchange accounts maintained, and the names of the foreign banks where such
accounts were held by the accused.
On January 3, 1992, eleven more Informations accusing Mrs. Marcos and Benedicto of the same offense, again in relation to
different accounts, were filed with the same court, docketed as Criminal Cases Nos. 92-101959 to 92-101969. The Informations were
similarly worded as the earlier indictments, save for the details as to the dates of the violations of Circular No. 960, the identities of
the dummies used, the balances and sources of the earnings, and the names of the foreign banks where these accounts were
maintained.
All of the aforementioned criminal cases were consolidated before Branch 26 of the said trial court.
On the same day that Criminal Cases Nos. 92-101959 to 92-101969 were filed, the Central Bank issued Circular No.
1318[5] which revised the rules governing non-trade foreign exchange transactions. It took effect on January 20, 1992.
On August 24, 1992, the Central Bank, pursuant to the governments policy of further liberalizing foreign exchange transactions,
came out with Circular No. 1353,[6] which amended Circular No. 1318. Circular No. 1353 deleted the requirement of prior Central
Bank approval for foreign exchange-funded expenditures obtained from the banking system.
Both of the aforementioned circulars, however, contained a saving clause, excepting from their coverage pending criminal
actions involving violations of Circular No. 960 and, in the case of Circular No. 1353, violations of both Circular No. 960 and Circular
No. 1318.
On September 19, 1993, the government allowed petitioners Benedicto and Rivera to return to the Philippines, on condition
that they face the various criminal charges instituted against them, including the dollar-salting cases. Petitioners posted bail in the
latter cases.
On February 28, 1994, petitioners Benedicto and Rivera were arraigned. Both pleaded not guilty to the charges of violating
Central Bank Circular No. 960. Mrs. Marcos had earlier entered a similar plea during her arraignment for the same offense on
February 12, 1992.
On August 11, 1994, petitioners moved to quash all the Informations filed against them in Criminal Cases Nos. 91-101879 to 91-
101883; 91-101884 to 91-101892, and 91-101959 to 91-101969. Their motion was grounded on lack of jurisdiction, forum shopping,
extinction of criminal liability with the repeal of Circular No. 960, prescription, exemption from the Central Banks reporting
requirement, and the grant of absolute immunity as a result of a compromise agreement entered into with the government.
On September 6, 1994, the trial court denied petitioners motion. A similar motion filed on May 23, 1994 by Mrs. Marcos
seeking to dismiss the dollar-salting cases against her due to the repeal of Circular No. 960 had earlier been denied by the trial court
in its order dated June 9, 1994. Petitioners then filed a motion for reconsideration, but the trial court likewise denied this motion on
October 18, 1994.
On November 21, 1994, petitioners moved for leave to file a second motion for reconsideration. The trial court, in its order of
November 23, 1994, denied petitioners motion and set the consolidated cases for trial on January 5, 1995.
Two separate petitions for certiorari and prohibition, with similar prayers for temporary restraining orders and/or writs of
preliminary injunction, docketed as CA-G.R. SP No. 35719 and CA-G.R. SP No. 35928, were respectively filed by Mrs. Marcos and
petitioners with the Court of Appeals. Finding that both cases involved violations of Central Bank Circular No. 960, the appellate
court consolidated the two cases.
On May 23, 1996, the Court of Appeals disposed of the consolidated cases as follows:

WHEREFORE, finding no grave abuse of discretion on the part of respondent Judge in denying petitioners respective Motions to
Quash, except that with respect to Criminal Case No. 91-101884, the instant petitions are hereby DISMISSED for lack of merit. The
assailed September 6, 1994 Order, in so far as it denied the Motion to Quash Criminal Case No. 91-101884 is hereby nullified and set
aside, and said case is hereby dismissed. Costs against petitioners.

SO ORDERED.[7]

Dissatisfied with the said decision of the court a quo, except with respect to the portion ordering the dismissal of Criminal Case
No. 91-101884, petitioners filed the instant petition, attributing the following errors to the appellate court:

THAT THE COURT ERRED IN NOT FINDING THAT THE INFORMATIONS/CASES FILED AGAINST PETITIONERS-APPELLANTS ARE
QUASHABLE BASED ON THE FOLLOWING GROUNDS:

(A) LACK OF JURISDICTION/FORUM SHOPPING/NO VALID PRELIMINARY INVESTIGATION

(B) EXTINCTION OF CRIMINAL LIABILITY

1) REPEAL OF CB CIRCULAR NO. 960 BY CB CIRCULAR NO. 1353;

2) REPEAL OF R.A. 265 BY R.A. 7653[8]

(C) PRESCRIPTION

(D) EXEMPTION FROM CB REPORTING REQUIREMENT

(E) GRANT OF ABSOLUTE IMMUNITY.[9]

Simply stated, the issues for our resolution are:

(1) Did the Court of Appeals err in denying the Motion to Quash for lack of jurisdiction on the part of the trial court, forum
shopping by the prosecution, and absence of a valid preliminary investigation?

(2) Did the repeal of Central Bank Circular No. 960 and Republic Act No. 265 by Circular No. 1353 and Republic Act No. 7653
respectively, extinguish the criminal liability of petitioners?

(3) Had the criminal cases in violation of Circular No. 960 already prescribed?

(4) Were petitioners exempted from the application and coverage of Circular No. 960?

(5) Were petitioners' alleged violations of Circular No. 960 covered by the absolute immunity granted in the Compromise
Agreement of November 3, 1990?

On the first issue, petitioners assail the jurisdiction of the Regional Trial Court. They aver that the dollar-salting charges filed
against them were violations of the Anti-Graft Law or Republic Act No. 3019, and the Sandiganbayan has original and exclusive
jurisdiction over their cases.
Settled is the rule that the jurisdiction of a court to try a criminal case is determined by the law in force at the time the action is
instituted.[10] The 25 cases were filed in 1991-92. The applicable law on jurisdiction then was Presidential Decree 1606. [11] Under P.D.
No. 1606, offenses punishable by imprisonment of not more than six years fall within the jurisdiction of the regular trial courts, not
the Sandiganbayan.[12]
In the instant case, all the Informations are for violations of Circular No. 960 in relation to Section 34 of the Central Bank Act
and not, as petitioners insist, for transgressions of Republic Act No. 3019. Pursuant to Section 34 of Republic Act No. 265, violations
of Circular No. 960 are punishable by imprisonment of not more than five years and a fine of not more than P20,000.00. Since under
P.D. No. 1606 the Sandiganbayan has no jurisdiction to try criminal cases where the imposable penalty is less than six years of
imprisonment, the cases against petitioners for violations of Circular No. 960 are, therefore, cognizable by the trial court. No error
may thus be charged to the Court of Appeals when it held that the RTC of Manila had jurisdiction to hear and try the dollar-salting
cases.
Still on the first issue, petitioners next contend that the filing of the cases for violations of Circular No. 960 before the RTC of
Manila constitutes forum shopping. Petitioners argue that the prosecution, in an attempt to seek a favorable verdict from more than
one tribunal, filed separate cases involving virtually the same offenses before the regular trial courts and the Sandiganbayan. They
fault the prosecution with splitting the cases. Petitioners maintain that while the RTC cases refer only to the failure to report interest
earnings on Treasury Notes, the Sandiganbayan cases seek to penalize the act of receiving the same interest earnings on Treasury
Notes in violation of the Anti-Graft Laws provisions on prohibited transactions. Petitioners aver that the violation of Circular No. 960
is but an element of the offense of prohibited transactions punished under Republic Act No. 3019 and should, thus, be deemed
absorbed by the prohibited transactions cases pending before the Sandiganbayan.
For a charge of forum shopping to prosper, there must exist between an action pending in one court and another action before
another court: (a) identity of parties, or at least such parties as represent the same interests in both actions; (b) identity of rights
asserted and relief prayed for, the relief being founded on the same facts; and (c) 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.[13] Here, we find that the single act of receiving unreported interest earnings on Treasury Notes held abroad
constitutes an offense against two or more distinct and unrelated laws, Circular No. 960 and R.A. 3019. Said laws define distinct
offenses, penalize different acts, and can be applied independently.[14] Hence, no fault lies at the prosecutions door for having
instituted separate cases before separate tribunals involving the same subject matter.
 With respect to the RTC cases, the receipt of the interest earnings violate Circular No. 960 in relation to Republic Act No. 265
because the same was unreported to the Central Bank. The act to be penalized here is the failure to report the interest earnings
from the foreign exchange accounts to the proper authority. As to the anti-graft cases before the Sandiganbayan involving the same
interest earnings from the same foreign exchange accounts, the receipt of the interest earnings transgresses Republic Act No. 3019
because the act of receiving such interest is a prohibited transaction prejudicial to the government. What the State seeks to punish
in these anti-graft cases is the prohibited receipt of the interest earnings. In sum, there is no identity of offenses charged, and
prosecution under one law is not an obstacle to a prosecution under the other law. There is no forum shopping.
Finally, on the first issue, petitioners contend that the preliminary investigation by the Department of Justice was invalid and in
violation of their rights to due process. Petitioners argue that governments ban on their travel effectively prevented them from
returning home and personally appearing at the preliminary investigation. Benedicto and Rivera further point out that the joint
preliminary investigation by the Department of Justice, resulted to the charges in one set of cases before the Sandiganbayan for
violations of Republic Act No. 3019 and another set before the RTC for violation of Circular No. 960.
Preliminary investigation is not part of the due process guaranteed by the Constitution. [15] It is an inquiry to determine whether
there is sufficient ground to engender a well-founded belief that a crime has been committed and the respondent is probably guilty
thereof.[16] Instead, the right to a preliminary investigation is personal. It is afforded to the accused by statute, and can be waived,
either expressly or by implication.[17] The waiver extends to any irregularity in the preliminary investigation, where one was
conducted.
The petition in the present case contains the following admissions:

1. Allowed to return to the Philippines on September 19, 1993on the condition that he face the criminal charges pending in courts,
petitioner-appellant Benedicto, joined by his co-petitioner Rivera, lost no time in attending to the pending criminal charges by
posting bail in the above-mentioned cases.

2. Not having been afforded a real opportunity of attending the preliminary investigation because of their forced absence from the
Philippines then, petitioners-appellants invoked their right to due process thru motions for preliminary investigationUpon denial of
their demands for preliminary investigation, the petitioners intended to elevate the matter to the Honorable Court of Appeals and
actually caused the filing of a petition for certiorari/prohibition sometime before their arraignment but immediately caused the
withdrawal thereofin view of the prosecutions willingness to go to pre-trial wherein petitioners would be allowed access to the
records of preliminary investigation which they could use for purposes of filing a motion to quash if warranted.

3. Thus, instead of remanding the Informations to the Department of Justicerespondent Judge set the case for pre-trial in order to
afford all the accused access to the records of the prosecution

xxx

5. On the basis of disclosures at the pre-trial, the petitioners-appellants Benedicto and Rivera moved for the quashing of the
informations/cases[18]

The foregoing admissions lead us to conclude that petitioners have expressly waived their right to question any supposed
irregularity in the preliminary investigation or to ask for a new preliminary investigation. Petitioners, in the above excerpts from this
petition, admit posting bail immediately following their return to the country, entered their respective pleas to the charges, and filed
various motions and pleadings. By so doing, without simultaneously demanding a proper preliminary investigation, they have waived
any and all irregularities in the conduct of a preliminary investigation. [19] The trial court did not err in denying the motion to quash
the informations on the ground of want of or improperly conducted preliminary investigation. The absence of a preliminary
investigation is not a ground to quash the information.[20]
On the second issue, petitioners contend that they are being prosecuted for acts punishable under laws that have already been
repealed. They point to the express repeal of Central Bank Circular No. 960 by Circular Nos. 1318 and 1353 as well as the express
repeal of Republic Act No. 265 by Republic Act No. 7653. Petitioners, relying on Article 22 of the Revised Penal Code, [21] contend that
repeal has the effect of extinguishing the right to prosecute or punish the offense committed under the old laws. [22]
As a rule, an absolute repeal of a penal law has the effect of depriving a court of its authority to punish a person charged with
violation of the old law prior to its repeal.[23] This is because an unqualified repeal of a penal law constitutes a legislative act of
rendering legal what had been previously declared as illegal, such that the offense no longer exists and it is as if the person who
committed it never did so. There are, however, exceptions to the rule. One is the inclusion of a saving clause in the repealing statute
that provides that the repeal shall have no effect on pending actions.[24] Another exception is where the repealing act reenacts the
former statute and punishes the act previously penalized under the old law. In such instance, the act committed before the
reenactment continues to be an offense in the statute books and pending cases are not affected, regardless of whether the new
penalty to be imposed is more favorable to the accused. [25]
In the instant case, it must be noted that despite the repeal of Circular No. 960, Circular No. 1353 retained the same reportorial
requirement for residents receiving earnings or profits from non-trade foreign exchange transactions.[26] Second, even the most
cursory glance at the repealing circulars, Circular Nos. 1318 and 1353 shows that both contain a saving clause, expressly providing
that the repeal of Circular No. 960 shall have no effect on pending actions for violation of the latter Circular. [27] A saving clause
operates to except from the effect of the repealing law what would otherwise be lost under the new law. [28] In the present case, the
respective saving clauses of Circular Nos. 1318 and 1353 clearly manifest the intent to reserve the right of the State to prosecute and
punish offenses for violations of the repealed Circular No. 960, where the cases are either pending or under investigation.
Petitioners, however, insist that the repeal of Republic Act No. 265, particularly Section 34, [29] by Republic Act No. 7653,
removed the applicability of any penal sanction for violations of any non-trade foreign exchange transactions previously penalized by
Circular No. 960. Petitioners posit that a comparison of the two provisions shows that Section 36 [30] of Republic Act No. 7653 neither
retained nor reinstated Section 34 of Republic Act No. 265. Since, in creating the Bangko Sentral ng Pilipinas, Congress did not
include in its charter a clause providing for the application of Section 34 of Republic Act No. 265 to pending cases, petitioners
pending dollar-salting cases are now bereft of statutory penalty, the saving clause in Circular No. 1353 notwithstanding. In other
words, absent a provision in Republic Act No. 7653 expressly reviving the applicability of any penal sanction for the repealed
mandatory foreign exchange reporting regulations formerly required under Circular No. 960, violations of aforesaid repealed Circular
can no longer be prosecuted criminally.
A comparison of the old Central Bank Act and the new Bangko Sentrals charter repealing the former show that in consonance
with the general objective of the old law and the new law to maintain internal and external monetary stability in the Philippines and
preserve the international value of the peso,[31] both the repealed law and the repealing statute contain a penal clause which sought
to penalize in general, violations of the law as well as orders, instructions, rules, or regulations issued by the Monetary Board. In the
case of the Bangko Sentral, the scope of the penal clause was expanded to include violations of other pertinent banking laws
enforced or implemented by the Bangko Sentral. In the instant case, the acts of petitioners sought to be penalized are violations of
rules and regulations issued by the Monetary Board. These acts are proscribed and penalized in the penal clause of the repealed law
and this proviso for proscription and penalty was reenacted in the repealing law. We find, therefore, that while Section 34 of
Republic Act No. 265 was repealed, it was nonetheless, simultaneously reenacted in Section 36 of Republic Act No. 7653. Where a
clause or provision or a statute for that matter is simultaneously repealed and reenacted, there is no effect, upon the rights and
liabilities which have accrued under the original statute, since the reenactment, in effect neutralizes the repeal and continues the
law in force without interruption.[32] The rule applies to penal laws and statutes with penal provisions. Thus, the repeal of a penal
law or provision, under which a person is charged with violation thereof and its simultaneous reenactment penalizing the same act
done by him under the old law, will neither preclude the accuseds prosecution nor deprive the court of its jurisdiction to hear and
try his case.[33] As pointed out earlier, the act penalized before the reenactment continues to remain an offense and pending cases
are unaffected. Therefore, the repeal of Republic Act No. 265 by Republic Act No. 7653 did not extinguish the criminal liability of
petitioners for transgressions of Circular No. 960 and cannot, under the circumstances of this case, be made a basis for quashing the
indictments against petitioners.
Petitioners, however, point out that Section 36 of Republic Act No. 7653, in reenacting Section 34 of the old Central Act,
increased the penalty for violations of rules and regulations issued by the Monetary Board. They claim that such increase in the
penalty would give Republic Act No. 7653 an ex post facto application, violating the Bill of Rights.[34]
Is Section 36 of Republic Act No. 7653 an ex post facto legislation?
An ex post facto law is one which: (1) makes criminal an act done before the passage of the law and which was innocent when
done, and punishes such an act; (2) aggravates a crime, or makes it greater than it was when committed; (3) changes the
punishment and inflicts a greater punishment than the law annexed to the crime when committed; (4) alters the legal rules of
evidence, and authorizes conviction upon less or different testimony than the law required at the time of the commission of the
offense; (5) assuming to regulate civil rights, and remedies only, in effect imposes penalty or deprivation of a right for something
which when done was lawful; and (6) deprives a person accused of a crime of some lawful protection to which he has become
entitled such as the protection of a former conviction or acquittal, or a proclamation of amnesty.[35]
The test whether a penal law runs afoul of the ex post facto clause of the Constitution is: Does the law sought to be applied
retroactively take from an accused any right that was regarded at the time of the adoption of the constitution as vital for the
protection of life and liberty and which he enjoyed at the time of the commission of the offense charged against him?[36]
The crucial words in the test are vital for the protection of life and liberty. [37] We find, however, the test inapplicable to the
penal clause of Republic Act No. 7653. Penal laws and laws which, while not penal in nature, nonetheless have provisions defining
offenses and prescribing penalties for their violation operate prospectively. [38] Penal laws cannot be given retroactive effect, except
when they are favorable to the accused.[39] Nowhere in Republic Act No. 7653, and in particular Section 36, is there any indication
that the increased penalties provided therein were intended to operate retroactively. There is, therefore, no ex post facto law in this
case.
On the third issue, petitioners ask us to note that the dollar interest earnings subject of the criminal cases instituted against
them were remitted to foreign banks on various dates between 1983 to 1987. They maintain that given the considerable lapse of
time from the dates of the commission of the offenses to the institution of the criminal actions in 1991 and 1992, the States right to
prosecute them for said offenses has already prescribed. Petitioners assert that the Court of Appeals erred in computing the
prescriptive period from February 1986. Petitioners theorize that since the remittances were made through the Central Bank as a
regulatory authority, the dates of the alleged violations are known, and prescription should thus be counted from these dates.
In ruling that the dollar-salting cases against petitioners have not yet prescribed, the court a quo quoted with approval the trial
courts finding that:

[T]he alleged violations of law were discovered only after the EDSA Revolution in 1986 when the dictatorship was toppled down. The
date of the discovery of the offense, therefore, should be the basis in computing the prescriptive period. Since (the) offenses
charged are punishable by imprisonment of not more than five (5) years, they prescribe in eight (8) years. Thus, only a little more
than four (4) years had elapsed from the date of discovery in 1986 when the cases were filed in 1991. [40]

The offenses for which petitioners are charged are penalized by Section 34 of Republic Act No. 265 by a fine of not more than
Twenty Thousand Pesos (P20,000.00) and by imprisonment of not more than five years. Pursuant to Act No. 3326, which mandates
the periods of prescription for violations of special laws, the prescriptive period for violations of Circular No. 960 is eight (8)
years.[41] The period shall commence to run from the day of the commission of the violation of the law, and if the same be not
known at the time, from the discovery thereof and institution of judicial proceedings for its investigation and punishment.[42] In the
instant case, the indictments against petitioners charged them with having conspired with the late President Ferdinand E. Marcos in
transgressing Circular No. 960.Petitioners contention that the dates of the commission of the alleged violations were known and
prescription should be counted from these dates must be viewed in the context of the political realities then prevailing. Petitioners,
as close associates of Mrs. Marcos, were not only protected from investigation by their influence and connections, but also by the
power and authority of a Chief Executive exercising strong-arm rule. This Court has taken judicial notice of the fact that Mr. Marcos,
his family, relations, and close associates resorted to all sorts of clever schemes and manipulations to disguise and hide their illicit
acquisitions.[43] In the instant case, prescription cannot, therefore, be made to run from the dates of the commission of the offenses
charged, for the obvious reason that the commission of those offenses were not known as of those dates. It was only after the EDSA
Revolution of February, 1986, that the recovery of ill-gotten wealth became a highly prioritized state policy,[44] pursuant to the
explicit command of the Provisional Constitution.[45] To ascertain the relevant facts to recover ill-gotten properties amassed by the
leaders and supporters of the (Marcos) regime[46] various government agencies were tasked by the Aquino administration to
investigate, and as the evidence on hand may reveal, file and prosecute the proper cases. Applying the presumption that official
duty has been regularly performed,[47] we are more inclined to believe that the violations for which petitioners are charged were
discovered only during the post-February 1986 investigations and the tolling of the prescriptive period should be counted from the
dates of discovery of their commission. The criminal actions against petitioners, which gave rise to the instant case, were filed in
1991 and 1992, or well within the eight-year prescriptive period counted from February 1986.
The fourth issue involves petitioners claim that they incurred no criminal liability for violations of Circular No. 960 since they
were exempted from its coverage.
Petitioners postulate that since the purchases of treasury notes were done through the Central Banks Securities Servicing
Department and payments of the interest were coursed through its Securities Servicing Department/Foreign Exchange Department,
their filing of reports would be surplusage, since the requisite information were already with the Central Bank. Furthermore, they
contend that the foreign currency investment accounts in the Swiss banks were subject to absolute confidentiality as provided for by
Republic Act No. 6426,[48] as amended by Presidential Decree Nos. 1035, 1246, and 1453, and fell outside the ambit of the reporting
requirements imposed by Circular No. 960. Petitioners further rely on the exemption from reporting provided for in Section
10(q), [49] Circular No. 960, and the confidentiality granted to Swiss bank accounts by the laws of Switzerland.
Petitioners correctly point out that Section 10(q) of Circular No. 960 exempts from the reporting requirement foreign currency
eligible for deposit under the Philippine Foreign Exchange Currency Deposit System, pursuant to Republic Act No. 6426, as
amended. But, in order to avail of the aforesaid exemption, petitioners must show that they fall within its scope. Petitioners must
satisfy the requirements for eligibility imposed by Section 2, Republic Act No. 6426.[50] Not only do we find the record bare of any
proof to support petitioners claim of falling within the coverage of Republic Act No. 6426, we likewise find from a reading of Section
2 of the Foreign Currency Deposit Act that said law is inapplicable to the foreign currency accounts in question. Section 2, Republic
Act No. 6426 speaks of deposit with such Philippine banks in good standing, as maybe designated by the Central Bank for the
purpose.[51] The criminal cases filed against petitioners for violation of Circular No. 960 involve foreign currency accounts maintained
in foreign banks, not Philippine banks. By invoking the confidentiality guarantees provided for by Swiss banking laws, petitioners
admit such reports made. The rule is that exceptions are strictly construed and apply only so far as their language fairly warrants,
with all doubts being resolved in favor of the general proviso rather than the exception.[52] Hence, petitioners may not claim
exemption under Section 10(q).
With respect to the banking laws of Switzerland cited by petitioners, the rule is that Philippine courts cannot take judicial
notice of foreign laws.[53] Laws of foreign jurisdictions must be alleged and proved. [54] Petitioners failed to prove the Swiss law relied
upon, either by: (1) an official publication thereof; or (2) a copy attested by the officer having the legal custody of the record, or by
his deputy, and accompanied by a certification from the secretary of the Philippine embassy or legation in such country or by the
Philippine consul general, consul, vice-consul, or consular agent stationed in such country, or by any other authorized officer in the
Philippine foreign service assigned to said country that such officer has custody.[55] Absent such evidence, this Court cannot take
judicial cognizance of the foreign law invoked by Benedicto and Rivera.
Anent the fifth issue, petitioners insist that the government granted them absolute immunity under the Compromise
Agreement they entered into with the government on November 3, 1990. Petitioners cite our decision in Republic v.
Sandiganbayan, 226 SCRA 314 (1993), upholding the validity of the said Agreement and directing the various government agencies
to be consistent with it. Benedicto and Rivera now insist that the absolute immunity from criminal investigation or prosecution
granted to petitioner Benedicto, his family, as well as to officers and employees of firms owned or controlled by Benedicto under the
aforesaid Agreement covers the suits filed for violations of Circular No. 960, which gave rise to the present case.
The pertinent provisions of the Compromise Agreement read:

WHEREAS, this Compromise Agreement covers the remaining claims and the cases of the Philippine Government against Roberto S.
Benedicto including his associates and nominees, namely, Julita C. Benedicto, Hector T. Rivera, x x x

WHEREAS, specifically these claims are the subject matter of the following cases (stress supplied):

1. Sandiganbayan Civil Case No. 9

2. Sandiganbayan Civil Case No. 24

3. Sandiganbayan Civil Case No. 34

4. Tanodbayan (Phil-Asia)

5. PCGG I.S. No. 1

xxx

WHEREAS, following the termination of the United States and Swiss cases, and also without admitting the merits of their respective
claims and counterclaims presently involved in uncertain, protracted and expensive litigation, the Republic of the Philippines, solely
motivated by the desire for the immediate accomplishment of its recovery mission and Mr. Benedicto being interested to lead a
peaceful and normal pursuit of his endeavors, the parties have decided to withdraw and/or dismiss their mutual claims and
counterclaims under the cases pending in the Philippines, earlier referred to (underscoring supplied);

xxx

II. Lifting of Sequestrations, Extension of Absolute Immunity and Recognition of the Freedom to Travel

a) The Government hereby lifts the sequestrations over the assets listed in Annex C hereof, the same being within the capacity of
Mr. Benedicto to acquire from the exercise of his profession and conduct of business, as well as all the haciendas listed in his name
in Negros Occidental, all of which were inherited by him or acquired with income from his inheritanceand all the other sequestered
assets that belong to Benedicto and his corporation/nominees which are not listed in Annex A as ceded or to be ceded to the
Government.

Provided, however, (that) any asset(s) not otherwise settled or covered by this Compromise Agreement, hereinafter found and
clearly established with finality by proper competent court as being held by Mr. Roberto S. Benedicto in trust for the family of the
late Ferdinand E. Marcos, shall be returned or surrendered to the Government for appropriate custody and disposition.
b) The Government hereby extends absolute immunity, as authorized under the pertinent provisions of Executive Orders Nos. 1, 2,
14 and 14-A, to Benedicto, the members of his family, officers and employees of his corporations above mentioned, who are
included in past, present and future cases and investigations of the Philippine Government, such that there shall be no criminal
investigation or prosecution against said persons for acts (or) omissions committed prior to February 25, 1986, that may be alleged
to have violated any laws, including but not limited to Republic Act No. 3019, in relation to the acquisition of any asset treated,
mentioned or included in this Agreement.

x x x[56]

In construing contracts, it is important to ascertain the intent of the parties by looking at the words employed to project their
intention. In the instant case, the parties clearly listed and limited the applicability of the Compromise Agreement to the cases listed
or identified therein. We have ruled in another case involving the same Compromise Agreement that:

[T]he subject matters of the disputed compromise agreement are Sandiganbayan Civil Case No. 0009, Civil Case No. 00234, Civil Case
No. 0034, the Phil-Asia case before the Tanodbayan and PCGG I.S. No. 1. The cases arose from complaints for reconveyance,
reversion, accounting, restitution, and damages against former President Ferdinand E. Marcos, members of his family, and alleged
cronies, one of whom was respondent Roberto S. Benedicto. [57]

Nowhere is there a mention of the criminal cases filed against petitioners for violations of Circular No. 960. Conformably with
Article 1370 of the Civil Code,[58] the Agreement relied upon by petitioners should include only cases specifically mentioned therein.
Applying the parol evidence rule,[59] where the parties have reduced their agreement into writing, the contents of the writing
constitute the sole repository of the terms of the agreement between the parties. [60] Whatever is not found in the text of the
Agreement should thus be construed as waived and abandoned. [61] Scrutiny of the Compromise Agreement will reveal that it does
not include all cases filed by the government against Benedicto, his family, and associates.
Additionally, the immunity covers only criminal investigation or prosecution against said persons for acts (or) omissions
committed prior to February 25, 1986 that may be alleged to have violated any penal laws, including but not limited to Republic Act
No. 3019, in relation to the acquisition of any asset treated, mentioned, or included in this Agreement. [62] It is only when the criminal
investigation or case involves the acquisition of any ill-gotten wealth treated, mentioned, or included in this Agreement [63] that
petitioners may invoke immunity. The record is bereft of any showing that the interest earnings from foreign exchange deposits in
banks abroad, which is the subject matter of the present case, are treated, mentioned, or included in the Compromise Agreement.
The phraseology of the grant of absolute immunity in the Agreement precludes us from applying the same to the criminal charges
faced by petitioners for violations of Circular No. 960. A contract cannot be construed to include matters distinct from those with
respect to which the parties intended to contract.[64]
In sum, we find that no reversible error of law may be attributed to the Court of Appeals in upholding the orders of the trial
court denying petitioners Motion to Quash the Informations in Criminal Case Nos. 91-101879 to 91-101883, 91-101884 to 91-
101892, and 92-101959 to 92-101969. In our view, none of the grounds provided for in the Rules of Court [65] upon which petitioners
rely, finds application in this case.
One final matter. During the pendency of this petition, counsel for petitioner Roberto S. Benedicto gave formal notice to the
Court that said petitioner died on May 15, 2000. The death of an accused prior to final judgment terminates his criminal liability as
well as the civil liability based solely thereon.[66]
WHEREFORE, the instant petition is DISMISSED. The assailed consolidated Decision of the Court of Appeals dated May 23,
1996, in CA-G.R. SP No. 35928 and CA-G.R. SP No. 35719, is AFFIRMED WITH MODIFICATION that the charges against deceased
petitioner, Roberto S. Benedicto, particularly in Criminal Cases Nos. 91-101879 to 91-101883, 91-101884 to 101892, and 92-101959
to 92-101969, pending before the Regional Trial Court of Manila, Branch 26, are ordered dropped and that any criminal as well as
civil liability ex delicto that might be attributable to him in the aforesaid cases are declared extinguished by reason of his death on
May 15, 2000. No pronouncement as to costs.
SO ORDERED.
 Republic of the Philippines
SUPREME COURT
Manila

FIRST DIVISION

G.R. No. 142396 February 11, 2003

KHOSROW MINUCHER, petitioner,

vs.
HON. COURT OF APPEALS and ARTHUR SCALZO, respondents.

DECISION

VITUG, J.:

Sometime in May 1986, an Information for violation of Section 4 of Republic Act No. 6425, otherwise also known as the "Dangerous
Drugs Act of 1972," was filed against petitioner Khosrow Minucher and one Abbas Torabian with the Regional Trial Court, Branch
151, of Pasig City. The criminal charge followed a "buy-bust operation" conducted by the Philippine police narcotic agents in the
house of Minucher, an Iranian national, where a quantity of heroin, a prohibited drug, was said to have been seized. The narcotic
agents were accompanied by private respondent Arthur Scalzo who would, in due time, become one of the principal witnesses for
the prosecution. On 08 January 1988, Presiding Judge Eutropio Migrino rendered a decision acquitting the two accused.

On 03 August 1988, Minucher filed Civil Case No. 88-45691 before the Regional Trial Court (RTC), Branch 19, of Manila for damages
on account of what he claimed to have been trumped-up charges of drug trafficking made by Arthur Scalzo. The Manila RTC detailed
what it had found to be the facts and circumstances surrounding the case.

"The testimony of the plaintiff disclosed that he is an Iranian national. He came to the Philippines to study in the University of the
Philippines in 1974. In 1976, under the regime of the Shah of Iran, he was appointed Labor Attach for the Iranian Embassies in
Tokyo, Japan and Manila, Philippines. When the Shah of Iran was deposed by Ayatollah Khomeini, plaintiff became a refugee of the
United Nations and continued to stay in the Philippines. He headed the Iranian National Resistance Movement in the Philippines.

"He came to know the defendant on May 13, 1986, when the latter was brought to his house and introduced to him by a certain
Jose Iigo, an informer of the Intelligence Unit of the military. Jose Iigo, on the other hand, was met by plaintiff at the office of Atty.
Crisanto Saruca, a lawyer for several Iranians whom plaintiff assisted as head of the anti-Khomeini movement in the Philippines.

"During his first meeting with the defendant on May 13, 1986, upon the introduction of Jose Iigo, the defendant expressed his
interest in buying caviar. As a matter of fact, he bought two kilos of caviar from plaintiff and paid P10,000.00 for it. Selling caviar,
aside from that of Persian carpets, pistachio nuts and other Iranian products was his business after the Khomeini government cut his
pension of over $3,000.00 per month. During their introduction in that meeting, the defendant gave the plaintiff his calling card,
which showed that he is working at the US Embassy in the Philippines, as a special agent of the Drug Enforcement Administration,
Department of Justice, of the United States, and gave his address as US Embassy, Manila. At the back of the card appears a
telephone number in defendants own handwriting, the number of which he can also be contacted.

"It was also during this first meeting that plaintiff expressed his desire to obtain a US Visa for his wife and the wife of a countryman
named Abbas Torabian. The defendant told him that he [could] help plaintiff for a fee of $2,000.00 per visa. Their conversation,
however, was more concentrated on politics, carpets and caviar. Thereafter, the defendant promised to see plaintiff again.

"On May 19, 1986, the defendant called the plaintiff and invited the latter for dinner at Mario's Restaurant at Makati. He wanted to
buy 200 grams of caviar. Plaintiff brought the merchandize but for the reason that the defendant was not yet there, he requested
the restaurant people to x x x place the same in the refrigerator. Defendant, however, came and plaintiff gave him the caviar for
which he was paid. Then their conversation was again focused on politics and business.

"On May 26, 1986, defendant visited plaintiff again at the latter's residence for 18 years at Kapitolyo, Pasig. The defendant wanted
to buy a pair of carpets which plaintiff valued at $27,900.00. After some haggling, they agreed at $24,000.00. For the reason that
defendant did not yet have the money, they agreed that defendant would come back the next day. The following day, at 1:00 p.m.,
he came back with his $24,000.00, which he gave to the plaintiff, and the latter, in turn, gave him the pair of carpets.1awphi1.nt
"At about 3:00 in the afternoon of May 27, 1986, the defendant came back again to plaintiff's house and directly proceeded to the
latter's bedroom, where the latter and his countryman, Abbas Torabian, were playing chess. Plaintiff opened his safe in the bedroom
and obtained $2,000.00 from it, gave it to the defendant for the latter's fee in obtaining a visa for plaintiff's wife. The defendant told
him that he would be leaving the Philippines very soon and requested him to come out of the house for a while so that he can
introduce him to his cousin waiting in a cab. Without much ado, and without putting on his shirt as he was only in his pajama pants,
he followed the defendant where he saw a parked cab opposite the street. To his complete surprise, an American jumped out of the
cab with a drawn high-powered gun. He was in the company of about 30 to 40 Filipino soldiers with 6 Americans, all armed. He was
handcuffed and after about 20 minutes in the street, he was brought inside the house by the defendant. He was made to sit down
while in handcuffs while the defendant was inside his bedroom. The defendant came out of the bedroom and out from defendant's
attach case, he took something and placed it on the table in front of the plaintiff. They also took plaintiff's wife who was at that
time at the boutique near his house and likewise arrested Torabian, who was playing chess with him in the bedroom and both were
handcuffed together. Plaintiff was not told why he was being handcuffed and why the privacy of his house, especially his bedroom
was invaded by defendant. He was not allowed to use the telephone. In fact, his telephone was unplugged. He asked for any
warrant, but the defendant told him to `shut up. He was nevertheless told that he would be able to call for his lawyer who can
defend him.

"The plaintiff took note of the fact that when the defendant invited him to come out to meet his cousin, his safe was opened where
he kept the $24,000.00 the defendant paid for the carpets and another $8,000.00 which he also placed in the safe together with a
bracelet worth $15,000.00 and a pair of earrings worth $10,000.00. He also discovered missing upon his release his 8 pieces hand-
made Persian carpets, valued at $65,000.00, a painting he bought for P30,000.00 together with his TV and betamax sets. He claimed
that when he was handcuffed, the defendant took his keys from his wallet. There was, therefore, nothing left in his house.

"That his arrest as a heroin trafficker x x x had been well publicized throughout the world, in various newspapers, particularly in
Australia, America, Central Asia and in the Philippines. He was identified in the papers as an international drug trafficker. x x x

In fact, the arrest of defendant and Torabian was likewise on television, not only in the Philippines, but also in America and in
Germany. His friends in said places informed him that they saw him on TV with said news.

"After the arrest made on plaintiff and Torabian, they were brought to Camp Crame handcuffed together, where they were detained
for three days without food and water."1

During the trial, the law firm of Luna, Sison and Manas, filed a special appearance for Scalzo and moved for extension of time to file
an answer pending a supposed advice from the United States Department of State and Department of Justice on the defenses to be
raised. The trial court granted the motion. On 27 October 1988, Scalzo filed another special appearance to quash the summons on
the ground that he, not being a resident of the Philippines and the action being one in personam, was beyond the processes of the
court. The motion was denied by the court, in its order of 13 December 1988, holding that the filing by Scalzo of a motion for
extension of time to file an answer to the complaint was a voluntary appearance equivalent to service of summons which could
likewise be construed a waiver of the requirement of formal notice. Scalzo filed a motion for reconsideration of the court order,
contending that a motion for an extension of time to file an answer was not a voluntary appearance equivalent to service of
summons since it did not seek an affirmative relief. Scalzo argued that in cases involving the United States government, as well as its
agencies and officials, a motion for extension was peculiarly unavoidable due to the need (1) for both the Department of State and
the Department of Justice to agree on the defenses to be raised and (2) to refer the case to a Philippine lawyer who would be
expected to first review the case. The court a quo denied the motion for reconsideration in its order of 15 October 1989.

Scalzo filed a petition for review with the Court of Appeals, there docketed CA-G.R. No. 17023, assailing the denial. In a decision,
dated 06 October 1989, the appellate court denied the petition and affirmed the ruling of the trial court. Scalzo then elevated the
incident in a petition for review on certiorari, docketed G.R. No. 91173, to this Court. The petition, however, was denied for its
failure to comply with SC Circular No. 1-88; in any event, the Court added, Scalzo had failed to show that the appellate court was in
error in its questioned judgment.

Meanwhile, at the court a quo, an order, dated 09 February 1990, was issued (a) declaring Scalzo in default for his failure to file a
responsive pleading (answer) and (b) setting the case for the reception of evidence. On 12 March 1990, Scalzo filed a motion to set
aside the order of default and to admit his answer to the complaint. Granting the motion, the trial court set the case for pre-trial. In
his answer, Scalzo denied the material allegations of the complaint and raised the affirmative defenses (a) of Minuchers failure to
state a cause of action in his complaint and (b) that Scalzo had acted in the discharge of his official duties as being merely an agent of
the Drug Enforcement Administration of the United States Department of Justice. Scalzo interposed a counterclaim of P100,000.00
to answer for attorneys' fees and expenses of litigation.
Then, on 14 June 1990, after almost two years since the institution of the civil case, Scalzo filed a motion to dismiss the complaint on
the ground that, being a special agent of the United States Drug Enforcement Administration, he was entitled to diplomatic
immunity. He attached to his motion Diplomatic Note No. 414 of the United States Embassy, dated 29 May 1990, addressed to the
Department of Foreign Affairs of the Philippines and a Certification, dated 11 June 1990, of Vice Consul Donna Woodward, certifying
that the note is a true and faithful copy of its original. In an order of 25 June 1990, the trial court denied the motion to dismiss.

On 27 July 1990, Scalzo filed a petition for certiorari with injunction with this Court, docketed G.R. No. 94257 and entitled "Arthur W.
Scalzo, Jr., vs. Hon. Wenceslao Polo, et al.," asking that the complaint in Civil Case No. 88-45691 be ordered dismissed. The case was
referred to the Court of Appeals, there docketed CA-G.R. SP No. 22505, per this Courts resolution of 07 August 1990. On 31 October
1990, the Court of Appeals promulgated its decision sustaining the diplomatic immunity of Scalzo and ordering the dismissal of the
complaint against him. Minucher filed a petition for review with this Court, docketed G.R. No. 97765 and entitled "Khosrow
Minucher vs. the Honorable Court of Appeals, et. al." (cited in 214 SCRA 242), appealing the judgment of the Court of Appeals. In a
decision, dated 24 September 1992, penned by Justice (now Chief Justice) Hilario Davide, Jr., this Court reversed the decision of the
appellate court and remanded the case to the lower court for trial. The remand was ordered on the theses (a) that the Court of
Appeals erred in granting the motion to dismiss of Scalzo for lack of jurisdiction over his person without even considering the issue
of the authenticity of Diplomatic Note No. 414 and (b) that the complaint contained sufficient allegations to the effect that Scalzo
committed the imputed acts in his personal capacity and outside the scope of his official duties and, absent any evidence to the
contrary, the issue on Scalzos diplomatic immunity could not be taken up.

The Manila RTC thus continued with its hearings on the case. On 17 November 1995, the trial court reached a decision; it adjudged:

"WHEREFORE, and in view of all the foregoing considerations, judgment is hereby rendered for the plaintiff, who successfully
established his claim by sufficient evidence, against the defendant in the manner following:

"`Adjudging defendant liable to plaintiff in actual and compensatory damages of P520,000.00; moral damages in the sum of P10
million; exemplary damages in the sum of P100,000.00; attorney's fees in the sum of P200,000.00 plus costs.

`The Clerk of the Regional Trial Court, Manila, is ordered to take note of the lien of the Court on this judgment to answer for the
unpaid docket fees considering that the plaintiff in this case instituted this action as a pauper litigant."2

While the trial court gave credence to the claim of Scalzo and the evidence presented by him that he was a diplomatic agent entitled
to immunity as such, it ruled that he, nevertheless, should be held accountable for the acts complained of committed outside his
official duties. On appeal, the Court of Appeals reversed the decision of the trial court and sustained the defense of Scalzo that he
was sufficiently clothed with diplomatic immunity during his term of duty and thereby immune from the criminal and civil
jurisdiction of the "Receiving State" pursuant to the terms of the Vienna Convention.

Hence, this recourse by Minucher. The instant petition for review raises a two-fold issue: (1) whether or not the doctrine of
conclusiveness of judgment, following the decision rendered by this Court in G.R. No. 97765, should have precluded the Court of
Appeals from resolving the appeal to it in an entirely different manner, and (2) whether or not Arthur Scalzo is indeed entitled to
diplomatic immunity.

The doctrine of conclusiveness of judgment, or its kindred rule of res judicata, would require 1) the finality of the prior judgment, 2)
a valid jurisdiction over the subject matter and the parties on the part of the court that renders it, 3) a judgment on the merits, and
4) an identity of the parties, subject matter and causes of action. 3 Even while one of the issues submitted in G.R. No. 97765 -
"whether or not public respondent Court of Appeals erred in ruling that private respondent Scalzo is a diplomat immune from civil
suit conformably with the Vienna Convention on Diplomatic Relations" - is also a pivotal question raised in the instant petition, the
ruling in G.R. No. 97765, however, has not resolved that point with finality. Indeed, the Court there has made this observation -

"It may be mentioned in this regard that private respondent himself, in his Pre-trial Brief filed on 13 June 1990, unequivocally states
that he would present documentary evidence consisting of DEA records on his investigation and surveillance of plaintiff and on his
position and duties as DEA special agent in Manila. Having thus reserved his right to present evidence in support of his position,
which is the basis for the alleged diplomatic immunity, the barren self-serving claim in the belated motion to dismiss cannot be
relied upon for a reasonable, intelligent and fair resolution of the issue of diplomatic immunity." 4

Scalzo contends that the Vienna Convention on Diplomatic Relations, to which the Philippines is a signatory, grants him absolute
immunity from suit, describing his functions as an agent of the United States Drugs Enforcement Agency as "conducting surveillance
operations on suspected drug dealers in the Philippines believed to be the source of prohibited drugs being shipped to the U.S.,
(and) having ascertained the target, (he then) would inform the Philippine narcotic agents (to) make the actual arrest." Scalzo has
submitted to the trial court a number of documents -

1. Exh. '2' - Diplomatic Note No. 414 dated 29 May 1990;

2. Exh. '1' - Certification of Vice Consul Donna K. Woodward dated 11 June 1990;

3. Exh. '5' - Diplomatic Note No. 757 dated 25 October 1991;

4. Exh. '6' - Diplomatic Note No. 791 dated 17 November 1992; and

5. Exh. '7' - Diplomatic Note No. 833 dated 21 October 1988.

6. Exh. '3' - 1st Indorsement of the Hon. Jorge R. Coquia, Legal Adviser, Department of Foreign Affairs, dated 27 June 1990
forwarding Embassy Note No. 414 to the Clerk of Court of RTC Manila, Branch 19 (the trial court);

7. Exh. '4' - Diplomatic Note No. 414, appended to the 1st Indorsement (Exh. '3'); and

8. Exh. '8' - Letter dated 18 November 1992 from the Office of the Protocol, Department of Foreign Affairs, through Asst.
Sec. Emmanuel Fernandez, addressed to the Chief Justice of this Court. 5

The documents, according to Scalzo, would show that: (1) the United States Embassy accordingly advised the Executive Department
of the Philippine Government that Scalzo was a member of the diplomatic staff of the United States diplomatic mission from his
arrival in the Philippines on 14 October 1985 until his departure on 10 August 1988; (2) that the United States Government was firm
from the very beginning in asserting the diplomatic immunity of Scalzo with respect to the case pursuant to the provisions of the
Vienna Convention on Diplomatic Relations; and (3) that the United States Embassy repeatedly urged the Department of Foreign
Affairs to take appropriate action to inform the trial court of Scalzos diplomatic immunity. The other documentary exhibits were
presented to indicate that: (1) the Philippine government itself, through its Executive Department, recognizing and respecting the
diplomatic status of Scalzo, formally advised the "Judicial Department" of his diplomatic status and his entitlement to all diplomatic
privileges and immunities under the Vienna Convention; and (2) the Department of Foreign Affairs itself authenticated Diplomatic
Note No. 414. Scalzo additionally presented Exhibits "9" to "13" consisting of his reports of investigation on the surveillance and
subsequent arrest of Minucher, the certification of the Drug Enforcement Administration of the United States Department of Justice
that Scalzo was a special agent assigned to the Philippines at all times relevant to the complaint, and the special power of attorney
executed by him in favor of his previous counsel6 to show (a) that the United States Embassy, affirmed by its Vice Consul,
acknowledged Scalzo to be a member of the diplomatic staff of the United States diplomatic mission from his arrival in the
Philippines on 14 October 1985 until his departure on 10 August 1988, (b) that, on May 1986, with the cooperation of the Philippine
law enforcement officials and in the exercise of his functions as member of the mission, he investigated Minucher for alleged
trafficking in a prohibited drug, and (c) that the Philippine Department of Foreign Affairs itself recognized that Scalzo during his tour
of duty in the Philippines (14 October 1985 up to 10 August 1988) was listed as being an Assistant Attach of the United States
diplomatic mission and accredited with diplomatic status by the Government of the Philippines. In his Exhibit 12, Scalzo described
the functions of the overseas office of the United States Drugs Enforcement Agency, i.e., (1) to provide criminal investigative
expertise and assistance to foreign law enforcement agencies on narcotic and drug control programs upon the request of the host
country, 2) to establish and maintain liaison with the host country and counterpart foreign law enforcement officials, and 3) to
conduct complex criminal investigations involving international criminal conspiracies which affect the interests of the United States.

The Vienna Convention on Diplomatic Relations was a codification of centuries-old customary law and, by the time of its ratification
on 18 April 1961, its rules of law had long become stable. Among the city states of ancient Greece, among the peoples of the
Mediterranean before the establishment of the Roman Empire, and among the states of India, the person of the herald in time of
war and the person of the diplomatic envoy in time of peace were universally held sacrosanct. 7 By the end of the 16th century, when
the earliest treatises on diplomatic law were published, the inviolability of ambassadors was firmly established as a rule of
customary international law.8Traditionally, the exercise of diplomatic intercourse among states was undertaken by the head of state
himself, as being the preeminent embodiment of the state he represented, and the foreign secretary, the official usually entrusted
with the external affairs of the state. Where a state would wish to have a more prominent diplomatic presence in the receiving
state, it would then send to the latter a diplomatic mission. Conformably with the Vienna Convention, the functions of the
diplomatic mission involve, by and large, the representation of the interests of the sending state and promoting friendly relations
with the receiving state.9
The Convention lists the classes of heads of diplomatic missions to include (a) ambassadors or nuncios accredited to the heads of
state,10 (b) envoys,11 ministers or internuncios accredited to the heads of states; and (c) charges d' affairs12 accredited to the
ministers of foreign affairs.13 Comprising the "staff of the (diplomatic) mission" are the diplomatic staff, the administrative staff and
the technical and service staff. Only the heads of missions, as well as members of the diplomatic staff, excluding the members of the
administrative, technical and service staff of the mission, are accorded diplomatic rank. Even while the Vienna Convention on
Diplomatic Relations provides for immunity to the members of diplomatic missions, it does so, nevertheless, with an understanding
that the same be restrictively applied. Only "diplomatic agents," under the terms of the Convention, are vested with blanket
diplomatic immunity from civil and criminal suits. The Convention defines "diplomatic agents" as the heads of missions or members
of the diplomatic staff, thus impliedly withholding the same privileges from all others. It might bear stressing that even consuls, who
represent their respective states in concerns of commerce and navigation and perform certain administrative and notarial duties,
such as the issuance of passports and visas, authentication of documents, and administration of oaths, do not ordinarily enjoy the
traditional diplomatic immunities and privileges accorded diplomats, mainly for the reason that they are not charged with the duty
of representing their states in political matters. Indeed, the main yardstick in ascertaining whether a person is a diplomat entitled to
immunity is the determination of whether or not he performs duties of diplomatic nature.

Scalzo asserted, particularly in his Exhibits "9" to "13," that he was an Assistant Attach of the United States diplomatic mission and
was accredited as such by the Philippine Government. An attach belongs to a category of officers in the diplomatic establishment
who may be in charge of its cultural, press, administrative or financial affairs. There could also be a class of attaches belonging to
certain ministries or departments of the government, other than the foreign ministry or department, who are detailed by their
respective ministries or departments with the embassies such as the military, naval, air, commercial, agricultural, labor, science, and
customs attaches, or the like. Attaches assist a chief of mission in his duties and are administratively under him, but their main
function is to observe, analyze and interpret trends and developments in their respective fields in the host country and submit
reports to their own ministries or departments in the home government. 14 These officials are not generally regarded as members of
the diplomatic mission, nor are they normally designated as having diplomatic rank.

In an attempt to prove his diplomatic status, Scalzo presented Diplomatic Notes Nos. 414, 757 and 791, all issued post litem motam,
respectively, on 29 May 1990, 25 October 1991 and 17 November 1992. The presentation did nothing much to alleviate the Court's
initial reservations in G.R. No. 97765, viz:

"While the trial court denied the motion to dismiss, the public respondent gravely abused its discretion in dismissing Civil Case No.
88-45691 on the basis of an erroneous assumption that simply because of the diplomatic note, the private respondent is clothed
with diplomatic immunity, thereby divesting the trial court of jurisdiction over his person.

"x x x x x x x x x

"And now, to the core issue - the alleged diplomatic immunity of the private respondent. Setting aside for the moment the issue of
authenticity raised by the petitioner and the doubts that surround such claim, in view of the fact that it took private respondent one
(1) year, eight (8) months and seventeen (17) days from the time his counsel filed on 12 September 1988 a Special Appearance and
Motion asking for a first extension of time to file the Answer because the Departments of State and Justice of the United States of
America were studying the case for the purpose of determining his defenses, before he could secure the Diplomatic Note from the
US Embassy in Manila, and even granting for the sake of argument that such note is authentic, the complaint for damages filed by
petitioner cannot be peremptorily dismissed.

"x x x x x x x x x

"There is of course the claim of private respondent that the acts imputed to him were done in his official capacity. Nothing supports
this self-serving claim other than the so-called Diplomatic Note. x x x. The public respondent then should have sustained the trial
court's denial of the motion to dismiss. Verily, it should have been the most proper and appropriate recourse. It should not have
been overwhelmed by the self-serving Diplomatic Note whose belated issuance is even suspect and whose authenticity has not yet
been proved. The undue haste with which respondent Court yielded to the private respondent's claim is arbitrary."

A significant document would appear to be Exhibit No. 08, dated 08 November 1992, issued by the Office of Protocol of the
Department of Foreign Affairs and signed by Emmanuel C. Fernandez, Assistant Secretary, certifying that "the records of the
Department (would) show that Mr. Arthur W. Scalzo, Jr., during his term of office in the Philippines (from 14 October 1985 up to 10
August 1988) was listed as an Assistant Attach of the United States diplomatic mission and was, therefore, accredited diplomatic
status by the Government of the Philippines." No certified true copy of such "records," the supposed bases for the belated issuance,
was presented in evidence.
Concededly, vesting a person with diplomatic immunity is a prerogative of the executive branch of the government. In World Health
Organization vs. Aquino,15 the Court has recognized that, in such matters, the hands of the courts are virtually tied. Amidst
apprehensions of indiscriminate and incautious grant of immunity, designed to gain exemption from the jurisdiction of courts, it
should behoove the Philippine government, specifically its Department of Foreign Affairs, to be most circumspect, that should
particularly be no less than compelling, in its post litem motam issuances. It might be recalled that the privilege is not an immunity
from the observance of the law of the territorial sovereign or from ensuing legal liability; it is, rather, an immunity from the exercise
of territorial jurisdiction.16 The government of the United States itself, which Scalzo claims to be acting for, has formulated its
standards for recognition of a diplomatic agent. The State Department policy is to only concede diplomatic status to a person who
possesses an acknowledged diplomatic title and "performs duties of diplomatic nature."17 Supplementary criteria for accreditation
are the possession of a valid diplomatic passport or, from States which do not issue such passports, a diplomatic note formally
representing the intention to assign the person to diplomatic duties, the holding of a non-immigrant visa, being over twenty-one
years of age, and performing diplomatic functions on an essentially full-time basis.18 Diplomatic missions are requested to provide
the most accurate and descriptive job title to that which currently applies to the duties performed. The Office of the Protocol would
then assign each individual to the appropriate functional category. 19

But while the diplomatic immunity of Scalzo might thus remain contentious, it was sufficiently established that, indeed, he worked
for the United States Drug Enforcement Agency and was tasked to conduct surveillance of suspected drug activities within the
country on the dates pertinent to this case. If it should be ascertained that Arthur Scalzo was acting well within his assigned
functions when he committed the acts alleged in the complaint, the present controversy could then be resolved under the related
doctrine of State Immunity from Suit.

The precept that a State cannot be sued in the courts of a foreign state is a long-standing rule of customary international law then
closely identified with the personal immunity of a foreign sovereign from suit 20 and, with the emergence of democratic states, made
to attach not just to the person of the head of state, or his representative, but also distinctly to the state itself in its sovereign
capacity.21 If the acts giving rise to a suit are those of a foreign government done by its foreign agent, although not necessarily a
diplomatic personage, but acting in his official capacity, the complaint could be barred by the immunity of the foreign sovereign
from suit without its consent. Suing a representative of a state is believed to be, in effect, suing the state itself. The proscription is
not accorded for the benefit of an individual but for the State, in whose service he is, under the maxim - par in parem, non habet
imperium - that all states are sovereign equals and cannot assert jurisdiction over one another. 22 The implication, in broad terms, is
that if the judgment against an official would require the state itself to perform an affirmative act to satisfy the award, such as the
appropriation of the amount needed to pay the damages decreed against him, the suit must be regarded as being against the state
itself, although it has not been formally impleaded.23

In United States of America vs. Guinto,24 involving officers of the United States Air Force and special officers of the Air Force Office of
Special Investigators charged with the duty of preventing the distribution, possession and use of prohibited drugs, this Court has
ruled -

"While the doctrine (of state immunity) appears to prohibit only suits against the state without its consent, it is also applicable to
complaints filed against officials of the state for acts allegedly performed by them in the discharge of their duties. x x x. It cannot for
a moment be imagined that they were acting in their private or unofficial capacity when they apprehended and later testified
against the complainant. It follows that for discharging their duties as agents of the United States, they cannot be directly impleaded
for acts imputable to their principal, which has not given its consent to be sued. x x x As they have acted on behalf of the
government, and within the scope of their authority, it is that government, and not the petitioners personally, [who were]
responsible for their acts."25

This immunity principle, however, has its limitations. Thus, Shauf vs. Court of Appeals26 elaborates:

"It is a different matter where the public official is made to account in his capacity as such for acts contrary to law and injurious to
the rights of the plaintiff. As was clearly set forth by Justice Zaldivar in Director of the Bureau of Telecommunications, et al., vs.
Aligaen, et al. (33 SCRA 368): `Inasmuch as the State authorizes only legal acts by its officers, unauthorized acts of government
officials or officers are not acts of the State, and an action against the officials or officers by one whose rights have been invaded or
violated by such acts, for the protection of his rights, is not a suit against the State within the rule of immunity of the State from suit.
In the same tenor, it has been said that an action at law or suit in equity against a State officer or the director of a State department
on the ground that, while claiming to act for the State, he violates or invades the personal and property rights of the plaintiff, under
an unconstitutional act or under an assumption of authority which he does not have, is not a suit against the State within the
constitutional provision that the State may not be sued without its consent. The rationale for this ruling is that the doctrine of state
immunity cannot be used as an instrument for perpetrating an injustice.
 "x x x x x x x x x

"(T)he doctrine of immunity from suit will not apply and may not be invoked where the public official is being sued in his private and
personal capacity as an ordinary citizen. The cloak of protection afforded the officers and agents of the government is removed the
moment they are sued in their individual capacity. This situation usually arises where the public official acts without authority or in
excess of the powers vested in him. It is a well-settled principle of law that a public official may be liable in his personal private
capacity for whatever damage he may have caused by his act done with malice and in bad faith or beyond the scope of his authority
and jurisdiction."27

A foreign agent, operating within a territory, can be cloaked with immunity from suit but only as long as it can be established that he
is acting within the directives of the sending state. The consent of the host state is an indispensable requirement of basic courtesy
between the two sovereigns. Guinto and Shauf both involve officers and personnel of the United States, stationed within Philippine
territory, under the RP-US Military Bases Agreement. While evidence is wanting to show any similar agreement between the
governments of the Philippines and of the United States (for the latter to send its agents and to conduct surveillance and related
activities of suspected drug dealers in the Philippines), the consent or imprimatur of the Philippine government to the activities of
the United States Drug Enforcement Agency, however, can be gleaned from the facts heretofore elsewhere mentioned. The official
exchanges of communication between agencies of the government of the two countries, certifications from officials of both the
Philippine Department of Foreign Affairs and the United States Embassy, as well as the participation of members of the Philippine
Narcotics Command in the "buy-bust operation" conducted at the residence of Minucher at the behest of Scalzo, may be inadequate
to support the "diplomatic status" of the latter but they give enough indication that the Philippine government has given
its imprimatur, if not consent, to the activities within Philippine territory of agent Scalzo of the United States Drug Enforcement
Agency. The job description of Scalzo has tasked him to conduct surveillance on suspected drug suppliers and, after having
ascertained the target, to inform local law enforcers who would then be expected to make the arrest. In conducting surveillance
activities on Minucher, later acting as the poseur-buyer during the buy-bust operation, and then becoming a principal witness in the
criminal case against Minucher, Scalzo hardly can be said to have acted beyond the scope of his official function or duties.

All told, this Court is constrained to rule that respondent Arthur Scalzo, an agent of the United States Drug Enforcement Agency
allowed by the Philippine government to conduct activities in the country to help contain the problem on the drug traffic, is entitled
to the defense of state immunity from suit.

WHEREFORE, on the foregoing premises, the petition is DENIED. No costs.

SO ORDERED.
 Republic of the Philippines
SUPREME COURT
Manila

FIRST DIVISION

G.R. No. 125865 January 28, 2000

JEFFREY LIANG (HUEFENG), petitioner,

vs.
PEOPLE OF THE PHILIPPINES, respondent.

YNARES-SANTIAGO, J.:

Petitioner is an economist working with the Asian Development Bank (ADB). Sometime in 1994, for allegedly uttering defamatory
words against fellow ADB worker Joyce Cabal, he was charged before the Metropolitan Trial Court (MeTC) of Mandaluyong City with
two counts of grave oral defamation docketed as Criminal Cases Nos. 53170 and 53171. Petitioner was arrested by virtue of a
warrant issued by the MeTC. After fixing petitioner's bail at P2,400.00 per criminal charge, the MeTC released him to the custody of
the Security Officer of ADB. The next day, the MeTC judge received an "office of protocol" from the Department of Foreign Affairs
(DFA) stating that petitioner is covered by immunity from legal process under Section 45 of the Agreement between the ADB and
the Philippine Government regarding the Headquarters of the ADB (hereinafter Agreement) in the country. Based on the said
protocol communication that petitioner is immune from suit, the MeTC judge without notice to the prosecution dismissed the two
criminal cases. The latter filed a motion for reconsideration which was opposed by the DFA. When its motion was denied, the
prosecution filed a petition for certiorari and mandamus with the Regional Trial Court (RTC) of Pasig City which set aside the MeTC
rulings and ordered the latter court to enforce the warrant of arrest it earlier issued. After the motion for reconsideration was
denied, petitioner elevated the case to this Court via a petition for review arguing that he is covered by immunity under the
Agreement and that no preliminary investigation was held before the criminal cases were filed in court.1wphi1.nt

The petition is not impressed with merit.

First, courts cannot blindly adhere and take on its face the communication from the DFA that petitioner is covered by any immunity.
The DFA's determination that a certain person is covered by immunity is only preliminary which has no binding effect in courts. In
receiving ex-parte the DFA's advice and in motu propio dismissing the two criminal cases without notice to the prosecution, the
latter's right to due process was violated. It should be noted that due process is a right of the accused as much as it is of the
prosecution. The needed inquiry in what capacity petitioner was acting at the time of the alleged utterances requires for its
resolution evidentiary basis that has yet to be presented at the proper time. 1 At any rate, it has been ruled that the mere invocation
of the immunity clause does not ipso facto result in the dropping of the charges. 2

Second, under Section 45 of the Agreement which provides:

Officers and staff of the Bank including for the purpose of this Article experts and consultants performing missions for the
Bank shall enjoy the following privileges and immunities:

a.) immunity from legal process with respect to acts performed by them in their official capacity except when the
Bank waives the immunity.

the immunity mentioned therein is not absolute, but subject to the exception that the acts was done in "official capacity." It is
therefore necessary to determine if petitioner's case falls within the ambit of Section 45(a). Thus, the prosecution should have been
given the chance to rebut the DFA protocol and it must be accorded the opportunity to present its controverting evidence, should it
so desire.

Third, slandering a person could not possibly be covered by the immunity agreement because our laws do not allow the commission
of a crime, such as defamation, in the name of official duty.3 The imputation of theft is ultra vires and cannot be part of official
functions. It is well-settled principle of law that a public official may be liable in his personal private capacity for whatever damage
he may have caused by his act done with malice or in bad faith or beyond the scope of his authority or jurisdiction. 4 It appears that
even the government's chief legal counsel, the Solicitor General, does not support the stand taken by petitioner and that of the DFA.
Fourth, under the Vienna Convention on Diplomatic Relations, a diplomatic agent, assuming petitioner is such, enjoys immunity from
criminal jurisdiction of the receiving state except in the case of an action relating to any professional or commercial activity
exercised by the diplomatic agent in the receiving state outside his official functions. 5 As already mentioned above, the commission
of a crime is not part of official duty.

Finally, on the contention that there was no preliminary investigation conducted, suffice it to say that preliminary investigation is not
a matter of right in cases cognizable by the MeTC such as the one at bar. 6 Being purely a statutory right, preliminary investigation
may be invoked only when specifically granted by law.7 The rule on the criminal procedure is clear that no preliminary investigation
is required in cases falling within the jurisdiction of the MeTC.8 Besides the absence of preliminary investigation does not affect the
court's jurisdiction nor does it impair the validity of the information or otherwise render it defective. 9

WHEREFORE, the petition is DENIED.

SO ORDERED.1wphi1.nt

Republic of the Philippines

SUPREME COURT
Manila

EN BANC

G.R. No. 149453 May 28, 2002

PEOPLE OF THE PHILIPPINES, ET AL.,

vs.
PANFILO M. LACSON

RESOLUTION

Before us is a petition for review on certiorari seeking to reverse and set aside the Decision1 of the Court of Appeals dated August
24, 2001 in CA-G.R. SP No. 65034.2 The said Decision of the appellate court granted respondent Lacson's Second Amended Petition
for Prohibition with application for the issuance of a Temporary Restraining Order, (1) assailing the Order issued by Judge Herminia
Pasamba of the Regional Trial Court (RTC) of Manila, Branch 40, that allowed the continuation of the re-investigation of Criminal
Cases Nos. Q-99-81679 to Q-99-81689 or the Kuratong Baleleng cases; and (2) praying for the dismissal of Criminal Cases Nos. Q-01-
101102 to Q-01-101112 entitled "People of the Philippines v. Panfilo Lacson, et al." pending before Branch 81 of the RTC of Quezon
City.

The following appear in the records of this case:

(1) On May 18, 1995, then PNP Director-General Recaredo Sarmiento II announced, in a press conference, the killing of eleven (11)
members of the Kuratong Baleleng Gang (KBG) in a shootout with police elements near the fly-over along Commonwealth Avenue,
Quezon City at about 4:00 A.M. that day.3

(2) On May 22, 1995, morning papers carried the news that SPO2 Eduardo delos Reyes had claimed that the killing of the eleven (11)
gang members was a "rub-out" or summary execution and not a shootout. 4

(3) In an affidavit he executed the following day, delos Reyes stated, among others, that he was part of a composite police team
called the Anti-Bank Robbery and Intelligence Task Force Group (ABRITFG) composed of elements of the National Capital Region
Command (NCRC) and headed by Chief Superintendent Jewel Canson; Traffic Management Command, headed by Senior
Superintendent Francisco Subia, Jr.; Presidential Anti-Crime Commission (PACC), headed by Chief Superintendent Panfilo M. Lacson;
Central Police District Command, headed by Chief Superintendent Ricardo de Leon; and Criminal Investigation Command (CIC),
headed by Chief Superintendent Romeo Acop. Delos Reyes claimed that the police team arrested the eleven (11) gang members in
early morning of May 18, 1995 at the gang's safe house in Superville Subdivision, Paraaque; that after their arrest, the gang
members were made to board two vans, their hands tied behind their backs, and brought initially to Camp Crame where a decision
to summarily execute them was made, and later to Commonwealth Avenue where they were shot to death by elements of
ABRITFG.5

(4) On May 26, 1995, SPO2 Corazon dela Cruz, another CIC investigator, executed an affidavit corroborating the material allegations
of delos Reyes. Dela Cruz claimed that she was with delos Reyes from the time the eleven (11) KBG members were arrested up to
the time they were killed in Commonwealth Avenue.6

(5) On May 31, 1995, Armando Capili, a reporter of Remate, executed an affidavit stating that he was present when the KBG
members were arrested in Superville Subdivision.7

(6) On June 1, 1995, Chief Superintendent Job A. Mayo, PNP Director for Investigation, filed murder charges with the Office of the
Ombudsman against ninety-seven (97) officers and personnel of ABRITFG. The next-of-kin of the slain KBG members also filed
murder charges against the same officers and personnel. 8

(7) Ombudsman Aniano Desierto then created a panel of investigators to conduct a preliminary investigation of the murder charges.
The panel was headed by Deputy Ombudsman for Military Affairs Bienvenido Blancaflor. On October 20, 1995, the panel issued a
resolution recommending the dismissal of the charges for lack of probable cause.

(8) Ombudsman Desierto referred the resolution for review by a panel composed of Over-all Deputy Ombudsman Francisco Villa as
head, and Special Prosecutor Leonardo Tamayo and Assistant Ombudsman Abelardo Aportadera as members. On November 20,
1995, the review panel reversed the Blancaflor resolution and found probable cause for the prosecution of multiple murder charges
against twenty-six (26) officers and personnel of ABRITFG. 9

(9) On November 2, 1995, the Ombudsman filed before the Sandiganbayan eleven (11) Informations for MURDER, docketed as
Criminal Cases Nos. 23047 to 23057, against respondent Panfilo M. Lacson and twenty-five (25) other accused. All twenty-six (26) of
them were charged as principals.10 The following appear to be the victims: Meleubren Sorronda in Crim. Case No. 23047; Welbor
Elcamel in Crim. Case No. 23048; Carlito Alap-ap in Crim. Case No. 23049; Jevy Redillas in Crim. Case No. 23050; Ray Abalora in Crim.
Case No. 23051; Joel Amora in Crim. Case No. 23052; Alex Neri in Crim. Case No. 23053; Rolando Siplon in Crim. Case No. 23054;
Manuel Montero in Crim. Case No. 23055; Sherwin Abalora in Crim. Case No. 23056; and Pacifico Montero in Crim. Case No. 23057.

(10) Upon motion of the respondent, the criminal cases were remanded to the Ombudsman for reinvestigation. On March 1, 1996,
Amended Informations were filed against the same twenty-six (26) suspects but the participation of respondent Lacson was
downgraded from principal to accessory. Arraignment then followed and respondent entered a plea of not guilty. 11

(11) With the downgrading of charges against him, respondent Lacson questioned the jurisdiction of the Sandiganbayan to hear the
criminal cases as none of the "principal" accused in the Amended Informations was a government official with a Salary Grade (SG) 27
or higher, citing Section 2 of R. A. No. 7975 then prevailing. Accordingly, the Sandiganbayan ordered the cases transferred to the
Regional Trial Court.12

(12) The Office of the Special Prosecutor filed a motion for reconsideration of the transfer. Pending resolution of the motion, R. A.
No. 8249 took effect on February 23, 1997, amending R. A. No. 7975. In particular, the amendatory law deleted the word "principal"
in Section 2 of R. A. No. 7975, thereby expanding the jurisdiction of the Sandiganbayan to include all cases where at least one of the
accused, whether principal, accomplice or accessory, is a government official of Salary Grade (SG) 27 or higher. The amendment is
made applicable to all cases pending in any court in which trial has not yet begun as of the date of its approval. 13

(13) In Lacson v. Executive Secretary,14 respondent Lacson challenged the constitutionality of the amendment and contended that
the Sandiganbayan had no jurisdiction over the criminal cases. This Court, while dismissing the constitutional challenge, nonetheless
ordered the transfer of the criminal cases to the Regional Trial Court on the ground that the Amended Informations for murder
failed to indicate that the offenses charged therein were committed in relation to, or in discharge of, the official functions of the
respondent, as required by R. A. No. 8249.

(14) Criminal Cases Nos. 23047 to 23057 were raffled off to Branch 81 of the Regional Trial Court of Quezon City, then presided by
Judge, now Associate Justice of the Court of Appeals, Wenceslao Agnir, Jr., and re-docketed as Criminal Cases Nos. Q-99-81679 to Q-
99-81689.

(15) Before the accused could be arraigned, prosecution witnesses Eduardo de los Reyes, Corazon de la Cruz, Armando Capili and
Jane Gomez recanted their affidavits which implicated respondent Lacson in the murder of the KBG members.
On the other hand, private complainants Myrna Abalora,15 Leonora Amora,16 Nenita Alap-ap,17 Imelda Montero,18 Margarita
Redillas,19 Carmelita Elcamel20 and Rolando Siplon21 also executed their respective affidavits of desistance declaring that they were
no longer interested to prosecute these cases. 22

(16) Due to these developments, the twenty-six (26) accused, including respondent Lacson, filed five separate but identical motions
to (1) make a judicial determination of the existence of probable cause for the issuance of warrants of arrest; (2) hold in abeyance
the issuance of the warrants, and (3) dismiss the cases should the trial court find lack of probable cause.

(17) The records of the case before us are not clear whether the private offended parties were notified of the hearing on March 22,
199923 held by Judge Agnir to resolve the motions filed by respondent Lacson and the other accused.

(18) During the said hearing, the private offended parties who desisted do not appear to have been presented on the witness stand.
In their stead, Atty. Godwin Valdez testified that he assisted them in preparing their affidavits of desistance and that he signed said
affidavits as witness. On the other hand, Atty. Aurora Bautista of the Philippine Lawyer's League presented the affidavits of
recantation of prosecution witnesses Eduardo de los Reyes, Armando Capili and Jane Gomez. Only prosecution witness Corazon de la
Cruz testified to affirm her affidavit.24

(19) On March 29, 1999, Judge Agnir issued a Resolution25 dismissing Criminal Cases Nos. Q-99-81679 to Q-99-81689, as follows:

"As already seen, the documents attached to the Informations in support thereof have been rendered meaningless, if not
absurd, with the recantation of the principal prosecution witnesses and the desistance of the private complainants. There is
no more evidence to show that a crime has been committed and that the accused are probably guilty thereof. Following the
doctrine above-cited, there is no more reason to hold the accused for trial and further expose them to an open and public
accusation. It is time to write finis to these cases and lay to rest the ghost of the incident of May 18, 1995 so that all those
involved--- the accused, the prosecution witnesses and the private complainants alike--- may get on with their lives.

The Court is not unmindful of the admonition in the recent case of People vs. Court of Appeals (G.R. No. 126005, January
21, 1999) where the Supreme Court said that the general rule is that 'if the Information is valid on its face and there is no
showing of manifest error, grave abuse of discretion or prejudice on the part of the public prosecutor, courts should not
dismiss it for want of evidence, because evidentiary matters should be presented and heard during the trial', and that the
ruling in Allado vs. Diokno 'is an exception to the general rule and may be invoked only if similar circumstances are clearly
shown to exist.'

This Court holds that the circumstances in the case at bench clearly make an exception to the general rule.

WHEREFORE, in view of the foregoing, the Court finds no probable cause for the issuance of the warrants of arrest against
the accused or to hold them for trial. Accordingly, the Informations in the above-numbered cases are hereby ordered
dismissed."

SO ORDERED."26

(20) On March 27, 2001, PNP Director Leandro R. Mendoza indorsed to the Department of Justice the new affidavits of P/Insp.
Ysmael S. Yu and P/S Insp. Abelardo Ramos regarding the Kuratong Baleleng incident for preliminary investigation. On the strength
of this indorsement, Secretary of Justice Hernando B. Perez formed a panel to investigate the matter. On April 17, 2001, the
respondent was subpoenaed to attend the investigation of Criminal Cases Nos. Q-99-81679 to Q-99-81689.27

(21) On May 28, 2001, respondent Lacson, et al., invoking, among others, their constitutional right against double jeopardy, filed a
petition for prohibition with application for temporary restraining order and/or writ of preliminary injunction with the Regional Trial
Court of Manila, primarily to enjoin the State prosecutors from conducting the preliminary investigation. The petition was docketed
as Civil Case No. 01-100933 and raffled to Branch 40, presided by Judge Herminia V. Pasamba. 28

(22) The plea for temporary restraining order was denied by Judge Pasamba in an Order29 dated June 5, 2001, viz:

"After a study, this Court submits that the dismissal of Criminal Cases Nos. Q-99-81679 to Q-99-81689 is not one on the
merits and without any recorded arraignment and entered plea on the part of the herein petitioners. The dismissal was a
direct consequence of the finding of the Quezon City RTC that no probable cause exists for the issuance of warrants of
arrest against petitioners herein and to hold them for trial. The arraignment had with the Sandiganbayan does not put the
 case in a different perspective since the Sandiganbayan was adjudged to be without any jurisdiction to try the cases. It is
the People of the Philippines who is the complainant in the Kuratong Baleleng case and remains to be the complainant in
the present investigation initiated thru a letter of PNP Chief Mendoza dated March 27, 2001 (Exhibit "B") together with the
sworn statements of witnesses Ramos and Yu (Exhibits "2" and "3" - supportive of the refiling of the case (Exhibit "9").

xxx xxx xxx

Above considered, this Court finds petitioners have not preliminarily established that they have a right to be preserved
pending hearing on the injunctive relief.

WHEREFORE, the prayer for temporary restraining order is hereby DENIED.

SO ORDERED."30

(23) On June 6, 2001, eleven (11) Informations for murder involving the killing of the same members of the Kuratong Baleleng gang
were filed before the Regional Trial Court of Quezon City and were docketed as Criminal Cases Nos. 01-101102 to 01-101112. The
new Informations charged as principals thirty-four (34) people, including respondent Lacson and his twenty-five (25) other co-
accused in Criminal Cases Nos. Q-99-81679 to Q-99-81689. The criminal cases were assigned to Judge Ma. Theresa L. Yadao.

(24) On the same day, respondent Lacson filed before the Court of Appeals a petition for certiorari 31 against Judge Pasamba, the
Secretary of Justice, the PNP Chief, State Prosecutors Ong and Zacarias, 2nd Assistant City Prosecutor Jamolin, and the People of the
Philippines. The said petition was amended to implead as additional party-respondents State Prosecutor Claro Arellano and the RTC,
Quezon City, Branch 81 in which the Informations in Criminal Cases Nos. 01-101102 to 01-101112 were filed.32

(25) The Second Amended Petition33 dated June 14, 2001 and admitted by the Court of Appeals on June 26, 2001, alleged:

"The reliefs of certiorari, prohibition and injunction against the questioned Order (Annex A) and the new Informations in
Criminal Cases Nos. 01-101102 to 01-101112 pending before respondent Yadao (Annex B) are founded upon the grave
abuse of discretion by respondent Judge Pasamba of her discretion in its issuance, the illegality of the proceedings of the
respondent State Prosecutors as they cannot revive complaints which had been dismissed over two (2) years from the date
the dismissal order was issued, and the invalidity of the new Informations for Murder filed against petitioners and others,
all in defiance of law and jurisprudence as shown by the following:

(a) Respondent judge had ruled on the merits of the main prohibition action a quo rendering the same moot and academic
by concluding that the dismissal of Criminal Cases Nos. Q-99-81679-Q-99-81689 by the QC RTC was not final and executory,
hence [i] the complaints therein can be reinvestigated, and [ii] petitioner's arraignment while the case had not yet been
remanded to the QC RTC and while the Sandiganbayan had valid jurisdiction thereover [Criminal Cases No. 23047-2048]
was void, notwithstanding that the only issue in the TRO application was the existence or lack of a valid complaint as
defined in S1 and S3, Rule 110.

(b) Respondent Judge ruled that respondent State Prosecutors could proceed to re-investigate and thereafter file new
Informations on June 6, 2001 covering those offenses subject of Criminal Cases Nos. Q-99-81679-Q-99-81689 on the basis
of affidavits filed after said cases were dismissed on March 29, 1999, despite the fact that under Section 8, Rule 117, cases
similar to those filed against the petitioner and others (where the penalty imposable is imprisonment of six (6) years or
more) cannot be revived after two (2) years from the date the dismissal order was issued.

(c) Respondent Judge held that the petitioner had not shown a right to be preserved despite evidence showing the short
cuts taken by respondent State prosecutors in re-investigating a dismissed case, in not complying with Rules in respect of its
re-opening, and in insisting that a valid complaint was filed in clear violation of the Rules and case law thereon, and despite
the fact that the petitioner had shown that an inextendible deadline of June 5, 2001 was given him to file his counter-
affidavit without which his indictment for a non-bailable offense is assured because of DOJ Secretary Hernando Perez's
political schemes."34

(26) In the meantime, on June 8, 2001, respondent Lacson also filed with the RTC-QC Branch 81 (presided by Judge Ma. Theresa
Yadao), a Motion for Judicial Determination of Probable Cause and in the absence thereof, to dismiss the cases outright. Respondent
Lacson, however, filed a Manifestation and Motion dated June 13, 2001 seeking the suspension of the proceedings before the trial
court.35
(27) The Court of Appeals issued a temporary restraining order enjoining Judge Yadao from issuing a warrant of arrest or conducting
any proceeding or hearing in Criminal Cases Nos. 01-101102 to 01-101112.36

(28) On August 24, 2001, the Court of Appeals (Special Third Division), rendered the now assailed Decision. It characterized the
termination of Criminal Cases Nos. Q-99-81679 to Q-99-81689 as "provisional dismissal," and considered Criminal Cases Nos. 01-
101102 to 01-101112 as mere revivals of the same. Applying Section 8, Rule 117 of the 2000 Revised Rules of Criminal Procedure, it
dismissed the criminal cases against the respondent, viz:

"In sum, this Court is of the considered view that the subject dismissal of [the] criminal cases was provisional in nature and
that the cases presently sought to be prosecuted by the respondents are mere revival or re-opening of the dismissed cases.
The present controversy, being one involving "provisional dismissal" and revival of criminal cases, falls within the purview of
the prescriptive period provided under Section 8, Rule 117 of the 2000 Revised Rules of Criminal Procedure. The second
paragraph of the said provision is couched in clear, simple and categorical words. It mandates that for offenses punishable
by imprisonment of more than six (6) years, as the subject criminal cases, their provisional dismissal shall become
permanent two (2) years after the issuance of the order without the case having been revived. It should be noted that the
revival of the subject criminal cases, even if reckoned from the DOJ's issuance of subpoenas to petitioner, was commenced
only on April 19, 2001, that is, more than two (2) years after the issuance, on March 29, 1999, of RTC-Quezon City's
Resolution, provisionally dismissing the criminal cases now sought to be revived. Applying the clear and categorical
mandate of Section 8, Rule 117, supra, such efforts to revive the criminal cases are now definitely barred by the two-year
prescriptive period provided therein.

xxx xxx xxx

WHEREFORE, the petition is GRANTED. As prayed for, the Temporary Restraining Order earlier issued against the conduct of
further proceedings in Criminal Cases Nos. 01-101102 to 01-101112, including the issuance of warrants of arrest against the
petitioner, PANFILO M. LACSON, is hereby made PERMANENT. Accordingly, with respect to said accused, the proceedings
conducted by respondent State Prosecutors in respect of the said criminal cases are declared NULL AND VOID and the
corresponding Informations, docketed as Criminal Cases Nos. 01-101102 to 01-101112, entitled 'People of the Philippines
vs. Panfilo M. Lacson, et al." and filed before respondent Judge Maria Theresa L. Yadao of Branch 81 of the Regional Trial
Court of Quezon City, are hereby ordered DISMISSED.

SO ORDERED."37

The issue is whether Section 8, Rule 117 bars the filing of the eleven (11) informations against the respondent Lacson involving the
killing of some members of the Kuratong Baleleng gang. This rule which took effect on December 1, 2000 provides:

"SEC. 8. Provisional dismissal.- A case shall not be provisionally dismissed except with the express consent of the accused
and with notice to the offended party.

The provisional dismissal of offenses punishable by imprisonment not exceeding six (6) years or a fine of any amount, or
both, shall become permanent one (1) year after issuance of the order without the case having been revived. With respect
to offenses punishable by imprisonment of more than six (6) years, their provisional dismissal shall become permanent two
(2) years after issuance of the order without the case having been revived."

Like any other favorable procedural rule, this new rule can be given retroactive effect. However, this Court cannot rule on this
jugular issue due to the lack of sufficient factual bases. Thus, there is need of proof of the following facts, viz: (1) whether the
provisional dismissal of the cases had the express consent of the accused; (2) whether it was ordered by the court after notice to the
offended party, (3) whether the 2-year period to revive has already lapsed, and (4) whether there is any justification for the filing of
the cases beyond the 2-year period.

There is no uncertainty with respect to the fact that the provisional dismissal of the cases against respondent Lacson bears his
express consent. It was respondent Lacson himself who moved to dismiss the subject cases for lack of probable cause before then
Judge Agnir, hence, it is beyond argument that their dismissal bears his express consent.

The records of the case, however, do not reveal with equal clarity and conclusiveness whether notices to the offended parties were
given before the cases against the respondent Lacson were dismissed by then Judge Agnir. It appears from the resolution of then
Judge Agnir that the relatives of the victims who desisted did not appear during the hearing to affirm their affidavits. Their affidavits
of desistance were only presented by Atty. Godwin Valdez who testified that he assisted the private complainants in preparing their
affidavits and he signed them as a witness. It also appears that only seven (7) persons submitted their affidavits of desistance,
namely:

a. Myrna Abalora, mother of the victims Sherwin Abalora and Rey Abalora

b. Carmelita Elcamel, wife of Wilbur Elcamel;

c. Leonora Amora, mother of victim Joel Amora;

d. Nenita Alap-ap, wife of victim Carlito Alap-ap;

e. Imelda Montero, wife of victim Manuel Montero;

f. Margarita Redillas, mother of victim Hilario Jevy Redillas; and

g. Rolando Siplon.

From the records of the case before us, it cannot be determined whether there were affidavits of desistance executed by the
relatives of the three (3)38 other victims, namely: Meleubren Soronda, Pacifico Montero, Jr., and Alex Neri. The same records do not
show whether they were notified of the hearing or had knowledge thereof. To be sure, it is not fair to expect the element of notice
to be litigated before then Judge Agnir for Section 8, Rule 117 was yet inexistent at that time.

The fact of notice to the offended parties was not raised either in the petition for prohibition with application for temporary
restraining order or writ of preliminary injunction filed by respondent Lacson in the RTC of Manila, presided by Judge Pasamba, to
enjoin the prosecutors from reinvestigating the said cases against him. The only question raised in said petition is whether the
reinvestigation will violate the right of respondent Lacson against double jeopardy. Thus, the issue of whether or not the
reinvestigation is barred by Section 8, Rule 117 was not tackled by the litigants.

Nor was the fact of notice to the offended parties the subject of proof after the eleven (11) informations for murder against
respondent Lacson and company were revived in the RTC of Quezon City presided by Judge Yadao. There was hardly any proceeding
conducted in the case for respondent Lacson immediately filed a petition for certiorari in the appellate court challenging, among
others, the authority of Judge Yadao to entertain the revived informations for multiple murder against him.

This is not to be wondered at. The applicability of Section 8, Rule 117 was never considered in the trial court. It was in the Court of
Appeals where respondent Lacson raised for the first time the argument that Section 8, Rule 117 bars the revival of the multiple
murder cases against him. But even then, the appellate court did not require the parties to elucidate the crucial issue of whether
notices were given to the offended parties before Judge Agnir ordered the dismissal of the cases against respondent Lacson and
company. To be sure, there is a statement in the Decision of the appellate court to the effect that "records show that the
prosecution and the private offended parties were notified of the hearing x x x." 39 It is doubtful whether this finding is supported by
the records of the case. It appears to be contrary to Judge Agnir's finding that only seven (7) of the complainants submitted affidavits
of desistance.

Indeed, the records of this case are inconclusive on the factual issue of whether the multiple murder cases against respondent
Lacson are being revived within or beyond the 2-year bar. The reckoning date of the 2-year bar has to be first determined - - -
whether it is from the date of the Order of then Judge Agnir dismissing the cases or from the dates the Order were received by the
various offended parties or from the date of the effectivity of the new rule.

If the cases were revived only after the 2-year bar, the State must be given the opportunity to justify its failure to comply with said
timeline. The new rule fixes a timeline to penalize the State for its inexcusable delay in prosecuting cases already filed in courts. It
can therefore present compelling reasons to justify the revival of cases beyond the 2-year bar.

In light of the lack of or the conflicting evidence on the various requirements to determine the applicability of Section 8, Rule 117,
this Court is not in a position to rule whether or not the re-filing of the cases for multiple murder against respondent Lacson should
be enjoined. Fundamental fairness requires that both the prosecution and the respondent Lacson should be afforded the
opportunity to be heard and to adduce evidence on the presence or absence of the predicate facts upon which the application of
the new rule depends. They involve disputed facts and arguable questions of law. The reception of evidence on these various issues
cannot be done in this Court but before the trial court.

IN VIEW OF THE FOREGOING, the case at bar is remanded to the RTC - Quezon City, Branch 81 so that the State prosecutors and the
respondent Lacson can adduce evidence and be heard on whether the requirements of Section 8, Rule 117 have been complied with
on the basis of the evidence of which the trial court should make a ruling on whether the Informations in Criminal Cases Nos. 01-
101102 to 01-101112 should be dismissed or not. Pending the ruling, the trial court is restrained from issuing any warrant of arrest
against the respondent Lacson. Melo and Carpio, JJ., take no part.

SO ORDERED.

THIRD DIVISION
[G.R. No. 151876. June 21, 2005]
SUSAN GO and the PEOPLE OF THE PHILIPPINES, petitioners, vs. FERNANDO L. DIMAGIBA, respondent.

DECISION
PANGANIBAN, J.:

Administrative Circular 12-2000, as clarified by Administrative Circular 13-2001, merely establishes a rule of preference in
imposing penalties for violations of Batas Pambansa Blg. 22 (BP 22), the Bouncing Checks Law. When the circumstances of both the
offense and the offender indicate good faith or a clear mistake of fact without taint of negligence, the imposition of a fine alone --
instead of imprisonment -- is the preferred penalty. As the Circular requires a review of the factual circumstances of a given case, it
applies only to pending or future litigations. It is not a penal law; hence, it does not have retroactive effect. Neither may it be used to
modify final judgments of conviction.

The Case

Before us is a Petition for Review[1] under Rule 45 of the Rules of Court, assailing the October 10, 2001 [2] and the October 11,
2001 Orders of the Regional Trial Court (RTC) (Branch 5), Baguio City.[4] The October 10, 2001 Order released Respondent Fernando
[3]

L. Dimagiba from confinement and required him to pay a fine of P100,000 in lieu of imprisonment. The October 11, 2001 Order
disposed as follows:

WHEREFORE, [in] applying the doctrine as held in the above-entitled cases in this case, the instant petition for Habeas Corpus should
be, as it is hereby, GRANTED. The Baguio City Jail Warden is hereby ordered to IMMEDIATELY RELEASE the petitioner from
confinement unless he is being held for some other lawful cause other than by virtue of the Sentence Mittimus dated September 28,
2001 issued by CESAR S. VIDUYA, Clerk of Court, MTC 4, Baguio City. Further, the petitioner is required to pay a fine in the amount
of P100,000.00 in lieu of his imprisonment, in addition to the civil aspect of the Joint Judgment rendered by MTC 4 dated July 16,
1999.[5]

The Facts

The pertinent facts are not disputed. Respondent Fernando L. Dimagiba issued to Petitioner Susan Go thirteen (13) checks
which, when presented to the drawee bank for encashment or payment on the due dates, were dishonored for the reason account
closed.[6] Dimagiba was subsequently prosecuted for 13 counts of violation of BP 22[7] under separate Complaints filed with the
Municipal Trial Court in Cities (MTCC) in Baguio City.[8] After a joint trial, the MTCC (Branch 4) rendered a Decision on July 16, 1999,
convicting the accused in the 13 cases. The dispositive portion reads as follows:
WHEREFORE, in view of the foregoing disquisition, this Court finds the evidence of the prosecution to have established the guilt of
the accused beyond reasonable doubt of the offenses charged and imposes upon the accused the penalty of 3 months
imprisonment for each count (13 counts) and to indemnify the offended party the amount of One Million Two Hundred Ninety Five
Thousand Pesos (P1,295,000.00) with legal interest per annum commencing from 1996 after the checks were dishonored by reason
ACCOUNT CLOSED on December 13, 1995, to pay attorneys fees of P15,000.00 and to pay the costs.[9]

The appeal of Dimagiba was raffled to Branch 4 of the RTC in Baguio City. [10] On May 23, 2000, the RTC denied the appeal and
sustained his conviction.[11] There being no further appeal to the Court of Appeals (CA), the RTC issued on February 1, 2001, a
Certificate of Finality of the Decision.[12]
Thus, on February 14, 2001, the MTCC issued an Order directing the arrest of Dimagiba for the service of his sentence as a
result of his conviction. The trial court also issued a Writ of Execution to enforce his civil liability. [13]
On February 27, 2001, Dimagiba filed a Motion for Reconsideration of the MTCC Order. He prayed for the recall of the Order of
Arrest and the modification of the final Decision, arguing that the penalty of fine only, instead of imprisonment also, should have
been imposed on him.[14] The arguments raised in that Motion were reiterated in a Motion for the Partial Quashal of the Writ of
Execution filed on February 28, 2001.[15]
In an Order dated August 22, 2001, the MTCC denied the Motion for Reconsideration and directed the issuance of a Warrant of
Arrest against Dimagiba.[16] On September 28, 2001, he was arrested and imprisoned for the service of his sentence.
On October 9, 2001, he filed with the RTC of Baguio City a Petition [17] for a writ of habeas corpus. The case was raffled to
Branch 5, which scheduled the hearing for October 10, 2001. Copies of the Order were served on respondents counsels and the city
warden.[18]

Ruling of the Regional Trial Court

Right after hearing the case on October 10, 2001, the RTC issued an Order directing the immediate release of Dimagiba from
confinement and requiring him to pay a fine of P100,000 in lieu of imprisonment. However, the civil aspect of the July 16, 1999
MTCC Decision was not touched upon.[19] A subsequent Order, explaining in greater detail the basis of the grant of the writ of habeas
corpus, was issued on October 11, 2001.[20]
In justifying its modification of the MTCC Decision, the RTC invoked Vaca v. Court of Appeals[21] and Supreme Court
Administrative Circular (SC-AC) No. 12-2000,[22] which allegedly required the imposition of a fine only instead of imprisonment also
for BP 22 violations, if the accused was not a recidivist or a habitual delinquent. The RTC held that this rule should be retroactively
applied in favor of Dimagiba.[23] It further noted that (1) he was a first-time offender and an employer of at least 200 workers who
would be displaced as a result of his imprisonment; and (2) the civil liability had already been satisfied through the levy of his
properties.[24]
On October 22, 2001, Petitioner Go filed a Motion for Reconsideration of the RTC Orders dated October 10 and 11,
2001.[25] That Motion was denied on January 18, 2002.[26]
Hence, this Petition filed directly with this Court on pure questions of law.[27]

The Issues

Petitioner raises the following issues for this Courts consideration:

1. [The RTC] Judge was utterly devoid of jurisdiction in amending a final and conclusive decision of the Municipal Trial Court, Branch
4, dated July 16, 1999, in nullifying the Sentence Mittimus, dated September 28, 2001, issued by x x x [the] Municipal Trial Court,
Branch 4, Baguio City, and in ordering the release of [Dimagiba] from confinement in jail for the service of his sentence under the
said final and conclusive judgment;

2. Assuming only for the sake of argument that habeas corpus is the proper remedy, the Petition for Habeas Corpus is utterly devoid
of merit as [Dimagiba was] not entitled to the beneficent policy enunciated in the Eduardo Vaca and Rosa Lim cases and reiterated
in the Supreme Court Circular No. 12-2000; x x x
3. Granting for the sake of argument that [Dimagiba was] entitled to the beneficent policy enunciated in the Eduardo Vaca and Rosa
Lim cases and reiterated in the Supreme Court Circular No. 12-2000, the minimum fine that should be imposed on [Dimagiba] is one
million and two hundred ninety five thousand pesos (P1,295,000.00) up to double the said amount or (P2,590,000), not just the
measly amount of P100,000; and

4. [The RTC] judge committed grave abuse of discretion amounting to lack or excess of jurisdiction in hearing and deciding
[Dimagibas] Petition for Habeas Corpus without notice and without affording procedural due process to the People of the
Philippines through the Office of [the] City Prosecutor of Baguio City or the Office of the Solicitor General. [28]

In the main, the case revolves around the question of whether the Petition for habeas corpus was validly granted. Hence, the
Court will discuss the four issues as they intertwine with this main question.[29]

The Courts Ruling

The Petition is meritorious.

Main Issue:
Propriety of the
Writ of Habeas Corpus

The writ of habeas corpus applies to all cases of illegal confinement or detention in which individuals are deprived of
liberty.[30] It was devised as a speedy and effectual remedy to relieve persons from unlawful restraint; or, more specifically, to obtain
immediate relief for those who may have been illegally confined or imprisoned without sufficient cause and thus deliver them from
unlawful custody.[31] It is therefore a writ of inquiry intended to test the circumstances under which a person is detained. [32]
The writ may not be availed of when the person in custody is under a judicial process or by virtue of a valid
judgment.[33] However, as a post-conviction remedy, it may be allowed when, as a consequence of a judicial proceeding, any of the
following exceptional circumstances is attendant: (1) there has been a deprivation of a constitutional right resulting in the restraint
of a person; (2) the court had no jurisdiction to impose the sentence; or (3) the imposed penalty has been excessive, thus voiding the
sentence as to such excess.[34]
In the present case, the Petition for a writ of habeas corpus was anchored on the ruling in Vaca and on SC-AC No. 12-2000,
which allegedly prescribed the imposition of a fine, not imprisonment, for convictions under BP 22. Respondent sought the
retroactive effect of those rulings, thereby effectively challenging the penalty imposed on him for being excessive. From his
allegations, the Petition appeared sufficient in form to support the issuance of the writ.
However, it appears that respondent has previously sought the modification of his sentence in a Motion for
Reconsideration[35] of the MTCCs Execution Order and in a Motion for the Partial Quashal of the Writ of Execution. [36] Both were
denied by the MTCC on the ground that it had no power or authority to amend a judgment issued by the RTC.
In his Petition for habeas corpus, respondent raised the same arguments that he had invoked in the said Motions. We believe
that his resort to this extraordinary remedy was a procedural infirmity. The remedy should have been an appeal of the MTCC Order
denying his Motions, in which he should have prayed that the execution of the judgment be stayed. But he effectively misused the
action he had chosen, obviously with the intent of finding a favorable court. His Petition for a writ of habeas corpus was clearly an
attempt to reopen a case that had already become final and executory. Such an action deplorably amounted to forum shopping.
Respondent should have resorted to the proper, available remedy instead of instituting a different action in another forum.
The Court also finds his arguments for his release insubstantial to support the issuance of the writ of habeas corpus.

Preference in the
Application of Penalties
for Violation of BP 22
 The following alternative penalties are imposable under BP 22: (1) imprisonment of not less than 30 days, but not more than
one year; (2) a fine of not less or more than double the amount of the check, a fine that shall in no case exceed P200,000; or (3) both
such fine and imprisonment, at the discretion of the court. [37]
SC-AC No. 12-2000, as clarified by SC-AC No. 13-2001,[38] established a rule of preference in imposing the above
penalties.[39] When the circumstances of the case clearly indicate good faith or a clear mistake of fact without taint of negligence, the
imposition of a fine alone may be considered as the preferred penalty. [40] The determination of the circumstances that warrant the
imposition of a fine rests upon the trial judge only.[41] Should the judge deem that imprisonment is appropriate, such penalty may be
imposed.[42]
SC-AC No. 12-2000 did not delete the alternative penalty of imprisonment. The competence to amend the law belongs to the
legislature, not to this Court.[43]

Inapplicability of
SC-AC No. 12-2000

Petitioners argue that respondent is not entitled to the benevolent policy enunciated in SC-AC No. 12-2000, because he is not a
first time offender.[44] This circumstance is, however, not the sole factor in determining whether he deserves the preferred penalty
of fine alone. The penalty to be imposed depends on the peculiar circumstances of each case.[45] It is the trial courts discretion to
impose any penalty within the confines of the law. SC-AC No. 13-2001 explains thus:

x x x. Administrative Circular No. 12-2000 establishes a rule of preference in the application of the penal provisions of BP 22 such
that where the circumstances of both the offense and the offender clearly indicate good faith or a clear mistake of fact without taint
of negligence, the imposition of a fine alone should be considered as the more appropriate penalty. Needless to say, the
determination of whether the circumstances warrant the imposition of a fine alone rests solely upon the Judge. x x x.

It is, therefore, understood that:

xxxxxxxxx

2. The Judges concerned, may in the exercise of sound discretion, and taking into consideration the peculiar circumstances of each
case, determine whether the imposition of a fine alone would best serve the interests of justice, or whether forbearing to impose
imprisonment would depreciate the seriousness of the offense, work violence on the social order, or otherwise be contrary to the
imperatives of justice;

The Court notes that the Petition for a writ of habeas corpus relied mainly on the alleged retroactivity of SC-AC No. 12-2000,
which supposedly favored BP 22 offenders.[46] On this point, Dimagiba contended that his imprisonment was violative of his right to
equal protection of the laws, since only a fine would be imposed on others similarly situated. [47]
The rule on retroactivity states that criminal laws may be applied retroactively if favorable to the accused. This principle,
embodied in the Revised Penal Code,[48] has been expanded in certain instances to cover special laws.[49]
The issue of retroactivity of SC-AC No. 12-2000 was settled in De Joya v. Jail Warden of Batangas City,[50] which we quote:

Petitioner's reliance of our ruling in Ordoez v. Vinarao that a convicted person is entitled to benefit from the reduction of penalty
introduced by the new law, citing People v. Simon, is misplaced. Thus, her plea that as provided for in Article 22 of the Revised Penal
Code, SC Admin. Circular No. 12-2000 as modified by SC Admin. Circular No. 13-2001 should benefit her has no basis.

First. SC Admin. Circular No. 12-2000 is not a penal law; hence, Article 22 of the Revised Penal Code is not applicable. The circular
applies only to those cases pending as of the date of its effectivity and not to cases already terminated by final judgment.

Second. As explained by the Court in SC Admin. Circular No. 13-2001, SC Admin. Circular No. 12-2000 merely lays down a rule of
preference in the application of the penalties for violation of B.P. Blg. 22. It does not amend B.P. Blg. 22, nor defeat the legislative
intent behind the law. SC Admin. Circular No. 12-2000 merely urges the courts to take into account not only the purpose of the law
but also the circumstances of the accused -- whether he acted in good faith or on a clear mistake of fact without taint of negligence -
- and such other circumstance which the trial court or the appellate court believes relevant to the penalty to be imposed. [51]
 Because the Circular merely lays down a rule of preference, it serves only as a guideline for the trial courts. Thus, it is addressed
to the judges, who are directed to consider the factual circumstances of each case prior to imposing the appropriate penalty. In
other words, the Administrative Circular does not confer any new right in favor of the accused, much less those convicted by final
judgment.
The competence to determine the proper penalty belongs to the court rendering the decision against the accused. [52] That
decision is subject only to appeal on grounds of errors of fact or law, or grave abuse of discretion amounting to lack or excess of
jurisdiction. Another trial court may not encroach upon this authority. Indeed, SC-AC No. 12-2000 necessarily requires a review of all
factual circumstances of each case. Such a review can no longer be done if the judgment has become final and executory.
In the present case, the MTCC of Baguio City had full knowledge of all relevant circumstances from which respondents
conviction and sentence were based. The penalty imposed was well within the confines of the law. Upon appeal, the conviction was
sustained by RTC-Branch 4 of Baguio City. Eventually, the Decision attained finality. Hence, RTC-Branch 5 did not have the
jurisdiction to modify the lawful judgment in the guise of granting a writ of habeas corpus.
The doctrine of equal protection of laws[53] does not apply for the same reasons as those on retroactivity. Foremost of these
reasons is that the Circular is not a law that deletes the penalty of imprisonment. As explained earlier, it is merely a rule of
preference as to which penalty should be imposed under the peculiar circumstances of a case. At any rate, this matter deserves
scant consideration, because respondent failed to raise any substantial argument to support his contention. [54]

Modification of Final
Judgment Not Warranted

The Court is not unmindful of So v. Court of Appeals,[55] in which the final judgment of conviction for violation of BP 22 was
modified by the deletion of the sentence of imprisonment and the imposition of a fine. That case proceeded from an Urgent
Manifestation of an Extraordinary Supervening Event, [56] not from an unmeritorious petition for a writ of habeas corpus, as in the
present case. The Court exercised in that case its authority to suspend or to modify the execution of a final judgment when
warranted or made imperative by the higher interest of justice or by supervening events.[57] The supervening event in that case was
the petitioners urgent need for coronary rehabilitation for at least one year under the direct supervision of a coronary care
therapist; imprisonment would have been equivalent to a death sentence. [58]
The peculiar circumstances of So do not obtain in the present case. Respondents supposed unhealthy physical condition due to
a triple by-pass operation, and aggravated by hypertension, cited by the RTC in its October 10, 2001 Order, [59] is totally bereft of
substantial proof. The Court notes that respondent did not make any such allegation in his Petition for habeas corpus. Neither did he
mention his physical state in his Memorandum and Comment submitted to this Court.
Respondent seeks the retroactive application of SC-AC No. 12-2000 in his favor on the basis alone of the alleged settlement of
his civil liability.[60] Citing Griffith v. Court of Appeals,[61]he theorizes that answering for a criminal offense is no longer justified after
the settlement of the debt.
Respondent, however, misreads Griffith. The Court held in that case that convicting the accused who, two years prior to the
filing of the BP 22 cases, had already paid his debt (from which the checks originated) was contrary to the basic principles of fairness
and justice.[62] Obviously, that situation is not attendant here.
The civil liability in the present case was satisfied through the levy and sale of the properties of respondent only after the
criminal case had been terminated with his conviction. [63]Apparently, he had sufficient properties that could have been used to
settle his liabilities prior to his conviction. Indeed, such an early settlement would have been an indication that he was in good faith,
a circumstance that could have been favorably considered in determining his appropriate penalty.
At any rate, civil liability differs from criminal liability.[64] What is punished in the latter is not the failure to pay the obligation,
but the issuance of checks that subsequently bounced or were dishonored for insufficiency or lack of funds. [65] The Court reiterates
the reasons why the issuance of worthless checks is criminalized:

The practice is prohibited by law because of its deleterious effects on public interest. The effects of the increase of worthless checks
transcend the private interest of the parties directly involved in the transaction and touches the interest of the community at large.
The mischief it creates is not only a wrong to the payee or holder, but also an injury to the public. The harmful practice of putting
valueless commercial papers in circulation multiplied a thousand-fold can very well pollute the channels of trade and commerce,
injure the banking system and eventually hurt the welfare of society and the public interest. The law punishes the act not as an
offense against property but an offense against public order.[66]
 WHEREFORE, the Petition is GRANTED and the assailed Orders NULLIFIED. Respondents Petition for habeas corpus is
hereby DENIED. Let this case be REMANDED to MTCC of Baguio City for the re-arrest of respondent and the completion of his
sentence.
No pronouncement as to costs.
SO ORDERED.

SECOND DIVISION
[G.R. No. 119619. December 13, 1996]
RICHARD HIZON, SILVERIO GARGAR, ERNESTO ANDAYA, NEMESIO GABO, RODRIGO ABRERA, CHEUNG TAI FOOK, SHEK CHOR LUK,
EFREN DELA PENA, JONEL AURELIO, GODOFREDO VILLAVERDE, ANGELITO DUMAYBAG, DEOMEDES ROSIL, AMADO
VILLANUEVA, FRANCISCO ESTREMOS, ANGEL VILLAVERDE, NEMESIO CASAMPOL, RICHARD ESTREMOS, JORNIE DELA
PENA, JESUS MACTAN, MARLON CAMPORAZO, FERNANDO BIRING, MENDRITO CARPO, LUIS DUARTE, JOSEPH AURELIO,
RONNIE JUEZAN, BERNARDO VILLACARLOS, RICARDO SALES, MARLON ABELLA, TEODORO DELOS REYES, IGNACIO
ABELLA, JOSEPH MAYONADO, JANAIRO LANGUYOD, DODONG DELOS REYES, JOLLY CABALLERO and ROPLANDO
ARCENAS, petitioners, vs. HONORABLE COURT OF APPEALS and THE PEOPLE OF THE PHILIPPINES, respondents.

DECISION
PUNO, J.:

This is a petition for review on certiorari of the decision of the Court of Appeals in CA-G.R. CR No. 15417 affirming the decision
of the Regional Trial Court, Branch 52, Palawan in Criminal Case No. 10429 convicting petitioners of the offense of illegal fishing with
the use of obnoxious or poisonous substance penalized under Presidential Decree (P.D.) No. 704, the Fisheries Decree of 1975.
In an Information dated October 15, 1992, petitioners were charged with a violation of P.D. 704 committed as follows:

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

The following facts were established by the prosecution: In September 1992, the Philippine National Police (PNP) Maritime
Command of Puerto Princesa City, Palawan received reports of illegal fishing operations in the coastal waters of the city. In response
to these reports, the city mayor organized Task Force Bantay Dagat to assist the police in the detection and apprehension of
violators of the laws on fishing.
On September 30, 1992 at about 2:00 in the afternoon, the Task Force Bantay Dagat reported to the PNP Maritime Command
that a boat and several small crafts were fishing by muro ami within the shoreline of Barangay San Rafael of Puerto Princesa. The
police, headed by SPO3 Romulo Enriquez, and members of the Task Force Bantay Dagat, headed by Benito Marcelo, Jr., immediately
proceeded to the area and found several men fishing in motorized sampans and a big fishing boat identified as F/B Robinson within
the seven-kilometer shoreline of the city. They boarded the F/B Robinson and inspected the boat with the acquiescence of the boat
captain, Silverio Gargar. In the course of their inspection, the police saw two foreigners in the captains deck. SPO3 Enriquez
examined their passports and found them to be mere photocopies. The police also discovered a large aquarium full of live lapu-lapu
and assorted fish weighing approximately one ton at the bottom of the boat.[2] They checked the license of the boat and its
fishermen and found them to be in order. Nonetheless, SPO3 Enriquez brought the boat captain, the crew and the fishermen to
Puerto Princesa for further investigation.
At the city harbor, members of the Maritime Command were ordered by SPO3 Enriquez to guard the F/B Robinson. The boat
captain and the two foreigners were again interrogated at the PNP Maritime Command office. Thereafter, an
Inspection/Apprehension Report was prepared and the boat, its crew and fishermen were charged with the following violations:
 1. Conducting fishing operations within Puerto Princesa coastal waters without mayors permit;
2. Employing excess fishermen on board (Authorized--26; On board--36);
3. Two (2) Hongkong nationals on board without original passports. [3]
The following day, October 1, 1992, SPO3 Enriquez directed the boat captain to get random samples of fish from the fish cage
of F/B Robinson for laboratory examination. As instructed, the boat engineer, petitioner Ernesto Andaya, delivered to the Maritime
Office four (4) live lapu-lapu fish inside a plastic shopping bag filled with water. SPO3 Enriquez received the fish and in the presence
of the boat engineer and captain, placed them inside a large transparent plastic bag without water. He sealed the plastic with heat
from a lighter.[4]
The specimens were brought to the National Bureau of Investigation (NBI) sub-office in the city for examination to determine
the method of catching the same for record or evidentiary purposes.[5] They were received at the NBI office at 8:00 in the evening of
the same day. The receiving clerk, Edna Capicio, noted that the fish were dead and she placed the plastic bag with the fish inside the
office freezer to preserve them. Two days later, on October 3, 1992, the chief of the NBI sub-office, Onos Mangotara, certified the
specimens for laboratory examination at the NBI Head Office in Manila. The fish samples were to be personally transported by Edna
Capicio who was then scheduled to leave for Manila for her board examination in Criminology.[6] On October 4, 1992, Ms. Capicio, in
the presence of her chief, took the plastic with the specimens from the freezer and placed them inside two shopping bags and
sealed them with masking tape. She proceeded to her ship where she placed the specimens in the ships freezer.
Capicio arrived in Manila the following day, October 5, 1992 and immediately brought the specimens to the NBI Head
Office. On October 7, 1992, NBI Forensic Chemist Emilia Rosaldes conducted two tests on the fish samples and found that they
contained sodium cyanide, thus:

FINDINGS:

Weight of Specimen 1.870 kilograms Examinations made on the above-mentioned specimen gave POSITIVE RESULTS to the test for
the presence of SODIUM CYANIDE x x x

REMARKS:

Sodium Cyanide is a violent poison.[7]

In light of these findings, the PNP Maritime Command of Puerto Princesa City filed the complaint at bar against the owner and
operator of the F/B Robinson, the First Fishermen Fishing Industries, Inc., represented by herein petitioner Richard Hizon, the boat
captain, Silverio Gargar, the boat engineer, Ernesto Andaya, two other crew members, the two Hongkong nationals and 28
fishermen of the said boat.
Petitioners were arraigned and they pled not guilty to the charge. As defense, they claimed that they are legitimate fishermen
of the First Fishermen Industries, Inc., a domestic corporation licensed to engage in fishing. They alleged that they catch fish by the
hook and line method and that they had used this method for one month and a half in the waters of CuyoIsland. They related that
on September 30, 1992 at about 7:00 A.M., they anchored the F/B Robinson in the east
of Podiado Island in Puerto Princesa City. The boat captain and the fishermen took out and boarded their sampans to fish for their
food. They were still fishing in their sampans at 4:00 P.M. when a rubber boat containing members of the PNP Maritime Command
and the Task Force Bantay Dagat approached them and boarded the F/B Robinson. The policemen were in uniform while the Bantay
Dagat personnel were in civilian clothes.They were all armed with guns. One of the Bantay Dagat personnel introduced himself as
Commander Jun Marcelo and he inspected the boat and the boats documents. Marcelo saw the two foreigners and asked for their
passports. As their passports were photocopies, Marcelo demanded for their original. The captain explained that the original
passports were with the companys head office in Manila. Marcelo angrily insisted for the originals and threatened to arrest
everybody. He then ordered the captain, his crew and the fishermen to follow him to Puerto Princesa. He held the magazine of his
gun and warned the captain Sige, huwag kang tatakas, kung hindi babarilin ko kayo![8] The captain herded all his men into the boat
and followed Marcelo and the police to Puerto Princesa.
They arrived at the city harbor at 7:45 in the evening and were met by members of the media. As instructed by Marcelo, the
members of the media interviewed and took pictures of the boat and the fishermen. [9]
The following day, October 1, 1992, at 8:00 in the morning, Amado Villanueva, one of the fishermen at the F/B Robinson, was
instructed by a policemen guarding the boat to get five (5) fish samples from the fish cage and bring them to the pier. Villanueva
inquired whether the captain knew about the order but the guard replied he was taking responsibility for it. Villanueva scooped five
pieces of lapu-lapu, placed them inside a plastic bag filled with water and brought the bag to the pier. The boat engineer, Ernesto
Andaya, received the fish and delivered them to the PNP Maritime Office. Nobody was in the office and Andaya waited for the
apprehending officers and the boat captain. Later, one of the policemen in the office instructed him to leave the bag and hang it on
a nail in the wall. Andaya did as he was told and returned to the boat at 10:00 A.M.[10]
In the afternoon of the same day, the boat captain arrived at the Maritime office. He brought along a representative from their
head office in Manila who showed the police and the Bantay Dagat personnel the original passports of the Hongkong nationals and
other pertinent documents of the F/B Robinson and its crew. Finding the documents in order, Marcelo approached the captain and
whispered to him Tandaan mo ito, kapitan, kung makakaalis ka dito, magkikita pa rin uli tayo sa dagat, kung hindi kayo lulubog ay
palulutangin ko kayo! It was then that SPO3 Enriquez informed the captain that some members of the Maritime Command, acting
under his instructions, had just taken five (5) pieces of lapu-lapu from the boat. SPO3 Enriquez showed the captain the fish
samples. Although the captain saw only four (4) pieces of lapu-lapu, he did not utter a word of protest. [11] Under Marcelos threat, he
signed the Certification that he received only four (4) pieces of fish. [12]
Two weeks later, the information was filed against petitioners. The case was prosecuted against thirty-one (31) of the thirty-
five (35) accused. Richard Hizon remained at large while the whereabouts of Richard Estremos, Marlon Camporazo and Joseph
Aurelio were unknown.
On July 9, 1993, the trial court found the thirty one (31) petitioners guilty and sentenced them to imprisonment for a minimum
of eight (8) years and one (1) day to a maximum of nine (9) years and four (4) months. The court also ordered the confiscation and
forfeiture of the F/B Robinson, the 28 sampans and the ton of assorted live fishes as instruments and proceeds of the offense, thus:

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

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

a) Fishing Boat (F/B) Robinson;

b) The 28 motorized fiberglass sampans; and

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

SO ORDERED.[13]

On appeal, the Court of Appeals affirmed the decision of the trial court. Hence, this petition.
Petitioners contend that:
I

THE HONORABLE COURT OF APPEALS ERRED IN HOLDING THAT THE MERE POSITIVE RESULTS TO THE TEST FOR THE PRESENCE
OF SODIUM CYANIDE IN THE FISH SPECIMEN, ALBEIT ILLEGALLY SEIZED ON THE OCCASION OF A WARRANTLESS SEARCH AND
ARREST, IS ADMISSIBLE AND SUFFICIENT BASIS FOR THE PETITIONERS CONVICTION OF THE CRIME OF ILLEGAL FISHING.

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

III

THE HONORABLE COURT OF APPEALS ERRED IN NOT REVERSING THE JUDGMENT OF THE TRIAL COURT AND ACQUITTING THE
PETITIONERS.[14]

The Solicitor General submitted a Manifestation in Lieu of Comment praying for petitioners acquittal.[15]
The petitioners, with the concurrence of the Solicitor General, primarily question the admissibility of the evidence against
petitioners in view of the warrantless search of the fishing boat and the subsequent arrest of petitioners. More concretely, they
contend that the NBI finding of sodium cyanide in the fish specimens should not have been admitted and considered by the trial
court because the fish samples were seized from the F/B Robinson without a search warrant.
Our constitution proscribes search and seizure and the arrest of persons without a judicial warrant. [16] As a general rule, any
evidence obtained without a judicial warrant is inadmissible for any purpose in any proceeding. The rule is, however, subject to
certain exceptions. Some of these are:[17] (1) a search incident to a lawful arrest;[18] (2) seizure of evidence in plain view; (3) search of
a moving motor vehicle;[19] and (4) search in violation of customs laws.[20]
Search and seizure without search warrant of vessels and aircrafts for violations of customs laws have been the traditional
exception to the constitutional requirement of a search warrant. It is rooted on the recognition that a vessel and an aircraft, like
motor vehicles, can be quickly moved out of the locality or jurisdiction in which the search warrant must be sought and
secured. Yielding to this reality, judicial authorities have not required a search warrant of vessels and aircrafts before their search
and seizure can be constitutionally effected.[21]
The same exception ought to apply to seizures of fishing vessels and boats breaching our fishery laws. These vessels are
normally powered by high-speed motors that enable them to elude arresting ships of the Philippine Navy, the Coast Guard and other
government authorities enforcing our fishery laws.[22]
We thus hold as valid the warrantless search on the F/B Robinson, a fishing boat suspected of having engaged in illegal
fishing. The fish and other evidence seized in the course of the search were properly admitted by the trial court. Moreover,
petitioners failed to raise the issue during trial and hence, waived their right to question any irregularity that may have attended the
said search and seizure.[23]
Given the evidence admitted by the trial court, the next question now is whether petitioners are guilty of the offense of illegal
fishing with the use of poisonous substances. Again, the petitioners, joined by the Solicitor General, submit that the prosecution
evidence cannot convict them.
We agree.
Petitioners were charged with illegal fishing penalized under sections 33 and 38 of P.D. 704 [24] which provide as follows:

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

It shall, likewise, be unlawful for any person knowingly to possess, deal in, sell or in any manner dispose of, for profit, any
fish or fishery/aquatic products which have been illegally caught, taken or gathered.
 The discovery of dynamite, other explosives and chemical compounds containing combustible elements, or obnoxious or
poisonous substance, or equipment or device for electric fishing in any fishing boat or in the possession of a fisherman shall
constitute a presumption that the same were used for fishing in violation of this Decree, and the discovery in any fishing
boat of fish caught or killed by the use of explosives, obnoxious or poisonous substance or by electricity shall constitute a
presumption that the owner, operator or fisherman were fishing with the use of explosives, obnoxious or poisonous
substance or electricity.

xxxxxxxxx

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

xxxxxxxxx

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

x x x x x x x x x.[25]
The offense of illegal fishing is committed when a person catches, takes or gathers or causes to be caught, taken or gathered
fish, fishery or aquatic products in Philippine waters with the use of explosives, electricity, obnoxious or poisonous substances. The
law creates a presumption that illegal fishing has been committed when: (a) explosives, obnoxious or poisonous substances or
equipment or device for electric fishing are found in a fishing boat or in the possession of a fisherman; or (b) when fish caught or
killed with the use of explosives, obnoxious or poisonous substances or by electricity are found in a fishing boat. Under these
instances, the boat owner, operator or fishermen are presumed to have engaged in illegal fishing.
Petitioners contend that this presumption of guilt under the Fisheries Decree violates the presumption of innocence
guaranteed by the Constitution.[26] As early as 1916, this Court has rejected this argument by holding that:[27]

In some States, as well as in England, there exists what are known as common law offenses. In the Philippine Islands no act
is a crime unless it is made so by statute. The state having the right to declare what acts are criminal, within certain well-
defined limitations, has the right to specify what act or acts shall constitute a crime, as well as what proof shall constitute
prima facie evidence of guilt, and then to put upon the defendant the burden of showing that such act or acts are innocent
and are not committed with any criminal intent or intention.[28]

The validity of laws establishing presumptions in criminal cases is a settled matter. It is generally conceded that the legislature
has the power to provide that proof of certain facts can constitute prima facie evidence of the guilt of the accused and then shift the
burden of proof to the accused provided there is a rational connection between the facts proved and the ultimate fact
presumed.[29] To avoid any constitutional infirmity, the inference of one from proof of the other must not be arbitrary and
unreasonable.[30] In fine, the presumption must be based on facts and these facts must be part of the crime when committed. [31]
The third paragraph of section 33 of P.D. 704 creates a presumption of guilt based on facts proved and hence is not
constitutionally impermissible. It makes the discovery of obnoxious or poisonous substances, explosives, or devices for electric
fishing, or of fish caught or killed with the use of obnoxious and poisonous substances, explosives or electricity in any fishing boat or
in the possession of a fisherman evidence that the owner and operator of the fishing boat or the fisherman had used such
substances in catching fish. The ultimate fact presumed is that the owner and operator of the boat or the fisherman were engaged in
illegal fishing and this presumption was made to arise from the discovery of the substances and the contaminated fish in the
possession of the fisherman in the fishing boat. The fact presumed is a natural inference from the fact proved.[32]
We stress, however, that the statutory presumption is merely prima facie. [33] It can not, under the guise of regulating the
presentation of evidence, operate to preclude the accused from presenting his defense to rebut the main fact presumed. [34] At no
instance can the accused be denied the right to rebut the presumption, [35] thus:

The inference of guilt is one of fact and rests upon the common experience of men. But the experience of men has taught
them that an apparently guilty possession may be explained so as to rebut such an inference and an accused person may
therefore put witnesses on the stand or go on the witness stand himself to explain his possession, and any reasonable
explanation of his possession, inconsistent with his guilty connection with the commission of the crime, will rebut the
inference as to his guilt which the prosecution seeks to have drawn from his guilty possession of the stolen goods.[36]
 We now review the evidence to determine whether petitioners have successfully rebutted this presumption. The facts show
that on November 13, 1992, after the information was filed in court and petitioners granted bail, petitioners moved that the fish
specimens taken from the F/B Robinson be reexamined. [37] The trial court granted the motion.[38] As prayed for, a member of the
PNP Maritime Command of Puerto Princesa, in the presence of authorized representatives of the F/B Robinson, the NBI and the local
Fisheries Office, took at random five (5) live lapu-lapu from the fish cage of the boat. The specimens were packed in the usual
manner of transporting live fish, taken aboard a commercial flight and delivered by the same representatives to the NBI Head Office
in Manila for chemical analysis.
On November 23, 1992, Salud Rosales, another forensic chemist of the NBI in Manila conducted three (3) tests on the
specimens and found the fish negative for the presence of sodium cyanide,[39] thus:

Gross weight of specimen = 3.849 kg.

Examination made on the above-mentioned specimens gave NEGATIVE RESULTS to the tests for the presence of SODIUM
CYANIDE.[40]

The Information charged petitioners with illegal fishing with the use of obnoxious or poisonous substance (sodium cyanide), of
more or less one (1) ton of assorted live fishes. There was more or less one ton of fishes in the F/B Robinsons fish cage. It was from
this fish cage that the four dead specimens examined on October 7, 1992 and the five live specimens examined on November 23,
1992 were taken. Though all the specimens came from the same source allegedly tainted with sodium cyanide, the two tests
resulted in conflicting findings. We note that after its apprehension, the F/B Robinson never left the custody of the PNP Maritime
Command. The fishing boat was anchored near the city harbor and was guarded by members of the Maritime Command. [41] It was
later turned over to the custody of the Philippine Coast Guard Commander of Puerto Princesa City. [42]
The prosecution failed to explain the contradictory findings on the fish samples and this omission raises a reasonable doubt
that the one ton of fishes in the cage were caught with the use of sodium cyanide.
The absence of cyanide in the second set of fish specimens supports petitioners claim that they did not use the poison in
fishing. According to them, they caught the fishes by the ordinary and legal way, i.e., by hook and line on board their sampans. This
claim is buttressed by the prosecution evidence itself. The apprehending officers saw petitioners fishing by hook and line when they
came upon them in the waters of Barangay San Rafael. One of the apprehending officers, SPO1 Demetrio Saballuca, testified as
follows:
ATTY. TORREFRANCA ON CROSS-EXAMINATION:
Q : I get your point therefore, that the illegal fishing supposedly conducted at San Rafael is a moro ami type of fishing
[that] occurred into your mind and that was made to understand by the Bantay Dagat personnel?
A : Yes, sir.
Q : Upon reaching the place, you and the pumpboat, together with the two Bantay Dagat personnel were SPO3 Romulo
Enriquez and Mr. Benito Marcelo and SPO1 Marzan, you did not witness that kind of moro ami fishing, correct?
A : None, sir.
Q :In other words, there was negative activity of moro ami type of fishing on September 30, 1992 at 4:00 in the afternoon
at San Rafael?
A : Yes, sir.
Q : And what you saw were 5 motorized Sampans with fishermen each doing a hook and line fishing type?
A : Yes, sir. More or less they were five.
Q : And despite the fact you had negative knowledge of this moro ami type of fishing, SPO3 Enriquez together with Mr.
Marcelo boarded the vessel just the same?
A : Yes, sir.
x x x x x x x x x.[43]

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

ITEMS QUANTITY REMARKS

F/B Robinson (1) unit operating

engine (1) unit ICE-900-BHP

sampans 28 units fiberglass

outboard motors 28 units operating

assorted fishes more or less 1 ton live

hooks and lines assorted

x x x.[44]

We cannot overlook the fact that the apprehending officers found in the boat assorted hooks and lines for catching fish. [45] For
this obvious reason, the Inspection/Apprehension Report prepared by the apprehending officers immediately after the search did
not charge petitioners with illegal fishing, much less illegal fishing with the use of poison or any obnoxious substance. [46]
The only basis for the charge of fishing with poisonous substance is the result of the first NBI laboratory test on the four fish
specimens. Under the circumstances of the case, however, this finding does not warrant the infallible conclusion that the fishes in
the F/B Robinson, or even the same four specimens, were caught with the use of sodium cyanide.
Prosecution witness SPO1 Bernardino Visto testified that for the first laboratory test , boat engineer Ernesto Andaya did not
only get four (4) samples of fish but actually got five (5) from the fish cage of the F/B Robinson.[47] This Certification that four (4) fish
samples were taken from the boat shows on its face the number of pieces as originally five (5) but this was erased with correction
fluid and four (4) written over it.[48] The specimens were taken, sealed inside the plastic bag and brought to Manila by the police
authorities in the absence of petitioners or their representative. SPO2 Enriquez testified that the same plastic bag containing the
four specimens was merely sealed with heat from a lighter.[49] Emilia Rosaldes, the NBI forensic chemist who examined the samples,
testified that when she opened the package, she found two ends of the same plastic bag knotted. [50] These circumstances as well as
the time interval from the taking of the fish samples and their actual examination [51] fail to assure the impartial mind that the
integrity of the specimens had been properly safeguarded.
Apparently, the members of the PNP Maritime Command and the Task Force Bantay Dagat were the ones engaged in an illegal
fishing expedition. As sharply observed by the Solicitor General, the report received by the Task Force Bantay Dagat was that a
fishing boat was fishing illegally through muro ami on the waters of San Rafael. Muro ami according to SPO1 Saballuca is made with
the use of a big net with sinkers to make the net submerge in the water with the fishermen surround[ing] the net. [52]
This method of fishing needs approximately two hundred (200) fishermen to execute. [53] What the apprehending officers
instead discovered were twenty eight (28) fishermen in their discovered were twenty eight (28) fishermen in their sampans fishing
by hook and line. The authorities found nothing on the boat that would have indicated any form of illegal fishing. All the documents
of the boat and the fishermen were in order. It was only after the fish specimens were tested, albeit under suspicious circumstances,
that petitioners were charged with illegal fishing with the use of poisonous substances.
IN VIEW WHEREOF, the petition is granted and the decision of the Court of Appeals in CA-G.R. CR No. 15417 is reversed and set
aside. Petitioners are acquitted of the crime of illegal fishing with the use of poisonous substances defined under the Section 33 of
Republic Act No. 704, the Fisheries Decree of 1975. No costs.
SO ORDERED.
 THIRD DIVISION

PEOPLE OF THE PHILIPPINES, G.R. No. 169364

Petitioner,
Present:
Ynares-Santiago, J. (Chairperson),
- versus - Chico-Nazario,
Velasco, Jr.,
Peralta, and
Bersamin*, JJ.
EVANGELINE SITON y SACIL and
KRYSTEL KATE SAGARANO y Promulgated:
MEFANIA,
Respondents. September 18, 2009

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

DECISION

YNARES-SANTIAGO, J.:

If a man is called to be a street sweeper, he should sweep streets even as Michelangelo painted, or
Beethoven composed music, or Shakespeare wrote poetry. He should sweep streets so well that all the hosts of
Heaven and Earth will pause to say, here lived a great street sweeper who did his job well.

Martin Luther King, Jr.

Assailed in this petition for review on certiorari is the July 29, 2005 Order [1] of Branch 11, Davao City Regional Trial Court in
Special Civil Case No. 30-500-2004 granting respondents Petition for Certiorari and declaring paragraph 2 of Article 202 of the
Revised Penal Code unconstitutional.
Respondents Evangeline Siton and Krystel Kate Sagarano were charged with vagrancy pursuant to Article 202 (2) of the
Revised Penal Code in two separate Informations dated November 18, 2003, docketed as Criminal Case Nos. 115,716-C-2003 and
115,717-C-2003 and raffled to Branch 3 of the Municipal Trial Court in Cities, Davao City. The Informations, read:

That on or about November 14, 2003, in the City of Davao, Philippines, and within the jurisdiction of this
Honorable Court, the above-mentioned accused, willfully, unlawfully and feloniously wandered and loitered
around San Pedro and Legaspi Streets, this City, without any visible means to support herself nor lawful and
justifiable purpose.[2]

Article 202 of the Revised Penal Code provides:

Art. 202. Vagrants and prostitutes; penalty. The following are vagrants:

1. Any person having no apparent means of subsistence, who has the physical ability to work and who
neglects to apply himself or herself to some lawful calling;

2. Any person found loitering about public or semi-public buildings or places or tramping or wandering
about the country or the streets without visible means of support;

3. Any idle or dissolute person who lodges in houses of ill fame; ruffians or pimps and those who
habitually associate with prostitutes;

4. Any person who, not being included in the provisions of other articles of this Code, shall be found
loitering in any inhabited or uninhabited place belonging to another without any lawful or justifiable purpose;

5. Prostitutes.
 For the purposes of this article, women who, for money or profit, habitually indulge in sexual intercourse
or lascivious conduct, are deemed to be prostitutes.

Any person found guilty of any of the offenses covered by this articles shall be punished by arresto
menor or a fine not exceeding 200 pesos, and in case of recidivism, by arresto mayor in its medium period
to prision correccional in its minimum period or a fine ranging from 200 to 2,000 pesos, or both, in the discretion of
the court.

Instead of submitting their counter-affidavits as directed, respondents filed separate Motions to Quash [3] on the ground
that Article 202 (2) is unconstitutional for being vague and overbroad.

In an Order[4] dated April 28, 2004, the municipal trial court denied the motions and directed respondents anew to file their
respective counter-affidavits. The municipal trial court also declared that the law on vagrancy was enacted pursuant to the States
police power and justified by the Latin maxim salus populi est suprem(a) lex, which calls for the subordination of individual benefit to
the interest of the greater number, thus:

Our law on vagrancy was enacted pursuant to the police power of the State. An authority on police
power, Professor Freund describes laconically police power as the power of promoting public welfare by
restraining and regulating the use of liberty and property. (Citations omitted). In fact the persons acts and
acquisitions are hemmed in by the police power of the state. The justification found in the Latin maxim, salus
populi est supreme (sic) lex (the god of the people is the Supreme Law). This calls for the subordination of
individual benefit to the interests of the greater number.In the case at bar the affidavit of the arresting police
officer, SPO1 JAY PLAZA with Annex A lucidly shows that there was a prior surveillance conducted in view of the
reports that vagrants and prostitutes proliferate in the place where the two accused (among other women) were
wandering and in the wee hours of night and soliciting male customer. Thus, on that basis the prosecution should
be given a leeway to prove its case. Thus, in the interest of substantial justice, both prosecution and defense must
be given their day in Court: the prosecution proof of the crime, and the author thereof; the defense, to show that
the acts of the accused in the indictment cant be categorized as a crime.[5]

The municipal trial court also noted that in the affidavit of the arresting police officer, SPO1 Jay Plaza, it was stated that
there was a prior surveillance conducted on the two accused in an area reported to be frequented by vagrants and prostitutes who
solicited sexual favors. Hence, the prosecution should be given the opportunity to prove the crime, and the defense to rebut the
evidence.

Respondents thus filed an original petition for certiorari and prohibition with the Regional Trial Court of Davao
City,[6] directly challenging the constitutionality of the anti-vagrancy law, claiming that the definition of the crime of vagrancy under
Article 202 (2), apart from being vague, results as well in an arbitrary identification of violators, since the definition of the crime
includes in its coverage persons who are otherwise performing ordinary peaceful acts. They likewise claimed that Article 202 (2)
violated the equal protection clause under the Constitution because it discriminates against the poor and unemployed, thus
permitting an arbitrary and unreasonable classification.

The State, through the Office of the Solicitor General, argued that pursuant to the Courts ruling in Estrada v.
Sandiganbayan,[7] the overbreadth and vagueness doctrines apply only to free speech cases and not to penal statutes. It also
asserted that Article 202 (2) must be presumed valid and constitutional, since the respondents failed to overcome this presumption.

On July 29, 2005, the Regional Trial Court issued the assailed Order granting the petition, the dispositive portion of which
reads:

WHEREFORE, PRESCINDING FROM THE FOREGOING, the instant Petition is hereby GRANTED. Paragraph 2
of Article 202 of the Revised Penal Code is hereby declared unconstitutional and the Order of the court a quo,
dated April 28, 2004, denying the petitioners Motion to Quash is set aside and the said court is ordered to dismiss
the subject criminal cases against the petitioners pending before it.

SO ORDERED.[8]

In declaring Article 202 (2) unconstitutional, the trial court opined that the law is vague and it violated the equal protection clause. It
held that the void for vagueness doctrine is equally applicable in testing the validity of penal statutes. Citing Papachristou v. City of
Jacksonville,[9] where an anti vagrancy ordinance was struck down as unconstitutional by the Supreme Court of the United States,
the trial court ruled:

The U.S. Supreme Courts justifications for striking down the Jacksonville Vagrancy Ordinance are equally applicable
to paragraph 2 of Article 202 of the Revised Penal Code.

Indeed, to authorize a police officer to arrest a person for being found loitering about public or semi-
public buildings or places or tramping or wandering about the country or the streets without visible means of
support offers too wide a latitude for arbitrary determinations as to who should be arrested and who should not.

Loitering about and wandering have become national pastimes particularly in these times of recession when there
are many who are without visible means of support not by reason of choice but by force of circumstance as borne
out by the high unemployment rate in the entire country.
To authorize law enforcement authorities to arrest someone for nearly no other reason than the fact that he
cannot find gainful employment would indeed be adding insult to injury.[10]

On its pronouncement that Article 202 (2) violated the equal protection clause of the Constitution, the trial court declared:

The application of the Anti-Vagrancy Law, crafted in the 1930s, to our situation at present runs afoul of
the equal protection clause of the constitution as it offers no reasonable classification between those covered by
the law and those who are not.

Class legislation is such legislation which denies rights to one which are accorded to others, or inflicts
upon one individual a more severe penalty than is imposed upon another in like case offending.

Applying this to the case at bar, since the definition of Vagrancy under Article 202 of the Revised Penal
Code offers no guidelines or any other reasonable indicators to differentiate those who have no visible means of
support by force of circumstance and those who choose to loiter about and bum around, who are the proper
subjects of vagrancy legislation, it cannot pass a judicial scrutiny of its constitutionality. [11]

Hence, this petition for review on certiorari raising the sole issue of:
WHETHER THE REGIONAL TRIAL COURT COMMITTED A REVERSIBLE ERROR IN DECLARING UNCONSTITUTIONAL
ARTICLE 202 (2) OF THE REVISED PENAL CODE[12]

Petitioner argues that every statute is presumed valid and all reasonable doubts should be resolved in favor of its
constitutionality; that, citing Romualdez v. Sandiganbayan,[13] the overbreadth and vagueness doctrines have special application to
free-speech cases only and are not appropriate for testing the validity of penal statutes; that respondents failed to overcome the
presumed validity of the statute, failing to prove that it was vague under the standards set out by the Courts; and that the State may
regulate individual conduct for the promotion of public welfare in the exercise of its police power.

On the other hand, respondents argue against the limited application of the overbreadth and vagueness doctrines. They
insist that Article 202 (2) on its face violates the constitutionally-guaranteed rights to due process and the equal protection of the
laws; that the due process vagueness standard, as distinguished from the free speech vagueness doctrine, is adequate to declare
Article 202 (2) unconstitutional and void on its face; and that the presumption of constitutionality was adequately overthrown.

The Court finds for petitioner.

The power to define crimes and prescribe their corresponding penalties is legislative in nature and inherent in the sovereign
power of the state to maintain social order as an aspect of police power. The legislature may even forbid and penalize acts formerly
considered innocent and lawful provided that no constitutional rights have been abridged. [14]However, in exercising its power to
declare what acts constitute a crime, the legislature must inform the citizen with reasonable precision what acts it intends to
prohibit so that he may have a certain understandable rule of conduct and know what acts it is his duty to avoid. [15] This requirement
has come to be known as the void-for-vagueness doctrine which states that a statute which either forbids or requires the doing of
an act in terms so vague that men of common intelligence must necessarily guess at its meaning and differ as to its application,
violates the first essential of due process of law.[16]

In Spouses Romualdez v. COMELEC,[17] the Court recognized the application of the void-for-vagueness doctrine to criminal
statutes in appropriate cases. The Court therein held:
 At the outset, we declare that under these terms, the opinions of the dissent which seek to bring to the
fore the purported ambiguities of a long list of provisions in Republic Act No. 8189 can be deemed as a facial
challenge. An appropriate as applied challenge in the instant Petition should be limited only to Section 45 (j) in
relation to Sections 10 (g) and (j) of Republic Act No. 8189 the provisions upon which petitioners are charged. An
expanded examination of the law covering provisions which are alien to petitioners case would be antagonistic to
the rudiment that for judicial review to be exercised, there must be an existing case or controversy that is
appropriate or ripe for determination, and not conjectural or anticipatory. [18]

The first statute punishing vagrancy Act No. 519 was modeled after American vagrancy statutes and passed by the
Philippine Commission in 1902. The Penal Code of Spain of 1870 which was in force in this country up to December 31, 1931 did not
contain a provision on vagrancy.[19] While historically an Anglo-American concept of crime prevention, the law on vagrancy was
included by the Philippine legislature as a permanent feature of the Revised Penal Code in Article 202 thereof which, to repeat,
provides:

ART. 202. Vagrants and prostitutes; penalty. The following are vagrants:

1. Any person having no apparent means of subsistence, who has the physical ability to work and who
neglects to apply himself or herself to some lawful calling;

2. Any person found loitering about public or semi-public buildings or places, or tramping or wandering
about the country or the streets without visible means of support;

3. Any idle or dissolute person who lodges in houses of ill-fame; ruffians or pimps and those who
habitually associate with prostitutes;

4. Any person who, not being included in the provisions of other articles of this Code, shall be found
loitering in any inhabited or uninhabited place belonging to another without any lawful or justifiable purpose;

5. Prostitutes.

For the purposes of this article, women who, for money or profit, habitually indulge in sexual intercourse
or lascivious conduct, are deemed to be prostitutes.

Any person found guilty of any of the offenses covered by this article shall be punished by arresto
menor or a fine not exceeding 200 pesos, and in case of recidivism, by arresto mayor in its medium period
to prision correccional in its minimum period or a fine ranging from 200 to 2,000 pesos, or both, in the discretion of
the court.

In the instant case, the assailed provision is paragraph (2), which defines a vagrant as any person found loitering about
public or semi-public buildings or places, or tramping or wandering about the country or the streets without visible means of
support. This provision was based on the second clause of Section 1 of Act No. 519 which defined vagrant as every person found
loitering about saloons or dramshops or gambling houses, or tramping or straying through the country without visible means of
support.The second clause was essentially retained with the modification that the places under which the offense might be
committed is now expressed in general terms public or semi-public places.

The Regional Trial Court, in asserting the unconstitutionality of Article 202 (2), take support mainly from the U.S. Supreme
Courts opinion in the Papachristou v. City of Jacksonville[20] case, which in essence declares:

Living under a rule of law entails various suppositions, one of which is that [all persons] are entitled to be
informed as to what the State commands or forbids. Lanzetta v. New Jersey, 306 U. S. 451, 306 U. S. 453.

Lanzetta is one of a well recognized group of cases insisting that the law give fair notice of the offending
conduct. See Connally v. General Construction Co., 269 U. S. 385, 269 U. S. 391; Cline v. Frink Dairy Co., 274 U. S.
445; United States v. Cohen Grocery Co., 255 U. S. 81. In the field of regulatory statutes governing business
activities, where the acts limited are in a narrow category, greater leeway is allowed. Boyce Motor Lines, Inc. v.
United States, 342 U. S. 337; United States v. National Dairy Products Corp., 372 U. S. 29; United States v. Petrillo,
332 U. S. 1.

The poor among us, the minorities, the average householder, are not in business and not alerted to the
regulatory schemes of vagrancy laws; and we assume they would have no understanding of their meaning and
impact if they read them. Nor are they protected from being caught in the vagrancy net by the necessity of having
a specific intent to commit an unlawful act. See Screws v. United States, 325 U. S. 91; Boyce Motor Lines, Inc.
v. United States, supra.

The Jacksonville ordinance makes criminal activities which, by modern standards, are normally innocent.
Nightwalking is one. Florida construes the ordinance not to make criminal one night's wandering, Johnson v. State,
202 So.2d at 855, only the habitual wanderer or, as the ordinance describes it, common night walkers. We know,
however, from experience that sleepless people often walk at night, perhaps hopeful that sleep-inducing
relaxation will result.

Luis Munoz-Marin, former Governor of Puerto Rico, commented once that loafing was a national virtue in
his Commonwealth, and that it should be encouraged. It is, however, a crime in Jacksonville.

xxxx

Persons wandering or strolling from place to place have been extolled by Walt Whitman and Vachel
Lindsay. The qualification without any lawful purpose or object may be a trap for innocent acts. Persons neglecting
all lawful business and habitually spending their time by frequenting . . . places where alcoholic beverages are sold
or served would literally embrace many members of golf clubs and city clubs.

Walkers and strollers and wanderers may be going to or coming from a burglary. Loafers or loiterers may
be casing a place for a holdup. Letting one's wife support him is an intra-family matter, and normally of no concern
to the police. Yet it may, of course, be the setting for numerous crimes.

The difficulty is that these activities are historically part of the amenities of life as we have known them.
They are not mentioned in the Constitution or in the Bill of Rights. These unwritten amenities have been, in part,
responsible for giving our people the feeling of independence and self-confidence, the feeling of creativity. These
amenities have dignified the right of dissent, and have honored the right to be nonconformists and the right to
defy submissiveness. They have encouraged lives of high spirits, rather than hushed, suffocating silence.

xxxx

Where the list of crimes is so all-inclusive and generalized as the one in this ordinance, those convicted
may be punished for no more than vindicating affronts to police authority:

The common ground which brings such a motley assortment of human troubles before
the magistrates in vagrancy-type proceedings is the procedural laxity which permits 'conviction'
for almost any kind of conduct and the existence of the House of Correction as an easy and
convenient dumping-ground for problems that appear to have no other immediate solution.
Foote, Vagrancy-Type Law and Its Administration, 104 U.Pa.L.Rev. 603, 631.

xxxx

Another aspect of the ordinance's vagueness appears when we focus not on the lack of notice given a
potential offender, but on the effect of the unfettered discretion it places in the hands of the Jacksonville police.
Caleb Foote, an early student of this subject, has called the vagrancy-type law as offering punishment by analogy.
Such crimes, though long common in Russia, are not compatible with our constitutional system.

xxxx

A presumption that people who might walk or loaf or loiter or stroll or frequent houses where liquor is
sold, or who are supported by their wives or who look suspicious to the police are to become future criminals is
too precarious for a rule of law. The implicit presumption in these generalized vagrancy standards -- that crime is
 being nipped in the bud -- is too extravagant to deserve extended treatment. Of course, vagrancy statutes are
useful to the police. Of course, they are nets making easy the roundup of so-called undesirables. But the rule of
law implies equality and justice in its application. Vagrancy laws of the Jacksonville type teach that the scales of
justice are so tipped that even-handed administration of the law is not possible. The rule of law, evenly applied to
minorities as well as majorities, to the poor as well as the rich, is the great mucilage that holds society together. [21]

The underlying principles in Papachristou are that: 1) the assailed Jacksonville ordinance fails to give a person of ordinary
intelligence fair notice that his contemplated conduct is forbidden by the statute; and 2) it encourages or promotes opportunities for
the application of discriminatory law enforcement.

The said underlying principle in Papachristou that the Jacksonville ordinance, or Article 202 (2) in this case, fails to give fair
notice of what constitutes forbidden conduct, finds no application here because under our legal system, ignorance of the law
excuses no one from compliance therewith.[22] This principle is of Spanish origin, and we adopted it to govern and limit legal conduct
in this jurisdiction. Under American law, ignorance of the law is merely a traditional rule that admits of exceptions. [23]

Moreover, the Jacksonville ordinance was declared unconstitutional on account of specific provisions thereof, which
are not found in Article 202 (2). The ordinance (Jacksonville Ordinance Code 257) provided, as follows:

Rogues and vagabonds, or dissolute persons who go about begging; common gamblers, persons who use
juggling or unlawful games or plays, common drunkards, common night walkers, thieves, pilferers or pickpockets,
traders in stolen property, lewd, wanton and lascivious persons, keepers of gambling places, common railers and
brawlers, persons wandering or strolling around from place to place without any lawful purpose or object, habitual
loafers, disorderly persons, persons neglecting all lawful business and habitually spending their time by
frequenting houses of ill fame, gaming houses, or places where alcoholic beverages are sold or served, persons
able to work but habitually living upon the earnings of their wives or minor children shall be deemed vagrants and,
upon conviction in the Municipal Court shall be punished as provided for Class D offenses.

Thus, the U.S. Supreme Court in Jacksonville declared the ordinance unconstitutional, because such activities or habits
as nightwalking, wandering or strolling around without any lawful purpose or object, habitual loafing, habitual spending of time
at places where alcoholic beverages are sold or served, and living upon the earnings of wives or minor children, which are
otherwise common and normal, were declared illegal. But these are specific acts or activities not found in Article 202 (2). The
closest to Article 202 (2) any person found loitering about public or semi-public buildings or places, or tramping or wandering about
the country or the streets without visible means of support from the Jacksonville ordinance, would be persons wandering or strolling
around from place to place without any lawful purpose or object. But these two acts are still not the same: Article 202 (2) is qualified
by without visible means of support while the Jacksonville ordinance prohibits wandering or strolling without any lawful purpose or
object, which was held by the U.S. Supreme Court to constitute a trap for innocent acts.

Under the Constitution, the people are guaranteed the right to be secure in their persons, houses, papers and effects
against unreasonable searches and seizures of whatever nature and for any purpose, and no search warrant or warrant of arrest
shall issue except upon probable cause to be determined personally by the judge after examination under oath or affirmation of the
complainant and the witnesses he may produce, and particularly describing the place to be searched and the persons or things to be
seized.[24] Thus, as with any other act or offense, the requirement of probable cause provides an acceptable limit on police or
executive authority that may otherwise be abused in relation to the search or arrest of persons found to be violating Article 202
(2). The fear exhibited by the respondents, echoing Jacksonville, that unfettered discretion is placed in the hands of the police to
make an arrest or search, is therefore assuaged by the constitutional requirement of probable cause, which is one less than certainty
or proof, but more than suspicion or possibility.[25]

Evidently, the requirement of probable cause cannot be done away with arbitrarily without pain of punishment, for, absent
this requirement, the authorities are necessarily guilty of abuse. The grounds of suspicion are reasonable when, in the absence of
actual belief of the arresting officers, the suspicion that the person to be arrested is probably guilty of committing the offense, is
based on actual facts, i.e., supported by circumstances sufficiently strong in themselves to create the probable cause of guilt of the
person to be arrested. A reasonable suspicion therefore must be founded on probable cause, coupled with good faith of the peace
officers making the arrest.[26]

The State cannot in a cavalier fashion intrude into the persons of its citizens as well as into their houses, papers and
effects. The constitutional provision sheathes the private individual with an impenetrable armor against unreasonable searches and
seizures. It protects the privacy and sanctity of the person himself against unlawful arrests and other forms of restraint, and
prevents him from being irreversibly cut off from that domestic security which renders the lives of the most unhappy in some
measure agreeable.[27]

As applied to the instant case, it appears that the police authorities have been conducting previous surveillance operations
on respondents prior to their arrest. On the surface, this satisfies the probable cause requirement under our Constitution. For this
reason, we are not moved by respondents trepidation that Article 202 (2) could have been a source of police abuse in their case.

Since the Revised Penal Code took effect in 1932, no challenge has ever been made upon the constitutionality of Article 202
except now. Instead, throughout the years, we have witnessed the streets and parks become dangerous and unsafe, a haven for
beggars, harassing watch-your-car boys, petty thieves and robbers, pickpockets, swindlers, gangs, prostitutes, and individuals
performing acts that go beyond decency and morality, if not basic humanity. The streets and parks have become the training ground
for petty offenders who graduate into hardened and battle-scarred criminals. Everyday, the news is rife with reports of innocent and
hardworking people being robbed, swindled, harassed or mauled if not killed by the scourge of the streets. Blue collar workers are
robbed straight from withdrawing hard-earned money from the ATMs (automated teller machines); students are held up for having
to use and thus exhibit publicly their mobile phones; frail and helpless men are mauled by thrill-seeking gangs; innocent passers-by
are stabbed to death by rowdy drunken men walking the streets; fair-looking or pretty women are stalked and harassed, if not
abducted, raped and then killed; robbers, thieves, pickpockets and snatchers case streets and parks for possible victims; the old are
swindled of their life savings by conniving streetsmart bilkers and con artists on the prowl; beggars endlessly pester and panhandle
pedestrians and commuters, posing a health threat and putting law-abiding drivers and citizens at risk of running them over. All
these happen on the streets and in public places, day or night.

The streets must be protected. Our people should never dread having to ply them each day, or else we can never say that
we have performed our task to our brothers and sisters. We must rid the streets of the scourge of humanity, and restore order,
peace, civility, decency and morality in them.

This is exactly why we have public order laws, to which Article 202 (2) belongs. These laws were crafted to maintain
minimum standards of decency, morality and civility in human society. These laws may be traced all the way back to ancient times,
and today, they have also come to be associated with the struggle to improve the citizens quality of life, which is guaranteed by our
Constitution.[28] Civilly, they are covered by the abuse of rights doctrine embodied in the preliminary articles of the Civil Code
concerning Human Relations, to the end, in part, that any person who willfully causes loss or injury to another in a manner that is
contrary to morals, good customs or public policy shall compensate the latter for the damage.[29] This provision is, together with the
succeeding articles on human relations, intended to embody certain basic principles that are to be observed for the rightful
relationship between human beings and for the stability of the social order.[30]

In civil law, for example, the summary remedy of ejectment is intended to prevent criminal disorder and breaches of the
peace and to discourage those who, believing themselves entitled to the possession of the property, resort to force rather than to
some appropriate action in court to assert their claims.[31] Any private person may abate a public nuisance which is specially injurious
to him by removing, or if necessary, by destroying the thing which constitutes the same, without committing a breach of the peace,
or doing unnecessary injury.[32]

Criminally, public order laws encompass a whole range of acts from public indecencies and immoralities, to public
nuisances, to disorderly conduct. The acts punished are made illegal by their offensiveness to societys basic sensibilities and their
adverse effect on the quality of life of the people of society. For example, the issuance or making of a bouncing check is deemed a
public nuisance, a crime against public order that must be abated.[33] As a matter of public policy, the failure to turn over the
proceeds of the sale of the goods covered by a trust receipt or to return said goods, if not sold, is a public nuisance to be abated by
the imposition of penal sanctions.[34] Thus, public nuisances must be abated because they have the effect of interfering with the
comfortable enjoyment of life or property by members of a community.

Article 202 (2) does not violate the equal protection clause; neither does it discriminate against the poor and the
unemployed. Offenders of public order laws are punished not for their status, as for being poor or unemployed, but for conducting
themselves under such circumstances as to endanger the public peace or cause alarm and apprehension in the community. Being
poor or unemployed is not a license or a justification to act indecently or to engage in immoral conduct.

Vagrancy must not be so lightly treated as to be considered constitutionally offensive. It is a public order crime which
punishes persons for conducting themselves, at a certain place and time which orderly society finds unusual, under such conditions
that are repugnant and outrageous to the common standards and norms of decency and morality in a just, civilized and ordered
society, as would engender a justifiable concern for the safety and well-being of members of the community.
 Instead of taking an active position declaring public order laws unconstitutional, the State should train its eye on their
effective implementation, because it is in this area that the Court perceives difficulties. Red light districts abound, gangs work the
streets in the wee hours of the morning, dangerous robbers and thieves ply their trade in the trains stations, drunken men terrorize
law-abiding citizens late at night and urinate on otherwise decent corners of our streets. Rugby-sniffing individuals crowd our
national parks and busy intersections. Prostitutes wait for customers by the roadside all around the metropolis, some even venture
in bars and restaurants. Drug-crazed men loiter around dark avenues waiting to pounce on helpless citizens. Dangerous groups
wander around, casing homes and establishments for their next hit. The streets must be made safe once more. Though a mans
house is his castle,[35] outside on the streets, the king is fair game.

The dangerous streets must surrender to orderly society.

Finally, we agree with the position of the State that first and foremost, Article 202 (2) should be presumed valid and
constitutional. When confronted with a constitutional question, it is elementary that every court must approach it with grave care
and considerable caution bearing in mind that every statute is presumed valid and every reasonable doubt should be resolved in
favor of its constitutionality.[36] The policy of our courts is to avoid ruling on constitutional questions and to presume that the acts of
the political departments are valid in the absence of a clear and unmistakable showing to the contrary. To doubt is to sustain, this
presumption is based on the doctrine of separation of powers which enjoins upon each department a becoming respect for the acts
of the other departments. The theory is that as the joint act of Congress and the President of the Philippines, a law has been
carefully studied, crafted and determined to be in accordance with the fundamental law before it was finally enacted.[37]

It must not be forgotten that police power is an inherent attribute of sovereignty. It has been defined as the power vested
by the Constitution in the legislature to make, ordain, and establish all manner of wholesome and reasonable laws, statutes and
ordinances, either with penalties or without, not repugnant to the Constitution, as they shall judge to be for the good and welfare of
the commonwealth, and for the subjects of the same. The power is plenary and its scope is vast and pervasive, reaching and
justifying measures for public health, public safety, public morals, and the general welfare. [38] As an obvious police power measure,
Article 202 (2) must therefore be viewed in a constitutional light.

WHEREFORE, the petition is GRANTED. The Decision of Branch 11 of the Regional Trial Court of Davao City in Special Civil
Case No. 30-500-2004 declaring Article 202, paragraph 2 of the Revised Penal Code UNCONSTITUTIONAL is REVERSED and SET
ASIDE.

Let the proceedings in Criminal Cases Nos. 115,716-C-2003 and 115,717-C-2003 thus continue.

No costs.

SO ORDERED.
 SECOND DIVISION
[G.R. No. 141066. February 17, 2005]
EVANGELINE LADONGA, petitioner, vs. PEOPLE OF THE PHILIPPINES, respondent.

DECISION
AUSTRIA-MARTINEZ, J.:

Petitioner Evangeline Ladonga seeks a review of the Decision,[1] dated May 17, 1999, of the Court of Appeals in CA-G.R. CR No.
20443, affirming the Decision dated August 24, 1996, of the Regional Trial Court (RTC), Branch 3 of Bohol, in Criminal Case Nos.
7068, 7069 and 7070 convicting her of violation of B.P. Blg. 22, otherwise known as The Bouncing Checks Law.
The factual background of the case is as follows:
On March 27, 1991, three Informations for violation of B.P. Blg. 22 were filed with the RTC, docketed as Criminal Case Nos.
7068 - 7070. The Information in Criminal Case No. 7068 alleges as follows:

That, sometime in May or June 1990, in the City of Tagbilaran, Philippines, and within the jurisdiction of this Honorable Court, the
above-named accused, conspiring, confederating, and mutually helping with one another, knowing fully well that they did not have
sufficient funds deposited with the United Coconut Planters Bank (UCPB), Tagbilaran Branch, did then and there willfully, unlawfully,
and feloniously, draw and issue UCPB Check No. 284743 postdated July 7, 1990 in the amount of NINE THOUSAND SEVENTY-FIVE
PESOS AND FIFTY-FIVE CENTAVOS (P9,075.55), payable to Alfredo Oculam, and thereafter, without informing the latter that they did
not have sufficient funds deposited with the bank to cover up the amount of the check, did then and there willfully, unlawfully and
feloniously pass on, indorse, give and deliver the said check to Alfredo Oculam by way of rediscounting of the aforementioned
checks; however, upon presentation of the check to the drawee bank for encashment, the same was dishonored for the reason that
the account of the accused with the United Coconut Planters Bank, Tagbilaran Branch, had already been closed, to the damage and
prejudice of the said Alfredo Oculam in the aforestated amount.

Acts committed contrary to the provisions of Batas Pambansa Bilang 22.[2]

The accusatory portions of the Informations in Criminal Case Nos. 7069 and 7070 are similarly worded, except for the
allegations concerning the number, date and amount of each check, that is:
(a) Criminal Case No. 7069 - UCPB Check No. 284744 dated July 22, 1990 in the amount of P12,730.00;[3]
(b) Criminal Case No. 7070 UCPB Check No. 106136 dated July 22, 1990 in the amount of P8,496.55.[4]
The cases were consolidated and jointly tried. When arraigned on June 26, 1991, the two accused pleaded not guilty to the
crimes charged.[5]
The prosecution presented as its lone witness complainant Alfredo Oculam. He testified that: in 1989, spouses Adronico [6] and
Evangeline Ladonga became his regular customers in his pawnshop business in Tagbilaran City, Bohol; [7] sometime in May 1990, the
Ladonga spouses obtained a P9,075.55 loan from him, guaranteed by United Coconut Planters Bank (UCPB) Check No. 284743, post
dated to dated July 7, 1990 issued by Adronico;[8] sometime in the last week of April 1990 and during the first week of May 1990, the
Ladonga spouses obtained an additional loan of P12,730.00, guaranteed by UCPB Check No. 284744, post dated to dated July 26,
1990 issued by Adronico;[9] between May and June 1990, the Ladonga spouses obtained a third loan in the amount of P8,496.55,
guaranteed by UCPB Check No. 106136, post dated to July 22, 1990 issued by Adronico; [10] the three checks bounced upon
presentment for the reason CLOSED ACCOUNT;[11] when the Ladonga spouses failed to redeem the check, despite repeated
demands, he filed a criminal complaint against them.[12]
While admitting that the checks issued by Adronico bounced because there was no sufficient deposit or the account was
closed, the Ladonga spouses claimed that the checks were issued only to guarantee the obligation, with an agreement that Oculam
should not encash the checks when they mature;[13] and, that petitioner is not a signatory of the checks and had no participation in
the issuance thereof.[14]
On August 24, 1996, the RTC rendered a joint decision finding the Ladonga spouses guilty beyond reasonable doubt of violating
B.P. Blg. 22, the dispositive portion of which reads:
Premises considered, this Court hereby renders judgment finding accused Adronico Ladonga, alias Ronie, and Evangeline Ladonga
guilty beyond reasonable doubt in the aforesaid three (3) criminal cases, for which they stand charged before this Court, and
accordingly, sentences them to imprisonment and fine, as follows:

1. In Criminal Case No. 7068, for (sic) an imprisonment of one (1) year for each of them, and a fine in the amount of P9,075.55,
equivalent to the amount of UCPB Check No. 284743;

2. In Criminal Case No. 7069, for (sic) an imprisonment for each of them to one (1) year and a fine of P12, 730.00, equivalent to the
amount of UCPB Check No. 284744; and,

3. In Criminal Case No. 7070, with (sic) an imprisonment of one year for each of them and a fine of P8,496.55 equivalent to the
amount of UCPB Check No. 106136;

4. That both accused are further ordered to jointly and solidarily pay and reimburse the complainant, Mr. Alfredo Oculam, the sum
of P15,000.00 representing actual expenses incurred in prosecuting the instant cases; P10,000.00 as attorneys fee; and the amount
of P30,302.10 which is the total value of the three (3) subject checks which bounced; but without subsidiary imprisonment in case of
insolvency.

With Costs against the accused.

SO ORDERED.[15]

Adronico applied for probation which was granted.[16] On the other hand, petitioner brought the case to the Court of Appeals,
arguing that the RTC erred in finding her criminally liable for conspiring with her husband as the principle of conspiracy is
inapplicable to B.P. Blg. 22 which is a special law; moreover, she is not a signatory of the checks and had no participation in the
issuance thereof.[17]
On May 17, 1999, the Court of Appeals affirmed the conviction of petitioner. [18] It held that the provisions of the penal code
were made applicable to special penal laws in the decisions of this Court in People vs. Parel, [19] U.S. vs. Ponte, [20] and U.S. vs.
Bruhez.[21] It noted that Article 10 of the Revised Penal Code itself provides that its provisions shall be supplementary to special laws
unless the latter provide the contrary. The Court of Appeals stressed that since B.P. Blg. 22 does not prohibit the applicability in a
suppletory character of the provisions of the Revised Penal Code (RPC), the principle of conspiracy may be applied to cases involving
violations of B.P. Blg. 22. Lastly, it ruled that the fact that petitioner did not make and issue or sign the checks did not exculpate her
from criminal liability as it is not indispensable that a co-conspirator takes a direct part in every act and knows the part which
everyone performed. The Court of Appeals underscored that in conspiracy the act of one conspirator could be held to be the act of
the other.
Petitioner sought reconsideration of the decision but the Court of Appeals denied the same in a Resolution dated November
16, 1999.[22]
Hence, the present petition.
Petitioner presents to the Court the following issues for resolution:

1. WHETHER OR NOT THE PETITIONER WHO WAS NOT THE DRAWER OR ISSUER OF THE THREE CHECKS THAT BOUNCED BUT HER CO-
ACCUSED HUSBAND UNDER THE LATTERS ACCOUNT COULD BE HELD LIABLE FOR VIOLATIONS OF BATAS PAMBANSA BILANG 22 AS
CONSPIRATOR.

2. ANCILLARY TO THE MAIN ISSUE ARE THE FOLLOWING ISSUES:

A. WHETHER OR NOT CONSPIRACY IS APPLICABLE IN VIOLATIONS OF BATAS PAMBANSA BILANG 22 BY INVOKING THE LAST
SENTENCE OF ARTICLE 10 OF THE REVISED PENAL CODE WHICH STATES:

Art. 10. Offenses not subject of the provisions of this Code. Offenses which are or in the future may be punished under special laws
are not subject to the provisions of this Code. This Code shall be supplementary to such laws, unless the latter should specially
provide the contrary.
B. WHETHER OR NOT THE CASES CITED BY THE HONORABLE COURT OF APPEALS IN AFFIRMING IN TOTO THE CONVICTION OF
PETITIONER AS CONSPIRATOR APPLYING THE SUPPLETORY CHARACTER OF THE REVISED PENAL CODE TO SPECIAL LAWS LIKE B.P.
BLG. 22 IS APPLICABLE.[23]

Petitioner staunchly insists that she cannot be held criminally liable for violation of B.P. Blg. 22 because she had no
participation in the drawing and issuance of the three checks subject of the three criminal cases, a fact proven by the checks
themselves. She contends that the Court of Appeals gravely erred in applying the principle of conspiracy, as defined under the RPC,
to violations of B.P. Blg. 22. She posits that the application of the principle of conspiracy would enlarge the scope of the statute and
include situations not provided for or intended by the lawmakers, such as penalizing a person, like petitioner, who had no
participation in the drawing or issuance of checks.
The Office of the Solicitor General disagrees with petitioner and echoes the declaration of the Court of Appeals that some
provisions of the Revised Penal Code, especially with the addition of the second sentence in Article 10, are applicable to special laws.
It submits that B.P. Blg. 22 does not provide any prohibition regarding the applicability in a suppletory character of the provisions of
the Revised Penal Code to it.
Article 10 of the RPC reads as follows:

ART. 10. Offenses not subject to the provisions of this Code. Offenses which are or in the future may be punishable under special laws
are not subject to the provisions of this Code. This Code shall be supplementary to such laws, unless the latter should specially
provide the contrary.

The article is composed of two clauses. The first provides that offenses which in the future are made punishable under special
laws are not subject to the provisions of the RPC, while the second makes the RPC supplementary to such laws. While it seems that
the two clauses are contradictory, a sensible interpretation will show that they can perfectly be reconciled.
The first clause should be understood to mean only that the special penal laws are controlling with regard to offenses therein
specifically punished. Said clause only restates the elemental rule of statutory construction that special legal provisions prevail over
general ones.[24] Lex specialis derogant generali. In fact, the clause can be considered as a superfluity, and could have been
eliminated altogether. The second clause contains the soul of the article. The main idea and purpose of the article is embodied in the
provision that the "code shall be supplementary" to special laws, unless the latter should specifically provide the contrary.
The appellate courts reliance on the cases of People vs. Parel,[25] U.S. vs. Ponte,[26] and U.S. vs. Bruhez[27] rests on a firm basis.
These cases involved the suppletory application of principles under the then Penal Code to special laws. People vs. Parel is concerned
with the application of Article 22[28] of the Code to violations of Act No. 3030, the Election Law, with reference to the retroactive
effect of penal laws if they favor the accused. U.S. vs. Ponte involved the application of Article 17[29] of the same Penal Code, with
reference to the participation of principals in the commission of the crime of misappropriation of public funds as defined and
penalized by Act No. 1740. U.S. vs. Bruhez covered Article 45[30] of the same Code, with reference to the confiscation of the
instruments used in violation of Act No. 1461, the Opium Law.
B.P. Blg. 22 does not expressly proscribe the suppletory application of the provisions of the RPC. Thus, in the absence of
contrary provision in B.P. Blg. 22, the general provisions of the RPC which, by their nature, are necessarily applicable, may be applied
suppletorily. Indeed, in the recent case of Yu vs. People,[31] the Court applied suppletorily the provisions on subsidiary imprisonment
under Article 39[32] of the RPC to B.P. Blg. 22.
The suppletory application of the principle of conspiracy in this case is analogous to the application of the provision on
principals under Article 17 in U.S. vs. Ponte. For once conspiracy or action in concert to achieve a criminal design is shown, the act of
one is the act of all the conspirators, and the precise extent or modality of participation of each of them becomes secondary, since
all the conspirators are principals.[33]
All these notwithstanding, the conviction of the petitioner must be set aside.
Article 8 of the RPC provides that a conspiracy exists when two or more persons come to an agreement concerning the
commission of a felony and decide to commit it. To be held guilty as a co-principal by reason of conspiracy, the accused must be
shown to have performed an overt act in pursuance or furtherance of the complicity. [34] The overt act or acts of the accused may
consist of active participation in the actual commission of the crime itself or may consist of moral assistance to his co-conspirators by
moving them to execute or implement the criminal plan.[35]
In the present case, the prosecution failed to prove that petitioner performed any overt act in furtherance of the alleged
conspiracy. As testified to by the lone prosecution witness, complainant Alfredo Oculam, petitioner was merely present when her
husband, Adronico, signed the check subject of Criminal Case No. 7068. [36] With respect to Criminal Case Nos. 7069-7070, Oculam
also did not describe the details of petitioners participation. He did not specify the nature of petitioners involvement in the
commission of the crime, either by a direct act of participation, a direct inducement of her co-conspirator, or cooperating in the
commission of the offense by another act without which it would not have been accomplished. Apparently, the only semblance of
overt act that may be attributed to petitioner is that she was present when the first check was issued. However, this inference
cannot be stretched to mean concurrence with the criminal design.
Conspiracy must be established, not by conjectures, but by positive and conclusive evidence.[37] Conspiracy transcends mere
companionship and mere presence at the scene of the crime does not in itself amount to conspiracy. [38] Even knowledge,
acquiescence in or agreement to cooperate, is not enough to constitute one as a party to a conspiracy, absent any
active participation in the commission of the crime with a view to the furtherance of the common design and purpose. [39]
As the Court eloquently pronounced in a case of recent vintage, People vs. Mandao:[40]

To be sure, conspiracy is not a harmless innuendo to be taken lightly or accepted at every turn. It is a legal concept that imputes
culpability under specific circumstances; as such, it must be established as clearly as any element of the crime. Evidence to prove it
must be positive and convincing, considering that it is a convenient and simplistic device by which the accused may be ensnared and
kept within the penal fold.

Criminal liability cannot be based on a general allegation of conspiracy, and a judgment of conviction must always be founded on the
strength of the prosecutions evidence. The Court ruled thus in People v. Legaspi, from which we quote:

At most, the prosecution, realizing the weakness of its evidence against accused-appellant Franco, merely relied and pegged the
latters criminal liability on its sweeping theory of conspiracy, which to us, was not attendant in the commission of the crime.

The rule is firmly entrenched that a judgment of conviction must be predicated on the strength of the evidence for the prosecution
and not on the weakness of the evidence for the defense. The proof against him must survive the test of reason; the strongest
suspicion must not be permitted to sway judgment. The conscience must be satisfied that on the defense could be laid the
responsibility for the offense charged; that not only did he perpetrate the act but that it amounted to a crime. What is required then
is moral certainty.

Verily, it is the role of the prosecution to prove the guilt of the appellant beyond reasonable doubt in order to overcome the
constitutional presumption of innocence.

In sum, conviction must rest on hard evidence showing that the accused is guilty beyond reasonable doubt of the crime charged. In
criminal cases, moral certainty -- not mere possibility -- determines the guilt or the innocence of the accused. Even when the
evidence for the defense is weak, the accused must be acquitted when the prosecution has not proven guilt with the requisite
quantum of proof required in all criminal cases. (Citations omitted)[41]

All told, the prosecution failed to establish the guilt of the petitioner with moral certainty. Its evidence falls short of the
quantum of proof required for conviction. Accordingly, the constitutional presumption of the petitioners innocence must be upheld
and she must be acquitted.
WHEREFORE, the instant petition is GRANTED. The assailed Decision, dated May 17, 1999, of the Court of Appeals in CA-G.R. CR
No. 20443 affirming the Decision, dated August 24, 1996, of the Regional Trial Court (Branch 3), Bohol, in Criminal Case Nos. 7068,
7069 and 7070 convicting the petitioner of violation of B.P. Blg. 22 is hereby REVERSED and SET ASIDE. Petitioner Evangeline
Ladonga is ACQUITTED of the charges against her under B.P. Blg. 22 for failure of the prosecution to prove her guilt beyond
reasonable doubt. No pronouncement as to costs.
SO ORDERED.