Today is Tuesday, January 16, 2018

Republic of the Philippines

SUPREME COURT
Manila

EN BANC

partnerships adversely affected. by Republic Act No. 1180, petitioner,

of Manila, respondents.

t Secretary of Finance.
asurer.

I. The case and issue, in general

gislative enactment, fundamental and far-reaching in significance. The enactment poses questions of due process, police power and e
g from a deep, militant, and positive nationalistic impulse, the law purports to protect citizen and country from the alien retailer. Throug
ional survival and welfare, into a concrete and tangible measures designed to free the national retailer from the competing dominanc

II. Pertinent provisions of Republic Act No. 1180

s the retail trade business. The main provisions of the Act are: (1) a prohibition against persons, not citizens of the Philippines, and ag
from the above prohibition in favor of aliens actually engaged in said business on May 15, 1954, who are allowed to continue to enga
until the expiration of term in case of juridical persons; (3) an exception therefrom in favor of citizens and juridical entities of the Unite
elating to trade, commerce and industry; (5) a prohibition against the establishment or opening by aliens actually engaged in the retai
fied statement concerning their businesses, giving, among other matters, the nature of the business, their assets and liabilities and th
for purposes of liquidation.

III. Grounds upon which petition is based-Answer thereto

erships adversely affected by the provisions of Republic Act. No. 1180, brought this action to obtain a judicial declaration that said Ac
e constitutionality of the Act, contending that: (1) it denies to alien residents the equal protection of the laws and deprives of their liber
epublic of the Philippines; (4) the provisions of the Act against the transmission by aliens of their retail business thru hereditary succe
rticle XIV of the Constitution.

passed in the valid exercise of the police power of the State, which exercise is authorized in the Constitution in the interest of nationa
ted but the value of the property is not impaired, and the institution of inheritance is only of statutory origin.

IV. Preliminary consideration of legal principles involved

claims that its exercise in this instance is attended by a violation of the constitutional requirements of due process and equal protecti
derations in the determination of the ever recurrent conflict between police power and the guarantees of due process and equal prote
e function and duty of the courts? These consideration must be clearly and correctly understood that their application to the facts of th

ble to limit its sweep. As it derives its existence from the very existence of the State itself, it does not need to be expressed or defined
e. Especially is it so under a modern democratic framework where the demands of society and of nations have multiplied to almost u
anscended human foresight. Otherwise stated, as we cannot foresee the needs and demands of public interest and welfare in this con
So it is that Constitutions do not define the scope or extent of the police power of the State; what they do is to set forth the limitations

our Constitution:

s of law, nor any person be denied the equal protection of the laws. (Article III, Phil. Constitution)

emocracies, are not limited to citizens alone but are admittedly universal in their application, without regard to any differences of race

well as hostile discrimination or the oppression of inequality. It is not intended to prohibit legislation, which is limited either in the obje
umstances and conditions both as to privileges conferred and liabilities enforced. The equal protection clause is not infringed by legis
who fall within such class and those who do not. (2 Cooley, Constitutional Limitations, 824-825.)

f the police power. Is there public interest, a public purpose; is public welfare involved? Is the Act reasonably necessary for the accom
pricious use of the legislative power? Can the aims conceived be achieved by the means used, or is it not merely an unjustified interf

ection of the laws is more apparent than real. Properly related, the power and the guarantees are supposed to coexist. The balancing
hat would be tyranny. Yet there can neither be absolute liberty, for that would mean license and anarchy. So the State can deprive pe
e test or standard, as always, is reason. The police power legislation must be firmly grounded on public interest and welfare, and a re
t not be overlooked, in the first place, that the legislature, which is the constitutional repository of police power and exercises the prer
he police power, or of the measures adopted to implement the public policy or to achieve public interest. On the other hand, courts, al
has been a clear, patent or palpable arbitrary and unreasonable abuse of the legislative prerogative. Moreover, courts are not suppos

V. Economic problems sought to be remedied

ed. If the disputed legislation were merely a regulation, as its title indicates, there would be no question that it falls within the legitimat
ade or occupation, as old as society itself, which from the immemorial has always been open to residents, irrespective of race, color o

roduce, the dealer, of course, is unknown. But as group life develops and families begin to live in communities producing more than w
begins, the dealer's importance is enhanced. Under modern conditions and standards of living, in which man's needs have multiplied
ed within the easy reach of consumers. Retail dealers perform the functions of capillaries in the human body, thru which all the neede

e ministers to the resident's daily needs, food in all its increasing forms, and the various little gadgets and things needed for home and
hread to sew them or darn the clothes that wear out. The retailer, therefore, from the lowly peddler, the owner of a small sari-sari stor

ation (Time there was when he was unknown in provincial towns and villages). Slowly but gradually be invaded towns and villages; n
ents and purchasing their agricultural produce for sale in the towns. It is an undeniable fact that in many communities the alien has rep

and insolent neighbors and customers are made in his face, but he heeds them not, and he forgets and forgives. The community take

ntrolling and dominant position that the alien retailer holds in the nation's economy. Food and other essentials, clothing, almost all art
of goods, such as lumber, hardware, textiles, groceries, drugs, sugar, flour, garlic, and scores of other goods and articles. And were

s said that the fear is unfounded and the threat is imagined; in another, it is charged that the law is merely the result of radicalism and
which brings up an issue of fact merits serious consideration. The others are matters of opinion within the exclusive competence of t

hite. Between the constitutional convention year (1935), when the fear of alien domination and control of the retail trade already filled
creasing dominance and control by the alien of the retail trade, as witness the following tables:
Owners, Benchmark: 1948 Census, issued by the Bureau of Census and Statistics, Department of Commerce and Industry; pp. 18-19

tablishments already include mere market vendors, whose capital is necessarily small..

ation has steadily increased during the years. It is true, of course, that Filipinos have the edge in the number of retailers, but aliens m
, do not imply superiority; the alien invests more capital, buys and sells six to seven times more, and gains much more. The same offi
by respondents, the native investment is thinly spread, and the Filipino retailer is practically helpless in matters of capital, credit, pric

legislature's target in the enactment of the disputed nationalization would never have been adopted. The framers of our Constitution
the public interest requires the nationalization of the retail trade; . . . ." (II Aruego, The Framing of the Philippine Constitution, 662-663
ege of Law, commenting on the patrimony clause of the Preamble opines that the fathers of our Constitution were merely translating t
Phil. Political Law, 10th ed., p. 114); and analyzing the concern of the members of the constitutional convention for the economic life o

ountry is not desirable and that if such a situation should remain, political independence alone is no guarantee to national stability and
d, timid and hesitant. Under such conditions, the government as the instrumentality of the national will, has to step in and assume the
onstitution) envisages an organized movement for the protection of the nation not only against the possibilities of armed invasion but
smen, manufacturers and producers believe so; they fear the dangers coming from alien control, and they express sentiments of eco
0, 1954, of the Second National Convention of Manufacturers and Producers. The man in the street also believes, and fears, alien pr
eality proved by official statistics, and felt by all the sections and groups that compose the Filipino community.

ominance alone; there is a prevailing feeling that such predominance may truly endanger the national interest. With ample capital, un
of the amount of goods or articles to be made available in the market, and even the choice of the goods or articles they would or wou
ded. Nationals, producers and consumers alike can be placed completely at their mercy. This is easily illustrated. Suppose an article o
uction. All that aliens would do is to agree to refuse to sell the first article, eliminating it from their stocks, offering the new one as a su
ulation. Freedom of trade is thus curtailed and free enterprise correspondingly suppressed.

mination. Grave abuses have characterized the exercise of the retail trade by aliens. It is a fact within judicial notice, which courts of j
ed by a pernicious and intolerable practices, the mention of a few of which would suffice for our purposes; that at some time or other t
ential foods to the inconvenience and prejudice of the consuming public, so much so that the Government has had to establish the Na
modities, such that the legislature had to enact a law (Sec. 9, Republic Act No. 1168), authorizing their immediate and automatic dep
o boycott honest merchants and traders who would not cater or yield to their demands, in unlawful restraint of freedom of trade and e
on and contempt of lawful authority. It is also believed that they have engaged in corrupting public officials with fabulous bribes, indir
l diplomatic representatives, action which impliedly admits a prevailing feeling about the existence of many of the above practices.

uture. The present dominance of the alien retailer, especially in the big centers of population, therefore, becomes a potential source o
powerful groups that dominate the distribution of goods and commodities in the communities and big centers of population. They ow
his country, the alien may even become the potential enemy of the State.

w is not the product of racial hostility, prejudice or discrimination, but the expression of the legitimate desire and determination of the
n the interest of the public, nay of the national security itself, and indisputably falls within the scope of police power, thru which and b

VI. The Equal Protection Limitation

, Does the law deny the equal protection of the laws? As pointed out above, the mere fact of alienage is the root and cause of the dis
ed by the lure of gain and profit. His aim or purpose of stay, we admit, is neither illegitimate nor immoral, but he is naturally lacking in
revent him from taking advantage of their weakness and exploiting them. The faster he makes his pile, the earlier can the alien go ba
he makes his profit, that it has been found necessary to adopt the legislation, radical as it may seem.

ribution to national income and wealth. He undoubtedly contributes to general distribution, but the gains and profits he makes are not
d to continue entrusting the very important function of retail distribution to his hands.

ir secret manipulations of stocks of commodities and prices, their utter disregard of the welfare of their customers and of the ultimate
xistence of real and actual, positive and fundamental differences between an alien and a national which fully justify the legislative clas
ct and reality were we to hold that no reason or ground for a legitimate distinction can be found between one and the other.

e actual and real, furnish sufficient grounds for legislative classification of retail traders into nationals and aliens. Some may disagree w
le, and all persons of one class are treated alike, and as it cannot be said that the classification is patently unreasonable and unfound
n.
 sons is not curtailed or denied by the equal protection of the laws clause. The legislative power admits of a wide scope of discretion,
e of Linsey vs. Natural Carbonic Fas Co. (1911), 55 L. ed., 369, which clearly and succinctly defined the application of equal protectio

e state the power to classify in the adoption of police laws, but admits of the exercise of the wide scope of discretion in that regard, an
ause merely because it is not made with mathematical nicety, or because in practice it results in some inequality. 3. When the classif
be assumed. 4. One who assails the classification in such a law must carry the burden of showing that it does not rest upon any reas

eady been affirmatively decided in this jurisdiction as well as in various courts in the United States. In the case of Smith Bell & Co. vs.
e to corporations formed by citizens of the Philippine Islands or the United States, thus denying the right to aliens, it was held that the
building and the safety for these Islands from foreign interlopers. We held that this was a valid exercise of the police power, and all p
violate the equal protection of the law and due process or law clauses of the Philippine Bill of Rights. In rendering said decision we q

s licensing gaming houses, retailers of spirituous liquors, etc. The act, in this instance, is distinctly of that character, and forms part o
serves to its own subjects a monopoly of its coasting trade; and a countervailing privilege in favor of American shipping is contemplat
o the act of her enrollment. But it is to confer on her American privileges, as contra distinguished from foreign; and to preserve the Go
whole system is projected."

se justified simply because the limitation of the class falls along the lines of nationality. That would be requiring a higher degree of pro
for reasonable classification in the exercise of police power. (2 Am., Jur. 468-469.)

awkers and peddlers, which provided that no one can obtain a license unless he is, or has declared his intention, to become a citizen
appiness of the community, and the court cannot question this judgment and conclusion. In Bloomfield vs. State, 99 N. E. 309 (Ohio,
pose to discriminate, but was based on the belief that an alien cannot be sufficiently acquainted with "our institutions and our life as t
926), the U.S. Supreme Court had under consideration an ordinance of the city of Cincinnati prohibiting the issuance of licenses (pool
uch a relation to a legitimate object of legislation as to be made the basis of permitted classification, and that it could not state that the
e case of State vs. Carrol, 124 N. E. 129 (Ohio, 1919) is a parallel case to the one at bar. In Asakura vs. City of Seattle, 210 P. 30 (W
ing aliens the right to engage in auctioneering was also sustained in Wright vs. May, L.R.A., 1915 P. 151 (Minnesota, 1914). So also
ions of issuance of licenses to them for the business of pawnbroker, pool, billiard, card room, dance hall, is not an infringement of con
ecision was the court's findings that the exercise of the business by the aliens does not in any way affect the morals, the health, or ev
neligible to citizenship was held void, because the law conflicts with Federal power over immigration, and because there is no public i
agonism toward the persons of Japanese ancestry. However, two Justices dissented on the theory that fishing rights have been treat
ralized male persons over 21 years of age, was declared void because the court found that there was no reason for the classification

d that the distinction between aliens and citizens is not a valid ground for classification. But in this decision the laws declared invalid w
In Yu Cong Eng vs. Trinidad, 70 L. ed. 1059 (1925), the United States Supreme Court declared invalid a Philippine law making unlaw
siness there would be no other system of distribution, and (2) that the Chinese would fall prey to all kinds of fraud, because they woul
m the operations of the law and on the other hand it would deprive Chinese of something indispensable for carrying on their business.
, but the court said that the power granted was arbitrary, that there was no reason for the discrimination which attended the administr
and peddlers was declared void, because the discrimination bore no reasonable and just relation to the act in respect to which the c

s do not naturally possess the sympathetic consideration and regard for the customers with whom they come in daily contact, nor the
cations of the aliens have been shown on many occasions and instances, especially in times of crisis and emergency. We can do no
he intimate knowledge of our laws, customs, and usages that our own people have. So it is likewise known that certain classes of alie
y, and whose ideals of governmental environment and control have been engendered and formed under entirely different regimes and
ment itself. Further enlargement, is unnecessary. I have said enough so that obviously it cannot be affirmed with absolute confidence

VII. The Due Process of Law Limitation.

ed by the highest authority in the United States that:

w shall not be unreasonable, arbitrary or capricious, and that the means selected shall have a real and substantial relation to the subje

xxx xxx xxx

tutional restriction a state is free to adopt whatever economic policy may reasonably be deemed to promote public welfare, and to en
ssed are seen to have a reasonable relation to a proper legislative purpose, and are neither arbitrary nor discriminatory, the requirem

scope of the police power in a constitutional sense, for the test used to determine the constitutionality of the means employed by the l
s. . . .

xxx xxx xxx

ersons whom it affects, must not be for the annoyance of a particular class, and must not be unduly oppressive. (11 Am. Jur. Sec. 30

ear, first, that the interests of the public generally, as distinguished from those of a particular class, require such interference; and sec

tutionality:

power to regulate the operation of a business, is or is not constitutional, one of the first questions to be considered by the court is wh
tial relation to the health, safety, morals, comfort, and general welfare of the public.

s long ago recognized as essential to the orderly pursuant of happiness by free men; that it is a gainful and honest occupation and th
the occupation is engaged in by petitioner, it has been so engaged by him, by the alien in an honest creditable and unimpeachable m
d, that the privilege has been so grossly abused by the alien, thru the illegitimate use of pernicious designs and practices, that he now

the facts and circumstances, but this, Is the exclusion in the future of aliens from the retail trade unreasonable. Arbitrary capricious,
deemed absolutely necessary to bring about the desired legislative objective, i.e., to free national economy from alien control and dom
y under all circumstances of the means adopted to carry out its purpose into effect (Id.) Judged by this test, disputed legislation, which
ll, which later was enacted into law:

re not citizens of the Philippines from having a strangle hold upon our economic life. If the persons who control this vital artery of our
e, we are not really the masters of our destiny. All aspects of our life, even our national security, will be at the mercy of other people.

ho are not citizens of the Philippines of their means of livelihood. While this bill seeks to take away from the hands of persons who ar

one the less legitimate. Freedom and liberty are not real and positive if the people are subject to the economic control and domination
l legislature may pursue. It is impossible to conceive that legislation that seeks to bring it about can infringe the constitutional limitatio

of due process on the attainment of such a noble motive as freedom from economic control and domination, thru the exercise of the p
m and liberty. On the precise issue now before us, they expressly made their voice clear; they adopted a resolution expressing their b

of retail trade; but it abstain from approving the amendment introduced by the Delegate for Manila, Mr. Araneta, and others on this ma
go, The Framing of the Philippine Constitution, quoted on pages 66 and 67 of the Memorandum for the Petitioner.)

titution. Thus in the preamble, a principle objective is the conservation of the patrimony of the nation and as corollary the provision lim
er form of authorization for the operation of the public utility shall be granted except to citizens of the Philippines." The nationalization
d spirit underlying many of the provisions of the Constitution is unreasonable, invalid and unconstitutional?

pproval of the radical measures is, therefore, fully justified. It would have been recreant to its duties towards the country and its peop
repository of the sovereign power of legislation, the Legislature was in duty bound to face the problem and meet, through adequate m

e Legislature has been. The law is made prospective and recognizes the right and privilege of those already engaged in the occupatio
of certain offenses. In the deliberations of the Court on this case, attention was called to the fact that the privilege should not have bee
bject to judicial review. It is well settled that the Court will not inquire into the motives of the Legislature, nor pass upon general matte
may hold views inconsistent with the wisdom of the law, it may not annul the legislation if not palpably in excess of the legislative powe
ese principles also answer various other arguments raised against the law, some of which are: that the law does not promote general
replacement is problematical; that there may be general breakdown; that there would be repercussions from foreigners; etc. Many of

VIII. Alleged defect in the title of the law

of is misleading or deceptive, as it conceals the real purpose of the bill which is to nationalize the retail business and prohibit aliens fr

be expressed in the title of the bill.

gislators or the public of the nature, scope and consequences of the law or its operation (I Sutherland, Statutory Construction, Sec. 1
ance convey the idea of "nationalization" and "prohibition", which terms express the two main purposes and objectives of the law. Bu
prohibit the sale of intoxicating liquors. (Sweet vs. City of Wabash, 41 Ind., 7; quoted in page 41 of Answer.)

ature shall be stated in the tale, the title to regulate the sale of intoxicating liquors, etc." sufficiently expresses the subject of an act pr
te, 48 Ind. 306, 308, quoted in p. 42 of Answer.)

nd prohibition of acts usually done in connection with the thing to be regulated. While word regulate does not ordinarily convey mean
of which involves suppression. (State vs. Morton, 162 So. 718, 182 La. 887, quoted in p. 42 of Answer.)

tle need not be an index to the entire contents of the law (I Sutherland, Statutory Construction, See. 4803, p. 345.) The above rule w
retail trade which may not be included in the terms "nationalization" or "prohibition"; so were the title changed from "regulate" to "natio
d with the principle governing the drafting of statutes, under which a simple or general term should be adopted in the title, which would

is to apprise the legislators of the purposes, the nature and scope of its provisions, and prevent the enactment into law of matters wh
ally the nationalization and the prohibition provisions. The legislators took active interest in the discussion of the law, and a great man
ed. The objection must therefore, be overruled.

IX. Alleged violation of international treaties and obligations

the Charter of the United Nations and of the Declaration of the Human Rights adopted by the United Nations General Assembly. We
and the Declaration of Human Rights contains nothing more than a mere recommendation or a common standard of achievement fo
Organizations, such as Norway and Denmark, prohibit foreigners from engaging in retail trade, and in most nations of the world laws a

8, 1947 is also claimed to be violated by the law in question. All that the treaty guarantees is equality of treatment to the Chinese natio
States, who are granted special rights by the Constitution, are all prohibited from engaging in the retail trade. But even supposing th
never curtail or restrict the scope of the police power of the State (plaston vs. Pennsylvania, 58 L. ed. 539.)

X. Conclusion

real actual threat and danger to national economy posed by alien dominance and control of the retail business and free citizens and c
security and future; that the law does not violate the equal protection clause of the Constitution because sufficient grounds exist for th
f aliens already engaged in the occupation and reasonably protects their privilege; that the wisdom and efficacy of the law to carry ou
e of the Legislature, with whose power and discretion the Judicial department of the Government may not interfere; that the provision
supposed conflict with treaty obligations because no treaty has actually been entered into on the subject and the police power may n

made less harsh in its impact on the aliens. Thus it is stated that the more time should have been given in the law for the liquidation
d the limitations of due process and equal protection guaranteed in the Constitution. Remedies against the harshness of the law shou

x, JJ., concur.

ct passed by the Congress and duly approved by the President of the Republic. But the rule does not preclude courts from inquiring
of the laws clauses of the Constitution does not infringe upon them, insofar as it affects associations, partnership or corporations, the
t it does not violate said clauses insofar as the Act applies to associations and partnerships referred to in the Act and to aliens, who a
d in good faith they were entitled to engaged in the business. The Act allows aliens to continue in business until their death or volunta
 in the business for a period of ten years from the date of the approval of the Act (19 June 1954) or until the expiry of term of the exis
, to engage in the retail business for a period of more than ten years from the date of the approval of the Act or beyond the term of the
se reasonably upon them by subsequent legislation.1 But the prohibition to engage in the retail business by associations and partners
upon by the associates and partners, and by alien heirs to whom the retail business is transmitted by the death of an alien engaged in
Act or until the expiration of the term of the existence of the association and partnership, whichever event comes first, and the six-mo
them to sell or dispose of their business. The price obtainable at such forced sale of the business would be inadequate to reimburse
f merchandise bought and sold at retail does not alone constitute the business. The goodwill that the association, partnership and the
ue process of law2 and that no person shall be denied the equal protection of the laws3would have no meaning as applied to associat
e Act and before the end of the term of the existence of the associations and partnership as agreed upon by the associations and par

hip of private agricultural lands which together with the lands of the public domain constitute the priceless patrimony and mainstay of

s and partnership referred to therein to wind up their retail business within ten years from the date of the approval of the Act even befo
his executor or administrator, to liquidate the business, are invalid, for they violate the due process of law and the equal protection of
 EN BANC

G.R. No. 216914, December 06, 2016

SUBIDO PAGENTE CERTEZA MENDOZA AND BINAY LAW

OFFICES, Petitioner, v. THE COURT OF APPEALS, HON. ANDRES B.
REYES, JR., IN HIS CAPACITY AS PRESIDING JUSTICE OF THE COURT
OF APPEALS, AND THE ANTI-MONEY LAUNDERING COUNCIL,
REPRESENTED BY ITS MEMBERS, HON. AMANDO M. TETANGCO, JR.,
GOVERNOR OF THE BANGKO SENTRAL NG PILIPINAS, HON.
TERESITA J. HERBOSA, CHAIRPERSON OF THE SECURITIES AND
EXCHANGE COMMISSION, AND HON. EMMANUEL F. DOOC,
INSURANCE COMMISSIONER OF THE INSURANCE
COMMISSION, Respondents.

DECISION

PEREZ, J.:

Challenged in this petition for certiorari1 and prohibition under Rule 65 of the Rules of Court is the
constitutionality of Section 11 of Republic Act (R.A.) No. 9160, the Anti-Money Laundering Act, as amended,
specifically the Anti-Money Laundering Council's authority to file with the Court of Appeals (CA) in this case,
an ex-parte application for inquiry into certain bank deposits and investments, including related accounts
based on probable cause.

In 2015, a year before the 2016 presidential elections, reports abounded on the supposed disproportionate
wealth of then Vice President Jejomar Binay and the rest of his family, some of whom were likewise elected
public officers. The Office of the Ombudsman and the Senate conducted investigations2 and
inquiries3 thereon ostensibly based on their respective powers delineated in the Constitution.

From various news reports announcing the inquiry into then Vice President Binay's bank accounts, including
accounts of members of his family, petitioner Subido Pagente Certeza Mendoza & Binay Law Firm (SPCMB)
was most concerned with the article published in the Manila Times on 25 February 2015 entitled "Inspect
Binay Bank Accounts" which read, in pertinent part:

xxx The Anti-Money Laundering Council (AMLC) asked the Court of Appeals (CA) to allow
the [C]ouncil to peek into the bank accounts of the Binays, their corporations, and a law
office where a family member was once a partner.

xxxx

Also the bank accounts of the law office linked to the family, the Subido Pagente Certeza
Mendoza & Binay Law Firm, where the Vice President's daughter Abigail was a former
partner.4

The following day, 26 February 2015, SPCMB wrote public respondent, Presiding Justice of the CA, Andres B.
Reyes, Jr.:
 The law firm of Subido Pagente Certeza Mendoza and Binay was surprised to receive a call
from Manila Times requesting for a comment regarding a [supposed petition] filed by the
Republic of the Philippines represented by the Anti-Money Laundering Council before the
Court of Appeals seeking to examine the law office's bank accounts.

To verify the said matter, the law office is authorizing its associate Atty. Jose Julius R.
Castro to inquire on the veracity of said report with the Court of Appeals. He is likewise
authorized to secure copies of the relevant documents of the case, such as the petition and
orders issued, if such a case exists.

As this is a matter demanding serious and immediate attention, the Firm respectfully
manifests that if no written response is received within 24-hours from receipt of this letter,
we shall be at liberty to assume that such a case exists and we shall act accordingly.

Hoping for your immediate action.

Respectfully yours,
For the Firm

CLARO F. CERTEZA5

Within twenty four (24) hours, Presiding Justice Reyes wrote SPCMB denying its request, thus:

Anent your request for a comment on a supposed petition to inquire into your law office's
bank accounts, please be informed that a petition of this nature is strictly confidential in
that when processing the same, not even the handling staff members of the Office of the
Presiding Justice know or have any knowledge who the subject bank account holders are,
as well as the bank accounts involved.

Please be informed further that clearly under the rules, the Office of the Presiding Justice is
strictly mandated not to disclose, divulge, or communicate to anyone directly or indirectly,
in any manner or by any means, the fact of the filing of any petition brought before this
Court by the Anti-Money Laundering Council, its contents and even its entry in the logbook.

Trusting that you find satisfactory the foregoing explanation.6

By 8 March 2015, the Manila Times published another article entitled, "CA orders probe of Binay's assets"
reporting that the appellate court had issued a Resolution granting the ex-parte application of the AMLC to
examine the bank accounts of SPCMB:

The Court of Appeals (CA) has officially issued an order for examination of Vice President
Jejomar Binay's bank accounts.

In granting the petition of the Anti-Money Laundering Council (AMLC), the CA also ordered
the inspection of the bank deposits of Binay's wife, children, and a law office connected to
him.

xxx xxx xxx

The bank accounts of the law office linked to Binay - the Subido Pagente Certeza
Mendoza & Binay where Binay's daughter, Makati City (Metro Manila) Rep. Mar-len Abigail
Binay was a partner, are also included in the probe, the sources said.7
Forestalled in the CA thus alleging that it had no ordinary, plain, speedy, and adequate remedy to protect its
rights and interests in the purported ongoing unconstitutional examination of its bank accounts by public
respondent Anti-Money Laundering Council (AMLC), SPCMB undertook direct resort to this Court via this
petition for certiorari and prohibition on the following grounds:

A. THE ANTI-MONEY LAUNDERING ACT IS UNCONSTITUTIONAL INSOFAR AS IT ALLOWS THE

EXAMINATION OF A BANK ACCOUNT WITHOUT ANY NOTICE TO THE AFFECTED PARTY: cralawlawli bra ry

1. IT VIOLATES THE PERSON'S RIGHT TO DUE PROCESS; AND

2. IT VIOLATES THE PERSON'S RIGHT TO PRIVACY.

B. EVEN ASSUMING ARGUENDO THAT THE ANTI-MONEY LAUNDERING ACT IS CONSTITUTIONAL, THE
RESPONDENTS COMMITTED GRAVE ABUSE OF DISCRETION AMOUNTING TO LACK OR EXCESS OF
JURISDICTION CONSIDERING THAT: cralawlawlibra ry

1. THE REFUSAL OF RESPONDENT PRESIDING JUSTICE TO PROVIDE PETITIONER

WITH A COPY OF THE EX-PARTEAPPLICATION FOR BANK EXAMINATION FILED
BY RESPONDENT AMLC AND ALL OTHER PLEADINGS, MOTIONS, ORDERS,
RESOLUTIONS, AND PROCESSES ISSUED BY THE RESPONDENT COURT OF
APPEALS IN RELATION THERETO VIOLATES PETITIONER'S RIGHT TO DUE
PROCESS;

2. A CARTE BLANCHE AUTHORITY TO EXAMINE ANY AND ALL TRANSACTIONS

PERTAINING TO PETITIONER'S BANK ACCOUNTS VIOLATES THE ATTORNEY-
CLIENT PRIVILEGE WHICH IS SACROSANCT IN THE LEGAL PROFESSION;

3. A BLANKET AUTHORITY TO EXAMINE PETITIONER'S BANK ACCOUNTS,

INCLUDING ANY AND ALL TRANSACTIONS THEREIN FROM ITS OPENING UP TO
THE PRESENT, PARTAKES THE NATURE OF A GENERAL WARRANT THAT IS
CLEARLY INTENDED TO AID A MERE FISHING EXPEDITION;

4. THERE IS NOTHING IN THE ANTI-MONEY LAUNDERING ACT THAT ALLOWS OR

JUSTIFIES THE WITHHOLDING OF INFORMATION AND/OR ANY COURT
RECORDS OR PROCEEDINGS PERTAINING TO AN EXAMINATION OF A BANK
ACCOUNT, ESPECIALLY IF THE COURT HAS ALREADY GRANTED THE AUTHORITY
TO CONDUCT THE EXAMINATION;
5. THE PETITIONER DID NOT COMMIT, NOR HAS THE PETITIONER BEEN
IMPLEADED IN ANY COMPLAINT INVOLVING ANY PREDICATE CRIME THAT
WOULD JUSTIFY AN INQUIRY INTO ITS BANK ACCOUNTS; AND

7. THE EXAMINATION OF THE PETITIONER'S BANK ACCOUNTS IS A FORM OF

POLITICAL PERSECUTION OR HARASSMENT.8

In their Comment, the AMLC, through the Office of the Solicitor General (OSG), points out a supposed
jurisdictional defect of the instant petition, i.e., SPCMB failed to implead the House of Representatives which
enacted the AMLA and its amendments. In all, the OSG argues for the dismissal of the present petition,
highlighting that the AMLC's inquiry into bank deposits does not violate due process nor the right to privacy:

1. Section 11's allowance for AMLC's ex-parte application for an inquiry into particular bank deposits and
investments is investigative, not adjudicatory;

2. The text of Section 11 itself provides safeguards and limitations on the allowance to the AMLC to inquire
into bank deposits: (a) issued by the CA based on probable cause; and (b) specific compliance to the
requirements of Sections 2 and 3, Article III of the Constitution;

3. The ex-parte procedure for investigating bank accounts is necessary to achieve a legitimate state
objective;

4. There is no legitimate expectation of privacy as to the bank records of a depositor;

5. The examination of, and inquiry, into SPCMB's bank accounts does not violate Attorney-Client Privilege;
and

6. A criminal complaint is not a pre-requisite to a bank inquiry order.

In their Reply, SPCMB maintains that the ex-parte proceedings authorizing inquiry of the AMLC into certain
bank deposits and investments is unconstitutional, violating its rights to due process and privacy.

Before anything else, we here have an original action turning on three crucial matters: (1) the petition
reaches us from a letter of the Presiding Justice of the CA in response to a letter written by SPCMB; (2)
SPCMB's bank account has been reported to be a related account to Vice President Binay's investigated by
the AMLC for anti-money laundering activities; and (3) the constitutionality of Section 11 of the AMLA at its
recent amendment has not been squarely raised and addressed.

To obviate confusion, we act on this petition given that SPCMB directly assails the constitutionality of Section
11 of the AMLA where it has been widely reported that Vice President Binay's bank accounts and all related
accounts therewith are subject of an investigation by the AMLC. In fact, subsequent events from the filing of
this petition have shown that these same bank accounts (including related accounts) were investigated by
the Ombudsman and both Houses of the Legislature. However, at the time of the filing of this petition,
SPCMB alleged that its accounts have been inquired into but not subjected to a freeze order under Section
10 of the AMLA. Thus, as previously noted, with its preclusion of legal remedies before the CA which under
the AMLA issues the ex-parte bank inquiry and freeze orders, Sections 10 and 11, respectively, SPCMB
establishes that it has no plain, speedy and adequate remedy in the ordinary course of law to protect its
rights and interests from the purported unconstitutional intrusion by the AMLC into its bank accounts.

The foregoing shall be addressed specifically and bears directly on the disposition of the decision herein.
Additionally, we note that the OSG did not question how this petition reaches us from a letter of the
appellate court's Presiding Justice, only that, procedurally, SPCMB should have impleaded Congress.

On the sole procedural issue of whether SPCMB ought to have impleaded Congress, the contention of the
OSG though novel is untenable. All cases questioning the constitutionality of a law does not require that
Congress be impleaded for their resolution. The requisites of a judicial inquiry are elementary:

1. There must be an actual case or controversy; party;

2. The question of constitutionality must be raised by the proper party;

3. The constitutional question must be raised at the earliest possible opportunity; and

4. The decision of the constitutional question must be necessary to the determination of the
case itself.9

The complexity of the issues involved herein require us to examine the assailed provision vis-a-vis the
constitutional proscription against violation of due process. The statute reads:

SEC. 11. Authority to Inquire into Bank Deposits. - Notwithstanding the provisions of
Republic Act No. 1405, as amended; Republic Act No. 6426, as amended; Republic Act No.
8791; and other laws, the AMLC may inquire into or examine any particular deposit or
investment, including related accounts, with any banking institution or non-bank financial
institution upon order of any competent court based on an ex parte application in cases of
violations of this Act, when it has been established that there is probable cause that the
deposits or investments, including related accounts involved, are related to an unlawful
activity as defined in Section 3(i) hereof or a money laundering offense under Section 4
hereof; except that no court order shall be required in cases involving activities defined in
Section 3(i)(1), (2), and (12) hereof, and felonies or offenses of a nature similar to those
mentioned in Section 3(i)(1), (2), and (12), which are punishable under the penal laws of
other countries, and terrorism and conspiracy to commit terrorism as defined and penalized
under Republic Act No. 9372.

The Court of Appeals shall act on the application to inquire into or examine any deposit or
investment with any banking institution or non-bank financial institution within twenty-four
(24) hours from filing of the application.

To ensure compliance with this Act, the Bangko Sentral ng Pilipinas may, in the course of a
periodic or special examination, check the compliance of a covered institution with the
requirements of the AMLA and its implementing rules and regulations.

For purposes of this section, 'related accounts' shall refer to accounts, the funds and
sources of which originated from and/or are materially linked to the monetary
instrument(s) or property(ies) subject of the freeze order(s).

A court order ex parte must first be obtained before the AMLC can inquire into these related
Accounts: Provided, That the procedure for the ex parte application of the ex parte court
order for the principal account shall be the same with that of the related accounts.

The authority to inquire into or examine the main account and the related accounts shall
comply with the requirements of Article III, Sections 2 and 3 of the 1987 Constitution,
which are hereby incorporated by reference.10

The due process clause of the Constitution reads:

SECTION 1. No person shall be deprived of life, liberty or property without due process of
law, nor shall any person be denied the equal protection of the laws. 11
The right to due process has two aspects: (1) substantive which deals with the extrinsic and intrinsic validity
of the law; and (2) procedural which delves into the rules government must follow before it deprives a
person of its life, liberty or property.12

As presently worded, Section 11 of the AMLA has three elements: (1) ex-parte application by the AMLC; (2)
determination of probable cause by the CA; and (3) exception of court order in cases involving unlawful
activities defined in Sections 3(i)(1), (2), and (12).

As a brief backgrounder to the amendment to Section 11 of the AMLA, the text originally did not specify for
an ex-parte application by the AMLC for authority to inquire into or examine certain bank accounts or
investments. The extent of this authority was the topic of Rep. of the Phils. v. Hon. Judge Eugenio, Jr., et al.
(Eugenio)13 where the petitioner therein, Republic of the Philippines, asseverated that the application for
that kind of order under the questioned section of the AMLA did not require notice and
hearing. Eugenio schooled us on the AMLA, specifically on the provisional remedies provided therein to aid
the AMLC in enforcing the law:

It is evident that Section 11 does not specifically authorize, as a general rule, the
issuance ex-parte of the bank inquiry order. We quote the provision in full:

SEC. 11. Authority to Inquire into Bank Deposits. — Notwithstanding

the provisions of Republic Act No. 1405, as amended, Republic Act No.
6426, as amended, Republic Act No. 8791, and other laws, the AMLC may
inquire into or examine any particular deposit or investment with any
banking institution or non bank financial institution upon order of any
competent court in cases of violation of this Act, when it has been
established that there is probable cause that the deposits or
investments are related to an unlawful activity as defined in
Section 3(i) hereof or a money laundering offense under Section 4
hereof, except that no court order shall be required in cases
involving unlawful activities defined in Sections 3(i)1, (2) and
(12).

To ensure compliance with this Act, the Bangko Sentral ng Pilipinas (BSP)
may inquire into or examine any deposit of investment with any banking
institution or non bank financial institution when the examination is made
in the course of a periodic or special examination, in accordance with the
rules of examination of the BSP. (Emphasis supplied)

Of course, Section 11 also allows the AMLC to inquire into bank accounts without having to
obtain a judicial order in cases where there is probable cause that the deposits or
investments are related to kidnapping for ransom, certain violations of the Comprehensive
Dangerous Drugs Act of 2002, hijacking and other violations under R.A. No. 6235,
destructive arson and murder. Since such special circumstances do not apply in this case,
there is no need for us to pass comment on this proviso. Suffice it to say, the proviso
contemplates a situation distinct from that which presently confronts us, and for purposes
of the succeeding discussion, our reference to Section 11 of the AMLA excludes said
proviso.

In the instances where a court order is required for the issuance of the bank inquiry order,
nothing in Section 11 specifically authorizes that such court order may be issued ex parte.
It might be argued that this silence does not preclude the ex parte issuance of the bank
inquiry order since the same is not prohibited under Section 11. Yet this argument falls
when the immediately preceding provision, Section 10, is examined.

SEC 10. Freezing of Monetary Instrument or Property. — The Court

of Appeals, upon application ex parte by the AMLC and after
determination that probable cause exists that any monetary instrument or
property is in any way related to an unlawful activity as defined in Section
3(i) hereof, may issue a freeze order which shall be effective
 immediately. The freeze order shall be for a period of twenty (20) days
unless extended by the court.

Although oriented towards different purposes, the freeze order under Section 10 and the
bank inquiry order under Section 11 are similar in that they are extraordinary provisional
reliefs which the AMLC may avail of to effectively combat and prosecute money laundering
offenses. Crucially, Section 10 uses specific language to authorize an ex parteapplication for
the provisional relief therein, a circumstance absent in Section 11. If indeed the legislature
had intended to authorize ex parte proceedings for the issuance of the bank inquiry order,
then it could have easily expressed such intent in the law, as it did with the freeze order
under Section 10.

Even more tellingly, the current language of Sections 10 and 11 of the AMLA was crafted at
the same time, through the passage of R.A. No. 9194. Prior to the amendatory law, it was
the AMLC, not the Court of Appeals, which had authority to issue a freeze order, whereas a
bank inquiry order always then required, without exception, an order from a competent
court. It was through the same enactment that ex parteproceedings were introduced for the
first time into the AMLA, in the case of the freeze order which now can only be issued by
the Court of Appeals. It certainly would have been convenient, through the same
amendatory law, to allow a similar ex parte procedure in the case of a bank inquiry order
had Congress been so minded. Yet nothing in the provision itself, or even the available
legislative record, explicitly points to an ex parte judicial procedure in the application for a
bank inquiry order, unlike in the case of the freeze order.

That the AMLA does not contemplate ex parte proceedings in applications for bank inquiry
orders is confirmed by the present implementing rules and regulations of the AMLA,
promulgated upon the passage of R.A. No. 9194. With respect to freeze orders under
Section 10, the implementing rules do expressly provide that the applications for freeze
orders be filed ex parte, but no similar clearance is granted in the case of inquiry orders
under Section 11. These implementing rules were promulgated by the Bangko Sentral ng
Pilipinas, the Insurance Commission and the Securities and Exchange Commission, and if it
was the true belief of these institutions that inquiry orders could be issued ex partesimilar
to freeze orders, language to that effect would have been incorporated in the said Rules.
This is stressed not because the implementing rules could authorize ex parteapplications for
inquiry orders despite the absence of statutory basis, but rather because the framers of the
law had no intention to allow such ex parte applications.

Even the Rules of Procedure adopted by this Court in A.M. No. 05-11-04-SC to enforce the
provisions of the AMLA specifically authorize ex parte applications with respect to freeze
orders under Section 10 but make no similar authorization with respect to bank inquiry
orders under Section 11.

The Court could divine the sense in allowing ex parteproceedings under Section 10 and in
proscribing the same under Section 11. A freeze order under Section 10 on the one hand is
aimed at preserving monetary instruments or property in any way deemed related to
unlawful activities as defined in Section 3(i) of the AMLA. The owner of such monetary
instruments or property would thus be inhibited from utilizing the same for the duration of
the freeze order. To make such freeze order anteceded by a judicial proceeding with notice
to the account holder would allow for or lead to the dissipation of such funds even before
the order could be issued. (Citations omitted.)

Quite apparent from the foregoing is that absent a specific wording in the AMLA allowing for ex-
parte proceedings in orders authorizing inquiry and examination by the AMLC into certain bank deposits or
investments, notice to the affected party is required.

Heeding the Court's observance in Eugenio that the remedy of the Republic then lay with the legislative,
Congress enacted Republic Act No. 10167 amending Section 11 of the AMLA and specifically inserted the
word ex-parte appositive of the nature of this provisional remedy available to the AMLC thereunder.
It is this current wording of Section 11 which SPCMB posits as unconstitutional and purportedly actually
proscribed in Eugenio.

We do not subscribe to SPCMB's position.

Succinctly, Section 11 of the AMLA providing for ex-parte application and inquiry by the AMLC into certain
bank deposits and investments does not violate substantive due process, there being no physical seizure of
property involved at that stage. It is the preliminary and actual seizure of the bank deposits or investments
in question which brings these within reach of the judicial process, specifically a determination that the
seizure violated due process.14 In fact, Eugeniodelineates a bank inquiry order under Section 11 from a
freeze order under Section 10 on both remedies' effect on the direct objects, i.e. the bank deposits and
investments:

On the other hand, a bank inquiry order under Section 11 does not necessitate any form of
physical seizure of property of the account holder. What the bank inquiry order authorizes
is the examination of the particular deposits or investments in banking institutions or non-
bank financial institutions. The monetary instruments or property deposited with such
banks or financial institutions are not seized in a physical sense, but are examined on
particular details such as the account holder's record of deposits and transactions. Unlike
the assets subject of the freeze order, the records to be inspected under a bank inquiry
order cannot be physically seized or hidden by the account holder. Said records are in the
possession of the bank and therefore cannot be destroyed at the instance of the account
holder alone as that would require the extraordinary cooperation and devotion of the
bank.15

At the stage in which the petition was filed before us, the inquiry into certain bank deposits and investments
by the AMLC still does not contemplate any form of physical seizure of the targeted corporeal property. From
this cite, we proceed to examine whether Section 11 of the law violates procedural due process.

As previously stated, the AMLA now specifically provides for an ex-parte application for an order authorizing
inquiry or examination into bank deposits or investments which continues to pass constitutional muster.

Procedural due process is essentially the opportunity to be heard.16 In this case, at the investigation stage
by the AMLC into possible money laundering offenses, SPCMB demands that it have notice and hearing of
AMLC's investigation into its bank accounts.

We are not unaware of the obiter in Eugenio17 and cited by SPCMB, voicing misgivings on an interpretation
of the former Section 11 of the AMLA allowing for ex-parte proceedings in bank inquiry orders, to wit:

There certainly is fertile ground to contest the issuance of an ex-parte order. Section 11
itself requires that it be established that "there is probable cause that the deposits or
investments are related to unlawful activities," and it obviously is the court which stands as
arbiter whether there is indeed such probable cause. The process of inquiring into the
existence of probable cause would involve the function of determination reposed on the trial
court. Determination clearly implies a function of adjudication on the part of the trial court,
and not a mechanical application of a standard pre-determination by some other body. The
word "determination" implies deliberation and is, in normal legal contemplation, equivalent
to "the decision of a court of justice."

The court receiving the application for inquiry order cannot simply take the AMLC's word
that probable cause exists that the deposits or investments are related to an unlawful
activity. It will have to exercise its own determinative function in order to be convinced of
such fact. The account holder would be certainly capable of contesting such
probable cause if given the opportunity to be apprised of the pending application
to inquire into his account; hence a notice requirement would not be an empty
spectacle. It may be so that the process of obtaining the inquiry order may become more
cumbersome or prolonged because of the notice requirement, yet we fail to see any
unreasonable burden cast by such circumstance. After all, as earlier stated, requiring notice
to the account holder should not, in any way, compromise the integrity of the bank records
 subject of the inquiry which remain in the possession and control of the bank. (Emphasis
supplied)

On that score, the SPCMB points out that the AMLC 's bank inquiry is preliminary to the seizure and
deprivation of its property as in a freeze order under Section 10 of the AMLA which peculiarity lends itself to
a sui generis proceeding akin to the evaluation process in extradition proceedings pronounced in Secretary
of Justice v. Hon. Lantion.18Under the extradition law, the Secretary of Foreign Affairs is bound to make a
finding that the extradition request and its supporting documents are sufficient and complete in form and
substance before delivering the same to the Secretary of Justice. We ruled:

[L]ooking at the factual milieu of the case before us, it would appear that there was failure
to abide by the provisions of Presidential Decree No. 1069. For while it is true that the
extradition request was delivered to the Department of Foreign Affairs on June 17, 1999,
the following day or less than 24 hours later, the Department of Justice received the
request, apparently without the Department of Foreign affairs discharging its duty
thoroughly evaluating the same and its accompanying documents. xxx.

xxxx

[T]he record cannot support the presumption of regularity that the Department of Foreign
Affairs thoroughly reviewed the extradition request and supporting documents and that it
arrived at a well-founded judgment that the request and its annexed documents satisfy the
requirements of law. XXX.

The evaluation process, just like the extradition proceedings, proper belongs to a
class by itself. It is sui generis. It is not a criminal investigation, but it is also
erroneous to say that it is purely an exercise of ministerial functions. At such
stage, the executive authority has the power: (a) to make a technical assessment
of the completeness and sufficiency of the extradition papers; (b) to outrightly
deny the request if on its face and on the face of the supporting documents the
crimes indicated are not extraditable; and (c) to make a determination whether or
not the request is politically motivated, or that the offense is a military one which
is not punishable under non-military penal legislation. Hence, said process may be
characterized as an investigative or inquisitorial process in contrast to a
proceeding conducted in the exercise of an administrative body's quasi-judicial
power.

In administrative law, a quasi-judicial proceeding involves: (a) taking and evaluation of

evidence; (b) determining facts based upon the evidence presented; and (c) rendering an
order or decision supported by the facts proved. Inquisitorial power, which is also known as
examining or investigatory power, is one of the determinative powers of an administrative
body which better enables it to exercise its quasi-judicial authority. This power allows the
administrative body to inspect the records and premises, and investigate the activities, of
persons or entities coming under its jurisdiction, or to require disclosure of information by
means of accounts, records, reports, testimony of witnesses, production of documents, or
otherwise.

The power of investigation consists in gathering, organizing, and analyzing evidence, which
is a useful aid or tool in an administrative agency's performance of its rule-making or quasi-
judicial functions. Notably, investigation is indispensable to prosecution.19 (Emphasis
supplied, citations omitted)

The submission of AMLC requires a determination whether the AMLC is an administrative body with quasi-
judicial powers; corollary thereto, a determination of the jurisdiction of the AMLC.

Lim v. Gamosa20 is enlightening on jurisdiction and the requirement of a specific grant thereof in the
enabling law. We declared that the creation of the National Commission on Indigenous Peoples (NCIP) by
the Indigenous Peoples Rights Act (IPRA) did not confer it exclusive and original, nor primary jurisdiction, in
all claims and disputes involving rights of IPs and ICCs where no such specific grant is bestowed.
In this instance, the grant of jurisdiction over cases involving money laundering offences is bestowed on the
Regional Trial Courts and the Sandiganbayan as the case may be. In fact, Rule 5 of the IRR is
entitled Jurisdiction of Money Laundering Cases and Money Laundering Investigation Procedures:

Rule 5.a. Jurisdiction of Money Laundering Cases. The Regional Trial Courts shall have
the jurisdiction to try all cases on money laundering. Those committed by public officers
and private persons who are in conspiracy with such public officers shall be under the
jurisdiction of the Sandiganbayan.

Rule 5.b. Investigation of Money Laundering Offenses. - The AMLC shall investigate:

(1) suspicious transactions;

(2) covered transactions deemed suspicious after an investigation
conducted by the AMLC;
(3) money laundering activities; and
(4) other violations of the AMLA, as amended.

The confusion on the scope and parameters of the AMLC's investigatory powers and whether such seeps into
and approximates a quasi-judicial agency's inquisitorial powers lies in the AMLC's investigation and
consequent initial determination of whether certain activities are constitutive of anti-money laundering
offenses.

The enabling law itself, the AMLA, specifies the jurisdiction of the trial courts, RTC and Sandiganbayan, over
money laundering cases, and delineates the investigative powers of the AMLC.

Textually, the AMLA is the first line of defense against money laundering in compliance with our international
obligation. There are three (3) stages of determination, two (2) levels of investigation, falling under three
(3) jurisdictions:

1. The AMLC investigates possible money laundering offences and initially determines whether there is
probable cause to charge any person with a money laundering offence under Section 4 of the AMLA,
resulting in the filing of a complaint with the Department of Justice or the Office of the Ombudsman;21

2. The DOJ or the Ombudsman conducts the preliminary investigation proceeding and if after due notice and
hearing finds probable cause for money laundering offences, shall file the necessary information before the
Regional Trial Courts or the Sandiganbayan;22

3. The RTCs or the Sandiganbayan shall try all cases on money laundering, as may be applicable.23

Nowhere from the text of the law nor its Implementing Rules and Regulations can we glean that the AMLC
exercises quasi-judicial functions whether the actual preliminary investigation is done simply at its behest or
conducted by the Department of Justice and the Ombudsman.

Again, we hark back to Lantion citing Ruperto v. Torres,23-a where the Court had occasion to rule on the
functions of an investigatory body with the sole power of investigation:

[Such a body] does not exercise judicial functions and its power is limited to investigating
facts and making findings in respect thereto. The Court laid down the test of determining
whether an administrative body is exercising judicial functions or merely investigatory
functions: Adjudication signifies the exercise of power and authority to adjudicate upon the
rights and obligations of the parties before it. Hence, if the only purpose for investigation is
to evaluate evidence submitted before it based on the facts and Circumstances presented to
it, and if the agency is not authorized to make a final pronouncement affecting the parties,
then there is an absence of judicial discretion and judgment.

adjudicate in regard to the rights and obligations of both the Requesting State and the
prospective extraditee. Its only power is to determine whether the papers comply with the
requirements of the law and the treaty and, therefore, sufficient to be the basis of an
 extradition petition. Such finding is thus merely initial and not final. The body has no power
to determine whether or not the extradition should be effected. That is the role of the court.
The body's power is limited to an initial finding of whether or not the extradition petition
can be filed in court.

It is to be noted, however, that in contrast to ordinary investigations, the evaluation

procedure is characterized by certain peculiarities. Primarily, it sets into motion the wheels
of the extradition process. Ultimately, it may result in the deprivation of liberty of the
prospective extraditee. This deprivation can be effected at two stages: First, the provisional
arrest of the prospective extraditee pending the submission of the request. This is so
because the Treaty provides that in case of urgency, a contracting party may request the
provisional arrest of the person sought pending presentation of the request (Paragraph [1],
Article 9, RP-US Extradition Treaty), but he shall be automatically discharged after 60 days
if no request is submitted (Paragraph 4). Presidential Decree No. 1069 provides for a
shorter period of 20 days after which the arrested person could be discharged (Section
20[d]). Logically, although the Extradition Law is silent on this respect, the provisions only
mean that once a request is forwarded to the Requested State, the prospective extraditee
may be continuously detained, or if not, subsequently rearrested (Paragraph [5], Article 9,
RP-US Extradition Treaty), for he will only be discharged if no request is submitted.
Practically, the purpose of this detention is to prevent his possible flight from the Requested
State. Second, the temporary arrest of the prospective extraditee during the pendency of
the extradition petition in court (Section 6, Presidential Decree No. 1069).

Clearly, there is an impending threat to a prospective extraditee's liberty as early as during

the evaluation stage. It is not only an imagined threat to his liberty, but a very imminent
one.

Because of these possible consequences, we conclude that the evaluation process is akin to
an administrative agency conducting an investigative proceeding, the consequences of
which are essentially criminal since such technical assessment sets off or commences the
procedure for, and ultimately, the deprivation of liberty of a prospective extraditee, As
described by petitioner himself, this is a "tool" for criminal law enforcement. In essence,
therefore, the evaluation process partakes of the nature of a criminal investigation. In a
number of cases, we had occasion to make available to a respondent in an administrative
case or investigation certain constitutional rights that are ordinarily available only in
criminal prosecutions. Further, as pointed out by Mr. Justice Mendoza during the oral
arguments, there are rights formerly available only at the trial stage that had been
advanced to an earlier stage in the proceedings, such as the right to counsel and the right
against self-incrimination.24(Citations omitted)

In contrast to the disposition in Lantion that the evaluation process before the Department of Foreign Affairs
is akin to an administrative agency conducting investigative proceedings with implications on the
consequences of criminal liability, i.e., deprivation of liberty of a prospective extraditee, the sole
investigative functions of the AMLC finds more resonance with the investigative functions of the National
Bureau of Investigation (NBI).

That the AMLC does not exercise quasi-judicial powers and is simply an investigatory body finds support in
our ruling in Shu v. Dee.25 In that case, petitioner Shu had filed a complaint before the NBI charging
respondents therein with falsification of two (2) deeds of real estate mortgage submitted to the Metropolitan
Bank and Trust Company (Metrobank). After its investigation, the NBI came up with a Questioned
Documents Report No. 746-1098 finding that the signatures of petitioner therein which appear on the
questioned deeds are not the same as the standard sample signatures he submitted to the NBI. Ruling on
the specific issue raised by respondent therein that they had been denied due process during the NBI
investigation, we stressed that the functions of this agency are merely investigatory and informational in
nature:

[The NBI] has no judicial or quasi-judicial powers and is incapable of granting any relief to
any party. It cannot even determine probable cause. The NBI is an investigative agency
whose findings are merely recommendatory. It undertakes investigation of crimes upon its
own initiative or as public welfare may require in accordance with its mandate. It also
 renders assistance when requested in the investigation or detection of crimes in order to
prosecute the persons responsible.

Since the NBI's findings were merely recommendatory, we find that no denial of the
respondent's due process right could have taken place; the NBI's findings were still subject
to the prosecutor's and the Secretary of Justice's actions for purposes of finding the
existence of probable cause. We find it significant that the specimen signatures in the
possession of Metrobank were submitted by the respondents for the consideration of the
city prosecutor and eventually of the Secretary of Justice during the preliminary
investigation proceedings. Thus, these officers had the opportunity to examine these
signatures.

The respondents were not likewise denied their right to due process when the NBI issued
the questioned documents report. We note that this report merely stated that the
signatures appearing on the two deeds and in the petitioner's submitted sample signatures
were not written by one and the same person. Notably, there was no categorical finding in
the questioned documents report that the respondents falsified the documents. This report,
too, was procured during the conduct of the NBI's investigation at the petitioner's request
for assistance in the investigation of the alleged crime of falsification. The report is
inconclusive and does not prevent the respondents from securing a separate documents
examination by handwriting experts based on their own evidence. On its own, the NBI's
questioned documents report does not directly point to the respondents' involvement in the
crime charged. Its significance is that, taken together with the other pieces of evidence
submitted by the parties during the preliminary investigation, these evidence could be
sufficient for purposes of finding probable cause — the action that the Secretary of Justice
undertook in the present case.

As carved out in Shu, the AMLC functions solely as an investigative body in the instances mentioned in Rule
5.b.26 Thereafter, the next step is for the AMLC to file a Complaint with either the DOJ or the Ombudsman
pursuant to Rule 6.b.

Even in the case of Estrada v. Office of the Ombudsman,27 where the conflict arose at the preliminary
investigation stage by the Ombudsman, we ruled that the Ombudsman's denial of Senator Estrada's Request
to be furnished copies of the counter-affidavits of his co-respondents did not violate Estrada's constitutional
right to due process where the sole issue is the existence of probable cause for the purpose of determining
whether an information should be filed and does not prevent Estrada from requesting a copy of the counter-
affidavits of his co-respondents during the pre-trial or even during trial. We expounded on the nature of
preliminary investigation proceedings, thus:

It should be underscored that the conduct of a preliminary investigation is only for the
determination of probable cause, and "probable cause merely implies probability of guilt
and should be determined in a summary manner. A preliminary investigation is not a part
of the trial and it is only in a trial where an accused can demand the full exercise of his
rights, such as the right to confront and cross-examine his accusers to establish his
innocence." Thus, the rights of a respondent in a preliminary investigation are limited to
those granted by procedural law.

A preliminary investigation is defined as an inquiry or proceeding for the

purpose of determining whether there is sufficient ground to engender a
well founded belief that a crime cognizable by the Regional Trial Court has
been committed and that the respondent is probably guilty thereof, and
should be held for trial. The quantum of evidence now required in
preliminary investigation is such evidence sufficient to "engender a well
founded belief' as to the fact of the commission of a crime and the
respondent's probable guilt thereof A preliminary investigation is not the
occasion for the full and exhaustive display of the parties' evidence; it is
for the presentation of such evidence only as may engender a well-
grounded belief that an offense has been committed and that the accused
is probably guilty thereof. We are in accord with the state prosecutor's
findings in the case at bar that there exists prima facie evidence of
 petitioner's involvement in the commission of the crime, it being
sufficiently supported by the evidence presented and the facts obtaining
therein.

Likewise devoid of cogency is petitioner's argument that the testimonies of

Galarion and Hanopol are inadmissible as to him since he was not granted
the opportunity of cross-examination.

It is a fundamental principle that the accused in a preliminary investigation

has no right to cross-examine the witnesses which the complainant may
present. Section 3, Rule 112 of the Rules of Court expressly provides that
the respondent shall only have the right to submit a counter-affidavit, to
examine all other evidence submitted by the complainant and, where the
fiscal sets a hearing to propound clarificatory questions to the parties or
their witnesses, to be afforded an opportunity to be present but without
the right to examine or cross-examine. Thus, even if petitioner was not
given the opportunity to cross-examine Galarion and Hanopol at the time
they were presented to testify during the separate trial of the case against
Galarion and Roxas, he cannot assert any legal right to cross-examine
them at the preliminary investigation precisely because such right was
never available to him. The admissibility or inadmissibility of said
testimonies should be ventilated before the trial court during the trial
proper and not in the preliminary investigation.

Furthermore, the technical rules on evidence are not binding on the fiscal
who has jurisdiction and control over the conduct of a preliminary
investigation. If by its very nature a preliminary investigation could be
waived by the accused, we find no compelling justification for a strict
application of the evidentiary rules. In addition, considering that under
Section 8, Rule 112 of the Rules of Court, the record of the preliminary
investigation does not form part of the record of the case in the Regional
Trial Court, then the testimonies of Galarion and Hanopol may not be
admitted by the trial court if not presented in evidence by the prosecuting
fiscal. And, even if the prosecution does present such testimonies,
petitioner can always object thereto and the trial court can rule on the
admissibility thereof; or the petitioner can, during the trial, petition said
court to compel the presentation of Galarion and Hanopol for purposes of
cross-examination. (Citations and emphasis omitted)

Plainly, the AMLC's investigation of money laundering offenses and its determination of possible money
laundering offenses, specifically its inquiry into certain bank accounts allowed by court order, does not
transform it into an investigative body exercising quasi-judicial powers. Hence, Section 11 of the AMLA,
authorizing a bank inquiry court order, cannot be said to violate SPCMB's constitutional right to procedural
due process.

We now come to a determination of whether Section 11 is violative of the constitutional right to privacy
enshrined in Section 2, Article III of the Constitution. SPCMB is adamant that the CA's denial of its request
to be furnished copies of AMLC's ex-parte application for a bank inquiry order and all subsequent pleadings,
documents and orders filed and issued in relation thereto, constitutes grave abuse of discretion where the
purported blanket authority under Section 11: (1) partakes of a general warrant intended to aid a mere
fishing expedition; (2) violates the attorney-client privilege; (3) is not preceded by predicate crime charging
SPCMB of a money laundering offense; and (4) is a form of political harassment [of SPCMB's] clientele.

We shall discuss these issues jointly since the assailed Section 11 incorporates by reference that "[t]he
authority to inquire into or examine the main and the related accounts shall comply with the requirements of
Article III, Sections 2 and 3 of the 1987 Constitution." On this point, SPCMB asseverates that "there is
nothing in the AMLA that allows or justifies the withholding of information and/or any court records or
proceedings pertaining to an examination of a bank account, especially if the court has already granted the
authority to conduct the examination."
The theme of playing off privacy rights and interest against that of the state's interest in curbing money
laundering offenses is recurring.28

The invoked constitutional provisions read:

SEC. 2. The right of the people to be secure in their persons, houses, papers, and effects
against unreasonable searches and seizures of whatever nature and for any purpose shall
be inviolable, 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 person or things to be seized.

SEC. 3. (1) The privacy of communication and correspondence shall be inviolable except
upon lawful order of the court, or when public policy or order requires otherwise as
prescribed by law.

(2) Any evidence obtained in violation of this or the preceding section shall be inadmissible
for any purpose in any proceeding.

Once again, Eugenio29 offers guidance:

The Court's construction of Section 11 of the AMLA is undoubtedly influenced by right to

privacy considerations. If sustained, petitioner's argument that a bank account may be
inspected by the government following an ex parte proceeding about which the depositor
would know nothing would have significant implications on the right to privacy, a right
innately cherished by all notwithstanding the legally recognized exceptions thereto. The
notion that the government could be so empowered is cause for concern of any individual
who values the right to privacy which, after all, embodies even the right to be "let alone,"
the most comprehensive of rights and the right most valued by civilized people.

One might assume that the constitutional dimension of the right to privacy, as applied to
bank deposits, warrants our present inquiry. We decline to do so. Admittedly, that question
has proved controversial in American jurisprudence. Notably, the United States
Supreme Court in U.S. v. Miller held that there was no legitimate expectation of
privacy as to the bank records of a depositor. Moreover, the text of our
Constitution has not bothered with the triviality of allocating specific rights
peculiar to bank deposits.

However, sufficient for our purposes, we can assert there is a right to privacy governing
bank accounts in the Philippines, and that such right finds application to the case at bar.
The source of such right is statutory, expressed as it is in R.A. No. 1405 otherwise known
as the Bank Secrecy Act of 1955. The right to privacy is enshrined in Section 2 of that law,
to wit:

SECTION 2. All deposits of whatever nature with banks or banking

institutions in the Philippines including investments in bonds
issued by the Government of the Philippines, its political
subdivisions and its instrumentalities, are hereby considered as of
an absolutely confidential natureand may not be examined, inquired or
looked into by any person, government official, bureau or office, except
upon written permission of the depositor, or in cases of impeachment, or
upon order of a competent court in cases of bribery or dereliction of duty
of public officials, or in cases where the money deposited or invested is the
subject matter of the litigation.

Because of the Bank Secrecy Act, the confidentiality of bank deposits remains a basic state
policy in the Philippines. Subsequent laws, including the AMLA, may have added exceptions
to the Bank Secrecy Act, yet the secrecy of bank deposits still lies as the general rule. It
falls within the zones of privacy recognized by our laws. The framers of the 1987
 Constitution likewise recognized that bank accounts are not covered by either the right to
information under Section 7, Article III or under the requirement of full public disclosure
under Section 28, Article II. Unless the Bank Secrecy Act is repealed or amended, the legal
order is obliged to conserve the absolutely confidential nature of Philippine bank deposits.

Any exception to the rule of absolute confidentiality must be specifically legislated. Section
2 of the Bank Secrecy Act itself prescribes exceptions whereby these bank accounts may be
examined by "any person, government official, bureau or office"; namely when: (1) upon
written permission of the depositor; (2) in cases of impeachment; (3) the examination of
bank accounts is upon order of a competent court in cases of bribery or dereliction of duty
of public officials; and (4) the money deposited or invested is the subject matter of the
litigation. Section 8 of R.A. Act No. 3019, the Anti-Graft and Corrupt Practices Act, has been
recognized by this Court as constituting an additional exception to the rule of absolute
confidentiality, and there have been other similar recognitions as well.

The AMLA also provides exceptions to the Bank Secrecy Act. Under Section 11, the AMLC
may inquire into a bank account upon order of any competent court in cases of violation of
the AMLA, it having been established that there is probable cause that the deposits or
investments are related to unlawful activities as defined in Section 3(i) of the law, or a
money laundering offense under Section 4 thereof. Further, in instances where there is
probable cause that the deposits or investments are related to kidnapping for ransom,
certain violations of the Comprehensive Dangerous Drugs Act of 2002, hijacking and other
violations under R.A. No. 6235, destructive arson and murder, then there is no need for the
AMLC to obtain a court order before it could inquire into such accounts.

It cannot be successfully argued the proceedings relating to the bank inquiry order under
Section 11 of the AMLA is a "litigation" encompassed in one of the exceptions to the Bank
Secrecy Act which is when "the money deposited or invested is the subject matter of the
litigation." The orientation of the bank inquiry order is simply to serve as a provisional relief
or remedy. As earlier stated, the application for such does not entail a full-blown trial.

Nevertheless, just because the AMLA establishes additional exceptions to the Bank Secrecy
Act it does not mean that the later law has dispensed with the general principle established
in the older law that "[a]ll deposits of whatever nature with banks or banking institutions in
the Philippines x x x are hereby considered as of an absolutely confidential nature." Indeed,
by force of statute, all bank deposits are absolutely confidential, and that nature is
unaltered even by the legislated exceptions referred to above. There is disfavor towards
construing these exceptions in such a manner that would authorize unlimited discretion on
the part of the government or of any party seeking to enforce those exceptions and inquire
into bank deposits. If there are doubts in upholding the absolutely confidential nature of
bank deposits against affirming the authority to inquire into such accounts, then such
doubts must be resolved in favor of the former. Such a stance would persist unless
Congress passes a law reversing the general state policy of preserving the absolutely
confidential nature of Philippine bank accounts. (Citations omitted, emphasis supplied)

From the foregoing disquisition, we extract the following principles:

1. The Constitution did not allocate specific rights peculiar to bank deposits;

2. The general rule of absolute confidentiality is simply statutory,30i.e. not specified in the Constitution,
which has been affirmed in jurisprudence;31

3. Exceptions to the general rule of absolute confidentiality have been carved out by the Legislature which
legislation have been sustained, albeit subjected to heightened scrutiny by the courts;32 and

4. One such legislated exception is Section 11 of the AMLA.

The warning in Eugenio that an ex-parte proceeding authorizing the government to inspect certain bank
accounts or investments without notice to the depositor would have significant implications on the right to
privacy still does not preclude such a bank inquiry order to be allowed by specific legislation as an exception
to the general rule of absolute confidentiality of bank deposits.

We thus subjected Section 11 of the AMLA to heightened scrutiny and found nothing arbitrary in the
allowance and authorization to AMLC to undertake an inquiry into certain bank accounts or deposits.
Instead, we found that it provides safeguards before a bank inquiry order is issued, ensuring adherence to
the general state policy of preserving the absolutely confidential nature of Philippine bank accounts:

(1) The AMLC is required to establish probable cause as basis for its ex-parte application for bank inquiry
order;

(2) The CA, independent of the AMLC's demonstration of probable cause, itself makes a finding of probable
cause that the deposits or investments are related to an unlawful activity under Section 3(i) or a money
laundering offense under Section 4 of the AMLA;

(3) A bank inquiry court order ex-parte for related accounts is preceded by a bank inquiry court order ex-
parte for the principal account which court order ex-parte for related accounts is separately based on
probable cause that such related account is materially linked to the principal account inquired into; and

(4) The authority to inquire into or examine the main or principal account and the related accounts shall
comply with the requirements of Article III, Sections 2 and 3 of the Constitution.

The foregoing demonstrates that the inquiry and examination into the bank account are not undertaken
whimsically and solely based on the investigative discretion of the AMLC. In particular, the requirement of
demonstration by the AMLC, and determination by the CA, of probable cause emphasizes the limits of such
governmental action. We will revert to these safeguards under Section 11 as we specifically discuss the CA's
denial of SPCMB's letter request for information concerning the purported issuance of a bank inquiry order
involving its accounts.

First. The AMLC and the appellate court are respectively required to demonstrate and ascertain probable
cause. Ret. Lt. Gen. Ligot, et al. v. Republic of the Philippines,33 which dealt with the adjunct provisional
remedy of freeze order under Section 10 of the AMLA, defined probable cause, thus:

The probable cause required for the issuance of a freeze order differs from the probable
cause required for the institution of a criminal action, xxx.

As defined in the law, the probable cause required for the issuance of a freeze order refers
to "such facts and circumstances which would lead a reasonably discreet, prudent or
cautious man to believe that an unlawful activity and/or money laundering offence is about
to be, is being or has been committed and that the account or any monetary
instrument or property subject thereof sought to be frozen is in any way related
to said unlawful activity and/or money laundering offense."

In other words, in resolving the issue of whether probable cause exits, the CA's statutorily-
guided determination's focus is not on the probable commissions of an unlawful activity (or
money laundering) that the office of the Ombudsman has already determined to exist, but
on whether the bank accounts, assets, or other monetary instruments sought to be
frozen are in any way related to any of the illegal activities enumerated under R.A. 9160,
as amended. Otherwise stated, probable cause refers to the sufficiency of the relation
between an unlawful activity and the property or monetary instrument which is the focal
point of Section 10 of RA No. 9160, as amended. xxx. (Emphasis supplied)

Second. As regards SPCMB's contention that the bank inquiry order is in the nature of a general
warrant, Eugenio already declared that Section 11, even with the allowance of an ex parte application
therefor, "is not a search warrant or warrant of arrest as it contemplates a direct object but not the seizure
of persons or property."34 It bears repeating that the ''bank inquiry order" under Section 11 is a provisional
remedy to aid the AMLC in the enforcement of the AMLA.
Third. Contrary to the stance of SPCMB, the bank inquiry order does not contemplate that SPCMB be first
impleaded in a money laundering case already filed before the courts:

We are unconvinced by this proposition, and agree instead with the then Solicitor General
who conceded that the use of the phrase "in cases of' was unfortunate, yet submitted that
it should be interpreted to mean "in the event there are violations" of the AMLA, and not
that there are already cases pending in court concerning such violations. If the contrary
position is adopted, then the bank inquiry order would be limited in purpose as a tool in aid
of litigation of live cases, and wholly inutile as a means for the government to ascertain
whether there is sufficient evidence to sustain an intended prosecution of the account
holder for violation of the AMLA. Should that be the situation, in all likelihood the AMLC
would be virtually deprived of its character as a discovery tool, and thus would become less
circumspect in filing complaints against suspect account holders. After all, under such set-
up the preferred strategy would be to allow or even encourage the indiscriminate filing of
complaints under the AMLA with the hope or expectation that the evidence of money
laundering would somehow .surface during the trial. Since the AMLC could not make use of
the bank inquiry order to determine whether there is evidentiary basis to prosecute the
suspected malefactors, not filing any case at all would not be an alternative. Such
unwholesome set-up should not come to pass. Thus Section 11 cannot be interpreted in a
way that would emasculate the remedy it has established and encourage the unfounded
initiation of complaints for money laundering.35 (Citation omitted)

Guided as we are by prior holdings, and bound as we are by the requirements for issuance of a bank inquiry
order under Section 11 of the AMLA, we are hard pressed to declare that it violates SPCMB's right to privacy.

Nonetheless, although the bank inquiry order ex-parte passes constitutional muster, there is nothing in
Section 11 nor the implementing rules and regulations of the AMLA which prohibits the owner of the bank
account, as in his instance SPCMB, to ascertain from the CA, post issuance of the bank inquiry order ex-
parte, if his account is indeed the subject of an examination. Emphasized by our discussion of the
safeguards under Section 11 preceding the issuance of such an order, we find that there is nothing therein
which precludes the owner of the account from challenging the basis for the issuance thereof.

The present controversy revolves around the issue of whether or not the appellate court, through the
Presiding Justice, gravely abused its discretion when it effectively denied SPCMB's letter-request for
confirmation that the AMLC had applied (ex-parte) for, and was granted, a bank inquiry order to examine
SPCMB's bank accounts relative to the investigation conducted on Vice-President Binay's accounts.

We recall the Presiding Justice's letter to SPCMB categorically stating that "under the rules, the Office of the
Presiding Justice is strictly mandated not to disclose, divulge, or communicate to anyone directly or
indirectly, in any manner or by any means, the fact of the filing of the petition brought before [the Court of
Appeals] by the [AMLC], its contents and even its entry in the logbook." Note that the letter did not cite the
aforementioned rules that were supposedly crystal clear to foreclose ambiguity. Note further that Rules
10.c.3 and 10.d of the IRR on Authority to File Petitions for Freeze Order provides that:

Rule 10.c. Duty of Covered Institutions upon receipt thereof. —

Rule 10.c.1. Upon receipt of the notice of the freeze order, the covered institution
concerned shall immediately freeze the monetary instrument or property and related
accounts subject thereof.

Rule 10.c.2. The covered institution shall likewise immediately furnish a copy of the notice
of the freeze order upon the owner or holder of the monetary instrument or property or
related accounts subject thereof.

Rule 10.c.3. Within twenty-four (24) hours from receipt of the freeze order, the covered
institution concerned shall submit to the Court of Appeals and the AMLC, by personal
delivery, a detailed written return on the freeze order, specifying all the pertinent and
relevant information which shall include the following:
 (a) the account numbers; (b) the names
of the account owners or holders;
(c) the amount of the monetary
instrument, property or related accounts
as of the time they were frozen;
(d) all relevant information as to the
nature of the monetary instrument or
property;
(e) any information on the related
accounts pertaining to the monetary
instrument or property subject of the
freeze order; and
(f) the time when the freeze thereon took
effect.

Rule 10.d. Upon receipt of the freeze order issued by the

Court of Appeals and upon verification by the covered
institution that the related accounts originated from and/or
are materially linked to the monetary instrument or
property subject of the freeze order, the covered institution
shall freeze these related accounts wherever these may be
found.

The return of the covered institution as required under Rule

10.c.3 shall include the fact of such freezing and an
explanation as to the grounds for the identification of the
related accounts.

If the related accounts cannot be determined within

twenty-four (24) hours from receipt of the freeze order due
to the volume and/or complexity of the transactions or any
other justifiable factor(s), the covered institution shall
effect the freezing of the related accounts, monetary
instruments and properties as soon as practicable and shall
submit a supplemental return thereof to the Court of
Appeals and the AMLC within twenty-four (24) hours from
the freezing of said related accounts, monetary instruments
and properties.

The foregoing rule, in relation to what Section 11

already provides, signifies that ex-parte bank inquiry
orders on related accounts may be questioned
alongside, albeit subsequent to, the issuance of the
initial freeze order of the subject bank accounts. The
requirements and procedure for the issuance of the
order, including the return to be made thereon lay the
grounds for judicial review thereof. We expound.

An act of a court or tribunal can only be considered

tainted with grave abuse of discretion when such act
is done in a capricious or whimsical exercise of
judgment as is equivalent to lack of jurisdiction. It is
well-settled that the abuse of discretion to be qualified
as "grave" must be so patent or gross as to constitute
an evasion of a positive duty or a virtual refusal to
perform the duty or to act at all in contemplation of
law.36 In this relation, case law states that not every
error in the proceedings, or every erroneous
conclusion of law or fact, constitutes grave abuse of
discretion.37 The degree of gravity, as above-
described, must be met.

That the propriety of the issuance of the bank inquiry

order is a justiciable issue brooks no argument. A
justiciable controversy refers to an existing case or
controversy that is appropriate or ripe for judicial
determination, not one that is conjectural or merely
anticipatory.38

As previously adverted to in our discussion on the

right to privacy, the clash of privacy rights and
interest against that of the government's is readily
apparent. However, the statutorily enshrined general
rule on absolute confidentiality of bank accounts
remains. Thus, the safeguards instituted in Section II
of the AMLA and heretofore discussed provide for
certain well defined limits, as in the language of Baker
v. Carr, "judicially discoverable standards" for
determining the validity of the exercise of such
discretion by the appellate court in denying the letter-
request of SPCMB.39 In short, Section II itself provides
the basis for the judicial inquiry and which the owner
of the bank accounts subject of the AMLC inquiry may
invoke.

Undeniably, there is probable and preliminary

governmental action against SPCMB geared towards
implementation of the AMLA directed at SPCMB's
property, although there is none, as yet, physical
seizure thereof, as in freezing of bank accounts under
Section 10 of the AMLA.40 Note, however, that the
allowance to question the bank inquiry order we carve
herein is tied to the appellate court's issuance of a
freeze order on the principal accounts. Even
in Eugenio, while declaring that the bank inquiry order
under Section II then required prior notice of such to
the account owner, we recognized that the
determination of probable cause by the appellate
court to issue the bank inquiry order can be contested.
As presently worded and how AMLC functions are
designed under the AMLA, the occasion for the
issuance of the freeze order upon the actual physical
seizure of the investigated and inquired into bank
account, calls into motions the opportunity for the
bank account owner to then question, not just
probable cause for the issuance of the freeze order
under Section I 0, but, to begin with, the
determination of probable cause for an ex-parte bank
inquiry order into a purported related account under
Section II.

In enacting the amendment to Section II of the AMLC,

the legislature saw it fit to place requirements before
a bank inquiry order may be issued. We discussed
these requirements as basis for a valid exception to
the general rule on absolute confidentiality of bank
accounts. However, these very safe guards allow
SPCMB, post issuance of the ex-parte bank inquiry
order, legal bases to question the propriety of such
issued order, if any. To emphasize, this allowance to
the owner of the bank account to question the bank
inquiry order is granted only after issuance of the
freeze order physically seizing the subject bank
account. It cannot be undertaken prior to the issuance
of the freeze order.

While no grave abuse of discretion could be ascribed

on the part of the appellate court when it explained in
its letter that petitions of such nature "is strictly
confidential in that when processing the same, not
even the handling staff members of the Office of the
Presiding Justice know or have any knowledge who
the subject bank account holders are, as well as the
bank accounts involved," it was incorrect when it
declared that "under the rules, the Office of the
Presiding Justice is strictly mandated not to disclose,
divulge, or communicate to anyone directly or
indirectly, in any manner or by any means, the fact of
the filing of any petition brought before [the Court of
Appeals] by the Anti-Money Laundering Council, its
contents and even its entry in the logbook." As a
result, the appellate court effectively precluded and
prevented SPCMB of any recourse, amounting to a
denial of SPCMB's letter request.

We cannot overemphasize that SPCMB, as the owner

of the bank account which may be the subject of
inquiry of the AMLC, ought to have a legal remedy to
question the validity and propriety of such an order by
the appellate court under Section 11 of the AMLA even
if subsequent to the issuance of a freeze order.
Moreover, given the scope of inquiry of the AMLC,
reaching and including even related accounts, which
inquiry into specifies a proviso that: "[t]hat the
procedure for the ex-parte application of the ex-
parte court order for the principal account shall be the
same with that of the related accounts," SPCMB
should be allowed to question the government
intrusion. Plainly, by implication, SPCMB can
demonstrate the absence of probable cause, i.e. that
it is not a related account nor are its accounts
materially linked to the principal account being
investigated.41

In BSB Group, Inc. v. Go,42 we recounted the

objective of the absolute confidentiality rule which is
protection from unwarranted inquiry or investigation
if the purpose of such inquiry or investigation is
merely to determine the existence and nature, as well
as the amount of the deposit in any given bank
account:

xxx. There is, in fact, much disfavor to construing these

primary and supplemental exceptions in a manner that
would authorize unbridled discretion, whether
governmental or otherwise, in utilizing these exceptions as
authority for unwarranted inquiry into bank accounts. It is
then perceivable that the present legal order is obliged to
conserve the absolutely confidential nature of bank
deposits.

The measure of protection afforded by the law has been

explained in China Banking Corporation v. Ortega. That
case principally addressed the issue of whether the
prohibition against an examination of bank deposits
precludes garnishment in satisfaction of a judgment. Ruling
on that issue in the negative, the Court found guidance in
the relevant portions of the legislative deliberations on
Senate Bill No. 351 and House Bill No. 3977, which later
became the Bank Secrecy Act, and it held that the absolute
confidentiality rule in R.A. No. 1405 actually aims at
protection from unwarranted inquiry or investigation if the
purpose of such inquiry or investigation is merely to
determine the existence and nature, as well as the amount
of the deposit in any given bank account. Thus,

x x x The lower court did not order an

examination of or inquiry into the deposit
of B&B Forest Development Corporation,
as contemplated in the law. It merely
required Tan Kim Liong to inform the court
whether or not the defendant B&B Forest
Development Corporation had a deposit in
the China Banking Corporation only for
purposes of the garnishment issued by it,
so that the bank would hold the same
intact and not allow any withdrawal until
further order. It will be noted from the
discussion of the conference committee
report on Senate Bill No. 351 and House
Bill No. 3977 which later became Republic
Act No. 1405, that it was not the intention
of the lawmakers to place banks deposits
beyond the reach of execution to satisfy a
final judgment Thus:

x x x Mr. Marcos: Now,

for purposes of the
record, I should like the
Chairman of the
Committee on Ways and
Means to clarify this
further. Suppose an
individual has a tax case.
He is being held liable by
the Bureau of Internal
Revenue [(BIR)] or, say,
P1,000.00 worth of tax
liability, and because of
this the deposit of this
individual [has been]
attached by the [BIR].

Mr. Ramos: The

attachment will only
apply after the court has
pronounced sentence
declaring the liability of
such person. But where
the primary aim is to
determine whether he
has a bank deposit in
order to bring about a
proper assessment by
the [BIR], such inquiry is
not allowed by this
proposed law.

Mr. Marcos: But under

our rules of procedure
and under the Civil Code,
 the attachment or
garnishment of money
deposited is allowed. Let
us assume for instance
that there is a
preliminary attachment
which is for garnishment
or for holding liable all
moneys deposited
belonging to a certain
individual, but such
attachment or
garnishment will bring
out into the open the
value of such deposit. Is
that prohibited by... the
law?

Mr. Ramos: It is only

prohibited to the extent
that the inquiry... is
made only for the
purpose of satisfying a
tax liability already
declared for the
protection of the right in
favor of the government;
but when the object is
merely to inquire
whether he has a deposit
or not for purposes of
taxation, then this is fully
covered by the law. x x x

Mr. Marcos: The law

prohibits a mere
investigation into the
existence and the
amount of the deposit.

Mr. Ramos: Into the very

nature of such deposit. x
x x (Citations omitted)

What is reflected by the foregoing disquisition is that

the law plainly prohibits a mere investigation into the
existence and the amount of the deposit. We relate
the principle to SPCMB's relationship to the reported
principal account under investigation, one of its
clients, former Vice President Binay. SPCMB as the
owner of one of the bank accounts reported to be
investigated by the AMLC for probable money
laundering offenses should be allowed to pursue
remedies therefrom where there are legal implications
on the inquiry into its accounts as a law firm. While
we do not lapse into conjecture and cannot take up
the lance for SPCMB on probable violation of the
attorney-client privilege based on pure speculation,
the extent of information obtained by the AMLC
concerning the clients of SPCMB has not been fully
drawn and sufficiently demonstrated. At the same
time, the owner of bank accounts that could be
potentially affected has the right to challenge whether
the requirements for issuance of the bank inquiry
order were indeed complied with given that such has
implications on its property rights. In this regard,
SPCMB's obeisance to promulgated rules on the
matter could have afforded it a remedy, even post
issuance of the bank inquiry order.

Rule 10.b. of the IRR defines probable cause as "such

facts and circumstances which would lead a
reasonably discreet, prudent or cautious man to
believe that an unlawful activity and/or a money
laundering offense is about to be, is being or has been
committed and that the account or any monetary
instrument or property sought to be frozen is in any
way related to said unlawful activity and/or money
laundering offense." Evidently, the provision only
refers to probable cause for freeze orders under
Section 10 of the AMLA. From this we note that there
is a glaring lacunae in our procedural rules concerning
the bank inquiry order under Section 11. Despite the
advent of RA No. 10167, amending Section 11 of the
AMLA, we have yet to draft additional rules
corresponding to the ex-parte bank inquiry order
under Section 11. A.M. No. 05-11-04-SC entitled
"Rule of Procedure in Cases of Civil Forfeiture, Asset
Preservation, and Freezing of Monetary Instrument,
Property, or Proceeds Representing, Involving, or
Relating to an Unlawful Activity or Money Laundering
Offense Under Republic Act No. 9160, as Amended,"
only covers what is already provided in the title. As
we have already noted, the bank inquiry order must
likewise be governed by rules specific to its issuance
where the AMLC regularly invokes this provision and
which, expectedly clashes with the rights of bank
account holders.
Apart from Section 2, Rule IV of the 2009 Internal
Rules of the CA (IRCA) reads:

SEC. 2. Action by the Presiding Justice or Executive

Justice.— When a petition involves an urgent matter, such
as an application for writ of habeas corpus, amparo or
habeas dataor for temporary restraining order, and there
is no way of convening the Raffle Committee or calling any
of its members, the Presiding Justice or the Executive
Justice, as the case may be, or in his/her absence, the most
senior Justice present, may conduct the raffle or act on the
petition, subject to raffle in the latter case on the next
working day in accordance with Rule III hereof.

(AMLA cases are limited to the first three most senior

Justices as stated in the law and are raffled by the
Chairmen of the First, Second and Third Divisions to
the members of their Divisions only.)

Nothing in the IRCA justifies the disallowance to

SPCMB of information and/or court records or
proceedings pertaining to the possible bank inquiry
order covering its bank deposits or investment.

We note that the Presiding Justice's reply to the

request for comment of SPCMB on the existence of a
petition for bank inquiry order by the AMLC covering
the latter's account only contemplates the provisions
of Section 10 of the AMLA, its IRR and the
promulgated rules thereon. Such immediate and
definitive foreclosure left SPCMB with no recourse on
how to proceed from what it perceived to be violation
of its rights as owner of the bank account examined.
The reply of the Presiding Justice failed to take into
consideration Section 54 of A.M. No. 05-11-04-SC on
Notice of Freeze Order which reads:

SEC. 54. Notice of freeze order.- The Court shall order that
notice of the freeze order be served personally, in the same
manner provided for the service of the asset preservation
order in Section 14 of this Rule, upon the respondent or any
person acting in his behalf and such covered institution or
government agency. The court shall notify also such
party in interest as may have appeared before the
court. (Emphasis supplied)

We relate this Section 54 to the already cited Rule

10.d of the IRR

Rule 10.d. Upon receipt of the freeze order issued by the

Court of Appeals and upon verification by the covered
institution that the related accounts originated from and/or
 are materially linked to the monetary instrument or
property subject of the freeze order, the covered institution
shall freeze these related accounts wherever these may be
found.

The return of the covered institution as required

under Rule 10.c.3 shall include the fact of such
freezing and an explanation as to the grounds for the
identification of the related accounts.

If the related accounts cannot be determined within

twenty-four (24) hours from receipt of the freeze
order due to the volume and/or complexity of the
transactions or any other justifiable factor(s), the
covered institution shall effect the freezing of the
related accounts, monetary instruments and
properties as soon as practicable and shall submit a
supplemental return thereof to the Court of Appeals
and the AMLC within twenty-four (24) hours from the
freezing of said related accounts, monetary
instruments and properties. (Emphasis supplied)

demonstrating that the return of the Freeze Order

must provide an explanation as to the grounds for the
identification of the related accounts, or the
requirement of notice to a party in interest affected
thereby whose bank accounts were examined. This
necessarily contemplates the procedure for a prior
bank inquiry order which we ought to provide for.

For exact reference, we cite A.M. No. 05-11-04-SC,

Title VIII on Petitions for Freeze Order in the CA which
certain pertinent provisions we adopt and apply
suppletorily as a separate Title on Petitions for Bank
Inquiry Order:

TITLE VIII
PETITIONS FOR FREEZE ORDER IN THE COURT OF
APPEALS

SEC. 43. Applicability. - This Rule shall apply to petitions

for freeze order in the Court of Appeals. The 2002 Internal
Rules of the Court of Appeals, as amended, shall apply
suppletorily in all other aspects.

xxxx

SEC. 46. Contents of the petition. - The petition shall

contain the following allegations:

(a) The name and address of the respondent;

 (b) A specific description with particularity of the monetary instrument,
property or proceeds, their location, the name of the owner, holder,
lienholder or possessor, if known;

(c) The grounds relied upon for the issuance of a freeze order; and

(d) The supporting evidence showing that the subject monetary instrumen
property, or proceeds are in any way related to or involved in an
unlawful activity as defined under Section 3(i) of Republic Act No. 9160
as amended by Republic Act No. 9194.
The petition shall be filed in seven clearly legible copies and shall be
accompanied by clearly legible copies of supporting documents duly
subscribed under oath.

xxxx

SEC. 49. Confidentiality; prohibited disclosure. - The

logbook and the entries therein shall be kept strictly
confidential and maintained under the responsibility of the
Presiding Justice or the Executive Justices, as the case may
be. No person, including Court personnel, shall disclose,
divulge or communicate to anyone directly or indirectly, in
any manner or by any means, the fact of the filing of the
petition for freeze order, its contents and its entry in the
logbook except to those authorized by the Court. Violation
shall constitute contempt of court.

xxxx

SEC. 51. Action by the Court of Appeals.- All members of

the Division of the Court to which the assigned justice
belongs shall act on the petition within twenty-four hours
after its filing. However, if one member of the Division is
not available, the assigned justice and the other justice
present shall act on the petition. If only the assigned justice
is present, he shall act alone. The action of the two justices
or of the assigned justice alone, as the case may be, shall
be forthwith promulgated and thereafter submitted on the
next working day to the absent member or members of the
Division for ratification, modification or recall.

If the Court is satisfied from the verified allegations of the

petition that there exists probable cause that the monetary
instrument, property, or proceeds are in any way related to
or involved in any unlawful activity as defined in Section
3(i) of Republic Act No. 9160, as amended by Republic Act
No. 9194, it shall issue ex parte a freeze order as
hereinafter provided.

If the Court finds no substantial merit in the petition, it shall

dismiss the petition outright, stating the specific reasons
for such dismissal.
When the unanimous vote of the three justices of the
Division cannot be obtained, the Presiding Justice or the
Executive Justice shall designate two justices by raffle from
among the other justices of the first three divisions to sit
temporarily with them forming a special division of five
justices. The concurrence of a majority of such special
division shall be required for the pronouncement of a
judgment or resolution.

SEC. 52. Issuance, form and contents of the freeze order -

The freeze order shall:

(a) issue in the name of the Republic of the Philippines represented by the
Anti-Money Laundering Council;

(b) describe with particularity the monetary instrument, property or

proceeds frozen, as well as the names of their owner or owners; and

(c) direct the person or covered institution to immediately freeze the subje
monetary instrument, property or proceeds or its related web of
accounts.

SEC. 53. Freeze order.

(a) Effectivity; post issuance hearing. - The freeze order shall be effective
immediately for a period of twenty days. Within the twenty-day period,
the court shall conduct a summary hearing, with notice to the parties,
determine whether or not to modify or lift the freeze order, or extend i
effectivity as hereinafter provided.

(b) Extension. - On motion of the petitioner filed before the expiration of

twenty days from issuance of a freeze order, the court may for good
cause extend its effectivity for a period not exceeding six months.

SEC. 54. Notice of freeze order.- The Court shall order that
notice of the freeze order be served personally, in the same
manner provided for the service of the asset preservation
order in Section 14 of this Rule, upon the respondent or any
person acting in his behalf and such covered institution or
government agency. The court shall notify also such party
in interest as may have appeared before the court.

SEC. 55. Duty of respondent, covered institution or

government agency upon receipt of freeze order. - Upon
receipt of a copy of the freeze order, the respondent,
covered institution or government agency shall
immediately desist from and not allow any transaction,
withdrawal, deposit, transfer, removal, conversion, other
movement or concealment the account representing,
involving or relating to the subject monetary instrument,
property, proceeds or its related web of accounts.
 SEC. 56. Consolidation with the pending civil forfeiture
proceedings - After the post-issuance hearing required in
Section 53, the Court shall forthwith remand the case and
transmit the records to the regional trial court for
consolidation with the pending civil forfeiture proceeding.

SEC. 57. Appeal.- Any party aggrieved by the decision or

ruling of the court may appeal to the Supreme Court by
petition for review on certiorari under Rule 45 of the Rules
of Court. The appeal shall not stay the enforcement of the
subject decision or final order unless the Supreme Court
directs otherwise.

A reverse situation affords us a clearer picture of the

arbitrary and total preclusion of SPCMB to question
the bank inquiry order of the appellate court. In
particular, in an occasion where the appellate court
denies the AMLC's ex-parte application for a bank
inquiry order under Section 11, the AMLC can question
this denial and assail such an order by the appellate
court before us on grave abuse of discretion. Among
others, the AMLC can demonstrate that it has
established probable cause for its issuance, or if the
situation contemplates a denial of an application for a
bank inquiry order into a related account, the AMLC
can establish that the account targeted is indeed a
related account. The resolution on these factual and
legal issues ought to be reviewable, albeit post
issuance of the Freeze Order, akin to the provision of
an Appeal to the Supreme Court under Section 57 of
A.M. No. 05-11-04-SC.

Palpably, the requirement to establish probable cause

is not a useless supposition. To establish and
demonstrate the required probable cause before
issuance of the bank inquiry and the freeze orders is
a screw on which the AMLC's intrusive functions turns.
We are hard pressed to justify a disallowance to an
aggrieved owner of a bank account to avail of
remedies.

That there are no specific rules governing the bank

inquiry order does not signify that the CA cannot
confirm to the actual owner of the bank account
reportedly being investigated whether it had in fact
issued a bank inquiry order for covering its accounts,
of course after the issuance of the Freeze Order. Even
in Ligot,43 we held that by implication, where the law
did not specify, the owner of the "frozen" property
may move to lift the freeze order issued under Section
10 of the AMLA if he can show that no probable cause
exists or the 20-day period of the freeze order has
already lapsed without any extension being requested
from and granted by the CA. Drawing a parallel, such
a showing of the absence of probable cause ought to
be afforded SPCMB.

Ligot clarifies that "probable cause refers to the

sufficiency of the relation between an unlawful activity
and the property or monetary instrument which is the
focal point of Section 10 of the AMLA, as amended."
This same probable cause is likewise the focal point in
a bank inquiry order to further determine whether the
account under investigation is linked to unlawful
activities and/or money laundering offense. Thus, the
specific applicability of Sections 52, 53, 54 and 57
Title VIII of A.M. No. 05-11-04-SC covering the
following: (1) Issuance, Form and Content of the
Freeze Order; (2) Effectivity of the Freeze Order and
Post Issuance Hearing thereon; (3) Notice of the
Freeze Order; and (4) Appeal from the Freeze Order
as separate Rules for Petitions to Question the Bank
Inquiry Order. And as held in Eugeniowhich now
applies to the present Section 11 of the AMLA:

Although oriented towards different purposes, the freeze

order under Section 10 and the bank inquiry order under
Section 11 are similar in that they are extraordinary
provisional reliefs which the AMLC may avail of to
effectively combat and prosecute money laundering
offenses. Crucially, Section 10 uses specific language to
authorize an ex parteapplication for the provisional relief
therein, a circumstance absent in Section 11. xxx.44

The cited rules cover and approximate the distinction

made by Eugenioin declaring that the bank inquiry
order is not a search warrant, and yet there are
instituted requirements for the issuance of these
orders given that such is now allowed ex-parte:

The Constitution and the Rules of Court prescribe particular

requirements attaching to search warrants that are not
imposed by the AMLA with respect to bank inquiry orders.
A constitutional warrant requires that the judge personally
examine under oath or affirmation the complainant and the
 witnesses he may produce, such examination being in the
form of searching questions and answers. Those are
impositions which the legislative did not specifically
prescribe as to the bank inquiry order under the AMLA and
we cannot find sufficient legal basis to apply them to
Section 11 of the AMLA. Simply put, a bank inquiry order is
not a search warrant or warrant of arrest as it contemplates
a direct object but not the seizure of persons or property.

Even as the Constitution and the Rules of Court impose a

high procedural standard for the determination of probable
cause for the issuance of search warrants which Congress
chose not to prescribe for the bank inquiry order under the
AMLA, Congress nonetheless disallowed ex
parteapplications for the inquiry order. We can discern that
in exchange for these procedural standards normally
applied to search warrants, Congress chose instead to
legislate a right to notice and a right to be heard —
characteristics of judicial proceedings which are not ex
parte. Absent any demonstrable constitutional infirmity,
there is no reason for us to dispute such legislative policy
choices.45

Thus, as an ex-parte bank inquiry order which

Congress has now specifically allowed, the owner of a
bank account post issuance of the freeze order has an
opportunity under the Rules to contest the
establishment of probable cause.

Again, we cannot avoid the requirement-limitation

nexus in Section 11. As it affords the government
authority to pursue a legitimate state interest to
investigate money laundering offenses, such likewise
provides the limits for the authority given. Moreover,
allowance to the owner of the bank account, post
issuance of the bank inquiry order and the
corresponding freeze order, of remedies to question
the order, will not forestall and waylay the
government's pursuit of money launderers. That the
bank inquiry order is a separate from the freeze order
does not denote that it cannot be questioned. The
opportunity is still rife for the owner of a bank account
to question the basis for its very inclusion into the
investigation and the corresponding freezing of its
account in the process.

As noted in Eugenio, such an allowance accorded the

account holder who wants to contest the issuance of
the order and the actual investigation by the AMLC,
does not cast an unreasonable burden since the bank
inquiry order has already been issued. Further,
allowing for notice to the account holder should not,
in any way, compromise the integrity of the bank
records subject of the inquiry which remain in the
possession and control of the bank. The account
holder so notified remains unable to do anything to
conceal or cleanse his bank account records of
suspicious or anomalous transactions, at least not
without the whole hearted cooperation of the bank,
which inherently has no vested interest to aid the
account holder in such manner. Rule 10.c.46of the IRR
provides for Duty of the Covered Institution receiving
the Freeze Order. Such can likewise be made
applicable to covered institutions notified of a bank
inquiry order.

On the other hand, a scenario where SPCMB or any

account holder under examination later shows that
the bank inquiry order was without the required
probable cause, the information obtained through the
account reverts to, and maintains, its confidentiality.
In short, any and all information obtained therein by
the AMLC remains confidential, as if no examination
or inquiry on the bank account or investments was
undertaken. The foregoing consequence can be added
as a Section in the Rules entitled "Effect of absence of
probable cause."

All told, we affirm the constitutionality of Section 11

of the AMLA allowing the ex-parte application by the
AMLC for authority to inquire into, and examine,
certain bank deposits and investments.

Section 11 of the AMLA providing for the ex-

parte bank deposit inquiry is constitutionally firm for
the reasons already discussed. The ex-parteinquiry
shall be upon probable cause that the deposits or
investments are related to an unlawful activity as
defined in Section 3(i) of the law or a money
laundering offense under Section 4 of the same law.
To effect the limit on the ex-parte inquiry, the petition
under oath for authority to inquire, must, akin to the
requirement of a petition for freeze order enumerated
in Title VIII of A.M. No. 05-11-04-SC, contain the
name and address of the respondent; the grounds
relied upon for the issuance of the order of inquiry;
and the supporting evidence that the subject bank
deposit are in any way related to or involved in an
unlawful activity.

If the CA finds no substantial merit in the petition, it

shall dismiss the petition outright stating the specific
reasons for such denial. If found meritorious and there
is a subsequent petition for freeze order, the
proceedings shall be governed by the existing Rules
on Petitions for Freeze Order in the CA. From the
issuance of a freeze order, the party aggrieved by the
ruling of the court may appeal to the Supreme Court
by petition for review on certiorari under Rule 45 of
the Rules of Court raising all pertinent questions of
law and issues, including the propriety of the issuance
of a bank inquiry order. The appeal shall not stay the
enforcement of the subject decision or final order
unless the Supreme Court directs otherwise. The CA
is directed to draft rules based on the foregoing
discussions to complement the existing A.M. No. 05-
11-04-SC Rule of Procedure in Cases of Civil
Forfeiture, Asset Preservation, and Freezing of
Monetary Instrument, Property, or Proceeds
Representing, Involving, or Relating to an Unlawful
Activity or Money Laundering Offense under Republic
Act No. 9160, as Amended for submission to the
Committee on the Revision of the Rules of Court and
eventual approval and promulgation of the Court en
banc.

WHEREFORE, the petition is DENIED. Section 11 of

Republic Act No. 9160, as amended, is
declared VALID and CONSTITUTIONAL.

SO ORDERED.

Sereno, C.J., Carpio, Velasco, Jr., Leonardo-De

Castro, Brion, Bersamin, Del Castillo, Mendoza,
Reyes, Perlas-Bernabe, and Jardeleza, JJ., concur.
Peralta, J., no part.
Leonen, J., see separate concurring opinion.
 CONCURRING OPINION

LEONEN, J.:

I concur in the result. It is my honor to do so

considering that the majority opinion is the
final ponencia for this Court En Banc of our esteemed
colleague Justice Jose P. Perez.

I join the unanimous declaration that, based on the

challenges posed by the present petitions and only
within its ambient facts, Section 11 of Republic Act No.
9160 or the Anti-Money Laundering Act is not
unconstitutional. Further, that we are unanimous in
declaring that the depositor has no right to demand
that it be notified of any application or issuance of an
order to inquire into his or her bank deposit. The
procedure in the Court of Appeals is ex parte but
requires proof of probable cause of the occurrence of
the predicate crime as well as the potential liability of
the owner of the deposit.

After the inquiry of the bank deposits and related

accounts within the limitations contained in the court
order, it is still the option of the law enforcers or the
Anti-Money Laundering Council, to proceed to request
for a Freeze Order in accordance with Section 10 of
the same law. The depositor is, thus, entitled to be
informed only after the freeze order has been issued.
In questioning the freeze order, the depositor may
then raise defenses relating to the existence of
sufficient evidence to lead the court to believe that
there is probable cause that a covered crime has
occurred, that the depositor is a participant in the
crime, and that the stay of all transactions with
respect to the bank account is essential in order to
preserve evidence or to keep the proceeds of the
crime intact for and on behalf of the victims.

I differ with the premises used to arrive at the same

conclusion.

I
The numbers on a bank's ledger corresponding to the
amounts of money that a depositor has and its various
transactions, especially when digitized, are definitely
not physical. Yet, just because they are not physical
does not necessarily mean that they do not partake of
the kinds of "life, liberty, or property"1 protected by
the due process clause of the Constitution. Neither
should it mean that the numerical equivalent of the
bank's debt to a depositor or the record of its various
transactions have nothing to do with the "persons . .
. papers, and effects"2 constitutionally protected
against "unreasonable searches and seizures."3 The
majority opinion's statement that the "inquiry by the
[Anti-Money Laundering Council] into certain bank
deposits and investments does not violate substantive
due process, there being no physical seizure of
property involved at that stage"4 may have been
inadvertent. It does, however, neglect that the
penumbra of rights protected by the due process
clause and the proscription against unreasonable
searches and seizures also pertains to protecting the
intangibles essential to human life. Definitely, every
liberal democratic constitutional order has outgrown
the archaic concept that life is only that which can be
tangible.

The due process clause is crafted as a proscription.

Thus, it states that "[n]o person shall be deprived of
life, liberty, or property without due process of
law[.]"5 This means that there is a sphere of individual
existence or a penumbra of individual autonomy that
exists prior to every regulation that should
primordially be left untouched. In other words, the
existence of what Louis D. Brandeis and Samuel D.
Warren once called "the right to be let alone"6 is now
broadly, though at times awkwardly referred to
roughly as the right to privacy, presumed. Every
regulation therefore that limits this aspect of
individuality may be the subject of inquiry that it does
not "deprive" one of their "life, liberty or property"
without "due process of law".

Thus, in the often cited writings of Warren and

Brandeis as early as 1890 on the right to privacy:
 That the individual shall have full protection in person and
in property is a principle as old as the common law; but it
has been found necessary from time to time to define anew
the exact nature and extent of such protection. Political,
social, and economic changes entail the recognition of new
rights, and the common law, in its eternal youth, grows to
meet the demands of society. Thus, in very early times, the
law gave a remedy only for physical interference with life
and property, for trespasses vi et armis. Then the "right to
life" served only to protect the subject from battery in its
various forms; liberty meant freedom from actual restraint;
and the right to property secured to the individual his lands
and his cattle. Later, there came a recognition of man's
spiritual nature, of his feelings and his intellect. Gradually
the scope of these legal rights broadened; and now the
right to life has come to mean the right to enjoy life,— the
right to be let alone; the right to liberty secures the exercise
of extensive civil privileges; and the term "property" has
grown to comprise every form of possession — intangible,
as well as tangible.

Thus, with the recognition of the legal value of sensations,

the protection against actual bodily injury was extended to
prohibit mere attempts to do such injury; that is, the
putting another in fear of such injury. From the action of
battery grew that of assault. Much later there came a
qualified protection of the individual against offensive
noises and odors, against dust and smoke, and excessive
vibration. The law of nuisance was developed. So regard for
human emotions soon extended the scope of personal
immunity beyond the body of the individual. His reputation,
the standing among his fellow-men, was considered, and
the law of slander and libel arose. Man's family relations
became a part of the legal conception of his life, and the
alienation of a wife's affections was held remediable.
Occasionally the law halted,—as in its refusal to recognize
the intrusion by seduction upon the honor of the family. But
even here the demands of society were met. A mean fiction,
the action per quod servitium amisit, was resorted to, and
by allowing damages for injury to the parents' feelings, an
adequate remedy was ordinarily afforded. Similar to the
expansion of the right to life was the growth of the legal
conception of property. From corporeal property arose the
incorporeal rights issuing out of it; and then there opened
the wide realm of intangible property, in the products and
processes of the mind, as works of literature and art,
goodwill, trade secrets, and trademarks.

This development of the law was inevitable.7 (Citations

omitted)

Nothing in the structure of the due process clause

limits the protected sphere of individual existence or
autonomy only to the physical or corporeal aspects of
life. After all, as we have long held, life is not limited
only to physical existence.8 Property can be
incorporeal.9Liberty denotes something more than
just freedom from physical restraint.
More fundamentally, the reservation of a very broad
sphere of individual privacy or individual autonomy is
implied in the very concept of society governed under
a constitutional and democratic order. The aspects of
our humanity and the parts of our liberty surrendered
to the government, in order to assure a functioning
society, should only be as much as necessary for a
just society and no more. While the extent of
necessary surrender cannot be determined with
precision, our existing doctrine is that any state
interference should neither be arbitrary nor unfair. In
many cases, we have held that due process of law
simply means that regulation should both be
reasonable and fair.

Reasonability and fairness is tentatively captured in

the twin legal concepts of substantive and procedural
due process respectively. Substantive due process is
usually, though not in all cases, a nuanced means-to-
end test. Basically, this means that the regulation
which impinges on individual autonomy is necessary
to meet a legitimate state interest to be protected
through means that can logically relate to achieving
that end.10 Procedural due process is succinctly and
most descriptively captured in the idea that in the
kinds of deprivation of rights where it would be
relevant, there should be an opportunity to be
heard.11

In the due process clause, there is the requirement of

"deprivation" of one's right to "life, liberty or
property." In my view, this means more than the
occasional and temporary discomforts we suffer,
which is consistent with the natural workings of
groups of human beings living within a society. De
minimis discomfort is a part of group life, independent
of the workings of the State. The deprivation that may
trigger a judicial inquiry should be more than
momentary. It must be fundamentally disruptive of a
value that we protect because it is constitutive of our
concept of individual autonomy.

For instance, a person who chooses to walk down a

public street cannot complain that a police officer
glances or even stares at him or her. The discomfort
of being the subject of the observation by others,
under those circumstances, may be too fleeting and
trivial that it should not cause any constitutional
query. That we look at each other in public spaces is
inherently a part of existing within a society. After all,
one of the worst human indignities may be that we
are rendered invisible to everyone for all time within
public spaces.

On the other hand, the uninvited and unwelcome

peering eyes of the State's agents as we reside in our
most private spaces presumptively violates our right
to life, liberty, and even our property. In such cases,
even the most fleeting act of voyeurism can cause
substantial disruption of our collective values.
Certainly, there is reason to trigger judicial inquiry. If
the intrusion is unreasonable, it violates the
constitutional protection of the due process clause.

Examining the petitioner's bank accounts is analogous

to the situation involving the uninvited and
unwelcome glance. For some, their financial worth
contained in the bank's ledgers may not be physical,
but it is constitutive of that part of their identity, which
for their own reasons, they may not want to disclose.
Peering into one's bank accounts and related
transactions is sufficiently disruptive as to be
considered a "deprivation" within the meaning of the
due process clause. It may be short of the physical
seizure of property but it should, in an actual
controversy such as this case at bar, be subject of
judicial review.

I disagree with the majority's opinion that bank

accounts do not have any "legitimate expectation of
privacy[.]"12 I believe that such opinion may be too
broad a reading of Republic v. Hon. Judge Eugenio,
Jr., et al.13 It is true that no bank account or
investment can be made without the cooperation of
those who work with financial intermediaries. The
possibility that there are those, who may come across
personal financial information, should not be the
measure of what may be "legitimate expectation" in a
constitutional sense. We should start to distinguish
between knowledge of the content of these accounts,
storage of these information, exchange of data, and
making public disclosures.

What we deal with when the Court of Appeals allows

inquiry is simply providing the Anti-Money Laundering
Council or the appropriate law enforcement agency
with access to knowledge of the content of these
accounts. The limits of its storage, how it is
exchanged, and making public disclosures are another
matter. Nothing in this decision should be used to
imply the nature of the right to privacy or the factors
to be considered to establish "legitimate expectation
of privacy" as it applies to storage, exchange, and
public disclosures of information.

The truth is that most of today's digital data is

vulnerable to one who is curious enough, exceedingly
determined, skillful, and willing to deploy the
necessary time and resources to make discovery of
our most private information. Ubiquitous surveillance
systems that ensure the integrity as well as increase
confidence in the security of the data kept in a system
are ever present. Copying or transferring digital data
occurs likewise with phenomenal speed. Data shared
in cyberspace also tends to be resilient and difficult to
completely delete. Users of various digital platforms,
including bank accounts, are not necessarily aware of
these vulnerabilities.

Therefore, the concept of "legitimate expectation of

privacy" as the framework for assessing whether
personal information fall within the constitutionally
protected penumbra need to be carefully
reconsidered. In my view, the protected spheres of
privacy will make better sense when our jurisprudence
in the appropriate cases make clear how specific types
of information relate to personal identity and why this
is valuable to assure human dignity and a robust
democracy in the context of a constitutional order.

II
A bank inquiry order is a provisional relief available to
the Anti-Money Laundering Council in aid of its
investigative powers. It partakes of the character of a
search warrant.

United Laboratories Inc. v. Isip14 discussed the nature

of a search warrant:

On the first issue, we agree with the petitioner's contention

that a search warrant proceeding is, in no sense, a criminal
action or the commencement of a prosecution. The
proceeding is not one against any person, but is solely for
the discovery and to get possession of personal property.
It is a special and peculiar remedy, drastic in nature, and
made necessary because of public necessity. It resembles
in some respect with what is commonly known as John Doe
proceedings. While an application for a search warrant is
entitled like a criminal action, it does not make it such an
action.

A search warrant is a legal process which has been likened

to a writ of discovery employed by the State to procure
relevant evidence of crime. It is in the nature of a criminal
process, restricted to cases of public prosecutions. A search
warrant is a police weapon, issued under the police power.
A search warrant must issue in the name of the State,
namely, the People of the Philippines.

A search warrant has no relation to a civil process. It is not

a process for adjudicating civil rights or maintaining mere
private rights. It concerns the public at large as
distinguished from the ordinary civil action involving the
rights of private persons. It may only be applied for in the
furtherance of public prosecution.15 (Emphasis supplied,
citations omitted)

In a search warrant proceeding, there is already a

crime that has been committed and law enforcers
apply for a search warrant to find evidence to support
a case or to retrieve and preserve evidence already
known to them.

In the same way, a bank inquiry order is "a means for

the government to ascertain whether there is
sufficient evidence to sustain an intended prosecution
of the account holder for violation of the [Anti-Money
Laundering Act]."16 It is a preparatory tool for the
discovery and procurement, and preservation —
through the subsequent issuance of a freeze order —
of relevant evidence of a money laundering
transaction or activity.
Considering its implications on the depositor's right to
privacy, Section 11 of the Anti-Money Laundering Act
explicitly mandates that "[t]he authority to inquire
into or examine the main account and the related
accounts shall comply with the requirements of Article
III, Sections 2 and 3 of the 1987 Constitution[.]"

Article III, Section II of the Constitution states:

SECTION 2. The right of the people to be secure in their

persons, houses, papers, and effects against unreasonable
searches and seizures of whatever nature and for any
purpose shall be inviolable, 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.

"The phrase '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' allows a determination of probable
cause by the judge [or the Court of Appeals in Anti-
Money Laundering Act cases] ex parte." 17

In People v. Delos Reyes,18 the Court held that due to

the ex parte and non-adversarial nature of the
proceedings, "the [j]udge acting on an application for
a search warrant is not bound to apply strictly the
rules of evidence."19

The ordinary rules of evidence are generally not applied

in ex parte proceedings, partly because there is no
opponent to invoke them, partly because the Judge's
determination is usually discretionary, partly because it is
seldom that, but mainly because the system of evidence
rules was devised for the special control of trials by
jury.20(Emphasis supplied)

"The existence [of probable cause] depends to a large

degree upon the finding or opinion of the judge [or
magistrate] conducting the
examination."21 "However, the findings of the judge
[or magistrate] should not disregard the facts before
him nor run counter to the clear dictates of reason."22
Search warrant proceedings are ex parte because of
the necessities of the investigation. La Chemise
Lacoste, S.A. v. Hon. Fernandez, etc. et al.,23 states:

... an application for a search warrant is heard ex parte. It

is neither a trial nor a part of the trial. Action on these
applications must be expedited for time is of the essence.
Great reliance has to be accorded by the judge to the
testimonies under oath of the complainant and the
witnesses.24 (Emphasis supplied)

Similarly, it is essential that investigations for Anti-

Money Laundering Act offenses, including the
proceedings for the issuance of bank inquiry orders,
be kept ex parte, in order not to frustrate the State's
effort in building its case and eventually prosecuting
money laundering offenses.

III

The absence of notice to the owner of a bank account

that an ex parteapplication as well as an order to
inquire has been granted by the Court of Appeals is
not unreasonable nor arbitrary. The lack of notice
does not violate the due process clause of the
Constitution.

It is reasonable for the State, through its law

enforcers, to inquire ex parte and without notice
because of the nature of a bank account at present.

A bank deposit is an obligation. It is a debt owed by a

bank to its client-depositor. It is understood that the
bank will make use of the value of the money
deposited to further create credit. This means that it
may use the value to create loans with interest to
another. Whoever takes out a loan likewise creates a
deposit with another bank creating another obligation
and empowering that other bank to create credit once
mere through providing other loans.

Bank deposits are not isolated information similar to

personal sets of preferences. Rather, bank deposits
exist as economically essential social constructs. The
inherent constitutionally protected private rights in
bank deposits and other similar instruments are not
absolute. These rights should, in proper cases, be
weighed against the need to maintaining the integrity
of our financial system. The integrity of our financial
system on the other hand contributes to the viability
of banks and financial intermediaries, and therefore
the viability of keeping bank deposits.

Furthermore, we are at an age of instantaneous

financial transactions. It would be practically
impossible to locate, preserve, and later on present
evidence of crimes covered by the Anti-Money
Laundering Act if the theory of the petitioner is
correct. After all, as correctly pointed out by the
majority opinion, the right to information accrues only
after a freeze order is issued. It is then that limitations
on the ability to transact the value of the bank account
will truly affect the depositor.

Accordingly, with these clarifications, I vote to DENY

the Petition.

Endnotes:

Republic of the Philippines

SUPREME COURT
Manila

EN BANC

G.R. No. 193636 July 24, 2012

MARYNETTE R. GAMBOA, Petitioner,

vs.
P/SSUPT. MARLOU C. CHAN, in his capacity as the PNP-
Provincial Director of Ilocos Norte, and P/SUPT. WILLIAM 0.
FANG, in his capacity as Chief, Intelligence Division, PNP
Provincial Office, Ilocos Norte,Respondents.

DECISION

SERENO, J.:

Before this Court is an Appeal by Certiorari (Under Rule 45 of the

Rules of Court) filed pursuant to Rule 191 of the Rule on the Writ of
Habeas Data,2 seeking a review of the 9 September 2010 Decision in
Special Proc. No. 14979 of the Regional Trial Court, First Judicial
Region, Laoag City, Branch 13 (RTC Br. 13).3 The questioned
Decision denied petitioner the privilege of the writ of habeas data.4
At the time the present Petition was filed, petitioner Marynette R.
Gamboa (Gamboa) was the Mayor of Dingras, Ilocos
Norte.5 Meanwhile, respondent Police Senior Superintendent
(P/SSUPT.) Marlou C. Chan was the Officer-in-Charge, and
respondent Police Superintendent (P/SUPT.) William O. Fang was
the Chief of the Provincial Investigation and Detective Management
Branch, both of the Ilocos Norte Police Provincial Office.6

On 8 December 2009, former President Gloria Macapagal-Arroyo

issued Administrative Order No. 275 (A.O. 275), "Creating an
Independent Commission to Address the Alleged Existence of Private
Armies in the Country."7 The body, which was later on referred to as
the Zeñarosa Commission,8 was formed to investigate the existence
of private army groups (PAGs) in the country with a view to
eliminating them before the 10 May 2010 elections and dismantling
them permanently in the future.9Upon the conclusion of its
investigation, the Zeñarosa Commission released and submitted to
the Office of the President a confidential report entitled "A Journey
Towards H.O.P.E.: The Independent Commission Against Private
Armies’ Report to the President" (the Report).10

Gamboa alleged that the Philippine National Police in Ilocos Norte

(PNP–Ilocos Norte) conducted a series of surveillance operations
against her and her aides,11 and classified her as someone who keeps
a PAG.12 Purportedly without the benefit of data verification, PNP–
Ilocos Norte forwarded the information gathered on her to the
Zeñarosa Commission,13 thereby causing her inclusion in the Report’s
enumeration of individuals maintaining PAGs.14 More specifically, she
pointed out the following items reflected therein:

(a) The Report cited the PNP as its source for the portion
regarding the status of PAGs in the Philippines.15

(b) The Report stated that "x x x the PNP organized one
dedicated Special Task Group (STG) for each private armed
group (PAG) to monitor and counteract their activities."16

(c) Attached as Appendix "F" of the Report is a tabulation

generated by the PNP and captioned as "Status of PAGs
Monitoring by STGs as of April 19, 2010," which classifies
PAGs in the country according to region, indicates their
identity, and lists the prominent personalities with whom these
groups are associated.17 The first entry in the table names a
PAG, known as the Gamboa Group, linked to herein
petitioner Gamboa.18

(d) Statistics on the status of PAGs were based on data from

the PNP, to wit:

The resolutions were the subject of a national press

conference held in Malacañang on March 24, 2010 at which
time, the Commission was also asked to comment on the
 PNP report that out of one hundred seventeen (117) partisan
armed groups validated, twenty-four (24) had been
dismantled with sixty-seven (67) members apprehended and
more than eighty-six (86) firearms confiscated.

Commissioner Herman Basbaño qualified that said statistics

were based on PNP data but that the more significant fact
from his report is that the PNP has been vigilant in monitoring
the activities of these armed groups and this vigilance is
largely due to the existence of the Commission which has
continued communicating with the Armed Forces of the
Philippines (AFP) and PNP personnel in the field to constantly
provide data on the activities of the PAGs. Commissioner
Basbaño stressed that the Commission’s efforts have
preempted the formation of the PAGs because now everyone
is aware that there is a body monitoring the PAGs movement
through the PNP. Commissioner Lieutenant General Edilberto
Pardo Adan also clarified that the PAGs are being
destabilized so that their ability to threaten and sow fear
during the election has been considerably weakened.19

(e) The Report briefly touched upon the validation system of

the PNP:

Also, in order to provide the Commission with accurate data which is

truly reflective of the situation in the field, the PNP complied with the
Commission’s recommendation that they revise their validation
system to include those PAGs previously listed as dormant. In the
most recent briefing provided by the PNP on April 26, 2010, there are
one hundred seven (107) existing PAGs. Of these groups, the PNP
reported that seven (7) PAGs have been reorganized.20

On 6 and 7 July 2010, ABS-CBN broadcasted on its evening news

program the portion of the Report naming Gamboa as one of the
politicians alleged to be maintaining a PAG.21 Gamboa averred that
her association with a PAG also appeared on print media.22 Thus, she
was publicly tagged as someone who maintains a PAG on the basis
of the unverified information that the PNP-Ilocos Norte gathered and
forwarded to the Zeñarosa Commission.23 As a result, she claimed
that her malicious or reckless inclusion in the enumeration of
personalities maintaining a PAG as published in the Report also
made her, as well as her supporters and other people identified with
her, susceptible to harassment and police surveillance operations.24

Contending that her right to privacy was violated and her reputation
maligned and destroyed, Gamboa filed a Petition dated 9 July 2010
for the issuance of a writ of habeas data against respondents in their
capacities as officials of the PNP-Ilocos Norte.25 In her Petition, she
prayed for the following reliefs: (a) destruction of the unverified
reports from the PNP-Ilocos Norte database; (b) withdrawal of all
information forwarded to higher PNP officials; (c) rectification of the
damage done to her honor; (d) ordering respondents to refrain from
forwarding unverified reports against her; and (e) restraining
respondents from making baseless reports.26

The case was docketed as Special Proc. No. 14979 and was raffled
to RTC Br. 13, which issued the corresponding writ on 14 July 2010
after finding the Petition meritorious on its face.27 Thus, the trial court
(a) instructed respondents to submit all information and reports
forwarded to and used by the Zeñarosa Commission as basis to
include her in the list of persons maintaining PAGs; (b) directed
respondents, and any person acting on their behalf, to cease and
desist from forwarding to the Zeñarosa Commission, or to any other
government entity, information that they may have gathered against
her without the approval of the court; (c) ordered respondents to
make a written return of the writ together with supporting affidavits;
and (d) scheduled the summary hearing of the case on 23 July
2010.28

In their Return of the Writ, respondents alleged that they had acted
within the bounds of their mandate in conducting the investigation
and surveillance of Gamboa.29 The information stored in their
database supposedly pertained to two criminal cases in which she
was implicated, namely: (a) a Complaint for murder and frustrated
murder docketed as NPS DOC No. 1-04-INQ-091-00077, and (b) a
Complaint for murder, frustrated murder and direct assault upon a
person in authority, as well as indirect assault and multiple attempted
murder, docketed as NPS DOCKET No. 1-04-INV-10-A-00009.30

Respondents likewise asserted that the Petition was incomplete for

failing to comply with the following requisites under the Rule on the
Writ of Habeas Data: (a) the manner in which the right to privacy was
violated or threatened with violation and how it affected the right to
life, liberty or security of Gamboa; (b) the actions and recourses she
took to secure the data or information; and (c) the location of the files,
registers or databases, the government office, and the person in
charge, in possession or in control of the data or information.31 They
also contended that the Petition for Writ of Habeas Data, being
limited to cases of extrajudicial killings and enforced disappearances,
was not the proper remedy to address the alleged besmirching of the
reputation of Gamboa.32

RTC Br. 13, in its assailed Decision dated 9 September 2010,

dismissed the Petition.33 The trial court categorically ruled that the
inclusion of Gamboa in the list of persons maintaining PAGs, as
published in the Report, constituted a violation of her right to privacy,
to wit:

In this light, it cannot also be disputed that by her inclusion in the list
of persons maintaining PAGs, Gamboa’s right to privacy indubitably
has been violated. The violation understandably affects her life,
liberty and security enormously. The untold misery that comes with
the tag of having a PAG could even be insurmountable. As she
essentially alleged in her petition, she fears for her security that at
any time of the day the unlimited powers of respondents may likely be
exercised to further malign and destroy her reputation and to
transgress her right to life.

By her inclusion in the list of persons maintaining PAGs, it is likewise

undisputed that there was certainly intrusion into Gamboa’s activities.
It cannot be denied that information was gathered as basis therefor.
After all, under Administrative Order No. 275, the Zeñarosa
Commission was tasked to investigate the existence of private armies
in the country, with all the powers of an investigative body under
Section 37, Chapter 9, Book I of the Administrative Code of 1987.

xxx xxx xxx

By her inclusion in the list of persons maintaining PAGs, Gamboa

alleged as she accused respondents, who are public officials, of
having gathered and provided information that made the Zeñarosa
Commission to include her in the list. Obviously, it was this gathering
and forwarding of information supposedly by respondents that
petitioner barks at as unlawful. x x x.34

Despite the foregoing findings, RTC Br. 13 nevertheless dismissed

the Petition on the ground that Gamboa failed to prove through
substantial evidence that the subject information originated from
respondents, and that they forwarded this database to the Zeñarosa
Commission without the benefit of prior verification.35 The trial court
also ruled that even before respondents assumed their official
positions, information on her may have already been
acquired.36 Finally, it held that the Zeñarosa Commission, as the body
tasked to gather information on PAGs and authorized to disclose
information on her, should have been impleaded as a necessary if not
a compulsory party to the Petition.37

Gamboa then filed the instant Appeal by Certiorari dated 24

September 2010,38 raising the following assignment of errors:

1. The trial court erred in ruling that the Zeñarosa

Commission be impleaded as either a necessary or
indispensable party;

2. The trial court erred in declaring that Gamboa failed to

present sufficient proof to link respondents as the informant to
[sic] the Zeñarosa Commission;

3. The trial court failed to satisfy the spirit of Habeas Data;

4. The trial court erred in pronouncing that the reliance of the

Zeñarosa Commission to [sic] the PNP as alleged by
Gamboa is an assumption;

5. The trial court erred in making a point that respondents are

distinct to PNP as an agency.39
On the other hand, respondents maintain the following arguments: (a)
Gamboa failed to present substantial evidence to show that her right
to privacy in life, liberty or security was violated, and (b) the trial court
correctly dismissed the Petition on the ground that she had failed to
present sufficient proof showing that respondents were the source of
the report naming her as one who maintains a PAG.40

Meanwhile, Gamboa argues that although A.O. 275 was a lawful

order, fulfilling the mandate to dismantle PAGs in the country should
be done in accordance with due process, such that the gathering and
forwarding of unverified information on her must be considered
unlawful.41 She also reiterates that she was able to present sufficient
evidence showing that the subject information originated from
respondents.42

In determining whether Gamboa should be granted the privilege of

the writ of habeas data, this Court is called upon to, first, unpack the
concept of the right to privacy; second, explain the writ of habeas
data as an extraordinary remedy that seeks to protect the right to
informational privacy; and finally, contextualize the right to privacy
vis-à-vis the state interest involved in the case at bar.

The Right to Privacy

The right to privacy, as an inherent concept of liberty, has long been

recognized as a constitutional right. This Court, in Morfe v.
Mutuc,43 thus enunciated:

The due process question touching on an alleged deprivation of

liberty as thus resolved goes a long way in disposing of the objections
raised by plaintiff that the provision on the periodical submission of a
sworn statement of assets and liabilities is violative of the
constitutional right to privacy. There is much to be said for this view of
Justice Douglas: "Liberty in the constitutional sense must mean more
than freedom from unlawful governmental restraint; it must include
privacy as well, if it is to be a repository of freedom. The right to be let
alone is indeed the beginning of all freedom." As a matter of fact, this
right to be let alone is, to quote from Mr. Justice Brandeis "the most
comprehensive of rights and the right most valued by civilized men."

The concept of liberty would be emasculated if it does not likewise

compel respect for his personality as a unique individual whose claim
to privacy and interference demands respect. xxx.

xxx xxx xxx

x x x In the leading case of Griswold v. Connecticut, Justice Douglas,

speaking for five members of the Court, stated: "Various guarantees
create zones of privacy. The right of association contained in the
penumbra of the First Amendment is one, as we have seen. The
Third Amendment in its prohibition against the quartering of soldiers
‘in any house’ in time of peace without the consent of the owner is
another facet of that privacy. The Fourth Amendment explicitly affirms
the ‘right of the people to be secure in their persons, houses, papers,
and effects, against unreasonable searches and seizures.’ The Fifth
Amendment in its Self-Incrimination Clause enables the citizen to
create a zone of privacy which government may not force him to
surrender to his detriment. The Ninth Amendment provides: ‘The
enumeration in the Constitution, of certain rights, shall not be
construed to deny or disparage others retained by the people." After
referring to various American Supreme Court decisions, Justice
Douglas continued: "These cases bear witness that the right of
privacy which presses for recognition is a legitimate one."

xxx xxx xxx

So it is likewise in our jurisdiction. The right to privacy as such is

accorded recognition independently of its identification with liberty; in
itself, it is fully deserving of constitutional protection. The language of
Prof. Emerson is particularly apt: "The concept of limited government
has always included the idea that governmental powers stop short of
certain intrusions into the personal life of the citizen. This is indeed
one of the basic distinctions between absolute and limited
government. Ultimate and pervasive control of the individual, in all
aspects of his life, is the hallmark of the absolute state. In contrast, a
system of limited government, safeguards a private sector, which
belongs to the individual, firmly distinguishing it from the public
sector, which the state can control. Protection of this private sector —
protection, in other words, of the dignity and integrity of the individual
— has become increasingly important as modern society has
developed. All the forces of a technological age — industrialization,
urbanization, and organization — operate to narrow the area of
privacy and facilitate intrusion into it. In modern terms, the capacity to
maintain and support this enclave of private life marks the difference
between a democratic and a totalitarian society."44 (Emphases
supplied)

In Ople v. Torres,45 this Court traced the constitutional and statutory

bases of the right to privacy in Philippine jurisdiction, to wit:

Indeed, if we extend our judicial gaze we will find that the right of
privacy is recognized and enshrined in several provisions of our
Constitution. It is expressly recognized in section 3 (1) of the Bill of
Rights:

Sec. 3. (1) The privacy of communication and correspondence shall

be inviolable except upon lawful order of the court, or when public
safety or order requires otherwise as prescribed by law.

Other facets of the right to privacy are protected in various provisions

of the Bill of Rights, viz:
Sec. 1. No person shall be deprived of life, liberty, or property without
due process of law, nor shall any person be denied the equal
protection of the laws.

Sec. 2. The right of the people to be secure in their persons, houses,

papers, and effects against unreasonable searches and seizures of
whatever nature and for any purpose shall be inviolable, 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.

xxx xxx xxx

Sec. 6. The liberty of abode and of changing the same within the
limits prescribed by law shall not be impaired except upon lawful
order of the court. Neither shall the right to travel be impaired except
in the interest of national security, public safety, or public health as
may be provided by law.

xxx xxx xxx

Sec. 8. The right of the people, including those employed in the public
and private sectors, to form unions, associations, or societies for
purposes not contrary to law shall not be abridged.

Sec. 17. No person shall be compelled to be a witness against

himself.

Zones of privacy are likewise recognized and protected in our laws.

The Civil Code provides that "every person shall respect the dignity,
personality, privacy and peace of mind of his neighbors and other
persons" and punishes as actionable torts several acts by a person of
meddling and prying into the privacy of another. It also holds a public
officer or employee or any private individual liable for damages for
any violation of the rights and liberties of another person, and
recognizes the privacy of letters and other private communications.
The Revised Penal Code makes a crime the violation of secrets by an
officer, the revelation of trade and industrial secrets, and trespass to
dwelling. Invasion of privacy is an offense in special laws like the
Anti-Wiretapping Law, the Secrecy of Bank Deposits Act and the
Intellectual Property Code. The Rules of Court on privileged
communication likewise recognize the privacy of certain information.

Unlike the dissenters, we prescind from the premise that the right to
privacy is a fundamental right guaranteed by the Constitution, hence,
it is the burden of government to show that A.O. No. 308 is justified
by some compelling state interest and that it is narrowly drawn. x x
x.46(Emphases supplied)
Clearly, the right to privacy is considered a fundamental right that
must be protected from intrusion or constraint. However, in Standard
Chartered Bank v. Senate Committee on Banks,47 this Court
underscored that the right to privacy is not absolute, viz:

With respect to the right of privacy which petitioners claim respondent

has violated, suffice it to state that privacy is not an absolute right.
While it is true that Section 21, Article VI of the Constitution,
guarantees respect for the rights of persons affected by the legislative
investigation, not every invocation of the right to privacy should be
allowed to thwart a legitimate congressional inquiry. In Sabio v.
Gordon, we have held that the right of the people to access
information on matters of public concern generally prevails over the
right to privacy of ordinary financial transactions. In that case, we
declared that the right to privacy is not absolute where there is an
overriding compelling state interest. Employing the rational basis
relationship test, as laid down in Morfe v. Mutuc, there is no
infringement of the individual’s right to privacy as the requirement to
disclosure information is for a valid purpose, in this case, to ensure
that the government agencies involved in regulating banking
transactions adequately protect the public who invest in foreign
securities. Suffice it to state that this purpose constitutes a reason
compelling enough to proceed with the assailed legislative
investigation.48

Therefore, when the right to privacy finds tension with a competing

state objective, the courts are required to weigh both notions. In these
cases, although considered a fundamental right, the right to privacy
may nevertheless succumb to an opposing or overriding state interest
deemed legitimate and compelling.

The Writ of Habeas Data

The writ of habeas data is an independent and summary remedy

designed to protect the image, privacy, honor, information, and
freedom of information of an individual, and to provide a forum to
enforce one’s right to the truth and to informational privacy.49 It seeks
to protect a person’s right to control information regarding oneself,
particularly in instances in which such information is being collected
through unlawful means in order to achieve unlawful ends.50 It must be
emphasized that in order for the privilege of the writ to be granted,
there must exist a nexus between the right to privacy on the one
hand, and the right to life, liberty or security on the other. Section 1 of
the Rule on the Writ of Habeas Data reads:

Habeas data. – The writ of habeas data is a remedy available to any

person whose right to privacy in life, liberty or security is violated or
threatened by an unlawful act or omission of a public official or
employee, or of a private individual or entity engaged in the
gathering, collecting or storing of data information regarding the
person, family, home and correspondence of the aggrieved party.
The notion of informational privacy is still developing in Philippine law
and jurisprudence. Considering that even the Latin American habeas
data, on which our own Rule on the Writ of Habeas Data is rooted,
finds its origins from the European tradition of data protection,51 this
Court can be guided by cases on the protection of personal data
decided by the European Court of Human Rights (ECHR). Of
particular note is Leander v. Sweden,52 in which the ECHR balanced
the right of citizens to be free from interference in their private affairs
with the right of the state to protect its national security. In this case,
Torsten Leander (Leander), a Swedish citizen, worked as a
temporary replacement museum technician at the Naval Museum,
which was adjacent to a restricted military security zone.53 He was
refused employment when the requisite personnel control resulted in
an unfavorable outcome on the basis of information in the secret
police register, which was kept in accordance with the Personnel
Control Ordinance and to which he was prevented access.54 He
claimed, among others, that this procedure of security control violated
Article 8 of the European Convention of Human Rights55 on the right to
privacy, as nothing in his personal or political background would
warrant his classification in the register as a security risk.56

The ECHR ruled that the storage in the secret police register of
information relating to the private life of Leander, coupled with the
refusal to allow him the opportunity to refute the same, amounted to
an interference in his right to respect for private life.57 However, the
ECHR held that the interference was justified on the following
grounds: (a) the personnel control system had a legitimate aim, which
was the protection of national security,58 and (b) the Personnel Control
Ordinance gave the citizens adequate indication as to the scope and
the manner of exercising discretion in the collection, recording and
release of information by the authorities.59 The following statements of
the ECHR must be emphasized:

58. The notion of necessity implies that the interference

corresponds to a pressing social need and, in particular, that
it is proportionate to the legitimate aim pursued (see, inter
alia, the Gillow judgment of 24 November 1986, Series A no.
109, p. 22, § 55).

59. However, the Court recognises that the national

authorities enjoy a margin of appreciation, the scope of which
will depend not only on the nature of the legitimate aim
pursued but also on the particular nature of the interference
involved. In the instant case, the interest of the respondent
State in protecting its national security must be balanced
against the seriousness of the interference with the
applicant’s right to respect for his private life.

There can be no doubt as to the necessity, for the purpose of

protecting national security, for the Contracting States to have laws
granting the competent domestic authorities power, firstly, to collect
and store in registers not accessible to the public information on
persons and, secondly, to use this information when assessing the
suitability of candidates for employment in posts of importance for
national security.

Admittedly, the contested interference adversely affected Mr.

Leander’s legitimate interests through the consequences it had on his
possibilities of access to certain sensitive posts within the public
service. On the other hand, the right of access to public service is not
as such enshrined in the Convention (see, inter alia, the Kosiek
judgment of 28 August 1986, Series A no. 105, p. 20, §§ 34-35), and,
apart from those consequences, the interference did not constitute an
obstacle to his leading a private life of his own choosing.

In these circumstances, the Court accepts that the margin of

appreciation available to the respondent State in assessing the
pressing social need in the present case, and in particular in choosing
the means for achieving the legitimate aim of protecting national
security, was a wide one.

xxx xxx xxx

66. The fact that the information released to the military authorities
was not communicated to Mr. Leander cannot by itself warrant the
conclusion that the interference was not "necessary in a democratic
society in the interests of national security", as it is the very absence
of such communication which, at least partly, ensures the efficacy of
the personnel control procedure (see, mutatis mutandis, the above-
mentioned Klass and Others judgment, Series A no. 28, p. 27, § 58).

The Court notes, however, that various authorities consulted before

the issue of the Ordinance of 1969, including the Chancellor of
Justice and the Parliamentary Ombudsman, considered it desirable
that the rule of communication to the person concerned, as contained
in section 13 of the Ordinance, should be effectively applied in so far
as it did not jeopardise the purpose of the control (see paragraph 31
above).

67. The Court, like the Commission, thus reaches the conclusion that
the safeguards contained in the Swedish personnel control system
meet the requirements of paragraph 2 of Article 8 (art. 8-2). Having
regard to the wide margin of appreciation available to it, the
respondent State was entitled to consider that in the present case the
interests of national security prevailed over the individual interests of
the applicant (see paragraph 59 above). The interference to which
Mr. Leander was subjected cannot therefore be said to have been
disproportionate to the legitimate aim pursued. (Emphases supplied)

Leander illustrates how the right to informational privacy, as a specific

component of the right to privacy, may yield to an overriding
legitimate state interest. In similar fashion, the determination of
whether the privilege of the writ of habeas data, being an
extraordinary remedy, may be granted in this case entails a delicate
balancing of the alleged intrusion upon the private life of Gamboa and
the relevant state interest involved.

The collection and forwarding of information by the PNP vis-à-vis the

interest of the state to dismantle private armies.

The Constitution explicitly mandates the dismantling of private armies

and other armed groups not recognized by the duly constituted
authority.60 It also provides for the establishment of one police force
that is national in scope and civilian in character, and is controlled
and administered by a national police commission.61

Taking into account these constitutional fiats, it is clear that the

issuance of A.O. 275 articulates a legitimate state aim, which is to
investigate the existence of PAGs with the ultimate objective of
dismantling them permanently.

To enable the Zeñarosa Commission to achieve its goals, A.O. 275

clothed it with the powers of an investigative body, including the
power to summon witnesses, administer oaths, take testimony or
evidence relevant to the investigation and use compulsory processes
to produce documents, books, and records.62 A.O. 275 likewise
authorized the Zeñarosa Commission to deputize the Armed Forces
of the Philippines, the National Bureau of Investigation, the
Department of Justice, the PNP, and any other law enforcement
agency to assist the commission in the performance of its functions.63

Meanwhile, the PNP, as the national police force, is empowered by

law to (a) enforce all laws and ordinances relative to the protection of
lives and properties; (b) maintain peace and order and take all
necessary steps to ensure public safety; and (c) investigate and
prevent crimes.64

Pursuant to the state interest of dismantling PAGs, as well as the

foregoing powers and functions accorded to the Zeñarosa
Commission and the PNP, the latter collected information on
individuals suspected of maintaining PAGs, monitored them and
counteracted their activities.65One of those individuals is herein
petitioner Gamboa.

This Court holds that Gamboa was able to sufficiently establish that
the data contained in the Report listing her as a PAG coddler came
from the PNP. Contrary to the ruling of the trial court, however, the
forwarding of information by the PNP to the Zeñarosa Commission
was not an unlawful act that violated or threatened her right to privacy
in life, liberty or security.

The PNP was rationally expected to forward and share intelligence

regarding PAGs with the body specifically created for the purpose of
investigating the existence of these notorious groups. Moreover, the
Zeñarosa Commission was explicitly authorized to deputize the police
force in the fulfillment of the former’s mandate, and thus had the
power to request assistance from the latter.

Following the pronouncements of the ECHR in Leander, the fact that

the PNP released information to the Zeñarosa Commission without
prior communication to Gamboa and without affording her the
opportunity to refute the same cannot be interpreted as a violation or
threat to her right to privacy since that act is an inherent and crucial
component of intelligence-gathering and investigation. Additionally,
1âw phi1

Gamboa herself admitted that the PNP had a validation system,

which was used to update information on individuals associated with
PAGs and to ensure that the data mirrored the situation on the
field.66 Thus, safeguards were put in place to make sure that the
information collected maintained its integrity and accuracy.

Pending the enactment of legislation on data protection, this Court

declines to make any further determination as to the propriety of
sharing information during specific stages of intelligence gathering.
To do otherwise would supplant the discretion of investigative bodies
in the accomplishment of their functions, resulting in an undue
encroachment on their competence.

However, to accord the right to privacy with the kind of protection

established in existing law and jurisprudence, this Court nonetheless
deems it necessary to caution these investigating entities that
information-sharing must observe strict confidentiality. Intelligence
gathered must be released exclusively to the authorities empowered
to receive the relevant information. After all, inherent to the right to
privacy is the freedom from "unwarranted exploitation of one’s person
or from intrusion into one’s private activities in such a way as to
cause humiliation to a person’s ordinary sensibilities."67

In this case, respondents admitted the existence of the Report, but

emphasized its confidential nature. That it was leaked to third parties
1âwphi 1

and the media was regrettable, even warranting reproach. But it must
be stressed that Gamboa failed to establish that respondents were
responsible for this unintended disclosure. In any event, there are
other reliefs available to her to address the purported damage to her
reputation, making a resort to the extraordinary remedy of the writ of
habeas data unnecessary and improper.

Finally, this Court rules that Gamboa was unable to prove through
substantial evidence that her inclusion in the list of individuals
maintaining PAGs made her and her supporters susceptible to
harassment and to increased police surveillance. In this regard,
respondents sufficiently explained that the investigations conducted
against her were in relation to the criminal cases in which she was
implicated. As public officials, they enjoy the presumption of
regularity, which she failed to overcome.

It is clear from the foregoing discussion that the state interest of

dismantling PAGs far outweighs the alleged intrusion on the private
life of Gamboa, especially when the collection and forwarding by the
PNP of information against her was pursuant to a lawful mandate.
Therefore, the privilege of the writ of habeas data must be denied.

WHEREFORE, the instant petition for review is DENIED. The

assailed Decision in Special Proc. No. 14979 dated 9 September
2010 of the Regional Trial Court, Laoag City, Br. 13, insofar as it
denies Gamboa the privilege of the writ of habeas data, is
AFFIRMED.

SO ORDERED.

MARIA LOURDES P.A. SERENO

Associate justice

WE CONCUR:

THIRD DIVISION

[G.R. No. 109714. December 15, 1997]

BETTER BUILDINGS, INC., WILLIAM WARNE and

LEDA BEAVERFORD, petitioners, vs. THE
NATIONAL LABOR RELATIONS
COMMISSION, HALIN YSMAEL and ELISEO
FELICIANO, respondents.

DECISION
ROMERO, J.:

This petition for certiorari with prayer for the issuance of a

temporary restraining order and/or injunction seeks to annul
the decision of public respondent National Labor Relations
Commission (NLRC) dated March 3, 1989[1]and resolution
dated December 18, 1992,2directing petitioner Better Building,
Inc. to reinstate private respondents Halim Ysmael and Eliseo
Feliciano to their former positions without loss of seniority
rights and benefits and to pay them backwages.
Private respondent Halim Ysmael (Ysmael) was hired as
a Sales Manager by petitioner Better Building, Inc. (BBI) on
March 16, 1985.In addition to his monthly salary, he was given
the free use of the company car, free gasoline and
commission from sales. Private respondent Eliseo Feliciano
(Feliciano), on the other hand, was employed as Chief
Supervisor by the petitioner since January 1966.
On May 3, 1988, petitioner, through its Assistant General
Manager, Leda A. Beverford, showed to private respondents
a memorandum regarding their termination from employment
effective the same day, to wit:

MEMO TO : Guard On Duty

FROM : The Asst. General Manager

DATE : May 03, 1988

SUBJECT : TERMINATION OF EMPLOYMENT OF

MR. HALIM YSMAEL &

MR. ELISEO FELICIANO

--------------------------------------
----------

Please be advised that Mr. Halim Ysmael and

Mr. Eliseo Feliciano have been terminated from
their employment with our company as of the
end of office hours today May 3, 1988.

For the above reason they are not allowed to enter our
premises.

For your strict compliance.

LEDA A. BEVERFORD

Unable to accept petitioners drastic action, on May 6,

1988, private respondents filed a complaint against BBI for
illegal dismissal.3
On March 3, 1989, Labor Arbiter Daisy G. Cauton-
Barcelona rendered a decision, the dispositive portion of
which reads:

WHEREFORE, judgment is hereby ordered declaring that

the complainants dismissal is illegal as discussed above
hence, ordering the respondents to reinstate them to their
former positions with full backwages and without loss of
seniority and other benefits.

Ordering further to pay the complainants their salary

differentials computed from November 1, 1986 up to the
time of actual reinstatement.

And, to pay complainant Halim Ysmael moral and

exemplary damages in the amount of P100,000
and P50,000 respectively.

With costs and attorneys fees against the respondents.

SO ORDERED. 4

Except for the reduction of the damages awarded by the

Labor Arbiter, the said decision was affirmed by the NLRC,5 to
wit:

WHEREFORE, premises considered, the decision appealed

from is hereby modified insofar as the awards of moral and
exemplary damages are concerned which are reduced
to P50,000 and P20,000 respectively.

In all other respects, the decision of the Labor Arbiter

below is affirmed.

SO ORDERED.

Petitioner, not satisfied with the decision, has filed the

instant petition for certiorari alleging that the NLRC gravely
abused its discretion amounting to lack or excess of
jurisdiction when it rendered the decision of March 3, 1989
and the resolution of December 11, 1992.
On September 4, 1996, this Court resolved to dismiss the
case against private respondent Ysmael by virtue of the
compromise agreement entered into between him and the
petitioner.6 Hence, the resolution of this case will only affect
private respondent Feliciano.
Petitioner argues that the private respondent was validly
dismissed for engaging in the same line of business as that of
his employer (petitioner). Thus, his act of engaging in a
business in direct competition with his employer was, not only
an act of disloyalty, but more specifically a willful breach of
trust and confidence.
In termination of employment cases, we have consistently
held that two requisites must concur to constitute a valid
dismissal: (a) the dismissal must be for any of the causes
expressed in Art. 282 of the Labor Code, and (b) the employee
must be accorded due process, the elements of which are the
opportunity to be heard and defend himself.7
First, on the substantive aspect, petitioner contends that
private respondent was dismissed from his employment for
engaging in business in direct competition with its line of
service.8 Hence, said conduct constitutes a willful breach of
trust which is justifiable cause for termination of employment.9
We sustain BBI.
Deeply entrenched in our jurisprudence is the doctrine
that an employer can terminate the services of an employee
only for valid and just causes which must be supported by
clear and convincing evidence.10 The employer has the burden
of proving that the dismissal was indeed for a valid and just
cause.11
In the case at bar, petitioner has clearly established
private respondents culpability by convincing evidence. First,
it was never disputed that private respondent established
another corporation, Reachout General Services, engaged in
the maintenance/janitorial service, the same line of business
as that of petitioner. In this regard, private respondent failed
to adduce substantial evidence to disprove this allegation.
Second, as Chief Supervisor of the petitioner, it was his
duty to promote and offer the services of the petitioner to
prospective clients; however, instead of so doing, private
respondent offered the services of his own company to
various clients, to the detriment of the petitioner. Notably,
private respondent even had the temerity to induce two of
BBIs prominent clients, namely the United States Embassy
and San Miguel Corporation, to transfer their respective
service contracts to Reachout General Services, his own
corporation.
Third, private respondents disloyalty became more
conspicuous when he hired as the employees of Reachout
General Services the former employees of the
petitioner. Clearly, this act has undercut petitioners business.
 Finally, we cannot help but notice that in all the pleadings
submitted by the private respondent, he never discussed nor
refuted the charge against him by the petitioner. By his
silence, we conclude that he was indeed guilty of disloyalty to
his employer. In fact, the records are devoid of any evidence
to controvert the evidence presented by the petitioner
regarding his alleged disloyalty.Such omission only
strengthens the petitioners claim.
While we find that private respondent was dismissed for
cause, the same was, however, effected without the
requirements of due process.
In this jurisdiction, we have consistently ruled that in
terminating an employee, it is essential that the twin
requirements of notice and hearing must be observed. 12 The
written notice apprises the employee of the particular acts or
omissions for which his dismissal is sought and at the same
informs the employee concerned of the employers decision to
dismiss him.
In the case at bar, the record is bereft of any showing that
private respondent was given notice of the charge against
him. Nor was he ever given the opportunity under the
circumstances to answer the charge; his termination was
quick, swift and sudden.
Interestingly, when this issue was brought up, all the
petitioner could state in its Reply was:
Even if there was a notice to explain and
notice of termination given to the private
respondents, the petitioner was already convinced
at that time that the private respondents were
already engaged in disloyal acts. The result would
be the same - dismissal. 13

Evidently, the decision to dismiss respondent was merely

based on the fact that petitioner was already convinced at the
time that the private respondents were engaged in disloyal
acts. As regards the procedural aspect, the failure to observe
the twin requirements of notice and hearing taints the
dismissal with illegality.
In fine, we find that there was basis for petitioners loss of
trust and confidence in private respondent. For an employer
cannot be compelled to retain in his service an employee who
is guilty of acts inimical to its interest.14 A company has the
right to dismiss its employees as a measure of
protection.15Corollarily, proof beyond reasonable doubt of an
employees misconduct is not required in dismissing an
employee on the ground of loss of trust and confidence.16 The
quantum of proof required, being only substantial
evidence,17 we are convinced that there was an actual breach
of trust committed by private respondent which was ample
basis for petitioners loss of trust and confidence in him.We,
therefore, hold that private respondents dismissal was for a
just and valid cause.However, the manner of terminating his
employment was done in complete disregard of the necessary
procedural safeguards. A mans job being a property right duly
protected by our laws, for depriving private respondent the
right to defend himself, petitioner is liable for damages
consistent with Article 32 of the Civil Code, which provides:

ART. 32. Any public officer or employee, or any private

individual, who directly or indirectly obstructs, defeats,
violates or in any manner impedes or impairs any of the
following rights and liberties of another person shall be
liable to the latter for damages:

xxxxxxxxx

(6) The right against deprivation of property without due

process of law;

x x x x x x x x x.

In this regard, the damages shall be in the form of nominal

damages18 for the award is not for the purpose of penalizing
the petitioner but to vindicate or recognize private
respondents right to procedural due process which was
violated by the petitioner.
WHEREFORE, in view of the foregoing, the assailed
decision of the NLRC and its accompanying resolution are
hereby SET ASIDE and ANNULLED. However, for failure to
observe procedural due process in effecting the dismissal,
petitioner shall pay to the private respondent P5,000.00 as
nominal damages. No costs.
SO ORDERED.
Narvasa, C.J., (Chairman), Melo, and Francisco, JJ.,
concur.
Panganiban, J., see concurring and dissenting opinion.
 [1]
Annex A of the Petition, Rollo, pp. 26-37.
2
Annex B of the Petition, Rollo, pp. 38-43.
3
Annex F of the Petition, Rollo, pp. 63-66.
4
Rollo, p. 37.
5
Ibid., p. 48.
6
Id., p. 181.
7
Oania v. NLRC, 244 SCRA 688 (1995); AHSI Philippines, Inc. v. Court of
Appeals, 257 SCRA 319 (1996); Ranises v. NLRC, 261 SCRA 371 (1996).
8
Ibid., pp. 10-18.
9
Art. 282 (c) of Labor Code.
10
PLDT v. NLRC, G.R. No. 99030, July 31, 1997.
11
Molave Tours Corporation v. NLRC, 250 SCRA 325 (1995); Pacific
Timber Export Corporation v. NLRC, 224 SCRA 860 (1993).
12
Wallem Maritime Service, Inc. v. NLRC, 263 SCRA 174 (1996); Marcelo
v. NLRC, 240 SCRA 782 (1995).
13
Rollo, p. 154.
San Miguel Corp. v. Deputy Minister of Labor and Employment, 145
14

SCRA 196 (1986).

15
Dole Philippines, Inc. v. NLRC, 123 SCRA 673 (1983).
16
Vallende v. NLRC, 245 SCRA 662 (1995).
17
Villarama v. NLRC, 236 SCRA 287 (1994).
18
ART 2221. Nominal damages are adjudicated in order that a right of the
plaintiff, which has been violated or invaded by the defendant, may be
vindicated or recognized, and not for the purpose of indemnifying the
plaintiff for any loss suffered by him.

Republic of the Philippines

SUPREME COURT
Manila

EN BANC

G.R. No. 197676 February 4, 2014

REMMAN ENTERPRISES, INC. and CHAMBER OF REAL ESTATE AND

BUILDERS'ASSOCIATION,Petitioners,
vs.
PROFESSIONAL REGULATORY BOARD OF REAL ESTATE SERVICE and PROFESSIONAL
REGULATION COMMISSION, Respondents.

DECISION

VILLARAMA, JR., J.:

Assailed in this petition for review under Rule 45 is the Decision1 dated July 12, 2011 of the Regional
Trial Court (RTC) of Manila, Branch 42 denying the petition to declare as unconstitutional Sections
28(a), 29 and 32 of Republic Act (R.A.) No. 9646.

R.A. No. 9646, otherwise known as the "Real Estate Service Act of the Philippines" was signed into
law on June 29, 2009 by President Gloria Macapagal-Arroyo. It aims to professionalize the real
estate service sector under a regulatory scheme of licensing, registration and supervision of real
estate service practitioners (real estate brokers, appraisers, assessors, consultants and
salespersons) in the country. Prior to its enactment, real estate service practitioners were under the
supervision of the Department of Trade and Industry (DTI) through the Bureau of Trade Regulation
and Consumer Protection (BTRCP), in the exercise of its consumer regulation functions. Such
authority is now transferred to the Professional Regulation Commission (PRC) through the
Professional Regulatory Board of Real Estate Service (PRBRES) created under the new law.

The implementing rules and regulations (IRR) of R.A. No. 9646 were promulgated on July 21, 2010
by the PRC and PRBRES under Resolution No. 02, Series of 2010.

On December 7, 2010, herein petitioners Remman Enterprises, Inc. (REI) and the Chamber of Real
Estate and Builders’ Association (CREBA) instituted Civil Case No. 10-124776 in the Regional Trial
Court of Manila, Branch 42. Petitioners sought to declare as void and unconstitutional the following
provisions of R.A. No. 9646:

SEC. 28. Exemptions from the Acts Constituting the Practice of Real Estate Service. – The
provisions of this Act and its rules and regulations shall not apply to the following:

(a) Any person, natural or juridical, who shall directly perform by himself/herself the acts mentioned
in Section 3 hereof with reference to his/her or its own property, except real estate developers;

xxxx

SEC. 29. Prohibition Against the Unauthorized Practice of Real Estate Service. – No person shall
practice or offer to practice real estate service in the Philippines or offer himself/herself as real estate
service practitioner, or use the title, word, letter, figure or any sign tending to convey the impression
that one is a real estate service practitioner, or advertise or indicate in any manner whatsoever that
one is qualified to practice the profession, or be appointed as real property appraiser or assessor in
any national government entity or local government unit, unless he/she has satisfactorily passed the
licensure examination given by the Board, except as otherwise provided in this Act, a holder of a
valid certificate of registration, and professional identification card or a valid special/temporary permit
duly issued to him/her by the Board and the Commission, and in the case of real estate brokers and
private appraisers, they have paid the required bond as hereto provided.

xxxx
SEC. 32. Corporate Practice of the Real Estate Service. – (a) No partnership or corporation shall
engage in the business of real estate service unless it is duly registered with the Securities and
Exchange Commission (SEC), and the persons authorized to act for the partnership or corporation
are all duly registered and licensed real estate brokers, appraisers or consultants, as the case may
be. The partnership or corporation shall regularly submit a list of its real estate service practitioners
to the Commission and to the SEC as part of its annual reportorial requirements. There shall at least
be one (1) licensed real estate broker for every twenty (20) accredited salespersons.

(b) Divisions or departments of partnerships and corporations engaged in marketing or selling any
real estate development project in the regular course of business must be headed by full-time
registered and licensed real estate brokers.

(c) Branch offices of real estate brokers, appraisers or consultants must be manned by a duly
licensed real estate broker, appraiser or consultant as the case may be.

In case of resignation or termination from employment of a real estate service practitioner, the same
shall be reported by the employer to the Board within a period not to exceed fifteen (15) days from
the date of effectivity of the resignation or termination.

Subject to the provisions of the Labor Code, a corporation or partnership may hire the services of
registered and licensed real estate brokers, appraisers or consultants on commission basis to
perform real estate services and the latter shall be deemed independent contractors and not
employees of such corporations. (Emphasis and underscoring supplied.)

According to petitioners, the new law is constitutionally infirm because (1) it violates Article VI,
Section 26 (1) of the 1987 Philippine Constitution which mandates that "[e]very bill passed by
Congress shall embrace only one subject which shall be expressed in the title thereof"; (2) it is in
direct conflict with Executive Order (E.O.) No. 648 which transferred the exclusive jurisdiction of the
National Housing Authority (NHA) to regulate the real estate trade and business to the Human
Settlements Commission, now the Housing and Land Use Regulatory Board (HLURB), which
authority includes the issuance of license to sell of subdivision owners and developers pursuant to
Presidential Decree (P.D.) No. 957; (3) it violates the due process clause as it impinges on the real
estate developers’ most basic ownership rights, the right to use and dispose property, which is
enshrined in Article 428 of the Civil Code; and (4) Section 28(a) of R.A. No. 9646 violates the equal
protection clause as no substantial distinctions exist between real estate developers and the
exempted group mentioned since both are property owners dealing with their own property.

Additionally, petitioners contended that the lofty goal of nurturing and developing a "corps of
technically competent, reasonable and respected professional real estate service practitioners" is not
served by curtailing the right of real estate developers to conduct their business of selling properties.
On the contrary, these restrictions would have disastrous effects on the real estate industry as the
additional cost of commissions would affect the pricing and affordability of real estate packages.
When that happens, petitioners claimed that the millions of jobs and billions in revenues that the real
estate industry generates for the government will be a thing of the past.

After a summary hearing, the trial court denied the prayer for issuance of a writ of preliminary
injunction.

On July 12, 2011, the trial court rendered its Decision2 denying the petition. The trial court held that
the assailed provisions are relevant to the title of the law as they are intended to regulate the
practice of real estate service in the country by ensuring that those who engage in it shall either be a
licensed real estate broker, or under the latter’s supervision. It likewise found no real discord
between E.O. No. 648 and R.A. No. 9646 as the latter does not render nugatory the license to sell
granted by the HLURB to real estate developers, which license would still subsist. The only
difference is that by virtue of the new law, real estate developers will now be compelled to hire the
services of one licensed real estate broker for every twenty salespersons to guide and supervise the
coterie of salespersons under the employ of the real estate developers.

On the issue of due process, the trial court said that the questioned provisions do not preclude
property owners from using, enjoying, or disposing of their own property because they can still
develop and sell their properties except that they have to secure the services of a licensed real
estate broker who shall oversee the actions of the unlicensed real estate practitioners under their
employ. Since the subject provisions merely prescribe the requirements for the regulation of the
practice of real estate services, these are consistent with a valid exercise of the State’s police power.
The trial court further ruled that Section 28(a) does not violate the equal protection clause because
the exemption of real estate developers was anchored on reasonable classification aimed at
protecting the buying public from the rampant misrepresentations often committed by unlicensed real
estate practitioners, and to prevent unscrupulous and unethical real estate practices from flourishing
considering the large number of consumers in the regular course of business compared to isolated
sale transactions made by private individuals selling their own property.

Hence, this appeal on the following questions of law:

1. Whether there is a justiciable controversy for this Honorable Court to adjudicate;

2. Whether [R.A. No. 9646] is unconstitutional for violating the "one title-one subject" rule
under Article VI, Section 26 (1) of the Philippine Constitution;

3. Whether [R.A. No. 9646] is in conflict with PD 957, as amended by EO 648, with respect
to the exclusive jurisdiction of the HLURB to regulate real estate developers;

4. Whether Sections 28(a), 29, and 32 of [R.A. No. 9646], insofar as they affect the rights of
real estate developers, are unconstitutional for violating substantive due process; and

5. Whether Section 28(a), which treats real estate developers differently from other natural or
juridical persons who directly perform acts of real estate service with reference to their own
property, is unconstitutional for violating the equal protection clause.3

The Court’s Ruling

The petition has no merit.

Justiciable Controversy

The Constitution4 requires as a condition precedent for the exercise of judicial power the existence of
an actual controversy between litigants. An actual case or controversy involves a conflict of legal
rights, an assertion of opposite legal claims susceptible to judicial resolution.5 The controversy must
be justiciable – definite and concrete – touching on the legal relations of parties having adverse legal
interests, which may be resolved by a court of law through the application of a law.6 In other words,
the pleadings must show an active antagonistic assertion of a legal right, on the one hand, and a
denial thereof on the other; that is, it must concern a real and not a merely theoretical question or
issue. There ought to be an actual and substantial controversy admitting of specific relief through a
decree conclusive in nature, as distinguished from an opinion advising what the law would be upon a
hypothetical state of facts.7An actual case is ripe for adjudication when the act being challenged has
a direct adverse effect on the individual challenging it.8

There is no question here that petitioners who are real estate developers are entities directly
affected by the prohibition on performing acts constituting practice of real estate service without first
complying with the registration and licensing requirements for brokers and agents under R.A. No.
9646. The possibility of criminal sanctions for disobeying the mandate of the new law is likewise real.
Asserting that the prohibition violates their rights as property owners to dispose of their properties,
petitioners challenged on constitutional grounds the implementation of R.A. No. 9646 which the
respondents defended as a valid legislation pursuant to the State’s police power. The Court thus
finds a justiciable controversy that calls for immediate resolution.

No Violation of One-Title One-Subject Rule

Section 26(1), Article VI of the Constitution states:

SEC. 26 (1). Every bill passed by the Congress shall embrace only one subject
which shall be expressed in the title thereof.

In Fariñas v. The Executive Secretary,9 the Court explained the provision as follows:

The proscription is aimed against the evils of the so-called omnibus bills and log-rolling legislation as
well as surreptitious and/or unconsidered encroaches. The provision merely calls for all parts of an
act relating to its subject finding expression in its title.

To determine whether there has been compliance with the constitutional requirement that the subject
of an act shall be expressed in its title, the Court laid down the rule that –

Constitutional provisions relating to the subject matter and titles of statutes should not be so
narrowly construed as to cripple or impede the power of legislation. The requirement that the subject
of an act shall be expressed in its title should receive a reasonable and not a technical construction.
It is sufficient if the title be comprehensive enough reasonably to include the general object which a
statute seeks to effect, without expressing each and every end and means necessary or convenient
for the accomplishing of that object. Mere details need not be set forth. The title need not be an
abstract or index of the Act.10 (Emphasis supplied.)

The Court has previously ruled that the one-subject requirement under the Constitution is satisfied if
all the parts of the statute are related, and are germane to the subject matter expressed in the title,
or as long as they are not inconsistent with or foreign to the general subject and title.11 An act having
a single general subject, indicated in the title, may contain any number of provisions, no matter how
diverse they may be, so long as they are not inconsistent with or foreign to the general subject, and
may be considered in furtherance of such subject by providing for the method and means of carrying
out the general object.12

It is also well-settled that the "one title-one subject" rule does not require the Congress to employ in
the title of the enactment language of such precision as to mirror, fully index or catalogue all the
contents and the minute details therein. The rule is sufficiently complied with if the title is
comprehensive enough as to include the general object which the statute seeks to effect.13 Indeed,
this Court has invariably adopted a liberal rather than technical construction of the rule "so as not to
cripple or impede legislation."14
R.A. No. 9646 is entitled "An Act Regulating the Practice of Real Estate Service in the Philippines,
Creating for the Purpose a Professional Regulatory Board of Real Estate Service, Appropriating
Funds Therefor and For Other Purposes." Aside from provisions establishing a regulatory system for
the professionalization of the real estate service sector, the new law extended its coverage to real
estate developers with respect to their own properties. Henceforth, real estate developers are
prohibited from performing acts or transactions constituting real estate service practice without first
complying with registration and licensing requirements for their business, brokers or agents,
appraisers, consultants and salespersons.

Petitioners point out that since partnerships or corporations engaged in marketing or selling any real
estate development project in the regular course of business are now required to be headed by full-
time, registered and licensed real estate brokers, this requirement constitutes limitations on the
property rights and business prerogatives of real estate developers which are not all reflected in the
title of R.A. No. 9646. Neither are real estate developers, who are already regulated under a different
law, P.D. No. 957, included in the definition of real estate service practitioners.

We hold that R.A. No. 9646 does not violate the one-title, one-subject rule.

The primary objective of R.A. No. 9646 is expressed as follows:

SEC. 2. Declaration of Policy. – The State recognizes the vital role of real estate service
practitioners in the social, political, economic development and progress of the country by promoting
the real estate market, stimulating economic activity and enhancing government income from real
property-based transactions. Hence, it shall develop and nurture through proper and effective
regulation and supervision a corps of technically competent, responsible and respected professional
real estate service practitioners whose standards of practice and service shall be globally
competitive and will promote the growth of the real estate industry.

We find that the inclusion of real estate developers is germane to the law’s primary goal of
developing "a corps of technically competent, responsible and respected professional real estate
service practitioners whose standards of practice and service shall be globally competitive and will
promote the growth of the real estate industry." Since the marketing aspect of real estate
development projects entails the performance of those acts and transactions defined as real estate
service practices under Section 3(g) of R.A. No. 9646, it is logically covered by the regulatory
scheme to professionalize the entire real estate service sector.

No Conflict Between R.A. No. 9646

and P.D. No. 957, as amended by E.O. No. 648

Petitioners argue that the assailed provisions still cannot be sustained because they conflict with
P.D. No. 957 which decreed that the NHA shall have "exclusive jurisdiction to regulate the real
estate trade and business." Such jurisdiction includes the authority to issue a license to sell to real
estate developers and to register real estate dealers, brokers or salesmen upon their fulfillment of
certain requirements under the law. By imposing limitations on real estate developers’ property
rights, petitioners contend that R.A. No. 9646 undermines the licenses to sell issued by the NHA
(now the HLURB) to real estate developers allowing them to sell subdivision lots or condominium
units directly to the public. Because the HLURB has been divested of its exclusive jurisdiction over
real estate developers, the result is an implied repeal of P.D. No. 957 as amended by E.O. No. 648,
which is not favored in law.

It is a well-settled rule of statutory construction that repeals by implication are not favored. In order to
effect a repeal by implication, the later statute must be so irreconcilably inconsistent and repugnant
with the existing law that they cannot be made to reconcile and stand together. The clearest case
possible must be made before the inference of implied repeal may be drawn, for inconsistency is
never presumed. There must be a showing of repugnance clear and convincing in character. The
language used in the later statute must be such as to render it irreconcilable with what had been
formerly enacted. An inconsistency that falls short of that standard does not suffice.15 Moreover, the
failure to add a specific repealing clause indicates that the intent was not to repeal any existing law,
unless an irreconcilable inconsistency and repugnancy exist in the terms of the new and old laws.16

There is nothing in R.A. No. 9646 that repeals any provision of P.D. No. 957, as amended by E.O.
No. 648. P.D. No. 957, otherwise known as "The Subdivision and Condominium Buyers’ Protective
Decree,"17 vested the NHA with exclusive jurisdiction to regulate the real estate trade and business in
accordance with its provisions. It empowered the NHA to register, approve and monitor real estate
development projects and issue licenses to sell to real estate owners and developers. It further
granted the NHA the authority to register and issue/revoke licenses of brokers, dealers and
salesmen engaged in the selling of subdivision lots and condominium units.

E.O. No. 648, issued on February 7, 1981, reorganized the Human Settlements Regulatory
Commission (HSRC) and transferred the regulatory functions of the NHA under P.D. 957 to the
HSRC. Among these regulatory functions were the (1) regulation of the real estate trade and
business; (2) registration of subdivision lots and condominium projects; (3) issuance of license to sell
subdivision lots and condominium units in the registered units; (4) approval of performance bond and
the suspension of license to sell; (5) registration of dealers, brokers and salesman engaged in the
business of selling subdivision lots or condominium units; and (6) revocation of registration of
dealers, brokers and salesmen.18

E.O. No. 90, issued on December 17, 1986, renamed the HSRC as the Housing and Land Use
Regulatory Board (HLURB) and was designated as the regulatory body for housing and land
development under the Housing and Urban Development Coordinating Council (HUDCC). To date,
HLURB continues to carry out its mandate to register real estate brokers and salesmen dealing in
condominium, memorial parks and subdivision projects pursuant to Section 11 of P.D. No. 957,
which reads:

SECTION 11. Registration of Dealers, Brokers and Salesmen. – No real estate dealer, broker or
salesman shall engage in the business of selling subdivision lots or condominium units unless he
has registered himself with the Authority in accordance with the provisions of this section.

If the Authority shall find that the applicant is of good repute and has complied with the applicable
rules of the Authority, including the payment of the prescribed fee, he shall register such applicant as
a dealer, broker or salesman upon filing a bond, or other security in lieu thereof, in such sum as may
be fixed by the Authority conditioned upon his faithful compliance with the provisions of this Decree:
Provided, that the registration of a salesman shall cease upon the termination of his employment
with a dealer or broker.

Every registration under this section shall expire on the thirty-first day of December of each year.
Renewal of registration for the succeeding year shall be granted upon written application therefore
made not less than thirty nor more than sixty days before the first day of the ensuing year and upon
payment of the prescribed fee, without the necessity of filing further statements or information,
unless specifically required by the Authority. All applications filed beyond said period shall be treated
as original applications.
The names and addresses of all persons registered as dealers, brokers, or salesmen shall be
recorded in a Register of Brokers, Dealers and Salesmen kept in the Authority which shall be open
to public inspection.

On the other hand, Section 29 of R.A. No. 9646 requires as a condition precedent for all persons
who will engage in acts constituting real estate service, including advertising in any manner one’s
qualifications as a real estate service practitioner, compliance with licensure examination and other
registration requirements including the filing of a bond for real estate brokers and private appraisers.
While Section 11 of P.D. No. 957 imposes registration requirements for dealers, brokers and
salespersons engaged in the selling of subdivision lots and condominium units, Section 29 of R.A.
No. 9646 regulates all real estate service practitioners whether private or government. While P.D.
No. 957 seeks to supervise brokers and dealers who are engaged in the sale of subdivision lots and
condominium units, R.A. No. 9646 aims to regulate the real estate service sector in general by
professionalizing their ranks and raising the level of ethical standards for licensed real estate
professionals.

There is no conflict of jurisdiction because the HLURB supervises only those real estate service
practitioners engaged in the sale of subdivision lots and condominium projects, specifically for
violations of the provisions of P.D. No. 957, and not the entire real estate service sector which is now
under the regulatory powers of the PRBRES. HLURB’s supervision of brokers and dealers to
effectively implement the provisions of P.D. No. 957 does not foreclose regulation of the real estate
service as a profession. Real estate developers already regulated by the HLURB are now further
required to comply with the professional licensure requirements under R.A. No. 9646, as provided in
Sections 28, 29 and 32. Plainly, there is no inconsistency or contradiction in the assailed provisions
of R.A. No. 9646 and P.D. No. 957, as amended.

The rule is that every statute must be interpreted and brought into accord with other laws in a way
that will form a uniform system of jurisprudence. The legislature is presumed to have known existing
laws on the subject and not to have enacted conflicting laws.19 Congress, therefore, could not be
presumed to have intended Sections 28, 29 and 32 of R.A. No. 9646 to run counter to P.D. No. 957.

No Violation of Due Process

Petitioners contend that the assailed provisions of R.A. No. 9646 are unduly oppressive and infringe
the constitutional rule against deprivation of property without due process of law. They stress that
real estate developers are now burdened by law to employ licensed real estate brokers to sell,
market and dispose of their properties. Despite having invested a lot of money, time and resources
in their projects, petitioners aver that real estate developers will still have less control in managing
their business and will be burdened with additional expenses.

The contention has no basis. There is no deprivation of property as no restriction on their use and
enjoyment of property is caused by the implementation of R.A. No. 9646. If petitioners as property
owners feel burdened by the new requirement of engaging the services of only licensed real estate
professionals in the sale and marketing of their properties, such is an unavoidable consequence of a
reasonable regulatory measure.

Indeed, no right is absolute, and the proper regulation of a profession, calling, business or trade has
always been upheld as a legitimate subject of a valid exercise of the police power of the State
particularly when their conduct affects the execution of legitimate governmental functions, the
preservation of the State, public health and welfare and public morals.20 In any case, where the
liberty curtailed affects at most the rights of property, the permissible scope of regulatory measures
is certainly much wider. To pretend that licensing or accreditation requirements violate the due
process clause is to ignore the settled practice, under the mantle of police power, of regulating entry
to the practice of various trades or professions.21

Here, the legislature recognized the importance of professionalizing the ranks of real estate
practitioners by increasing their competence and raising ethical standards as real property
transactions are "susceptible to manipulation and corruption, especially if they are in the hands of
unqualified persons working under an ineffective regulatory system." The new regulatory regime
aimed to fully tap the vast potential of the real estate sector for greater contribution to our gross
domestic income, and real estate practitioners "serve a vital role in spearheading the continuous flow
of capital, in boosting investor confidence, and in promoting overall national progress."22

We thus find R.A. No. 9646 a valid exercise of the State’s police power. As we said in another case
challenging the constitutionality of a law granting discounts to senior citizens:

The law is a legitimate exercise of police power which, similar to the power of eminent domain, has
general welfare for its object. Police power is not capable of an exact definition, but has been
purposely veiled in general terms to underscore its comprehensiveness to meet all exigencies and
provide enough room for an efficient and flexible response to conditions and circumstances, thus
assuring the greatest benefits. Accordingly, it has been described as "the most essential, insistent
and the least limitable of powers, extending as it does to all the great public needs." It is "[t]he power
vested in the legislature by the constitution 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 of the
subjects of the same."

For this reason, when the conditions so demand as determined by the legislature, property rights
must bow to the primacy of police power because property rights, though sheltered by due process,
must yield to general welfare.

Police power as an attribute to promote the common good would be diluted considerably if on the
mere plea of petitioners that they will suffer loss of earnings and capital, the questioned provision is
invalidated. Moreover, in the absence of evidence demonstrating the alleged confiscatory effect of
the provision in question, there is no basis for its nullification in view of the presumption of validity
which every law has in its favor.23 (Emphasis supplied.)

No Violation of Equal Protection Clause

Section 28 of R.A. No. 9646 exempts from its coverage natural and juridical persons dealing with
their own property, and other persons such as receivers, trustees or assignees in insolvency or
bankruptcy proceedings. However, real estate developers are specifically mentioned as an
exception from those enumerated therein. Petitioners argue that this provision violates the equal
protection clause because it unjustifiably treats real estate developers differently from those
exempted persons who also own properties and desire to sell them. They insist that no substantial
distinctions exist between ordinary property owners and real estate developers as the latter, in fact,
are more capable of entering into real estate transactions and do not need the services of licensed
real estate brokers. They assail the RTC decision in citing the reported fraudulent practices as basis
1âwphi1

for the exclusion of real estate developers from the exempted group of persons under Section 28(a).

We sustain the trial court’s ruling that R.A. No. 9646 does not violate the equal protection clause.

In Ichong v. Hernandez,24 the concept of equal protection was explained as follows:

The equal protection of the law clause is against undue favor and individual or class privilege, as
well as hostile discrimination or the oppression of inequality. It is not intended to prohibit legislation,
which is limited either in the object to which it is directed or by territory within which it is to operate. It
does not demand absolute equality among residents; it merely requires that all persons shall be
treated alike, under like circumstances and conditions both as to privileges conferred and liabilities
enforced. The equal protection clause is not infringed by legislation which applies only to those
persons falling within such class, and reasonable grounds exists for making a distinction between
those who fall within such class and those who do not. (2 Cooley, Constitutional Limitations, 824-
825).25

Although the equal protection clause of the Constitution does not forbid classification, it is imperative
that the classification should be based on real and substantial differences having a reasonable
relation to the subject of the particular legislation.26 If classification is germane to the purpose of the
law, concerns all members of the class, and applies equally to present and future conditions, the
classification does not violate the equal protection guarantee.27

R.A. No. 9646 was intended to provide institutionalized government support for the development of
"a corps of highly respected, technically competent, and disciplined real estate service practitioners,
knowledgeable of internationally accepted standards and practice of the profession."28 Real estate
developers at present constitute a sector that hires or employs the largest number of brokers,
salespersons, appraisers and consultants due to the sheer number of products (lots, houses and
condominium units) they advertise and sell nationwide. As early as in the ‘70s, there has been a
proliferation of errant developers, operators or sellers who have reneged on their representation and
obligations to comply with government regulations such as the provision and maintenance of
subdivision roads, drainage, sewerage, water system and other basic requirements. To protect the
interest of home and lot buyers from fraudulent acts and manipulations perpetrated by these
unscrupulous subdivision and condominium sellers and operators, P.D. No. 957 was issued to
strictly regulate housing and real estate development projects. Hence, in approving R.A. No. 9646,
the legislature rightfully recognized the necessity of imposing the new licensure requirements to all
real estate service practitioners, including and more importantly, those real estate service
practitioners working for real estate developers. Unlike individuals or entities having isolated
transactions over their own property, real estate developers sell lots, houses and condominium units
in the ordinary course of business, a business which is highly regulated by the State to ensure the
health and safety of home and lot buyers.

The foregoing shows that substantial distinctions do exist between ordinary property owners
exempted under Section 28(a) and real estate developers like petitioners, and the classification
enshrined in R.A. No. 9646 is reasonable and relevant to its legitimate purpose. The Court thus rules
that R.A. No. 9646 is valid and constitutional.

Since every law is presumed valid, the presumption of constitutionality can be overcome only by the
clearest showing that there was indeed an infraction of the Constitution, and only when such a
conclusion is reached by the required majority may the Court pronounce, in the discharge of the duty
it cannot escape, that the challenged act must be struck down.29

Indeed, "all presumptions are indulged in favor of constitutionality; one who attacks a statute,
alleging unconstitutionality must prove its invalidity beyond a reasonable doubt; that a law may work
hardship does not render it unconstitutional; that if any reasonable basis may be conceived which
supports the statute, it will be upheld, and the challenger must negate all possible bases; that the
courts are not concerned with the wisdom, justice, policy, or expediency of a statute; and that a
liberal interpretation of the constitution in favor of the constitutionality of legislation should be
adopted."30
WHEREFORE, the petition is DENIED. The Decision dated July 12, 2011 of the Regional Trial Court
of Manila, Branch 42 in Civil Case No. 10-124776 is hereby AFFIRMED and UPHELD.

No pronouncement as to costs.

SO ORDERED.

MARTIN S. VILLARAMA, JR.

Associate Justice

WE CONCUR:

Republic of the Philippines

SUPREME COURT
Manila

EN BANC

G.R. No. L-63915 April 24, 1985

LORENZO M. TAÑADA, ABRAHAM F. SARMIENTO, and MOVEMENT OF ATTORNEYS FOR

BROTHERHOOD, INTEGRITY AND NATIONALISM, INC. [MABINI], petitioners,
vs.
HON. JUAN C. TUVERA, in his capacity as Executive Assistant to the President, HON.
JOAQUIN VENUS, in his capacity as Deputy Executive Assistant to the President ,
MELQUIADES P. DE LA CRUZ, in his capacity as Director, Malacañang Records Office, and
FLORENDO S. PABLO, in his capacity as Director, Bureau of Printing, respondents.

ESCOLIN, J.:

Invoking the people's right to be informed on matters of public concern, a right recognized in Section
6, Article IV of the 1973 Philippine Constitution, 1 as well as the principle that laws to be valid and
enforceable must be published in the Official Gazette or otherwise effectively promulgated,
petitioners seek a writ of mandamus to compel respondent public officials to publish, and/or cause
the publication in the Official Gazette of various presidential decrees, letters of instructions, general
orders, proclamations, executive orders, letter of implementation and administrative orders.

Specifically, the publication of the following presidential issuances is sought:

a] Presidential Decrees Nos. 12, 22, 37, 38, 59, 64, 103, 171, 179, 184, 197, 200,
234, 265, 286, 298, 303, 312, 324, 325, 326, 337, 355, 358, 359, 360, 361, 368, 404,
406, 415, 427, 429, 445, 447, 473, 486, 491, 503, 504, 521, 528, 551, 566, 573, 574,
594, 599, 644, 658, 661, 718, 731, 733, 793, 800, 802, 835, 836, 923, 935, 961,
1017-1030, 1050, 1060-1061, 1085, 1143, 1165, 1166, 1242, 1246, 1250, 1278,
1279, 1300, 1644, 1772, 1808, 1810, 1813-1817, 1819-1826, 1829-1840, 1842-
1847.

b] Letter of Instructions Nos.: 10, 39, 49, 72, 107, 108, 116, 130, 136, 141, 150, 153,
155, 161, 173, 180, 187, 188, 192, 193, 199, 202, 204, 205, 209, 211-213, 215-224,
 226-228, 231-239, 241-245, 248, 251, 253-261, 263-269, 271-273, 275-283, 285-
289, 291, 293, 297-299, 301-303, 309, 312-315, 325, 327, 343, 346, 349, 357, 358,
362, 367, 370, 382, 385, 386, 396-397, 405, 438-440, 444- 445, 473, 486, 488, 498,
501, 399, 527, 561, 576, 587, 594, 599, 600, 602, 609, 610, 611, 612, 615, 641, 642,
665, 702, 712-713, 726, 837-839, 878-879, 881, 882, 939-940, 964,997,1149-
1178,1180-1278.

c] General Orders Nos.: 14, 52, 58, 59, 60, 62, 63, 64 & 65.

d] Proclamation Nos.: 1126, 1144, 1147, 1151, 1196, 1270, 1281, 1319-1526, 1529,
1532, 1535, 1538, 1540-1547, 1550-1558, 1561-1588, 1590-1595, 1594-1600, 1606-
1609, 1612-1628, 1630-1649, 1694-1695, 1697-1701, 1705-1723, 1731-1734, 1737-
1742, 1744, 1746-1751, 1752, 1754, 1762, 1764-1787, 1789-1795, 1797, 1800,
1802-1804, 1806-1807, 1812-1814, 1816, 1825-1826, 1829, 1831-1832, 1835-1836,
1839-1840, 1843-1844, 1846-1847, 1849, 1853-1858, 1860, 1866, 1868, 1870,
1876-1889, 1892, 1900, 1918, 1923, 1933, 1952, 1963, 1965-1966, 1968-1984,
1986-2028, 2030-2044, 2046-2145, 2147-2161, 2163-2244.

e] Executive Orders Nos.: 411, 413, 414, 427, 429-454, 457- 471, 474-492, 494-507,
509-510, 522, 524-528, 531-532, 536, 538, 543-544, 549, 551-553, 560, 563, 567-
568, 570, 574, 593, 594, 598-604, 609, 611- 647, 649-677, 679-703, 705-707, 712-
786, 788-852, 854-857.

f] Letters of Implementation Nos.: 7, 8, 9, 10, 11-22, 25-27, 39, 50, 51, 59, 76, 80-81,
92, 94, 95, 107, 120, 122, 123.

g] Administrative Orders Nos.: 347, 348, 352-354, 360- 378, 380-433, 436-439.

The respondents, through the Solicitor General, would have this case dismissed outright on the
ground that petitioners have no legal personality or standing to bring the instant petition. The view is
submitted that in the absence of any showing that petitioners are personally and directly affected or
prejudiced by the alleged non-publication of the presidential issuances in question 2 said petitioners
are without the requisite legal personality to institute this mandamus proceeding, they are not being
"aggrieved parties" within the meaning of Section 3, Rule 65 of the Rules of Court, which we quote:

SEC. 3. Petition for Mandamus.—When any tribunal, corporation, board or person

unlawfully neglects the performance of an act which the law specifically enjoins as a
duty resulting from an office, trust, or station, or unlawfully excludes another from the
use a rd enjoyment of a right or office to which such other is entitled, and there is no
other plain, speedy and adequate remedy in the ordinary course of law, the person
aggrieved thereby may file a verified petition in the proper court alleging the facts
with certainty and praying that judgment be rendered commanding the defendant,
immediately or at some other specified time, to do the act required to be done to
Protect the rights of the petitioner, and to pay the damages sustained by the
petitioner by reason of the wrongful acts of the defendant.

Upon the other hand, petitioners maintain that since the subject of the petition concerns a public
right and its object is to compel the performance of a public duty, they need not show any specific
interest for their petition to be given due course.

The issue posed is not one of first impression. As early as the 1910 case of Severino vs. Governor
General, 3 this Court held that while the general rule is that "a writ of mandamus would be granted to
a private individual only in those cases where he has some private or particular interest to be
subserved, or some particular right to be protected, independent of that which he holds with the
public at large," and "it is for the public officers exclusively to apply for the writ when public rights are
to be subserved [Mithchell vs. Boardmen, 79 M.e., 469]," nevertheless, "when the question is one of
public right and the object of the mandamus is to procure the enforcement of a public duty, the
people are regarded as the real party in interest and the relator at whose instigation the proceedings
are instituted need not show that he has any legal or special interest in the result, it being sufficient
to show that he is a citizen and as such interested in the execution of the laws [High, Extraordinary
Legal Remedies, 3rd ed., sec. 431].

Thus, in said case, this Court recognized the relator Lope Severino, a private individual, as a proper
party to the mandamus proceedings brought to compel the Governor General to call a special
election for the position of municipal president in the town of Silay, Negros Occidental. Speaking for
this Court, Mr. Justice Grant T. Trent said:

We are therefore of the opinion that the weight of authority supports the proposition
that the relator is a proper party to proceedings of this character when a public right
is sought to be enforced. If the general rule in America were otherwise, we think that
it would not be applicable to the case at bar for the reason 'that it is always
dangerous to apply a general rule to a particular case without keeping in mind the
reason for the rule, because, if under the particular circumstances the reason for the
rule does not exist, the rule itself is not applicable and reliance upon the rule may
well lead to error'

No reason exists in the case at bar for applying the general rule insisted upon by
counsel for the respondent. The circumstances which surround this case are different
from those in the United States, inasmuch as if the relator is not a proper party to
these proceedings no other person could be, as we have seen that it is not the duty
of the law officer of the Government to appear and represent the people in cases of
this character.

The reasons given by the Court in recognizing a private citizen's legal personality in the
aforementioned case apply squarely to the present petition. Clearly, the right sought to be enforced
by petitioners herein is a public right recognized by no less than the fundamental law of the land. If
petitioners were not allowed to institute this proceeding, it would indeed be difficult to conceive of
any other person to initiate the same, considering that the Solicitor General, the government officer
generally empowered to represent the people, has entered his appearance for respondents in this
case.

Respondents further contend that publication in the Official Gazette is not a sine qua non
requirement for the effectivity of laws where the laws themselves provide for their own effectivity
dates. It is thus submitted that since the presidential issuances in question contain special provisions
as to the date they are to take effect, publication in the Official Gazette is not indispensable for their
effectivity. The point stressed is anchored on Article 2 of the Civil Code:

Art. 2. Laws shall take effect after fifteen days following the completion of their
publication in the Official Gazette, unless it is otherwise provided, ...

The interpretation given by respondent is in accord with this Court's construction of said article. In a
long line of decisions,4 this Court has ruled that publication in the Official Gazette is necessary in
those cases where the legislation itself does not provide for its effectivity date-for then the date of
publication is material for determining its date of effectivity, which is the fifteenth day following its
publication-but not when the law itself provides for the date when it goes into effect.

Respondents' argument, however, is logically correct only insofar as it equates the effectivity of laws
with the fact of publication. Considered in the light of other statutes applicable to the issue at hand,
the conclusion is easily reached that said Article 2 does not preclude the requirement of publication
in the Official Gazette, even if the law itself provides for the date of its effectivity. Thus, Section 1 of
Commonwealth Act 638 provides as follows:

Section 1. There shall be published in the Official Gazette [1] all important legisiative
acts and resolutions of a public nature of the, Congress of the Philippines; [2] all
executive and administrative orders and proclamations, except such as have no
general applicability; [3] decisions or abstracts of decisions of the Supreme Court
and the Court of Appeals as may be deemed by said courts of sufficient importance
to be so published; [4] such documents or classes of documents as may be required
so to be published by law; and [5] such documents or classes of documents as the
President of the Philippines shall determine from time to time to have general
applicability and legal effect, or which he may authorize so to be published. ...

The clear object of the above-quoted provision is to give the general public adequate notice of the
various laws which are to regulate their actions and conduct as citizens. Without such notice and
publication, there would be no basis for the application of the maxim "ignorantia legis non excusat." It
would be the height of injustice to punish or otherwise burden a citizen for the transgression of a law
of which he had no notice whatsoever, not even a constructive one.

Perhaps at no time since the establishment of the Philippine Republic has the publication of laws
taken so vital significance that at this time when the people have bestowed upon the President a
power heretofore enjoyed solely by the legislature. While the people are kept abreast by the mass
media of the debates and deliberations in the Batasan Pambansa—and for the diligent ones, ready
access to the legislative records—no such publicity accompanies the law-making process of the
President. Thus, without publication, the people have no means of knowing what presidential
decrees have actually been promulgated, much less a definite way of informing themselves of the
specific contents and texts of such decrees. As the Supreme Court of Spain ruled: "Bajo la
denominacion generica de leyes, se comprenden tambien los reglamentos, Reales decretos,
Instrucciones, Circulares y Reales ordines dictadas de conformidad con las mismas por el Gobierno
en uso de su potestad.5

The very first clause of Section I of Commonwealth Act 638 reads: "There shall be published in the
Official Gazette ... ." The word "shall" used therein imposes upon respondent officials an imperative
duty. That duty must be enforced if the Constitutional right of the people to be informed on matters of
public concern is to be given substance and reality. The law itself makes a list of what should be
published in the Official Gazette. Such listing, to our mind, leaves respondents with no discretion
whatsoever as to what must be included or excluded from such publication.

The publication of all presidential issuances "of a public nature" or "of general applicability" is
mandated by law. Obviously, presidential decrees that provide for fines, forfeitures or penalties for
their violation or otherwise impose a burden or. the people, such as tax and revenue measures, fall
within this category. Other presidential issuances which apply only to particular persons or class of
persons such as administrative and executive orders need not be published on the assumption that
they have been circularized to all concerned. 6
It is needless to add that the publication of presidential issuances "of a public nature" or "of general
applicability" is a requirement of due process. It is a rule of law that before a person may be bound
by law, he must first be officially and specifically informed of its contents. As Justice Claudio
Teehankee said in Peralta vs. COMELEC 7:

In a time of proliferating decrees, orders and letters of instructions which all form part
of the law of the land, the requirement of due process and the Rule of Law demand
that the Official Gazette as the official government repository promulgate and publish
the texts of all such decrees, orders and instructions so that the people may know
where to obtain their official and specific contents.

The Court therefore declares that presidential issuances of general application, which have not been
published, shall have no force and effect. Some members of the Court, quite apprehensive about the
possible unsettling effect this decision might have on acts done in reliance of the validity of those
presidential decrees which were published only during the pendency of this petition, have put the
question as to whether the Court's declaration of invalidity apply to P.D.s which had been enforced
or implemented prior to their publication. The answer is all too familiar. In similar situations in the
past this Court had taken the pragmatic and realistic course set forth in Chicot County Drainage
District vs. Baxter Bank 8 to wit:

The courts below have proceeded on the theory that the Act of Congress, having
been found to be unconstitutional, was not a law; that it was inoperative, conferring
no rights and imposing no duties, and hence affording no basis for the challenged
decree. Norton v. Shelby County, 118 U.S. 425, 442; Chicago, 1. & L. Ry. Co. v.
Hackett, 228 U.S. 559, 566. It is quite clear, however, that such broad statements as
to the effect of a determination of unconstitutionality must be taken with
qualifications. The actual existence of a statute, prior to such a determination, is an
operative fact and may have consequences which cannot justly be ignored. The past
cannot always be erased by a new judicial declaration. The effect of the subsequent
ruling as to invalidity may have to be considered in various aspects-with respect to
particular conduct, private and official. Questions of rights claimed to have become
vested, of status, of prior determinations deemed to have finality and acted upon
accordingly, of public policy in the light of the nature both of the statute and of its
previous application, demand examination. These questions are among the most
difficult of those which have engaged the attention of courts, state and federal and it
is manifest from numerous decisions that an all-inclusive statement of a principle of
absolute retroactive invalidity cannot be justified.

Consistently with the above principle, this Court in Rutter vs. Esteban 9 sustained the right of a party
under the Moratorium Law, albeit said right had accrued in his favor before said law was declared
unconstitutional by this Court.

Similarly, the implementation/enforcement of presidential decrees prior to their publication in the

Official Gazette is "an operative fact which may have consequences which cannot be justly ignored.
The past cannot always be erased by a new judicial declaration ... that an all-inclusive statement of a
principle of absolute retroactive invalidity cannot be justified."

From the report submitted to the Court by the Clerk of Court, it appears that of the presidential
decrees sought by petitioners to be published in the Official Gazette, only Presidential Decrees Nos.
1019 to 1030, inclusive, 1278, and 1937 to 1939, inclusive, have not been so published. 10Neither the
subject matters nor the texts of these PDs can be ascertained since no copies thereof are available.
But whatever their subject matter may be, it is undisputed that none of these unpublished PDs has
ever been implemented or enforced by the government. In Pesigan vs. Angeles, 11 the Court, through
Justice Ramon Aquino, ruled that "publication is necessary to apprise the public of the contents of
[penal] regulations and make the said penalties binding on the persons affected thereby. " The
cogency of this holding is apparently recognized by respondent officials considering the
manifestation in their comment that "the government, as a matter of policy, refrains from prosecuting
violations of criminal laws until the same shall have been published in the Official Gazette or in some
other publication, even though some criminal laws provide that they shall take effect immediately.

WHEREFORE, the Court hereby orders respondents to publish in the Official Gazette all
unpublished presidential issuances which are of general application, and unless so published, they
shall have no binding force and effect.

SO ORDERED.

Relova, J., concurs.

Aquino, J., took no part.

Concepcion, Jr., J., is on leave.

EN BANC

JENNY M. AGABON and G.R. No. 158693

VIRGILIO C. AGABON,
Petitioners, Present:

Davide, Jr., C.J.,

Puno,
Panganiban,
Quisumbing,
Ynares-Santiago,
Sandoval-Gutierrez,
- versus - Carpio,
Austria-Martinez,
Corona,
Carpio-Morales,
Callejo, Sr.,
Azcuna,
Tinga,
Chico-Nazario, and
Garcia, JJ.
NATIONAL LABOR RELATIONS
COMMISSION (NLRC), RIVIERA
HOME IMPROVEMENTS, INC. Promulgated:
and VICENTE ANGELES,
Respondents. November 17, 2004

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

DECISION

YNARES-SANTIAGO, J.:
This petition for review seeks to reverse the decision[1] of the Court of Appeals
dated January 23, 2003, in CA-G.R. SP No. 63017, modifying the decision of National
Labor Relations Commission (NLRC) in NLRC-NCR Case No. 023442-00.

Private respondent Riviera Home Improvements, Inc. is engaged in the business of

selling and installing ornamental and construction materials. It employed
petitioners Virgilio Agabon and Jenny Agabon as gypsum board and cornice
installers on January 2, 1992[2]until February 23, 1999 when they were dismissed
for abandonment of work.

Petitioners then filed a complaint for illegal dismissal and payment of money
[3]
claims and on December 28, 1999, the Labor Arbiter rendered a decision
declaring the dismissals illegal and ordered private respondent to pay the monetary
claims. The dispositive portion of the decision states:

WHEREFORE, premises considered, We find the termination of the complainants

illegal. Accordingly, respondent is hereby ordered to pay them their backwages up
to November 29, 1999 in the sum of:

1. Jenny M. Agabon - P56, 231.93

2. Virgilio C. Agabon - 56, 231.93

and, in lieu of reinstatement to pay them their separation pay of one (1) month for
every year of service from date of hiring up to November 29, 1999.

Respondent is further ordered to pay the complainants their holiday pay and service
incentive leave pay for the years 1996, 1997 and 1998 as well as their premium pay
for holidays and rest days and Virgilio Agabons 13thmonth pay differential
amounting to TWO THOUSAND ONE HUNDRED FIFTY (P2,150.00) Pesos, or
the aggregate amount of ONE HUNDRED TWENTY ONE THOUSAND SIX
HUNDRED SEVENTY EIGHT & 93/100 (P121,678.93) Pesos for Jenny Agabon,
and ONE HUNDRED TWENTY THREE THOUSAND EIGHT HUNDRED
TWENTY EIGHT & 93/100 (P123,828.93) Pesos for Virgilio Agabon, as per
attached computation of Julieta C. Nicolas, OIC, Research and Computation Unit,
NCR.

SO ORDERED.[4]
On appeal, the NLRC reversed the Labor Arbiter because it found that the petitioners
had abandoned their work, and were not entitled to backwages and separation pay.
The other money claims awarded by the Labor Arbiter were also denied for lack of
evidence.[5]
Upon denial of their motion for reconsideration, petitioners filed a petition for
certiorari with the Court of Appeals.

The Court of Appeals in turn ruled that the dismissal of the petitioners was not illegal
because they had abandoned their employment but ordered the payment of money
claims. The dispositive portion of the decision reads:
WHEREFORE, the decision of the National Labor Relations Commission is
REVERSED only insofar as it dismissed petitioners money claims. Private
respondents are ordered to pay petitioners holiday pay for four (4) regular holidays
in 1996, 1997, and 1998, as well as their service incentive leave pay for said years,
and to pay the balance of petitioner Virgilio Agabons 13th month pay for 1998 in
the amount of P2,150.00.

SO ORDERED.[6]

Hence, this petition for review on the sole issue of whether petitioners were illegally
dismissed.[7]

Petitioners assert that they were dismissed because the private respondent
refused to give them assignments unless they agreed to work on a pakyaw basis
when they reported for duty on February 23, 1999. They did not agree on this
arrangement because it would mean losing benefits as Social Security System (SSS)
members. Petitioners also claim that private respondent did not comply with the twin
requirements of notice and hearing.[8]

Private respondent, on the other hand, maintained that petitioners were not dismissed
but had abandoned their work.[9] In fact, private respondent sent two letters to the
last known addresses of the petitioners advising them to report for work. Private
respondents manager even talked to petitioner Virgilio Agabon by telephone
sometime in June 1999 to tell him about the new assignment at Pacific Plaza Towers
involving 40,000 square meters of cornice installation work. However, petitioners
did not report for work because they had subcontracted to perform installation work
for another company. Petitioners also demanded for an increase in their wage to
P280.00 per day. When this was not granted, petitioners stopped reporting for work
and filed the illegal dismissal case.[10]
It is well-settled that findings of fact of quasi-judicial agencies like the NLRC are
accorded not only respect but even finality if the findings are supported by
substantial evidence. This is especially so when such findings were affirmed by the
Court of Appeals.[11] However, if the factual findings of the NLRC and the Labor
Arbiter are conflicting, as in this case, the reviewing court may delve into the records
and examine for itself the questioned findings.[12]

Accordingly, the Court of Appeals, after a careful review of the facts, ruled
that petitioners dismissal was for a just cause. They had abandoned their
employment and were already working for another employer.
To dismiss an employee, the law requires not only the existence of a just and valid
cause but also enjoins the employer to give the employee the opportunity to be heard
and to defend himself.[13] Article 282 of the Labor Code enumerates the just causes
for termination by the employer: (a) serious misconduct or willful disobedience by
the employee of the lawful orders of his employer or the latters representative in
connection with the employees work; (b) gross and habitual neglect by the employee
of his duties; (c) fraud or willful breach by the employee of the trust reposed in him
by his employer or his duly authorized representative; (d) commission of a crime or
offense by the employee against the person of his employer or any immediate
member of his family or his duly authorized representative; and (e) other causes
analogous to the foregoing.
Abandonment is the deliberate and unjustified refusal of an employee to resume his
employment.[14] It is a form of neglect of duty, hence, a just cause for termination of
employment by the employer.[15] For a valid finding of abandonment, these two
factors should be present: (1) the failure to report for work or absence without valid
or justifiable reason; and (2) a clear intention to sever employer-employee
relationship, with the second as the more determinative factor which is manifested
by overt acts from which it may be deduced that the employees has no more intention
to work. The intent to discontinue the employment must be shown by clear proof
that it was deliberate and unjustified.[16]
In February 1999, petitioners were frequently absent having subcontracted for an
installation work for another company. Subcontracting for another company clearly
showed the intention to sever the employer-employee relationship with private
respondent. This was not the first time they did this. In January 1996, they did not
report for work because they were working for another company. Private respondent
at that time warned petitioners that they would be dismissed if this happened again.
Petitioners disregarded the warning and exhibited a clear intention to sever their
employer-employee relationship. The record of an employee is a relevant
consideration in determining the penalty that should be meted out to him. [17]

In Sandoval Shipyard v. Clave,[18] we held that an employee who deliberately

absented from work without leave or permission from his employer, for the purpose
of looking for a job elsewhere, is considered to have abandoned his job. We should
apply that rule with more reason here where petitioners were absent because they
were already working in another company.
The law imposes many obligations on the employer such as providing just
compensation to workers, observance of the procedural requirements of notice and
hearing in the termination of employment. On the other hand, the law also recognizes
the right of the employer to expect from its workers not only good performance,
adequate work and diligence, but also good conduct[19] and loyalty. The employer
may not be compelled to continue to employ such persons whose continuance in the
service will patently be inimical to his interests.[20]

After establishing that the terminations were for a just and valid cause, we now
determine if the procedures for dismissal were observed.

The procedure for terminating an employee is found in Book VI, Rule I,

Section 2(d) of the Omnibus Rules Implementing the Labor Code:

Standards of due process: requirements of notice. In all cases of termination

of employment, the following standards of due process shall be substantially
observed:

I. For termination of employment based on just causes as defined in Article

282 of the Code:

(a) A written notice served on the employee specifying the ground or

grounds for termination, and giving to said employee reasonable opportunity within
which to explain his side;
 (b) A hearing or conference during which the employee concerned, with the
assistance of counsel if the employee so desires, is given opportunity to respond to
the charge, present his evidence or rebut the evidence presented against him; and

(c) A written notice of termination served on the employee indicating that

upon due consideration of all the circumstances, grounds have been established to
justify his termination.

In case of termination, the foregoing notices shall be served on the employees last
known address.

Dismissals based on just causes contemplate acts or omissions attributable to

the employee while dismissals based on authorized causes involve grounds under
the Labor Code which allow the employer to terminate employees. A termination
for an authorized cause requires payment of separation pay. When the termination
of employment is declared illegal, reinstatement and full backwages are mandated
under Article 279. If reinstatement is no longer possible where the dismissal was
unjust, separation pay may be granted.

Procedurally, (1) if the dismissal is based on a just cause under Article 282,
the employer must give the employee two written notices and a hearing or
opportunity to be heard if requested by the employee before terminating the
employment: a notice specifying the grounds for which dismissal is sought a hearing
or an opportunity to be heard and after hearing or opportunity to be heard, a notice
of the decision to dismiss; and (2) if the dismissal is based on authorized causes
under Articles 283 and 284, the employer must give the employee and the
Department of Labor and Employment written notices 30 days prior to the effectivity
of his separation.

From the foregoing rules four possible situations may be derived: (1) the dismissal
is for a just cause under Article 282 of the Labor Code, for an authorized cause under
Article 283, or for health reasons under Article 284, and due process was observed;
(2) the dismissal is without just or authorized cause but due process was observed;
(3) the dismissal is without just or authorized cause and there was no due process;
and (4) the dismissal is for just or authorized cause but due process was not observed.

In the first situation, the dismissal is undoubtedly valid and the employer will not
suffer any liability.
 In the second and third situations where the dismissals are illegal, Article 279
mandates that the employee is entitled to reinstatement without loss of seniority
rights and other privileges and full backwages, inclusive of allowances, and other
benefits or their monetary equivalent computed from the time the compensation was
not paid up to the time of actual reinstatement.

In the fourth situation, the dismissal should be upheld. While the procedural
infirmity cannot be cured, it should not invalidate the dismissal. However, the
employer should be held liable for non-compliance with the procedural
requirements of due process.

The present case squarely falls under the fourth situation. The dismissal should be
upheld because it was established that the petitioners abandoned their jobs to work
for another company. Private respondent, however, did not follow the notice
requirements and instead argued that sending notices to the last known addresses
would have been useless because they did not reside there anymore. Unfortunately
for the private respondent, this is not a valid excuse because the law mandates the
twin notice requirements to the employees last known address.[21] Thus, it should be
held liable for non-compliance with the procedural requirements of due process.

A review and re-examination of the relevant legal principles is appropriate and

timely to clarify the various rulings on employment termination in the light
ofSerrano v. National Labor Relations Commission.[22]

Prior to 1989, the rule was that a dismissal or termination is illegal if the employee
was not given any notice. In the 1989 case of Wenphil Corp. v. National Labor
Relations Commission,[23] we reversed this long-standing rule and held that the
dismissed employee, although not given any notice and hearing, was not entitled to
reinstatement and backwages because the dismissal was for grave misconduct and
insubordination, a just ground for termination under Article 282. The employee had
a violent temper and caused trouble during office hours, defying superiors who tried
to pacify him. We concluded that reinstating the employee and awarding backwages
may encourage him to do even worse and will render a mockery of the rules of
discipline that employees are required to observe.[24] We further held that:
 Under the circumstances, the dismissal of the private respondent for just cause
should be maintained. He has no right to return to his former employment.

However, the petitioner must nevertheless be held to account for failure to

extend to private respondent his right to an investigation before causing his
dismissal. The rule is explicit as above discussed. The dismissal of an employee
must be for just or authorized cause and after due process. Petitioner committed
an infraction of the second requirement. Thus, it must be imposed a sanction for its
failure to give a formal notice and conduct an investigation as required by law
before dismissing petitioner from employment. Considering the circumstances of
this case petitioner must indemnify the private respondent the amount of P1,000.00.
The measure of this award depends on the facts of each case and the gravity of the
omission committed by the employer.[25]

The rule thus evolved: where the employer had a valid reason to dismiss an
employee but did not follow the due process requirement, the dismissal may be
upheld but the employer will be penalized to pay an indemnity to the employee.
This became known as the Wenphil or Belated Due Process Rule.

On January 27, 2000, in Serrano, the rule on the extent of the sanction was
changed. We held that the violation by the employer of the notice requirement in
termination for just or authorized causes was not a denial of due process that will
nullify the termination. However, the dismissal is ineffectual and the employer
must pay full backwages from the time of termination until it is judicially declared
that the dismissal was for a just or authorized cause.

The rationale for the re-examination of the Wenphil doctrine in Serrano was
the significant number of cases involving dismissals without requisite notices. We
concluded that the imposition of penalty by way of damages for violation of the
notice requirement was not serving as a deterrent. Hence, we now required
payment of full backwages from the time of dismissal until the time the Court finds
the dismissal was for a just or authorized cause.

Serrano was confronting the practice of employers to dismiss now and pay
later by imposing full backwages.
 We believe, however, that the ruling in Serrano did not consider the full
meaning of Article 279 of the Labor Code which states:

ART. 279. Security of Tenure. In cases of regular employment, the employer shall
not terminate the services of an employee except for a just cause or when authorized
by this Title. An employee who is unjustly dismissed from work shall be entitled to
reinstatement without loss of seniority rights and other privileges and to his full
backwages, inclusive of allowances, and to his other benefits or their monetary
equivalent computed from the time his compensation was withheld from him up to
the time of his actual reinstatement.

This means that the termination is illegal only if it is not for any of the justified
or authorized causes provided by law. Payment of backwages and other benefits,
including reinstatement, is justified only if the employee was unjustly dismissed.

The fact that the Serrano ruling can cause unfairness and injustice which
elicited strong dissent has prompted us to revisit the doctrine.

To be sure, the Due Process Clause in Article III, Section 1 of the Constitution

embodies a system of rights based on moral principles so deeply imbedded in the

traditions and feelings of our people as to be deemed fundamental to a civilized

society as conceived by our entire history. Due process is that which comports with

the deepest notions of what is fair and right and just.[26] It is a constitutional restraint

on the legislative as well as on the executive and judicial powers of the government

provided by the Bill of Rights.

 Due process under the Labor Code, likeConstitutional due process, has two
aspects: substantive, i.e., the valid and authorized causes of employment
termination under the Labor Code; and procedural, i.e., the manner of dismissal.
Procedural due process requirements for dismissal are found in the Implementing
Rules of P.D. 442, as amended, otherwise known as the Labor Code of the
Philippines in Book VI, Rule I, Sec. 2, as amended by Department Order Nos. 9 and
10.[27] Breaches of these due process requirements violate the Labor Code.
Therefore statutory due process should be differentiated from failure to comply
with constitutional due process.

Constitutional due process protects the individual from the government and
assures him of his rights in criminal, civil or administrative proceedings;
while statutory due process found in the Labor Code and Implementing Rules
protects employees from being unjustly terminated without just cause after notice
and hearing.

In Sebuguero v. National Labor Relations Commission,[28] the dismissal was

for a just and valid cause but the employee was not accorded due process. The
dismissal was upheld by the Court but the employer was sanctioned. The sanction
should be in the nature of indemnification or penalty, and depends on the facts of
each case and the gravity of the omission committed by the employer.

In Nath v. National Labor Relations Commission,[29] it was ruled that even if

the employee was not given due process, the failure did not operate to eradicate
the just causes for dismissal. The dismissal being for just cause, albeitwithout due
process, did not entitle the employee to reinstatement, backwages, damages and
attorneys fees.

Mr. Justice Jose C. Vitug, in his separate opinion in MGG Marine Services, Inc.
v. National Labor Relations Commission,[30]which opinion he reiterated in Serrano,
stated:
 C. Where there is just cause for dismissal but due process has not been properly
observed by an employer, it would not be right to order either the reinstatement of the
dismissed employee or the payment of backwages to him. In failing, however, to comply
with the procedure prescribed by law in terminating the services of the employee, the
employer must be deemed to have opted or, in any case, should be made liable, for the
payment of separation pay. It might be pointed out that the notice to be given and the
hearing to be conducted generally constitute the two-part due process requirement of
law to be accorded to the employee by the employer. Nevertheless, peculiar
circumstances might obtain in certain situations where to undertake the above steps
would be no more than a useless formality and where, accordingly, it would not be
imprudent to apply the res ipsa loquitur rule and award, in lieu of separation pay, nominal
damages to the employee. x x x.[31]

After carefully analyzing the consequences of the divergent doctrines in the

law on employment termination, we believe that in cases involving dismissals for
cause but without observance of the twin requirements of notice and hearing, the
better rule is to abandon the Serrano doctrine and to follow Wenphil by holding
that the dismissal was for just cause but imposing sanctions on the employer. Such
sanctions, however, must be stiffer than that imposed in Wenphil. By doing so, this
Court would be able to achieve a fair result by dispensing justice not just to
employees, but to employers as well.

The unfairness of declaring illegal or ineffectual dismissals for valid or authorized

causes but not complying with statutory due process may have far-reaching
consequences.

This would encourage frivolous suits, where even the most notorious violators of
company policy are rewarded by invoking due process. This also creates absurd
situations where there is a just or authorized cause for dismissal but a procedural
infirmity invalidates the termination. Let us take for example a case where the
employee is caught stealing or threatens the lives of his co-employees or has
become a criminal, who has fled and cannot be found, or where serious business
losses demand that operations be ceased in less than a month. Invalidating the
dismissal would not serve public interest. It could also discourage investments that
can generate employment in the local economy.
 The constitutional policy to provide full protection to labor is not meant to
be a sword to oppress employers. The commitment of this Court to the cause of
labor does not prevent us from sustaining the employer when it is in the right, as
in this case.[32] Certainly, an employer should not be compelled to pay employees
for work not actually performed and in fact abandoned.

The employer should not be compelled to continue employing a person who is

admittedly guilty of misfeasance or malfeasance and whose continued
employment is patently inimical to the employer. The law protecting the rights of
the laborer authorizes neither oppression nor self-destruction of the employer.[33]

It must be stressed that in the present case, the petitioners committed a grave
offense, i.e., abandonment, which, if the requirements of due process were
complied with, would undoubtedly result in a valid dismissal.

An employee who is clearly guilty of conduct violative of Article 282 should not be
protected by the Social Justice Clause of the Constitution. Social justice, as the term
suggests, should be used only to correct an injustice. As the eminent Justice Jose P.
Laurel observed, social justice must be founded on the recognition of the necessity
of interdependence among diverse units of a society and of the protection that
should be equally and evenly extended to all groups as a combined force in our
social and economic life, consistent with the fundamental and paramount
objective of the state of promoting the health, comfort, and quiet of all persons,
and of bringing about the greatest good to the greatest number.[34]

This is not to say that the Court was wrong when it ruled the way it did
in Wenphil, Serrano and related cases. Social justice is not based on rigid
formulas set in stone. It has to allow for changing times and circumstances.

Justice Isagani Cruz strongly asserts the need to apply a balanced approach to
labor-management relations and dispense justice with an even hand in every case:
 We have repeatedly stressed that social justice or any justice for that matter is for
the deserving, whether he be a millionaire in his mansion or a pauper in his hovel.
It is true that, in case of reasonable doubt, we are to tilt the balance in favor of the
poor to whom the Constitution fittingly extends its sympathy and compassion. But
never is it justified to give preference to the poor simply because they are poor, or
reject the rich simply because they are rich, for justice must always be served for
the poor and the rich alike, according to the mandate of the law.[35]

Justice in every case should only be for the deserving party. It should not be
presumed that every case of illegal dismissal would automatically be decided in
favor of labor, as management has rights that should be fully respected and
enforced by this Court. As interdependent and indispensable partners in nation-
building, labor and management need each other to foster productivity and
economic growth; hence, the need to weigh and balance the rights and welfare of
both the employee and employer.

Where the dismissal is for a just cause, as in the instant case, the lack of

statutory due process should not nullify the dismissal, or render it illegal, or

ineffectual. However, the employer should indemnify the employee for the violation

of his statutory rights, as ruled in Reta v. National Labor Relations

Commission.[36] The indemnity to be imposed should be stiffer to discourage the

abhorrent practice of dismiss now, pay later, which we sought to deter in

the Serrano ruling. The sanction should be in the nature of indemnification or

penalty and should depend on the facts of each case, taking into special consideration

the gravity of the due process violation of the employer.

Under the Civil Code, nominal damages is adjudicated in order that a right of the
plaintiff, which has been violated or invaded by the defendant, may be vindicated
or recognized, and not for the purpose of indemnifying the plaintiff for any loss
suffered by him.[37]

As enunciated by this Court in Viernes v. National Labor Relations

Commissions,[38] an employer is liable to pay indemnity in the form of nominal
damages to an employee who has been dismissed if, in effecting such dismissal, the
employer fails to comply with the requirements of due process. The Court, after
considering the circumstances therein, fixed the indemnity at P2,590.50, which was
equivalent to the employees one month salary. This indemnity is intended not to
penalize the employer but to vindicate or recognize the employees right to
statutory due process which was violated by the employer.[39]

The violation of the petitioners right to statutory due process by the private
respondent warrants the payment of indemnity in the form of nominal damages.
The amount of such damages is addressed to the sound discretion of the court,
taking into account the relevant circumstances.[40] Considering the prevailing
circumstances in the case at bar, we deem it proper to fix it at P30,000.00. We
believe this form of damages would serve to deter employers from future violations
of the statutory due process rights of employees. At the very least, it provides a
vindication or recognition of this fundamental right granted to the latter under the
Labor Code and its Implementing Rules.

Private respondent claims that the Court of Appeals erred in holding that it failed
to pay petitioners holiday pay, service incentive leave pay and 13th month pay.

We are not persuaded.

We affirm the ruling of the appellate court on petitioners money claims.

Private respondent is liable for petitioners holiday pay, service incentive leave pay
and 13th month pay without deductions.
As a general rule, one who pleads payment has the burden of proving it. Even
where the employee must allege non-payment, the general rule is that the burden
rests on the employer to prove payment, rather than on the employee to prove
non-payment. The reason for the rule is that the pertinent personnel files, payrolls,
records, remittances and other similar documents which will show that overtime,
differentials, service incentive leave and other claims of workers have been paid
are not in the possession of the worker but in the custody and absolute control of
the employer.[41]

In the case at bar, if private respondent indeed paid petitioners holiday pay and
service incentive leave pay, it could have easily presented documentary proofs of
such monetary benefits to disprove the claims of the petitioners. But it did not,
except with respect to the 13th month pay wherein it presented cash vouchers
showing payments of the benefit in the years disputed.[42] Allegations by private
respondent that it does not operate during holidays and that it allows its employees
10 days leave with pay, other than being self-serving, do not constitute proof of
payment. Consequently, it failed to discharge the onus probandi thereby making it
liable for such claims to the petitioners.
Anent the deduction of SSS loan and the value of the shoes from petitioner Virgilio
Agabons 13th month pay, we find the same to be unauthorized. The evident
intention of Presidential Decree No. 851 is to grant an additional income in the
form of the 13th month pay to employees not already receiving the same[43] so as to
further protect the level of real wages from the ravages of world-wide
inflation.[44]Clearly, as additional income, the 13thmonth pay is included in the
definition of wage under Article 97(f) of the Labor Code, to wit:

(f) Wage paid to any employee shall mean the remuneration or earnings, however
designated, capable of being expressed in terms of money whether fixed or ascertained
on a time, task, piece , or commission basis, or other method of calculating the same,
which is payable by an employer to an employee under a written or unwritten contract
of employment for work done or to be done, or for services rendered or to be rendered
and includes the fair and reasonable value, as determined by the Secretary of Labor, of
board, lodging, or other facilities customarily furnished by the employer to the employee
from which an employer is prohibited under Article 113[45] of the same Code from
making any deductions without the employees knowledge and consent. In the
instant case, private respondent failed to show that the deduction of the SSS loan
and the value of the shoes from petitioner Virgilio Agabons 13th month pay was
authorized by the latter. The lack of authority to deduct is further bolstered by the
fact that petitioner Virgilio Agabon included the same as one of his money claims
against private respondent.

The Court of Appeals properly reinstated the monetary claims awarded by

the Labor Arbiter ordering the private respondent to pay each of the petitioners
holiday pay for four regular holidays from 1996 to 1998, in the amount of
P6,520.00, service incentive leave pay for the same period in the amount of
P3,255.00 and the balance of Virgilio Agabons thirteenth month pay for 1998 in the
amount of P2,150.00.

WHEREFORE, in view of the foregoing, the petition is DENIED. The decision of the
Court of Appeals dated January 23, 2003, in CA-G.R. SP No. 63017, finding that
petitioners Jenny and Virgilio Agabon abandoned their work, and ordering private
respondent to pay each of the petitioners holiday pay for four regular holidays from
1996 to 1998, in the amount of P6,520.00, service incentive leave pay for the same
period in the amount of P3,255.00 and the balance of Virgilio Agabons thirteenth
month pay for 1998 in the amount of P2,150.00 is AFFIRMEDwith
the MODIFICATION that private respondent Riviera Home Improvements, Inc. is
further ORDERED to pay each of the petitioners the amount of P30,000.00 as
nominal damages for non-compliance with statutory due process.

No costs.

SO ORDERED.
CONSUELO YNARES-SANTIAGO
Associate Justice

WE CONCUR:

HILARIO G. DAVIDE, JR.

Chief Justice

REYNATO S. PUNO ARTEMIO V. PANGANIBAN

Associate Justice Associate Justice

LEONARDO A. QUISUMBING ANGELINA SANDOVAL-GUTIERREZ

Associate Justice Associate Justice

ANTONIO T. CARPIO MA. ALICIA AUSTRIA-MARTINEZ

Associate Justice Associate Justice
RENATO C. CORONA CONCHITA CARPIO-MORALES
Associate Justice Associate Justice

ROMEO J. CALLEJO, SR. ADOLFO S. AZCUNA

Associate Justice Associate Justice

DANTE O. TINGA MINITA V. CHICO-NAZARIO

Associate Justice Associate Justice

CANCIO C. GARCIA
Associate Justice
 CERTIFICATION

Pursuant to Section 13, Article VIII of the Constitution, it is hereby certified

that the conclusions in the above Decision were reached in consultation before the
case was assigned to the writer of the opinion of the Court.

HILARIO G. DAVIDE, JR.

Chief Justice

[1]
Penned by Associate Justice Marina L. Buzon and concurred in by Associate Justices Josefina
Guevara-Salonga and Danilo B. Pine.
[2]
Rollo, p. 41.
[3]
Id., pp. 13-14.
[4]
Id., p. 92.
[5]
Id., p. 131.
[6]
Id., p. 173.
[7]
Id., p. 20.
[8]
Id., pp. 21-23.
[9]
Id., p. 45.
[10]
Id., pp. 42-43.
[11]
Rosario v. Victory Ricemill, G.R. No. 147572, 19 February 2003, 397 SCRA 760, 767.
[12]
Reyes v. Maxims Tea House, G.R. No. 140853, 27 February 2003, 398 SCRA 288, 298.
[13]
Santos v. San Miguel Corporation, G.R. No. 149416, 14 March 2003, 399 SCRA 172, 182.
[14]
Columbus Philippine Bus Corporation v. NLRC, 417 Phil. 81, 100 (2001).
[15]
De Paul/King Philip Customs Tailor v. NLRC, 364 Phil. 91, 102 (1999).
[16]
Sta. Catalina College v. NLRC, G.R. No. 144483, 19 November 2003.
[17]
Cosmos Bottling Corporation v. NLRC, G.R. No. 111155, 23 October 1997, 281 SCRA 146,
153-154.
[18]
G.R. No. L-49875, 21 November 1979, 94 SCRA 472, 478.
[19]
Judy Philippines, Inc. v. NLRC, 352 Phil. 593, 606 (1998).
[20]
Philippine-Singapore Transport Services, Inc. v. NLRC, 343 Phil. 284, 291 (1997).
[21]
See Stolt-Nielsen Marine Services, Inc. v. NLRC, G.R. No. 128395, 29 December 1998, 300
SCRA 713, 720.
[22]
G.R. No. 117040, 27 January 2000, 323 SCRA 445.
[23]
G.R. No. 80587, 8 February 1989, 170 SCRA 69.
[24]
Id. at 76.
[25]
Id.
[26]
Solesbee v. Balkcom, 339 U.S. 9, 16 (1950) (Frankfurter, J., dissenting). Due process is
violated if a practice or rule offends some principle of justice so rooted in the traditions and
conscience of our people as to be ranked as fundamental; Snyder v. Massachusetts, 291 U.S. 97,
105 (1934).
[27]
Department Order No. 9 took effect on 21 June 1997. Department Order No. 10 took effect on
22 June 1997.
[28]
G.R. No. 115394, 27 September 1995, 248 SCRA 535.
[29]
G.R. No. 122666, 19 June 1997, 274 SCRA 386.
[30]
G.R. No. 114313, 29 July 1996, 259 SCRA 699, 700.
[31]
Serrano, supra, Vitug, J., Separate (Concurring and Dissenting) Opinion, 323 SCRA 524, 529-
530 (2000).
[32]
Capili v. NLRC, G.R. No. 117378, 26 March 1997, 270 SCRA 488, 495.
[33]
Filipro, Inc. v. NLRC, G.R. No. L-70546, 16 October 1986, 145 SCRA 123.
[34]
Calalang v. Williams, 70 Phil. 726, 735 (1940).
[35]
Gelos v. Court of Appeals, G.R. No. 86186, 8 May 1992, 208 SCRA 608, 616.
[36]
G.R. No. 112100, 27 May 1994, 232 SCRA 613, 618.
[37]
Art. 2221, Civil Code.
[38]
G.R. No. 108405. April 4, 2003 citingKwikway Engineering Works v. NLRC, G.R. No. 85014, 22 March
1991, 195 SCRA 526, 532; Aurelio v. NLRC, G.R. No. 99034, 12 April 1993, 221 SCRA 432, 443; and
Sampaguita Garments Corporation v. NLRC, G.R. No. 102406, 17 June 1994, 233 SCRA 260, 265.
[39]
Id. citing Better Buildings, Inc. v. NLRC, G.R. No. 109714, 15 December 1997, 283 SCRA 242, 251; Iran
v. NLRC, G.R. No. 121927, 22 April 1998, 289 SCRA 433, 442.
[40]
Savellano v. Northwest Airlines, G.R. No. 151783, 8 July 2003.
[41]
Villar v. NLRC, G.R. No. 130935, 11 May 2000.
[42]
Rollo, pp. 60-71.
[43]
UST Faculty Union v. NLRC, G.R. No. 90445, 2 October 1990.
[44]
Whereas clauses, P.D. No. 851.
[45]
Art. 113. Wage deduction. - No employer, in his own behalf or in behalf of any person,
shall make any deduction from the wages of his employees except:
(a) In cases where the worker is insured with his consent by the employer, and the
deduction is to recompense the employer for the amount paid by him as premium
on the insurance;
(b) For union dues, in cases where the right of the worker or his union to check off
has been recognized by the employer or authorized in writing by the individual
worker concerned; and
(c) In cases where the employer is authorized by law or regulations issued by the
Secretary of Labor and Employment.