Arnault v Nazareno (1950) Ponente: Ozaeta Nature: Original petition for habeas corpus Petitioner: Jean L.

Arnault Respondent: Leon Nazareno (Senate Sergeant-at-Arms), Eustaquio Balagtas (Director of Prisons) FACTS - Oct. 1949: The Philippine Government bought two estates through the Rural Progress Administration (RPA), Buenavista and Tamambong, for P4.5M and P500k respectively (total of P5M). Of those amounts, P1M and P500k were paid to Ernest H. Burt, a nonresident American, for his alleged interests in the two estates. These sums were paid through Jean Arnault, the representative of Burts attorneys-in-fact, the Associated Estates Inc. and the North Manila Development Co., Inc. - The original owner of the Buenavista estate was San Juan de Dios Hospital (SDJH). The Philippine Government held a 25-year lease on the estate, with the option to purchase it for P3M at any time during those 25 years, starting from Jan. 1939. The occupation (Japanese) Philippine government exercised this option and bought the land for P3M in Japanese notes. - On June 29, 1946, SJDH had sold this estate to Burt for P5M, but Burt never paid anything beyond a downpayment of P10k. By stipulation, Burts downpayment was forfeited, and the sale was rescinded. - The original owner of the Tamambong estate was Philippine Trust Company (PTC). On May 14, 1946, PTC sold the estate to Burt, but Burt never paid anything beyond the P10k downpayment. - Sept. 4, 1947: PTC sold, conveyed and delivered the Tamambong estate to the RPA by absolute deed of sale for P750,000.00. RPA made a notarial demand upon Burt for the resolution and cancellation of his contract of purchase with PTC for his failure to pay the installments. CFI of Rizal ordered the cancellation of Burts certificate of title and the issuance of a new title in the name of the RPA. - February 27, 1950: The Senate adopted Resolution no. 8, creating a special committee to investigate the estate deals on the following grounds: ~ The Buenavista estate could have been bought for P3M instead of P4.5M by virtue of the lease contract. It was even alleged that the Philippine Government didnt need to pay anything, because the Supreme Court had ruled in 1949 that the P3M paid to SJDH in Japanese notes was valid during the occupation. ~The Tamambong estate was practically owned by the Philippine Government by virtue of its sale to the Rural Progress Administration and by recission of Burts contract. The Philippine Government shouldnt have had to pay anything.

- Jean Arnault, as the attorney who received the payments on Burts behalf, was summoned to appear before the inquiry. Arnault received a total of P1.5M and opened an account with PNB. He withdrew two amounts from this account: P500K, which he transferred to the account of Associated Agencies Inc., and P440K, which he personally cashed. - When asked about the P440K, Arnault initially claimed that the transaction was legal, but that divulging the identity of the person to whom he handed the money would be self-incrimination, in that a citizen (presumably referring to the recipient) has the right to privacy in his dealings with other people. When questioned further, however, Arnault asserted that he did not remember the name of the person involved in the transaction. Arnault was cited for contempt. - Through counsel Atty. Orendain, Arnault reasserted that the questions asked were incriminatory to him, in that he could be charged for bribery if the person was a public official or for slander if the person was a private individual. Sen. Sumulong rejected Arnaults position, saying that Arnaults two positions that the questions were self-incriminatory or that he couldnt remember the name of the recipient are not compatible with one another. The Senate subsequently adopted a resolution that Arnault be detained by the Senate Sergeant-at-Arms until he reveals the identity of the recipient of the P440K and answers other pertinent questions. Hence this petition. ISSUES 1. Does the Senate have the power to punish Arnault for contempt? 2. Does the Senate have the power to detain Arnault for a term beyond their legislative session? 3. Can Arnault invoke his right against self-incrimination? RATIO 1: The power of Congress to conduct an inquiry in aid of legislation shall include the power to compel testimony from a witness and to cite and punish a witness for contempt. - Senate Resolution No. 8 was not assailed and is presumed valid. Citing the Court of Appeals decision in People ex rel. McDonald v. Keeler, the Court is bound to presume that the action of a legislative body was with a legitimate object if it is capble of being so construed, and the Court has no right to assume that the contrary was intended. - From the case text: "The inquiry, to be within the jurisdiction of the legislative body to make, must be material or necessary to the exercise of a power in it vested by the Constitution, such as to legislate, or to expel a Member; and every question which the investigator is empowered to coerce a witness to answer must be material or pertinent to the subject of the inquiry or investigation." - Question need not be directly related to proposed legislation. Materiality is determined by its direct relation to the subject matter of the inquiry. Citing the U.S. case McGrain v. Daugherty, if the question is not pertinent to the matter under inquiry, then the witness may rightly refuse to answer. In Arnaults case, the subject matter of the inquiry is the determination of the parties responsible for the Buenavista and Tamambong estates deal. The question of the identity of the

recipient of the P440K is the very thing sought to be determined, and is thus a material question. - By refusing to answer a material question, Arnault can be cited for contempt by the Senate Commmittee and incarcerated. - The Kilbourn v. Thompson case, as relied upon by the petitioner, is not applicable. The Kilbourn case involved a private real-estate pool or partnership, while this case involved public funds. Furthermore, the claim of the Government as creditor in the Kilbourn case was still pending adjudication in the courts, whereas the authority of the Senate to conduct this inquiry cannot be questioned by the court. - The Marshall v. Gordon case is also not applicable, as the reason for the contempt citation in that case was an offensive letter written to a chairman of a committee conducting an investigation. In Arnaults case, he was refusing to answer a material question. RATIO 2: If the Senate, as a continuing body, persists in performing a legislative function, then the Senate may continue to exercise powers related to such functions. - The Senate is a continuing body and does not cease to exist. There is no time limit as to the Senates power to punish for contempt in cases where that power may constitutionally be exerted. - The Court assumes that the Senate will not be disposed to exert the power beyond its proper bounds. Even then, should Senate disregard its limits, the Court is always open to those whose rights might be transgressed. RATIO 3: If a witness asserts the legality of his or her actions, then the witness cannot invoke the right against self-incrimination to avoid answering questions directly related to those actions. - The Court found that the testimony Arnault offered tended to show that he was aware of the name of the person to whom he gave the P440K. It would be impossible for Arnault to assert self-incrimination without implying that he knew the identity of the person. - The Court held that it is a witness duty as a citizen to give frank, sincere and truthful testimony before a competent authority. When a specific right and a specific obligation conflict with each other, and one is doubtful or uncertain (right against self-incrimination) while the other is clear and imperative (duty to provide testimony), the former must give way to the latter. DISPOSITION: Petition is DENIED Tuason, dissenting - Question asked of Arnault does not meet the constitutional requirement. IT does not have anything to do with any matter within the cognizance of the Congress. - Only plausible reason for the questions is to clear the names of person suspected of having received the money. But this is beyond the scope of legislative authority and prerogatives. Pressing the process of deduction further, it seems that the object of the question is to prepare the way for a court action.

- Tuason also points at the fact that the Special Committee formed by Senate Resolution No. 8 has already concluded its investigation and submitted a final report, and that the Senate has approved a bill on the bases of the facts found. By implication, it means that the naming of the recipient of the P440K is unessential, and the question is therefore moot. - On the bill barring brothers and near relatives of any President of the Philippines from intervening in transactions involving the Government: it is subject to change depending on the name Arnault gives. Tuason challenges this, saying that the bill was crafted with the assumption that Antonio Quirino (relative of Pres. Elpidio Quirino?) was involved, and that it was also an expansion of existing laws and intended to cover all such instances, not just the alleged one in the present case. Arnaults testimony should not change this bill regardless of who he names. - Tuason also points out that if the Court allows Congress this unbounded jurisdiction to cite for contempt and detain indefinitely, then the person has no other redress.