Katlyn's world: 04/16/08

LOREN B. LEGARDA v. NOLI L. DE CASTRO

P.E.T. Case No. 003, 18 January 2008, Presidential Electoral Tribunal, (Quisumbing, J. )

We are also in agreement that the protestant, in assuming the office of Senator and discharging her duties as such, which fact we can take judicial notice of, has effectively abandoned or withdrawn her protest, or abandoned her determination to protect and pursue the public interest involved in the matter of who is the real choice of the electorate.

FACTS OF THE CASE:

Petitioner Loren B. Legarda filed before the Presidential Electoral Tribunal a petition to annul the proclamation of Respodent Noli L. De Castro as the Vice-President of the Philippines. The protest filed by Legarda consisted of two aspects. The First Aspect covers the alleged erroneous, manipulated and/or falsified results of the election. While the Second pertains to the revision of the ballots of the precincts specified in the protest. The Second Aspect was earlier dismissed by the Supreme Court for the failure of Legarda to pay the required deposit for the expenses.

ISSUE:

Whether or not petitioner clearly and convincingly proved the presence of manipulation or falsification of election results

HELD:

Petition DISMISSED.

We are also in agreement that the protestant, in assuming the office of Senator and discharging her duties as such, which fact we can take judicial notice of, has effectively abandoned or withdrawn her protest, or abandoned her determination to protect and pursue the public interest involved in the matter of who is the real choice of the electorate. The most relevant precedent on this issue is Defensor-Santiago v. Ramos, a decision rendered by this Tribunal, which held that:
The term of office of the Senators elected in the 8 May 1995 election is six years, the first three of which coincides with the last three years of the term of the President elected in the 11 May 1992 synchronized elections. The latter would be Protestant Santiago’s term if she would succeed in proving in the instant protest that she was the true winner in the 1992 elections. In assuming the office of Senator then, the Protestant has effectively abandoned or withdrawn this protest, or at the very least, in the language of Moraleja, abandoned her “determination to protect and pursue the public interest involved in the matter of who is the real choice of the electorate.” Such abandonment or withdrawal operates to render moot the instant protest. Moreover, the dismissal of this protest would serve public interest as it would dissipate the aura of uncertainty as to the results of the 1992 presidential election, thereby enhancing the all-[too] crucial political stability of the nation during this period of national recovery.
It must also be stressed that under the Rules of the Presidential Electoral Tribunal, an election protest may be summarily dismissed, regardless of the public policy and public interest implications thereof, on the following grounds:
(1) The petition is insufficient in form and substance;
(2) The petition is filed beyond the periods provided in Rules 14 and 15 hereof;
(3) The filing fee is not paid within the periods provided for in these Rules;
(4) The cash deposit, or the first P100,000.00 thereof, is not paid within 10 days after the filing of the protest; and
(5) The petition or copies thereof and the annexes thereto filed with the Tribunal are not clearly legible.
Other grounds for a motion to dismiss, e.g., those provided in the Rules of Court which apply in a suppletory character, may likewise be pleaded as affirmative defenses in the answer. After which, the Tribunal may, in its discretion, hold a preliminary hearing on such grounds. In sum, if an election protest may be dismissed on technical grounds, then it must be, for a decidedly stronger reason, if it has become moot due to its abandonment by the Protestant.

In the case at bar, protestant’s tenure in the Senate coincides with the term of the Vice-Presidency 2004-2010, that is the subject of her protest.

On the matter of the alleged spurious ER copies, we agree with the protestee that the protestant had not adequately and convincingly rebutted the presumption that as public documents, the Congress-retrieved ER copies, used for the proclamation of the protestee by the NBC, are authentic and duly executed in the regular course of official business. The evidence adduced by protestee to show that the supposed security features and markings in the Congress-retrieved ERs and the COMELEC/NAMFREL’s copies are different, did not categorically establish that the Congress-retrieved ERs are fake and spurious. To overcome the presumption of regularity, there must be evidence that is clear, convincing and more than merely preponderant. Absent such convincing evidence, the presumption must be upheld. In fact, the records show that even the witnesses presented by the protestant testified that they were able to discern security features and markings in the Congress-retrieved ERs. The records also show that witnesses were not made to examine all Congress-retrieved ERs in making observations relative to security features and markings, but only a sample set thereof was utilized, resulting in grave insufficiency in the evidence presented by protestant.
As to the alleged break-in in Congress, which allegedly facilitated the switching of ERs, no conclusive evidence has been given. One of the protestant’s own witnesses, Atty. Artemio Adasa, Deputy General for Legislative Operations of the House of Representatives, categorically denied that a break-in and a switching of ERs had occurred in Congress.
At any rate, as pointed out by protestee, even assuming arguendo that all the votes in the 497 precincts included in the pilot areas for the First Aspect with approximately 99,400 votes are considered in favor of protestant, still the protestant would not be able to overcome the lead of the protestee. The margin in favor of protestee adds up to a total of 881,722 votes, and it would take much more than a hundred thousand votes to overcome this lead. This is what the protestant had set out to do in her protest before the Tribunal, but unfortunately she failed to make out her case. In fact, Taraka and Balindong, the only two municipalities on which protestant anchors her arguments for the First Aspect, would only yield an additional 9,931 votes (4,912 votes for Taraka and 5,019 votes for Balindong), a mere fraction of the lead of protestee over protestant. To say that she could have shown that such fraudulent machination was replicated in several other municipalities of Lanao del Sur and other provinces, such as Basilan, Sulu, Tawi-Tawi, Maguindanao, Sultan Kudarat and Lanao del Sur if she had enough time, is mere conjecture and can not be considered convincing by this Tribunal. It is the protestant herself who admits that she was able to adduce evidence only in Taraka and Balindong, for lack of time. But this Tribunal has been liberal in granting her plea for time extension. To say that the protestant had shown enough evidence to prove that the whole or even half (440,862) of the lead of the protestee over the protestant is spurious, would go against the grain of the evidence on hand. One cannot say that half a million votes were illegally obtained based on unclear evidence of cheating in less than ten thousand. The protestant has been afforded ample opportunity to adduce evidence in her behalf for the First Aspect of the protest but the evidence presented is simply insufficient to convince the Tribunal to render invalid all or even half of the 881,722 votes that protestee had over her in the last elections for Vice-President.

ZENON R. PEREZ v. PEOPLE OF THE PHILIPPINES and SANDIGANBAYAN

G.R. No. 164763, 12 February 2008, Third Division, (Reyes,R.T, J.)

In malversation, all that is necessary to prove is that the defendant received in his possession public funds; that he could not account for them and did not have them in his possession; and that he could not give a reasonable excuse for its disappearance. An accountable public officer may be convicted of malversation even if there is no direct evidence of misappropriation and the only evidence is shortage in his accounts which he has not been able to explain satisfactorily.

FACTS OF THE CASE:

The Office of the Provincial Auditor of Bohol (Office) conducted a case examination on the account of Petitioner Zenon R, Perez, then Acting Municipal Treasurer. During the investigation, it was found out that Perez incurred a shortage of P72, 784.50. He explained that the amount was used to pay the loan of his brother and for his medication. The then recommended the filing of appropriate charges against him. On various dates, however, Perez made remittances before the Office of the Provincial Treasurer to cover the shortage. Despite of this, a criminal case of malversation of public funds was filed against Perez before the Sandiganbayan. The Court, after almost twelve years, rendered its decision convicting Perez of the crime charged. On appeal, Perez contends that the Court erred in convicting him and that there was a violation of his right to speedy disposition of case and right to counsel. He further contends that the penalty was cruel and unusual considering the fact that he made remittances.

ISSUES:

1. Whether or not the Court erred in convicting Perez of malversation of public funds
2. Whether or not there was a violation of the right of the accused to counsel and speedy disposition of cases
3. Whether or not the penalty imposed was cruel and unusual

HELD:

Petition DISMISSED.

Petitioner was correctly convicted of malversation

There are four elements that must concur in order that one may be found guilty of the crime. They are:

(a) That the offender be a public officer;

(b) That he had the custody or control of funds or property by reason of the duties of his office;

(c) That those funds or property involved were public funds or property for which he is accountable; and

(d) That he has appropriated, took or misappropriated or consented or, through abandonment or negligence, permitted another person to take them.

Evidently, the first three elements are present in the case at bar. At the time of the commission of the crime charged, petitioner was a public officer, being then the acting municipal treasurer of Tubigon, Bohol. By reason of his public office, he was accountable for the public funds under his custody or control.

In malversation, all that is necessary to prove is that the defendant received in his possession public funds; that he could not account for them and did not have them in his possession; and that he could not give a reasonable excuse for its disappearance. An accountable public officer may be convicted of malversation even if there is no direct evidence of misappropriation and the only evidence is shortage in his accounts which he has not been able to explain satisfactorily.

Verily, an accountable public officer may be found guilty of malversation even if there is no direct evidence of malversation because the law establishes a presumption that mere failure of an accountable officer to produce public funds which have come into his hands on demand by an officer duly authorized to examine his accounts is prima facie case of conversion.

Because of the prima facie presumption in Article 217, the burden of evidence is shifted to the accused to adequately explain the location of the funds or property under his custody or control in order to rebut the presumption that he has appropriated or misappropriated for himself the missing funds. Failing to do so, the accused may be convicted under the said provision.

In the case at bar, petitioner was not able to present any credible evidence to rebut the presumption that he malversed the missing funds in his custody or control.

By the explicit admission of petitioner, coupled with the testimony of Arlene R. Mandin, the fourth element of the crime of malversation was duly established. His conviction thus stands in terra firma.

There was no violation of the right of the accused to counsel and speedy disposition of cases

There is no law, jurisprudence or rule which mandates that an employee should be assisted by counsel in an administrative case. On the contrary, jurisprudence is in unison in saying that assistance of counsel is not indispensable in administrative proceedings.

The right to counsel, which cannot be waived unless the waiver is in writing and in the presence of counsel, is a right afforded a suspect or accused during custodial investigation. It is not an absolute right and may be invoked or rejected in a criminal proceeding and, with more reason, in an administrative inquiry.

The right to counsel is not imperative in administrative investigations because such inquiries are conducted merely to determine whether there are facts that merit disciplinary measures against erring public officers and employees, with the purpose of maintaining the dignity of government service.

There is nothing in the Constitution that says that a party in a non-litigation proceeding is entitled to be represented by counsel and that, without such representation, he shall not be bound by such proceedings. The assistance of lawyers, while desirable, is not indispensable. The legal profession was not engrafted in the due process clause such that without the participation of its members, the safeguard is deemed ignored or violated. The ordinary citizen is not that helpless that he cannot validly act at all except only with a lawyer at his side.

Petitioner’s claim of violation of his right to a speedy disposition of his case must also fail.

The 1987 Constitution guarantees the right of an accused to speedy trial. Both the 1973 Constitution in Section 16 of Article IV and the 1987 Constitution in Section 16 of Article III, Bill of Rights, are also explicit in granting to the accused the right to speedy disposition of his case.

The right to speedy disposition of cases, like the right to speedy trial, is violated only when the proceedings are attended by vexatious, capricious and oppressive delays. In the determination of whether said right has been violated, particular regard must be taken of the facts and circumstances peculiar to each case. The conduct of both the prosecution and defendant, the length of the delay, the reasons for such delay, the assertion or failure to assert such right by accused, and the prejudice caused by the delay are the factors to consider and balance.

Moreover, the determination of whether the delays are of said nature is relative and cannot be based on a mere mathematical reckoning of time.

Measured by the foregoing yardstick, We rule that petitioner was not deprived of his right to a speedy disposition of his case.

More important than the absence of serious prejudice, petitioner himself did not want a speedy disposition of his case. Petitioner was duly represented by counsel de parte in all stages of the proceedings before the Sandiganbayan. From the moment his case was deemed submitted for decision up to the time he was found guilty by the Sandiganbayan, however, petitioner has not filed a single motion or manifestation which could be construed even remotely as an indication that he wanted his case to be dispatched without delay.

The penalty imposed was not cruel and unusual

What constitutes cruel and unusual punishment has not been exactly defined. The Eighth Amendment of the United States Constitution, the source of Section 19, Article III of the Bill of Rights of our own Constitution, has yet to be put to the test to finally determine what constitutes cruel and inhuman punishment.
Cases that have been decided described, rather than defined, what is meant by cruel and unusual punishment. This is explained by the pronouncement of the United States Supreme Court that “[t]he clause of the Constitution, in the opinion of the learned commentators, may be therefore progressive, and is not fastened to the obsolete, but may acquire meaning as public opinion becomes enlightened by a humane justice.”
In his last ditch effort to exculpate himself, petitioner argues that the penalty meted for the crime of malversation of public funds “that ha[ve] been replenished, remitted and/or returned” to the government is cruel and therefore unconstitutional, “as government has not suffered any damage.”

The argument is specious on two grounds.

First. What is punished by the crime of malversation is the act of a public officer who, by reason of the duties of his office, is accountable for public funds or property, shall appropriate the same, or shall take and misappropriate or shall consent, or through abandonment or negligence shall permit any other person to take such public funds or property, wholly or partially, or shall otherwise be guilty of the misappropriation or malversation of such funds or property.

Payment or reimbursement is not a defense for exoneration in malversation; it may only be considered as a mitigating circumstance. This is because damage is not an element of malversation.

Second. There is strong presumption of constitutionality accorded to statutes.

It is established doctrine that a statute should be construed whenever possible in harmony with, rather than in violation of, the Constitution. The presumption is that the legislature intended to enact a valid, sensible and just law and one which operates no further than may be necessary to effectuate the specific purpose of the law. It is presumed that the legislature has acted within its constitutional powers. So, it is the generally accepted rule that every statute, or regularly accepted act, is, or will be, or should be, presumed to be valid and constitutional.

ERNESTO PIDELI v. PEOPLE OF THE PHILIPPINES

G.R. No. 163437, 13 February 2008, Third Division, (Reyes, R.T.,J.)

FACTS OF THE CASE:

Placido Cancio (Placido) and Wilson Pideli (Wilson) were partners and subcontractors in a rip rapping and spillway project at Benguet. Petitioner Ernesto Pideli extended his credit limit with the Mt. Trail Farm Supply and Hardware (MTFSH) to Placido and Wilson for their purchase of construction materials. After the release of the final payment to Wilson and Placido, they calculated their expenses and realized a net income of P130, 000.00. This was fully entrusted to the custody of Pideli for the settlement of their account with MTFHS. Pideli was instructed that the balance should be delivered to Wilson and Placido. The two, however, did not anymore receive anything from Pideli. They were informed that nothing was left from the proceeds after the settlement of their account. A criminal complaint was filed against him and the Regional Trial Court found Pideli guilty of the crime of theft. On appeal, the Court of Appeals affirmed the decision of the lower court.

ISSUE:

Whether or not Pideli is guilty of theft or estafa

HELD:

Petition DISMISSED.

The elements of theft are as follows:
1. That there be taking of personal property;
2. That said property belongs to another;
3. That the taking be done with intent to gain;
4. That the taking be done without the consent of the owner; and
5. That the taking be accomplished without the use of violence against or intimidation of persons or force upon things.

There is, here, a confluence of the elements of theft. Petitioner received the final payment due the partners Placido and Wilson under the pretext of paying off their obligation with the MTFSH. Under the terms of their agreement, petitioner was to account for the remaining balance of the said funds and give each of the partners their respective shares. He, however, failed to give private complainant Placido what was due him under the construction contract.

In an effort to exculpate himself, petitioner posits that he cannot be held liable for theft of the unaccounted funds. The monies subject matter of the complaint pertain to the partnership. As an agent of partner Wilson, intent to gain cannot be imputed against petitioner.

Although there is misappropriation of funds here, petitioner was correctly found guilty of theft. As early as U.S. v. De Vera, the Court has consistently ruled that not all misappropriation is estafa.

The principal distinction between the two crimes is that in theft the thing is taken while in estafa the accused receives the property and converts it to his own use or benefit. However, there may be theft even if the accused has possession of the property. If he was entrusted only with the material or physical (natural) or de facto possession of the thing, his misappropriation of the same constitutes theft, but if he has the juridical possession of the thing, his conversion of the same constitutes embezzlement or estafa.

CIVIL SERVICE COMMISSION v. PETER E. NIERRAS

G.R. No. 165121, 17 February 2008, En Banc, (Quisumbing, J.)

Clearly, there is no doubt that the act of Nierras constituted misconduct. However, it would be inappropriate to impose on him the penalty of dismissal from the service. Section 16, Rule XIV of the Rules Implementing Book V of Executive Order No. 292 provides that in the determination of penalties to be imposed, mitigating and aggravating circumstances may be considered.

FACTS OF THE CASE:

Respondent Peter E. Nierras was charged with sexual harassment, grave misconduct and conduct of unbecoming a public officer before the Civil Service Commission (CSC). The CSC found respondent guilty and was dismissed from service. On appeal, the Court of Appeals held that respondent guilty but imposed the penalty of suspension for six months.

ISSUE:

Whether or not CA erred in imposing a penalty of suspension instead of dismissal from service

HELD:

Petition DISMISSED.

Misconduct refers to intentional wrongdoing or deliberate violation of a rule of law or standard of behavior, especially by a government official. To constitute an administrative offense, misconduct should relate to, or be connected with, the performance of the official functions and duties of a public officer. Grave misconduct is distinguished from simple misconduct in that the elements of corruption, clear intent to violate the law or flagrant disregard of established rule must be manifest in grave misconduct.

Otherwise stated, the misconduct is grave if it involves the additional element of corruption. Corruption as an element of grave misconduct consists of the act of an official or fiduciary person who unlawfully and wrongfully uses his station or character to procure some benefit for himself or for another person, contrary to duty and the rights of others.

In this case, we find that the element of corruption is absent. Nierras did not use his position as Acting General Manager of the Metro Carigara Water District in the act of sexually harassing Oña. In fact, it is established that Nierras and Oña are not employed or connected with the same agency or instrumentality of the government. While this fact would not negate the possibility that sexual harassment could be committed by one against the other, the same would not warrant the dismissal of the offender because he did not use his position to procure sexual favors from Oña.

Clearly, there is no doubt that the act of Nierras constituted misconduct. However, it would be inappropriate to impose on him the penalty of dismissal from the service. Section 16, Rule XIV of the Rules Implementing Book V of Executive Order No. 292 provides that in the determination of penalties to be imposed, mitigating and aggravating circumstances may be considered. Considering the fact that this is the first time that Nierras is being administratively charged, it would be too harsh to impose on him the penalty of dismissal outright. Worth noting, in the case of Civil Service Commission v. Belagan, although the Court found that the act of the offending public official constituted grave misconduct, still it did not impose the penalty of dismissal on him, considering the fact that it was his first offense.

SOCIAL JUSTICE SOCIETY v. HON. MAYOR LITO L. ATIENZA, JR.

G.R. No. 156052, 13 February 2008, First Division, (Corona, J.)

The tests of a valid ordinance are well established. For an ordinance to be valid, it must not only be within the corporate powers of the LGU to enact and be passed according to the procedure prescribed by law, it must also conform to the following substantive requirements: (1) must not contravene the Constitution or any statute; (2) must not be unfair or oppressive; (3) must not be partial or discriminatory; (4) must not prohibit but may regulate trade; (5) must be general and consistent with public policy and (6) must not be unreasonable.

FACTS OF THE CASE:

Cheveron Philippines Inc, Petron Corporation, Pilipinas Shell Petroleum Corporation and Department of Energy filed their respective motion to intervene after the Supreme Court rendered its decision in the case at bar.

Petitioners Social Justice Society (SJS), Vladimir Alarique T. Cabigao and Bonifacio S. Tumboko sought to compel respondent Lito L. Atienza, then Mayor of City of Manila, to enforce Ordinance No. 8027 which reclassified Pandacan area from industrial to commercial and redirected the owners and operators of disallowed businesses to desist from operating their business. Among the disallowed businesses was the “Pandacan Terminal” of the oil companies.

Cheveron, Petron, Shell and DOE question the validity and enforceability of Ordinance No. 8027 and contend that it was superseded by Ordinance No. 8119 also known as the Manila Comprehensive Land Use Plan and Zoning Ordinance of 2006.

ISSUES:

1. Whether or not Cheveron, Petron, Shell and DOE has the right to intervene
2. Whether or not Ordinance No. 8027 was repealed by Ordinance No. 8119
3. Whether o not Ordinance No. 8027 is valid and enforceable

HELD:

Petition DISMISSED.

Intervention of the Oil Companies and the DOE should be allowed in the Interest of Justice

Intervention is a remedy by which a third party, not originally impleaded in the proceedings, becomes a litigant therein to enable him, her or it to protect or preserve a right or interest which may be affected by such proceedings.

The following are the requisites for intervention of a non-party:
(1) Legal interest

(a) in the matter in controversy; or
(b) in the success of either of the parties; or
against both parties; or
(d) person is so situated as to be adversely affected by a distribution or other disposition of property in the custody of the court or of an officer thereof;

(2) Intervention will not unduly delay or prejudice the adjudication of rights of original parties;

(3) Intervenor’s rights may not be fully protected in a separate proceeding and

(g) The motion to intervene may be filed at any time before rendition of judgment by the trial court.

For both the oil companies and DOE, the last requirement is definitely absent. As a rule, intervention is allowed “before rendition of judgment” as Section 2, Rule 19 expressly provides. Both filed their separate motions after our decision was promulgated.

We agree that the oil companies have a direct and immediate interest in the implementation of Ordinance No. 8027. Their claim is that they will need to spend billions of pesos if they are compelled to relocate their oil depots out of Manila. Considering that they admitted knowing about this case from the time of its filing on December 4, 2002, they should have intervened long before our March 7, 2007 decision to protect their interests. But they did not. Neither did they offer any worthy explanation to justify their late intervention.

Be that as it may, although their motion for intervention was not filed on time, we will allow it because they raised and presented novel issues and arguments that were not considered by the Court in its March 7, 2007 decision. After all, the allowance or disallowance of a motion to intervene is addressed to the sound discretion of the court before which the case is pending.

Odinance No. 8119 did not Impliedly Repealed Ordinance No. 8027

Repeal by implication proceeds on the premise that where a statute of later date clearly reveals the intention of the legislature to abrogate a prior act on the subject, that intention must be given effect.

There are two kinds of implied repeal. The first is: where the provisions in the two acts on the same subject matter are irreconcilably contradictory, the latter act, to the extent of the conflict, constitutes an implied repeal of the earlier one. The second is: if the later act covers the whole subject of the earlier one and is clearly intended as a substitute, it will operate to repeal the earlier law. The oil companies argue that the situation here falls under the first category.

Implied repeals are not favored and will not be so declared unless the intent of the legislators is manifest. As statutes and ordinances are presumed to be passed only after careful deliberation and with knowledge of all existing ones on the subject, it follows that, in passing a law, the legislature did not intend to interfere with or abrogate a former law relating to the same subject matter. If the intent to repeal is not clear, the later act should be construed as a continuation of, and not a substitute for, the earlier act.

We disagree that, in enacting Ordinance No. 8119, there was any indication of the legislative purpose to repeal Ordinance No. 8027. While it is true that both ordinances relate to the same subject matter, i.e. classification of the land use of the area where Pandacan oil depot is located, if there is no intent to repeal the earlier enactment, every effort at reasonable construction must be made to reconcile the ordinances so that both can be given effect.

For the first kind of implied repeal, there must be an irreconcilable conflict between the two ordinances. There is no conflict between the two ordinances. Ordinance No. 8027 reclassified the Pandacan area from Industrial II to Commercial I. Ordinance No. 8119, in Section 23, designated it as a “Planned Unit Development/Overlay Zone (O-PUD).” In its Annex C which defined the zone boundaries, the Pandacan area was shown to be within the “High Density Residential/Mixed Use Zone (R-3/MXD).” These zone classifications in Ordinance No. 8119 are not inconsistent with the reclassification of the Pandacan area from Industrial to Commercial in Ordinance No. 8027. The “O-PUD” classification merely made Pandacan a “project site ... comprehensively planned as an entity via unitary site plan which permits flexibility in planning/design, building siting, complementarity of building types and land uses, usable open spaces and the preservation of significant natural land features....” Its classification as “R-3/MXD” means that it should “be used primarily for high-rise housing/dwelling purposes and limited complementary/supplementary trade, services and business activities.” There is no conflict since both ordinances actually have a common objective, i.e., to shift the zoning classification from industrial to commercial (Ordinance No. 8027) or mixed residential/commercial (Ordinance No. 8119).

Ordinance No. 8027 is a special law since it deals specifically with a certain area described therein (the Pandacan oil depot area) whereas Ordinance No. 8119 can be considered a general law as it covers the entire city of Manila.

The repealing clause of Ordinance No. 8119 cannot be taken to indicate the legislative intent to repeal all prior inconsistent laws on the subject matter, including Ordinance No. 8027, a special enactment, since the aforequoted minutes (an official record of the discussions in the Sanggunian) actually indicated the clear intent to preserve the provisions of Ordinance No. 8027.

To summarize, the conflict between the two ordinances is more apparent than real. The two ordinances can be reconciled. Ordinance No. 8027 is applicable to the area particularly described therein whereas Ordinance No. 8119 is applicable to the entire City of Manila.

Ordinance No, 8027 is constitutional and valid

Having ruled that there is no impediment to the enforcement of Ordinance No. 8027, we now proceed to make a definitive ruling on its constitutionality and validity.

The tests of a valid ordinance are well established. For an ordinance to be valid, it must not only be within the corporate powers of the LGU to enact and be passed according to the procedure prescribed by law, it must also conform to the following substantive requirements: (1) must not contravene the Constitution or any statute; (2) must not be unfair or oppressive; (3) must not be partial or discriminatory; (4) must not prohibit but may regulate trade; (5) must be general and consistent with public policy and (6) must not be unreasonable.

Ordinance No. 8027 is not Unfair, Oppressive or Confiscatory Which Amounts to Taking Without Just Compensation

According to the oil companies, Ordinance No. 8027 is unfair and oppressive as it does not only regulate but also absolutely prohibits them from conducting operations in the City of Manila. Respondent counters that this is not accurate since the ordinance merely prohibits the oil companies from operating their businesses in the Pandacan area.

The oil companies are not prohibited from doing business in other appropriate zones in Manila. The City of Manila merely exercised its power to regulate the businesses and industries in the zones it established.

The oil companies aver that the ordinance is unfair and oppressive because they have invested billions of pesos in the depot. Its forced closure will result in huge losses in income and tremendous costs in constructing new facilities.

Their contention has no merit. In the exercise of police power, there is a limitation on or restriction of property interests to promote public welfare which involves no compensable taking. Compensation is necessary only when the state’s power of eminent domain is exercised. In eminent domain, property is appropriated and applied to some public purpose. Property condemned under the exercise of police power, on the other hand, is noxious or intended for a noxious or forbidden purpose and, consequently, is not compensable. The restriction imposed to protect lives, public health and safety from danger is not a taking. It is merely the prohibition or abatement of a noxious use which interferes with paramount rights of the public.

Ordinance No. 8027 is not partial and discriminatory

The oil companies take the position that the ordinance has discriminated against and singled out the Pandacan Terminals despite the fact that the Pandacan area is congested with buildings and residences that do not comply with the National Building Code, Fire Code and Health and Sanitation Code.

This issue should not detain us for long. An ordinance based on reasonable classification does not violate the constitutional guaranty of the equal protection of the law. The requirements for a valid and reasonable classification are: (1) it must rest on substantial distinctions; (2) it must be germane to the purpose of the law; (3) it must not be limited to existing conditions only and (4) it must apply equally to all members of the same class.

The law may treat and regulate one class differently from another class provided there are real and substantial differences to distinguish one class from another. Here, there is a reasonable classification. We reiterate that what the ordinance seeks to prevent is a catastrophic devastation that will result from a terrorist attack. Unlike the depot, the surrounding community is not a high-value terrorist target. Any damage caused by fire or explosion occurring in those areas would be nothing compared to the damage caused by a fire or explosion in the depot itself. Accordingly, there is a substantial distinction. The enactment of the ordinance which provides for the cessation of the operations of these terminals removes the threat they pose. Therefore it is germane to the purpose of the ordinance. The classification is not limited to the conditions existing when the ordinance was enacted but to future conditions as well. Finally, the ordinance is applicable to all businesses and industries in the area it delineated.

Both law and jurisprudence support the constitutionality and validity of Ordinance No. 8027. Without a doubt, there are no impediments to its enforcement and implementation. Any delay is unfair to the inhabitants of the City of Manila and its leaders who have categorically expressed their desire for the relocation of the terminals. Their power to chart and control their own destiny and preserve their lives and safety should not be curtailed by the intervenors’ warnings of doomsday scenarios and threats of economic disorder if the ordinance is enforced.

Secondary to the legal reasons supporting the immediate implementation of Ordinance No. 8027 are the policy considerations which drove Manila’s government to come up with such a measure:

... [The] oil companies still were not able to allay the apprehensions of the city regarding the security threat in the area in general. No specific action plan or security measures were presented that would prevent a possible large-scale terrorist or malicious attack especially an attack aimed at Malacañang. The measures that were installed were more directed towards their internal security and did not include the prevention of an external attack even on a bilateral level of cooperation between these companies and the police and military.

xxx xxx xxx

It is not enough for the city government to be told by these oil companies that they have the most sophisticated fire-fighting equipments and have invested millions of pesos for these equipments. The city government wants to be assured that its residents are safe at any time from these installations, and in the three public hearings and in their position papers, not one statement has been said that indeed the absolute safety of the residents from the hazards posed by these installations is assured.

We are also putting an end to the oil companies’ determination to prolong their stay in Pandacan despite the objections of Manila’s residents.

PHILIPPINE COMMERCIAL AND INTERNATIONAL BANK v. DENNIS CUSTODIO, et al.

G.R. No. 173207, 14 February 2008, Second Division, (Carpio Morales, J. )

Points of law, theories, issues and arguments not adequately brought to the attention of the trial court ordinarily will not be considered by a reviewing court as they cannot be raised for the first time on appeal because this would be offensive to the basic rules of fair play, justice, and due process. It would be unfair to the adverse party who would have no opportunity to present further evidence material to the new theory which it could have done had it been aware of it at the time of the hearing before the trial court.

FACTS OF THE CASE:

Respondent Dennis Custodio (Custodio) was engaged in a door-to-door dollar remittance and Wilfredo Gliane (Gliane) was one of his agents in Saudi Arabia. Custodio and Gliane availed the “Express Padala” services of Petitioner Philippine Commercial and International Bank (PCIB). One of its clients was respondent Rolando Francisco (Francisco).

Francisco and his wife, on behalf of their company ROL-ED Traders Group Corporation (ROL-ED), entered with PCIB into a Foreign Bills Purchase Line Agreement (FBPLA) in the amount of P70 million pesos. In the said agreement, the spouses authorized PCIB, in case of returned or dishonored checks, to automatically debit in any of their accounts with any of its branches, the amount of the checks. Thereafter, Francisco deposited US$651, 000 in his joint account with his wife at PCIB. These were cleared and paid by Chase Manhattan bank. Since the funds were insufficient, the checks were dishonored and Chase Manhattan debited the amount of the dishonored checks from the spouses’ account at PCIB. PCIB then debited the amount of US$85, 000 as partial payment.

Gliane remitted US$42, 300 to the joint account of Francisco at PCIB. This was thereafter applied to the remaining balance of Francisco with the bank. Before this, however, Francisco instructed Custodio to desist from remitting in their account. Francisco and Gliane requested for the amendment of the designated beneficiary. This was rejected due to its impossibility. An action for specific performance and damages was instituted against PCIB and Francisco. The trial court held PCIB liable, subject to reimbursement from Fracisco. On appeal, the Court of Appeals (CA) initially found Francisco solely liable for damages. Francisco, in his Motion for Reconsideration, raised the defense that it was (ROL-ED) which entered an agreement with PCIB. The CA reversed its decision and reinstated the decision of the lower court.

ISSUE:

Whether or not CA erred in affirming the decision of the trial court

HELD:

Petition GRANTED.

Points of law, theories, issues and arguments not adequately brought to the attention of the trial court ordinarily will not be considered by a reviewing court as they cannot be raised for the first time on appeal because this would be offensive to the basic rules of fair play, justice, and due process. It would be unfair to the adverse party who would have no opportunity to present further evidence material to the new theory which it could have done had it been aware of it at the time of the hearing before the trial court.

In the case at bar, there can be no mistake that Francisco belatedly invoked the separate identity of ROL-ED to evade his liability to PCIB.

On the failure of PCIB to comply with Gliane’s request for amendment of beneficiary, Gliane and Custodio failed to prove that the request for amendment was communicated to PCIB within reasonable time. The testimonies of Marilyn and Allen Alcantara (Alcantara), the PCIB Remittance Officer for the Middle East, that PCIB received the amendatory request after the set-off was not refuted. Thus, Alcantara explained that PCIB-Greenhills received the amendatory request on May 19, 1998, local time, after the said request underwent authentication procedures.

The entry reflecting the debiting of the US$85,000 against Francisco’s account with PCIB-Greenhills is dated May 19, 1998, 4:45 P.M, local time. Gliane and Custodio argue that “it is of standard operating policy of any banking institutions that the regular “holding period” of money transfers is more or less three (3) days.” They failed to prove, however, that PCIB had that policy, or that the contract under the Express Padala service of PCIB provided for a three-day holding period. Furthermore, PCIB could not be faulted for the dispatch with which it credited the US$42,300 to Francisco’s account.

REPUBLIC OF THE PHILIPPINES, represented by THE ANTI-MONEY LAUNDERING COUNCIL (AMCL) v. HON. ANTONIO M. EUGENIO et al.

G.R. No. 174629, 14 February 2008, Second Division, (Tinga, J.)

Still, even if the bank inquiry order may be availed of without need of a pre-existing case under the AMLA, it does not follow that such order may be availed of ex parte. It is evident that Section 11 does not specifically authorize, as a general rule, the issuance ex parte of the bank inquiry order. 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.

FACTS OF THE CASE:

After the Supreme Court (SC) decided the case of Agan v. PIATCO, several investigations were conducted by the Ombudsman concerning the award of NAIA 3 to PIATCO. Among the persons investigated was respondent Pantaleon Alvarez who had worked as the Chairman of the PBAC Technical Committee. Based on the investigation, Alvarez maintained eight bank accounts with six different banks.

To fully inquire on the alleged bank accounts, Petitioner Anti-Money Laundering Council (AMLC) filed before the Regional Trial Court a Motion for the issuance of bank inquiry order. The RTC issued said orders ex parte. Upon a Motion filed by Alvarez, the bank inquiry orders were lifted and AMLC was ordered to refrain from proceeding from its inquiry and from publishing any information derived from the investigation.

Before the Court of Appeals, however, a petition for writ of preliminary injunction was filed by Respondent Lilia Cheng. Said petition was granted by the Court.

ISSUE:

Whether or not the RTC and CA erred in not issuing bank inquiry orders

HELD:

Petition DISMISSED.

Respondents posit that a bank inquiry order under Section 11 may be obtained only upon the pre-existence of a money laundering offense case already filed before the courts. The conclusion is based on the phrase “upon order of any competent court in cases of violation of this Act,” the word “cases” generally understood as referring to actual cases pending with 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.

Still, even if the bank inquiry order may be availed of without need of a pre-existing case under the AMLA, it does not follow that such order may be availed of ex parte. There are several reasons why the AMLA does not generally sanction ex parte applications and issuances of the bank inquiry order.

It is evident that Section 11 does not specifically authorize, as a general rule, the issuance ex parte of the bank inquiry order. 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.

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 parte application 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 parte proceedings 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 parte similar 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 parte applications 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.

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.

Interestingly, petitioner’s memorandum does not attempt to demonstrate before the Court that the bank inquiry order under Section 11 may be issued ex parte, although the petition itself did devote some space for that argument. The petition argues that the bank inquiry order is “a special and peculiar remedy, drastic in its name, and made necessary because of a public necessity… [t]hus, by its very nature, the application for an order or inquiry must necessarily, be ex parte.” This argument is insufficient justification in light of the clear disinclination of Congress to allow the issuance ex parte of bank inquiry orders under Section 11, in contrast to the legislature’s clear inclination to allow the ex parte grant of freeze orders under Section 10.

Without doubt, a requirement that the application for a bank inquiry order be done with notice to the account holder will alert the latter that there is a plan to inspect his bank account on the belief that the funds therein are involved in an unlawful activity or money laundering offense. Still, the account holder so alerted will in fact be 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.

The necessary implication of this finding that Section 11 of the AMLA does not generally authorize the issuance ex parte of the bank inquiry order would be that such orders cannot be issued unless notice is given to the owners of the account, allowing them the opportunity to contest the issuance of the order. Without such a consequence, the legislated distinction between ex parte proceedings under Section 10 and those which are not ex parte under Section 11 would be lost and rendered useless.

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.

Petitioner argues that a bank inquiry order necessitates a finding of probable cause, a characteristic similar to a search warrant which is applied to and heard ex parte. We have examined the supposed analogy between a search warrant and a bank inquiry order yet we remain to be unconvinced by petitioner.

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.

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.

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.

Katlyn's world

Wednesday, April 16, 2008

Welcome to my world!

House of Representatives

Blog Archive

About Me