Bache v Ruiz

Facts:
Commissioner of Internal Revenue Vera wrote a letter to Judge Ruiz requesting the
issuance of a search warrant for the violation of Section 46 (a) of the National
Revenue Code in relation with Sections 53, 72, 73, 208 and 209 and for Judge Ruiz
to authorize Examiner De Leon to male and file the application for search warrant
which was attached to the same letter. Three days after, De Leo and his witness
Logronio went to Judge Ruizs CFI bringing the letter-request, the application for the
search warrant prepared by him [unsigned], Logronios affidavit subscribed defore
De Leon, a deposition by Logronio [printed and signed but not subscribed] and a
search warrant accomplished but yet unsigned by Judge Ruiz.
At the time they [De Leon and Logronio] were at the court, Judge Ruiz was
conducting a hearing in his sala and so he [Ruiz] instructed his Deputy Clerk of
Court to take the depositions of De Leon and Logronio, after which [hearing done]
Judge Ruiz along with Deputy Clerk Gonzales, stenographer Gaspar, De Leon and
Logronio went inside the chamber where Judge Ruiz requested for the Gaspar
[stenographer] to read to him her stenographic notes [deposition]. After that Judge
Ruiz then had De Leon and Logronio swear an oath and warned them that should
statements be false and without legal basis they would be charged with perjury.
Judge Ruiz then signed De Leons application for Search Warrant and Logronios
deposition, Search Warrant No. 2-M-70 was issued.
Petitioners filed for MTQ, preliminary and prohibitory Writs of Injunction to be issued,
for the SW to be declared null and void and for respondents to pay for damages and
attorneys fees. Respondent filed an answer and the motion was dismissed. While
the case was ongoing, BIR made tax assessments based or partly based on the
documents seized during the search.
Issues:
1) W/N Judge Ruiz sufficiently determined if there was probable cause before
issuing the Search Warrant.
2) W/N the Search Warrant was valid for covering more than one offense.
3) W/N the Search Warrant is general in nature.
4) W/N the corporation is entitled to protection against unreasonable search and
seizures.
Ruling:
I
Judge Ruiz failed to personally examine the complainant and his witness [Art. III,
Sec. 1 of 1987 Constitution and Rule 126, Sec. 3 and 4 of ROC ]

Section 4, Rule 126 of ROC requires that the judge himself personally examine the
complainant and his witness to determine the existence of probable cause. There
was no examination done in the present case, while it is true that the application for
SW and Logronios deposition were subscribed before the judge, there were no
questions asked to which could possibly be the basis in determining whether or not
there was probable cause.

II
The SW was for at least 4 distinct offenses under the Tax Code:
1st violation Sec. 46 (a), Sec. 72 and 73 provided for the filing of ITR which are
interrelated;
2nd violation Sec. 53 for withholding of income taxes at source;
3rd violation Sec. 208 for unlawful pursuit of business or occupation;
4th violation Sec. 209 for failure to make a return of receipts, sales, business or
gross value of output actually removed or to pay tax due.
Stonehill v Diokno is not applicable to the case, respondents contend since at the
time, the Search Warrant was issued for violation of Central Bank Laws, Internal
Revenue (Code) and Revised Penal Code; whereas, here Search Warrant No 2-M-70
was issued for violation of only one code. This is not true since it [Stonehill v
Diokno] it was ruled that no search warrant shall issue for more than one specific
offense.
III
The search warrant does not particularly describe the things to be seized. In
Stonehill v Diokno where the warrants sanctioned the seizure of all records of the
petitioners and the aforementioned corporations, whatever their nature, thus openly
contravening the explicit command of our Bill of Rights that the things to be seized
be particularly described as well as tending to defeat its major objective: the
elimination of general warrants.
In Uy Kheytin, et.al. v Villareal, it was established that the purpose and intent of the
requiring that a search warrant describe the place to be searched and the things to
be seized is to limit the things to be seized and only those particularly described in
the SW so as unreasonable searches and seizures may not be made.
Tests for SW:
- A search warrant may be said to particularly describe the things to be seized
when the description therein is as specific as the circumstances will ordinarily
allow (People vs. Rubio; 57 Phil. 384);
- or when the description expresses a conclusion of fact not of law by which
the warrant officer may be guided in making the search and seizure (idem.,
dissent of Abad Santos, J.,)

or when the things described are limited to those which bear direct relation to
the offense for which the warrant is being issued (Sec. 2, Rule 126,
Revised Rules of Court)

IV
A corporation is, after all, but an association of individuals under an assumed name
and with a distinct legal entity. In organizing itself as a collective body it waives no
constitutional immunities appropriate to such body. Its property cannot be taken
without compensation. It can only be proceeded against by due process of law, and
is protected, under the 14th Amendment, against unlawful discrimination . . .
(Hale v. Henkel, 201 U.S. 43, 50 L. ed. 652.)

Separate Opinion by Justice Barredo: side note.

This could be an instance wherein taxes properly due the State will probably remain
unassessed and unpaid only because the ones in charge of the execution of the
laws did not know how to respect basic constitutional rights and liberties.

Notes:
Art. III, Sec. 1, Constitution
The right of the people to be secure in their persons, houses, papers and effects
against unreasonable searches andseizures shall not be violated, and no warrants
shall issue but upon probable cause, to be determined 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.
Rule 126, Sec. 3,Rules of Court
Personal Property to be Seized A search warrant may be issued for the search and
seizure of personal property: a) Subject of the offense; b) Stolen or embezzled and
other proceeds, or fruits of the offense; c) Used or intended to be used as the
means of committing an offense.
Rule 126, Sec. 4, Rules of Court
Requisites for issuing search warrant A search warrant shall not issue except upon
probable cause in connection with one specific offense 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 things to be seized which may be anywhere in the Philippines.
NIRC at the time [sorry guys, couldnt find the Tax Code used in 1971]
Sec. 46(a) requires the filing of income tax returns by corporations. Sec. 53
requires the withholding of income taxes at source.
Sec. 72 imposes surcharges for failure to render income tax returns and for
rendering false and fraudulent returns.

Sec. 73 provides the penalty for failure to pay the income tax, to make a return or
to supply the information required under the Tax Code.
Sec. 208 penalizes *any person who distills, rectifies, repacks, compounds, or
manufactures any article subject to a specific tax, without having paid the privilege
tax therefore, or who aids or abets in the conduct of illicit distilling, rectifying,
compounding, or illicit manufacture of any article subject to specific tax . . ., and
provides that in the case of a corporation, partnership, or association, the official
and/or employee who caused the violation shall be responsible.
Sec. 209 penalizes the failure to make a return of receipts, sales, business, or gross
value of output removed, or to pay the tax due thereon.