1.G.R. No.

L-20387 January 31, 1968

JESUS P. MORFE, plaintiff-appellee,

vs.
AMELITO R. MUTUC, as Executive Secretary, ET AL., defendants-appellants.

Jesus P. Morfe for and his own behalf as plaintiff-appellee.

Office of the Solicitor General for defendants-appellants.

FERNANDO, J.:

Congress in 1960 enacted the Anti-Graft and Corrupt Practices Act 1 to deter public officials and
employees from committing acts of dishonesty and improve the tone of morality in public service. It
was declared to be the state policy "in line with the principle that a public office is a public trust, to
repress certain acts of public officers and private persons alike which constitute graft or corrupt
practices or which may lead thereto." 2 Nor was it the first statute of its kind to deal with such a grave
problem in the public service that unfortunately has afflicted the Philippines in the post-war era. An
earlier statute decrees the forfeiture in favor of the State of any property found to have been
unlawfully acquired by any public officer or employee. 3

One of the specific provisions of the Anti-Graft and Corrupt Practices Act of 1960 is that every public
officer, either within thirty (30) days after its approval or after his assumption of office "and within the
month of January of every other year thereafter", as well as upon the termination of his position,
shall prepare and file with the head of the office to which he belongs, "a true detailed and sworn
statement of assets and liabilities, including a statement of the amounts and sources of his income,
the amounts of his personal and family expenses and the amount of income taxes paid for the next
preceding calendar: . . ." 4

In this declaratory relief proceeding, the periodical submission "within the month of January of every
other year thereafter" of such sworn statement of assets and liabilities after an officer or employee
had once bared his financial condition upon assumption of office was challenged for being violative
of due process as an oppressive exercise of police power and as an unlawful invasion of the
constitutional right to privacy, implicit in the ban against unreasonable search and seizure construed
together with the prohibition against self-incrimination. The lower court in the decision appealed from
sustained plaintiff, then as well as now, a judge of repute of a court of first instance. For it, such
requirement of periodical submission of such sworn statement of assets and liabilities exceeds the
permissible limit of the police power and is thus offensive to the due process clause.

We do not view the matter thus and accordingly reverse the lower court.

1. The reversal could be predicated on the absence of evidence to rebut the presumption of validity.
For in this action for declaratory relief filed with the Court of First Instance of Pangasinan on January
31, 1962, plaintiff, after asserting his belief "that it was a reasonable requirement for employment
that a public officer make of record his assets and liabilities upon assumption of office and thereby
make it possible thereafter to determine whether, after assuming his position in the public service,
he accumulated assets grossly disproportionate to his reported incomes, the herein plaintiff [having]
filed within the period of time fixed in the aforesaid Administrative Order No. 334 the prescribed
sworn statement of financial condition, assets, income and liabilities, . . ." 5 maintained that the
provision on the "periodical filing of sworn statement of financial condition, assets, income and
liabilities after an officer or employee had once bared his financial condition, upon assumption of
office, is oppressive and unconstitutional." 6

As earlier noted, both the protection of due process and the assurance of the privacy of the individual
as may be inferred from the prohibition against unreasonable search and seizure and self-
incrimination were relied upon. There was also the allegation that the above requirement amounts
to "an insult to the personal integrity and official dignity" of public officials, premised as it is "on the
unwarranted and derogatory assumption" that they are "corrupt at heart" and unless thus restrained
by this periodical submission of the statements of "their financial condition, income, and expenses,
they cannot be trusted to desist from committing the corrupt practices defined. . . ." 7 It was further
asserted that there was no need for such a provision as "the income tax law and the tax census law
also require statements which can serve to determine whether an officer or employee in this
Republic has enriched himself out of proportion to his reported income." 8

Then on February 14, 1962, came an Answer of the then Executive Secretary and the then Secretary
of Justice as defendants, where after practically admitting the facts alleged, they denied the
erroneous conclusion of law and as one of the special affirmative defenses set forth: "1. That when
a government official, like plaintiff, accepts a public position, he is deemed to have voluntarily
assumed the obligation to give information about his personal affair, not only at the time of his
assumption of office but during the time he continues to discharge public trust. The private life of an
employee cannot be segregated from his public life. . . ." 9 The answer likewise denied that there
was a violation of his constitutional rights against self-incrimination as well as unreasonable search
and seizure and maintained that "the provision of law in question cannot be attacked on the ground
that it impairs plaintiff's normal and legitimate enjoyment of his life and liberty because said provision
merely seeks to adopt a reasonable measure of insuring the interest or general welfare in honest
and clean public service and is therefore a legitimate exercise of the police power." 10

On February 27, 1962, plaintiff filed a Motion for judgment on the pleadings as in his opinion all his
material allegations were admitted. Then on March 10, 1962, an order was issued giving the parties
thirty days within which to submit memoranda, but with or without them, the case was deemed
submitted for decision the lower court being of the belief that "there is no question of facts, . . . the
defendants [having admitted] all the material allegations of the complaint." 11

The decision, now on appeal, came on July 19, 1962, the lower court declaring "unconstitutional,
null and void Section 7, Republic Act No. 3019, insofar as it required periodical submittal of sworn
statements of financial conditions, assets and liabilities of an official or employee of the government
after he had once submitted such a sworn statement upon assuming office; . . . ." 12

In Ermita-Malate Hotel and Motel Operators Association v. The Mayor of Manila, 13 it was the holding
of this Court that in the absence of a factual foundation, the lower court deciding the matter purely
"on the pleadings and the stipulation of facts, the presumption of validity must prevail." In the present
case likewise there was no factual foundation on which the nullification of this section of the statute
could be based. Hence as noted the decision of the lower court could be reversed on that ground.

A more extended consideration is not inappropriate however, for as likewise made clear in the above
Ermita-Malate Hotel case: "What cannot be stressed sufficiently is that if the liberty involved were
freedom of the mind or the person, the standard for the validity of governmental acts is much more
rigorous and exacting, but where the liberty curtailed affects at the most rights of property, the
permissible scope of regulatory measure is wider."

Moreover, in the Resolution denying the Motion for Reconsideration in the above case, we expressly
affirmed: "This is not to discount the possibility of a situation where the nullity of a statute, executive
order, or ordinance may not be readily apparent but the threat to constitutional rights, especially
those involving the freedom of the mind, present and ominous." 14 In such an event therefore, "there
should not be a rigid insistence on the requirement that evidence be presented." Also, in the same
Resolution, Professor Freund was quoted thus: "In short, when freedom of the mind is imperiled by
law, it is freedom that commands a momentum of respect; when property is imperiled, it is the
lawmakers' judgment that commands respect. This dual standard may not precisely reverse the
presumption of constitutionality in civil liberties cases, but obviously it does set up a hierarchy of
values within the due process clause. 15
2. We inquire first whether or not by virtue of the above requirement for a periodical submission of
sworn statement of assets and liabilities, there is an invasion of liberty protected by the due process
clause.

Under the Anti-Graft Act of 1960, after the statement of policy, 16 and definition of terms, 17 there is
an enumeration of corrupt practices declared unlawful in addition to acts or omissions of public
officers already penalized by existing law. They include persuading, inducing, or influencing another
public officer to perform an act constituting a violation of rules and regulations duly promulgated by
competent authority or an offense in connection with the official duties of the latter, or allowing
himself to be persuaded, induced, or influenced to commit such violation or offense; requesting or
receiving directly or indirectly any gift, present, share, percentage, or benefit, for himself, or for any
other person, in connection with any contract or transaction between the government and any other
party, wherein the public officer in his official capacity, has to intervene under the law; requesting or
receiving directly or indirectly any gift, present, or other pecuniary or material benefit, for himself or
for another, from any person for whom the public officer, in any manner or capacity, has secured or
obtained, or will secure or obtain, any Government permit or license, in consideration for the help
given or to be given; accepting or having any member of his family accept employment in a private
enterprise which has pending official business with him during the pendency thereof or within one
year after its termination; causing any undue injury to any party, including the Government, or giving
any private party any unwarranted benefits, advantage or preference in the discharge of his official
administrative or judicial functions through manifest partiality, evident bad faith or gross inexcusable
negligence; neglecting or refusing, after due demand or request, without sufficient justification, to
act within a reasonable time on any matter pending before him for the purpose of obtaining, directly
or indirectly, from any person interested in the matter some pecuniary or material benefit or
advantage, or for the purpose of favoring his own interest or giving undue advantage in favor of or
discriminating against any other interested party; entering, on behalf of the Government, into any
contract or transaction manifestly and grossly disadvantageous to the same, whether or not the
public officer profited or will profit thereby; having directly or indirectly financial or pecuniary interest
in any business, contract or transaction in connection with which he intervenes or takes part in his
official capacity or in which he is prohibited by the Constitution or by any law from having any
interests; becoming interested directly or indirectly, for personal gain, or having a material interest
in any transaction or act requiring the approval of a board, panel or group of which he is a member,
and which exercises discretion in such approval, even if he votes against the same or does not
participate in such action; approving or granting knowingly any license, permit, privilege or benefit
in favor of any person not qualified for or not legally entitled to such license, permit, privilege or
advantage, or of a mere representative or dummy of one who is not so qualified or entitled and
divulging valuable information of a confidential character, acquired by his office or by him on account
of his official position to unauthorized persons, or releasing such information in advance of its
authorized release date. 18

After which come the prohibition on private individuals, 19 prohibition on certain relatives, 20 and
prohibition on Members of Congress. 21 Then there is this requirement of a statement of assets and
liabilities, that portion requiring periodical submission being challenged here. 22 The other sections
of the Act deal with dismissal due to unexplained wealth, reference being made to the previous
statute, 23 penalties for violation, 24 the vesting of original jurisdiction in the Court of First Instance as
the competent court, 25 the prescription of offenses, 26 the prohibition against any resignation or
retirement pending investigation, criminal or administrative or pending a prosecution, 27suspension
and loss of benefits, 28 exception of unsolicited gifts or presents of small or insignificant value as
well as recognition of legitimate practice of one's profession or trade or occupation, 29 the
separability clause, 30 and its effectivity. 31

Nothing can be clearer therefore than that the Anti-Graft Act of 1960 like the earlier statute 32 was
precisely aimed at curtailing and minimizing the opportunities for official corruption and maintaining
a standard of honesty in the public service. It is intended to further promote morality in public
administration. A public office must indeed be a public trust. Nobody can cavil at its objective; the
goal to be pursued commands the assent of all. The conditions then prevailing called for norms of
such character. The times demanded such a remedial device.

The statute was framed with that end in view. It is comprehensive in character, sufficiently detailed
and explicit to make clear to all and sundry what practices were prohibited and penalized. More than
that, an effort was made, so evident from even a cursory perusal thereof, to avoid evasions and plug
loopholes. One such feature is the challenged section. Thereby it becomes much more difficult by
those disposed to take advantage of their positions to commit acts of graft and corruption.

While in the attainment of such public good, no infringement of constitutional rights is permissible,
there must be a showing, clear, categorical, and undeniable, that what the Constitution condemns,
the statute allows. More specifically, since that is the only question raised, is that portion of the
statute requiring periodical submission of assets and liabilities, after an officer or employee had
previously done so upon assuming office, so infected with infirmity that it cannot be upheld as valid?

Or, in traditional terminology, is this requirement a valid exercise of the police power? In the
aforesaid Ermita-Malate Hotel decision, 33 there is a reaffirmation of its nature and scope as
embracing the power to prescribe regulations to promote the health, morals, education, good order,
safety, or the general welfare of the people. It has been negatively put forth by Justice Malcolm as
"that inherent and plenary power in the state which enables it to prohibit all things hurtful to the
comfort, safety and welfare of society." 34

Earlier Philippine cases refer to police power as the power to promote the general welfare and public
interest; 35 to enact such laws in relation to persons and property as may promote public health,
public morals, public safety and the general welfare of each inhabitant; 36 to preserve public order
and to prevent offenses against the state and to establish for the intercourse of citizen with citizen
those rules of good manners and good neighborhood calculated to prevent conflict of rights. 37 In his
work on due process, Mott 38 stated that the term police power was first used by Chief Justice
Marshall. 39

As currently in use both in Philippine and American decisions then, police power legislation usually
has reference to regulatory measures restraining either the rights to property or liberty of private
individuals. It is undeniable however that one of its earliest definitions, valid then as well as now,
given by Marshall's successor, Chief Justice Taney does not limit its scope to curtailment of rights
whether of liberty or property of private individuals. Thus: "But what are the police powers of a State?
They are nothing more or less than the powers of government inherent in every sovereignty to the
extent of its dominions. And whether a State passes a quarantine law, or a law to punish offenses,
or to establish courts of justice, or requiring certain instruments to be recorded, or to regulate
commerce within its own limits, in every case it exercises the same power; that is to say, the power
of sovereignty, the power to govern men and things within the limits of its domain." 40 Text writers
like Cooley and Burdick were of a similar mind. 41

What is under consideration is a statute enacted under the police power of the state to promote
morality in public service necessarily limited in scope to officialdom. May a public official claiming to
be adversely affected rely on the due process clause to annul such statute or any portion thereof?
The answer must be in the affirmative. If the police power extends to regulatory action affecting
persons in public or private life, then anyone with an alleged grievance can invoke the protection of
due process which permits deprivation of property or liberty as long as such requirement is
observed.

While the soundness of the assertion that a public office is a public trust and as such not amounting
to property in its usual sense cannot be denied, there can be no disputing the proposition that from
the standpoint of the security of tenure guaranteed by the Constitution the mantle of protection
afforded by due process could rightfully be invoked. It was so implicitly held in Lacson v.
Romero, 42 in line with the then pertinent statutory provisions 43 that procedural due process in the
form of an investigation at which he must be given a fair hearing and an opportunity to defend himself
must be observed before a civil service officer or employee may be removed. There was a
reaffirmation of the view in even stronger language when this Court through Justice Tuason
in Lacson v. Roque 44 declared that even without express provision of law, "it is established by the
great weight of authority that the power of removal or suspension for cause can not, except by clear
statutory authority, be exercised without notice and hearing." Such is likewise the import of a
statement from the then Justice, now Chief Justice, Concepcion, speaking for the Court in Meneses
v. Lacson; 45 "At any rate, the reinstatement directed in the decision appealed from does not bar
such appropriate administrative action as the behaviour of petitioners herein may warrant, upon
compliance with the requirements of due process."

To the same effect is the holding of this Court extending the mantle of the security of tenure provision
to employees of government-owned or controlled corporations entrusted with governmental
functions when through Justice Padilla in Tabora v. Montelibano, 46 it stressed: "That safeguard,
guarantee, or feeling of security that they would hold their office or employment during good behavior
and would not be dismissed without justifiable cause to be determined in an investigation, where an
opportunity to be heard and defend themselves in person or by counsel is afforded them, would
bring about such a desirable condition." Reference was there made to promoting honesty and
efficiency through an assurance of stability in their employment relation. It was to be expected then
that through Justice Labrador in Unabia v. City Mayor, 47 this Court could categorically affirm: "As
the removal of petitioner was made without investigation and without cause, said removal is null and
void. . . ."

It was but logical therefore to expect an explicit holding of the applicability of due process guaranty
to be forthcoming. It did in Cammayo v. Viña, 48 where the opinion of Justice Endencia for the Court
contained the following unmistakable language: "Evidently, having these facts in view, it cannot be
pretended that the constitutional provision of due process of law for the removal of the petitioner has
not been complied with."

Then came this restatement of the principle from the pen of Justice J.B.L. Reyes "We are thus
compelled to conclude that the positions formerly held by appellees were not primarily confidential
in nature so as to make their terms of office co-terminal with the confidence reposed in them. The
inevitable corollary is that respondents-appellees, Leon Piñero, et al., were not subject to dismissal
or removal, except for cause specified by law and within due process. . . ." 49 In a still later
decision, Abaya v. Subido, 50 this Court, through Justice Sanchez, emphasized "that the vitality of
the constitutional principle of due process cannot be allowed to weaken by sanctioning cancellation"
of an employee's eligibility or "of his dismissal from service — without hearing — upon a doubtful
assumption that he has admitted his guilt for an offense against Civil Service rules." Equally
emphatic is this observation from the same case: "A civil service employee should be heard before
he is condemned. Jurisprudence has clung to this rule with such unrelenting grasp that by now it
would appear trite to make citations thereof."

If as is so clearly and unequivocally held by this Court, due process may be relied upon by public
official to protect the security of tenure which in that limited sense is analogous to property, could
he not likewise avail himself of such constitutional guarantee to strike down what he considers to be
an infringement of his liberty? Both on principle, reason and authority, the answer must be in the
affirmative. Even a public official has certain rights to freedom the government must respect. To the
extent then, that there is a curtailment thereof, it could only be permissible if the due process
mandate is not disregarded.

Since under the constitutional scheme, liberty is the rule and restraint the exception, the question
raised cannot just be brushed aside. In a leading Philippine case, Rubi v. Provincial Board, 51 liberty
as guaranteed by the Constitution was defined by Justice Malcolm to include "the right to exist and
the right to be free from arbitrary personal restraint or servitude. The term cannot be dwarfed into
mere freedom from physical restraint of the person of the citizen, but is deemed to embrace the right
of man to enjoy the facilities with which he has been endowed by his Creator, subject only to such
restraint as are necessary for the common welfare." In accordance with this case therefore, the
rights of the citizens to be free to use his faculties in all lawful ways; to live and work where he will;
to earn his livelihood by any lawful calling; to pursue any avocation, are all deemed embraced in the
concept of liberty. This Court in the same case, however, gave the warning that liberty as understood
in democracies, is not license. Implied in the term is restraint by law for the good of the individual
and for the greater good, the peace and order of society and the general well-being. No one can do
exactly as he pleases. Every man must renounce unbridled license. In the words of Mabini as quoted
by Justice Malcolm, "liberty is freedom to do right and never wrong; it is ever guided by reason and
the upright and honorable conscience of the individual."

The liberty to be safeguarded is, as pointed out by Chief Justice Hughes, liberty in a social
organization, 52 implying the absence of arbitrary restraint not immunity from reasonable regulations
and prohibitions imposed in the interest of the community. 53 It was Linton's view that "to belong to
a society is to sacrifice some measure of individual liberty, no matter how slight the restraints which
the society consciously imposes." 54 The above statement from Linton however, should be
understood in the sense that liberty, in the interest of public health, public order or safety, of general
welfare, in other words through the proper exercise of the police power, may be regulated. The
individual thought, as Justice Cardozo pointed out, has still left a "domain of free activity that cannot
be touched by government or law at all, whether the command is specially against him or generally
against him and others." 55

Is this provision for a periodical submission of sworn statement of assets and liabilities after he had
filed one upon assumption of office beyond the power of government to impose? Admittedly without
the challenged provision, a public officer would be free from such a requirement. To the extent then
that there is a compulsion to act in a certain way, his liberty is affected. It cannot be denied however
that under the Constitution, such a restriction is allowable as long as due process is observed.

The more crucial question therefore is whether there is an observance of due process. That leads
us to an inquiry into its significance. "There is no controlling and precise definition of due process. It
furnishes though a standard to which governmental action should conform in order that deprivation
of life, liberty or property, in each appropriate case, be valid. What then is the standard of due
process which must exist both as a procedural and as substantive requisite to free the challenged
ordinance, or any action for that matter, from the imputation of legal infirmity sufficient to spell its
doom? It is responsiveness to the supremacy of reason, obedience to the dictates of justice.
Negatively put, arbitrariness is ruled out and unfairness avoided. To satisfy the due process
requirement, official action, to paraphrase Cardozo, must not outrun the bounds of reason and result
in sheer oppression. Due process is thus hostile to any official action marred by lack of
reasonableness. Correctly has it been identified as freedom from arbitrariness. It is the embodiment
of the sporting idea of fair play. It exacts fealty 'to those strivings for justice' and judges the act of
officialdom of whatever branch 'in the light of reason drawn from considerations of fairness that
reflect [democratic] traditions of legal and political thought.' It is not a narrow or 'technical conception
with fixed content unrelated to time, place and circumstances,' decisions based on such a clause
requiring a 'close and perceptive inquiry into fundamental principles of our society.' Questions of
due process are not to be treated narrowly or pedantically in slavery to form or phrases." 56

It would be to dwell in the realm of abstractions and to ignore the harsh and compelling realities of
public service with its ever-present temptation to heed the call of greed and avarice to condemn as
arbitrary and oppressive a requirement as that imposed on public officials and employees to file
such sworn statement of assets and liabilities every two years after having done so upon assuming
office. The due process clause is not susceptible to such a reproach. There was therefore no
unconstitutional exercise of police power.

4. 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." 57 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." 58

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. As Laski so very
aptly stated: "Man is one among many, obstinately refusing reduction to unity. His separateness, his
isolation, are indefeasible; indeed, they are so fundamental that they are the basis on which his civic
obligations are built. He cannot abandon the consequences of his isolation, which are, broadly
speaking, that his experience is private, and the will built out of that experience personal to himself.
If he surrenders his will to others, he surrenders his personality. If his will is set by the will of others,
he ceases to be master of himself. I cannot believe that a man no longer master of himself is in any
real sense free." 59

Nonetheless, in view of the fact that there is an express recognition of privacy, specifically that of
communication and correspondence which "shall be inviolable except upon lawful order of Court or
when public safety and order" 60may otherwise require, and implicitly in the search and seizure
clause, 61 and the liberty of abode 62 the alleged repugnancy of such statutory requirement of further
periodical submission of a sworn statement of assets and liabilities deserves to be further looked
into.

In that respect the question is one of first impression, no previous decision having been rendered
by this Court. It is not so in the United States where, in the leading case of Griswold v.
Connecticut, 63 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, 64 Justice
Douglas continued: "These cases bear witness that the right of privacy which presses for recognition
is a legitimate one."

The Griswold case invalidated a Connecticut statute which made the use of contraceptives a criminal
offense on the ground of its amounting to an unconstitutional invasion of the right of privacy of
married persons; rightfully it stressed "a relationship lying within the zone of privacy created by
several fundamental constitutional guarantees." 65 It has wider implications though. The
constitutional right to privacy has come into its own.1äwphï1.ñët

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." 66

Even with due recognition of such a view, it cannot be said that the challenged statutory provision
calls for disclosure of information which infringes on the right of a person to privacy. It cannot be
denied that the rational relationship such a requirement possesses with the objective of a valid
statute goes very far in precluding assent to an objection of such character. This is not to say that a
public officer, by virtue of a position he holds, is bereft of constitutional protection; it is only to
emphasize that in subjecting him to such a further compulsory revelation of his assets and liabilities,
including the statement of the amounts and sources of income, the amounts of personal and family
expenses, and the amount of income taxes paid for the next preceding calendar year, there is no
unconstitutional intrusion into what otherwise would be a private sphere.

5. Could it be said, however, as plaintiff contends, that insofar as the challenged provision requires
the periodical filing of a sworn statement of financial condition, it would be violative of the guarantees
against unreasonable search and seizure and against self-incrimination?

His complaint cited on this point Davis v. United States. 67 In that case, petitioner Davis was
convicted under an information charging him with unlawfully having in his possession a number of
gasoline ration coupons representing so many gallons of gasoline, an offense penalized under a
1940 statute. 68 He was convicted both in the lower court and in the Circuit Court of Appeals over
the objection that there was an unlawful search which resulted in the seizure of the coupons and
that their use at the trial was in violation of Supreme Court decisions. 69 In the District Court, there
was a finding that he consented to the search and seizure. The Circuit Court of Appeals did not
disturb that finding although expressed doubt concerning it, affirming however under the view that
such seized coupons were properly introduced in evidence, the search and seizure being incidental
to an arrest, and therefore reasonable regardless of petitioner's consent.

In affirming the conviction the United States Supreme Court, through Justice Douglas emphasized
that the Court was dealing in this case "not with private papers or documents, but with gasoline
ration coupons which never became the private property of the holder but remained at all times the
property of the government and subject to inspection and recall by it." 70 He made it clear that the
opinion was not to be understood as suggesting "that officers seeking to reclaim government
property may proceed lawlessly and subject to no restraints. Nor [does it] suggest that the right to
inspect under the regulations subjects a dealer to a general search of his papers for the purpose of
learning whether he has any coupons subject to inspection and seizure. The nature of the coupons
is important here merely as indicating that the officers did not exceed the permissible limits of
persuasion in obtaining them." 71

True, there was a strong dissenting opinion by Justice Frankfurter in which Justice Murphy joined,
critical of what it considered "a process of devitalizing interpretation" which in this particular case
gave approval "to what was done by arresting officers" and expressing the regret that the Court
might be "in danger of forgetting what the Bill of Rights reflects experience with police excesses."

Even this opinion, however, concerned that the constitutional guarantee against unreasonable
search and seizure "does not give freedom from testimonial compulsion. Subject to familiar
qualifications every man is under obligation to give testimony. But that obligation can be exacted
only under judicial sanctions which are deemed precious to Anglo-American civilization. Merely
because there may be the duty to make documents available for litigation does not mean that police
officers may forcibly or fraudulently obtain them. This protection of the right to be let alone except
under responsible judicial compulsion is precisely what the Fourth Amendment meant to express
and to safeguard." 72
It would appear then that a reliance on that case for an allegation that this statutory provision offends
against the unreasonable search and seizure clause would be futile and unavailing. This is the more
so in the light of the latest decision of this Court in Stonehill v. Diokno, 73 where this Court, through
Chief Justice Concepcion, after stressing that the constitutional requirements must be strictly
complied with, and that it would be "a legal heresy of the highest order" to convict anybody of a
violation of certain statutes without reference to any of its determinate provisions delimited its scope
as "one of the most fundamental rights guaranteed in our Constitution," safeguarding "the sanctity,
of the domicile and the privacy of communication and correspondence. . . ." Such is precisely the
evil sought to be remedied by the constitutional provision above quoted — to outlaw the so-called
general warrants.

It thus appears clear that no violation of the guarantee against unreasonable search and seizure
has been shown to exist by such requirement of further periodical submission of one's financial
condition as set forth in the Anti-Graft Act of 1960.

Nor does the contention of plaintiff gain greater plausibility, much less elicit acceptance, by his
invocation of the non-incrimination clause. According to the Constitution: "No person shall be
compelled to be a witness against himself." 74 This constitutional provision gives the accused
immunity from any attempt by the prosecution to make easier its task by coercing or intimidating him
to furnish the evidence necessary to convict. He may confess, but only if he voluntarily wills it. He
may admit certain facts but only if he freely chooses to. 75 Or he could remain silent, and the
prosecution is powerless to compel him to talk. 76 Proof is not solely testimonial in character. It may
be documentary. Neither then could the accused be ordered to write, when what comes from his
pen may constitute evidence of guilt or innocence. 77 Moreover, there can be no search or seizure
of his house, papers or effects for the purpose of locating incriminatory matter. 78

In a declaratory action proceeding then, the objection based on the guaranty against self-
incrimination is far from decisive. It is well to note what Justice Tuason stated: "What the above
inhibition seeks to [prevent] is compulsory disclosure of incriminating facts." 79 Necessarily then, the
protection it affords will have to await, in the language of Justice J. B. L. Reyes, the existence of
actual cases, "be they criminal, civil or administrative." 80 Prior to such a stage, there is no pressing
need to pass upon the validity of the fear sincerely voiced that there is an infringement of the non-
incrimination clause. What was said in an American State decision is of relevance. In that case, a
statutory provision requiring any person operating a motor vehicle, who knows that injury has been
caused a person or property, to stop and give his name, residence, and his license number to the
injured party or to a police officer was sustained against the contention that the information thus
exacted may be used as evidence to establish his connection with the injury and therefore compels
him to incriminate himself. As was stated in the opinion: "If the law which exacts this information is
invalid, because such information, although in itself no evidence of guilt, might possibly lead to a
charge of crime against the informant, then all police regulations which involve identification may be
questioned on the same ground. We are not aware of any constitutional provision designed to
protect a man's conduct from judicial inquiry or aid him in fleeing from justice. But, even if a
constitutional right be involved, it is not necessary to invalidate the statute to secure its protection.
If, in this particular case, the constitutional privilege justified the refusal to give the information
exacted by the statute, that question can be raised in the defense to the pending prosecution.
Whether it would avail, we are not called upon to decide in this proceeding." 81

6. Nor could such a provision be nullified on the allegation that it constitutes "an insult to the personal
integrity and official dignity" of public officials. On its face, it cannot thus be stigmatized. As to its
being unnecessary, it is well to remember that this Court, in the language of Justice Laurel, "does
not pass upon questions of wisdom, justice or expediency of legislation." 82 As expressed by Justice
Tuason: "It is not the province of the courts to supervise legislation and keep it within the bounds of
propriety and common sense. That is primarily and exclusively a legislative concern." 83 There can
be no possible objection then to the observation of Justice Montemayor: "As long as laws do not
violate any Constitutional provision, the Courts merely interpret and apply them regardless of
whether or not they are wise or salutary." 84 For they, according to Justice Labrador, "are not
supposed to override legitimate policy and . . . never inquire into the wisdom of the law." 85

It is thus settled, to paraphrase Chief Justice Concepcion in Gonzales v. Commission on

Elections, 86 that only congressional power or competence, not the wisdom of the action taken may
be the basis for declaring a statute invalid. This is as it ought to be. The principle of separation of
powers has in the main wisely allocated the respective authority of each department and confined
its jurisdiction to such a sphere. There would then be intrusion not allowable under the Constitution
if on a matter left to the discretion of a coordinate branch, the judiciary would substitute its own. If
there be adherence to the rule of law, as there ought to be, the last offender should be courts of
justice, to which rightly litigants submit their controversy precisely to maintain unimpaired the
supremacy of legal norms and prescriptions. The attack on the validity of the challenged provision
likewise insofar as there may be objections, even if valid and cogent on its wisdom cannot be
sustained.

WHEREFORE, the decision of the lower court of July 19, 1962 "declaring unconstitutional, null and
void Section 7, Republic Act No. 3019, insofar as it requires periodical submittal of sworn statements
of financial conditions, assets and liabilities of an official or employee of the government after he
had once submitted such a sworn statement . . . is reversed." Without costs.

Concepcion, C.J., Reyes, J.B.L., Makalintal, Bengzon, J.P., Zaldivar and Angeles, JJ., concur.
Sanchez, J., reserves his vote.
Castro, J., concurs in the result.
2.G.R. No. 147904. October 4, 2002
NESTOR B. MAGNO, petitioner, vs. COMMISSION ON ELECTIONS and CARLOS C.
MONTES, respondents.

DECISION
CORONA, J.:

Before this Court is a petition for certiorari under Rule 65 which seeks to annul and set aside
the resolution dated May 7, 2001 of the Commission on Elections as well as the resolution dated
May 12, 2001 denying petitioners motion for reconsideration.
This petition originated from a case filed by private respondent on March 21, 2001 for the
disqualification of petitioner Nestor Magno as mayoralty candidate of San Isidro, Nueva Ecija during
the May 14, 2001 elections on the ground that petitioner was previously convicted by the
Sandiganbayan of four counts of direct bribery penalized under Article 210 of the Revised Penal
Code. It appears that on July 25, 1995, petitioner was sentenced to suffer the indeterminate penalty
of 3 months and 11 days of arresto mayor as minimum to 1 year 8 months and 21 days of prision
correccional as maximum, for each of the four counts of direct bribery. Thereafter, petitioner applied
for probation and was discharged on March 5, 1998 upon order of the Regional Trial Court of Gapan,
Nueva Ecija.
On May 7, 2001, the Commission on Elections (COMELEC) rendered a decision granting the
petition of private respondent and declaring that petitioner was disqualified from running for the
position of mayor in the May 14, 2001 elections. In ruling against petitioner, the COMELEC cited
Section 12 of the BP 881 or the Omnibus Election Code which provides as follows:

Sec. 12. Disqualifications. Any person who has been declared by competent authority insane or
incompetent, or has been sentenced by final judgment for subversion, insurrection, rebellion or for
any offense for which he has been sentenced to a penalty of more than eighteen (18) months, or
for a crime involving moral turpitude, shall be disqualified to be a candidate and to hold any office,
unless he has been given plenary pardon, or granted amnesty.

The disqualifications to be a candidate herein provided shall be deemed removed upon the
declaration by competent authority that said insanity or incompetence had been removed or after
the expiration of a period of five years from his service of sentence, unless within the same period
he again becomes disqualified.

The above provision explicitly lifts the disqualification to run for an elective office of a person
convicted of a crime involving moral turpitude after five (5) years from the service of
sentence. According to the COMELEC, inasmuch as petitioner was considered to have completed
the service of his sentence on March 5, 1998, his five-year disqualification will end only on March 5,
2003.
On May 10, 2001, petitioner filed a motion for reconsideration but the same was denied by the
COMELEC in its resolution dated May 12, 2001.
Hence, this petition.
Petitioner argues that direct bribery is not a crime involving moral turpitude. Likewise, he cites
Section 40 of RA 7160, otherwise known as the Local Government Code of 1991, which he claims
is the law applicable to the case at bar, not BP 881 or the Omnibus Election Code as claimed by the
COMELEC. Said provision reads:

Section 40. Disqualifications. - The following persons are disqualified from running for any elective
local position:
(a) Those sentenced by final judgment for an offense involving moral turpitude or for an offense
punishable by one (1) year or more of imprisonment, within two (2) years after serving sentence.

xxxx

Petitioner insists that he had already served his sentence as of March 5, 1998 when he was
discharged from probation. Such being the case, the two-year disqualification period imposed by
Section 40 of the Local Government Code expired on March 5, 2000. Thus, petitioner was qualified
to run in the 2001 elections.
Meanwhile, Sonia Lorenzo was proclaimed by the COMELEC as the duly elected mayor of San
Isidro, Nueva Ecija. Thus, on June 19, 2001, petitioner filed a supplemental petition which this Court
merely noted in its resolution dated June 26, 2001. In his supplemental petition, petitioner assailed
the proclamation of Sonia Lorenzo on the ground that the propriety of his disqualification was still
under review by this Court. Petitioner likewise asked this Court to declare him as the duly elected
municipal mayor instead of Sonia Lorenzo.
On July 18, 2001, the Solicitor-General filed his manifestation and agreed with petitioner that
COMELEC should have applied Section 40 of the Local Government Code.
The main issue is whether or not petitioner was disqualified to run for mayor in the 2001
elections. In resolving this, two sub-issues need to be threshed out, namely: (1) whether the crime
of direct bribery involves moral turpitude and (2) whether it is the Omnibus Election Code or the
Local Government Code that should apply in this situation.
Regarding the first sub-issue, the Court has consistently adopted the definition in Blacks Law
Dictionary of moral turpitude as:

x x x an act of baseness, vileness, or depravity in the private duties which a man owes his fellow
men, or to society in general, contrary to the accepted and customary rule of right and duty
between man and woman or conduct contrary to justice, honesty, modesty, or good morals. [1]

Not every criminal act, however, involves moral turpitude. It frequently depends on the
circumstances surrounding the violation of the law.[2]
In this case, we need not review the facts and circumstances relating to the commission of the
crime considering that petitioner did not assail his conviction. By applying for probation, petitioner in
effect admitted all the elements of the crime of direct bribery:
1. the offender is a public officer;
2. the offender accepts an offer or promise or receives a gift or present by himself or through
another;
3. such offer or promise be accepted or gift or present be received by the public officer with
a view to committing some crime, or in consideration of the execution of an act which
does not constitute a crime but the act must be unjust, or to refrain from doing something
which it is his official duty to do; and [Italics supplied]
4. the act which the offender agrees to perform or which he executes is connected with the
performance of his official duties.[3]
Moral turpitude can be inferred from the third element. The fact that the offender agrees to
accept a promise or gift and deliberately commits an unjust act or refrains from performing an official
duty in exchange for some favors, denotes a malicious intent on the part of the offender to renege
on the duties which he owes his fellowmen and society in general. Also, the fact that the offender
takes advantage of his office and position is a betrayal of the trust reposed on him by the public. It
is a conduct clearly contrary to the accepted rules of right and duty, justice, honesty and good
morals. In all respects, direct bribery is a crime involving moral turpitude.
 It is the second sub-issue which is problematical. There appears to be a glaring incompatibility
between the five-year disqualification period provided in Section 12 of the Omnibus Election Code
and the two-year disqualification period in Section 40 of the Local Government Code.
It should be noted that the Omnibus Election Code (BP 881) was approved on December 3,
1985 while the Local Government Code (RA 7160) took effect on January 1, 1992. It is basic in
statutory construction that in case of irreconcilable conflict between two laws, the later enactment
must prevail, being the more recent expression of legislative will.[4] Legis posteriores priores
contrarias abrogant. In enacting the later law, the legislature is presumed to have knowledge of the
older law and intended to change it. Furthermore, the repealing clause of Section 534 of RA 7160
or the Local Government Code states that:

(f) All general and special laws, acts, city charters, decrees, executive orders, proclamations and
administrative regulations, or part or parts thereof which are inconsistent with any provisions of
this Code are hereby repealed or modified accordingly.

In accordance therewith, Section 40 of RA 7160 is deemed to have repealed Section 12 of BP

881. Furthermore, Article 7 of the Civil Code provides that laws are repealed only by subsequent
ones, and not the other way around. When a subsequent law entirely encompasses the subject
matter of the former enactment, the latter is deemed repealed.
In David vs. COMELEC[5], we declared that RA 7160 is a codified set of laws that specifically
applies to local government units. Section 40 thereof specially and definitively provides for
disqualifications of candidates for elective local positions. It is applicable to them only. On the other
hand, Section 12 of BP 881 speaks of disqualifications of candidates for any public office. It deals
with the election of all public officers. Thus, Section 40 of RA 7160, insofar as it governs the
disqualifications of candidates for local positions, assumes the nature of a special law which ought
to prevail.
The intent of the legislature to reduce the disqualification period of candidates for local positions
from five to two years is evident. The cardinal rule in the interpretation of all laws is to ascertain and
give effect to the intent of the law.[6] The reduction of the disqualification period from five to two years
is the manifest intent.
Therefore, although his crime of direct bribery involved moral turpitude, petitioner nonetheless
could not be disqualified from running in the 2001 elections. Article 12 of the Omnibus Election Code
(BP 881) must yield to Article 40 of the Local Government Code (RA 7160). Petitioners
disqualification ceased as of March 5, 2000 and he was therefore under no such disqualification
anymore when he ran for mayor of San Isidro, Nueva Ecija in the May 14, 2001 elections.
Unfortunately, however, neither this Court nor this case is the proper forum to rule on (1) the
validity of Sonia Lorenzos proclamation and (2) the declaration of petitioner as the rightful
winner. Inasmuch as Sonia Lorenzo had already been proclaimed as the winning candidate, the
legal remedy of petitioner would have been a timely election protest.
WHEREFORE, the instant petition is hereby PARTIALLY GRANTED. The challenged
resolutions of the Commission on Elections dated May 7, 2001 and May 12, 2001 are hereby
reversed and set aside. The petitioners prayer in his supplemental petition for his proclamation as
the winner in the May 14, 2001 mayoralty elections in San Isidro, Nueva Ecija, not being within our
jurisdiction, is hereby denied.
SO ORDERED.
3. [G.R. No. 148560. November 19, 2001]

JOSEPH EJERCITO ESTRADA, petitioner, vs. SANDIGANBAYAN (Third Division) and

PEOPLE OF THE PHILIPPINES, respondents.

DECISION
BELLOSILLO, J.:

JOHN STUART MILL, in his essay On Liberty, unleashes the full fury of his pen in defense of
the rights of the individual from the vast powers of the State and the inroads of societal pressure. But
even as he draws a sacrosanct line demarcating the limits on individuality beyond which the State
cannot tread - asserting that "individual spontaneity" must be allowed to flourish with very little regard
to social interference - he veritably acknowledges that the exercise of rights and liberties is imbued
with a civic obligation, which society is justified in enforcing at all cost, against those who would
endeavor to withhold fulfillment. Thus he says –
The sole end for which mankind is warranted, individually or collectively, in interfering with the
liberty of action of any of their number, is self-protection. The only purpose for which power can be
rightfully exercised over any member of a civilized community, against his will, is to prevent harm to
others.
Parallel to individual liberty is the natural and illimitable right of the State to self-
preservation. With the end of maintaining the integrity and cohesiveness of the body politic, it
behooves the State to formulate a system of laws that would compel obeisance to its collective
wisdom and inflict punishment for non-observance.
The movement from Mill's individual liberalism to unsystematic collectivism wrought changes in
the social order, carrying with it a new formulation of fundamental rights and duties more attuned to
the imperatives of contemporary socio-political ideologies. In the process, the web of rights and
State impositions became tangled and obscured, enmeshed in threads of multiple shades and
colors, the skein irregular and broken. Antagonism, often outright collision, between the law as the
expression of the will of the State, and the zealous attempts by its members to preserve their
individuality and dignity, inevitably followed. It is when individual rights are pitted against State
authority that judicial conscience is put to its severest test.
Petitioner Joseph Ejercito Estrada, the highest-ranking official to be prosecuted under RA 7080
(An Act Defining and Penalizing the Crime of Plunder),[1] as amended by RA 7659,[2] wishes to
impress upon us that the assailed law is so defectively fashioned that it crosses that thin but distinct
line which divides the valid from the constitutionally infirm. He therefore makes a stringent call for
this Court to subject the Plunder Law to the crucible of constitutionality mainly because, according
to him, (a) it suffers from the vice of vagueness; (b) it dispenses with the "reasonable doubt" standard
in criminal prosecutions; and, (c) it abolishes the element of mens rea in crimes already punishable
under The Revised Penal Code, all of which are purportedly clear violations of the fundamental
rights of the accused to due process and to be informed of the nature and cause of the accusation
against him.
Specifically, the provisions of the Plunder Law claimed by petitioner to have transgressed
constitutional boundaries are Secs. 1, par. (d), 2 and 4 which are reproduced hereunder:

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

(1) Through misappropriation, conversion, misuse, or malversation of public funds or raids on the
public treasury;
(2) By receiving, directly or indirectly, any commission, gift, share, percentage, kickbacks or any
other form of pecuniary benefit from any person and/or entity in connection with any government
contract or project or by reason of the office or position of the public office concerned;

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

(4) By obtaining, receiving or accepting directly or indirectly any shares of stock, equity or any
other form of interest or participation including the promise of future employment in any business
enterprise or undertaking;

(5) By establishing agricultural, industrial or commercial monopolies or other combinations and/or

implementation of decrees and orders intended to benefit particular persons or special interests; or

(6) By taking advantage of official position, authority, relationship, connection or influence to

unjustly enrich himself or themselves at the expense and to the damage and prejudice of the
Filipino people and the Republic of the Philippines.

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

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

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

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

2. That he amassed, accumulated or acquired ill-gotten wealth through a combination or series of

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

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

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

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

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

(a) by receiving OR collecting, directly or indirectly, on SEVERAL INSTANCES, MONEY IN THE

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

(b) by DIVERTING, RECEIVING, misappropriating, converting OR misusing DIRECTLY OR

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

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

(d) by unjustly enriching himself FROM COMMISSIONS, GIFTS, SHARES, PERCENTAGES,

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

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

Combination - the result or product of combining; the act or process of combining. To combine is
to bring into such close relationship as to obscure individual characters.

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

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

DELIBERATIONS OF THE BICAMERAL COMMITTEE ON JUSTICE, 7 May 1991

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

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

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

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

Hence, it cannot plausibly be contended that the law does not give a fair warning and sufficient
notice of what it seeks to penalize. Under the circumstances, petitioner's reliance on the "void-for-
vagueness" doctrine is manifestly misplaced. The doctrine has been formulated in various ways, but
is most commonly stated to the effect that a statute establishing a criminal offense must define the
offense with sufficient definiteness that persons of ordinary intelligence can understand what
conduct is prohibited by the statute. It can only be invoked against that specie of legislation that is
utterly vague on its face, i.e., that which cannot be clarified either by a saving clause or by
construction.
A statute or act may be said to be vague when it lacks comprehensible standards that men of
common intelligence must necessarily guess at its meaning and differ in its application. In
such instance, the statute is repugnant to the Constitution in two (2) respects - it violates due process
for failure to accord persons, especially the parties targeted by it, fair notice of what conduct to avoid;
and, it leaves law enforcers unbridled discretion in carrying out its provisions and becomes an
arbitrary flexing of the Government muscle.[10] But the doctrine does not apply as against legislations
that are merely couched in imprecise language but which nonetheless specify
a standard though defectively phrased; or to those that are apparently ambiguous yet fairly
applicable to certain types of activities. The first may be "saved" by proper construction, while no
challenge may be mounted as against the second whenever directed against such activities. [11] With
more reason, the doctrine cannot be invoked where the assailed statute is clear and free from
ambiguity, as in this case.
The test in determining whether a criminal statute is void for uncertainty is whether the language
conveys a sufficiently definite warning as to the proscribed conduct when measured by common
understanding and practice.[12] It must be stressed, however, that the "vagueness" doctrine merely
requires a reasonable degree of certainty for the statute to be upheld - not absolute precision or
mathematical exactitude, as petitioner seems to suggest. Flexibility, rather than meticulous
specificity, is permissible as long as the metes and bounds of the statute are clearly delineated. An
act will not be held invalid merely because it might have been more explicit in its wordings or detailed
in its provisions, especially where, because of the nature of the act, it would be impossible to provide
all the details in advance as in all other statutes.
Moreover, we agree with, hence we adopt, the observations of Mr. Justice Vicente V. Mendoza
during the deliberations of the Court that the allegations that the Plunder Law is vague and
overbroad do not justify a facial review of its validity -
The void-for-vagueness doctrine states that "a statute which either forbids or requires the doing of
an act in terms so vague that men of common intelligence must necessarily guess at its meaning
and differ as to its application, violates the first essential of due process of law."[13] The
overbreadth doctrine, on the other hand, decrees that "a governmental purpose may not be
achieved by means which sweep unnecessarily broadly and thereby invade the area of protected
freedoms."[14]

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

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

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

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

Indeed, "on its face" invalidation of statutes results in striking them down entirely on the ground
that they might be applied to parties not before the Court whose activities are constitutionally
protected.[22] It constitutes a departure from the case and controversy requirement of the
Constitution and permits decisions to be made without concrete factual settings and in sterile
abstract contexts.[23] But, as the U.S. Supreme Court pointed out in Younger v. Harris[24]
[T]he task of analyzing a proposed statute, pinpointing its deficiencies, and requiring correction of
these deficiencies before the statute is put into effect, is rarely if ever an appropriate task for the
judiciary.The combination of the relative remoteness of the controversy, the impact on the
legislative process of the relief sought, and above all the speculative and amorphous nature of the
required line-by-line analysis of detailed statutes, . . . ordinarily results in a kind of case that is
wholly unsatisfactory for deciding constitutional questions, whichever way they might be decided.

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

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

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

The assailed provisions of the Anti-Graft and Corrupt Practices Act consider a corrupt practice and
make unlawful the act of the public officer in:
x x x or giving any private party any unwarranted benefits, advantage or preference in the
discharge of his official, administrative or judicial functions through manifest partiality, evident bad
faith or gross inexcusable negligence, x x x (Section 3 [e], Rep. Act 3019, as amended).

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

In other words, this Court found that there was nothing vague or ambiguous in the use of the
term "unwarranted" in Sec. 3, par. (e), of The Anti-Graft and Corrupt Practices Act, which was
understood in its primary and general acceptation. Consequently, in that case, petitioners' objection
thereto was held inadequate to declare the section unconstitutional.
On the second issue, petitioner advances the highly stretched theory that Sec. 4 of the Plunder
Law circumvents the immutable obligation of the prosecution to prove beyond reasonable doubt the
predicate acts constituting the crime of plunder when it requires only proof of a pattern of overt or
criminal acts showing unlawful scheme or conspiracy -

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

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

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

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

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

Implicit in the foregoing section is that to avoid the whole act from being declared invalid as a
result of the nullity of some of its provisions, assuming that to be the case although it is not really
so, all the provisions thereof should accordingly be treated independently of each other, especially
if by doing so, the objectives of the statute can best be achieved.
As regards the third issue, again we agree with Justice Mendoza that plunder is a malum in
se which requires proof of criminal intent. Thus, he says, in his Concurring Opinion -

x x x Precisely because the constitutive crimes are mala in se the element of mens rea must be
proven in a prosecution for plunder. It is noteworthy that the amended information alleges that the
crime of plunder was committed "willfully, unlawfully and criminally." It thus alleges guilty
knowledge on the part of petitioner.
In support of his contention that the statute eliminates the requirement of mens rea and that is the
reason he claims the statute is void, petitioner cites the following remarks of Senator Taada made
during the deliberation on S.B. No. 733:

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

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

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

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

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

Indeed, 2 provides that -

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

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

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

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

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

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

To clinch, petitioner likewise assails the validity of RA 7659, the amendatory law of RA 7080,
on constitutional grounds. Suffice it to say however that it is now too late in the day for him to
resurrect thislong dead issue, the same having been eternally consigned by People v.
Echegaray[38] to the archives of jurisprudential history. The declaration of this Court therein that RA
7659 is constitutionally valid stands as a declaration of the State, and becomes, by necessary effect,
assimilated in the Constitution now as an integral part of it.
Our nation has been racked by scandals of corruption and obscene profligacy of officials in high
places which have shaken its very foundation. The anatomy of graft and corruption has become
more elaborate in the corridors of time as unscrupulous people relentlessly contrive more and more
ingenious ways to bilk the coffers of the government. Drastic and radical measures are imperative
to fight the increasingly sophisticated, extraordinarily methodical and
economically catastrophic looting of the national treasury. Such is the Plunder Law, especially
designed to disentangle those ghastly tissues of grand-scale corruption which, if left unchecked, will
spread like a malignant tumor and ultimately consume the moral and institutional fiber of our
nation. The Plunder Law, indeed, is a living testament to the will of the legislature to ultimately
eradicate this scourge and thus secure society against the avarice and other venalities in public
office.
These are times that try men's souls. In the checkered history of this nation, few issues of
national importance can equal the amount of interest and passion generated by petitioner's
ignominious fall from the highest office, and his eventual prosecution and trial under a virginal
statute. This continuing saga has driven a wedge of dissension among our people that may linger
for a long time. Only by responding to the clarion call for patriotism, to rise above factionalism and
prejudices, shall we emerge triumphant in the midst of ferment.
PREMISES CONSIDERED, this Court holds that RA 7080 otherwise known as the Plunder Law,
as amended by RA 7659, is CONSTITUTIONAL. Consequently, the petition to declare the law
unconstitutional is DISMISSED for lack of merit.
SO ORDERED.
4. G.R. No. L-65952 July 31, 1984
LAURO G. SORIANO, JR., petitioner,
vs.
THE HONORABLE SANDIGANBAYAN AND THE PEOPLE OF THE
PHILIPPINES, respondents.

Dakila F. Castro for petitioner.

The Solicitor General for respondents.

ABAD SANTOS, J.:

The principal issue in this petition to review a decision of the Sandiganbayan is whether or not the
preliminary investigation of a criminal complaint conducted by a Fiscal is a "contract or transaction"
so as to bring it within the ambit of Section 3 (b) of Republic Act No. 3019, otherwise known as the
Anti-Graft and Corrupt Practices Act.

The factual background is as follows:

Thomas N. Tan was accused of qualified theft in a complaint lodged with the City Fiscal of Quezon
City. The case was docketed as I.S. No. 82-2964 and assigned for investigation to the petitioner
who was then an Assistant City Fiscal. In the course of the investigation the petitioner demanded
P4,000.00 from Tan as the price for dismissing the case. Tan reported the demand to the National
Bureau of Investigation which set up an entrapment. Because Tan was hard put to raise the required
amount only P2,000.00 in bills were marked by the NBI which had to supply one-half thereof. The
entrapment succeeded and an information was filed with the Sandiganbayan in Criminal Case No.
7393 which reads as follows:

The undersigned Tanodbayan Special Prosecutor accuses LAURO G. SORIANO, for

Violation of Section 3, paragraph (b) of Republic Act 3019, otherwise known as the
Anti-Graft and Corrupt Practices Act, committed as follows:

That on or about the 21st day of March 1983, at Quezon City,

Philippines, and within the jurisdiction of this Honorable Court, the
above-named accused, a public officer, being then and still is an
Assistant City Fiscal of the Quezon City Fiscal's Office, detailed as the
Investigating Fiscal in the case of MARIANNE Z. LACAMBRA versus
THOMAS N. TAN, docketed as I.S. No. 82-2964, for Qualified Theft,
taking advantage of his official position and with grave abuse of
authority, did then and there wilfully, unlawfully and feloniously demand
and request from Thomas N. Tan the amount of FOUR THOUSAND
PESOS (P4,000.00) Philippine Currency, and actually received from
said Thomas N. Tan the amount of TWO THOUSAND PESOS
(P2,000.00) Philippine Currency, in consideration for a favorable
resolution by dismissing the abovementioned case, wherein said
accused has to intervene in his official capacity as such Investigating
Fiscal.

CONTRARY TO LAW.

Manila, Philippines, March 22, 1983.

 (SGD.)
EDGARDO C.
LABELLA
Special
Prosecutor

After trial the Sandiganbayan rendered a decision with the following dispositive portion:

WHEREFORE, the Court finds accused Lauro G. Soriano, Jr., GUILTY beyond
reasonable doubt, as Principal in the Information, for Violation of Section 3, paragraph
(b), of Republic Act No. 3019, as amended, otherwise known as the Anti-Graft and
Corrupt Practices Act, and hereby sentences him to suffer the indeterminate penalty
of imprisonment ranging from SIX (6) YEARS and ONE (1) MONTH, as minimum, to
NINE (9) YEARS and ONE (1) DAY, as maximum; to suffer perpetual disqualification
from public office; to suffer loss of all retirement or gratuity benefits under any law;
and, to pay costs.

Of the sum of Two Thousand Pesos (P2,000.00) used in the entrapment operations,
and which was fully recovered from the accused, One Thousand Pesos (P1,000.00)
shall be returned to private complainant Thomas N. Tan, and the other half, to the
National Bureau of Investigation, National Capital Region.

A motion to reconsider the decision was denied by the Sandiganbayan; hence the instant petition.

The petitioner has raised several legal questions plus one factual question. The latter is to the effect
that the Sandiganbayan convicted him on the weakness of his defense and not on the strength of
the prosecution's evidence. This claim is not meritorious not only because it is not for Us to review
the factual findings of the court a quo but also because a reading of its decision shows that it
explicitly stated the facts establishing the guilt of the petitioner and the competence of the witnesses
who testified against him.

As stated above, the principal issue is whether or not the investigation conducted by the petitioner
can be regarded as a "contract or transaction" within the purview of Sec. 3 (b) of R.A. No. 3019. On
this issue the petition is highly impressed with merit.

The afore-mentioned provision reads as follows:

SEC. 3. Corrupt practices of public officers. — In addition to acts or omissions of public

officers already penalized by existing law, the following shall constitute corrupt
practices of any public officer and are hereby declared to be unlawful:

(a) ...

(b) Directly or indirectly requesting or receiving any gift, present, share, percentage,
or benefit, for himself or for any other person, in connection with any contract or
transaction between the Government and any other party, wherein the public officer in
his official capacity has to intervene under the law.

The petitioner states:

Assuming in gratia argumenti, petitioner's guilt, the facts make out a case of Direct
Bribery defined and penalized under the provision of Article 210 of the Revised Penal
Code and not a violation of Section 3, subparagraph (b) of Rep. Act 3019, as amended.
 The evidence for the prosecution clearly and undoubtedly support, if at all the offense
of Direct Bribery, which is not the offense charged and is not likewise included in or is
necessarily included in the offense charged, which is for violation of Section 3,
subparagraph (b) of Rep. Act 3019, as amended. The prosecution showed that: the
accused is a public officer; in consideration of P4,000.00 which was allegedly solicited,
P2,000.00 of which was allegedly received, the petitioner undertook or promised to
dismiss a criminal complaint pending preliminary investigation before him, which may
or may not constitute a crime; that the act of dismissing the criminal complaint pending
before petitioner was related to the exercise of the function of his office. Therefore, it
is with pristine clarity that the offense proved, if at all is Direct Bribery. (Petition, p. 5.)

Upon the other hand, the respondents claim:

A reading of the above-quoted provision would show that the term 'transaction' as used
thereof is not limited in its scope or meaning to a commercial or business transaction
but includes all kinds of transaction, whether commercial, civil or administrative in
nature, pending with the government. This must be so, otherwise, the Act would have
so stated in the "Definition of Terms", Section 2 thereof. But it did not, perforce leaving
no other interpretation than that the expressed purpose and object is to embrace all
kinds of transaction between the government and other party wherein the public officer
would intervene under the law. (Comment, p. 8.)

It is obvious that the investigation conducted by the petitioner was not a contract. Neither was it
a transactionbecause this term must be construed as analogous to the term which precedes it. A
transaction, like a contract, is one which involves some consideration as in credit transactions and
this element (consideration) is absent in the investigation conducted by the petitioner.

In the light of the foregoing, We agree with the petitioner that it was error for the Sandiganbayan to
have convicted him of violating Sec. 3 (b) of R.A. No. 3019.

The petitioner also claims that he cannot be convicted of bribery under the Revised Penal Code
because to do so would be violative of as constitutional right to be informed of the nature and cause
of the accusation against him. Wrong. A reading of the information which has been reproduced
herein clearly makes out a case of bribery so that the petitioner cannot claim deprivation of the right
to be informed.

IN THE LIGHT OF THE FOREGOING, the judgment of the Sandiganbayan is modified in that the
petitioner is deemed guilty of bribery as defined and penalized by Article 210 of the Revised Penal
Code and is hereby sentenced to suffer an indeterminate penalty of six (6) months of arresto mayor,
as minimum, to two (2) years of prision correccional as maximum, and to pay a fine of Two
Thousand (P2,000.00) Pesos. The rest of the judgment is hereby affirmed. Costs against the
petitioner.

SO ORDERED
5. FELICITAS P. ONG, G.R. No. 176546
Petitioner,
Present:
Ynares-Santiago, J. (Chairperson),
- versus - Chico-Nazario,
Velasco, Jr.,
Nachura, and
Peralta, JJ.
THE PEOPLE OF THE
PHILIPPINES, Promulgated:
Respondent.
September 25, 2009
x ---------------------------------------------------------------------------------------- x

DECISION

YNARES-SANTIAGO, J.:

Assailed in this petition for review is the Decision[1] of the Sandiganbayan dated November
13, 2006 in Criminal Case No. 24416, finding petitioner Felicitas P. Ong guilty beyond reasonable
doubt of violation of Sec. 3 (e) of Republic Act No. 3019, otherwise known as the Anti-Graft and
Corrupt Practices Act. Also assailed is the Resolution[2] dated February 2, 2007 denying the motion
for reconsideration.

On August 12, 1996 petitioner in her capacity as Mayor of Angadanan, Isabela, bought [3] an
Isuzu dump truck[4] for P750,000.00 from Josephine Ching for the use of the municipality.

On March 26, 1997, a letter-complaint[5] was filed against petitioner by her successor, Mayor
Diosdado Siquian[6] and several other Sangguniang Bayan members[7]before the Office of the
Ombudsman, accusing her of malversation of public funds and property in connection with several
alleged irregularities committed during her term as Mayor of Angadanan, including the purchase of
the dump truck for being grossly overpriced.

On August 14, 1997, Graft Investigation Officer I Germain G. Lim found no probable cause
to hold petitioner liable for the charges. Upon reconsideration however, she was indicted for violation
of Sec. 3 (e) of RA No. 3019, as amended, with respect to the acquisition of the dump truck.

The Information[8] reads:

That on or about August 1996, or sometime prior or subsequent thereto in the

Municipality of Angadanan, Isabela, Philippines, and within the jurisdiction of this
Honorable Court, the above-named accused, Felicitas P. Ong, a public official, being
the Municipal Mayor of Angadanan, Isabela, taking advantage of her official position
and committing the offense in relation to her office, acting with manifest partiality,
evident bad faith or gross inexcusable negligence, did then and there willfully,
unlawfully and feloniously cause injury to the Municipality of Angadanan by causing
and approving, without public bidding, the acquisition of an Isuzu dump truck with Plate
 Number T-BBB-206 from J.C. Trucking in the amount of SEVEN HUNDRED FIFTY
THOUSAND PESOS (P750,000.00) when the same or similar type of dump truck
could have been bought at a much lower price of not more than FIVE HUNDRED
THOUSAND PESOS (P500,000.00), to the damage and prejudice of the Municipality
of Angadanan in the amount of TWO HUNDRED AND FIFTY THOUSAND PESOS
(P250,000.00).

CONTRARY TO LAW.

On January 12, 1999, petitioner was arraigned and entered a plea of Not guilty. [9]

During trial, Ramon De Guzman Sevilla, Sales Manager of Christian Motor Sales
in Cabanatuan City, Nueva Ecija, testified that the cost of a ten wheeler-front drive, military type
Isuzu dump truck ranges from P190,000.00-P490,000.00.[10]

Sangguniang Bayan members and complainants Ruben P. Lappay and Mirasol P. Lappay
both testified that the dump truck was bought without conducting a public bidding or a resolution by
the Sangguniang Bayan; that the truck was merely reconditioned and not brand new as can be seen
from its deplorable condition, worn tires and old battery; [11]and that a subsequent canvass of other
suppliers showed that better quality dump trucks cost no more than P500,000.00. [12]

In her defense, petitioner testified that in 1996, the municipality appropriated the amount of
P1,000,000.00 for the purchase of a dump truck;[13] that pursuant to said appropriation, the subject
vehicle was purchased on August 12, 1996 for P750,000.00 through a negotiated purchase from
Josephine Ching of J.C. Trucking; that the public bidding and prior Sangguniang Bayan resolution
were dispensed with pursuant to Commission on Audit (COA) Resolution Nos. 95-244[14] and 95-
244-A[15] which do not require the conduct of a public bidding on any negotiated purchase in amounts
not exceeding P10,000,000.00;[16] that the truck was not in disrepair as the same was inspected by
the Regional Engineer from COA who declared it fit and in good running condition; [17] and that the
purchase was allowed by COA because it did not issue a notice of disallowance. [18]

On November 13, 2006, the Sandiganbayan rendered its Decision finding petitioner guilty
beyond reasonable doubt of violation of Sec. 3 (e) of RA No. 3019. The dispositive portion thereof
reads:

WHEREFORE, the Court finds accused Felicitas P. Ong, GUILTY beyond

reasonable doubt, for violation of Sec. 3 (e) of RA No. 3019, and is hereby sentenced
to suffer the penalty of:

(A) Imprisonment of, after applying the Indeterminate Sentence Law, six years
and one month as minimum, up to ten years, as maximum; and

(B) Perpetual disqualification from Public Office.

Accused is hereby ordered to RETURN to the Municipality of Angadanan the

amount of P250,000.00.
 SO ORDERED.[19]

The Sandiganbayan found that as Mayor of Angadanan, there is no dispute that petitioner
was a public officer discharging administrative and official functions; that there is no merit to
petitioners claim that the purchase of the dump truck without public bidding was justified by COA
Resolution Nos. 95-244 and 95-244-A; and that the prosecution was able to prove that had petitioner
observed the proper procurement procedure, the municipality could have acquired a dump truck
similar to, if not better than that which she bought, for a much lesser price.

Hence, this appeal where petitioner contends that the Sandiganbayan erred in finding her
guilty of violation of Section 3 (e) of RA No. 3019. In particular, petitioner denies causing injury or
giving anybody any unwarranted benefits, advantage or preference in the discharge of her official
or administrative functions, or that she is guilty of any manifest partiality, evident bad faith or gross
negligence.

We are not persuaded.

It is a well-entrenched rule that factual findings of the Sandiganbayan are conclusive upon
the Supreme Court except where: (1) the conclusion is a finding grounded entirely on speculation,
surmise and conjectures; (2) the inference made is manifestly mistaken; (3) there is grave abuse of
discretion; (4) the judgment is based on misapprehension of facts and the findings of fact of the
Sandiganbayan are premised on the absence of evidence and are contradicted by evidence on
record.[20] None of the above exceptions obtains in this case.

Section 3 (e) of RA No. 3019, as amended, provides:

Section 3. Corrupt practices of public officers.- In addition to acts or omissions

of public officers already penalized by existing law, the following shall constitute
corrupt practices of any public officer and are hereby declared to be unlawful

(e) Causing any undue injury to any party, including the Government, or giving
any private party any unwarranted benefits, advantage or preference in the discharge
of his official, administrative or judicial functions through manifest partiality, evident
bad faith or gross inexcusable negligence. This provision shall apply to officers and
employees of offices or government corporations charged with the grant of licenses or
permits or other concessions.

The following essential elements must be present:

1. The accused must be a public officer discharging administrative, judicial

or official functions;
2. He must have acted with manifest partiality, evident bad faith or gross
inexcusable negligence; and
 3. His action caused any undue injury to any party, including the
government, or gave any private party unwarranted benefits, advantage or
preference in the discharge of his functions.[21]

We find that all the elements of the offense charged have been duly established beyond
reasonable doubt. Petitioner, being then the Mayor of Angadanan, Isabela is a public officer
discharging administrative and official functions. The act of purchasing the subject truck without the
requisite public bidding and authority from the Sangguniang Bayan displays gross and inexcusable
negligence. Undue injury was caused to the Government because said truck could have been
purchased at a much lower price.

The contention that the acquisition through a negotiated purchase was valid the same being
pursuant to COA Resolution Nos. 95-244 and 95-244-A, is untenable.Petitioners reliance on said
COA Resolutions is misplaced. COA Resolution No. 95-244 as amended by Resolution No. 95-244-
A states that there is no necessity of prescribing the limit of purchases not subject to public bidding
since Executive Order No. 301[22] authorizes the heads of an agency with the approval of the
Department Heads to enter into a negotiated purchase as long as the same is advantageous to the
government.

Both resolutions are implementing guidelines which must be read and applied in conjunction
with Title VI,[23] Book II, of Republic Act No. 7160 otherwise known as the Local Government Code
of 1991. Section 356 thereof states the general rule that the acquisition of supplies by the local
government units shall be through competitive bidding. The only instances when public bidding
requirements can be dispensed with are provided under Section 366, to wit:

Section 366. Procurement without Public Bidding. - Procurement of

supplies may be made without the benefit of public bidding under any of the following
modes:

(a) Personal canvass of responsible merchants;

(b) Emergency purchases;
(c) Negotiated purchase;
(d) Direct purchase from manufacturers or exclusive distributors; and,
(e) Purchase from other government entities. (Underscoring supplied)

The negotiated purchase is further qualified by Section 369 thereof which states:

Section 369. Negotiated Purchase.- (a) In cases where public biddings have
failed for two (2) consecutive times and no suppliers have qualified to participate or
win in the biddings, local government units may, through the local chief executive
concerned, undertake the procurement of supplies by negotiated purchase, regardless
of amount, without public bidding: provided, however, that the contract covering the
negotiated purchase shall be approved by the Sanggunian concerned x x x.

Thus, a local chief executive could only resort to a negotiated purchase under Section 366 of
RA No. 7160 and COA Resolution Nos. 95-244 and 95-244-A, if the following two requisites are
present: (1) public biddings have failed for at least two consecutive times and; (2) no suppliers have
qualified to participate or win in the biddings.

The Sandiganbayan correctly ruled that by procuring the subject truck through a negotiated
purchase without public bidding, petitioner failed to comply with the above stated procedure. Indeed,
as the local chief executive, petitioner is not only expected to know the proper procedure in the
procurement of supplies, she is also duty bound to follow the same and her failure to discharge this
duty constitutes gross and inexcusable negligence.

Price quotations obtained from several suppliers[24] as well as the testimonies of Ramon de
Guzman Sevilla, Ruben Lappay and Mirasol Lappay proved that the dump truck purchased by
petitioner was over-priced. Hence, had petitioner observed the proper procurement procedure, the
municipality of Angadanan could have acquired a dump truck similar to, if not better than the one
originally bought, at a much lower price of not more than P500,000.00. Without doubt, petitioners
negligence caused undue injury to the government while at the same time gave unwarranted
benefits to Josephine Ching.

The penalty for violation of Section 3(e) of RA 3019 is imprisonment for not less than six
years and one month nor more than fifteen years, and perpetual disqualification from public
office.[25] Under the Indeterminate Sentence Law, if the offense is punished by special law, as in the
present case, an indeterminate penalty shall be imposed on the accused, the maximum term of
which shall not exceed the maximum fixed by the law, and the minimum not less than the minimum
prescribed therein.[26]

In view of the circumstances obtaining in the instant case, the Sandiganbayan correctly
imposed the indeterminate prison term of six (6) years and one (1) month, as minimum, to ten (10)
years and one (1) day, as maximum, with perpetual disqualification from public office.

WHEREFORE, the petition is DENIED. The Decision of the Sandiganbayan dated November
13, 2006 finding petitioner Felicitas P. Ong guilty beyond reasonable doubt of violation of Section 3
(e) of Republic Act No. 3019 and sentencing her to suffer the penalty of six (6) years and one (1)
month, as minimum, to ten (10) years and one (1) day, as maximum, with perpetual disqualification
from holding public office and with order to return the amount of P250,000.00, is AFFIRMED.

SO ORDERED.
6. G.R. No. 70332-43 November 13, 1986
GENEROSO TRIESTE, SR., petitioner,
vs.
SANDIGANBAYAN (SECOND DIVISION), respondent.

Arturo M. de Castro for petitioner.

The Solicitor General for respondent.

ALAMPAY, J.:

The present case relates to an appeal by way of a Petition for Review of the decision promulgated
on November 6, 1984, by the Sandiganbayan convicting the herein petitioner, Generoso Trieste,
Sr., of twelve (12) separate violations of Section 3 paragraph (h) of Republic Act 3019, otherwise
known as the Anti-Graft and Corrupt Practices - Act, which petitioner were accused of in Criminal
Cases Nos. 6856-6867 of said Court. Petitioner's motion for reconsideration and/or new trial was
denied by the respondent Sandiganbayan under its Resolution of March 11, 1985.

The twelve (12) separate Informations filed by the Tanodbayan against the herein petitioner for
violation of Section 3 (h) of the Anti-Graft Law are all similarly worded as the information presented
in Criminal Case No. 6856 which is hereunder quoted:

That on or about the month of July, 1980 and some time subsequent thereto, in the
municipality of Numancia, Aklan, Philippines, and within the jurisdiction of this
Honorable Court, the abovenamed accused, being then the Municipal Mayor and
member of the Committee on Award of the Municipality of Numancia, Aklan and as
such, had administrative control of the funds of the municipality and whose approval
is required in the disbursements of municipal funds, did then and there wilfully and
unlawfully have financial or pecuniary interest in a business, contract or transaction in
connection with which said accused intervened or took part in his official capacity and
in which he is prohibited by law from having any interest, to wit the purchases of
construction materials by the Municipality of Numancia, Aklan from Trigen Agro-
Industrial Development Corporation, of which the accused is the president,
incorporator, director and major stockholder paid under Municipal Voucher No. 211-
90-10-174 in the amount of P558.80 by then and there awarding the supply and
delivery of said materials to Trigen Agro-Industrial Development Corporation and
approving payment thereof to said corporation in violation of the Anti-Graft and corrupt
Practices Act.

except only as to the dates of the commission of the offense, voucher numbers, and amounts
involved.

Criminal Cases Nos. 6856, 6857, 6858, 6859, 6860. 6861, and 6862 were allegedly committed in
July, 1980; Criminal Cases Nos. 6863 and 6864, in August, 1980; and Criminal Cases Nos. C-865,
6866 and 6867 in October, 1980. The separate vouchers involved in the twelve (12) cases are said
to be the following:

Crim. Case #6856, Vchr #211-90-10-174 at P558.80

Crim. Case #6857, Vchr #211-80-10-187 at 943.60

Crim. Case #6858, Vchr #211-80-10-189 at 144.00

 Crim. Case #6859, Vchr #211-80-10-190 at 071.30

Crim. Case #6860, Vchr #211-80-10-191 at 270.00

Crim. Case #6861, Vchr #211-80-10-232 at 1,820.00

Crim. Case #6862, Vchr #211-80-10-239 at 1,085.80

Crim. Case #6863, Vchr #211-80-10-407 at 150.00

Crim. Case #6864, Vchr #211-80-12-494 at 500.00

Crim. Case #6865, Vchr #211-81-04-61 at 840.00

Crim. Case #6866, Vchr #211-81-04-62 at 787.00

Crim. Case #6867, Vchr #211-81-04-63 at 560.00

T o t a l - - - - P7,730.50

(Consolidated Comment, pg. 4; Rollo, 325)

After trial, the Sandiganbayan rendered the challenged decision dated November 6, 1984,
convicting the petitioner in all the twelve (12) criminal cases, (Rollo, pp. 324-325) and in each case
he was sentenced,"...to suffer the indeterminate penalty of imprisonment ranging from THREE (3)
YEARS and ONE (1) DAY as the minimum, to SIX (6) YEARS and ONE (1) DAY as the maximum,
to further suffer perpetual disqualification from the public office, and to pay the cost of the action."
(pp. 37-40, Decision; Rollo, 322).

After the petition for review was filed in this case and pending the submission by respondent of its
comment to the petition, herein petitioner presented to this Court on June 7, 1985, an urgent petition
to lift the order of the Sandiganbayan dated September 12, 1983, suspending him from Office as
the elected Municipal Mayor of Numancia, Aklan. His term was to expire in 1986. No objection to
the petition for the lifting of the suspension order was interposed by the Solicitor General.
Accordingly, and pursuant to the resolution of this Court dated October 1, 1985, petitioner's
preventive suspension was lifted and his reinstatement as Municipal Mayor of Numancia, Aklan was
ordered to take effect immediately.

A supplemental petition, dated October 10, 1985, was later filed by petitioner's new counsel in
collaboration with the original counsel on record of petitioner. In this supplemental pleading, it was
vigorously stressed that the petitioner did not, in any way, intervene in making the awards and
payment of the purchases in question as he signed the voucher only after all the purchases had
already been made, delivered and paid for by the Municipal Treasurer. It was further pointed out
that there was no bidding at all as erroneously adverted to in the twelve informations filed against
herein petitioner because the transactions involved were emergency direct purchases by personal
canvass.

Upon leave of the Court given, the former Solicitor General filed a consolidated comment dated
November 4, 1984, to the original petition filed in this case dated April 30, 1985 as well as on the
supplemental petition dated October 10, 1985. He argued the dismissal of the petition on the ground
that the same raise factual issues which are, therefore, non-reviewable (Consolidated Comment,
pg. 20; Rollo, 341). The submission made by the Office of the Solicitor General in the Consolidated
Comment dated November 4, 1986, are hereunder quoted:

xxx xxx xxx

 The impugned decision convicted petitioner for violation of Section 3 (h), paragraph
(h) of the Anti-Graft and Corrupt Practices Act which reads as follows:

SEC. 3. Corrupt Practices of Public Officers. - In addition to acts or omissions of public

officers already penalized by existing laws, the following shall constitute corrupt
practices of any public officer and are hereby declared to be unlawful:

xxx xxx xxx

(h) Directly or indirectly having financial or pecuniary interest in any business, contract
or transaction in connection with which he intervenes or takes part in his official
capacity, or in which he is prohibited by the Constitution or by any law from having any
interest.

The elements essential in the commission of the crime are:

a) The public officer has financial or pecuniary interest in a business, contract or

transaction;

b) In connection with which he intervenes in his official capacity.

Concurrence of both elements is necessary as the absence of one will not warrant
conviction. (Rollo, pp. 338-339).

The earlier view taken by the Solicitor General's Office was that petitioner's evidence of divestment
of interest in Trigen 'Corporation, which is said to have been effected on February 25, 1980, before
the petitioner assumed the Mayorship, should have been presented at the earliest opportunity before
the Tanodbayan and because this was not done by him the resolution of the Tanodbayan finding a
prima facie case against petitioner should be sustained. Furthermore, petitioner was faulted
because the transfer of his interest in the corporate stock of Trigen Corporation should have been
recorded in the Securities and Exchange Commission but no evidence of this sort, was presented.
The consolidated comment also played up the advertisement of Trigen Corporation in the program
of the Rotary Club of Kalibo, Aklan, showing the printed name of petitioner as the President-Manager
of the said corporation. (Consolidated Comment; Rollo, pp. 340-341)

Petitioner filed a Reply controverting the allegations and arguments recited in the aforestated
Consolidated Comment of the Solicitor General.

After considering the pleadings filed and deliberating on the issues raised in the petition and
supplemental petition for review on certiorari of the decision of the Sandiganbayan, as well as the
consolidated comment and the reply thereto filed by petitioner's counsel, the Court in its resolution
of January 16, 1986, gave due course to the petition and required the parties to file their respective
briefs.

Petitioner's exhaustive and well-reasoned out Brief which was filed with the Court on April 14, 1986,
raised the following legal questions.

xxx xxx xxx

From the foregoing recital of facts, the following legal questions arise:

1. Does the mere signing by a Municipal Mayor of municipal vouchers and other
supporting papers covering purchases of materials previously ordered by the
Municipal Treasurer without the knowledge and consent of the former, subsequently
delivered by the supplier, and, thereafter paid by the same Municipal Treasurer also
 without the knowledge and consent of the Municipal Mayor, constitute a violation of
the provisions of Section 3 (h) of Rep. Act No. 3019 otherwise known as the Anti-Graft
and Corrupt Practices Act?

2. Does the mere signing of the mere documents above constitute the kind of
intervention of taking part in (his) official capacity within the context of the above-
mentioned law?

3. Was damage or prejudice, as an element of the offense under Section 3 (h) of the
said law, caused to the Government or the Municipality of Numancia as a result of the
contracts in question and as a corollary thereto, was undue advantage and gained by
the transacting corporation?

4. Was there divestment on the part of the herein petitioner of his shares in Trigen
Agro-Industrial Development Corporation long before the questioned transactions?
(Appellant's Brief, page 15)

It was then discus and argued by the petitioner that the prosecution failed to establish the presence
of all the elements of the offense, and more particularly to adduce proof that petitioner has, directly
or indirectly, a financial or pecuniary interest in the imputed business contracts or transactions.

Discussion of petitioner's arguments in this regard will not however, be recited anymore as this was
obviated when a new Solicitor General, after seeking and obtaining several extensions of time to file
its Brief in this case at bar, filed on October 7, 1986, a "Manifestation For Acquittal" (in lieu of the
People's Brief). Rollo, 293).

The new Solicitor General's Office after adopting the statement of facts recited in the consolidated
comment of the former Solicitor General's Office moved for the acquittal of the petitioner, upon
acknowledging and concluding that:

xxx xxx xxx

Petitioner has divested his interest with Trigen

Petitioner sought to establish that before he assumed office as mayor on March 3,

1980, he had already sold his shares with Trigen to his sister Mrs. Rosene Trieste-
Tuason. The sale was made by corresponding indorsements to her stock certificate
which was duly recorded in the stock and transfer book of the corporation.

Respondent Sandiganbayan however doubts the sale because the same was not
reported to the SEC. SEC records, as the prosecution evidence show, do not reflect
the sale and petitioner still appears as the firm's President.

The prosecution's evidence to establish non-divestment of petitioner's interest with

Trigen is weak. Anyway, Trigen has not updated its reports to the SEC since 1976. It
have not even submitted its financial annual report ever since. Absence of the sales
report in the SEC does not mean that the sale did not take place. Reporting the sale
is not a mandatory requirement.

Sales of stocks need not be reported to SEC

In any event, the law only requires submission of annual financial reports, not sales or
disposal of stocks (Section 141, Corporation Code of the Philippines).
 Upholding the evidence of petitioner's divestment of his interest with Trigen would
necessarily allow him to act freely in his official capacity in the municipality's dealings
or transactions with Trigen. That in itself is sufficient to acquit him of the crimes
charged. (Rollo, pp. 299-300).

In the matter of the alleged intervention of petitioner, the Office of the Solicitor General itself
subscribes to and on its own volition place on record the following observations:

Prosecution failed to prove charges; evidence discloses absence of bidding and award

The prosecution's lone witness, Treasurer Aniceto Vega, testified that there never was
a public bidding conducted because all the transactions were made by direct
purchases from Trigen.

Q. In other words, in all these transactions there never really was any
public bidding?

A. Yes, Sir. There was no public bidding.

Q. And these purchases were made by direct purchases from the

establishment of Trigen?

A. Yes, Sir. (pp. 36-37, Tsn., Oct. 26, 1983)

In the absence of a public bidding and as emphatically declared by the prosecution's

sole witness Vega that all the transactions were on direct purchases from Trigen, how
can one ever imagine that petitioner has awarded the supply and delivery of
construction materials to Trigen as specifically charged in the twelve (12)
informations? The charges are of course baseless and even contradict the evidence
of the prosecution itself.

Even the respondent Court finally found that petitioner did not intervene during the
bidding and award, which of course is a false assumption because of Vega's testimony
that there was no public bidding at all. Respondent Court said:

. . . . In short, accused's intervention may not be present during the bidding and award,
but his liability may also come in when he took part in said transactions such as signing
the vouchers under certifications 1, 2 and 3 thereof, to make it appear that the
transactions were regular and proper. (Resolution dated March 11, 1985 denying
petitioner's motion for reconsideration/new trial, page 7).

No evidence to prove petitioner approved payment

Now, did petitioner intervene by approving payments to Trigen as also charged in the
information? Can there be intervention after payment.

Vega testified that petitioner signed the twelve (12) municipal vouchers (Exhibits A to
L) for the purchase and payment of construction materials. It was sometime after
delivery of the construction materials that he (Vega) signed and paid the twelve (12) -
municipal vouchers (pages 5 to 7), decision of respondent Sandiganbayan dated
November 2, 1984). The prosecution has not presented evidence to show as to when
petitioner signed the twelve (12) municipal vouchers. But it can safely be assumed as
a matter of procedure that petitioner had signed the voucher after Treasurer Vega
signed and paid them., (Rello, pp. 301-303)
xxx xxx xxx

Testimonial and documentary evidence confirms that petitioner signed vouchers after
payment

Additional facts which respondent Court failed to consider and which could have
altered the outcome of the case in the following uncontroverted testimony of Josue
Maravilla:

Q. When these municipal vouchers were prepared by the municipal

treasurer, as you said, and then presented to Mayor Trieste for his
signature, were the purchases in question already paid?

A. They had already been paid for, sir.

Q. Previously, prior to the signature of Mayor Trieste?

A. Yes, sir.

A.J. ESCAREAL:

Q. Under what authority were they paid?

A. Under official receipt issued by Trigen.

Q. Who authorized the payment?

A. The municipal treasurer who paid the materials.

ATTY. CONSULTA:

Q. You said they had already been paid for. Do you know of any receipts
issued by Trigen to indicate that at the time these municipal vouchers
were signed by Mayor Trieste, the materials had already been delivered
and paid by the municipality to Trigen?

xxx xxx xxx

A. Yes, sir

Q. Now, what exhibits particularly do you know were issued

by Trigen to indicate that payments were made prior to the signing of the
municipal vouchers by Mayor Trieste?

A. Exhibits A, G, B, F, C, D, Exhibit I and Exhibit H.

xxx xxx xxx

Q. Now, Mr. Maravilla, aside from these prosecution's exhibits which are
Trigen receipts showing payments long before the municipal vouchers
were prepared, what can you say about the other municipal vouchers in
this case in reference to payments made by Trigen to the municipality?

ESCAREAL:
 Payment made by Trigen?

ATTY. CONSULTA:

I am sorry, Your Honor, made to Trigen by the municipality?

A. Official receipts issued by Trigen also indicate that when municipal

vouchers marked Exhibits E, B, C, D, F, G, H, I were prepared, they had
already been delivered and the amounts indicated therein were already
prepared by the municipal treasurer.

Q. Did you say already made by the municipal treasurer-the amounts

were already paid by the municipal treasurer?

A. Already paid.

Q. Who disbursed the funds evidenced by the Trigen official receipts?

A. The municipal treasurer, then Mr. Vega.

Q. Now, do you know why Mr. Vega asked that those municipal vouchers
be nevertheless signed in spite of the fact that he knew that the amounts
had already been disbursed and paid by him to Trigen?

A. He said that the municipal vouchers for record purposes is necessary

to be signed by the mayor. (Tsn., Mar. 5, 1984, pp. 19-49).

Inasmuch as Treasurer Vega signed and paid the vouchers after the materials were
delivered, petitioner's signature on the vouchers after payment is not, we submit the
kind of intervention contemplated under Section 3(h) of the Anti-Graft Law.

xxx xxx xxx

What is contemplated in Section 3(h) of the anti-graft law is the actual intervention in
the transaction in which one has financial or pecuniary interest in order that liability
may attach. (Opinion No. 306, Series 1961 and Opinion No. 94, Series 1972 of the
Secretary of Justice). The official need not dispose his shares in the corporation as
long as he does not do anything for the firm in its contract with the office. For the law
aims to prevent the don-tenant use of influence, authority and power (Deliberation on
Senate Bill 293, May 6, 1959, Congressional Record, Vol. 11, page 603).

There is absolutely no evidence that petitioner had, in his capacity as Mayor, used his
influence, power, and authority in having the transactions given to Trigen. He didn't
ask anyone-neither Treasurer Vega nor Secretary Maravilla for that matter, to get the
construction materials from Trigen.

Trigen did not gain any undue advantage in the transaction

Petitioner should not be faulted for Trigen's transaction with the municipality, which by
the way, has been dealing with it even before petitioner had assumed the mayorship
on March 3, 1980. Personal canvasses conducted found that Trigen's offer was the
lowest, most reasonable, and advantageous to the municipality. . . . (Rollo, pp. 307-
308; Emphasis supplied).
It is also an acknowledged fact that there was no complaint for non-delivery, underdelivery or
overpricing regarding any of the transactions.

Considering the correct facts now brought to the attention of this Court by the Solicitor General and
in view of the reassessment made by that Office of the issues and the evidence and the law involved,
the Court takes a similar view that the affirmance of the decision appealed from cannot be rightfully
sustained. The conscientious study and thorough analysis made by the Office of the Solicitor
General in this case truly reflects its consciousness of its role as the People's Advocate in the
administration of justice to the end that the innocent be equally defended and set free just as it has
the task of having the guilty punished. This Court will do no less and, therefore, accepts the
submitted recommendation that the decision and resolution in question of the respondent
Sandiganbayan be reversed and that as a matter of justice, the herein petitioner be entitled to a
judgment of acquittal.

WHEREFORE, the decision rendered by the Sandiganbayan, dated November 2, 1984, in Criminal
Cases Nos. 6856 to 6867, finding the herein petitioner, Generoso Trieste, Sr. guilty of the violations
of Section 3 paragraph (h) of Republic Act 3019, as amended, is hereby set aside and reversing the
appealed judgment, a new judgment is now rendered ACQUITTING Generoso Trieste, Sr., of said
offenses charged against him with costs de oficio.

SO ORDERED
7. [G.R. Nos. 104805-07. January 13, 1993.]

AMOR D. DELOSO, Petitioner, v. HON. SANDIGANBAYAN (FIRST DIVISION) and PEOPLE

OF THE PHILIPPINES, Respondents.

Francisco Ed Lim and Rowena L. Garcia for Petitioner.

SYLLABUS

1. CIVIL LAW; OBLIGATIONS AND CONTRACTS; CONTRACTS OBLIGATORY IN WHATEVER

FORM ENTERED INTO PROVIDED ALL REQUISITES FOR VALIDITY ARE PRESENT; IN CASE
AT BAR; VERBAL LEASE OF TRACTORS, VALID AND ENFORCEABLE. — All the witnesses of
the defense as well as of the Government uniformly attested to the reality of verbal agreements
between the Municipality and the tractors lessees, i.e., that all said lessees were made aware of the
obligations they were assuming prior to the delivery to them of the tractors; and that on their taking
delivery thereof, they all bound themselves in writing "to all the terms and conditions which the
Municipality of Botolan, Zambales may impose . . ." And the fact that the lease agreements were
not initially reduced to writing, this having been done only some time later by the Sangguniang Bayan
through a resolution adopted for that purpose, certainly does not make the transactions anomalous
or felonious, nor preclude the generation of the contractual relation of lessor and lessee between
the Municipality and the farmers. It is axiomatic that contracts may be entered into in any form, orally
or in writing, or parol in part and written in part, it being needful merely that the essential requisites
for their validity be present — a precept of general application unless "the law requires that a contract
be in some form in order that it may be valid or enforceable, . . ." Quite obviously, the lease of the
tractors in this case is not one of those required by law to be in writing or other particular form in
order that it may be valid or enforceable.

2. CRIMINAL LAW; ANTI-GRAFT AND CORRUPT PRACTICES ACT; LEASE OF TRACTORS

NOT MADE THROUGH CANVASS OR PUBLIC BIDDING AND WITHOUT BOND, NOT CRIMINAL;
REASONS THEREFOR. — The absence of a bond does not make the transactions criminal either.
There is no proof whatever that, under the circumstances, such a bond was required by any law or
regulation of the "tractor recipients to secure the proper performance by them of the terms and
conditions of their alleged contract or even for the purpose of security for loss or damage from
malevolent handling." The lower Court’s opinion that the "grant of (the) farm tractors to the
beneficiaries were (sic) not made through canvass or public bidding, . . ." is inconsequential. There
is no evidence that this is a requirement for leases of government equipment, one exigible of the
petitioner Mayor, prescinding from the fact that under the circumstances, a public bidding would
have been a futile exercise, given the reluctance of the farmers in the area, as already mentioned,
to accept the tractors by way of lease.

3. REMEDIAL LAW; EVIDENCE; WEIGHT AND SUFFICIENCY; IN CASE AT BAR, EVIDENCE IN

ITS ENTIRETY INSUFFICIENT TO INDUCE MORAL CERTAINTY OF GUILTY BEYOND
REASONABLE DOUBT. — The Court a quo completely ignored the plain circumstance that Ferrer’s
testimony is corroborated in all its material aspects by the other witness of the Government as well
as the defense. What is more, even conceding that Ferrer’s testimony could be correctedly
discarded and disregarded as self-contradictory, no reason exists to reject the evidence given by
the other prosecution witnesses-lessees, specially considering that, as already repeatedly pointed
out, their evidence is substantially identical to that of the defense witnesses. Also incorrect is the
declaration that Mayor Deloso did not follow the requirement of the "Local Government Audit Office,
LGAO, of the Commission on Audit . . . that (private individuals renting) government equipment or
machineries must . . . (pay) rental fees based on rates (set) by the Department of Public Works and
Highways." Apart from the fact that no proof of any such requirement is found in the record, the
statement is inconsistent with the lower Court’s own view that the consideration for the use of the
tractor "is too burdensome for a single person to uphold." The record shows that there was complete
accord between the Sangguniang Bayan and Mayor Deloso regarding the acquisition and
subsequent disposition of the tractors in question. Their acts were done officially and publicly,
without any attempt at disguise or dissimulation. There is no indication of such intimacy or closeness
of relation between Mayor Deloso, or any member of the Sangguniang Bayan, on the one hand, and
any of the lessees, on the other, as could reasonably engender a suspicion that the former had
cause to grant unwarranted benefits to the latter. Considered in its entirety, the evidence is, as the
Solicitor General manifests, "insufficient to induce that moral certainty of guilt beyond reasonable
doubt. The conscience remains uneasy and unsettled after considering the nature and speculative
character of the . . . (declared basis of) the judgment of conviction."

DECISION

NARVASA, C.J.:

The petitioner, Amor D. Deloso, is the incumbent Governor of the Province of Zambales. Prior to
being elected Governor, he was the Mayor of the Municipality of Botolan, Zambales. He stands
charged with violating, sometime in the 1978, Section 3 (e) of the Anti-Graft and Corrupt Practices
Act, 1 in that while Mayor of Botolan —

". . . taking advantage of his public and official position, he did . . . wilfully, unlawfully and feloniously
give unwarranted benefits to . . . (five [5] private individuals) thru manifest partiality and evident bad
faith in the discharge of his official functions by issuing to . . . (each of them) a tractor purchased by
the Municipality of Botolan thru a loan financed by the Land Bank of the Philippines for lease to local
farmers at reasonable cost without any agreement as to the payment of rentals for the use of said
tractor . . . thereby causing undue injury to the Municipality of Botolan."cralaw virtua1aw library

The names of the five (5) persons to whom the tractors were allegedly given, and the dates they
received possession of the tractors in question, are as follows, viz.:chanrob1es virtual 1aw library

1. Alfonso Lim, Jr. February 3, 1978

2. Daniel Ferrer April, 1978

3. Maximiano Quinsay February 3, 1978

4. Augusto Deloso -do-

5. Isidro Encarnacion -do-

The charges involving these particular persons were set out in five (5) separate informations filed in
1984. The indictments were identically formulated — except, of course, as regards the names of the
identified beneficiaries — and were respectively docketed in the Sandiganbayan as Criminal Cases
Numbered 9200, 9201, 9202, 9203 and 9204.

It was not, however, until some five years later, or on January 6, 1989 that Deloso was arraigned.
This was due to various motions filed by him with the Sandiganbayan seeking either a reinvestigation
of the charges, or quashal of the informations, or consolidation of the accusations in one pleading,
as well as an unsuccessful recourse to this Court impugning the Sandiganbayan’s resolutions on
those initiatives. On arraignment, Deloso entered a plea of not guilty, and trial followed as a matter
of course.
After the prosecution rested its case, Deloso filed a demurrer to evidence impugning the sufficiency
of the evidence adduced by the prosecution in all five (5) criminal actions. The demurrer was denied
as regards Cases Numbered 9200, 9201 and 9204, but granted as to Cases Numbered 9202 2 and
9203. 3 The Sandiganbayan agreed with Deloso that in these last two cases, the prosecution had
indeed failed to establish a prima facie case against him. Deloso then presented evidence in his
behalf in the remaining three (3) cases.

On October 18, 1991 the Sandiganbayan promulgated its Decision in the three cases (Numbered
9200, 9201 and 9204). In all said cases, it found Deloso guilty beyond reasonable doubt of a violation
of Section 3 (e) of Republic Act 3019, as amended, and sentenced him in each case "to suffer the
indeterminate penalty of imprisonment of SIX (6) YEARS and ONE (1) MONTH to TEN (10) YEARS;
to suffer perpetual disqualification from public office; to indemnify the government . . . 4; and to pay
the costs." 5

Upon certain of the material antecedents recounted in the Sandiganbayan’s decision, the Court
observes no serious disagreement between the prosecution and the defense. These are the
following:chanrob1es virtual 1aw library

1. On recommendation of an ad hoc committee, the Sangguniang Bayan, of Botolan authorized and

caused the obtention by the Municipality (through the mayor) of a loan from the Land Bank of the
Philippines, for the explicit purpose of purchasing five (5) farm tractors from the Gregorio Araneta
Machines, Inc. to aid the farmers in the area "in tilling their respective agricultural land so as to
undertake full production." 6

2. However, after acquisition of the tractors in December, 1977, and public announcements that the
machines were available for lease to farmers on an hourly or daily basis, not one farmer opted to
make use thereof. This negative reaction was due, in Deloso’s view, to the following
circumstances:chanrob1es virtual 1aw library

a) at that time, the need of the farmers therefor "was not yet imperative;" chanrobles virtual lawlibrary

b) the demand for sugar for export had diminished, causing the Central Azucarera de Bataan to
slow down operations; and

c) the proposed irrigation system in Botolan failed to operate as expected. 7

3. To make the best of a bad situation, and to prevent deterioration of the tractors from non-use, the
Sangguniang Bayan conceived a plan to lease them to "affluent landowners" to be selected by the
municipality, who "would be responsible for maintenance and repair and . . . (payment of) annual
rentals equivalent to 1/5 of the annual amortization payments payable by the municipality to the
Land Bank of the Philippines." A committee was created to screen and evaluate the prospective
lessees. 8 The persons chosen as lessees were (a) Alfonso Lim, Jr., (b) Daniel Ferrer, (c) Maximiano
Quinsay, 9 (d) Augusto D. Deloso, 10 and (e) Isidoro Encarnacion, Jr. Mayor Deloso had no part in
the selection. The award of the tractors to the beneficiaries was not made through canvass or public
bidding.

4. The tractors were turned over to the selected lessees without any written contract; and it was not
until the tractors had been actually delivered to the lessees and used by them that a resolution was
adopted by the Sangguniang Bayan setting out generally the conditions for the use of the tractors,
this act being characterized as an "afterthought" by the Sandiganbayan. 11

5. The tractors were returned to the Municipality after a year or so. The machines eventually
deteriorated over time, and were later "sold as junk." After applying the proceeds of the sale and
other amounts paid as rentals to liquidation of the loan obligation owing to the Land Bank, the
Municipality was still left with a balance due to the Bank of P300,000.00 or so. 12
It is in light of the foregoing undisputed facts, in relation to the evidence regarding other facts
submitted by the parties, that the Sandiganbayan arrived at the following conclusions, to
wit:chanrob1es virtual 1aw library

1. "The farm tractors were irresponsibly delivered to the individual beneficiaries . . . without so much
as a piece of paper to evidence delivery." 13

2. "There was no written agreement entered into between the municipality, on the one hand, and
the aforesaid beneficiaries, on the other, (1) as to the nature of the transactions; (2) as to payment
of consideration therefor; (3) as to maintenance and repair; and, (4) as to period of use or utilization
by the beneficiaries . . ." 14

3. "There was no bond which ordinarily is posted by tractor recipients to secure the proper
performance by them of the terms and conditions of their alleged contract or even for the purpose
of security for loss or damage from malevolent handling." 15

4. "The beneficiaries paid nary a cent to the Municipality for the use of the tractors until agents of
the National Bureau of Investigation had started to question them on the legality of their possession
of the equipment. . . .;" and "only after July, 1983." 16" (T)he tractors were given out to these
beneficiaries without thought of compensation for their use . . ." 17

5. "The grant of farm tractors to the beneficiaries were (sic) not made through canvass or public
bidding. . . ."cralaw virtua1aw library

From the verdict of conviction of October 18, 1991, Deloso has appealed to this Court. Here, he
prays for acquittal, imputing the following errors to the Court a quo, viz.:chanrob1es virtual 1aw
library

1) having "wrongly made many damaging conclusions that are highly speculative, without
evidentiary basis and/or contrary to law and evidence," including "the crucial finding that there was
no rental agreement between the lessees and the Municipality of Botolan, a conclusion that goes
against the evidence of record, including the testimonies of the prosecution witnesses themselves;"
18

2) having "improperly allowed the prosecution to impeach its own witness (Ferrer) through the use
of a prior, allegedly contradictory affidavit; and subsequently . . . (using) this affidavit . . . not merely
as impeaching evidence, but as substantive proof to establish the truth of the statement therein (that
no conditions were imposed on Ferrer when a tractor was issued to him), for the purpose of
contradicting Ferrer’s court testimony that he received the tractor on the understanding that he would
pay rent, among other prestations;" 19

3) having made "a statement of economic policy (that it was wrong for the Municipality of Botolan to
engage in the business of leasing farm tractors in competition with private enterprise) and . . . using
petitioner Deloso’s participation in the formulation of said policy as a basis for his conviction;" 20

4) having assumed "without proof that the Municipality of Botolan, through then Mayor Deloso,
violated an unspecified COA Circular allegedly fixing rental rates for government equipment and in
concluding on the basis of said assumption that the petitioner acted with ‘manifest partiality and
evident bad faith;’" 21

5) having concluded "that through the disputed lease contracts (which respondent Court refused to
recognize allegedly due to absence of consideration), petitioner Deloso had caused undue injury to
the Municipality of Botolan and given unwarranted benefits to the lessees; and that said act was
done through manifest partiality and evident bad faith." 22
The gravamen of the three (3) offenses ascribed to Deloso 23 — the other two accusations against
him, as already pointed out, having been dismissed upon a demurrer to evidence, supra 24 — is
that he "issued" (gave possession and custody) to each of three persons (Daniel Ferrer, Isidoro
Encarnacion, Jr., and Alfonso Lim, Jr.) "a tractor purchased by the Municipality of Botolan thru a
loan financed by the Land Bank of the Philippines for lease to local farmers at reasonable cost
without any agreement as to the payment of rentals for the use of said tractor . . . thereby causing
undue injury to the Municipality of Botolan."25cralaw:red

The evidence adduced by both the prosecution and the defense, proves the contrary.

All the three "beneficiaries" above mentioned: Ferrer, Encarnacion, and Lim, were presented by the
prosecution as its witnesses; and all of them positively declared that they received the tractors from
the Municipality of Botolan upon the explicit understanding that they would pay rentals therefor, and
keep them in good repair.chanrobles virtual lawlibrary

Ferrer, described by the Sandiganbayan as "a 64-year old U.S. Navy retiree," 26 testified that when
he got one of the tractors, he was told by Mayor Deloso that he was bound to maintain the tractor in
good repair and house it in a secure place, 27 as well as pay rental therefor - equivalent to one-fifth
(1/5) of the amortization due on the loan from the Land Bank used for the purchase of the tractor,
the precise amount to be subsequently determined, the mayor’s estimate being P60,000.00 per
year; 28 that while using the tractor, and after the Municipal Treasurer had talked to him, he had in
fact paid P5,000.00 in concept of rental; 29 and that he realizes that he still is bound to pay arrears
in rentals to the Municipality of Botolan. 30

Similarly, the second beneficiary, Encarnacion, referred to by the Sandiganbayan as "a merchant-
farmer by occupation," 31 deposed that (a) he was aware, on receiving the tractor allotted to him,
that he was obliged to "share the payment of the amortization (to the Land Bank)," although the
precise amount was yet undetermined, there being merely a "calculation" that the amount he would
have to pay was P30,000.00 every six months; 32 (b) that he knew that he was obligated to maintain
the tractor in good order and secure it in a safe place, at his own expense; and that (c) he had paid
P10,000.00 on account of said amortization. 33

The other lessee, Lim, a businessman, according to the Sandiganbayan, 34 testified to substantially
the same things: that Mayor Deloso had told him of his obligations in connection with the award to
him of the use of a tractor by the Municipality, one of which was to pay 1/5 of the amortization
payment due the Land Bank, amounting to about P60,000.00 a year; 35 and that he had in fact paid
something on account of the rental, P7,000.00. 36

Of no little significance is that the facts established by these proofs of the prosecution relative to the
lease are the same as those demonstrated by the evidence of the defense. 37

Fredesvinda Encarnacion of the Integrated Health Office of Iba, the wife of Isidoro Encarnacion, Jr.,
corroborated her husband’s declarations to the effect that he was aware of his obligation to pay an
annual rental of P60,000.00 for the use of the tractor, and that in truth her husband had paid
P10,000.00 on account of said rentals in 1978 and 1979 pursuant to requests therefor of the Botolan
Municipal Treasurer. 38

Mrs. Bernardita Sison — the incumbent Municipal Treasurer of Botolan, appointed in August, 1980,
and who held the position of Assistant Municipal Treasurer and Municipal Secretary from April, 1978
to December, 1979 — testified that she addressed letters to the lessees of the farm tractors in July,
1978, in July, 1979, and on other subsequent occasions, requiring payment of the rentals for the
tractors; and that in response, payments were made by the lessees in connection with which official
receipts were issued in due course. Mrs. Sison was however able to produce copies only of the
letters addressed to Alfonso Lim, and only the official receipts evidencing the latter’s rental
payments, the others having been lost or destroyed. According to her, these official receipts, and
other relevant documents still available, show rental payments made for the tractors at various times
during the period from 1979 to 1983 in the total amount of P69,978.03. 39

Petitioner Deloso himself took the witness stand to give evidence in his defense. His testimony is
more detailed than that of the other defense witnesses, but as regards the terms of the lease, is
substantially of the same tenor. He declared that because no farmer came forward to avail of the
public offer to all and sundry for lease of the tractors on an hourly or daily basis, the Sangguniang
Bayan decided to choose five responsible lessees who would be answerable for the upkeep of the
machines and would pay an annual rental equivalent to one-fifth of the amortization payment due to
the Land Bank of the Philippines. The lessees were selected by a screening committee of said
Sangguniang Bayan. The Mayor had asked that the terms of the lease be embodied in a resolution,
but the Sanggunian had declined at the time, professing its inability to do so because copies of the
loan documents were not yet in its possession. What Deloso did was to instruct the Municipal
Treasurer to incorporate the general terms and conditions of the lease in a memorandum receipt to
be issued to each lessee on or about the time of delivery to them of the tractors. 40 This was done,
albeit quite imperfectly; the receipts set out the following undertaking (aside, of course, from the
acknowledgment of delivery of the tractors and accessories): 41

"I undertake that by receiving and taking possession of the above items, I agree to all the terms and
conditions which the Municipality of Botolan, Zambales may impose upon and I commit myself to
sign any document necessary thereof." cralawnad

Deloso also deposed that he personally explained the terms of the lease to Ferrer, Encarnacion and
Lim, when they came to see him about the matter; and when the loan documents were eventually
transmitted by the Land Bank to the Mayor’s Office, the Sangguniang Bayan finally passed
Resolution No. 19 dated March 30, 1979 (Exh. 21) putting in writing the terms of the parol
agreements respecting the lease of the tractors. 42

Full corroboration of petitioner Deloso’s evidence also proceeds from the testimony of Dr. Tito Doble
y Blanco - at present the Mayor of Botolan, and from 1976 to 1979, a member of the Sangguniang
Bayan of that town, representing the professional sector. 43

It will thus be seen that the Sandiganbayan’s conclusions fly in the teeth of the recorded evidence
submitted by both the prosecution and the defense.

It is not true that, as the lower Court alleges, the tractors "were irresponsibly delivered to the
individual beneficiaries without so much as a piece of paper to evidence delivery." 44 As just stated,
memorandum receipts were in fact prepared by the municipality and signed by the lessees. 45

It is not true that as the informations state, said tractors were delivered to the lessees "without any
agreement as to the payment of rentals for the use of said tractor . . .," 46 or that, as the
Sandiganbayan avers, "the tractors were given out to these beneficiaries without thought of
compensation for their use . . ." 47 For all the witnesses of the defense as well as of the Government
uniformly attested to the reality of verbal agreements between the Municipality and the tractors
lessees, i.e., that all said lessees were made aware of the obligations they were assuming prior to
the delivery to them of the tractors; and that on their taking delivery thereof, they all bound
themselves in writing "to all the terms and conditions which the Municipality of Botolan, Zambales
may impose . . . ." 48 And the fact that the lease agreements were not initially reduced to writing,
this having been done only some time later by the Sangguniang Bayan through a resolution adopted
for that purpose, certainly does not make the transactions anomalous or felonious, nor preclude the
generation of the contractual relation of lessor and lessee between the Municipality and the farmers.
It is axiomatic that contracts may be entered into in any form, orally or in writing, or parol in part and
written in part, it being needful merely that the essential requisites for their validity be present - a
precept of general application unless "the law requires that a contract be in some form in order that
it may be valid or enforceable, . . ." 49 Quite obviously, the lease of the tractors in this case is not
one of those required by law to be in writing or other particular form in order that it may be valid or
enforceable.chanrobles virtual lawlibrary

It is also not true that the "beneficiaries paid nary a cent to the Municipality for the use of the tractors
until agents of the National Bureau of Investigation had started to question them on the legality of
their possession of the equipment. . . .;" and "only after July, 1983." 50 The unrebutted and
uncontradicted declarations on the witness stand of all three (3) lessees is that they did make partial
payments of rentals as early as 1979; and said declarations are entirely consistent with the testimony
of an impartial witness, Mrs. Bernardita Sison — who held the positions of Assistant Municipal
Treasurer and Municipal Secretary of Botolan, concurrently, from April, 1978 to December, 1979.
Mrs. Sison’s evidence is to the effect that rental payments were made by the users of the tractors
at various times during the period from 1979 to 1983 in the total amount of P69,978.03. 51 These
rental payments are in fact summarized by the Sandiganbayan in its decision, 52 as
follows:jgc:chanrobles.com.ph

"1979 Rental on Equipment (tractors) — P20,000.00

1980 Rental of Tractors — 13,160.00

1981 Rental of Tractors — 6,500.00

1982 Rental of Tractors — 11,222.00

1983 Rental of Tractors — 19,096.00."cralaw virtua1aw library

Nor is it correct to conclude that the lessees made payment of rentals only because the National
Bureau of Investigation had commenced in 1983 an investigation concerning their possession and
use of the tractors. Nothing in the declarations of the lessees themselves justifies such a conclusion.
On the contrary, such a conclusion is negated by the testimony of Bernardita Sison, just adverted
to. Much less may an inference to drawn that they had agreed to pay rentals in consideration of their
not being made defendants in cases to be filed against Mayor Deloso. 53 There is simply no
evidence at all on which this inference may be predicted.

The absence of a bond does not make the transactions criminal either. There is no proof whatever
that, under the circumstances, such a bond was required by any law or regulation of the "tractor
recipients to secure the proper performance by them of the terms and conditions of their alleged
contract or even for the purpose of security for loss or damage from malevolent handling." 54

The lower Court’s opinion that the "grant of (the) farm tractors to the beneficiaries were (sic) not
made through canvass or public bidding, . . ." is inconsequential. There is no evidence that this is a
requirement for leases of government equipment, one exigible of the petitioner Mayor, prescinding
from the fact that under the circumstances, a public bidding would have been a futile exercise, given
the reluctance of the farmers in the area, as already mentioned, to accept the tractors by way of
lease. 55

The lower Court declared prosecution witness Daniel Ferrer to be unworthy of belief. It cited
inconsistencies between Ferrer’s sworn statement given to the NBI in 1983, on the one hand, and
an affidavit subsequently executed by him in 1989 and his testimony before the Sandiganbayan, on
the other. The Court a quo spurned Ferrer’s testimony despite his proffered explanation of the
specified discrepancies, and his categorical assertion that his later affidavit and his testimony before
the Sandiganbayan reflected the truth. The lower Court theorized that Ferrer had been suborned by
Deloso, a theory it draws from Ferrer’s admission that prior to the execution of his affidavit, he had
been invited by Deloso to his beach house to talk to the latter’s lawyer "concerning the tractors;"
and that he had accepted the invitation and had in fact spoken to the attorney. However, these
occurrences are too tenuous a premise to support a conclusion of subordination on the part of
Deloso, "by himself or through his lawyers and subordinates."cralaw virtua1aw library

What is worse is that on the same speculative predicate — that Ferrer had had a conversation with
the attorney of Deloso at the latter’s beach house, without more — the Court a quo extended its
theory of subordination to the other two (2) lessees, Encarnacion and Lim, opining that they, too,
had been induced by the mayor to execute recantations of prior statements. No such recantations
were ever made by Encarnacion and Lim. Moreover, the fact that Ferrer might have been induced
to make such a recantation is not competent proof that his fellow lessees were also induced to make
similar recantations, a proposition that rests upon the same logical foundation, and would seem to
the Court as acceptable, as the familiar doctrine of res inter alios acta.

The Court a quo completely ignored the plain circumstance that Ferrer’s testimony is corroborated
in all its material aspects by the other witness of the Government as well as the defense. What is
more, even conceding that Ferrer’s testimony could be correctedly discarded and disregarded as
self-contradictory, no reason exists to reject the evidence given by the other prosecution witnesses-
lessees, specially considering that, as already repeatedly pointed out, their evidence is substantially
identical to that of the defense witnesses.

Also incorrect is the declaration that Mayor Deloso did not follow the requirement of the "Local
Government Audit Office, LGAO, of the Commission on Audit . . . that (private individuals renting)
government equipment or machineries must . . . (pay) rental fees based on rates (set) by the
Department of Public Works and Highways." Apart from the fact that no proof of any such
requirement is found in the record, the statement is inconsistent with the lower Court’s own view
that the consideration for the use of the tractor "is too burdensome for a single person to uphold."
56

The record shows that there was complete accord between the Sangguniang Bayan and Mayor
Deloso regarding the acquisition and subsequent disposition of the tractors in question. Their acts
were done officially and publicly, without any attempt at disguise or dissimulation. There is no
indication of such intimacy or closeness of relation between Mayor Deloso, or any member of the
Sangguniang Bayan, on the one hand, and any of the lessees, on the other, as could reasonably
engender a suspicion that the former had cause to grant unwarranted benefits to the latter.

Considered in its entirety, the evidence is, as the Solicitor General manifests, "insufficient to induce
that moral certainty of guilt beyond reasonable doubt. The conscience remains uneasy and unsettled
after considering the nature and speculative character of the . . . (declared basis of) the judgment of
conviction." chanrobles virtualawlibrary chanrobles.com:chanrobles.com.ph

What has already been said makes unnecessary the consideration and resolution of the other issues
raised in this appeal.

WHEREFORE, the Decision of the Sandiganbayan promulgated on October 18, 1991 in Criminal
Cases Numbered 9200, 9201 and 9204 is hereby REVERSED AND SET ASIDE, and the petitioner,
Amor D. Deloso, is ACQUITTED of the crimes charged with costs de officio.

IT IS SO ORDERED.
8.G.R. No. 155001. January 21, 2004]

DEMOSTHENES P. AGAN, JR., JOSEPH B. CATAHAN, JOSE MARI B. REUNILLA, MANUEL

ANTONIO B. BOE, MAMERTO S. CLARA, REUEL E. DIMALANTA, MORY V. DOMALAON,
CONRADO G. DIMAANO, LOLITA R. HIZON, REMEDIOS P. ADOLFO, BIENVENIDO C.
HILARIO, MIASCOR WORKERS UNION-NATIONAL LABOR UNION (MWU-NLU), and
PHILIPPINE AIRLINES EMPLOYEES ASSOCIATION (PALEA), petitioners, vs.PHILIPPINE
INTERNATIONAL AIR TERMINALS CO., INC., MANILA INTERNATIONAL AIRPORT
AUTHORITY, DEPARTMENT OF TRANSPORTATION AND COMMUNICATIONS and
SECRETARY LEANDRO M. MENDOZA, in his capacity as Head of the Department of
Transportation and Communications, respondents,
MIASCOR GROUNDHANDLING CORPORATION, DNATA-WINGS AVIATION SYSTEMS
CORPORATION, MACROASIA-EUREST SERVICES, INC., MACROASIA-MENZIES
AIRPORT SERVICES CORPORATION, MIASCOR CATERING SERVICES
CORPORATION, MIASCOR AIRCRAFT MAINTENANCE CORPORATION, and MIASCOR
LOGISTICS CORPORATION, Petitioners-in-Intervention,
FLORESTE ALCONIS, GINA ALNAS, REY AMPOLOQUIO, ROSEMARIE ANG, EUGENE
ARADA, NENETTE BARREIRO, NOEL BARTOLOME, ALDRIN BASTADOR, ROLETTE
DIVINE BERNARDO, MINETTE BRAVO, KAREN BRECILLA, NIDA CAILAO, ERWIN
CALAR, MARIFEL CONSTANTINO, JANETTE CORDERO, ARNOLD FELICITAS,
MARISSA GAYAGOY, ALEX GENERILLO, ELIZABETH GRAY, ZOILO HERICO,
JACQUELINE IGNACIO, THELMA INFANTE, JOEL JUMAO-AS, MARIETTA LINCHOCO,
ROLLY LORICO, FRANCIS AUGUSTO MACATOL, MICHAEL MALIGAT, DENNIS
MANALO, RAUL MANGALIMAN, JOEL MANLANGIT, CHARLIE MENDOZA, HAZNAH
MENDOZA, NICHOLS MORALES, ALLEN OLAO, CESAR ORTAL, MICHAEL ORTEGA,
WAYNE PLAZA, JOSELITO REYES, ROLANDO REYES, AILEEN SAPINA, RAMIL
TAMAYO, PHILLIPS TAN, ANDREW UY, WILLIAM VELASCO, EMILIO VELEZ, NOEMI
YUPANO, MARY JANE ONG, RICHARD RAMIREZ, CHERYLE MARIE ALFONSO,
LYNDON BAUTISTA, MANUEL CABOCAN AND NEDY LAZO, Respondents-in-
Intervention,
NAGKAISANG MARALITA NG TAONG ASSOCIATION, INC., Respondents-in-Intervention,

[G.R. No. 155547. January 21, 2003]

SALACNIB F. BATERINA, CLAVEL A. MARTINEZ and CONSTANTINO G.

JARAULA, petitioners, vs. PHILIPPINE INTERNATIONAL AIR TERMINALS CO., INC.,
MANILA INTERNATIONAL AIRPORT AUTHORITY, DEPARTMENT OF
TRANSPORTATION AND COMMUNICATIONS, DEPARTMENT OF PUBLIC WORKS
AND HIGHWAYS, SECRETARY LEANDRO M. MENDOZA, in his capacity as Head of the
Department of Transportation and Communications, and SECRETARY SIMEON A.
DATUMANONG, in his capacity as Head of the Department of Public Works and
Highways, respondents, JACINTO V. PARAS, RAFAEL P. NANTES, EDUARDO C.
ZIALCITA, WILLY BUYSON VILLARAMA, PROSPERO C. NOGRALES, PROSPERO A.
PICHAY, JR., HARLIN CAST ABAYON, and BENASING O.
MACARANBON, Respondents-Intervenors,
FLORESTE ALCONIS, GINA ALNAS, REY AMPOLOQUIO, ROSEMARIE ANG, EUGENE
ARADA, NENETTE BARREIRO, NOEL BARTOLOME, ALDRIN BASTADOR, ROLETTE
DIVINE BERNARDO, MINETTE BRAVO, KAREN BRECILLA, NIDA CAILAO, ERWIN
CALAR, MARIFEL CONSTANTINO, JANETTE CORDERO, ARNOLD FELICITAS,
MARISSA GAYAGOY, ALEX GENERILLO, ELIZABETH GRAY, ZOILO HERICO,
 JACQUELINE IGNACIO, THELMA INFANTE, JOEL JUMAO-AS, MARIETTA LINCHOCO,
ROLLY LORICO, FRANCIS AUGUSTO MACATOL, MICHAEL MALIGAT, DENNIS
MANALO, RAUL MANGALIMAN, JOEL MANLANGIT, CHARLIE MENDOZA, HAZNAH
MENDOZA, NICHOLS MORALES, ALLEN OLAO, CESAR ORTAL, MICHAEL ORTEGA,
WAYNE PLAZA, JOSELITO REYES, ROLANDO REYES, AILEEN SAPINA, RAMIL
TAMAYO, PHILLIPS TAN, ANDREW UY, WILLIAM VELASCO, EMILIO VELEZ, NOEMI
YUPANO, MARY JANE ONG, RICHARD RAMIREZ, CHERYLE MARIE ALFONSO,
LYNDON BAUTISTA, MANUEL CABOCAN AND NEDY LAZO, Respondents-in-
Intervention,
NAGKAISANG MARALITA NG TAONG ASSOCIATION, INC., Respondents-in-Intervention,

[G.R. No. 155661. January 21, 2003]

CEFERINO C. LOPEZ, RAMON M. SALES, ALFREDO B. VALENCIA, MA. TERESA V.

GAERLAN, LEONARDO DE LA ROSA, DINA C. DE LEON, VIRGIE CATAMIN, RONALD
SCHLOBOM, ANGELITO SANTOS, MA. LUISA M. PALCON and SAMAHANG
MANGGAGAWA SA PALIPARAN NG PILIPINAS (SMPP), petitioners, vs. PHILIPPINE
INTERNATIONAL AIR TERMINALS CO., INC., MANILA INTERNATIONAL
AIRPORT AUTHORITY, DEPARTMENT OF TRANSPORTATION AND
COMMUNICATIONS, SECRETARY LEANDRO M. MENDOZA, in his capacity as Head of
the Department of Transportation and Communications, respondents,
FLORESTE ALCONIS, GINA ALNAS, REY AMPOLOQUIO, ROSEMARIE ANG, EUGENE
ARADA, NENETTE BARREIRO, NOEL BARTOLOME, ALDRIN BASTADOR, ROLETTE
DIVINE BERNARDO, MINETTE BRAVO, KAREN BRECILLA, NIDA CAILAO, ERWIN
CALAR, MARIFEL CONSTANTINO, JANETTE CORDERO, ARNOLD FELICITAS,
MARISSA GAYAGOY, ALEX GENERILLO, ELIZABETH GRAY, ZOILO HERICO,
JACQUELINE IGNACIO, THELMA INFANTE, JOEL JUMAO-AS, MARIETTA LINCHOCO,
ROLLY LORICO, FRANCIS AUGUSTO MACATOL, MICHAEL MALIGAT, DENNIS
MANALO, RAUL MANGALIMAN, JOEL MANLANGIT, CHARLIE MENDOZA, HAZNAH
MENDOZA, NICHOLS MORALES, ALLEN OLAO, CESAR ORTAL, MICHAEL ORTEGA,
WAYNE PLAZA, JOSELITO REYES, ROLANDO REYES, AILEEN SAPINA, RAMIL
TAMAYO, PHILLIPS TAN, ANDREW UY, WILLIAM VELASCO, EMILIO VELEZ, NOEMI
YUPANO, MARY JANE ONG, RICHARD RAMIREZ, CHERYLE MARIE ALFONSO,
LYNDON BAUTISTA, MANUEL CABOCAN AND NEDY LAZO, Respondents-in-
Intervention,
NAGKAISANG MARALITA NG TAONG ASSOCIATION, INC., Respondents-in-Intervention.

RESOLUTION
Puno, J.:

Before this Court are the separate Motions for Reconsideration filed by respondent Philippine
International Air Terminals Co., Inc. (PIATCO), respondents-intervenors Jacinto V. Paras, Rafael P.
Nantes, Eduardo C. Zialcita, Willie Buyson Villarama, Prospero C. Nograles, Prospero A. Pichay,
Jr., Harlin Cast Abayon and Benasing O. Macaranbon, all members of the House of Representatives
(Respondent Congressmen),[1] respondents-intervenors who are employees of PIATCO and other
workers of the Ninoy Aquino International Airport International Passenger Terminal III (NAIA IPT III)
(PIATCO Employees)[2] and respondents-intervenors Nagkaisang Maralita ng Taong Association,
Inc., (NMTAI)[3] of the Decision of this Court dated May 5, 2003 declaring the contracts for the NAIA
IPT III project null and void.
 Briefly, the proceedings. On October 5, 1994, Asias Emerging Dragon Corp. (AEDC) submitted
an unsolicited proposal to the Philippine Government through the Department of Transportation and
Communication (DOTC) and Manila International Airport Authority (MIAA) for the construction and
development of the NAIA IPT III under a build-operate-and-transfer arrangement pursuant to R.A.
No. 6957, as amended by R.A. No. 7718 (BOT Law). [4] In accordance with the BOT Law and its
Implementing Rules and Regulations (Implementing Rules), the DOTC/MIAA invited the public for
submission of competitive and comparative proposals to the unsolicited proposal of AEDC. On
September 20, 1996 a consortium composed of the Peoples Air Cargo and Warehousing Co., Inc.
(Paircargo), Phil. Air and Grounds Services, Inc. (PAGS) and Security Bank Corp. (Security Bank)
(collectively, Paircargo Consortium), submitted their competitive proposal to the Prequalification
Bids and Awards Committee (PBAC).
After finding that the Paircargo Consortium submitted a bid superior to the unsolicited proposal
of AEDC and after failure by AEDC to match the said bid, the DOTC issued the notice of award for
the NAIA IPT III project to the Paircargo Consortium, which later organized into herein respondent
PIATCO. Hence, on July 12, 1997, the Government, through then DOTC Secretary Arturo T. Enrile,
and PIATCO, through its President, Henry T. Go, signed the Concession Agreement for the Build-
Operate-and-Transfer Arrangement of the Ninoy Aquino International Airport Passenger Terminal
III (1997 Concession Agreement). On November 26, 1998, the 1997 Concession Agreement was
superseded by the Amended and Restated Concession Agreement (ARCA) containing certain
revisions and modifications from the original contract. A series of supplemental agreements was
also entered into by the Government and PIATCO. The First Supplement was signed on August 27,
1999, the Second Supplement on September 4, 2000, and the Third Supplement on June 22, 2001
(collectively, Supplements) (the 1997 Concession Agreement, ARCA and the Supplements
collectively referred to as the PIATCO Contracts).
On September 17, 2002, various petitions were filed before this Court to annul the 1997
Concession Agreement, the ARCA and the Supplements and to prohibit the public respondents
DOTC and MIAA from implementing them.
In a decision dated May 5, 2003, this Court granted the said petitions and declared the 1997
Concession Agreement, the ARCA and the Supplements null and void.
Respondent PIATCO, respondent-Congressmen and respondents-intervenors now seek the
reversal of the May 5, 2003 decision and pray that the petitions be dismissed. In the alternative,
PIATCO prays that the Court should not strike down the entire 1997 Concession Agreement, the
ARCA and its supplements in light of their separability clause. Respondent-Congressmen and
NMTAI also pray that in the alternative, the cases at bar should be referred to arbitration pursuant
to the provisions of the ARCA. PIATCO-Employees pray that the petitions be dismissed and
remanded to the trial courts for trial on the merits or in the alternative that the 1997 Concession
Agreement, the ARCA and the Supplements be declared valid and binding.
I

Procedural Matters

a. Lack of Jurisdiction

Private respondents and respondents-intervenors reiterate a number of procedural issues which

they insist deprived this Court of jurisdiction to hear and decide the instant cases on its merits. They
continue to claim that the cases at bar raise factual questions which this Court is ill-equipped to
resolve, hence, they must be remanded to the trial court for reception of evidence. Further, they
allege that although designated as petitions for certiorari and prohibition, the cases at bar are
actually actions for nullity of contracts over which the trial courts have exclusive jurisdiction. Even
assuming that the cases at bar are special civil actions for certiorari and prohibition, they contend
that the principle of hierarchy of courts precludes this Court from taking primary jurisdiction over
them.
We are not persuaded.
There is a question of fact when doubt or difference arises as to the truth or falsity of the facts
alleged.[5] Even a cursory reading of the cases at bar will show that the Court decided them by
interpreting and applying the Constitution, the BOT Law, its Implementing Rules and other relevant
legal principles on the basis of clearly undisputed facts. All the operative facts were settled,
hence, there is no need for a trial type determination of their truth or falsity by a trial court.
We reject the unyielding insistence of PIATCO Employees that the following factual issues are
critical and beyond the capability of this Court to resolve, viz: (a) whether the National Economic
Development Authority- Investment Coordinating Committee (NEDA-ICC) approved the
Supplements; (b) whether the First Supplement created ten (10) new financial obligations on the
part of the government; and (c) whether the 1997 Concession Agreement departed from the draft
Concession Agreement contained in the Bid Documents.[6]
The factual issue of whether the NEDA-ICC approved the Supplements is hardly relevant. It is
clear in our Decision that the PIATCO contracts were invalidated on other and more substantial
grounds. It did not rely on the presence or absence of NEDA-ICC approval of the Supplements. On
the other hand, the last two issues do not involve disputed facts. Rather, they involve contractual
provisions which are clear and categorical and need only to be interpreted. The interpretation of
contracts and the determination of whether their provisions violate our laws or contravene any public
policy is a legal issue which this Court may properly pass upon.
Respondents corollary contention that this Court violated the hierarchy of courts when it
entertained the cases at bar must also fail. The rule on hierarchy of courts in cases falling within the
concurrent jurisdiction of the trial courts and appellate courts generally applies to cases involving
warring factual allegations. For this reason, litigants are required to repair to the trial courts at the
first instance to determine the truth or falsity of these contending allegations on the basis of the
evidence of the parties. Cases which depend on disputed facts for decision cannot be brought
immediately before appellate courts as they are not triers of facts.
It goes without saying that when cases brought before the appellate courts do not involve factual
but legal questions, a strict application of the rule of hierarchy of courts is not necessary. As the
cases at bar merely concern the construction of the Constitution, the interpretation of the BOT Law
and its Implementing Rules and Regulations on undisputed contractual provisions and
government actions, and as the cases concern public interest, this Court resolved to take primary
jurisdiction over them. This choice of action follows the consistent stance of this Court to settle any
controversy with a high public interest component in a single proceeding and to leave no root or
branch that could bear the seeds of future litigation. The suggested remand of the cases at bar to
the trial court will stray away from this policy.[7]

b. Legal Standing

Respondent PIATCO stands pat with its argument that petitioners lack legal personality to file
the cases at bar as they are not real parties in interest who are bound principally or subsidiarily to
the PIATCO Contracts. Further, respondent PIATCO contends that petitioners failed to show any
legally demandable or enforceable right to justify their standing to file the cases at bar.
These arguments are not difficult to deflect. The determination of whether a person may institute
an action or become a party to a suit brings to fore the concepts of real party in interest, capacity to
sue and standing to sue. To the legally discerning, these three concepts are different although
commonly directed towards ensuring that only certain parties can maintain an action. [8] As defined
in the Rules of Court, a real party in interest is the party who stands to be benefited or injured by the
judgment in the suit or the party entitled to the avails of the suit. [9]Capacity to sue deals with a
situation where a person who may have a cause of action is disqualified from bringing a suit under
applicable law or is incompetent to bring a suit or is under some legal disability that would prevent
him from maintaining an action unless represented by a guardian ad litem. Legal standing is relevant
in the realm of public law. In certain instances, courts have allowed private parties to institute actions
challenging the validity of governmental action for violation of private rights or constitutional
principles.[10] In these cases, courts apply the doctrine of legal standing by determining whether the
party has a direct and personal interest in the controversy and whether such party has
sustained or is in imminent danger of sustaining an injury as a result of the act complained
of, a standard which is distinct from the concept of real party in interest. [11] Measured by this
yardstick, the application of the doctrine on legal standing necessarily involves a preliminary
consideration of the merits of the case and is not purely a procedural issue.[12]
Considering the nature of the controversy and the issues raised in the cases at bar, this Court
affirms its ruling that the petitioners have the requisite legal standing. The petitioners in G.R. Nos.
155001 and 155661 are employees of service providers operating at the existing international
airports and employees of MIAA while petitioners-intervenors are service providers with existing
contracts with MIAA and they will all sustain direct injury upon the implementation of the PIATCO
Contracts. The 1997 Concession Agreement and the ARCA both provide that upon the
commencement of operations at the NAIA IPT III, NAIA Passenger Terminals I and II will cease to
be used as international passenger terminals.[13] Further, the ARCA provides:

(d) For the purpose of an orderly transition, MIAA shall not renew any expired concession
agreement relative to any service or operation currently being undertaken at the Ninoy Aquino
International Airport Passenger Terminal I, or extend any concession agreement which may expire
subsequent hereto, except to the extent that the continuation of the existing services and
operations shall lapse on or before the In-Service Date.[14]

Beyond iota of doubt, the implementation of the PIATCO Contracts, which the petitioners and
petitioners-intervenors denounce as unconstitutional and illegal, would deprive them of their sources
of livelihood. Under settled jurisprudence, one's employment, profession, trade, or calling is a
property right and is protected from wrongful interference.[15] It is also self evident that the petitioning
service providers stand in imminent danger of losing legitimate business investments in the event
the PIATCO Contracts are upheld.
Over and above all these, constitutional and other legal issues with far-reaching economic and
social implications are embedded in the cases at bar, hence, this Court liberally granted legal
standing to the petitioning members of the House of Representatives. First, at stake is the build-
operate-andtransfer contract of the countrys premier international airport with a projected capacity
of 10 million passengers a year. Second, the huge amount of investment to complete the project is
estimated to be P13,000,000,000.00. Third, the primary issues posed in the cases at bar demand a
discussion and interpretation of the Constitution, the BOT Law and its implementing rules which
have not been passed upon by this Court in previous cases.They can chart the future inflow of
investment under the BOT Law.
Before writing finis to the issue of legal standing, the Court notes the bid of new parties to
participate in the cases at bar as respondents-intervenors, namely, (1) the PIATCO Employees and
(2) NMTAI (collectively, the New Respondents-Intervenors). After the Courts Decision, the New
Respondents-Intervenors filed separate Motions for Reconsideration-In-Intervention alleging
prejudice and direct injury. PIATCO employees claim that they have a direct and personal interest
[in the controversy]... since they stand to lose their jobs should the governments contract with
PIATCO be declared null and void.[16] NMTAI, on the other hand, represents itself as a corporation
composed of responsible tax-paying Filipino citizens with the objective of protecting and sustaining
the rights of its members to civil liberties, decent livelihood, opportunities for social advancement,
and to a good, conscientious and honest government.[17]
The Rules of Court govern the time of filing a Motion to Intervene. Section 2, Rule 19 provides
that a Motion to Intervene should be filed before rendition of judgment.... The New Respondents-
Intervenors filed their separate motions after a decision has been promulgated in the present
cases. They have not offered any worthy explanation to justify their late intervention. Consequently,
their Motions for Reconsideration-In-Intervention are denied for the rules cannot be relaxed to await
litigants who sleep on their rights. In any event, a sideglance at these late motions will show that
they hoist no novel arguments.

c. Failure to Implead an Indispensable Party

PIATCO next contends that petitioners should have impleaded the Republic of the Philippines
as an indispensable party. It alleges that petitioners sued the DOTC, MIAA and the DPWH in their
own capacities or as implementors of the PIATCO Contracts and not as a contract party or as
representatives of the Government of the Republic of the Philippines. It then leapfrogs to the
conclusion that the absence of an indispensable party renders ineffectual all the proceedings
subsequent to the filing of the complaint including the judgment.[18]
PIATCOs allegations are inaccurate. The petitions clearly bear out that public respondents
DOTC and MIAA were impleaded as parties to the PIATCO Contracts and not merely as their
implementors. The separate petitions filed by the MIAA employees[19] and members of the House of
Representatives[20] alleged that public respondents are impleaded herein because they
either executed the PIATCO Contracts or are undertaking acts which are related to the PIATCO
Contracts. They are interested and indispensable parties to this Petition. [21] Thus, public
respondents DOTC and MIAA were impleaded as parties to the case for having executed the
contracts.
More importantly, it is also too late in the day for PIATCO to raise this issue. If PIATCO seriously
views the non-inclusion of the Republic of the Philippines as an indispensable party as fatal to the
petitions at bar, it should have raised the issue at the onset of the proceedings as a ground to
dismiss. PIATCO cannot litigate issues on a piecemeal basis, otherwise, litigations shall be like a
shore that knows no end. In any event, the Solicitor General, the legal counsel of the Republic,
appeared in the cases at bar in representation of the interest of the government.
II

Pre-qualification of PIATCO

The Implementing Rules provide for the unyielding standards the PBAC should apply to
determine the financial capability of a bidder for pre-qualification purposes: (i) proof of the ability of
the project proponent and/or the consortium to provide a minimum amount of equity to the
project and (ii) a letter testimonial from reputable banks attesting that the project proponent
and/or members of the consortium are banking with them, that they are in good financial
standing, and that they have adequate resources.[22] The evident intent of these standards is to
protect the integrity and insure the viability of the project by seeing to it that the proponent has the
financial capability to carry it out. As a further measure to achieve this intent, it maintains a certain
debt-to-equity ratio for the project.
At the pre-qualification stage, it is most important for a bidder to show that it has the financial
capacity to undertake the project by proving that it can fulfill the requirement on minimum amount of
equity. For this purpose, the Bid Documents require in no uncertain terms:

The minimum amount of equity to which the proponents financial capability will be based shall
be thirty percent (30%) of the project cost instead of the twenty percent (20%) specified in
Section 3.6.4 of the Bid Documents. This is to correlate with the required debt-to-equity ratio of
70:30 in Section 2.01a of the draft concession agreement. The debt portion of the project financing
should not exceed 70% of the actual project cost.[23]
 In relation thereto, section 2.01 (a) of the ARCA provides:
Section 2.01 Project Scope.
The scope of the project shall include:

(a) Financing the project at an actual Project cost of not less than Three Hundred Fifty Million
United States Dollars (US$350,000,000.00) while maintaining a debt-to-equity ratio of
70:30, provided that if the actual Project costs should exceed the aforesaid amount,
Concessionaire shall ensure that the debt-to-equity ratio is maintained;[24]

Under the debt-to-equity restriction, a bidder may only seek financing of the NAIA IPT III Project
up to 70% of the project cost. Thirty percent (30%) of the cost must come in the form of equity or
investment by the bidder itself. It cannot be overly emphasized that the rules require a minimum
amount of equity to ensure that a bidder is not merely an operator or implementor of the project but
an investor with a substantial interest in its success. The minimum equity requirement also
guarantees the Philippine government and the general public, who are the ultimate beneficiaries of
the project, that a bidder will not be indifferent to the completion of the project. The discontinuance
of the project will irreparably damage public interest more than private interest.
In the cases at bar, after applying the investment ceilings provided under the General Banking
Act and considering the maximum amounts that each member of the consortium may validly invest
in the project, it is daylight clear that the Paircargo Consortium, at the time of pre-qualification, had
a net worth equivalent to only 6.08% of the total estimated project cost.[25] By any reckoning, a
showing by a bidder that at the time of pre-qualification its maximum funds available for investment
amount to only 6.08% of the project cost is insufficient to satisfy the requirement prescribed by the
Implementing Rules that the project proponent must have the ability to provide at least 30% of the
total estimated project cost. In peso and centavo terms, at the time of pre-qualification, the Paircargo
Consortium had maximum funds available for investment to the NAIA IPT III Project only in the
amount of P558,384,871.55, when it had to show that it had the ability to provide at
least P2,755,095,000.00. The huge disparity cannot be dismissed as of de minimis importance
considering the high public interest at stake in the project.
PIATCO nimbly tries to sidestep its failure by alleging that it submitted not only audited financial
statements but also testimonial letters from reputable banks attesting to the good financial standing
of the Paircargo Consortium. It contends that in adjudging whether the Paircargo Consortium is a
pre-qualified bidder, the PBAC should have considered not only its financial statements but other
factors showing its financial capability.
Anent this argument, the guidelines provided in the Bid Documents are instructive:

3.3.4 FINANCING AND FINANCIAL PREQUALIFICATIONS REQUIREMENTS

Minimum Amount of Equity

Each member of the proponent entity is to provide evidence of networth in cash and assets
representing the proportionate share in the proponent entity. Audited financial statements for
the past five (5) years as a company for each member are to be provided.

Project Loan Financing

Testimonial letters from reputable banks attesting that each of the members of the ownership
entity are banking with them, in good financial standing and having adequate resources are to be
provided.[26]

It is beyond refutation that Paircargo Consortium failed to prove its ability to provide the
amount of at least P2,755,095,000.00, or 30% of the estimated project cost. Its submission of
testimonial letters attesting to its good financial standing will not cure this failure. At best, the said
letters merely establish its credit worthiness or its ability to obtain loans to finance the project. They
do not, however, prove compliance with the aforesaid requirement of minimum amount of equity in
relation to the prescribed debt-to-equity ratio. This equity cannot be satisfied through possible loans.
In sum, we again hold that given the glaring gap between the net worth of Paircargo and PAGS
combined with the amount of maximum funds that Security Bank may invest by equity in a non-allied
undertaking, Paircargo Consortium, at the time of pre-qualification, failed to show that it had the
ability to provide 30% of the project cost and necessarily, its financial capability for the project cannot
pass muster.
III

1997 Concession Agreement

Again, we brightline the principle that in public bidding, bids are submitted in accord with the
prescribed terms, conditions and parameters laid down by government and pursuant to the
requirements of the project bidded upon. In light of these parameters, bidders formulate competing
proposals which are evaluated to determine the bid most favorable to the government.Once the
contract based on the bid most favorable to the government is awarded, all that is left to be done by
the parties is to execute the necessary agreements and implement them.There can be no substantial
or material change to the parameters of the project, including the essential terms and conditions of
the contract bidded upon, after the contract award. If there were changes and the contracts end up
unfavorable to government, the public bidding becomes a mockery and the modified contracts must
be struck down.
Respondents insist that there were no substantial or material amendments in the 1997
Concession Agreement as to the technical aspects of the project, i.e., engineering design, technical
soundness, operational and maintenance methods and procedures of the project or the technical
proposal of PIATCO. Further, they maintain that there was no modification of the financial features
of the project, i.e., minimum project cost, debt-to-equity ratio, the operations and maintenance
budget, the schedule and amount of annual guaranteed payments, or the financial proposal of
PIATCO. A discussion of some of these changes to determine whether they altered the terms and
conditions upon which the bids were made is again in order.

a. Modification on Fees and

Charges to be collected by PIATCO

PIATCO clings to the contention that the removal of the groundhandling fees, airline office
rentals and porterage fees from the category of fees subject to MIAA regulation in the 1997
Concession Agreement does not constitute a substantial amendment as these fees are not really
public utility fees. In other words, PIATCO justifies the re-classification under the 1997 Concession
Agreement on the ground that these fees are non-public utility revenues.
We disagree. The removal of groundhandling fees, airline office rentals and porterage fees from
the category of Public Utility Revenues under the draft Concession Agreement and its re-
classification to Non-Public Utility Revenues under the 1997 Concession Agreement is significant
and has far reaching consequence. The 1997 Concession Agreement provides that with respect to
Non-Public Utility Revenues, which include groundhandling fees, airline office rentals and porterage
fees,[27] [PIATCO] may make any adjustments it deems appropriate without need for the consent
of GRP or any government agency.[28] In contrast, the draft Concession Agreement specifies
these fees as part of Public Utility Revenues and can be adjusted only once every two years and
in accordance with the Parametric Formula and the adjustments shall be made effective only after
the written express approval of the MIAA.[29] The Bid Documents themselves clearly provide:
4.2.3 Mechanism for Adjustment of Fees and Charges

4.2.3.1 Periodic Adjustment in Fees and Charges

Adjustments in the fees and charges enumerated hereunder, whether or not falling
within the purview of public utility revenues, shall be allowed only once every two
years in accordance with the parametric formula attached hereto as Annex 4.2f.
Provided that the adjustments shall be made effective only after the written express
approval of MIAA. Provided, further, that MIAAs approval, shall be contingent only on
conformity of the adjustments to the said parametric formula.

The fees and charges to be regulated in the above manner shall consist of the
following:

c) groundhandling fees;

d) rentals on airline offices;

(f) porterage fees;

The plain purpose in re-classifying groundhandling fees, airline office rentals and porterage fees
as non-public utility fees is to remove them from regulation by the MIAA. In excluding these fees
from government regulation, the danger to public interest cannot be downplayed.
We are not impressed by the effort of PIATCO to depress this prejudice to public interest by its
contention that in the 1997 Concession Agreement governing Non-Public Utility Revenues, it is
provided that [PIATCO] shall at all times be judicious in fixing fees and charges constituting Non-
Public Utility Revenues in order to ensure that End Users are not unreasonably deprived of
services.[31] PIATCO then peddles the proposition that the said provision confers upon MIAA full
regulatory powers to ensure that PIATCO is charging non-public utility revenues
at judicious rates.[32] To the trained eye, the argument will not fly for it is obviously non
sequitur. Fairly read, it is PIATCO that wields the power to determine the judiciousness of the said
fees and charges. In the draft Concession Agreement the power was expressly lodged with the
MIAA and any adjustment can only be done once every two years. The changes are not insignificant
specks as interpreted by PIATCO.
PIATCO further argues that there is no substantial change in the 1997 Concession Agreement
with respect to fees and charges PIATCO is allowed to impose which are not covered by
Administrative Order No. 1, Series of 1993 [33] as the relevant provision of the 1997 Concession
Agreement is practically identical with the draft Concession Agreement. [34]
We are not persuaded. Under the draft Concession Agreement, PIATCO may impose fees and
charges other than those fees and charges previously imposed or collected at the Ninoy Aquino
International Airport Passenger Terminal I, subject to the written approval of MIAA. [35] Further, the
draft Concession Agreement provides that MIAA reserves the right to regulate these new fees
and charges if in its judgment the users of the airport shall be deprived of a free option for the
services they cover.[36] In contrast, under the 1997 Concession Agreement, the MIAA merely
retained the right to approve any imposition of new fees and charges which were not previously
collected at the Ninoy Aquino International Airport Passenger Terminal I. The agreement did not
contain an equivalent provision allowing MIAA to reserve the right to regulate the
adjustments of these new fees and charges.[37] PIATCO justifies the amendment by arguing that
MIAA can establish terms before approval of new fees and charges, inclusive of the mode for their
adjustment.
PIATCOs stance is again a strained one. There would have been no need for an amendment if
there were no change in the power to regulate on the part of MIAA. The deletion of MIAAs
reservation of its right to regulate the price adjustments of new fees and charges can have no other
purpose but to dilute the extent of MIAAs regulation in the collection of these fees. Again, the
amendment diminished the authority of MIAA to protect the public interest in case of abuse by
PIATCO.

b. Assumption by the
Government of the liabilities
of PIATCO in the event of the latters
default

PIATCO posits the thesis that the new provisions in the 1997 Concession Agreement in case of
default by PIATCO on its loans were merely meant to prescribe and limit the rights of PIATCOs
creditors with regard to the NAIA Terminal III. PIATCO alleges that Section 4.04 of the 1997
Concession Agreement simply provides that PIATCOs creditors have no right to foreclose the NAIA
Terminal III.
We cannot concur. The pertinent provisions of the 1997 Concession Agreement state:

Section 4.04 Assignment.

(b) In the event Concessionaire should default in the payment of an Attendant Liability, and the
default has resulted in the acceleration of the payment due date of the Attendant Liability prior to
its stated date of maturity, the Unpaid Creditors and Concessionaire shall immediately inform GRP
in writing of such default. GRP shall, within one hundred eighty (180) Days from receipt of the joint
written notice of the Unpaid Creditors and Concessionaire, either (i) take over the Development
Facility and assume the Attendant Liabilities, or (ii) allow the Unpaid Creditors, if qualified, to be
substituted as concessionaire and operator of the Development Facility in accordance with the
terms and conditions hereof, or designate a qualified operator acceptable to GRP to operate the
Development Facility, likewise under the terms and conditions of this Agreement; Provided that if
at the end of the 180-day period GRP shall not have served the Unpaid Creditors and
Concessionaire written notice of its choice, GRP shall be deemed to have elected to take over the
Development Facility with the concomitant assumption of Attendant Liabilities.

(c) If GRP should, by written notice, allow the Unpaid Creditors to be substituted as
concessionaire, the latter shall form and organize a concession company qualified to take over the
operation of the Development Facility. If the concession company should elect to designate an
operator for the Development Facility, the concession company shall in good faith identify and
designate a qualified operator acceptable to GRP within one hundred eighty (180) days from
receipt of GRPs written notice. If the concession company, acting in good faith and with due
diligence, is unable to designate a qualified operator within the aforesaid period, then GRP shall at
the end of the 180-day period take over the Development Facility and assume Attendant
Liabilities.

A plain reading of the above provision shows that it spells out in limpid language the obligation
of government in case of default by PIATCO on its loans. There can be no blinking from the fact that
in case of PIATCOs default, the government will assume PIATCOs Attendant Liabilities as defined
in the 1997 Concession Agreement.[38] This obligation is not found in the draft Concession
Agreement and the change runs roughshod to the spirit and policy of the BOT Law which was crafted
precisely to prevent government from incurring financial risk.
In any event, PIATCO pleads that the entire agreement should not be struck down as the 1997
Concession Agreement contains a separability clause.
The plea is bereft of merit. The contracts at bar which made a mockery of the bidding process
cannot be upheld and must be annulled in their entirety for violating law and public policy.As
demonstrated, the contracts were substantially amended after their award to the successful bidder
on terms more beneficial to PIATCO and prejudicial to public interest. If this flawed process would
be allowed, public bidding will cease to be competitive and worse, government would not be favored
with the best bid. Bidders will no longer bid on the basis of the prescribed terms and conditions in
the bid documents but will formulate their bid in anticipation of the execution of a future contract
containing new and better terms and conditions that were not previously available at the time of the
bidding. Such a public bidding will not inure to the public good. The resulting contracts cannot be
given half a life but must be struck down as totally lawless.
IV.

Direct Government Guarantee

The respondents further contend that the PIATCO Contracts do not contain direct government
guarantee provisions. They assert that section 4.04 of the ARCA, which superseded sections
4.04(b) and (c), Article IV of the 1997 Concession Agreement, is but a clarification and
explanation[39] of the securities allowed in the bid documents. They allege that these provisions
merely provide for compensation to PIATCO[40] in case of a government buy-out or takeover of NAIA
IPT III. The respondents, particularly respondent PIATCO, also maintain that the guarantee
contained in the contracts, if any, is an indirect guarantee allowed under the BOT Law, as
amended.[41]
We do not agree. Section 4.04(c), Article IV[42] of the ARCA should be read in conjunction with
section 1.06, Article I,[43] in the same manner that sections 4.04(b) and (c), Article IV of the 1997
Concession Agreement should be related to Article 1.06 of the same contract. Section 1.06, Article
I of the ARCA and its counterpart provision in the 1997 Concession Agreement define in no uncertain
terms the meaning of attendant liabilities. They tell us of the amounts that the Government has to
pay in the event respondent PIATCO defaults in its loan payments to its Senior Lenders and no
qualified transferee or nominee is chosen by the Senior Lenders or is willing to take over from
respondent PIATCO.
A reasonable reading of all these relevant provisions would reveal that the ARCA made the
Government liable to pay all amounts ... from time to time owed or which may become owing by
Concessionaire [PIATCO] to Senior Lenders or any other persons or entities who have
provided, loaned, or advanced funds or provided financial facilities to Concessionaire
[PIATCO] for the Project [NAIA Terminal 3].[44] These amounts include without limitation, all
principal, interest, associated fees, charges, reimbursements, and other related
expenses... whether payable at maturity, by acceleration or otherwise. [45] They further include
amounts owed by respondent PIATCO to its professional consultants and advisers, suppliers,
contractors and sub-contractors as well as fees, charges and expenses of any agents or trustees of
the Senior Lenders or any other persons or entities who have provided loans or financial facilities to
respondent PIATCO in relation to NAIA IPT III.[46] The counterpart provision in the 1997 Concession
Agreement specifying the attendant liabilities that the Government would be obligated to pay should
PIATCO default in its loan obligations is equally onerous to the Government as those contained in
the ARCA. According to the 1997 Concession Agreement, in the event the Government is forced to
prematurely take over NAIA IPT III as a result of respondent PIATCOs default in the payment of its
loan obligations to its Senior Lenders, it would be liable to pay the following amounts as attendant
liabilities:

Section 1.06. Attendant Liabilities

Attendant Liabilities refer to all amounts recorded and from time to time outstanding in the
books of the Concessionaire as owing to Unpaid Creditors who have provided, loaned or
advanced funds actually used for the Project, including all interests, penalties, associated
fees, charges, surcharges, indemnities, reimbursements and other related expenses, and
further including amounts owed by Concessionaire to its suppliers, contractors and sub-
contractors.[47]

These provisions reject respondents contention that what the Government is obligated to pay,
in the event that respondent PIATCO defaults in the payment of its loans, is merely termination
payment or just compensation for its takeover of NAIA IPT III. It is clear from said section 1.06 that
what the Government would pay is the sum total of all the debts, including all interest, fees
and charges, that respondent PIATCO incurred in pursuance of the NAIA IPT III Project. This
reading is consistent with section 4.04 of the ARCA itself which states that the Government shall
make a termination payment to Concessionaire [PIATCO] equal to the Appraised Value (as
hereinafter defined) of the Development Facility [NAIA Terminal III] or the sum of the Attendant
Liabilities, if greater. For sure, respondent PIATCO will not receive any amount less than
sufficient to cover its debts, regardless of whether or not the value of NAIA IPT III, at the time
of its turn over to the Government, may actually be less than the amount of PIATCOs
debts. The scheme is a form of direct government guarantee for it is undeniable that it leaves the
government no option but to pay the attendant liabilities in the event that the Senior Lenders are
unable or unwilling to appoint a qualified nominee or transferee as a result of PIATCOs default in
the payment of its Senior Loans. As we stressed in our Decision, this Court cannot depart from the
legal maxim that those that cannot be done directly cannot be done indirectly.
This is not to hold, however, that indirect government guarantee is not allowed under the BOT
Law, as amended. The intention to permit indirect government guarantee is evident from the Senate
deliberations on the amendments to the BOT Law. The idea is to allow for reasonable government
undertakings, such as to authorize the project proponent to undertake related ventures within the
project area, in order to encourage private sector participation in development projects.[48] An
example cited by then Senator Gloria Macapagal-Arroyo, one of the sponsors of R.A. No. 7718, is
the Mandaluyong public market which was built under the Build-and-Transfer (BT) scheme wherein
instead of the government paying for the transfer, the project proponent was allowed to operate the
upper floors of the structure as a commercial mall in order to recoup their investments.[49] It was
repeatedly stressed in the deliberations that in allowing indirect government guarantee, the law
seeks to encourage both the government and the private sector to formulate reasonable and
innovative government undertakings in pursuance of BOT projects. In no way, however, can the
government be made liable for the debts of the project proponent as this would be tantamount to a
direct government guarantee which is prohibited by the law. Such liability would defeat the very
purpose of the BOT Law which is to encourage the use of private sector resources in the
construction, maintenance and/or operation of development projects with no, or at least minimal,
capital outlay on the part of the government.
The respondents again urge that should this Court affirm its ruling that the PIATCO Contracts
contain direct government guarantee provisions, the whole contract should not be nullified.They rely
on the separability clause in the PIATCO Contracts.
We are not persuaded.
The BOT Law and its implementing rules provide that there are three (3) essential requisites for
an unsolicited proposal to be accepted: (1) the project involves a new concept in technology and/or
is not part of the list of priority projects, (2) no direct government guarantee, subsidy or equity
is required, and (3) the government agency or local government unit has invited by publication
other interested parties to a public bidding and conducted the same.[50] The failure to fulfill any of
the requisites will result in the denial of the proposal. Indeed, it is further provided that a direct
government guarantee, subsidy or equity provision will necessarily disqualify a proposal from being
treated and accepted as an unsolicited proposal.[51] In fine, the mere inclusion of a direct government
guarantee in an unsolicited proposal is fatal to the proposal. There is more reason to invalidate a
contract if a direct government guarantee provision is inserted later in the contract via a backdoor
amendment. Such an amendment constitutes a crass circumvention of the BOT Law and renders
the entire contract void.
 Respondent PIATCO likewise claims that in view of the fact that other BOT contracts such as
the JANCOM contract, the Manila Water contract and the MRT contract had been considered valid,
the PIATCO contracts should be held valid as well. [52] There is no parity in the cited cases. For
instance, a reading of Metropolitan Manila Development Authority v. JANCOM Environmental
Corporation[53] will show that its issue is different from the issues in the cases at bar. In the
JANCOM case, the main issue is whether there is a perfected contract between JANCOM and the
Government. The resolution of the issue hinged on the following: (1) whether the conditions
precedent to the perfection of the contract were complied with; (2) whether there is a valid notice of
award; and (3) whether the signature of the Secretary of the Department of Environment and Natural
Resources is sufficient to bind the Government. These issue and sub-issues are clearly
distinguishable and different. For one, the issue of direct government guarantee was not considered
by this Court when it held the JANCOM contract valid, yet, it is a key reason for invalidating the
PIATCO Contracts. It is a basic principle in law that cases with dissimilar facts cannot have similar
disposition.
This Court, however, is not unmindful of the reality that the structures comprising the NAIA IPT
III facility are almost complete and that funds have been spent by PIATCO in their construction. For
the government to take over the said facility, it has to compensate respondent PIATCO as builder
of the said structures. The compensation must be just and in accordance with law and equity for the
government can not unjustly enrich itself at the expense of PIATCO and its investors.
II.

Temporary takeover of business affected with

public interest in times of national emergency

Section 17, Article XII of the 1987 Constitution grants the State in times of national emergency
the right to temporarily take over the operation of any business affected with public interest. This
right is an exercise of police power which is one of the inherent powers of the State.
Police power has been defined as the "state authority to enact legislation that may interfere with
personal liberty or property in order to promote the general welfare." [54] It consists of two essential
elements. First, it is an imposition of restraint upon liberty or property. Second, the power is
exercised for the benefit of the common good. Its definition in elastic terms underscores its all-
encompassing and comprehensive embrace.[55] It is and still is the most essential, insistent, and
illimitable[56] of the States powers. It is familiar knowledge that unlike the power of eminent
domain, police power is exercised without provision for just compensation for its paramount
consideration is public welfare.[57]
It is also settled that public interest on the occasion of a national emergency is the primary
consideration when the government decides to temporarily take over or direct the operation of a
public utility or a business affected with public interest. The nature and extent of the emergency is
the measure of the duration of the takeover as well as the terms thereof. It is the State that prescribes
such reasonable terms which will guide the implementation of the temporary takeover as dictated
by the exigencies of the time. As we ruled in our Decision, this power of the State can not be negated
by any party nor should its exercise be a source of obligation for the State.
Section 5.10(c), Article V of the ARCA provides that respondent PIATCO shall be entitled to
reasonable compensation for the duration of the temporary takeover by GRP, which compensation
shall take into account the reasonable cost for the use of the Terminal and/or Terminal Complex. [58] It
clearly obligates the government in the exercise of its police power to compensate respondent
PIATCO and this obligation is offensive to the Constitution. Police power can not be diminished, let
alone defeated by any contract for its paramount consideration is public welfare and interest. [59]
Again, respondent PIATCOs reliance on the case of Heirs of Suguitan v. City of
Mandaluyong[60] to justify its claim for reasonable compensation for the Governments temporary
takeover of NAIA IPT III in times of national emergency is erroneous. What was involved in Heirs
of Suguitan is the exercise of the states power of eminent domain and not of police power, hence,
just compensation was awarded. The cases at bar will not involve the exercise of the power of
eminent domain.
III.

Monopoly

Section 19, Article XII of the 1987 Constitution mandates that the State prohibit or regulate
monopolies when public interest so requires. Monopolies are not per se prohibited. Given its
susceptibility to abuse, however, the State has the bounden duty to regulate monopolies to protect
public interest. Such regulation may be called for, especially in sensitive areas such as the operation
of the countrys premier international airport, considering the public interest at stake.
By virtue of the PIATCO contracts, NAIA IPT III would be the only international passenger airport
operating in the Island of Luzon, with the exception of those already operating in Subic Bay Freeport
Special Economic Zone (SBFSEZ), Clark Special Economic Zone (CSEZ) and in Laoag
City. Undeniably, the contracts would create a monopoly in the operation of an international
commercial passenger airport at the NAIA in favor of PIATCO.
The grant to respondent PIATCO of the exclusive right to operate NAIA IPT III should not exempt
it from regulation by the government. The government has the right, indeed the duty, to protect the
interest of the public. Part of this duty is to assure that respondent PIATCOs exercise of its right
does not violate the legal rights of third parties. We reiterate our ruling that while the service
providers presently operating at NAIA Terminals I and II do not have the right to demand for the
renewal or extension of their contracts to continue their services in NAIA IPT III, those who have
subsisting contracts beyond the In-Service Date of NAIA IPT III can not be arbitrarily or unreasonably
treated.
Finally, the Respondent Congressmen assert that at least two (2) committee reports by the
House of Representatives found the PIATCO contracts valid and contend that this Court, by taking
cognizance of the cases at bar, reviewed an action of a co-equal body.[61] They insist that the Court
must respect the findings of the said committees of the House of Representatives. [62] With due
respect, we cannot subscribe to their submission. There is a fundamental difference between a case
in court and an investigation of a congressional committee. The purpose of a judicial proceeding is
to settle the dispute in controversy by adjudicating the legal rights and obligations of the parties to
the case. On the other hand, a congressional investigation is conducted in aid of legislation. [63] Its
aim is to assist and recommend to the legislature a possible action that the body may take with
regard to a particular issue, specifically as to whether or not to enact a new law or amend an existing
one. Consequently, this Court cannot treat the findings in a congressional committee report as
binding because the facts elicited in congressional hearings are not subject to the rigors of the Rules
of Court on admissibility of evidence. The Court in assuming jurisdiction over the petitions at bar
simply performed its constitutional duty as the arbiter of legal disputes properly brought before it,
especially in this instance when public interest requires nothing less.
WHEREFORE, the motions for reconsideration filed by the respondent PIATCO, respondent
Congressmen and the respondents-in-intervention are DENIED with finality.
SO ORDERED.
9. G.R. Nos. L-51065-72
ARTURO A. MEJORADA, petitioner,
vs.
THE HONORABLE SANDIGANBAYAN and THE PEOPLE OF THE
PHILIPPINES, respondents.

CORTES, J.:

This petition for certiorari seeks to reverse the May 23, 1979 decision of the Sandiganbayan finding
the accused Arturo A. Mejorada in Criminal Cases Nos. 002-009 guilty beyond reasonable doubt of
violating Section 3(E) of Republic Act No. 3019, otherwise known as the Anti-Graft and Corrupt
Practices Act.

Eight informations were filed by the Provincial Fiscal against the petitioner and jointly tried before
the Sandiganbayan. The eight informations substantially allege the same set of circumstances
constituting the offense charged, Criminal Case No. 002 reads as follows:

That in (sic) or about and during the period comprised from October 1977 to February 1978,
in the municipality of Pasig, Metro Manila, Philippines and within the jurisdiction of this
Honorable Court, the above-named accused, being employed in the Office of the Highway
District Engineer, Pasig, Metro Manila, as Right-of-Way-Agent conspiring and confederating
together with two (2) other John Does whose true Identities and present whereabouts are still
unknown, with evident bad faith, and for personal gain, did then and there wilfully, unlawfully
and feloniously, directly intervene, work for, and facilitate the approval of one Isagani de
Leon's claim for the payment in the removal and reconstruction of his house and a part of his
land expropriated by the government having been affected by the proposed Pasig-Sta Cruz-
Calamba Road. 2nd IBRD Project at Binangonan, Rizal, while the accused, Arturo A.
Mejorada is in the discharge of his official and/or administrative functions and after said claim
was approved and the corresponding PNB Check No. SN 5625748 was issued and encashed
in the amount of P7,200.00 given only P1,000.00 to claimant (Isagani de Leon), appropriating,
applying and converting to themselves the amount of P6,200.00, thereby causing damage
and prejudice to Isagani de Leon and the government in the aforementioned amount of
P6,200.00.

Contrary to law.

Except for the date of the commission of the offense, the name of the aggrieved private party, the
PNB Check number, the amount involved and the number or John Does, the seven other
informations are verbatim repetitions of the above.

The facts are found by the respondent Sandiganbayan are as follows:

Arturo A. Mejorada was a public officer who was first employed as a temporary skilled laborer in the
Bureau of Public Works on March 16, 1947, and then as right-of-way agent in the Office of the
Highway District Engineer, Pasig, Metro Manila, from February, 1974 up to December 31, 1978. As
a right-of-way agent, his main duty was to negotiate with property owners affected by highway
constructions or improvements for the purpose of compensating them for the damages incurred by
said owners.

Among those whose lots and improvements were affected by the widening of the proposed Pasig-
Sta. Cruz-Calamba Road. 2nd IBRD Project, at Binangonan, Rizal were Isagani de Leon, Isaac
Carlos, Napoleon Maybituin, Dominga Villaroza, Florentino de la Cruz, Cipriano Aran, Celestina S.
Mallari and Rodolfo Rivera, all residents of Mambog, Binangonan, Rizal.
Sometime in October or November 1977, petitioner contacted the aforenamed persons and
informed them that he could work out their claims for payment of the values of their lots and/or
improvements affected by the widening of said highway. In the process, Mejorada required the
claimants to sign blank copies of the "Sworn Statement on the Correct and Fair Market Value of
Real Properties" and "Agreement to Demolish, Remove and Reconstruct improvements" pertinent
to their claims. The claimants complied without bothering to find out what the documents were all
about as they were only interested in the payment of damages.

In said "Sworn Statements" and "Agreements to Demolish", the value of the respective properties
of the claimants were made to appear very much higher than the actual value claimed by them.
Likewise, the said "Agreements to Demolish" reflected the value of the improvements as per
assessor" which on the average was only P2,000.00 lower than the value declared by the owners
in their sworn statements. The value as per assessor was, in turn, supported by the Declarations of
Real Property in the names of the claimants containing an assessed value exactly the same as that
stated in the Agreements to Demolish "as per assessor", except the claims of De la Cruz and Aran
where there is only a difference of P400.00 and P200.00, respectively. It turned out, however, that
said Declarations of Property are not really intended for the claimants as they were registered in the
names of other persons, thus showing that they were all falsified.

A few months after processing the claims, accused accompanied the claimants to the Office of the
Highway District Engineer at the provincial capitol of Pasig, Metro Manila, to receive payments and
personally assisted the claimants in signing the vouchers and encashing the checks by certifying as
to their Identities and guaranteeing payment.

Right after the claimants had received the proceeds of their checks, accused accompanied them to
his car which was parked nearby where they were divested of the amounts paid to them leaving
only the sum of P1,000.00 to each, except Isaac Carlos to whom P5,000.00 was left, explaining to
them that there were many who would share in said amounts. All the claimants were helpless to
complaint because they were afraid of the accused and his armed companion.

The claimants, through the assistance of counsel, filed their complaints with the Provincial Fiscal's
Office of Pasig, Metro Manila, narrating in their supporting sworn statements what they later testified
to in court.

Five issues are raised in this petition to review the decision of the Sandiganbayan:

I. Whether or not the essential elements constituting the offense penalized by section 3(e) of
Republic Act No. 3019, otherwise known as the Anti-Graft and Corrupt Practices Act have been
clearly and convincingly proven by the prosecution;

II. Whether or not the Sandiganbayan is a court of competent jurisdiction duly constituted in
accordance with Pres. Dec. No. 1606;

III. Whether or not the penalty imposed upon the petitioner is excessive and contrary to the three-
fold rule as provided for by Article 70 of the Revised Penal Code;

IV. Whether or not there is a variance between the offense charged in the information and the
offense proved;

V. Whether or not the conclusion drawn from the record of the Sandiganbayan in arriving at a verdict
of conviction of petitioner is correct is a question of law which this Honorable Court is authorized to
pass upon.
I. Petitioner contends that the eight informations filed against him before the Sandiganbayan are
fatally defective in that it failed to allege the essential ingredients or elements constituting the offense
penalized by Section 3(e) of Rep. Act No. 3019.

The section under which the accused-petitioner was charged provides:

Sec. 3. Corrupt practices of public officers. In addition to acts or omissions of public officers
already penalized by existing law, the following shall constitute corrupt practices of any public
officer and are hereby declared to be unlawful.

xxx xxx xxx

(e) Causing any undue injury to any party, including the Government, or giving any private
party any unwarranted benefits, advantage or preference in the discharge of his official
administrative or judicial functions through manifest partiality, evident bad faith or gross
inexcusable negligence. This provision shall apply to officers and employees of offices or
government corporations charged with the grant of licenses or permits or other concessions.

Petitioner enumerated three elements which, in his opinion, constitute a violation of Section 3(e).

First, that the accused must be a public officer charged with the duty of granting licenses or permits
or other concessions. Petitioner contends that inasmuch as he is not charged with the duty of
granting licenses, permits or other concessions, then he is not the officer contemplated by Section
3 (e).

Section 3 cited above enumerates in eleven subsections the corrupt practices of any public officers
declared unlawful. Its reference to "any public officer" is without distinction or qualification and it
specifies the acts declared unlawful. We agree with the view adopted by the Solicitor General that
the last sentence of paragraph (e) is intended to make clear the inclusion of officers and employees
of officers or government corporations which, under the ordinary concept of "public officers" may not
come within the term. It is a strained construction of the provision to read it as applying exclusively
to public officers charged with the duty of granting licenses or permits or other concessions.

The first element, therefore, of Section 3 (e) is that the accused must be a public officer. This, the
informations did not fail to allege.

Second, that such public officer caused undue injury to any party, including the Government, or
gave any private party unwarranted benefits, advantage or preference in the discharge of his official
administrative or judicial functions.

Petitioner denies that there was injury or damage caused the Government because the payments
were allegedly made on the basis of a document solely made by the Highway District Engineer to
which petitioner had no hand in preparing. The fact, however, is that the government suffered undue
injury as a result of the petitioner's having inflated the true claims of complainants which became
the basis of the report submitted by the Highway District Engineer to the Regional Director of the
Department of Highways and which eventually became the basis of payment. His contention that he
had no participation is belied by the fact that as a right-of-way-agent, his duty was precisely to
negotiate with property owners who are affected by highway constructions for the purpose of
compensating them.

On the part of the complainants, the injury caused to them consists in their being divested of a large
proportion of their claims and receiving payment in an amount even lower than the actual damage
they incurred. They were deprived of the just compensation to which they are entitled.
Third, the injury to any party, or giving any private party any unwarranted benefits, advantage or
preference was done through manifest, partiality, evident bad faith or gross inexcusable negligence.

Petitioner argues that for the third element to be present, the alleged injury or damage to the
complainants and the government must have been caused by the public officer in the discharge of
his official, administrative or judicial functions and inasmuch as when the damage was caused to
the complainants, he was no longer discharging his official administrative functions, therefore, he is
not liable for the offense charged.

The argument is devoid of merit. The Sandiganbayan established the fact that the petitioner took
advantage of his position as a right-of-way-agent by making the claimants sign the aforementioned
agreements to demolish and sworn statements which contained falsified declarations of the value
of the improvements and lots. There was evident bad faith on the part of the petitioner when he
inflated the values of the true claims and when he divested the claimants of a large share of the
amounts due them.

In view of the above holding. We also dispose of the fourth issue which relates to the allegation that
petitioner cannot be convicted for a violation of the Anti-Graft Law because the evidence adduced
by the prosecution is not the violation of Section 3 (e) but the crime of robbery. Contrary to the
petitioner averment. We find no variance between the offense charged in the information and the
offense proved. The prosecution was able to establish through the corroborating testimonies of the
witnesses presented how through evident bad faith, petitioner caused damage to the claimants and
the Government. The manner by which the petitioner divested the private parties of the
compensation they received was part of' the scheme which commenced when the petitioner
approached the claimants and informed them that he could work out their claims for payment of the
values of their lots and/or improvements affected by the widening of the Pasig-Sta. Cruz-Calamba
Road. The evidence presented by the prosecution clearly establish a violation of Section 3(e).

II. The petitioner also assails the competency of the Sandiganbayan to hear and decide this case.
He argues that before the Sandiganbayan could legally function as a judicial body, at least two (2)
divisions, or majority of the justices shall have been duly constituted and appointed.

We previously ruled on this matter in the case of De Guzman v. People (G.R. No. 54288, December
15, 1982, 119 SCRA 337). In that case, the petitioner De Guzman questioned the authority of the
Sandiganbayan to hear and decide his case on the same ground that herein petitioner assails its
jurisdiction. The Court upheld the authority of the Sandiganbayan saying that:

Although the Sandiganbayan is composed of a Presiding Justice, and eight Associate

Justices, it does not mean that it cannot validly function without all of the Divisions constituted.
Section 3 of P.D. 1606 provides that the "Sandiganbayan shall sit in three divisions of three
justices each" while Section 5 thereof provides that the unanimous vote of three justices of a
division shall be necessary for the pronouncement of a judgment.

Thus the Sandiganbayan functions in Divisions of three Justices each and each Division
functions independently of the other. As long as a division has been duly constituted it is a
judicial body whose pronouncements are binding as judgments of the Sandiganbayan.

The judgment convicting petitioner was a unanimous Decision of the First Division duly
constituted. It thus met the requirement for the pronouncement of a judgment as required by
Section 5 of P.D. 1606 supra.

III. The third issue raised by the petitioner concerns the penalty imposed by the Sandiganbayan
which totals fifty-six (56) years and eight (8) days of imprisonment. Petitioner impugns this as
contrary to the three-fold rule and insists that the duration of the aggregate penalties should not
exceed forty (40) years.
Petitioner is mistaken in his application of the three-fold rule as set forth in Article 70 of the Revised
Penal Code. This article is to be taken into account not in the imposition of the penalty but in
connection with the service of the sentence imposed (People v. Escares, 102 Phil. 677 [1957]).
Article 70 speaks of "service" of sentence, "duration" of penalty and penalty "to be inflicted".
Nowhere in the article is anything mentioned about the "imposition of penalty". It merely provides
that the prisoner cannot be made to serve more than three times the most severe of these penalties
the maximum of which is forty years.

The Sandiganbayan, therefore, did not commit any error in imposing eight penalties for the eight
informations filed against the accused-petitioner. As We pointed out in the case of People v. Peralta,
(No. L-19069, October 29, 1968, 25 SCRA 759, 783-784):

... Even without the authority provided by Article 70, courts can still impose as many penalties
as there are separate and distinct offenses committed, since for every individual crime
committed, a corresponding penalty is prescribed by law. Each single crime is an outrage
against the State for which the latter, thru the courts of justice, has the power to impose the
appropriate penal sanctions.

In the light of the above reasons, petitioner cannot assail the penalty imposed upon him as harsh,
cruel and unusual (See Veniegas v. People, G.R. No. 57601-06 July 20, 1982, 115 SCRA 790, 792).

We deem it unnecessary to pass upon the fifth issue raised in view of the foregoing discussion.

WHEREFORE, the petition is denied for lack of merit.

SO ORDERED.