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HARRY STONEHILL was stationed in the Philippines during World War II. After the war,
Stonehill briefly returned to his native Chicago, but returned to the Philippines several years
later. Upon his return, Stonehill began what became an enormously successful business
career, eventually becoming Robert Brooks's partner.
In less than two decades, following the end of WWII , Stonehill was able to build a
business empire allegedly valued at around 50M USD. From US Tobacco Corp, to glass
manufacture, to cement production and publishing. The 18 corporations he started in the
country were pioneering and high earning business ventures.
Stonehill’s success attracted attention from both Philippine and U.S. authorities.
The U.S. State Department became interested in Stonehill's operations as early as
1950. The State Department requested that the U.S. Embassy in Manila conduct a “discreet
investigation” into Stonehill's operations. The reports from this investigation led to
Congressional investigation in 1960 in the Philippines on alleged tax evasion charges against
Stonehill.
The congressional hearing on Harry Stonehill resulted in the lawmakers unable to pin
down the American Entrepreneur. It seems like whatever they threw against him, Stonehill
had always a ready answer. The hearing itself became a media event, making Stonehill a
household name.
Then in March 1962. events took an unexpected turn. Harry Stonehill and his business
associate Robert Brooks were arrested on charges of frustrated murder. Meinhart Spielman,
became the ever the first whistle blower, he was former general manager of US Tobacco
Corporation, one of the corporations allegedly managed by Stonehill, accused the two man
of beating him almost to death.
This became a huge case of that year. Spielman then revealed to the NBI (National
Bureau of Investigation) the tobacco company's shady dealings. This prompted Justice
Secretary Jose W. Diokno to order the NBI to conduct raids on the various offices of Stonehill.
This case of Stonehill describes the milieu under which the Philippine political and
judicial systems responded to the most critical challenge posed by the corruption to the
Philippine democracy in the 1st 3 decades of the post war years.
There were names of government officials and media men found written in the so
called “BLUE BOOK” of Stonehill, which were alleged to be the names of people who receives
money from him in exchange of favors and information, including the name of the newly
elected reformist President Diosdado Macapagal, and Senate President then Ferdinand
Marcos.
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CASE PROPER
FACTS
SITUATION

From March 3-9, 1962, upon the application of the officers of government led by
Secretary Diokno, several judges issued a total of 42 search warrants that directed peace
officers to search the premises of the offices, warehouses, and residences of petitioners in
this case and seize the following properties: books of accounts, financial records, vouchers,
correspondence, receipts, ledgers, journals, portfolios, credit journals, typewriters, and other
documents and/or papers showing all business transactions including disbursements receipts,
balance sheets and profit and loss statements and bobbins (cigarette wrappers), in relation
to violation of Central Bank Laws, Tariff and Customs Laws, Internal Revenue (Code) and the
Revised Penal Code.

PETITIONER’S
On march 20, 1962, Petitioners alleged that the warrant is illegal for, inter alia: (1) they
do not describe with particularity the documents, books and things to be seized; (2) cash
money, not mentioned in the warrants, were actually seized; (3) the warrants were issued to
fish evidence against the aforementioned petitioners in deportation cases filed against them;
(4) the searches and seizures were made in an illegal manner; and (5) the documents, papers
and cash money seized were not delivered to the courts that issued the warrants, to be
disposed of in accordance with law x x x.
The petitioner contended that the search warrants are null and void as their issuance violated
the Constitution and the Rules of Court for being in a nature of general warrants.
Thus, he filed a petition with the Supreme Court for certiorari, prohibition, mandamus and
injunction to prevent the seized effects from being introduced as evidence in their prior
deportation cases.
RESPONDENTS’
Meanwhile, the respondents answered that first, the questioned search warrants are
valid and issued in accordance with the law. Second, the consent of the petitioners cured any
(legal) defects present in these warrants and third, invoke the Moncado vs People’s Court
ruling: even if the searches and seizures under consideration were unconstitutional, the
documents, papers and things thus seized are admissible in evidence against petitioners
herein.

ISSUE
Whether or not the petitioner can validly assail the legality of the search and seizure in
both premises
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RULINGS
The court in relation to the documents, papers and things seized under the alleged authority
of warrants in question, had split in to two major group.
1.) Those found and seized in the offices of the corporation
 U.S. Tobacco Corporation
 Atlas Cement Corporation
 Atlas Development Corporation
 Far East Publishing Corporation (Evening News),
 Investment Inc.,
 Industrial Business Management Corporation,
 General Agricultural Corporation
 American Asiatic Oil Corporation
 Investment Management Corporation
 Holiday Hills, Inc.,
 Republic Glass Corporation
 Industrial and Business
 Management Corporation
 United Housing Corporation
 The Philippine Tobacco-Flue-Curing and Redrying Corporation
 Republic Real Estate Corporation
 Merconsel Corporation.

On the first group, those found and seized in the offices of the corporation, the court
ruled that the petitioner has no cause of action to assail the legality of the contested
warrants and the of the seizures made in pursuance thereof. Since a corporation has a
personality separate and distinct from the personality of its officers or herein
petitioner regardless of the amount of shares of stock or interest of each in the said
corporation, and whatever office they hold therein. Only the party whose right has
been impaired can validly object the legality of a seizure--a purely personal right which
cannot be exercised by a third party.
The right to object to admission as evidence the documents, papers and things seized
from the offices of a particular corporation belongs exclusively to such corporation and
may not be invoked by its corporate officers in proceedings against them in their
individual capacity.
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2.) Those found and seized in the residences of petitioners

On the second group, those found and seized in the residences of petitioners, The SC
ruled in favor of Stonehill et. al., reversing the Moncado doctrine. the 3 warrants issued to
search petitioners’ residences were declared void. Thus, the searches and seizures made
therein are illegal.
The court emphasized that The constitution protects the people’s right against
unreasonable search and seizure. It provides:
(1) that no warrant shall issue but upon probable cause, to be determined by the judge in
the manner set forth in said provision; and
(2) that the warrant shall particularly describe the things to be seized.

In the case at bar, none of these are met.

The warrant was issued from mere allegation that petitioners committed a“violation of
Central Bank Laws, Tariff and Customs Laws, Internal Revenue (Code) and Revised Penal
Code.” As no specific violation has been alleged, it was impossible for the judges who
issued said warrants to have found the existence of probable cause, for the same
presupposes the introduction of competent proof that the party against whom it is sought
has performed or committed violations of the law. In other words, it would be a legal
heresy, of the highest order, to convict anybody of a “violation of Central Bank Laws, Tariff
and Customs Laws, Internal Revenue (Code) and Revised Penal Code,” — as alleged in the
aforementioned applications — without reference to any determinate provision of said
laws or codes. General warrants are also to be eliminated, as the legality or illegality of
petitioners’ transactions is immaterial to the invalidity of the general warrant that sought
these effects to be searched and seized: “Books of accounts, financial records, vouchers,
journals, correspondence, receipts, ledgers, portfolios, credit journals, typewriters, and
other documents and/or papers showing all business transactions including disbursement
receipts, balance sheets and related profit and loss statements.”
The Court also holds that the only practical means of enforcing the constitutional
injunction against unreasonable searches and seizures is, in the language of the Federal
Supreme Court: x x x If letters and private documents can thus be seized and held and
used in evidence against a citizen accused of an offense, the protection of the 4th
Amendment, declaring his rights to be secure against such searches and seizures, is of no
value, and, so far as those thus placed are concerned, might as well be stricken from the
Constitution. The efforts of the courts and their officials to bring the guilty to punishment,
praiseworthy as they are, are not to be aided by the sacrifice of those great principles
established by years of endeavor and suffering which have resulted in their embodiment
in the fundamental law of the land.