fifth set secretary of justice to alonte

8/10/2019 Fifth Set Secretary of Justice to Alonte

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6tates had to secure orders from the concerned istrict Courts authorizing the 8nited 6tates to disclosecertain grand Fury information to (hilippine government and law enforcement personnel for the purposeof e1tradition of +r. #imenez. 9ny further disclosure of the said information is not authorized by the8nited 6tates istrict Courts. 4n this particular e1tradition re>uest the 8nited 6tates 7overnmentre>uested the (hilippine 7overnment to prevent unauthorized disclosure of the subFect information. Thisepartments denial of your re>uest is consistent with 9rticle ' of the R(;86 *1tradition Treaty which

provides that the (hilippine 7overnment must represent the interests of the 8nited 6tates in anyproceedings arising out of a re>uest for e1tradition. The epartment of #ustice under (.. -o. $/& isthe counsel of the foreign governments in all e1tradition re>uests.

%. This epartment is not in a position to hold in abeyance proceedings in connection with an e1traditionre>uest. 9rticle A/ of the @ienna Convention on the Eaw of Treaties, to which we are a party providesthat 0*very treaty in force is binding upon the parties to it and must be performed by them in goodfaith0. *1tradition is a tool of criminal law enforcement and to be effective, re>uests for e1tradition orsurrender of accused or convicted persons must be processed e1peditiously.

:pp. '';'?,Rollo.uest, and thereafter to evaluate the re>uest impartially, fairly andobFectively


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place or stead are hereby "R*R* to C*96* and *646T from enforcing the assailed order dated9ugust &, $&&& issued by public respondent in Civil Case -o. &&;&5/?5.

74@*- by the Honorable H4E9R4" 7. 9@4*, #R., Chief #ustice, 6upreme Court of the (hilippines,this $'th day of 9ugust $&&&.

:pp. $A;$A$,Rollo.uested3

5. 9 statement of the provisions of law describing the punishment for the offense3

=. 9 statement of the provisions of the law describing any time limit on the prosecution or the e1of punishment for the offense3

/. ocuments, statements, or other types of information specified in paragraph % or paragraph 5 9rticle, as applicable.

:(aragraph A, 9rticle ', (residential ecree -o. $/&.uest, apparently without the epartment of )oreign 9ffairs discharging its duty ofthoroughly evaluating the same and its accompanying documents. The statement of an assistant secretary aepartment of )oreign 9ffairs that his epartment, in this regard, is merely acting as a post office, for whireason he simply forwarded the re>uest to the epartment of #ustice, indicates the magnitude of the error oepartment of )oreign 9ffairs in taking lightly its responsibilities. Thereafter, the epartment of #ustice toupon itself to determine the completeness of the documents and to evaluate the same to find out whether thcomply with the re>uirements laid down in the *1tradition Eaw and the R(;86 *1tradition Treaty. (etitionratiocinates in this connection that although the epartment of #ustice had no obligation to evaluate the e1tdocuments, the epartment also had to go over them so as to be able to prepare an e1tradition petition :tsn%$, $&&&, pp. A5;A=uest and the supporting papers3 :A< the right to be heard which consists in havinreasonable period of time to oppose the re>uest, and to present evidence in support of the opposition3 and :the evaluation proceedings be held in abeyance pending the filing of private respondents opposition to the

The two epartments seem to have misread the scope of their duties and authority, one abdicating its powethe other enlarging its commission. The epartment of )oreign 9ffairs, moreover, has, through the 6olicito7eneral, filed a manifestation that it is adopting the instant petition as its own, indirectly conveying the methat if it were to evaluate the e1tradition re>uest, it would not allow private respondent to participate in theof evaluation.

(lainly then, the record cannot support the presumption of regularity that the epartment of )oreign 9ffairthoroughly reviewed the e1tradition re>uest and supporting documents and that it arrived at a well;founded

Fudgment that the re>uest and its anne1ed documents satisfy the re>uirements of law. The 6ecretary of #useminent as he is in the field of law, could not privately review the papers all by himself. He had to officiallconstitute a panel of attorneys. How then could the )9 6ecretary or his undersecretary, in less than one damake the more authoritative determinationL

The evaluation process, Fust like the e1tradition proceedings proper, belongs to a class by itself. 4t issui 'eis not a criminal investigation, but it is also erroneous to say that it is purely an e1ercise of ministerial func9t such stage, the e1ecutive authority has the power! :a< to make a technical assessment of the completenesufficiency of the e1tradition papers3 :b< to outrightly deny the re>uest if on its face and on the face of the


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supporting documents the crimes indicated are not e1traditable3 and :c< to make a determination whether or not there>uest is politically motivated, or that the offense is a military one which is not punishable under non;military

penal legislation :tsn, 9ugust %$, $&&&, pp. A?;A&3 9rticle A M and (aragraph %, 9rticle %, R(;86 *1traditionTreatyuisitorial process in contrast to a

proceeding conducted in the e1ercise of an administrative bodys >uasi;Fudicial power.

4n administrative law, a >uasi;Fudicial proceeding involves! :a< taking a nd evaluation of evidence3 :b< determiningfacts based upon the evidence presented3 and :c< rendering an order or decision supported by the facts proved :eEeon, 9dministrative Eaw! Te1t and Cases, $&&% ed., p. $&?, citing +organ vs. 8nited 6tates, %5 8.6. $uisitorial power, which is also known as e1amining or investigatory power, is one or the determinative powersof an administrative body which better enables it to e1ercise its >uasi;Fudicial authority :Cruz, (hil. 9dministrativeEaw, $&&/ ed., p. A/uirements of the lawand the treaty and, therefore, sufficient to be the basis of an e1tradition petition. 6uch finding is thus merely initialand not final. The body has no power to determine whether or not the e1tradition should be effected. That is therole of the court. The bodys power is limited to an initial finding of whether or not the e1tradition petition can befiled in court.

4t is to be noted, however, that in contrast to ordinary investigations, the evaluation procedure is characterized bycertain peculiarities. (rimarily, it sets into motion the wheels of the e1tradition process. 8ltimately, it may result inthe deprivation of liberty of the prospective e1traditee. This deprivation can be effected at two stages!/irst, the

provisional arrest of the prospective e1traditee pending the submission of the re>uest. This is so because the Treaty

provides that in case of urgency, a contracting party may re>uest the provisional arrest of the person soughtpending presentation of the re>uest :(aragraph $, 9rticle &, R(;86 *1tradition Treatyuest is submitted :(aragraph 5uested 6tate, the prospective e1traditee may be continuously detained, or if not, subse>uentlyrearrested :(aragraph =, 9rticle &, R(;86 *1tradition Treatyuest issubmitted. (ractically, the purpose of this detention is to prevent his possible flight from the Re>uested

6tate. Second, the temporary arrest of the prospective e1traditee during the pendency of the e1tradition petcourt :6ection /, (residential ecree -o. $/&uences, we conclude that the evaluation process is akin to an administrativagency conducting an investigative proceeding, the conse>uences of which are essentially criminal since sutechnical assessment sets off or commences the procedure for, and ultimately, the deprivation of liberty of

prospective e1traditee. 9s described by petitioner himself, this is a 0tool0 for criminal law enforcement :p.

'?,Rollo


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preliminary investigation, which may result in the filing of an information against the respondent, can possiblylead to his arrest, and to the deprivation of his liberty.

(etitioners reliance on 3ri'"t vs. Court o) A((eals:A%= 6CR9 A5$ $&&A< :p. ?, petitioners +emorandum< thatthe e1tradition treaty is neither a piece of criminal legislation nor a criminal procedural statute is not well;taken.3ri'"tis not authority for petitioners conclusion that his preliminary processing is not akin to a preliminaryinvestigation. The characterization of a treaty in 3ri'"twas in reference to the applicability of the prohibitionagainst an e# (ost )actolaw. 4t had nothing to do with the denial of the right to notice, information, and hearing.

9s early as $??5, the 8nited 6tates 6upreme Court ruled that 0any legal proceeding enforced by public a uthority,

whether sanctioned by age or custom, or newly devised in the discretion of the legislative power, in furtherance ofthe general public good, which regards and preserved these principles of liberty and Fustice, must be held to be due

process of law0 :Hurtado vs. California, $$ 8.6. =$/uirements cannot bedeemed non;compliance with treaty commitments.

The 8nited 6tates and the (hilippines share a mutual concern about the suppression and punishment of crime intheir respective Furisdictions. 9t the same time, both 6tates accord common due process protection to theirrespective citizens.

The due process clauses in the 9merican and (hilippine Constitutions are not only worded in e1actly identicallanguage and terminology, but more importantly, they are alike in what their respective 6upreme Courts havee1pounded as the spirit with which the provisions are informed and impressed, the elasticity in their interpretation,their dynamic and resilient character which make them capable of meeting every modern problem, and theirhaving been designed from earliest time to the present to meet the e1igencies of an undefined and e1pandingfuture. The re>uirements of due process are interpreted in both the 8nited 6tates and the (hilippines as not

denying to the law the capacity for progress and improvement. Toward this effect and in order to avoid theconfines of a legal straitFacket, the courts instead prefer to have the meaning of the due process clause 0graduallyascertained by the process of inclusion and e1clusion in the course of the decisions of cases as they arise0:Twining vs. -ew #ersey, A$$ 8.6. '?


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4n international proceedings, e1tradition treaties generally provide for the presentation to the e1ecutive authorityof the Re>uested 6tate of a re>uisition or demand for the return of the alleged offender, and the designation of the

particular officer having authority to act in behalf of the demanding nation :%$9Am 4ur Ad ?$=uests

for the provincial arrest of an individual may be made directly by the (hilippine epartment of #usticeto the 8.6. epartment of #ustice, and vice;versa. 4n the event of a provisional arrest, a formal re>uestfor e1tradition is transmitted subse>uently through the diplomatic channel.

A. The epartment of 6tate forwards the incoming (hilippine e1tradition re>uest to the epartment of#ustice. Before doing so, the epartment of 6tate prepares a declaration confirming that a formal re>uesthas been made, that the treaty is in full force and effect, that under 9rticle $' thereof the parties providereciprocal legal representation in e1tradition proceedings, that the offenses are covered as e 1traditableoffenses under 9rticle A thereof, and that the documents have been authenticated in a ccordance with thefederal statute that ensures a dmissibility at any subse>uent e1tradition hearing.

%. 9 Fudge or magistrate Fudge is authorized to issue a warrant for the a rrest of the prospective e1traditee:$? 8.6.C. N%$?5uest :I$id.uires theparties to a treaty to keep their agreement therein in good faith. The observance of our countrys legal duties undera treaty is also compelled by 6ection A, 9rticle 44 of the Constitution which provides that 0the ( hilippinesrenounces war as an instrument of national policy, adopts the generally accepted principles of international law as

part of the law of the land, and adheres to the policy of peace, e>uality, Fustice, freedom, cooperation and amitywith nations.0 8nder the doctrine of incorporation, rules of international law form part of the law of the and landno further legislative action is needed to make such rules applicable in the domestic sphere :6alonga M Jap, (ublic4nternational Eaw, $&&A ed., p. $Auest and the supportingdocuments.

2e disagree.

4n the absence of a law or principle of law, we must apply the rules of fair play. 9n application of the basic twindue process rights of notice a nd hearing will not go a gainst the treaty or the implementing law. -either the Treatynor the *1tradition Eaw precludes these rights from a prospective e1traditee. 6imilarly, 9merican Furisprudenceand procedures on e1tradition pose no proscription. 4n fact, in interstate e1tradition proceedings as e1plainedabove, the prospective e1traditee may even re>uest for copies of the e1tradition documents from the governor ofthe asylum state, and if he does, his right to be supplied the same becomes a demandable right :%= C.#.6. 5$uested the (hilippine 7overnment to prevent unauthorized diof confidential information. Hence, the secrecy surrounding the action of the epartment of #ustice ( anel o9ttorneys. The confidentiality argument is, however, overturned by petitioners revelation that everything irefuses to make available at this stage would be obtainable during trial. The epartment of #ustice states th8.6. istrict Court concerned has authorized the disclosure of certain grand Fury information. 4f the informtruly confidential, the veil of secrecy cannot be lifted at any stage of the e1tradition proceedings. -ot even trial.

9 libertarian approach is thus called for under the premises.

"ne will search in vain the R(;86 *1tradition Treaty, the *1tradition Eaw, as well as 9merican Furisprudeprocedures on e1tradition, for any prohibition against the conferment of the two basic due process rights oand hearing during the evaluation stage of the e1tradition proceedings. 2e have to consider similar situatio

Furisprudence for an application by analogy.

*arlier, we stated that there are similarities between the evaluation process and a preliminary investigationboth procedures may result in the arrest of the respondent or the prospective e1traditee. 4n the evaluation pa provisional arrest is even allowed by the Treaty and the *1tradition Eaw :9rticle &, R(;86 *1tradition T6ec. A, (residential ecree -o. $/&uires it0L(etitioners theory would also infer that bail is not available during the arrest of the prospective e1traditee wthe e1tradition petition has already been filed in court since (residential ecree -o. $/& does not providetherefor, notwithstanding 6ection $%, 9rticle 444 of the Constitution which provides that 0all persons, e1cethose charged with offenses punishable by reclusion (er(etuawhen evidence of guilt is strong, shall, befor

conviction, be bailable by sufficient sureties, or be released on recognizance as may be provided by law. Thto bail shall not be impaired even when the privilege of the writ of "a$eas cor(usis suspended. . .0 Can pevalidly argue that since these contraventions are by virtue of a treaty and hence affecting foreign relations, aforestated guarantees in the Bill of Rights could thus be subservient theretoL

The basic principles of administrative law instruct us that 0the essence of due process in administrative prois an opportunity to e1plain ones side or an opportunity to seek reconsideration of the actions or rulingcomplained of :+irano vs. -ERC, A' 6CR9 &/ $&&'3 (adilla vs. -ERC, A'% 6CR9 5=' $&&'3 (ET

-ERC, A'/ 6CR9 $ $&&'3 Helpmate, 4nc. vs. -ERC, A'/ 6CR9 %$= $&&'3 9>uinas 6chool vs. +agna6CR9 /A $&&'3 #amer vs. -ERC, A'? 6CR9 /%A $&&'


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Commission in 9ccordance with (rovisions of the Constitution, (rescribing its (owers and )unctions and for"ther (urposesuest and the deprivation of private respondents

liberty is easily comprehensible.

2e have ruled time and again that this Courts e>uity Furisdiction, which is aptly described as 0Fustice outsidelegality,0 may be availed of only in the absence of, and never against, statutory law or Fudicial pronouncements:6mith Bell M Co., 4nc. vs. Court of 9ppeals, A/' 6CR9 =% $&&'3 avid;Chan vs. Court of 9ppeals, A/?6CR9 /'' $&&'


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To aid the Commissioner and to e1pedite his task of determining the actual indebtedness of CCC, both CCCand B( provided the representatives of the Commissioner with the pertinent data and documents which werewithin their custody and possession. 9mong the documents provided was a copy of the +emorandum of9greement5e1ecuted between CCC and B( which pegged CCCOs total indebtedness to B( at($%%,'$',A?/.&=as of 9ugust %$, $&'&.

The Commissioner was unable to accomplish his assigned task within the period set by the court. He wasinitially given an e1tension of si1ty :/< days. This proved to be insufficient thus he was granted another forty;five :5=< days from ecember $?, $&?&.

espite several e1tensions given to the Commissioner to complete his report, he failed to do so. Thisprompted the trial court to issue an "rder dated 9pril A%, $&& directing 9tty. #ose Eeynes =to e1plain why heshould not be cited for contempt for his une1plained omission to perform and accomplish his duties as the courtappointed Commissioner. This was followed by another "rder dated #uly A, $&& citing 9tty. Eeynes in contemptof court and ordered his imprisonment for his non;compliance with the 9pril A%, $&& order.

To avoid the conse>uences of the contempt order, 9tty. Eeynes submitted a draft report on #uly $$, $&&entitled Q6ummary of 4nitial )indings. The contempt order was subse>uently lifted by the trial court on 9ugustA, $&&.

9fter several months of work had passed, the Commissioner, this time known as QEaya +anabat 6algado MCo., submitted to the lower court its report entitled QCommissionerOs Report on Eoan (roceeds and (aymentsdated #anuary $$, $&&$. The findings of the Commissioner as cited by the Court of 9ppeals in its decision were asfollows!

It -ears e/$asis t$at t$e re/ort is #onined to a deterination o CCC0s inde-tedness to )"P in relation

onl1 to our 234 straig$t /eso loans , namely, a $AS ten;year loan of ( %,?/',A&$ signed on 9ugust A, $&/?3 a$S ten;year loan of (','?5, signed on 6eptember $&, $&/&3 a $S ten;year loan signed on "ctober A%, $&/&3

and a (=.=. +illion loan not covered by any promissory note but released to the e1tent of($. +illion in +arch$&'A, and two :A< guaranteed foreign e1change loans consisting of 86A,, contracted on 6eptember 5,$&/? by CCC but guaranteed by B( in favor of 6ome1 Etd. and +$$,A%%,$$= :7erman eutsche +arks< infavor of consortium of 2est 7erman +anufacturers headed by Ilockner;Humboldt;eutz, 9.7. dated +ay &,$&/& :Report, p. %


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/. dismissing the plaintiffOs claim for unspecified attorneyOs fees and e1penses of litigation.

-o pronouncement as to costs.

6" "R*R*.&

9fter having learned of the decision of the trial court, 9(T and B( filed their respective "mnibus+otions. 9(T, in its "mnibus +otion dated "ctober A', $&&A, prayed for the issuance of the following orders bythe trial court!

$< vacating and nullifying its ecision dated "ctober =, $&&A3A< granting 9(T an opportunity to cross;e1amine plaintiffOs witness3

%< allowing B( and 9(T to present their witnesses and evidence3

5< after trial, re>uiring the parties to submit their respective +emoranda.$

The trial court, on ecember $5, $&&A, issued an "rder denying the separate "mnibus +otions of 9(T andB(. Both 9(T and B( appealed the trial courtOs decision dated "ctober =, $&&A and orders dated 9ugust A=,$&&A and ecember $5, $&&A.

"n #une ', $&&%, 9(T and B( filed with the Court of 9ppeals a petition for certiorariand prohibition withprayer for an e#-(arteissuance of a restraining order and a writ of preliminary inFunction docketed as C9;7.R. 6(-o. %A?=%. However, on #anuary %$, $&&5, the Court of 9ppeals dismissed the petition for lack of merit.

Thus, on +arch A?, $&&=, the Court of 9ppeals, in C9;7.R. C@ -o. 5A=&/ rendered the assailed decision,the dispositive portion of which reads as follows!

Q2H*R*)"R*, premises considered, Fudgment is hereby rendered 9))4R+4-7 the ecision dated "ctober =,$&&A and the orders dated 9ugust A= and ecember $5, $&&A in toto. The order dated #anuary AA, $&&% is herebyannulled and set aside insofar as it directs the partial release of collate rals by defendants;appellants B( and9(T.$$

4n the instant (etition for Review, 9(T assigns the following errors committed by the appellate court!

I

TH* C"8RT ") 9((*9E6 4- 9))4R+4-7 TH* E"2*R C"8RTO6 *C464"-, 46R*79R* TH*(R4-C4(E*6 *+B"4* 4- TH* 8* (R"C*66 CE986* ") TH* C"-6T4T8T4"-, TH86!

A

TH* C"8RT ") 9((*9E6 *RR* 4- )4-4-7 TH9T (*T4T4"-*R H96 294@* 4T6 R47HT T"CR"66;*9+4-* R*6("-*-TO6 24T-*66

II

TH* C"8RT ") 9((*9E6 *RR* 2H*- 4T 9))4R+* TH* TR49E C"8RTO6 *C464"- 9"(T4- T"T" TH* R*("RT ") TH* C"++4664"-*R

A

TH* C"8RT ") 9((*9E6 *RR* 4- 9))4R+4-7 TH* TR49E C"8RTO6 *C464"- TH9T TH*+*+"R9-8+ ") 97R**+*-T 46 8-*-)"RC*9BE*

"

TH* C"8RT ") 9((*9E6 *RR* 4- 9))4R+4-7 TH* TR49E C"8RTO6 *C464"- E4+4T4-7 THE49B4E4TJ ") R*6("-*-T 4- TH* 9+"8-T ") (/$,5&?,?5&. 96 ") *C*+B*R %$, $&&4-6T*9 ") (A,/=/,='%,'$/.$$

III

TH* C"8RT ") 9((*9E6 *RR* 4- 9))4R+4-7 TH* TR49E C"8RTO6 46689-C* ") 9 T*+("R*6TR94-4-7 "R*R 9- 2R4T6 ") (R*E4+4-9RJ 9- (*R+9-*-T 4-#8-CT4"-.

9nent the first assigned error, petitioner 9(T insists that the lower court as well as the Court of 9disregarded the principles of the due process clause embodied in the Constitution when it found 9(Twaived its right to cross;e1amine respondentOs witnesses. "n the other hand, respondent CCC countersfindings of the lower court may be attributed to the fault of 9(TOs counsel. CCC alleges that the counsel often absented himself on scheduled hearing dates, resulting in the failure to cross;e1amine the witnrespondent CCC.

The insistence of the petitioner is without basis.

Eong ingrained in our Furisprudence is the principle that there can be no denial of due process wherhad the opportunity to participate in the proceedings but did not do so.$A

9s shown from the records, the counsel for 9(T was absent on several occasions, specifically on +ay =, #une A, #une $/, 9ugust A5 and A=, $&&A. 6everal reasons were raised by 9(TOs counsel to Fuabsence, such as withdrawal of previous counsel, unreadiness to conduct the cross;e1aminations, and illness.

These flimsy e1cuses do not warrant consideration from this Court. The withdrawal of 9(TOs counsel in the thick of the proceedings would be a reasonable ground to seek postponementhearing. However, such reason necessitates a duty, nay an obligation, on the part of the new counsel tohimself for the ne1t scheduled hearing. The e1cuse that it was due to the former counselOs failure to turnrecords of the case to 9(T, shows the negligence of the new counsel to actively recover the recordscase. +ere demands are not sufficient. Counsel should have taken ade>uate steps to fully protect the inhis client, rather than pass the blame on the previous counsel.

9 motion to postpone trial on the ground that counsel is unprepared for trial demonstrates indifferedisregard of a clientOs interest. 9 new counsel who appears in a case in midstream is presumed and obac>uaint himself with all the antecedent processes and proceedings that have transpired prior to his takeove

9s regards the serious illness suffered by counsel during the trial dates of 9ugust A5 and A=, $&&A, note that engue Hemorrhagic )ever, if not treated at its early stage, could cause serious illness, sometim
http://sc.judiciary.gov.ph/jurisprudence/1999/jan99/119712.htm#_edn9http://sc.judiciary.gov.ph/jurisprudence/1999/jan99/119712.htm#_edn10http://sc.judiciary.gov.ph/jurisprudence/1999/jan99/119712.htm#_edn11http://sc.judiciary.gov.ph/jurisprudence/1999/jan99/119712.htm#_edn12http://sc.judiciary.gov.ph/jurisprudence/1999/jan99/119712.htm#_edn9http://sc.judiciary.gov.ph/jurisprudence/1999/jan99/119712.htm#_edn10http://sc.judiciary.gov.ph/jurisprudence/1999/jan99/119712.htm#_edn11http://sc.judiciary.gov.ph/jurisprudence/1999/jan99/119712.htm#_edn12


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death. This Court is not unmindful of the fact that counselOs absence was due to this deadly disease. 2hat bafflesthis Court is the reason offered by counsel that Qalthough two other 9(T lawyers were mentioned in the pleadings,only one was actively involved in the handling of the case. $5Counsel further adds that he could not have

possibly appraised the two other lawyers to appear during the scheduled hearing in his absence.

2e cannot understand why it would be difficult for counsel to appraise his two other collaboratingcounsels. Counsel himself readily admits that of the two, only one is actively handling the case. 4t would take amere phone call to inform his co;counsels than he would be unable to attend rather than be declared absent duringtrial. Jet, counsel failed to do so.

4n view of the foregoing, we find the Court of 9ppeals did not commit error, when it declared that petitionerwaived its right to cross;e1amine the respondentOs witnesses. The due process re>uirement is satisfied where the

parties are given the opportunity to submit position papers, $=as in this case. Both parties, CCC and B(G9(T,were given opportunity to submit their respective position papers after the Commissioner rendered hisreport. Contained in their position papers were their respective comments and obFections to the saidreport. )urthermore, the parties were also given the chance to cross;e1amine the Commissioner and hisrepresentative. They were likewise granted opportunity to cross;e1amine the witnesses of the other party,however, like in 9(TOs case, they were deemed to have waived their right, as previously discussed.

The essence of due process is that a party be afforded a reasonable opportunity to be heard and to supportany evidence he may have in support of his defense. $/2hat the law prohibits is absolute absence of theopportunity to be heard, hence, a party cannot feign denial of due process when he had been afforded theopportunity to present his side.$'

9s to the second assigned error, petitioner avers that the Court of 9ppeals erred when it affirmed the trialcourtOs decision adopting in totothe report of the Commissioner and the decision of the trial court declaring the+emorandum of 9greement as unenforceable.

The above;mentioned issues involve matters which are factual in nature. 9s a general rule, findings of factof the Court of 9ppeals are binding and conclusive upon this Court, and we will not normally disturb such factualfindings unless the findings of the court are palpably unsupported by the evidence on record or unless the

Fudgment itself is based on a misapprehension of facts.$?

4n the case at bar, we find no such error that would warrant a reversal of the a ssailed decision. 9s to thematter of the memorandum of agreement, we concur with the decision of the Court of 9ppeals. The +emorandumof 9greement itself stated that Qfailure of Continental to meet this deadline shall be construed as its obFection tothis new restructuring scheme.$&+oreover, CCC did not e1ecute nor submit all the documents needed to makesaid agreement effective. The fact that CCC did not comply with the re>uirements of the +emorandum of9greement at the e1piration of the period set by B(, only shows CCCOs non;conformity to the agreement.

6ince CCC did not e1press its conformity to the agreement, it was only proper for the Commissioner toconsider the amount of indebtedness of CCC based on actual loan releases. The Commissioner did consider the+emorandum of 9greement as a source document, however, no one was able to satisfactorily e1plain howthe figure was arrived at. 4t must be emphasized that the CommissionerOs report was limited in relation to four :5uired the technical know;how and e1pertise possessed

by the Commissioner. The records also bear the fact that said Commissioner was chosen by both parties.

9s we have previously ruled in Quebral vs. CAAthat factual findings of the Court of 9ppeals normnot reviewable by this Court under Rule 5= of the Rules of Court, e1cept when the findings of the appellaare at variance with those of the trial court. 6ince the trial court and the Court of 9ppeals were in unison findings of the Commissioner, this Court is of the opinion that it finds no compelling reason to reverse the

Eastly, petitioner 9(T argues that the Court of 9ppeals erred in affirming the trial courtOs issuantemporary restraining order and a writ of preliminary and permanent inFunction against it :9(T


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The writ of preliminary inFunction issued on #anuary $', $&?/, and the writ of permanent inFunction issuedon "ctober =, $&&A are hereby declared -8EE 9- @"4 pursuant to 6ection %$, (roclamation -o. =.

SO OR)ERE).

!ATUUINA INTERATE) BOO) PRO)UCTS, INC.,petitioner, vs.T$e HON. COURT OF

APPEALS, )A*AO ENTERPRISES CORPORATION, T$e HON. !INISTER, 2NOB

SECRETARY4 o NATURAL RESOURCES AN) PHILLIP CO, respondents.

) E C I S I O N

TORRES, JR.,J.+

+atuguina 4ntegrated 2ood (roducts 4nc. :+42(4, for brevity< filed this action for prohibition, amagesand 4nFunction, in order to prevent the respondent +inister :now 6ecretary< of -atural Resources from enforcingits "rder of *1ecution against it, for liability arising from an alleged encroachment of the petitioner over thetimber concession of respondent 9@*-C"R located in +ati, avao "riental.

The Regional Trial Court, Branch $', avao City, ruled in favor of the petitioner, but on appeal, wasreversed by the respondent Court of 9ppeals in its decision dated )ebruary A=, $&&$, which found +42(4, as analter ego of +ilagros +atuguina andGor +atuguina Eogging enterprises :+E*, to be liable to 9@*-C"R forillegal encroachment.

The following are the antecedent facts!

"n #une A?, $&'%, the 9cting irector of the Bureau of )orest evelopment issued (rovisional TimberEicense :(TE< -o. %, covering an area of =,5 hectares to +s. +ilagros +atuguina who was then doing

business under the name of +E*, a sole proprietorship venture. 9 portion, covering $,& hectares, of the said

area was located within the territorial boundary of 7ov. 7eneroso in +ati, avao "riental, and adFoined thetimber concession of avao *nterprises Corporation :9@*-C"Ruested the irector for a change of name and transfer of management of (TE -o. %, from

proprietorship under her name, to that of +42(4.

This re>uest was favorably endorsed on ecember A, $&'5

%

by the B)Os 9cting irector, #ose @respondent 6ecretary of -atural Resources, who approved the same on6eptember =, $&'=.5

"n #uly $', $&'=, +ilagros +atuguina and petitioner +42(4 e1ecuted a eed of Transfer=transfeof the formerOs rights, interests, ownership and participation in (rovincial Timber Eicense -o. % to the laand in consideration of $5?, shares of stocks in +42(4.

9 copy of said deed was submitted to the irector of )orest evelopment and (etitioner +42(4 hbeen acting as holder and licensee of (TE -o. %.

"n #uly A?, $&'=, pending a pproval of the re>uest to transfer the ( TE to +42(4, 9@*-C"R, thr9ssistant 7eneral +anager, complained to the istrict )orester at +ati, avao "riental that ++atuguinaG+E* had encroached into and was conducting logging operations in 9@*-C"ROsconcession.

9fter investigation of 9@*-C"ROs complaint, the 4nvestigating Committee which look9@*-C"ROs complaint submitted its report to the irector, finding that +E* had encroached on the con

area of 9@*-C"R. 4n line with this, the irector of )orest evelopment issued an "rder

/

on #uly $finding and declaring +E* to have encroached upon, and c onducted illegal logging operations within the or concession area of 9@*-C"R.

+E* appealed the "rder to the +inistry of -atural Resources, which appeal was docketed as +-R-o. /5=. uring the pendency of the appealed case with the +inister of -atural Resources, +a. ++atuguina disposed of her shares in petitioner +42(4, thereby ceasing to be a stockholder of the peof +arch $/, $&?/.'

"n "ctober $, $&?/, The +inister of -atural Resources, Hon. *rnesto +. +aceda rendered his ?affirming the aforesaid order of the irector of )orest evelopment, stating thus!

*C464"-

Q)or our Resolution is the appeal by +9T8784-9 E"774-7 *-T*R(R46*6 :+ER, for short< of the "dated $= #uly $&&$ of the irector of )orest evelopment finding and declaring +E* to have encroached

and conducted illegal logging operations within the license or c oncession area of 9@9" *-T*R(R46*6C"R("R9T4"-. The aforesaid "rder dispositively states!

Q2H*R*)"R*, there being a clear and convincing proof that +atuguina Conducted illegal operation withlicensed area of 9@*-C"R, above named respondent is hereby ordered to pay to the complainant the e>value in pesos of A,%=A.5 cubic meters of timber based on the market price obtaining, at the logpond of threspondent at the time of cutting, minus the cost of production, or to restitute to the complainant e>ual volu
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A,%=A.5 cubic meters of logs owned by respondent to be taken at respondentOs logpond. The respondent is herebydirected to comply with this "rder within a period of ninety :&< days from receipt of this "rder and after thelapse of the said period, no compliance has been made by the respondent, its logging operations shall i(so

)actobecome automatically suspended until respondent shall have complied as directed.

The Regional irector of Region 44, avao City is hereby instructed to implement this "rder and to submit hiscompliance report within ten :$< days after the lapse of the ninety :&< days period within which the respondentis directed to comply with this order.

9nd that the dispositive portion of the said decision states3

Q2H*R*)"R*, the "rder dated $= #uly $&?$ of the irector of )orest evelopment is hereby 9))4R+*.

2hen the ecision of the +inister of -atural Resources became final and e1ecutory, (hilip Co and9@*-C"R re>uested the respondent +inister on "ctober %, $&?/ to issue immediately a writ of e1ecutionagainst +E* andGor +42(4.&The "rder of *1ecution $was issued on #anuary /, $&?' by the +inister throughthe latterOs 9ssistant on Eegal 9ffairs. The said "rder directed the issuance of a writ of e1ecution, not only against+E*, but likewise against +42(4. The dispositive portion of the order provides!

Q2H*R*)"R*, let a 2rit of *1ecution be issued against +atuguina Eogging *nterprises andGor +atuguina4ntegrated 2ood (roducts, 4nc. )or the satisfaction of the ecision of the Bureau of )orest evelopment dated$=#uly $&?$, and the "rder of this office dated $ "ctober $&?/.

6" "R*R*.

6ubse>uently, a writ of e1ecution$$dated #anuary ?, $&?' was issued in favor of the respondent9@*-C"R, which states!

QThe CityG(rovincial 6heriff

avao City

7R**T4-76!

Jou are hereby directed to enforce, implement and e1ecute the "rder of *1ecution dated / #une $&?' of this"ffice in the above;entitled case against +atuguina Eogging *nterprises andGor +atuguina 4ntegrated 2ood(roducts, 4nc. its officers or any person or corporation in its behalf and conformably with the "rder dated $= #uly$&?$ of the irector of )orest evelopment, stating dispositively.

111

Jou are hereby re>uested to submit your return to this "ffice within the period of si1ty :/< days from your rece ipthereof as to action taken hereon.

6" "R*R*.0

"n )ebruary $$, $&?', +42(4 filed the instant complaint $Afor prohibition, damages and inFunctiprayer for restraining order, which case was docketed as Civil Case -o. $?,5=';?' in the Regional Trialavao City, Branch $'. +42(4 stated its primary cause of action, the relevant portion of which reads, viz

Q=. That plaintiff which has a distinct and separate personality of its own under the law, and was never a pathe case between 9@*-C"R and +E*, suddenly became a party to the case after the decision bec ame fie1ecutory with the issuance of 9nne1 QB hereof for reasons known to the defendants alone!

/. That the issuance of 9nne1 WBO hereof :the order of e1ecution< by the defendant +inister has been madeonly without or in e1cess of his authority but that the same was issued patently without any factual or legalhence, a gross violation of plaintiffOs constitutional rights under the due process clause3

'. That plaintiff, in the face of the order :9nne1 WBO< complained of, there being no appeal or any plain, spand ade>uate remedy in the ordinary course of law, does not have any alternative but to ventilate the presenrecourse3

?. That defendant +inister is doing, threatens or is about to do, or is procuring or suffering to be done, somwhich definitely is in violation of the plaintiffOs rights respecting the subFect matter of the action, and unlesact or acts are restrained or prohibited at least during the pendency of this case, said act or acts would probwork not only inFustice to plaintiff but world tend to render the Fudgment of this Honorable court ineffectu

&. That the commission or continuance of the acts complained of during the present litigation would not ongreat and irreparable inFury, but will also work inFustice to the plaintiff, and would complicate, aggravate anmultiply the issues in this case3

$. That the plaintiff is entitled to the relief demanded, and the whole or part of such relief consist in restrathe commission or continuance of the acts complained of, or in the performance of acts, either for a limitedor perpetually3

$$. That great and irreparable inFury would inevitably result to the plaintiff before the matter can be heard onotice, hence, immediate issuance of a restraining order is necessary and proper3

$A. That the plaintiff is willing and able to file the necessary bond e1ecuted to the defendants, in an amounfi1ed by the Court, to the effect that the plaintiff will pay to the defendants all damages which they may sureason of the inFunction if the court should finally decide that the plaintiff was not entitled thereto.

+42(4, likewise alleges that in wantonly and imprudently procuring the 2rit of *1ecution against 9@*-C"R and (hilip Co seek to enforce a A.= +illion (eso li ability of plaintiff, the latter has been conto bring the present action, thereby incurring damages in the sum of (=,. in concept of actcompensatory damages, and (A=,. in attorneyOs fees, which amount petitioner now seeks to recover

The trial court issued a temporary restraining order the ne1t day, )ebruary $A, $&?', restrainingenFoining the private respondents and the Hon. 6ecretary of -atural Resources from enforcing, impleandGor carrying into effect, the decision of the respondent 6ecretary dated "ctober $, $&?/, as well as the e1ecution dated #anuary /, $&?'.

"n )ebruary $', $&?', private respondent filed a +otion to ismiss$%alleging that the trial courFurisdiction over the case under (residential ecree -o. '=, to which +otion to ismiss, petitioner
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"pposition$5dated )ebruary $&?'. "n +arch &, $&?', the trial court issued an order$=denying privaterespondentOs +otion to ismiss. Hence, private respondents filed their 9nswer$/dated +arch $%, $&?' and an9mended 9nswer$'

4n the latter pleading, private respondents raised the following special and affirmative defenses!

Q'. That neither +ilagros +atuguina nor +atuguina 4ntegrated 2ood (roducts, 4nc. advised defendant avencorof the change of name, and transfer of management of ( TE -o. %. )rom +ilagros +atuguina to +atuguina4ntegrated 2ood (roducts, 4nc., during the pendency of +-R Case -o. /=5 before the Bureau of )oresteveloment and the +inistry of -atural Resources, notwithstanding that the lawyer of matuguina 4ntegrated2ood (roducts, 4nc., who was also a stockholder thereof, had a ppeared for +ilagros +atuguina in saidadministrative case.

?. That plaintiff has acted in bad faith and is now in estoppel from >uestioning the 2rit of *1ecution issuedagainst +ilagros +atuguina :now +atuguina 4ntegrated 2ood (roducts, 4nc.< to satisfy the Fudgment in +-RCase -o. /=5.

&. This Honorable Court has no Furisdiction over the nature and subFect matter of this action, especially because!

:a< The plaintiff has not e1hausted administrative remedies available to it before initiating thisaction3

:b< 4n the guise of entertaining an action for damages, this Court is being misled by the plaintiff intodeciding >uestions properly for the epartment of -atural Resources to decide e1clusively inthe lawful e1ercise of its regulatory Furisdiction3

:c< The plaintiff is now precluded and estopped from filing this action.

$. The plaintiff has no cause of action against the defendants and has not stated any in its complaint, especiallybecause!

:a< Having failed to e1haust administrative remedies, plaintiff is without a ripe cause of action thatcan be pleaded before this Honorable Court3

:b< 4n substance, there is no Fustifiable >uestion raised under the facts and circumstances of thiscase.

+eanwhile, on #une A, $&?', the trial court issued an order$?granting the petitionerOs prayer for theissuance of a writ of preliminary inFunction against the private respondents and the 6ecretary of -aturalResources, ordering them to desist, refrain and prevent from enforcing respondent 6ecretaryOs ecision dated

"ctober $, $&?/ as well as the writ of e1ecution dated #anuary ?, $&?'."n +ay $, $&?&, the trial court rendered its ecison $&in favor of the petitioner, disposing of the action as

follows!

Q2H*R*)"R*, in view of the foregoing, finding the evidence of plaintiff, +atuguina 4ntegrated 2ood (roducts,4nc. sufficient to sustain a preponderance of evidence, showing that the order of e1ecution dated #anuary /, $&?',issued by the +inister of -atural Resources, through 9le1ander C. Castro, 9ssistant +inister for Eegal 9ffairs,

included therein, plaintiff +atuguina 4ntegrated 2ood (roducts, 4nc., despite non;inclusion of plaintiff in tdecision of the then +inister of -atural Resources, dated "ctober $, $&?/, a lready final and e1ecutory befoissuance of the order and e1ecution, said order or e1ecution is hereby declared null and void and without aeffect.

9s a conse>uence thereof, the writ of preliminary inFunction issued by this c ourt, dated #une A, $&?' is hermade permanent.

+oreover, as a result of the filing of this case, defendant (hilip Co and avencor Corporation, are orderedFointly and severally pay the amount of ($,. as actual and compensatory damages, along with anoamount of (A,. as attorneyOs fees and costs of this action, in favor of plaintiff +atuguina 4ntegrated(roducts, 4nc.

6" "R*R*.

(rivate respondents appealed the trial courtOs decision on +ay $&, $&?&. Their notice of appapproved by the trial court. The appealed case was docketed with respondent Honorable Court of 9ppeal7.R. 6( -o. $&??'.

"n )ebruary A=, $&&$, the respondent Court rendered its ecision,Areversing the lowerpronouncement. The dispositive portion of the decision reads!

Q2H*R*)"R*, premises considered, the decision appealed from is reversed and set aside and the "rder o*1ecution issued by the +inister of -atural Resources dated #anuary /, $&?' is affirmed. 2ithout pronouas to costs.

6" "R*R*.

4n due time, petitioner filed a motion for reconsideration .A$(rivate respondents filed their oppositthe same on 9pril A, $&&$. 4n a ResolutionA%dated 9pril $A, $&&$, the motion was denied by the resCourt.

-ot content with the courtOs pronouncement, petitioner is now before us on a (etition for on Certiorari,A5alleging that the respondent court acted with grave abuse of discretion in rende>uestioned decision and its companion resolution, denying the motion for reconsideration.

The reasons relied upon by the (etitioner in filing its petition are hereby restated!

I

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(rivate Respondent 9@*-C"R and the public respondent Hon. +inister :now 6ecretary< of -aturalResources filed separate Comments A/on 6eptember =, $&&$ and #une ?, $&&A respectively.

The essential issues of the present controversy boil down to the following!

2as the (etitioner denied due process when it was adFudged liable with +E* for encroaching upon thetimber concession of 9@*-C"R in the respondent +inisters order of *1ecutionL

4s the petitioner a transferee of +E*s interest, as to make it liable for the latterOs illegal logging opin 9@*-C"ROs timber concession, or more specifically, is it possible to pierce the veil of +42(4Os coe1istence, making it a mere conduit or successor of +E*L

7enerally accepted is the principle that no man shall be affected by any proceeding to which he is a sand strangers to a case are not bound by Fudgment rendered by the court. 4n the same manner an e1ecutioissued only against a party and not against one who did not have his day in court. 4n Eorenzo vs. Caye6CR9 5?= $&?', this Court held that only real parties in interest in an action are bound by Fudgment the

by writs of e1ecution and demolition issued pursuant thereto.A'

4ndeed a Fudgment cannot bind persons who are not parties to the action. A?4t is elementary that straa case are not bound by the Fudgment rendered by the court and such Fudgment is not available as an adFud

either against or in favor of such other person. 9 decision of a court will not operate to divest the rigperson who has not and has never been a party to a litigation, either as plaintiff or as defendant. *1ecuFudgment can only be issued against one who is a party to the action, and not against one who, not being athe action has not yet had his day in court. A&

The writ of e1ecution must conform to the Fudgment which is to be e1ecuted, as it may not vary the the Fudgment it seeks to enforce.%-or may it go beyond the terms of the Fudgment which souge1ecuted. 2here the e1ecution is not in harmony with the Fudgment which gives it life and e1ceeds it, ittantono validity. To maintain otherwise would be to ignore the constitutional provision against depriving of his property without due process of law.%$

The writ of e1ecution issued by the 6ecretary of -atural Resources on #anuary ?, $&?' clearly vaterm of his ecision of "ctober $, $&?/, inasmuch as the 2rit includes the +42(4 as party liable wheecision only mentions +ilagros +atuguinaG+E*.

There is no basis for the issuance of the "rder of *1ecution against the petitioner. The same wawithout giving the petitioner an opportunity to defend itself and oppose the re>uest of 9@*-C"Rissuance of a writ of e1ecution against it. 4n fact, it does not appear that petitioner was at all furnished witof 9@*-C"ROs letter re>uesting for the *1ecution of the Honorable 6ecretaryOs decision against it. (was suddenly made liable upon the order of e1ecution by the respondent 6ecretaryOs e1pedient conclus+E* and +42(4 are one and the same, apparently on the basis merely of 9@*-C"ROs letter re>uestin"rder, and without hearing or impleading +42(4. 8ntil the issuance of the "rder of e1ecution, petitionerincluded or mentioned in the proceedings as having any participation in the encroachment in 9@*-timber concession. This a ction of the respondent 6ecretary disregards the most basic tenets of due proelementary fairness.

The liberal atmosphere which pervades the procedure in administrative proceedings does not empopresiding officer to make conclusions of fact before hearing all the parties concerned.%A4n (olice CommiHon #udge Eood,%%we held that the formalities usually attendant in court hearings need not be preseadministrative investigation, provided that the parties are heard and given the opportunity to adduevidence. The right to notice and hearing is essential to due process and its non;observance will, asinvalidate the administrative proceedings.

9s observed by the appellate court, to wit!

Qthe appellant should have filed a +otion with the +inister with -otice to the appellee to include the latterparty liable for the Fudgment in order to afford the appellee an opportunity to be heard on its liability for thFudgment rendered against +a. +ilagros +atuguina doing business under the name +atuguina Eogging*nterprises.%5
http://sc.judiciary.gov.ph/jurisprudence/1996/oct1996/98310.htm#_edn25http://sc.judiciary.gov.ph/jurisprudence/1996/oct1996/98310.htm#_edn25http://sc.judiciary.gov.ph/jurisprudence/1996/oct1996/98310.htm#_edn26http://sc.judiciary.gov.ph/jurisprudence/1996/oct1996/98310.htm#_edn26http://sc.judiciary.gov.ph/jurisprudence/1996/oct1996/98310.htm#_edn27http://sc.judiciary.gov.ph/jurisprudence/1996/oct1996/98310.htm#_edn28http://sc.judiciary.gov.ph/jurisprudence/1996/oct1996/98310.htm#_edn28http://sc.judiciary.gov.ph/jurisprudence/1996/oct1996/98310.htm#_edn29http://sc.judiciary.gov.ph/jurisprudence/1996/oct1996/98310.htm#_edn30http://sc.judiciary.gov.ph/jurisprudence/1996/oct1996/98310.htm#_edn30http://sc.judiciary.gov.ph/jurisprudence/1996/oct1996/98310.htm#_edn30http://sc.judiciary.gov.ph/jurisprudence/1996/oct1996/98310.htm#_edn31http://sc.judiciary.gov.ph/jurisprudence/1996/oct1996/98310.htm#_edn32http://sc.judiciary.gov.ph/jurisprudence/1996/oct1996/98310.htm#_edn32http://sc.judiciary.gov.ph/jurisprudence/1996/oct1996/98310.htm#_edn33http://sc.judiciary.gov.ph/jurisprudence/1996/oct1996/98310.htm#_edn34http://sc.judiciary.gov.ph/jurisprudence/1996/oct1996/98310.htm#_edn25http://sc.judiciary.gov.ph/jurisprudence/1996/oct1996/98310.htm#_edn26http://sc.judiciary.gov.ph/jurisprudence/1996/oct1996/98310.htm#_edn27http://sc.judiciary.gov.ph/jurisprudence/1996/oct1996/98310.htm#_edn28http://sc.judiciary.gov.ph/jurisprudence/1996/oct1996/98310.htm#_edn29http://sc.judiciary.gov.ph/jurisprudence/1996/oct1996/98310.htm#_edn30http://sc.judiciary.gov.ph/jurisprudence/1996/oct1996/98310.htm#_edn31http://sc.judiciary.gov.ph/jurisprudence/1996/oct1996/98310.htm#_edn32http://sc.judiciary.gov.ph/jurisprudence/1996/oct1996/98310.htm#_edn33http://sc.judiciary.gov.ph/jurisprudence/1996/oct1996/98310.htm#_edn34


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Continuing, the said court stated further that!

Q-evertheless, the failure to comply with the procedure in order to sa tisfy the re>uirements of due process wascured by the present action for prohibition where the liability of appellee has been ventilated.

2e do not agree. *ssentially, (rohibition is a remedy to prevent inferior courts, corporations, boards orpersons from usurping or e1ercising a Furisdiction or power with which they have not been vested by law%=9s weheld in +afinco Trading Corporation vs. "ple, et al, %/in a certiorarior prohibition case, only issues affecting the

Furisdiction of the tribunal, board and offices involved may be resolved on the basis of undisputed facts.

The issue of whether or not petitioner is an alter ego of +ilagros +atuguinaG+E*, is one of fact, and whichshould have been threshed out in the administrative proceedings, and not in the prohibition proceedings in the trialcourt, where it is precisely the failure of the respondent +inister of -atural Resources to proceed as mandated bylaw in the e 1ecution of its order which is under scrutiny.

9ssuming, ar'uendo, that prohibition is the proper remedy for determining the propriety of piercing theseparate personality of petitioner with its stockholders, the evidence presented at said trial does not warrant suchaction.

4t is settled that a corporation is clothed with a personality separate and distinct from that of personscomposing it. 4t may not generally be held liable for that of the persons composing it. 4t may not be held liablefor the personal indebtedness of its stockholders or those of the entities connected with it. Conversely, astockholder cannot be made to answer for any of its financial obligations even if he should be its president. %'Butwhen the Furidical personality of the corporation is used to defeat public convenience, Fustify wrong, protect fraudor defend crime, the corporation shall be considered as a mere association of persons :Ioppel, 4nc. vs. Jatco, ''(hil 5&/, (alay, 4nc. vs. Clave, 7.R. -o. =/'/, 6eptember A$, $&?%, $A5 6CR9 /%?


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better position to e1amine real e vidence, as well as to observe the demeanor of the witnesses while testifying inthe case.5$

4t is likewise improper to state that the +42(4 is the privy or the successor;in;interest of +E*, as theliability for the encroachment over 9@*-C"ROs timber concession is concerned, by reason of the transfer ofinterest in (TE -o. % from +E* to +42(4.

)irst at all, it does not appear indubitable that the said transfer ever became effective, since (TE -o. %remained in the name of +ilagros +atuguinaG+E* until it e1pired on #une %, $&''.5A

+ore importantly, even if it is deemed that there was a valid change of name and transfer of interest in the(TE -o. %, this only signifies a transfer of authority, from +E* to +42(4, to conduct logging operations in the

area covered by (TE -o. %. 4t does not show indubitable proof that +42(4 was a mere conduit or successor of+ilagros +atuguinaG+E*, as far the latterOs liability for the encroachment upon 9@*-C"ROs concession isconcerned. This is the only conclusion which we c an discern from the language of 6ection /$ of (.. '=,5%andthe letters of the 9cting +inister of -atural Resources to +ilagros +atuguinaG+E* and to +42(4, on 6eptember$/, $&'=.554n 6oriano vs. Court of 9ppeals, this Court stated in clear language, that;

Q4t is the general rule that the protective mantle of a corporationOs separate and distinct personality could only bepierced and liability attached directly to its officers andGor members U stockholders, when the same is used forfraudulent, unfair, or illegal purpose. 4n the case at bar, there is no showing that the 9ssociation entered into thetransaction with the private respondent for the purpose of defrauding the latter of his goods or the paymentthereof. 111. Therefore, the general rule on corporate liability, not the e1ception, should be applied in resolvingthis case. :7.R. -o. 5&?%5, #une AA, $&?&uired by the Constitution. +eanwhile, on the strength of his proclamation,the private respondent took his oath as a member of the Batasang (ambansa.

The case was still being considered by this Court when on )ebruary $$, $&?/, the petitioner was gunned down incold blood and in broad daylight. The nation, already indignant over the obvious manipulation of the presidentialelections in favor of +arcos, was revolted by the killing, which flaunted a scornful disregard for the law by theassailants who apparently believed they were above the law. This ruthless murder was possibly one of the factorsthat strengthened the cause of the "pposition in the )ebruary revolution that toppled the +arcos regime andinstalled the present government under (resident Corazon C. 9>uino.

The abolition of the Batasang (ambansa and the disappearance of the office in dispute between the petitioner andthe private respondent;both of whom have gone their separate ways;could be a convenient Fustification fordismissing this case. But there are larger issues involved that must be resolved now, once and for all, not only todispel the legal ambiguities here raised. The more important purpose is to manifest in the clearest possible termsthat this Court will not disregard and in effect condone wrong on the simplistic and tolerant prete1t that the casehas become moot and academic.

The 6upreme Court is not only the highest arbiter of legal >uestions but also the conscience of the government.The citizen comes to us in >uest of law but we must also give him Fustice. The two are not always the same. Thereare times when we cannot grant the latter because the issue has been settled and decision is no longer possibleaccording to the law. But there are also times when although the dispute has disappeared, as in this case, itnevertheless cries out to be resolved. #ustice demands that we act then, not only for the vindication of the outragedright, though gone, but also for the guidance of and as a restraint upon the future.

4t is a notorious fact decried by many people and even by the foreign press that elections during the period of the+arcos dictatorship were in the main a desecration of the right of suffrage. @ote;buying, intimidation andviolence, illegal listing of voters, falsified returns, and other elections anomalies misrepresented and vitiated the

popular will and led to the induction in office of persons who did not enFoy the confidence of the sovereignelectorate. 7enuine elections were a rarity. The price at times was human lives. The rule was chicanery andirregularity, and on all levels of the polls, from the barangay to the presidential. This included the rigged

plebiscites and referenda that also elicited the derision and provoked the resentments of the people.

9nti>ue in $&?5 hewed to the line and e>ualed if it did not surpass the viciousness of elections in other provincesdominated by the IBE. Terrorism was a special feature, as demonstrated by the killings previously mentioned,which victimized no less than one of the main protagonists and implicated his rival as a principal perpetrator."pposition leaders were in constant peril of their lives even as their supporters were gripped with fear of violenceat the hands of the party in power.

2hat made the situation especially deplorable was the apparently indifferent attitude of the Commission on

*lections toward the anomalies being committed. 4t is a matter of record that the petitioner complained against theterroristic acts of his opponents. 9ll the e lectoral body did was refer the matter to the 9rmed )orces without takinga more active step as befitted its constitutional role as the guardian of free, orderly and honest elections. 9 moreassertive stance could have averted the 6ibalom election eve massacre and saved the lives of the nine victims ofthe tragedy.

(ublic confidence in the Commission on *lections was practically nil because of its transparent bias in favadministration. This preFudice left many opposition candidates without recourse e1cept only to this Court.

9lleging serious anomalies in the conduct of the elections and the canvass of the election returns, the petitiwent to the Commission on *lections to prevent the impending proclamation of his rival, the private responherein. D6pecifically, the petitioner charged that the elections were marred by 0massive terrorism, intimidaduress, vote;buying, fraud, tampering and falsification of election returns under duress, threat and intimidasnatching of ballot bo1es perpetrated by the armed men of respondent (acificador.0 %(articular mention wof the municipalities of Caluya, Cabate, Tibiao, Barbaza, Eaua;an, and also of 6an Remigio, where the petclaimed the election returns were not placed in the ballot bo1es but merely wrapped in cement bags or +an

paper.

"n +ay $?, $&?5, the 6ec ond ivision of the Commission on *lections directed the provincial board ofcanvassers of 9nti>ue to proceed with the canvass but to suspend the proclamation of the winning candidafurther orders.;"n #une ', $&?5, the same 6econd ivision ordered the board to immediately convene and

proclaim the winner without preFudice to the outcome of the case before the Commission.3"ncertioraribthis Court, the proclamation made by the board of canvassers was set aside as premature, having been madthe lapse of the =;day period of appeal, which the petitioner had seasonably made. &)inally, on #uly A%, $&6econd ivision promulgated the decision now subFect of this petition which inter aliaproclaimed 9rturo (acificador the elected assemblyman of the province of 9nti>ue. =

This decision was signed by Chairman @ictoriano 6avellano and Commissioners #aime "pinion and )roilaBacungan. (reviously asked to inhibit himself on the ground that he was a former law partner of privaterespondent (acificador, "pinion had refused. uestion in this case is one of Furisdiction, to wit! 2as the 6econd ivision of the Commission on*lections authorized to promulgate its decision of #uly A%, $&?5, proclaiming the private respondent the withe electionL

The applicable provisions are found in 9rticle 44;C, 6ections A and %, of the $&'% Constitution.

6ection A confers on the Commission on *lections the power to!

:A< Be the sole Fudge of all contests relating to the election, returns and >ualifications of all memthe Batasang (ambansa and elective provincial and city officials.

6ection % provides!

The Commission on *lections may siten $ancor in three divisions. 9ll election cases may be hedecided by divisions e1cept contests involving members of the Batasang (ambansa, which shall heard and decided en $anc. 8nless otherwise provided by law, all election c ases shall be decidedninety days from the date of their submission for decision.


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2hile both invoking the above provisions, the petitioner and the respondents have arrived at opposite conclusions.The records are voluminous and some of the pleadings are e1haustive and in part even erudite. 9nd well theymight be, for the noble profession of the law;despite all the canards that have been flung against it;e1erts allefforts and considers all possible viewpoints in its earnest search of the truth.

The petitioner complains that the (roclamation made by the 6econd ivision is invalid because all contestsinvolving the members of the Batasang (ambansa come under the Furisdiction of the Commission on *lections en$ancThis is as it should be, he says, to insure a more careful decision, considering the importance of the officesinvolved. The respondents, for their part, argue that only contests need to be heard and decided en $anc and allother cases can be;in fact,s"ouldbe;filed with and decided only by any of the three divisions.

The former 6olicitor 7eneral makes much of this argument and lays a plausible distinction between the terms0contests0 and 0cases0 to prove his point. :6imply put, his contention is that the pre;proclamation controversy

between the petitioner and the private respondent was not yet a contest at that time and therefore could be validlyheard by a mere division of the Commission on *lections, consonant with 6ection %. The issue was at this stagestill administrative and so was resoluble by the Commission under its power to administer all laws relative to theconduct of elections,@not its authority as sole Fudge of the election contest.

9 contest, according to him, should involve a contention between the parties for the same office 0in which thecontestant seeks not only to oust the intruder but also to have himself inducted into the office.0 D>-o proclamationhad as yet been made when the petition was filed and later decided. Hence, since neither the petitioner nor the

private respondent had at that time assumed office, there was no +ember of the Batasang (ambansa from 9nti>uewhose election, returns or >ualifications could be e1amined by the Commission on *lections en $anc

4n providing that the Commission on *lections could act in division when deciding election cases, according tothis theory, the Constitution was laying down the general rule. The e1ception was the election contest involving

the members of the Batasang (ambansa, which had to be heard and decided en $anc. DDThe en banc re>uirementwould apply only from the time a candidate for the Batasang (ambansa was proclaimed as winner, for it was onlythen that a contest could be permitted under the law. 9ll matters arising before such time were, necessarily, subFectto decision only by division of the Commission as these would come under the general heading of 0electioncases.0

9s the Court sees it, the effect of this interpretation would be to divide the Furisdiction of the Commission on*lections into two, viz.! :$< over matters arising $e)orethe proclamation, which should be heard and decided bydivision in the e1ercise of its administrative power3 and :A< over matters arising a)terthe proclamation, whichcould be heard and decided only en $ancin the e1ercise of its Fudicial power. 6tated otherwise, the Commission asa whole could not act as sole Fudge as long as one of its divisions was hearing a pre;proclamation matter affectingthe candidates for the Batasang (ambansa because there was as yet no contest3 or to put it still another way, theCommission en $anccould not do what one of its divisions was competent to do, i.e., decide a pre;proclamationcontroversy. +oreover, a mere division of the Commission on *lections could hear and decide, save only thoseinvolving the election, returns and >ualifications of the members of the Batasang (ambansa, all cases involving

elective provincial and city officials)rom start to )inis",including pre;proclamation controversies and up to theelection protest. 4n doing so, it would e1ercise first administrative and then Fudicial powers. But in the case of theCommission en $anc, its Furisdiction would beginonl5 a)ter t"e (roclamation as made and a contest as

)iled and not at any time and on any matter before that, and always in the e1ercise only of Fudicial power.

This interpretation would give to the part more powers than were enFoyed by the whole, granting to the divwhile denying to the $anc. 2e do not think this was the intention of the Constitution. The framers could nointended such an irrational rule.

2e believe that in making the Commission on *lections the sole Fudge of all contests involving the electioreturns and >ualifications of the members of the Batasang (ambansa and elective provincial and city officiConstitution intended to give it)ull aut"orit5 to hear and decide these cases )rom $e'innin' to end and on matters related t"ereto, includin' t"ose arisin' $e)ore t"e (roclamation o) t"e inners

4t is worth observing that the special procedure for the settlement of what are now called 0pre;proclamatiocontroversies0 is a relatively recent innovation in our laws, having been introduced only in $&'?, through (

$A&/, otherwise known as the $&'? *lection Code. 6ection $'= thereof provided!

6ec. $'=.Sus(ension and annulment o) (roclamation.;The Commission shall be the sole Fudge opre;proclamation controversies and any of its decisions, orders or rulings shall be final and e1ecmay,motu (ro(rioor upon written petition, and after due notice and hearing order the suspension

proclamation of a candidate;elect or annul any proclamation, if one has been made, on any of thegrounds mentioned in 6ections $'A, $'% and $'5 thereof.

Before that time all proceedings affecting the election, returns and >ualifications of public officers came uncomplete Furisdiction of the competent court or tribunal from beginning to end and in the e1ercise of Fudici

power only. 4t therefore could not have been the intention of the framers in $&%=, when the CommonwealtCharter was adopted, and even in $&'%, when the past Constitution was imposed, to divide the electoral printo the pre;proclamation stage and the post;proclamation stage and to provide for a separate Furisdiction fstage, considering the first administrative and the second Fudicial.

Besides, the term 0contest0 as it was understood at the time 9rticle 44;C. 6ection A:A< was incorporated in$&'% Constitution did not follow the strict definition of a contention between the parties for the same officethe *lection Code of $&'$, which presumably was taken into consideration when the $&'% Constitution wadrafted, election contests included thequo arrantopetition that could be filed by any voter on the grounddisloyalty or ineligibility of the contestee although such voter was himself not claiming the office involved

The word 0contests0 should not be given a restrictive meaning3 on the contrary, it should receive the widespossible scope conformably to the rule that the words used in the Constitution should be interpreted liberaemployed in the $&'% Constitution, the term should be understood as referring to any matter involving the claim of title to an elective office, made before or after proclamation of the winner, whether or not the contclaiming the office in dispute. -eedless to stress, the term should be given a consistent meaning and underthe same sense under both 6ection A:A< and 6ection % of 9rticle 44;C of the Constitution.

The phrase 0election, returns and >ualifications0 should be interpreted in its totality as referring to all matteaffecting the validity of the contestees title. But if it is necessary to specify, we can say that 0election0 refethe conduct of the polls, including the listing of voters, the holding of the electoral campaign, and the casticounting of the votes3 0returns0 to the canvass of the returns and the proclamation of the winners, including>uestions concerning the composition of the board of canvassers and the authenticity of the election return0>ualifications0 to matters that could be raised in aquo arrantoproceeding against the proclaimed winneas his disloyalty or ineligibility or the inade>uacy of his certificate of candidacy.


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9ll these came under the e1clusive Furisdiction of the Commission on *lections insofar as they applied to themembers of the defunct Batasang (ambansa and, under 9rticle 44;C, 6ection %, of the $&'% Constitution, could

be heard and decided by it only en $anc

2e interpret 0cases0 as the generic term denoting the actions that might be heard and decided by the Commissionon *lections, only by division as a general rule e1cept where the case was a 0contest0 involving members of theBatasang (ambansa, which had to be heard and decided en $anc.

9s correctly observed by the petitioner, the purpose of 6ection % in re>uiring that cases involving members of theBatasang (ambansa be heard and decided by the Commission en banc was to insure the most careful considerationof such cases. "bviously, that obFective could not be achieved if the Commission could act en $anconly after the

proclamation had been made, for it might then be too late already. 2e are all;too;familiar with the grab;the;proclamation;and;delay;the;protest strategy of many unscrupulous candidates which has resulted in the frustrationof the popular will and the virtual defeat of the real winners in the election. The respondents theory would makethis gambit possible for the pre; proclamation proceedings, being summary in nature, could be hastily decided byonly three members in division, without the care and deliberation that would have otherwise been observed by theCommission en $anc.

9fter that, the delay. The Commissionen $ancmight then no longer be able to rectify in time the proclamationsummarily and not very Fudiciously made by the division. 2hile in the end the protestant might be sustained, hemight find himself with only a (hyrric victory because the term of his office would have already e1pired.

4t may be argued that in conferring the initial power to decide the pre; proclamation >uestion upon the division,the Constitution did not intend to prevent the Commission en $ancfrom e1ercising the power directly, on thetheory that the greater power embraces the lesser. 4t could if it wanted to but then it could also allow the divisionto act for it. That argument would militate against the purpose of the provision, which precisely limited all

>uestions affecting the election contest, as distinguished from election cases in general, to the Furisdiction of theCommission en $ancas sole Fudge thereof. 06ole Fudge0 e1cluded not only all other tribunals but also and even thedivision of the Commission 9 decision made on the contest by less than the Commission en $ancwould not meetthe e1acting standard of care and deliberation ordained by the Constitution

4ncidentally, in making the Commission the 0sole Fudge0 of pre; proclamation controversies in 6ection $'=, su(ra,the law was obviously referring to the body sittingen $anc4n fact, the pre;proclamation controversies involvedinAratuc vs Commissionon *lections, D;where the said provision was applied, were heard and decided en banc.

9nother matter deserving the highest consideration of this Court but accorded cavalier a ttention by the respondentCommission on *lections is due process of law, that ancient guaranty of Fustice and fair play which is the hallmarkof the free society. Commissioner "pinion ignored it. 9sked to inhibit himself on the ground that he was formerlya law partner of the private respondent, he obstinately insisted on participating in the case, denying he was

biased. D3

7iven the general attitude of the Commission on *lections toward the party in power at the time, and the particularrelationship between Commissioner "pinion and +( (acificador, one could not be at least apprehensive, if notcertain, that the decision of the body would be adverse to the petitioner. 9s in fact it was. Commissioner "pinionsrefusal to inhibit himself and his obFection to the transfer of the case to another division cannot be Fustified by anycriterion of propriety. His conduct on this matter belied his wounded protestations of innocence and proved themotives of the 6econd ivision when it rendered its decision.

This Court has repeatedly and consistently demanded 0the cold neutrality of an impartial Fudge0 as theindispensable imperative of due process. D&To bolster that re>uirement, we have held that the Fudge must n

be impartial but must also appear to be impartial as an added assurance to the parties that his decision will Fust.D=The litigants are entitled to no less than that. They should be sure that when their rights are violated can go to a Fudge who shall give them Fustice. They must trust the Fudge, otherwise they will not go to him They must believe in his sense of fairness, otherwise they will not seek his Fudgment. 2ithout such confidethere would be no point in invoking his action for the Fustice they e1pect.

ue process is intended to insure that confidence by re>uiring compliance with what #ustice )rankfurter carudiments of fair play. )air play cans for e>ual Fustice. There cannot be e>ual Fustice where a suitor approacourt already committed to the other party and with a Fudgment already made and waiting only to be forma

after the litigants shall have undergone the charade of a formal hearing. #udicial :and also e1tra;Fudicialuestions in this petition for certiorari contending that the respondent courtgravely abused its discretion;:$< when it denied a motion to lift an order of default issued seven :'< days before the

petitioner received the order to file responsive pleading3 :A< when it denied a motion for new trial orreconsideration on the ground that it was pro;forma3 :%< when it rendered a decision, not supported by the factsand the law, granting a total amount of ($,$?',/$=./& covering the principal and damages in a connection case foronly (A=,&A.==3 :5< when it issued orders denying an e1tension of time to file the record on appeal anddismissing the appeal3 and :=< when it issued a writ of preliminary attachment on a bond of (A=,. with no

basis for the allegation that he is about to remove or dispose of his properties to further defraud his creditors.

"n +arch $5, $&'&, respondent Rosalinda Tecson filed a complaint for collection of the sum of ( A=,&A.== withinterests. Tecson also prayed for ($,. actual and compensatory damages, (=,. moral damages,e1emplary damages as may be proved during the trial, twenty five percent :A=S< attorneyOs fees, litigatione1penses, and costs. The complaint alleged that Tecson, on various occasions, loaned a total of (%&$,?AA.'? to9zul to finance the latterOs deliveries of supplies and construction materials to the 9rmed )orces of the(hilippines. 9s inducement for the loans in addition to her share of the profits, the private respondent alleged thatshe was authorized to collect the checks due to 9zul from the 9)( )inance Center. However, Tecson was able to

collect only ($5$,'%.A% thus leaving a balance of (A=,&A.==, subFect matter of the suit filed with the )irst 4nstance of Rizal at Kuezon City, then presided by #udge 8lpiano 6armiento.

The copy of the complaint was received by petitioner 9zul on +arch A', $&'&. "n 9pril $, $&'&, the pfiled an urgent e1;parte motion for e1tension of time to file a responsive pleading. He asked for fifteen :from 9pril $$, $&'&.

#udge 6armiento having retired, #udge Eino 9nover took over the sala temporarily and gave 9zul onlydays from 9pril $$, $&'& within which to file his responsive pleading.

8nfortunately, the petitioner received this order dated 9pril $$, $&'& to declare the petitioner in default si

e1tended period had e1pired.

"n 9pril $?, $&'&, respondent #udge #ose Castro over the sala vacated by #udge 6armiento. 9mong histhat first day in office was an order declaring 9zul in default and directing the presentation of evidence e

before the branch clerk of court Qat such time and date convenient to both.

The reception of evidence was conducted by the courtOs commissioner on 9pril $&, $&'&. "n 9pril A', $&respondent court rendered the >uestioned decision, the dispositive portion of which reads!

2H*R*)"R*, Fudgment is hereby rendered ordering the defendant to pay plaintiff as follows!

a. The sum of (A=,&A.== the principal obligation, with interest thereon a t the legal rate from the date of the complaint on +arch $5, $&'& until fully paid3

b. the sum of ($,. as actual and compensatory damages in both causes of action3

c. the sum of (%=,. as moral damages in both causes of action3

d. the sum of ($=,. as e1emplary damages in both causes of action3

e. the sum e>uivalent to A=S percent of the total claims involved in all the causes of action in the compattorneyOs fees3

f. to pay the e1penses of litigation and costs of suit.

"n +ay A, $&'&, petitioner 9zul, as yet unaware of the decision, filed a motion to lift the order of Together with the motion, he also filed his answer.

"n +ay ', $&'&, the decision adverse to the petitioner was received by his counsel.

"n #une /, $&'&, the petitioner filed a motion for reconsideration or new trial.

"n #uly A, $&'&, the court issued an order denying the motion to lift the order of default followed byorder on #uly A5, $&'& denying the motion for reconsideration or new trial.

"n 9ugust $, $&'&, the petitioner filed a notice of appeal, appeal bond, and a motion for e1tension of timhis record on appeal.


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"n 9ugust %, $&'&, the respondent court denied the motion for e1tension of time to file record on appeal statingthat the motion was filed late. The petitioner asked that this denial be reconsidered because the decision wasactually received on +ay ', $&'&. The petitioner e1plained that the date Q+ay =, $&'&Y given as the date of receiptwas a clerical error and, therefore, the motion for e1tension of time to file record on appeal was filed within thereglementary period.

"n 9ugust ', $&'&, the court reconsidered its earlier denial and stated, Qwhile the instant motion is not sufficientlymeritorious, if only to give the defendant a final chance to ventilate his case on appeal and in the interest of

Fustice, said defendant is given ten :$< days from receip

fifth set secretary of justice to alonte

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