JUDICIARY

Hacienda Luisita Inc. (HLI) v. Presidential Agrarian Reform Council (PARC), et al.,
G.R. No. 171101, November 22, 2011

I. THE FACTS

On July 5, 2011, the Supreme Court en banc voted unanimously (11-0) to

DISMISS/DENY the petition filed by HLI and AFFIRM with MODIFICATIONS the
resolutions of the PARC revoking HLI’s Stock Distribution Plan (SDP) and placing the
subject lands in Hacienda Luisita under compulsory coverage of the Comprehensive
Agrarian Reform Program (CARP) of the government.

The Court however did not order outright land distribution. Voting 6-5, the Court
noted that there are operative facts that occurred in the interim and which the Court
cannot validly ignore. Thus, the Court declared that the revocation of the SDP must, by
application of the operative fact principle, give way to the right of the original 6,296
qualified farmworkers-beneficiaries (FWBs) to choose whether they want to remain as
HLI stockholders or [choose actual land distribution]. It thus ordered the Department of
Agrarian Reform (DAR) to “immediately schedule meetings with the said 6,296 FWBs
and explain to them the effects, consequences and legal or practical implications of their
choice, after which the FWBs will be asked to manifest, in secret voting, their choices in
the ballot, signing their signatures or placing their thumbmarks, as the case may be, over
their printed names.”

II. THE ISSUES

(1) Is the operative fact doctrine available in this case?

(2) Is Sec. 31 of RA 6657 unconstitutional?

(3) Can’t the Court order that DAR’s compulsory acquisition of Hacienda Lusita
cover the full 6,443 hectares allegedly covered by RA 6657 and previously
held by Tarlac Development Corporation (Tadeco), and not just the 4,915.75
hectares covered by HLI’s SDP?

(4) Is the date of the “taking” (for purposes of determining the just compensation
payable to HLI) November 21, 1989, when PARC approved HLI’s SDP?

(5) Has the 10-year period prohibition on the transfer of awarded lands under RA
6657 lapsed on May 10, 1999 (since Hacienda Luisita were placed under
CARP coverage through the SDOA scheme on May 11, 1989), and thus the
qualified FWBs should now be allowed to sell their land interests in Hacienda
Luisita to third parties, whether they have fully paid for the lands or not?

(6) THE CRUCIAL ISSUE: Should the ruling in the July 5, 2011 Decision that
the qualified FWBs be given an option to remain as stockholders of HLI be
reconsidered?

III. THE RULING

[The Court PARTIALLY GRANTED the motions for reconsideration of

respondents PARC, et al. with respect to the option granted to the original farmworkers-
beneficiaries (FWBs) of Hacienda Luisita to remain with petitioner HLI, which option the
Court thereby RECALLED and SET ASIDE. It reconsidered its earlier decision that the
qualified FWBs should be given an option to remain as stockholders of HLI,
and UNANIMOUSLY directed immediate land distribution to the qualified FWBs.]

1. YES, the operative fact doctrine is applicable in this case.

[The Court maintained its stance that the operative fact doctrine is applicable in this case
since, contrary to the suggestion of the minority, the doctrine is not limited only to invalid
or unconstitutional laws but also applies to decisions made by the President or the
administrative agencies that have the force and effect of laws. Prior to the nullification or
recall of said decisions, they may have produced acts and consequences that must be
respected. It is on this score that the operative fact doctrine should be applied to acts and
consequences that resulted from the implementation of the PARC Resolution approving
the SDP of HLI. The majority stressed that the application of the operative fact doctrine
by the Court in its July 5, 2011 decision was in fact favorable to the FWBs because not
only were they allowed to retain the benefits and homelots they received under the stock
distribution scheme, they were also given the option to choose for themselves whether
they want to remain as stockholders of HLI or not.]

2. NO, Sec. 31 of RA 6657 NOT unconstitutional.

[The Court maintained that the Court is NOT compelled to rule on the constitutionality of
Sec. 31 of RA 6657, reiterating that it was not raised at the earliest opportunity and that
the resolution thereof is not the lis mota of the case. Moreover, the issue has been
rendered moot and academic since SDO is no longer one of the modes of acquisition
under RA 9700. The majority clarified that in its July 5, 2011 decision, it made no ruling
in favor of the constitutionality of Sec. 31 of RA 6657, but found nonetheless that there
was no apparent grave violation of the Constitution that may justify the resolution of the
issue of constitutionality.]

3. NO, the Court CANNOT order that DAR’s compulsory acquisition of Hacienda
Lusita cover the full 6,443 hectares and not just the 4,915.75 hectares covered by HLI’s
SDP.

[Since what is put in issue before the Court is the propriety of the revocation of the SDP,
which only involves 4,915.75 has. of agricultural land and not 6,443 has, then the Court
is constrained to rule only as regards the 4,915.75 has. of agricultural land. Nonetheless,
this should not prevent the DAR, under its mandate under the agrarian reform law, from
subsequently subjecting to agrarian reform other agricultural lands originally held by
Tadeco that were allegedly not transferred to HLI but were supposedly covered by RA
6657.

However since the area to be awarded to each FWB in the July 5, 2011 Decision appears
too restrictive – considering that there are roads, irrigation canals, and other portions of
the land that are considered commonly-owned by farmworkers, and these may
necessarily result in the decrease of the area size that may be awarded per FWB – the
Court reconsiders its Decision and resolves to give the DAR leeway in adjusting the area
that may be awarded per FWB in case the number of actual qualified FWBs decreases. In
order to ensure the proper distribution of the agricultural lands of Hacienda Luisita per
qualified FWB, and considering that matters involving strictly the administrative
implementation and enforcement of agrarian reform laws are within the jurisdiction of
the DAR, it is the latter which shall determine the area with which each qualified FWB
will be awarded.

On the other hand, the majority likewise reiterated its holding that the 500-hectare
portion of Hacienda Luisita that have been validly converted to industrial use and have
been acquired by intervenors Rizal Commercial Banking Corporation (RCBC) and
Luisita Industrial Park Corporation (LIPCO), as well as the separate 80.51-hectare
SCTEX lot acquired by the government, should be excluded from the coverage of the
assailed PARC resolution. The Court however ordered that the unused balance of the
proceeds of the sale of the 500-hectare converted land and of the 80.51-hectare land used
for the SCTEX be distributed to the FWBs.]

4. YES, the date of “taking” is November 21, 1989, when PARC approved HLI’s
SDP.

[For the purpose of determining just compensation, the date of “taking” is November 21,
1989 (the date when PARC approved HLI’s SDP) since this is the time that the FWBs
were considered to own and possess the agricultural lands in Hacienda Luisita. To be
precise, these lands became subject of the agrarian reform coverage through the stock
distribution scheme only upon the approval of the SDP, that is, on November 21, 1989.
Such approval is akin to a notice of coverage ordinarily issued under compulsory
acquisition. On the contention of the minority (Justice Sereno) that the date of the notice
of coverage [after PARC’s revocation of the SDP], that is, January 2, 2006, is
determinative of the just compensation that HLI is entitled to receive, the Court majority
noted that none of the cases cited to justify this position involved the stock distribution
scheme. Thus, said cases do not squarely apply to the instant case. The foregoing
notwithstanding, it bears stressing that the DAR's land valuation is only preliminary and
is not, by any means, final and conclusive upon the landowner. The landowner can file an
original action with the RTC acting as a special agrarian court to determine just
compensation. The court has the right to review with finality the determination in the
exercise of what is admittedly a judicial function.]

5. NO, the 10-year period prohibition on the transfer of awarded lands under RA
6657 has NOT lapsed on May 10, 1999; thus, the qualified FWBs should NOT yet be
allowed to sell their land interests in Hacienda Luisita to third parties.

[Under RA 6657 and DAO 1, the awarded lands may only be transferred or conveyed
after 10 years from the issuance and registration of the emancipation patent (EP) or
certificate of land ownership award (CLOA). Considering that the EPs or CLOAs have
not yet been issued to the qualified FWBs in the instant case, the 10-year prohibitive
period has not even started. Significantly, the reckoning point is the issuance of the EP or
CLOA, and not the placing of the agricultural lands under CARP coverage. Moreover,
should the FWBs be immediately allowed the option to sell or convey their interest in the
subject lands, then all efforts at agrarian reform would be rendered nugatory, since, at
the end of the day, these lands will just be transferred to persons not entitled to land
distribution under CARP.]

6. YES, the ruling in the July 5, 2011 Decision that the qualified FWBs be given an
option to remain as stockholders of HLI should be reconsidered.

[The Court reconsidered its earlier decision that the qualified FWBs should be given an
option to remain as stockholders of HLI, inasmuch as these qualified FWBs will never
gain control [over the subject lands] given the present proportion of shareholdings in
HLI. The Court noted that the share of the FWBs in the HLI capital stock is [just]
33.296%. Thus, even if all the holders of this 33.296% unanimously vote to remain as
HLI stockholders, which is unlikely, control will never be in the hands of the
FWBs. Control means the majority of [sic] 50% plus at least one share of the common
shares and other voting shares. Applying the formula to the HLI stockholdings, the
number of shares that will constitute the majority is 295,112,101 shares (590,554,220
total HLI capital shares divided by 2 plus one [1] HLI share). The 118,391,976.85
shares subject to the SDP approved by PARC substantially fall short of the 295,112,101
shares needed by the FWBs to acquire control over HLI.]
 Ma. Elena Malaga, et. al. vs. Manuel R. Penachos, Jr., et.al.
GR No. 86995 03 September 1992

Chartered Institution and GOCC, defined.

FACTS: The Iloilo State College of Fisheries (ISCOF) through its Pre-qualifications,
Bids and Awards Committee (PBAC) caused the publication in the November 25, 26 and
28, 1988 issues of the Western Visayas Daily an Invitation to Bid for the construction of
a Micro Laboratory Building at ISCOF. The notice announced that the last day for the
submission of pre-qualification requirements was on December 2, 1988, and that the bids
would be received and opened on December 12, 1988 at 3 o'clock in the afternoon.

Petitioners Malaga and Najarro, doing business under the name of BE Construction and
Best Built Construction, respectively, submitted their pre-qualification documents at two
o'clock in the afternoon of December 2, 1988. Petitioner Occeana submitted his own
PRE-C1 on December 5, 1988. All three of them were not allowed to participate in the
bidding as their documents were considered late.

On December 12, 1988, the petitioners filed a complaint with the Iloilo RTC against the
officers of PBAC for their refusal without just cause to accept them resulting to their non-
inclusion in the list of pre-qualified bidders. They sought to the resetting of the
December 12, 1988 bidding and the acceptance of their documents. They also asked that
if the bidding had already been conducted, the defendants be directed not to award the
project pending resolution of their complaint.

On the same date, Judge Lebaquin issued a restraining order prohibiting PBAC from
conducting the bidding and award the project. The defendants filed a motion to lift the
restraining order on the ground that the court is prohibited from issuing such order,
preliminary injunction and preliminary mandatory injunction in government
infrastructure project under Sec. 1 of P.D. 1818. They also contended that the
preliminary injunction had become moot and academic as it was served after the bidding
had been awarded and closed.

On January 2, 1989, the trial court lifted the restraining order and denied the petition for
preliminary injunction. It declared that the building sought to be constructed at the
ISCOF was an infrastructure project of the government falling within the coverage of the
subject law.

ISSUE: Whether or not ISCOF is a government instrumentality subject to the provisions

of PD 1818?

RULING: The 1987 Administrative Code defines a government instrumentality as

follows:
Instrumentality refers to any agency of the National Government, not integrated within
the department framework, vested with special functions or jurisdiction by law, endowed
with some if not all corporate powers, administering special funds, and enjoying
operational autonomy, usually through a charter. This term includes regulatory agencies,
chartered institutions, and government-owned or controlled corporations. (Sec. 2 (5)
Introductory Provisions)

The same Code describes a chartered institution thus: Chartered institution - refers to any
agency organized or operating under a special charter, and vested by law with functions
relating to specific constitutional policies or objectives. This term includes the state
universities and colleges, and the monetary authority of the state. (Sec. 2 (12)
Introductory Provisions).

It is clear from the above definitions that ISCOF is a chartered institution and is therefore
covered by P.D. 1818.
There are also indications in its charter that ISCOF is a government instrumentality. First,
it was created in pursuance of the integrated fisheries development policy of the State, a
priority program of the government to effect the socio-economic life of the nation.
Second, the Treasurer of the Republic of the Philippines shall also be the ex-officio
Treasurer of the state college with its accounts and expenses to be audited by the
Commission on Audit or its duly authorized representative. Third, heads of bureaus and
offices of the National Government are authorized to loan or transfer to it, upon request
of the president of the state college, such apparatus, equipment, or supplies and even the
services of such employees as can be spared without serious detriment to public service.
Lastly, an additional amount of P1.5M had been appropriated out of the funds of the
National Treasury and it was also decreed in its charter that the funds and maintenance of
the state college would henceforth be included in the General Appropriations Law.

Nevertheless, it does not automatically follow that ISCOF is covered by the prohibition in
the said decree as there are irregularities present surrounding the transaction that justified
the injunction issued as regards to the bidding and the award of the project (citing the
case of Datiles vs. Sucaldito).
 PACU VS. SEC OF EDUCATION / (G.R. No. L-5279 October 31, 1955)

ACTUL CASE / CONTROVERSY

Facts:
The Philippine Association of Colleges and Universities made a petition that Acts No.
2706 otherwise known as the “Act making the Inspection and Recognition of private
schools and colleges obligatory for the Secretary of Public Instruction” and was amended
by Act No. 3075 and Commonwealth Act No. 180 be declared unconstitutional on the
grounds that 1) the act deprives the owner of the school and colleges as well as teachers
and parents of liberty and property without due process of Law; 2) it will also deprive the
parents of their Natural Rights and duty to rear their children for civic efficiency and 3)
its provisions conferred on the Secretary of Education unlimited powers and discretion to
prescribe rules and standards constitute towards unlawful delegation of Legislative
powers.

Section 1 of Act No. 2706

“It shall be the duty of the Secretary of Public Instruction to maintain a general standard
of efficiency in all private schools and colleges of the Philippines so that the same shall
furnish adequate instruction to the public, in accordance with the class and grade of
instruction given in them, and for this purpose said Secretary or his duly authorized
representative shall have authority to advise, inspect, and regulate said schools and
colleges in order to determine the efficiency of instruction given in the same,”

The petitioner also complain that securing a permit to the Secretary of Education before
opening a school is not originally included in the original Act 2706. And in support to the
first proposition of the petitioners they contended that the Constitution guaranteed the
right of a citizen to own and operate a school and any law requiring previous
governmental approval or permit before such person could exercise the said right. On the
other hand, the defendant Legal Representative submitted a memorandum contending
that 1) the matters presented no justiciable controversy exhibiting unavoidable necessity
of deciding the constitutional question; 2) Petitioners are in estoppels to challenge the
validity of the said act and 3) the Act is constitutionally valid. Thus, the petition for
prohibition was dismissed by the court.

Issue:

Whether or not Act No. 2706 as amended by Act no. 3075 and Commonwealth Act
no. 180 is void and unconstitutional.

Ruling:

The Petitioner suffered no wrong under the terms of law and needs no relief in the form
they seek to obtain. Moreover, there is no justiciable controversy presented before the
court. It is an established principle that to entitle a private individual immediately in
danger of sustaining a direct injury and it is not sufficient that he has merely invoke the
judicial power to determined the validity of executive and legislative action he must show
that he has sustained common interest to all members of the public. Furthermore, the
power of the courts to declare a law unconstitutional arises only when the interest of
litigant require the use of judicial authority for their protection against actual interference.
As such, Judicial Power is limited to the decision of actual cases and controversies and
the authority to pass on the validity of statutes is incidental to the decisions of such cases
where conflicting claims under the constitution and under the legislative act assailed as
contrary to the constitution but it is legitimate only in the last resort and it must be
necessary to determined a real and vital controversy between litigants. Thus, actions like
this are brought for a positive purpose to obtain actual positive relief and the court does
not sit to adjudicate a mere academic question to satisfy scholarly interest therein. The
court however, finds the defendant position to be sufficiently sustained and state that the
petitioner remedy is to challenge the regulation not to invalidate the law because it needs
no argument to show that abuse by officials entrusted with the execution of the statute
does not per se demonstrate the unconstitutionality of such statute. On this phase of the
litigation the court conclude that there has been no undue delegation of legislative power
even if the petitioners appended a list of circulars and memoranda issued by the
Department of Education they fail to indicate which of such official documents was
constitutionally objectionable for being capricious or pain nuisance. Therefore, the court
denied the petition for prohibition.
 Mariano v COMELEC

G.R. No. 118577 March 7, 1995, 242 SCRA 211

FACTS:

This is a petition for prohibition and declaratory relief filed by petitioners Juanito
Mariano, Jr., Ligaya S. Bautista, Teresita Tibay, Camilo Santos, Frankie Cruz, Ricardo
Pascual, Teresita Abang, Valentina Pitalvero, Rufino Caldoza, Florante Alba, and
Perfecto Alba. Of the petitioners, only Mariano, Jr., is a resident of Makati. The others
are residents of Ibayo Ususan, Taguig, Metro Manila. Suing as taxpayers, they assail
sections 2, 51, and 52 of Republic Act No. 7854 as unconstitutional.

ISSUE:

Whether or not there is an actual case or controversy to challenge the

constitutionality of one of the questioned sections of R.A. No. 7854.

HELD:

The requirements before a litigant can challenge the constitutionality of a law are well
delineated. They are:

(1) there must be an actual case or controversy;

(2) the question of constitutionality must be raised by the proper party;
(3) the constitutional question must be raised at the earliest possible opportunity; and
(4) the decision on the constitutional question must be necessary to the determination of
the case itself.

Petitioners have far from complied with these requirements. The petition is
premised on the occurrence of many contingent events, i.e., that Mayor Binay will run
again in this coming mayoralty elections; that he would be re-elected in said elections;
and that he would seek re-election for the same position in the 1998 elections.
Considering that these contingencies may or may not happen, petitioners merely pose a
hypothetical issue which has yet to ripen to an actual case or controversy. Petitioners who
are residents of Taguig (except Mariano) are not also the proper partiesto raise this
abstract issue. Worse, they hoist this futuristic issue in a petition for declaratory relief
over which this Court has no jurisdiction.
 COA

Guevara v. Gimenez
6 SCRA 813

FACTS:
The District Engineer of Sorsogon prepared a program of work and detailed estimate for
the reconstruction of the Sorsogon Central School building at Burabod, Sorsogon. The
cost of painting was left out in the detailed estimate and specifications, nevertheless, the
Division Engineer in Lucena approved with an authorized appropriation of P40,000.00
“provided that painting shall be included”. Eight days after completion of the project,
Guevara filed with the Director of Public Works a written claim for the payment of
P4,620.00 representing the cost of the painting not covered by the contract. After hearing,
the Secretary of Public Works and Communications denied the claim. Guevara contends
that the bidders were not aware of the inclusion of painting because the District Engineer
did not add painting to the plans and specifications furnished them prior to the bidding.

ISSUE:
Whether or not the contract for the reconstruction of the school building included the
painting

HELD:
The contract between Fernando Guevara and the Bureau of Public Works provided for
the painting of the school building. Petitioner Guevara, a civil engineer, has twenty years’
experience as a public works contractor. He must have acquired first-hand knowledge of
the mechanics of government contracting as well as skill in administering construction
contracts. The practice of contractors, before submitting any bid or proposal, is to verify
with the office of the District Engineer the fund available for a project, approval of the
plans, specifications, and program of work and other relevant and necessary matters in
prosecuting a government contract. He would have noted the first indorsement dated
August 9, 1954 approving the detailed estimate and program of work and requiring that
painting is included. From that moment, he must have been aware that he would bid for a
construction work that included painting. In the event that Guevara dispensed with
verification, he alone should bear the consequences of his negligence. As petitioner has
been fully paid the contract price of P37,500.00, no additional payment is due.
 OROCIO v. COMMISSION ON AUDIT

FACTS

On May 25, 1982 an accident occurred at the Malaya Thermal Plant of the National
Power Corporation (NPC). Based on the accident report, tube leaks were confirmed at
2:30 am. The tubes were drained and prepared for repair by maintenance personnel. By
8:45 am the system was declared safe for repair. From that time on until 11:10 work
ensued, until the plug from the leaking tube gave way. The leaking tube spew hot steam
and water, injuring two personnel making the repairs. One of the men injured was a
contractual janitor employed by OP Landrito’s General Services (OPLGS), NPC’s
janitorial contractor. His hospitalization expenses amounted to P50,802.26. NPC initially
advanced the amount, but later on reimbursed itself by deducting the amount, on a
staggered basis, from OPLGS’s billings to NPC. Subsequently OPLGS requested for a
refund of the said amount. NPC’s Legal Services Division Chief, Orocio, found
negligence on their part (quasi-delict), he therefore recommended the reimbursement to
OPLGS of the said amount. But later on it was disallowed by the COA. COA made
certain officers of NPC liable for the disallowance (approving authority, chief accountant,
etc), including Orocio.

ISSUE

Is Orocio personally liable for the disallowance considering that he was merely
performing his function?

HELD

NO. Under Sec 103 of the Gov’t Auditing Code, expenditures of gov’t funds or uses of
government property in violation of law or regulations shall be a personal liability of the
official or employee found directly responsible therefore. In the instant case, though it
was petitioner who rendered the opinion relied upon for the disbursement, it cannot be
said that he was directly responsible therefore. His was only a legal opinion which the
governing board of the NPC or any of its authorized officials could adopt or reject. The
Court added that although Orocio was performing his official functions only, he could
still be made liable if it was found that he acted with malice and in bad faith or beyond
the scope of his authority. But whether petitioner acted in such way could only
be determined through a proper hearing to be conducted by the COA. Since it was not
done, it will be in violation of Orocio’s right to due process if he was made liable
therefore.
 Osmena v COA 238 SCRA 363

FACTS:

Reynaldo de la Cerna was stabbed and was rushed to Cebu City Medical Center but died
in the same day due to severe loss of blood. His parents claimed that Reynaldo would not
have died were it not for the “ineptitude, gross negligence, irresponsibility, stupidity and
incompetence of the medical staff” of the Medical Center. The parents subsequently
instituted in the RTC an action for recovery of damages which the City of Cebu was
impleaded as defendant on the theory that as employer of the alleged negligent doctors, it
is vicariously responsible for the latters' negligence.

To put an end to the controversy, a compromise agreement was entered into by the
plaintiffs and defendant City of Cebu for the payment of the sum of P30,000. The
agreement was ratified by the Sangguniang Panglungsod of the City and authorized the
City Budget Officer of Cebu to include in Supplemental Budget No. 6 of the Ciy for the
year 1989 the amount of P30,000 for financial assistance to the parents of the late
Reynaldo de la Cerna”.

However, the respondent COA disallowed the financial assistance granted to the spouses
de la Cerna holding that it is not within the power of the Sangguniang to provide financial
assistance, either on general welfare clause or humanitarian grounds, to promote
economic and private interests of certain individual only. Respondent further stressed that
not being a party to the compromise agreement, it was not bound by it and that any
money claim arising therefrom was subjected to its usual audit in the pursuance of the
valid exercis and discharge of its constitutional power, authority and duty. The City of
Cebu filed a Motion for Reconsideraton but was denied.

Hence this instant petition.

ISSUE:

Whether COA committed grave abuse of discretion in disallowing the city's appropriaton
of P30,000 made conformably with the compromise agreement in the civil suit against
the City?

HELD:

YES. There can be no question of COA's competence to act on the supplemental budget
for 1989 of the City of Cebu. It appears that respondent COA greivously misconstrued
the undertaking of Cebu City to pay P30,000 to the heirs of the deceased Reynaldo de la
Cerna. It was construed as intended only to promote the private welfare and interest of
the de la Cerna family. The respondent is well aware that the appropriation was a part of
the package agreed upon by all parties in a civil case for the amicable settlement of the
controversy. Judicial compromise is conclusive and binding on all the parties.
 EDMUNDO C. SAMBELI vs. PROVINCE OF ISABELA, ET AL
G.R. No. 92279 June 18, 1992

Facts

An agreement was entered between the City of Isabela and ECS Enterprise for the
purchase of wheelbarrows, pieces of shovels, and a set of radio communication
equipment. Based on the finding of the Price Evaluation Division – COA Technical
Services Office, the Provincial Auditor advised the Provincial Treasurer that an overprice
exists out of the total price offered by ECS Enterprises or an overpayment of
P195,893.10. It recommended that the future claim of ECS Enterprises be withheld.
Provincial Auditor formally forwarded the matter with the Regional Director who
formally endorsed the stand. ECS appealed the decision but was denied for lack of merit.
Hence this instant petition. Petitioner assails the ruling of the COA as invalid. It contends
that the contract of sale has not only been perfected between the Province of Isabela and
petitioner but delivery has been made by it with the corresponding partial payment by the
Province of Isabela. Thus, it is allegedly incumbent upon COA to authorize the payment
of the balance because to act otherwise will constitute an impairment of contract.

Issue
Whether or not the ruling of COA is invalid in so far as it constitutes impairment of
contracts

Ruling
No. In the exercises of the regulatory power vested upon it by the Constitution, the
Commission on Audit adheres to the policy that government funds and property should
be fully protected and conserved and that irregular, unnecessary, excessive or extravagant
expenditures or uses of such funds and property should be prevented. On the proposition
that improper or wasteful spending of public funds or immoral use of government
property, for being highly irregular or unnecessary, or scandalously excessive or
extravagant, offends the sovereign people's will, it behooves the Commission on Audit to
put a stop thereto. Indeed, not only is the COA vested with the power and authority, but is
also charged with the duty to examine, audit and settle all accounts pertaining to the
expenditure or uses of funds owned by or pertaining to, the Government or any of its
subdivisions, agencies or instrumentalities. The petition is hereby dismissed.
 Bustamante v COA 216 SCRA 134

FACTS:

Petitioner is the Regional Legal Counsel of National Power Corporation (NPC). As such
he was issued a government vehicle with plate number SCC 387. Pursuant to NPC policy
as reflected in the Board Resolution No. 81-95 authorizing the monthly disbursement of
transportation allowance, the petitioner, in addition to the use of government vehicle,
claimed his transportation allowance for the month of January 1989. On May 31, 1990,
the petitioner received an Auditor's Notice to Person Liable dated April 17, 1990 from
respondent Regional Auditor Martha Roxana Caburian disallowing P1,250.00
representing aforesaid transportation allowance. The petitioner moved for reconsideration
of the disallowance of the claim for transportation allowance which was denied.

Petitioner appealed this denial to the Commission on Audit which denied do due course.
Hence this petition.

The petitioner takes exception from the coverage of said circular contending that such
circular did not mention the NPC as one of the corporations/offices covered by it ( COA
Circular No. 75-6)

ISSUE:

Whether such denial to give due course to the appeal of herein petitioner constitutes
grave abuse of discretion amounting to lack of jurisdiction?

Whether NPC takes an exception from such coverage of the said circular contending that
such circular did not mention NPC as one of the corporations/offices covered by it.

HELD:

NO. Grave abuse of discretion implies such capricious and whimsical exercise of
judgment as is equivalent to lack of jurisdiction, or in other words where the power is
exercised in an arbitrary or despotic manner by reason of passion or personal hostility,
and it must be so patent and gross as to amount to an evasion of positive duty or to a
virtual refusal to perform the duty enjoined or to act at all in contemplation of law.

NO. It is very patent that the circular is addressed, among others, to managing heads of
Government-owned or Controlled Corporations, the NPC being held under such category
of corporations. We likewise cannot sustain petitioner's contention that the Commission,
in the exercise of its power granted by the Constitution, usurped the statutory functions of
the NPC Board of Directors for its leads to the absurd conclusion that a mere Board of
Directors of a government-owned and controlled corporation, by issuing a resolution, can
put to naught a constitutional provision which has been ratified by the majority of the
Filipino people. If We will not sustain the Commission's power and duty to examine,
audit and settle accounts pertaining to this particular expenditures or use of funds and
property, owned or held in trust by this government-owned and controlled corporation,
the NPC, We will be rendering inutile this Constitutional Body which has been tasked to
be vigilant and conscientious in safeguarding the proper use of the government's, and
ultimately, the people's property.
Petitioners: EDITHA B. SALIGUMBA
Respondents: COMMISSION ON AUDIT AND LEONARDO ESTELLA
G.R. No: L-61676
Date: 18 October 1982

Facts:

Editha Saligumba claimed that she was raped by Leonardo Estella. The COA instituted
the administrative case against Leonardo Estella, Auditing Examiner III, in the Auditor's
Office of Misamis Occidental. The charge was that the respondent raped Editha
Saligumba on several occasions.

On April 12, 1982, the COA rendered a decision with the following judgment:

"Wherefore, for insufficiency of evidence, the instant charge is hereby dropped.

Respondent is, however, warned to comfort himself henceforth in such a manner as
would forestall the filing of similar complaints in the future.

Editha Saligumba now wants Us to review the COA decision. She insists that the
decision of the COA is contrary to the evidence.

Issue:
Is the COA the right agency to determine the rape charges or the finding of the truth on
this issue?

Ruling:

The petition has to be dismissed for the following reasons:

1. The power to review COA decisions refers to money matters and not to
administrative cases involving the discipline of its personnel.

2. Even assuming that they have jurisdiction to review decisions on administrative

matters as mentioned above, they cannot do so on factual issues; their power to review is
limited to legal issues.
 Bagatsing v Committee Date:
July 14, 1995
Ponente:
Quiason, J.

Facts:
This case revolves around the privatization of Petron, or Esso Philippines, Inc., a
subsidiary of Esso Eastern, Inc., and Mobil Petroleum Company, Inc., Petron having been
acquired by the government as a subsidiary of the PNOC during height of the world-wide
oil crisis in 1973 brought about by the Middle East conflicts. PETRON owns the largest,
most modern complex refinery in the Philippines with a nameplate capacity of 155,000
barrels per stream day. It is also the country's biggest combined retail
and wholesale market of refined petroleum products. In 1992, it garnered a 39.8% share
of all domestic products sold, and at year end its assets totalled P24.4 billion. PETRON's
income as of September 1993 was P2.7 billion. It is listed as the No. 1 corporation in
terms of assets and income in the Philippines. The government, in pursuant to President
Corazon Aquino’s Proclamation No. 50 or “Proclaiming and Launching a Program for
the Expeditious Disposition and Privatization of Certain Government Corporations and/or
the Assets thereof, and Creating the Committee on Privatization and
the Asset Privatization Trust” eventually decided to put PETRON up for privatization
– first a 100% privatization, and then after several recommendations and consultations
among the pertinent departments and administrative bodies, a 40%-20%-40%
privatization strategy was approved by the President Ramos (this was already in
1993). The Petron Privatization Working Committee finalized such strategy with
40% of the shares to be sold to a strategic partner and 20% to the general public
through the initial public offering and employees stock option plan.

Implicit in the Proclamation is the need to raise revenue for the Government and
the ideal of leaving business to the private sector. The Government can then concentrate
on the delivery of basic services and the performance of vital public functions. The
bidders for the 40% block were PETRONAS, ARAMCO, and WESTMONT.

ARAMCO was the highest bidder at US$502 million and was declared by the
PNOC. Petitioners are assailing the sale of the 40% block to ARAMCO on the ground
(main issue on “public utility” among others) that PETRON is a public utility, in which
foreign ownership of its equity shall not exceed 40% thereof and the foreign
participation in the governing body shall be limited to their proportionate share in
its capital. According to petitioners, ARAMCO is entitled only to a maximum of
four seats in the ten-man board but was given five seats.

Issue: (main –as to public utility)

W/N the sale of the 40% to ARAMCO must be annulled as PETRON is a public utility?

Hence, is PETRON, as an entity in the oil-refining business even a public utility?

Ruling:

The petition has been dismissed. Sale to ARAMCO not annulled! The Court clarifies the
definition of a public utility and the oil refining business by going back to
the Constitution and the Petroleum Act of 1949 : Implementing Section 8 of Article XIV
of the 1935 Constitution, the progenitor of Section 5 of Article XIV of the 1973
Constitution, is Section 13(b) of the Public Service Act, which provides: The term
"public service" includes every person that now or hereafter may own, operate, manage,
or control in the Philippines, for hire or compensation, with general or limited clientele,
whether permanent, occasional, or accidental and done for general business purposes, any
common carrier, railroad, street railway, . . . and other similar public services:
 POLICE POWER

White Light vs City of Manila

Facts:

On 3 Dec 1992, then Mayor Lim signed into law Ord 7774 entitled “An
Ordinance prohibiting short time admission in hotels, motels, lodging houses,
pension houses and similar establishments in the City of Manila”. White Light
Corp is an operator of mini hotels and motels who sought to have the
Ordinance be nullified as the said Ordinance infringes on the private rights of
their patrons. The RTC ruled in favor of WLC. It ruled that the Ordinance
strikes at the personal liberty of the individual guaranteed by the Constitution.
The City maintains that the ordinance is valid as it is a valid exercise of police
power. Under the LGC, the City is empowered to regulate the establishment,
operation and maintenance of cafes, restaurants, beerhouses, hotels, motels,
inns, pension houses, lodging houses and other similar establishments,
including tourist guides and transports. The CA ruled in favor of the City.

ISSUE: Whether or not Ord 7774 is valid.

HELD: The SC ruled that the said ordinance is null and void as it indeed
infringes upon individual liberty. It also violates the due process clause which
serves as a guaranty for protection against arbitrary regulation or seizure. The
said ordinance invades private rights. Note that not all who goes into motels
and hotels for wash up rate are really there for obscene purposes only. Some
are tourists who needed rest or to “wash up” or to freshen up. Hence, the
infidelity sought to be avoided by the said ordinance is more or less subjected
only to a limited group of people. The SC reiterates that individual rights may
be adversely affected only to the extent that may fairly be required by the
legitimate demands of public interest or public welfare.
Petitioner: Metropolitan Manila Development Authority
Respondent: Trackworks Rail Transit Advertising, Vending and Promotions, Inc.

Facts: In 1997, the Government, through the Department of Transportation and

Communications, entered into a build-lease-transfer agreement (BLT agreement) with
Metro Rail Transit Corporation, Limited (MRTC) pursuant to Republic Act No. 6957
(Build, Operate and Transfer Law), under which MRTC undertook to build MRT3
subject to the condition that MRTC would own MRT3 for 25 years, upon the expiration
of which the ownership would transfer to the Government. In 1998, respondent
Trackworks Rail Transit Advertising, Vending & Promotions, Inc. (Trackworks) entered
into a contract for advertising services with MRTC. Trackworks thereafter installed
commercial billboards, signages and other advertising media in the different parts of the
MRT3. In 2001, however, MMDA requested Trackworks to dismantle the billboards,
signages and other advertising media pursuant to MMDA Regulation No. 96-009,
whereby MMDA prohibited the posting, installation and display of any kind or form of
billboards, signs, posters, streamers, in any part of the road, sidewalk, center island,
posts, trees, parks and open space. After Trackworks refused the request of MMDA,
MMDA proceeded to dismantle the former’s billboards and similar forms of
advertisement.

Issue: Whether MMDA has the power to dismantle, remove or destroy the billboards,
signages and other advertising media installed by Trackworks on the interior and exterior
structures of the MRT3.

Ruling: That Trackworks derived its right to install its billboards, signages and other
advertising media in the MRT3 from MRTC’s authority under the BLT agreement to
develop commercial premises in the MRT3 structure or to obtain advertising income
therefrom is no longer debatable. Under the BLT agreement, indeed, MRTC owned the
MRT3 for 25 years, upon the expiration of which MRTC would transfer ownership of the
MRT3 to the Government.
Considering that MRTC remained to be the owner of the MRT3 during the time material
to this case, and until this date, MRTC’s entering into the contract for advertising services
with Trackworks was a valid exercise of ownership by the former. In fact,
in Metropolitan Manila Development Authority v. Trackworks Rail Transit Advertising,
Vending & Promotions, Inc., this Court expressly recognized Trackworks’ right to install
the billboards, signages and other advertising media pursuant to said contract. The latter’s
right should, therefore, be respected.
It is futile for MMDA to simply invoke its legal mandate to justify the dismantling of
Trackworks’ billboards, signages and other advertising media. MMDA simply had no
power on its own to dismantle, remove, or destroy the billboards, signages and other
advertising media installed on the MRT3 structure by Trackworks. In Metropolitan
Manila Development Authority v. Bel-Air Village Association, Inc., Metropolitan Manila
Development Authority v. Viron Transportation Co., Inc., and Metropolitan Manila
Development Authority v. Garin, the Court had the occasion to rule that MMDA’s powers
were limited to the formulation, coordination, regulation, implementation, preparation,
management, monitoring, setting of policies, installing a system, and administration.
Nothing in Republic Act No. 7924 granted MMDA police power, let alone legislative
power.

The Court also agrees with the CA’s ruling that MMDA Regulation No. 96-009 and
MMC Memorandum Circular No. 88-09 did not apply to Trackworks’ billboards,
signages and other advertising media. The prohibition against posting, installation and
display of billboards, signages and other advertising media applied only to public areas,
but MRT3, being private property pursuant to the BLT agreement between the
Government and MRTC, was not one of the areas as to which the prohibition applied.
 G.R. No. 100152 March 31, 2000

Petitioner: Acebedo Optical Company, Inc.

Respondent: The Honorable Court of Appeals

Facts: Petitioner applied with the Office of the City Mayor of Iligan for a business
permit. After consideration of petitioner's application and the opposition interposed
thereto by local optometrists, respondent City Mayor issued Business Permit No.
5342 subject to the following conditions: (1) Since it is a corporation, Acebedo cannot
put up an optical clinic but only a commercial store; (2) It cannot examine and/or
prescribe reading and similar optical glasses for patients, because these are functions of
optical clinics; (3) It cannot sell reading and similar eyeglasses without a prescription
having first been made by an independent optometrist or independent optical clinic.
Acebedo can only sell directly to the public, without need of a prescription, Ray-Ban and
similar eyeglasses; (4) It cannot advertise optical lenses and eyeglasses, but can advertise
Ray-Ban and similar glasses and frames; (5) It is allowed to grind lenses but only upon
the prescription of an independent optometrist. On December 5, 1988, private respondent
Samahan ng Optometrist Sa Pilipinas (SOPI lodged a complaint against the petitioner
alleging that Acebedo had violated the conditions set forth in its business permit and
requesting the cancellation and/or revocation of such permit. On July 19, 1989, the City
Mayor sent petitioner a Notice of Resolution and Cancellation of Business Permit
effective as of said date and giving petitioner three (3) months to wind up its affairs.

Issue: Whether the City Mayor has the authority to impose special conditions, as a valid
exercise of police power, in the grant of business permits

Ruling: Police power as an inherent attribute of sovereignty is the power to prescribe

regulations to promote the health, morals, peace, education, good order or safety and
general welfare of the people. It is essentially regulatory in nature and the power to issue
licenses or grant business permits, if exercised for a regulatory and not revenue-raising
purpose, is within the ambit of this power. The authority of city mayors to issue or grant
licenses and business permits is beyond cavil. However, the power to grant or issue
licenses or business permits must always be exercised in accordance with law, with
utmost observance of the rights of all concerned to due process and equal protection of
the law.
In the case under consideration, the business permit granted by respondent City Mayor to
petitioner was burdened with several conditions. Petitioner agrees with the holding by the
Court of Appeals that respondent City Mayor acted beyond his authority in imposing
such special conditions in its permit as the same have no basis in the law or ordinance.
Public respondents and private respondent SOPI are one in saying that the imposition of
said special conditions is well within the authority of the City Mayor as a valid exercise
of police power.
The issuance of business licenses and permits by a municipality or city is essentially
regulatory in nature. The authority, which devolved upon local government units to issue
or grant such licenses or permits, is essentially in the exercise of the police power of the
State within the contemplation of the general welfare clause of the Local Government
Code.

What is sought by petitioner from respondent City Mayor is a permit to engage in the
business of running an optical shop. It does not purport to seek a license to engage in the
practice of optometry. The objective of the imposition of subject conditions on
petitioner's business permit could be attained by requiring the optometrists in petitioner's
employ to produce a valid certificate of registration as optometrist, from the Board of
Examiners in Optometry. A business permit is issued primarily to regulate the conduct of
business and the City Mayor cannot, through the issuance of such permit, regulate the
practice of a profession. Such a function is within the exclusive domain of the
administrative agency specifically empowered by law to supervise the profession, in this
case the Professional Regulations Commission and the Board of Examiners in
Optometry.
 Petitioner: Association of Small Landowners in the Philippines
Respondent: Honorable Secretary of Agrarian Reform

Facts:

These are consolidated cases which involve common legal, including serious challenges
to the constitutionality of the several measures such as P.D. No. 27, E.O. No. 228,
Presidential Proclamation No. 131, E.O. No. 229, and R.A. No. 6657.
G.R. No. 79777

The petitioners are questioning P.D. No. 27 and E.O. Nos. 228 and 229 on grounds inter
alia of separation of powers, due process, equal protection and the constitutional
limitation that no private property shall be taken for public use without just
compensation.
This petition seeks to prohibit the implementation of Proc. No. 131 and E.O. No. 229.
They contend that taking must be simultaneous with payment of just compensation as it is
traditionally understood, i.e., with money and in full, but no such payment is
contemplated in Section 5 of the E.O. No. 229.
G.R. No. 79744
The petitioner argues that E.O. Nos. 228 and 229 are violative of the constitutional
provision that no private property shall be taken without due process or just
compensation.
G.R. No. 78742
Petitioners claim they cannot eject their tenants and so are unable to enjoy their right of
retention because the Department of Agrarian Reform has so far not issued the
implementing rules required under the above-quoted decree.

Issue: Whether agrarian reform is an exercise of police power or eminent domain

Ruling: There are traditional distinctions between the police power and the power of
eminent domain that logically preclude the application of both powers at the same time
on the same subject. Property condemned under the police power is noxious or intended
for a noxious purpose, such as a building on the verge of collapse, which should be
demolished for the public safety, or obscene materials, which should be destroyed in the
interest of public morals. The confiscation of such property is not compensable, unlike
the taking of property under the power of expropriation, which requires the payment of
just compensation to the owner.

The cases before us present no knotty complication insofar as the question of

compensable taking is concerned. To the extent that the measures under challenge merely
prescribe retention limits for landowners, there is an exercise of the police power for the
regulation of private property in accordance with the Constitution. But where, to carry
out such regulation, it becomes necessary to deprive such owners of whatever lands they
may own in excess of the maximum area allowed, there is definitely a taking under the
power of eminent domain for which payment of just compensation is imperative. The
taking contemplated is not a mere limitation of the use of the land. What is required is the
surrender of the title to and the physical possession of the said excess and all beneficial
rights accruing to the owner in favor of the farmer-beneficiary. This is definitely an
exercise not of the police power but of the power of eminent domain
 LIM VS FELIX

FACTS: On March 17, 1989, at about 7:30 o'clock in the morning, at the vicinity of the
airport road of the Masbate Domestic Airport, located at the municipality of Masbate
province of Masbate, Congressman Moises Espinosa, Sr. and his security escorts, namely
Provincial Guards Antonio Cortes, Gaspar Amaro, and Artemio Fuentes were attacked
and killed by a lone assassin. Dante Siblante another security escort of Congressman
Espinosa, Sr. survived the assassination plot, although, he himself suffered a gunshot
wound. An investigation of the incident then followed.

Thereafter, and for the purpose of preliminary investigation, the designated investigator
filed an amended complaint with the Municipal Trial Court of Masbate accusing Vicente
Lim, Sr. et al of the crime of multiple murder and frustrated murder in connection with
the airport incident.

After conducting the preliminary investigation, the court issued an order concluding that
a probable cause has been established for the issuance of a warrant of arrest of named
accused..

On October 30, 1989, Fiscal Alfane filed with the Regional Trial Court of Masbate, four
(4) separate informations of murder against the twelve (12) accused with a
recommendation of no bail.

On November 21, 1989, petitioners Vicente Lim, Sr. and Susana Lim filed with us a
verified petition for change of venue w/c was authorized, from the RTC of Masbate to the
RTCt of Makati to avoid miscarriage of justice. The cases were raffled to Branch 56
presided by respondent Judge Nemesio S. Felix.

Petitioners Vicente Lim, Sr. and Susana Lim filed with the respondent court several
motions and manifestations, among others was an order be issued requiring the
transmittal of the initial records of the preliminary inquiry or investigation conducted by
the Municipal Judge Barsaga of Masbate for the best enlightenment of this Honorable
Court in its personal determination of the existence of a probable cause or prima facie
evidence as well as its determination of the existence of guilt, pursuant to the
mandatory mandate of the constitution that no warrant shall issue unless the issuing
magistrate shall have himself been personally convinced of such probable cause.

Respondent court issued an order denying for lack of merit the motions and
manifestations and issued warrants of arrest against the accused including the petitioners
herein.

ISSUE : Whether or not a judge may issue a warrant of arrest without bail by simply
relying on the prosecution's certification and recommendation that a probable cause
exists.

HELD: If a Judge relies solely on the certification of the Prosecutor as in this case where
all the records of the investigation are in Masbate, he or she has not personally
determined probable cause. The determination is made by the Provincial Prosecutor. The
constitutional requirement has not been satisfied. The Judge commits a grave abuse of
discretion.
 SECOND DIVISION [G.R. No. 188133. July 7, 2014.]
PEOPLE OF THE PHILIPPINES, appellee, vs. OLIVER RENATO EDAÑO y
EBDANE, appellant
Theme: Inadmissibility of evidence in arrest inflagrante delicto; Chain of custody
requirement: Section 21, Article II of R.A. No. 9165
FACTS:
The prosecution charged the appellant Edaño and Godofredo Siochi with violation
of Section 11, Article II of R.A. No. 9165 under two separate Informations.

The appellant and Siochi pleaded not guilty to the charge on arraignment. Joint
trial on the merits followed.

Prosecution
Witnesses: Police Inspector (P/Insp.) Aylin
Casignia and Police Officer (PO) 3 Elmer
Corbe
On the evening of August 6, 2002,
members of the Metro Manila Drugs
Enforcement Group, together with a female
informant, went to the parking area of
McDonalds, West Avenue to conduct an
entrapment operation against a certain alias
"Nato."
At around 7:00 p.m., the appellant arrived
on board a space wagon driven by Siochi. 5
The informant approached the appellant
and talked to him inside the vehicle.
Afterwards, the informant waved at PO3
Corbe. 6 When PO3 Corbe was
approaching the appellant, the latter went
out of the vehicle and ran away.
PO3 Corbe recovered a "knot-tied"
transparent plastic bag from the appellant's
right hand, while PO3 Alcancia seized a
gun tucked in the appellant's waist. The
other members of the police arrested
Siochi. Thereafter, the police brought the
appellant, Siochi and the seized items to the
police station for investigation.
P/Insp. Casignia, the Forensic Chemical
Officer examined the seized items and
found them positive for the presence of
shabu.
Defense
Witnesses: Siochi and Ruben Forteza
At around 4:00 p.m. on August 6, 2002, he
called Siochi on the phone, and informed
him that the motorbike starter the latter
needed was already available. On the same
day, Vanessa Paduada called the appellant,
and asked for the directions to McDonalds,
West Avenue. At around 6:00 p.m., Siochi
and Ruben arrived at the gate of Philam
Homes on board a space wagon. The
appellant met them at the subdivision gate,
and showed the starter to Siochi.
Thereafter, Vanessa called on the
appellant's cellular phone. The appellant
then boarded the vehicle, and told Siochi
that he would just talk to a person at
McDonalds. Afterwards, Vanessa called
him from inside a parked car. The appellant
approached Vanessa who, for her part,
alighted from the car. Vanessa told the
appellant to get inside the car's rear. The
appellant did as instructed. Immediately
after, the male driver alighted from the
vehicle and entered the car's rear. The
appellant went out of the car, but the male
driver followed him and grabbed his hand.
The appellant resisted, and wrestled with
the driver along West Avenue. During this
commotion, the appellant heard a gunfire;
four (4) persons approached him, and then
tied his hands with a masking tape. The
police placed him on board a pick-up truck,
and then brought him to Bicutan. In
Bicutan, the police brought him to the
interrogation room, where they punched
him and placed a plastic on his head.

RTC: found the appellant guilty beyond reasonable doubt of illegal possession of
shabu under Section 11, Article II of R.A. No. 9165, and sentenced him to suffer
the penalty of life imprisonment. It also ordered him to pay a P500,000.00 fine.
The RTC, however, acquitted Siochi on the ground of reasonable doubt.

On appeal, the CA affirmed the RTC decision. The CA added that strict
compliance with Section 21, Article II of R.A. No. 9165 was not required as long
as the integrity of the seized item had been ensured. It further held that the police
 officers were presumed to have regularly performed their official duties. Finally,
the CA held that the prosecution was able to establish all the elements of illegal
possession of shabu.

The appellant moved to reconsider this decision, but the CA denied his motion in
its resolution dated December 23, 2008. Hence, the instant appeal.

ISSUES:
1. Whether or not the warrantless arrest was valid, and if so, whether or not the
seized items were admissible?
2. Whether or not the corpus delicti of the crime charged was adequately proven?

RULING:
1. No, the shabu purportedly seized from the appellant is inadmissible in
evidence for being the proverbial fruit of the poisonous tree.
Section 5 (a), Rule 113 of the Rules of Criminal Procedure provides that a peace
officer or a private person may, without a warrant, arrest a person when, in his presence,
the person to be arrested has committed, is actually committing, or is attempting to
commit an offense. This is known as arrest in flagrante delicto.
"For a warrantless arrest of an accused caught in flagrante delicto to be valid, two
requisites must concur: (1) the person to be arrested must execute an overt act indicating
that he has just committed, is actually committing, or is attempting to commit a crime;
and (2) such overt act is done in the presence or within the view of the arresting officer."
In the present case, there was no overt act indicative of a felonious enterprise that
could be properly attributed to the appellant to rouse suspicion in the mind of PO3 Corbe
that he (appellant) had just committed, was actually committing, or was attempting to
commit a crime. In fact, PO3 Corbe testified that the appellant and the informant were
just talking with each other when he approached them.
As testified to by PO3 Corbe himself, the appellant and the informant were just
talking to each other; there was no exchange of money and drugs when he approached the
car. Notably, while it is true that the informant waved at PO3 Corbe, the latter admitted
that this was not the pre-arranged signal to signify that the sale of drugs had been
consummated. PO3 Corbe also admitted on cross-examination that he had no personal
knowledge on whether there was a prohibited drug and gun inside the space wagon when
he approached it.
That the appellant attempted to run away when PO3 Corbe approached him is
irrelevant and cannot by itself be construed as adequate to charge the police officer with
personal knowledge that the appellant had just engaged in, was actually engaging in or
was attempting to engage in criminal activity.
As the Court explained in People v. Villareal:
Flight per se is not synonymous with guilt and must not always be
attributed to one's consciousness of guilt. It is not a reliable indicator of
guilt without other circumstances, for even in high crime areas there are
many innocent reasons for flight, including fear of retribution for
speaking to officers, unwillingness to appear as witnesses, and fear of
being wrongfully apprehended as a guilty party.
In other words, trying to run away when no crime has been overtly committed, cannot
be evidence of guilt. Considering that the appellant's warrantless arrest was unlawful,
the search and seizure that resulted from it was likewise illegal. Thus, the alleged
plastic bag containing white crystalline substances seized from him is inadmissible in
evidence, having come from an invalid search and seizure.

2. No, the prosecution failed to adequately prove the corpus delicti of the crime
charged.
We stress that "[t]he existence of dangerous drugs is a condition sine qua non for
conviction for the illegal sale and possession of dangerous drugs, it being the very corpus
delicti of the crimes." Thus, the evidence of the corpus delicti must be established beyond
reasonable doubt.
 In the present case, the various lapses — enumerated and discussed below — committed by the
police in the handling, safekeeping and custody over the seized drug tainted the integrity and evidentiary
value of the confiscated shabu.
1) We find it highly unusual and irregular that the police o fficers would let the appellant mark the
drugs seized from him, instead of doing the marking themselves.

Marking, as used in drug cases, means the placing by the apprehending officer or the poseur-buyer
of his/her initials and signature on the item/s seized. "Consistency with the "chain of custody" rule
requires that the "marking" of the seized items — to truly ensure that they are the same items that
enter the chain and are eventually the ones offered in evidence — should be done (1) in the
presence of the apprehended violator (2) immediately upon confiscation."

Thus, while marking of the seized drugs at the police station is permitted, the marking should be
done by the police, and not by the accused. The appellant's participation in the marking procedure
should only be as a witness. Why the police failed to do a basic police procedure truly baffles us.

2) The police did not inventory or photograph the seized drugs, whether at the place of confiscation
or at the police station. These omissions were admitted by the prosecution during pre-trial.

The required procedure on the seizure and custody of drugs is embodied in Section 21, paragraph
1, Article II of R.A. No. 9165, which states:

The apprehending team having initial custody and control of the drugs shall,
immediately after seizure and confiscation, physically inventory and
photograph the same in the presence of the accused or the person/s from whom
such items were confiscated and/or seized, or his/her representative or counsel,
a representative from the media and the Department of Justice (DOJ), and any
elected public official who shall be required to sign the copies of the inventory
and be given a copy thereof[.]

This is implemented by Section 21 (a), Article II of the Implementing Rules and Regulations
(IRR) of R.A. No. 9165.
To be sure, Section 21 (a), Article II of the IRR offers some flexibility in complying with the
express requirements under paragraph 1, Section 21, Article II of R.A. No. 9165, i.e., "non-compliance
with these requirements under justifiable grounds, as long as the integrity and the evidentiary value of the
seized items are properly preserved by the apprehending officer/team, shall not render void and invalid
such seizures of and custody over said items[.]" This saving clause, however, applies only where the
prosecution recognized the procedural lapses and thereafter explained the cited justifiable grounds, and
when the prosecution established that the integrity and evidentiary value of the evidence seized had been
preserved. These conditions were not met in the present case, as the prosecution did not even attempt to
offer any justification for its failure to follow the prescribed procedures in the handling and safekeeping of
the seized items.
Although the Court has recognized that minor deviations from the procedures under R.A. No.
9165 would not automatically exonerate an accused, we have also declared that when there is gross
disregard of the procedural safeguards prescribed in the substantive law (R.A. No. 9165), serious
uncertainty is generated about the identity of the seized items that the prosecution presented in evidence.
This doubt cannot be remedied by simply invoking the presumption of regularity in the performance of
official duties, for a gross, systematic, or deliberate disregard of the procedural safeguards effectively
produces an irregularity in the performance of official duties.

WHEREFORE, premises considered, we REVERSE and SET ASIDE the October 16, 2008 decision and
the December 23, 2008 resolution of the Court of Appeals in CA-G.R. CR HC No. 01142. Appellant Oliver
Renato Edaño y Ebdane is hereby ACQUITTED for failure of the prosecution to prove his guilt beyond
reasonable doubt.
 Manalili v CA (GR 113447) Oct. 9, 1997

Facts:

At about 2:10 PM on April 11, 1988, Police Anti-Narcotics Unit of Kalookan City
conducted surveillance along A. Mabini Street, in front of the Kalookan City Cemetery.
This was done after receiving information that drug addicts were roaming around said
area.

Upon reaching the cemetery, the policemen chanced upon a male person, the
petitioner, in front of the cemetery who appeared high on drugs. The petitioner had
reddish eyes and was walking in a swaying manner.

Petitioner was trying to avoid the policemen, but the officers were able to
introduce themselves and asked him what he was holding in his hands. Petitioner resisted.
Policeman Espiritu asked him if he could see what the petitioner had in his hands. The
petitioner showed his wallet and allowed the officer to examine it. Policeman Espiritu
found suspected crushed marijuana residue inside. He kept the wallet and its marijuana
contents and took petitioner to headquarters to be further investigated.

The suspected marijuana was sent to the NBI Forensic Chemistry Section for analysis.

Issue:
Whether or not the search and seizure of the suspected marijuana is unreasonable, and
hence inadmissible as evidence.

Held:
The general rule is a search and seizure must be validated by a previously secured
judicial warrant; otherwise, such a search and seizure is unconstitutional and subject to
challenge. Any evidence obtained in violation of this constitutionally guaranteed right is
legally inadmissible in any proceeding.

The exceptions to the rule are: (1) search incidental to a lawful arrest, (2) search
of moving vehicles, (3) seizure in plain view, (4) customs search, and (5) waiver by the
accused of their right against unreasonable search and seizure. In these cases, the search
and seizure may be made only with probable cause. Probable cause being at best defined
as a reasonable ground of suspicion, supported by circumstances sufficiently strong in
themselves to warrant a cautious man in the belief that the person accused is guilty of the
offense with which he is charged; or the existence of such facts and circumstances which
could lead a reasonably discreet and prudent man to believe that an offense has been
committed and that the item(s), article(s) or object(s) sought in connection with said
offense or subject to seizure and destruction by is in the place to be searched.
Additionally, stop-and-frisk has already been adopted as another exception to the general
rule against a search without a warrant.

In the present case, petitioner effectively waived the inadmissibility of the

evidence illegally obtained when he failed to raise the issue or object thereto during the
trial.

The Supreme Court affirmed with modifications the assailed Decision and
Resolution of the respondent court.