THIRD DIVISION

G.R. No. 200334, July 30, 2014

THE PEOPLE OF THE PHILIPPINES, Respondent-Appellee, v. VICTOR COGAED Y ROMANA,Accused-Appellant.

D E C I S I O N

LEONEN, J.:

The mantle of protection upon one’s person and one’s effects through Article III, Section 2 of the Constitution is essential to allow citizens to evolve their autonomy and, hence, to avail themselves of their right to privacy.  The alleged compromise with the battle against dangerous drugs is more apparent than real.  Often, the compromise is there because law enforcers neglect to perform what could have been done to uphold the Constitution as they pursue those who traffic this scourge of society.

Squarely raised in this appeal1 is the admissibility of the evidence seized as a result of a warrantless arrest.  The police officers identified the alleged perpetrator through facts that were not based on their personal knowledge.  The information as to the accused’s whereabouts was sent through a text message.  The accused who never acted suspicious was identified by a driver.  The bag that allegedly contained the contraband was required to be opened under intimidating circumstances and without the accused having been fully apprised of his rights.

This was not a reasonable search within the meaning of the Constitution.  There was no reasonable suspicion that would allow a legitimate “stop and frisk” action.  The alleged waiver of rights by the accused was not done intelligently, knowingly, and without improper pressure or coercion.

The evidence, therefore, used against the accused should be excluded consistent with Article III, Section 3 (2) of the Constitution.  There being no possible admissible evidence, the accused should be acquitted.

I

According to the prosecution, at about 6:00 a.m. of November 25, 2005, Police Senior Inspector Sofronio Bayan (PSI Bayan) of the San Gabriel Police Station in San Gabriel, La Union, “received a text message from an unidentified civilian informer”2 that one Marvin Buya (also known as Marvin Bugat) “[would] be transporting marijuana”3 from Barangay Lun-Oy, San Gabriel, La Union to the Poblacion of San Gabriel, La Union.4

cralawred

PSI Bayan organized checkpoints in order “to intercept the suspect.”5  PSI Bayan ordered SPO1 Jaime Taracatac, Jr. (SPO1 Taracatac), a member of the San Gabriel Police, to set up a checkpoint in the waiting area of passengers from San Gabriel bound for San Fernando City.6

cralawred

A passenger jeepney from Barangay Lun-Oy arrived at SPO1 Taracatac’s checkpoint.7  The jeepney driver disembarked and signalled to SPO1 Taracatac indicating the two male passengers who were carrying marijuana.8  SPO1 Taracatac approached the two male passengers who were later identified as Victor Romana Cogaed and Santiago Sacpa Dayao.9  Cogaed was carrying a blue bag and a sack while Dayao was holding a yellow bag.10

cralawred

SPO1 Taracatac asked Cogaed and Dayao about the contents of their bags.11  Cogaed and Dayao told SPO1 Taracatac that they did not know since they were transporting the bags as a favor for theirbarriomate named Marvin.12  After this exchange, Cogaed opened the blue bag, revealing three bricks of what looked like marijuana.13  Cogaed then muttered, “nagloko daytoy nga Marvinen, kastoy met gayam ti nagyanna,” which translates to “Marvin is a fool, this is what [is] contained in the bag.”14  “SPO1 Taracatac arrested [Cogaed] and . . . Dayao and brought them to the police station.”15  Cogaed and Dayao “were still carrying their

respective bags”16 inside the station.17cralawred

While at the police station, the Chief of Police and Investigator PO3 Stanley Campit (PO3 Campit) requested Cogaed and Dayao to empty their bags.18  Inside Cogaed’s sack was “four (4) rolled pieces of suspected marijuana fruiting tops,”19 and inside Dayao’s yellow bag was a brick of suspected marijuana.20

cralawred

PO3 Campit prepared the suspected marijuana for laboratory testing.21 PSI Bayan personally delivered the suspected marijuana to the PNP Crime Laboratory.22  Forensic Chemical Officer Police Inspector Valeriano Panem Laya II performed the tests and found that the objects obtained were indeed marijuana.23  The marijuana collected from Cogaed’s blue bag had a total weight of 8,091.5 grams.24  The marijuana from Cogaed’s sack weighed 4,246.1 grams.25  The marijuana collected from Dayao’s bag weighed 5,092 grams.26  A total of 17,429.6 grams were collected from Cogaed’s and Dayao’s bags.27

cralawred

According to Cogaed’s testimony during trial, he was at Balbalayan, La Union, “waiting for a jeepney to take him”28 to the Poblacion of San Gabriel so he could buy pesticide.29  He boarded a jeepney and recognized Dayao, his younger brother’s friend.30  Upon arrival at the Poblacion of San Gabriel, Dayao and Cogaed alighted from the jeepney.31  Dayao allegedly “asked for [Cogaed’s] help in carrying his things, which included a travelling bag and a sack.”32  Cogaed agreed because they were both going to the market.33  This was when SPO1 Taracatac approached them, and when SPO1 Taracatac asked Cogaed what was inside the bags, Cogaed replied that he did not know.34  SPO1 Taracatac then talked to Dayao, however, Cogaed was not privy to their conversation.35  Thereafter, SPO1 Taracatac arrested Dayao and Cogaed and brought them to the police station.36  These facts were corroborated by an eyewitness, Teodoro Nalpu-ot, who was standing across the parking lot where Cogaed was apprehended.37

cralawred

At the police station, Cogaed said that “SPO1 Taracatac hit [him] on the head.”38  The bags were also opened, but Cogaed never knew what was inside.39

cralawred

It was only later when Cogaed learned that it was marijuana when he and Dayao were charged with illegal possession of dangerous drugs under Republic Act No. 9165.40  The information against them states:chanRoblesvirtualLawlibrary

That on or about the 25th day of November, 2005, in the Municipality of San Gabriel, Province of La Union, and within the jurisdiction of this Honorable Court, the above-named accused VICTOR COGAED Y ROMANA and SANTIAGO DAYAO Y SACPA (who acted with discernment) and JOHN DOE, conspiring, confederating and mutually helping one another, did then there wilfully, unlawfully, feloniously and knowingly, without being authorized by law, have in their control, custody and possession dried marijuana, a dangerous drug, with a total weight of seventeen thousand, four hundred twenty-nine and six-tenths (17, 429.6) grams.

CONTRARY TO Section 11 (Possession of Dangerous Drugs), Article II, of Republic Act No. 9165 (otherwise known as the “Comprehensive Dangerous Drugs Act of 2002”).41

The case was raffled to Regional Trial Court, Branch 28 of San Fernando City, La Union.42 Cogaed and Dayao pleaded not guilty.43  The case was dismissed against Dayao because he was only 14 years old at that time and was exempt from criminal liability under the Juvenile Justice and Welfare Act of 2006 or Republic Act No. 9344.44  Trial against Cogaed ensued.  In a decision45 dated May 21, 2008, the Regional Trial Court found Cogaed guilty.  The dispositive portion of the decision states: chanRoblesvirtualLawlibrary

WHEREFORE, the Court finds accused Victor Cogaed y Romana GUILTY beyond reasonable doubt for Violation of Section 11, Article II of Republic Act No. 9165 (otherwise known as the “Comprehensive Dangerous Drugs Act of 2002”) and sentences him to suffer life imprisonment, and to pay a fine of one million pesos (Php 1,000,000.00).46

chanrobleslaw

The trial court judge initially found Cogaed’s arrest illegal considering that “Cogaed at that time was not, at the moment of his arrest, committing a crime nor was shown that he was about to do so or that had just done so.  He just alighted from the passenger jeepney and there was no outward indication that called for his arrest.”47  Since the arrest was illegal, the warrantless search should also be considered illegal.48  However, the trial court stated that notwithstanding the illegality of the arrest, Cogaed “waived his right to object to such irregularity” 49 when “he did not protest when SPO1 Taracatac, after identifying himself, asked him to open his bag.”50

cralawred

Cogaed appealed51 the trial court’s decision.  However, the Court of Appeals denied his appeal and affirmed the trial court’s decision.52  The Court of Appeals found that Cogaed waived his right against warrantless searches when “[w]ithout any prompting from SPO1 Taracatac, [he] voluntarily opened his bag.”53  Hence, this appeal was filed.

The following errors were assigned by Cogaed in his appellant’s brief: chanRoblesvirtualLawlibrary

I

THE TRIAL COURT GRAVELY ERRED IN ADMITTING THE SEIZED DANGEROUS DRUGS AS EVIDENCE AGAINST THE ACCUSED-APPELLANT DESPITE BEING THE RESULT OF AN UNLAWFUL WARRANTLESS SEARCH AND SEIZURE.

II

THE TRIAL COURT GRAVELY ERRED IN CONVICTING THE ACCUSED-APPELLANT DESPITE THE ARRESTING OFFICER’S NON-COMPLIANCE WITH THE REQUIREMENTS FOR THE PROPER CUSTODY OF SEIZED DANGEROUS DRUGS UNDER REPUBLIC ACT NO. 9165.

III

THE TRIAL COURT GRAVELY ERRED IN CONVICTING THE ACCUSED-APPELLANT DESPITE THE ARRESTING OFFICER’S FAILURE TO PRESERVE THE INTEGRITY AND EVIDENTIARY VALUE OF THE SEIZED DANGEROUS DRUGS.54

For our consideration are the following issues: (1) whether there was a valid search and seizure of marijuana as against the appellant; (2) whether the evidence obtained through the search should be admitted; and (3) whether there was enough evidence to sustain the conviction of the accused.

In view of the disposition of this case, we deem that a discussion with respect to the requirements on the chain of custody of dangerous drugs unnecessary.55

cralawred

We find for the accused.

II

The right to privacy is a fundamental right enshrined by implication in our Constitution.  It has many dimensions.  One of its dimensions is its protection through the prohibition of unreasonable searches and seizures in Article III, Section 2 of the Constitution: chanRoblesvirtualLawlibrary

The right of the people to be secure in their persons, houses, papers, and effects against unreasonable searches and seizures of whatever nature and for any purpose shall be inviolable, and no search warrant or warrant of arrest shall issue except upon probable cause to be determined personally by the judge after examination under oath or affirmation of the complainant and the witnesses he may produce, and particularly describing the place to be searched and the persons or things to be seized.

This provision requires that the court examine with care and diligence whether searches and seizures are “reasonable.”  As a general rule, searches conducted with a warrant that meets all the requirements of this provision are reasonable.  This warrant requires the existence of probable cause that can only be determined by a judge.56  The existence of probable cause must be established by the judge after asking searching questions and answers.57  Probable cause at this stage can only exist if there is an offense alleged to be committed.  Also, the warrant frames the searches done by the law enforcers.  There must be a particular description of the place and the things to be searched.58

cralawred

However, there are instances when searches are reasonable even when warrantless.59  In the Rules of Court, searches incidental to lawful arrests are allowed even without a separate warrant.60  This court has taken into account the “uniqueness of circumstances involved including the purpose of the search or seizure, the presence or absence of probable cause, the manner in which the search and seizure was made, the place or thing searched, and the character of the articles procured.”61  The known jurisprudential instances of reasonable warrantless searches and seizures are: chanRoblesvirtualLawlibrary

1. Warrantless search incidental to a lawful arrest . . . ;chanroblesvirtuallawlibrary

2. Seizure of evidence in “plain view,” . . . ; chanroblesvirtuallawlibrary

3. Search of a moving vehicle. Highly regulated by the government, the vehicle’s inherent mobility reduces expectation of privacy especially when its transit in public thoroughfares furnishes a highly reasonable suspicion amounting to probable cause that the occupant committed a criminal activity;chanroblesvirtuallawlibrary

4. Consented warrantless search;chanroblesvirtuallawlibrary

5. Customs search;chanroblesvirtuallawlibrary

6. Stop and frisk; andChanRoblesVirtualawlibrary

7. Exigent and emergency circumstances.62 (Citations omitted)

III

One of these jurisprudential exceptions to search warrants is “stop and frisk”.  “Stop and frisk” searches are often confused with searches incidental to lawful arrests under the Rules of Court.63  Searches incidental to a lawful arrest require that a crime be committed  in flagrante delicto, and the search conducted within the vicinity and within reach by the person arrested is done to ensure that there are no weapons, as well as to preserve the evidence.64

cralawred

On the other hand, “stop and frisk” searches are conducted to prevent the occurrence of a crime.  For instance, the search in Posadas v. Court of Appeals65 was similar “to a ‘stop and frisk’ situation whose object is either to determine the identity of a suspicious individual or to maintain the status quo momentarily while the police officer seeks to obtain more information.”66  This court stated that the “stop and frisk” search should be used “[w]hen dealing with a rapidly unfolding and potentially criminal situation in the city streets where unarguably there is no time to secure . . . a search warrant.”67

cralawred

The search involved in this case was initially a “stop and frisk” search, but it did not comply with all the requirements of reasonability required by the Constitution.

“Stop and frisk” searches (sometimes referred to as Terry searches68) are necessary for law enforcement.  That is, law enforcers should be given the legal arsenal to prevent the commission of offenses.  However, this should be balanced with the need to protect the privacy of citizens in accordance with Article III, Section 2 of the Constitution.

The balance lies in the concept of “suspiciousness” present in the situation where the police officer finds himself or herself in.  This may be undoubtedly based on the experience of the police officer.  Experienced police officers have personal experience dealing with criminals and criminal behavior.  Hence, they should have the ability to discern — based on facts that they themselves observe — whether an individual is acting in a suspicious manner.  Clearly, a basic criterion would be that the police officer, with his or her personal knowledge, must observe the facts leading to the suspicion of an illicit act.

In Manalili v. Court of Appeals,69 the police officers were initially informed about a place frequented by people abusing drugs.70  When they arrived, one of the police officers saw a man with “reddish eyes and [who was] walking in a swaying manner.”71  The suspicion increased when the man avoided the police officers.72  These observations led the police officers to conclude that the man was high on drugs.73  These were sufficient facts observed by the police officers “to stop [the] petitioner [and] investigate.”74

cralawred

In People v. Solayao,75 police officers noticed a man who appeared drunk.76  This man was also “wearing a camouflage uniform or a jungle suit.”77  Upon seeing the police, the man fled.78  His flight added to the suspicion.79  After stopping him, the police officers found an unlicensed “homemade firearm”80 in his possession.81  This court ruled that “[u]nder the circumstances, the government agents could not possibly have procured a search warrant first.”82  This was also a valid search.

In these cases, the police officers using their senses observed facts that led to the suspicion.  Seeing a man with reddish eyes and walking in a swaying manner, based on their experience, is indicative of a person who uses dangerous and illicit drugs.  A drunk civilian in guerrilla wear is probably hiding something as well.

The case of Cogaed was different.  He was simply a passenger carrying a bag and traveling aboard a jeepney.  There was nothing suspicious, moreover, criminal, about riding a jeepney or carrying a bag.  The assessment of suspicion was not made by the police officer but by the jeepney driver.  It was the driver who signalled to the police that Cogaed was “suspicious.”

This is supported by the testimony of SPO1 Taracatac himself: chanRoblesvirtualLawlibrary

COURT:Q So you don’t know what was the content while it was still being

carried by him in the passenger jeep?WITNESS:A Not yet, Your Honor.83

SPO1 Taracatac likewise stated:chanRoblesvirtualLawlibrary

COURT:Q If the driver did not make a gesture pointing to the accused, did you

have reason to believe that the accused were carrying marijuana?WITNESS:A No, Your Honor.84

The jeepney driver had to point to Cogaed.  He would not have been identified by the police officers otherwise.

It is the police officer who should observe facts that would lead to a reasonable degree of suspicion of a person.  The police officer should not adopt the suspicion initiated by another person.  This is necessary to justify that the person suspected be stopped and reasonably searched.85  Anything less than this would be an infringement upon one’s basic right to security of one’s person and effects.

IV

Normally, “stop and frisk” searches do not give the law enforcer an opportunity to confer with a judge to determine probable cause.  In Posadas v. Court of Appeals,86 one of the earliest cases adopting the “stop and frisk” doctrine in Philippine jurisprudence, this court approximated the suspicious circumstances as probable cause:chanRoblesvirtualLawlibrary

The probable cause is that when the petitioner acted suspiciously and attempted to flee with the buri bag there was a probable cause that he was concealing something illegal in the bag and it was the right and duty of the police officers to inspect the same.87(Emphasis supplied)chanrobleslaw

For warrantless searches, probable cause was defined as “a reasonable ground of suspicionsupported by circumstances sufficiently strong in themselves to warrant a cautious man to believe that the person accused is guilty of the offense with which he is charged.”88

cralawred

Malacat v. Court of Appeals89 clarifies the requirement further.  It does not have to be probable cause, but it cannot be mere suspicion.90 It has to be a “genuine reason”91to serve the purposes of the “stop and frisk” exception:92

cralawred

Other notable points of Terry are that while probable cause is not required to conduct a “stop and frisk,” it nevertheless holds that mere suspicion or a hunch will not validate a “stop and frisk.” A genuine reason must exist, in light of the police officer’s experience and surrounding conditions, to warrant the belief that the person detained has weapons concealed about him.93 (Emphasis supplied, footnotes omitted)

In his dissent for Esquillo v. People,94 Justice Bersamin reminds us that police officers must not rely on a single suspicious circumstance.95  There should be “presence of more than one seemingly innocent activity, which, taken together, warranted a reasonable inference of criminal activity.”96  The Constitution prohibits “unreasonable searches and seizures.”97  Certainly, reliance on only one suspicious circumstance or none at all will not result in a reasonable search.98

cralawred

There was not a single suspicious circumstance in this case, and there was no approximation for the probable cause requirement for warrantless arrest.  The person searched was not even the person mentioned by the informant.  The informant gave the name of Marvin Buya, and the person searched was Victor Cogaed.  Even if it was true that Cogaed responded by saying that he was transporting the bag to

Marvin Buya, this still remained only as one circumstance.  This should not have been enough reason to search Cogaed and his belongings without a valid search warrant.

V

Police officers cannot justify unbridled searches and be shielded by this exception, unless there is compliance with the “genuine reason” requirement and that the search serves the purpose of protecting the public. As stated in Malacat:chanRoblesvirtualLawlibrary

[A] “stop-and-frisk” serves a two-fold interest: (1) the general interest of effective crime prevention and detection, which underlies the recognition that a police officer may, under appropriate circumstances and in an appropriate manner, approach a person for purposes of investigating possible criminal behavior even without probable cause; and (2) the more pressing interest of safety and self-preservation which permit the police officer to take steps to assure himself that the person with whom he deals is not armed with a deadly weapon that could unexpectedly and fatally be used against the police officer.99 (Emphasis supplied)

The “stop and frisk” search was originally limited to outer clothing and for the purpose of detectingdangerous weapons.100  As in Manalili,101 jurisprudence also allows “stop and frisk” for cases involving dangerous drugs.

The circumstances of this case are analogous to People v. Aruta.102  In that case, an informant told the police that a certain “Aling Rosa” would be bringing in drugs from Baguio City by bus.103  At the bus terminal, the police officers prepared themselves.104  The informant pointed at a woman crossing the street105 and identified her as “Aling Rosa.”106  The police apprehended “Aling Rosa,” and they alleged that she allowed them to look inside her bag.107  The bag contained marijuana leaves.108

cralawred

In Aruta, this court found that the search and seizure conducted was illegal.109  There were no suspicious circumstances that preceded Aruta’s arrest and the subsequent search and seizure.110  It was only the informant that prompted the police to apprehend her.111  The evidence obtained was not admissible because of the illegal search.112  Consequently, Aruta was acquitted.113

cralawred

Aruta is almost identical to this case, except that it was the jeepney driver, not the police’s informant, who informed the police that Cogaed was “suspicious.”

The facts in Aruta are also similar to the facts in People v. Aminnudin.114  Here, the National Bureau of Investigation (NBI) acted upon a tip, naming Aminnudin as somebody possessing drugs.115  The NBI waited for the vessel to arrive and accosted Aminnudin while he was disembarking from a boat.116  Like in the case at bar, the NBI inspected Aminnudin’s bag and found bundles of what turned out to be marijuana leaves.117  The court declared that the search and seizure was illegal.118  Aminnudin was acquitted.119

cralawred

People v. Chua120 also presents almost the same circumstances.  In this case, the police had been receiving information that the accused was distributing drugs in “different karaoke bars in Angeles City.”121  One night, the police received information that this drug dealer would be dealing drugs at the Thunder Inn Hotel so they conducted a stakeout.122  A car “arrived and parked”123 at the hotel.124  The informant told the police that the man parked at the hotel was dealing drugs.125  The man alighted from his car.126  He was carrying a juice box.127  The police immediately apprehended him and discovered live ammunition and drugs in his person and in the juice box he was holding.128

cralawred

Like in Aruta, this court did not find anything unusual or suspicious about Chua’s situation when the police apprehended him and ruled that “[t]here was no valid ‘stop-and-frisk’.”129

cralawred

VI

None of the other exceptions to warrantless searches exist to allow the evidence to be admissible.  The facts of this case do not qualify as a search incidental to a lawful arrest.

Rule 126, Section 13 of the Rules of Court allows for searches incidental to a lawful arrest.  For there to be a lawful arrest, there should be either a warrant of arrest or a lawful warrantless arrest as enumerated in Rule 113, Section 5 of the Rules of Court:chanRoblesvirtualLawlibrary

Section 5. Arrest without warrant; when lawful. – A peace officer or a private person may, without a warrant, arrest a person:

(a) When, in his presence, the person to be arrested has committed, is

actually committing, or is attempting to commit an offense;(b) When an offense has just been committed and he has probable cause to

believe based on personal knowledge of facts or circumstances that the person to be arrested has committed it; and

(c) When the person to be arrested is a prisoner who has escaped from a penal establishment or place where he is serving final judgment or temporarily confined while his case is pending, or has escaped while being transferred from one confinement to another.

The apprehension of Cogaed was not effected with a warrant of arrest.  None of the instances enumerated in Rule 113, Section 5 of the Rules of Court were present when the arrest was made.

At the time of his apprehension, Cogaed has not committed, was not committing, or was about to commit a crime.  As in People v. Chua, for a warrantless arrest of in flagrante delicto to be affected, “two elements 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.”130  Both elements were missing when Cogaed was arrested.131  There were no overt acts within plain view of the police officers that suggested that Cogaed was in possession of drugs at that time.

Also, Cogaed was not an escapee prisoner that time; hence, he could not have qualified for the last allowable warrantless arrest.

VII

There can be no valid waiver of Cogaed’s constitutional rights even if we assume that he did not object when the police asked him to open his bags.  As this court previously stated: chanRoblesvirtualLawlibrary

Appellant’s silence should not be lightly taken as consent to such search. The implied acquiescence to the search, if there was any, could not have been more than mere passive conformity given under intimidating or coercive circumstances and is thus considered no consent at all within the purview of the constitutional guarantee.132(Citations omitted)chanrobleslaw

Cogaed’s silence or lack of aggressive objection was a natural reaction to a coercive environment brought about by the police officer’s excessive intrusion into his private space.  The prosecution and the police carry the burden of showing that the waiver of a constitutional right is one which is knowing, intelligent, and free from any coercion.  In all cases, such waivers are not to be presumed.

The coercive atmosphere created by the presence of the police officer can be discerned again from the testimony of SPO1 Taracatac during cross-examination: chanRoblesvirtualLawlibrary

ATTY. BINWAG:Q Now, Mr. witness, you claimed that you only asked them what are the

contents of their bags, is it not?WITNESS:A Yes, ma’am.Q And then without hesitation and voluntarily they just opened their

bags, is it not?A Yes, ma’am.Q So that there was not any order from you for them to open the bags?A None, ma’am.Q Now, Mr. witness when you went near them and asked them what

were the contents of the bag, you have not seen any signs of hesitation or fright from them, is it not?

A It seems they were frightened, ma’am.

Q But you actually [claimed] that there was not any hesitation from them in opening the bags, is it not?

A Yes, ma’am but when I went near them it seems that they were surprised.133(Emphasis supplied)

The state of mind of Cogaed was further clarified with SPO1 Taracatac’s responses to Judge Florendo’s questions:chanRoblesvirtualLawlibrary

COURT:. . . .Q Did you have eye contact with Cogaed?A When I [sic] was alighting from the jeepney, Your Honor I observed

that he was somewhat frightened. He was a little apprehensive and when he was already stepping down and he put down the bag I asked him, “what’s that,” and he answered, “I don’t know because Marvin only asked me to carry.”134

For a valid waiver by the accused of his or her constitutional right, it is not sufficient that the police officer introduce himself or herself, or be known as a police officer.  The police officer must also inform the person to be searched that any inaction on his or her part will amount to a waiver of any of his or her objections that the circumstances do not amount to a reasonable search.  The police officer must communicate this clearly and in a language known to the person who is about to waive his or her constitutional rights.  There must be an assurance given to the police officer that the accused fully understands his or her rights.  The fundamental nature of a person’s constitutional right to privacy requires no less.

VIII

The Constitution provides:chanRoblesvirtualLawlibrary

Any evidence obtained in violation of [the right against unreasonable searches and seizures] shall be inadmissible for any purpose in any proceeding.135

Otherwise known as the exclusionary rule or the fruit of the poisonous tree doctrine, this constitutional provision originated from Stonehill v. Diokno.136  This rule prohibits the issuance of general warrants that encourage law enforcers to go on fishing expeditions.  Evidence obtained through unlawful seizures should be excluded as evidence because it is “the only practical means of enforcing the constitutional injunction against unreasonable searches and seizures.”137  It ensures that the fundamental rights to one’s person, houses, papers, and effects are not lightly infringed upon and are upheld.

Considering that the prosecution and conviction of Cogaed were founded on the search of his bags, a pronouncement of the illegality of that search means that there is no evidence left to convict Cogaed.

Drugs and its illegal traffic are a scourge to our society.  In the fight to eradicate this menace, law enforcers should be equipped with the resources to be able to perform their duties better.  However, we cannot, in any way, compromise our society’s fundamental values enshrined in our Constitution.  Otherwise, we will be seen as slowly dismantling the very foundations of the society that we seek to protect.

WHEREFORE, the decisions of the Regional Trial Court, Branch 28, San Fernando City, La Union and of the Court of Appeals in CA-G.R. CR-HC No. 03394 are hereby REVERSED and SET ASIDE.  For lack of evidence to establish his guilt beyond reasonable doubt, accused-appellant VICTOR COGAED Y ROMANA is hereby ACQUITTED and ordered RELEASED from confinement unless he is being held for some other legal grounds.  No costs.

SO ORDERED.

Velasco, Jr., (Chairperson), Peralta, Villarama, Jr.,* and Mendoza, JJ., concur.

O R D E R  O F  R E L E A S E

TO: The Director        Bureau of Corrections        1770 Muntinlupa City

G R E E T I N G S:

WHEREAS, the Supreme Court on July 30, 2014 promulgated a Decision in the above-entitled case, the dispositive portion of which reads: chanRoblesvirtualLawlibrary

"WHEREFORE, the decisions of the Regional Trial Court, Branch 28, San Fernando City, La Union and of the Court of Appeals in CA-G.R. CR-HC No. 03394 are hereby REVERSED and SET ASIDE.  For lack of evidence to establish his guilt beyond reasonable doubt, accused-appellant VICTOR COGAED Y ROMANA is hereby ACQUITTED and ordered RELEASED from confinement unless he is held for some other legal ground.  No costs.

SO ORDERED."chanrobleslaw

NOW THEREFORE, You are hereby ordered to immediately release VICTOR COAGAED Y ROMANAunless there are other causes for which he should be further detained, and to return this Order with the certificate of your proceedings within five (5) days from notice hereof.

GIVEN by the Honorable PRESBITERO J. VELASCO, JR., Chairperson of the Third Division of the Supreme Court of the Philippines this 30 th  day of July 2014.

Very truly yours,(SGD)

WILFREDO V. LAPITANDivision Clerk of Court

Republic of the PhilippinesSUPREME COURT

Manila

EN BANC

G.R. No. 175723               February 4, 2014

THE CITY OF MANILA, represented by MAYOR JOSE L. ATIENZA, JR., and MS. LIBERTY M. TOLEDO, in her capacity as the City Treasurer of Manila, Petitioners, vs.HON. CARIDAD H. GRECIA-CUERDO, in her capacity as Presiding Judge of the Regional Trial Court, Branch 112, Pasay City; SM MART, INC.; SM PRIME HOLDINGS, INC.; STAR APPLIANCES CENTER; SUPERVALUE, INC.; ACE HARDWARE PHILIPPINES, INC.; WATSON PERSONAL CARE STORES, PHILS., INC.; JOLLIMART PHILS., CORP.; SURPLUS MARKETING CORPORATION and SIGNATURE LINES,Respondents.

D E C I S I O N

PERALTA, J.:

Before the Court is a special civil action for certiorari under Rule 65 of the Rules of Court seeking to reverse and set aside the Resolutions1 dated April 6, 2006 and November 29, 2006 of the Court of Appeals (CA) in CA-G.R. SP No. 87948.

The antecedents of the case, as summarized by the CA, are as follows:

The record shows that petitioner City of Manila, through its treasurer, petitioner Liberty Toledo, assessed taxes for the taxable period from January to December 2002 against private respondents SM Mart, Inc., SM Prime Holdings, Inc., Star Appliances Center, Supervalue, Inc., Ace Hardware Philippines, Inc., Watsons Personal Care Stores Phils., Inc., Jollimart Philippines Corp., Surplus Marketing Corp. and Signature Lines. In addition to the taxes purportedly due from private respondents pursuant to Section 14, 15, 16, 17 of the Revised Revenue Code of Manila (RRCM), said assessment covered the local business taxes petitioners were authorized to collect under Section 21 of the same Code. Because payment of the taxes assessed was a precondition for the issuance of their business permits, private respondents were constrained to pay the P19,316,458.77 assessment under protest.

On January 24, 2004, private respondents filed [with the Regional Trial Court of Pasay City] the complaint denominated as one for "Refund or Recovery of Illegally and/or Erroneously-Collected Local Business Tax, Prohibition with Prayer to Issue TRO and Writ of Preliminary Injunction"

which was docketed as Civil Case No. 04-0019-CFM before public respondent's sala [at Branch 112]. In the amended complaint they filed on February 16, 2004, private respondents alleged that, in relation to Section 21 thereof, Sections 14, 15, 16, 17, 18, 19 and 20 of the RRCM were violative of the limitations and guidelines under Section 143 (h) of Republic Act. No. 7160 [Local Government Code] on double taxation. They further averred that petitioner city's Ordinance No. 8011 which amended pertinent portions of the RRCM had already been declared to be illegal and unconstitutional by the Department of Justice.2

In its Order3 dated July 9, 2004, the RTC granted private respondents' application for a writ of preliminary injunction.

Petitioners filed a Motion for Reconsideration4 but the RTC denied it in its Order5 dated October 15, 2004.

Petitioners then filed a special civil action for certiorari with the CA assailing the July 9, 2004 and October 15, 2004 Orders of the RTC.6

In its Resolution promulgated on April 6, 2006, the CA dismissed petitioners' petition for certiorari holding that it has no jurisdiction over the said petition. The CA ruled that since appellate jurisdiction over private respondents' complaint for tax refund, which was filed with the RTC, is vested in the Court of Tax Appeals (CTA), pursuant to its expanded jurisdiction under Republic Act No. 9282 (RA 9282), it follows that a petition for certiorari seeking nullification of an interlocutory order issued in the said case should, likewise, be filed with the CTA.

Petitioners filed a Motion for Reconsideration,7 but the CA denied it in its Resolution dated November 29, 2006.

Hence, the present petition raising the following issues:

I- Whether or not the Honorable Court of Appeals gravely erred in dismissing the case for lack of jurisdiction.

II- Whether or not the Honorable Regional Trial Court gravely abuse[d] its discretion amounting to lack or excess of jurisdiction in enjoining by issuing a Writ of Injunction the petitioners, their agents and/or authorized representatives from implementing Section 21 of the Revised Revenue Code of Manila, as amended, against private respondents.

III- Whether or not the Honorable Regional Trial Court gravely abuse[d] its discretion amounting to lack or excess of jurisdiction in issuing the Writ of Injunction despite failure of private respondents to make a written claim for tax credit or refund with the City Treasurer of Manila.

IV- Whether or not the Honorable Regional Trial Court gravely abuse[d] its discretion amounting to lack or excess of jurisdiction considering that under Section 21 of the Manila Revenue Code, as amended, they are mere collecting agents of the City Government.

V- Whether or not the Honorable Regional Trial Court gravely abuse[d] its discretion amounting to lack or excess of jurisdiction in issuing the Writ of Injunction because petitioner City of Manila and its constituents would result to greater damage and prejudice thereof. (sic)8

Without first resolving the above issues, this Court finds that the instant petition should be denied for being moot and academic.

Upon perusal of the original records of the instant case, this Court discovered that a Decision9 in the main case had already been rendered by the RTC on August 13, 2007, the dispositive portion of which reads as follows:

WHEREFORE, in view of the foregoing, this Court hereby renders JUDGMENT in favor of the plaintiff and against the defendant to grant a tax refund or credit for taxes paid pursuant to Section 21 of the Revenue Code of the City of Manila as amended for the year 2002 in the following amounts:

To plaintiff SM Mart, Inc. - P 11,462,525.02

To plaintiff SM Prime Holdings, Inc. - 3,118,104.63

To plaintiff Star Appliances Center - 2,152,316.54

To plaintiff Supervalue, Inc. - 1,362,750.34

To plaintiff Ace Hardware Phils., Inc. - 419,689.04

To plaintiff Watsons Personal Care Health - 231,453.62

Stores Phils., Inc.

To plaintiff Jollimart Phils., Corp. - 140,908.54

To plaintiff Surplus Marketing Corp. - 220,204.70

To plaintiff Signature Mktg. Corp. - 94,906.34

TOTAL: - P 19,316,458.77

Defendants are further enjoined from collecting taxes under Section 21, Revenue Code of Manila from herein plaintiff.

SO ORDERED.10

The parties did not inform the Court but based on the records, the above Decision had already become final and executory per the Certificate of Finality11 issued by the same trial court on October 20, 2008. In fact, a Writ of Execution12 was issued by the RTC on November 25, 2009. In view of the foregoing, it clearly appears that the issues raised in the present petition, which merely involve the incident on the preliminary injunction issued by the RTC, have already become moot and academic considering that the trial court, in its decision on the merits in the main case, has already ruled in favor of respondents and that the same decision is now final and executory. Well entrenched is the rule that where the issues have become moot and academic, there is no justiciable controversy, thereby rendering the resolution of the same of no practical use or value.13

In any case, the Court finds it necessary to resolve the issue on jurisdiction raised by petitioners owing to its significance and for future guidance of both bench and bar. It is a settled principle that courts will decide a question otherwise moot and academic if it is capable of repetition, yet evading review.14

However, before proceeding, to resolve the question on jurisdiction, the Court deems it proper to likewise address a procedural error which petitioners committed.

Petitioners availed of the wrong remedy when they filed the instant special civil action for certiorari under Rule 65 of the Rules of Court in assailing the Resolutions of the CA which dismissed their petition filed with the said court and their motion for reconsideration of such dismissal. There is no dispute that the assailed Resolutions of the CA are in the nature of a final order as they disposed of the petition completely. It is settled that in cases where an assailed judgment or order is considered final, the remedy of the aggrieved party is appeal. Hence, in the instant case, petitioner should have filed a petition for review on certiorari under Rule 45, which is a continuation of the appellate process over the original case.15

Petitioners should be reminded of the equally-settled rule that a special civil action for certiorari under Rule 65 is an original or independent action based on grave abuse of discretion amounting to lack or excess of jurisdiction and it will lie only if there is no appeal or any other plain, speedy, and adequate remedy in the ordinary course of law.16 As such, it cannot be a substitute for a lost appeal.17

Nonetheless, in accordance with the liberal spirit pervading the Rules of Court and in the interest of substantial justice, this Court has, before, treated a petition for certiorari as a petition for review on certiorari, particularly (1) if the petition for certiorari was filed within the reglementary period within which to file a petition for review on certiorari; (2) when errors of judgment are averred; and (3) when there is sufficient reason to justify the relaxation of the rules.18 Considering that the present petition was filed within the 15-day reglementary period for filing a petition for review on certiorari under Rule 45, that an error of judgment is averred, and because of the significance of the issue on jurisdiction, the Court deems it proper and justified to relax the rules and, thus, treat the instant petition for certiorari as a petition for review on certiorari.

Having disposed of the procedural aspect, we now turn to the central issue in this case. The basic question posed before this Court is whether or not the CTA has jurisdiction over a special civil action for certiorari assailing an interlocutory order issued by the RTC in a local tax case.

This Court rules in the affirmative.

On June 16, 1954, Congress enacted Republic Act No. 1125 (RA 1125) creating the CTA and giving to the said court jurisdiction over the following:

(1) Decisions of the Collector of Internal Revenue in cases involving disputed assessments, refunds of internal revenue taxes, fees or other charges, penalties imposed in relation thereto, or other matters arising under the National Internal Revenue Code or other law or part of law administered by the Bureau of Internal Revenue;

(2) Decisions of the Commissioner of Customs in cases involving liability for customs duties, fees or other money charges; seizure, detention or release of property affected fines, forfeitures or other penalties imposed in relation thereto; or other matters arising under the Customs Law or other law or part of law administered by the Bureau of Customs; and

(3) Decisions of provincial or City Boards of Assessment Appeals in cases involving the assessment and taxation of real property or other matters arising under the Assessment Law, including rules and regulations relative thereto.

On March 30, 2004, the Legislature passed into law Republic Act No. 9282 (RA 9282) amending RA 1125 by expanding the jurisdiction of the CTA, enlarging its membership and elevating its rank to the level of a collegiate court with special jurisdiction. Pertinent portions of the amendatory act provides thus:

Sec. 7. Jurisdiction. - The CTA shall exercise:

a. Exclusive appellate jurisdiction to review by appeal, as herein provided:

1. Decisions of the Commissioner of Internal Revenue in cases involving disputed assessments, refunds of internal revenue taxes, fees or other charges, penalties in relation thereto, or other matters arising under the National Internal Revenue or other laws administered by the Bureau of Internal Revenue;

2. Inaction by the Commissioner of Internal Revenue in cases involving disputed assessments, refunds of internal revenue taxes, fees or other charges, penalties in relations thereto, or other matters arising under the National Internal Revenue Code or other laws administered by the Bureau of Internal Revenue, where the National Internal Revenue Code provides a specific period of action, in which case the inaction shall be deemed a denial;

3. Decisions, orders or resolutions of the Regional Trial Courts in local tax cases originally decided or resolved by them in the exercise of their original or appellate jurisdiction;

4. Decisions of the Commissioner of Customs in cases involving liability for customs duties, fees or other money charges, seizure, detention or release of property affected, fines, forfeitures or other penalties in relation thereto, or other matters

arising under the Customs Law or other laws administered by the Bureau of Customs;

5. Decisions of the Central Board of Assessment Appeals in the exercise of its appellate jurisdiction over cases involving the assessment and taxation of real property originally decided by the provincial or city board of assessment appeals;

6. Decisions of the Secretary of Finance on customs cases elevated to him automatically for review from decisions of the Commissioner of Customs which are adverse to the Government under Section 2315 of the Tariff and Customs Code;

7. Decisions of the Secretary of Trade and Industry, in the case of nonagricultural product, commodity or article, and the Secretary of Agriculture in the case of agricultural product, commodity or article, involving dumping and countervailing duties under Section 301 and 302, respectively, of the Tariff and Customs Code, and safeguard measures under Republic Act No. 8800, where either party may appeal the decision to impose or not to impose said duties.

b. Jurisdiction over cases involving criminal offenses as herein provided:

1. Exclusive original jurisdiction over all criminal offenses arising from violations of the National Internal Revenue Code or Tariff and Customs Code and other laws administered by the Bureau of Internal Revenue or the Bureau of Customs: Provided, however, That offenses or felonies mentioned in this paragraph where the principal amount of taxes and fees, exclusive of charges and penalties, claimed is less than One million pesos (P1,000,000.00) or where there is no specified amount claimed shall be tried by the regular Courts and the jurisdiction of the CTA shall be appellate. Any provision of law or the Rules of Court to the contrary notwithstanding, the criminal action and the corresponding civil action for the recovery of civil liability for taxes and penalties shall at all times be simultaneously instituted with, and jointly determined in the same proceeding by the CTA, the filing of the criminal action being deemed to necessarily carry with it the filing of the civil action, and no right to reserve the filing of such civil action separately from the criminal action will be recognized.

2. Exclusive appellate jurisdiction in criminal offenses:

a. Over appeals from the judgments, resolutions or orders of the Regional Trial Courts in tax cases originally decided by them, in their respected territorial jurisdiction.

b. Over petitions for review of the judgments, resolutions or orders of the Regional Trial Courts in the exercise of their appellate jurisdiction over tax cases originally decided by the Metropolitan Trial Courts, Municipal Trial Courts and Municipal Circuit Trial Courts in their respective jurisdiction.

c. Jurisdiction over tax collection cases as herein provided:

1. Exclusive original jurisdiction in tax collection cases involving final and executory assessments for taxes, fees, charges and penalties: Provides, however, that collection cases where the principal amount of taxes and fees, exclusive of charges and penalties, claimed is less than One million pesos (P1,000,000.00) shall be tried by the proper Municipal Trial Court, Metropolitan Trial Court and Regional Trial Court.

2. Exclusive appellate jurisdiction in tax collection cases:

a. Over appeals from the judgments, resolutions or orders of the Regional Trial Courts in tax collection cases originally decided by them, in their respective territorial jurisdiction.

b. Over petitions for review of the judgments, resolutions or orders of the Regional Trial Courts in the Exercise of their appellate jurisdiction over tax collection cases originally decided by the Metropolitan Trial Courts, Municipal Trial Courts and Municipal Circuit Trial Courts, in their respective jurisdiction.19

A perusal of the above provisions would show that, while it is clearly stated that the CTA has exclusive appellate jurisdiction over decisions, orders or resolutions of the RTCs in local tax cases originally decided or resolved by them in the exercise of their original or appellate jurisdiction, there is no categorical statement under RA 1125 as well as the amendatory RA 9282, which provides that th e CTA has jurisdiction over petitions for certiorari assailing interlocutory orders issued by the RTC in local tax cases filed before it.

The prevailing doctrine is that the authority to issue writs of certiorari involves the exercise of original jurisdiction which must be expressly conferred by the Constitution or by law and cannot be implied from the mere existence of appellate jurisdiction.20 Thus, in the cases of Pimentel v. COMELEC,21 Garcia v. De Jesus,22 Veloria v. COMELEC,23 Department of Agrarian Reform Adjudication Board v. Lubrica,24 and Garcia v. Sandiganbayan,25this Court has ruled against the jurisdiction of courts or tribunals over petitions for certiorari on the ground that there is no law which expressly gives these tribunals such power.26 It must be observed, however, that with the exception of Garcia v. Sandiganbayan,27 these rulings pertain not to regular courts but to tribunals exercising quasi-judicial powers. With respect to the Sandiganbayan, Republic Act No. 824928 now provides that the special criminal court has exclusive original jurisdiction over petitions for the issuance of the writs of mandamus, prohibition, certiorari, habeas corpus, injunctions, and other ancillary writs and processes in aid of its appellate jurisdiction.

In the same manner, Section 5 (1), Article VIII of the 1987 Constitution grants power to the Supreme Court, in the exercise of its original jurisdiction, to issue writs of certiorari, prohibition and mandamus. With respect to the Court of Appeals, Section 9 (1) of Batas Pambansa Blg. 129 (BP 129) gives the appellate court, also in the exercise of its original jurisdiction, the power to issue, among others, a writ of certiorari,whether or not in aid of its appellate jurisdiction. As to Regional Trial Courts, the power to issue a writ of certiorari, in the exercise of their original jurisdiction, is provided under Section 21 of BP 129.

The foregoing notwithstanding, while there is no express grant of such power, with respect to the CTA, Section 1, Article VIII of the 1987 Constitution provides, nonetheless, that judicial power shall be vested in one Supreme Court and in such lower courts as may be established by law and that judicial power includes the duty of the courts of justice to settle actual controversies involving rights which are legally demandable and enforceable, and to determine whether or not there has been a grave abuse of discretion amounting to lack or excess of jurisdiction on the part of any branch or instrumentality of the Government.

On the strength of the above constitutional provisions, it can be fairly interpreted that the power of the CTA includes that of determining whether or not there has been grave abuse of discretion amounting to lack or excess of jurisdiction on the part of the RTC in issuing an interlocutory order in cases falling within the exclusive appellate jurisdiction of the tax court. It, thus, follows that the CTA, by constitutional mandate, is vested with jurisdiction to issue writs of certiorari in these cases.

Indeed, in order for any appellate court to effectively exercise its appellate jurisdiction, it must have the authority to issue, among others, a writ of certiorari. In transferring exclusive jurisdiction over appealed tax cases to the CTA, it can reasonably be assumed that the law intended to transfer also such power as is deemed necessary, if not indispensable, in aid of such appellate jurisdiction. There is no perceivable reason why the transfer should only be considered as partial, not total.

Consistent with the above pronouncement, this Court has held as early as the case of J.M. Tuason & Co., Inc. v. Jaramillo, et al.29 that "if a case may be appealed to a particular court or judicial tribunal or body, then said court or judicial tribunal or body has jurisdiction to issue the extraordinary writ of certiorari, in aid of its appellate jurisdiction."30 This principle was affirmed in De Jesus v. Court of Appeals,31 where the Court stated that "a court may issue a writ of certiorari in aid of its appellate jurisdiction if said court has jurisdiction to review, by appeal or writ of error, the final orders or decisions of the lower court."32 The rulings in J.M. Tuason and De Jesus were reiterated in the more recent cases of Galang, Jr. v. Geronimo33 and Bulilis v. Nuez.34

Furthermore, Section 6, Rule 135 of the present Rules of Court provides that when by law, jurisdiction is conferred on a court or judicial officer, all auxiliary writs, processes and other means necessary to carry it into effect may be employed by such court or officer.

If this Court were to sustain petitioners' contention that jurisdiction over their certiorari petition lies with the CA, this Court would be confirming the exercise by two judicial bodies, the CA and the CTA, of jurisdiction over basically the same subject matter – precisely the split-jurisdiction situation which is anathema to the orderly administration of justice.35 The Court cannot accept that such was the legislative motive, especially considering that the law expressly confers on the CTA, the tribunal with the specialized competence over tax and tariff matters, the role of judicial review over local tax cases without mention of any other court that may exercise such power. Thus, the Court agrees with the ruling of the CA that since appellate jurisdiction over private respondents' complaint for tax refund is vested in the CTA, it follows that a petition for certiorari seeking nullification of an interlocutory order issued in the said case should, likewise, be filed with the same court. To rule otherwise would lead to an absurd situation where one court decides an appeal in the main case while another court rules on an incident in the very same case.

Stated differently, it would be somewhat incongruent with the pronounced judicial abhorrence to split jurisdiction to conclude that the intention of the law is to divide the authority over a local tax case filed with the RTC by giving to the CA or this Court jurisdiction to issue a writ of certiorari against interlocutory orders of the RTC but giving to the CTA the jurisdiction over the appeal from the decision of the trial court in the same case. It is more in consonance with logic and legal soundness to conclude that the grant of appellate jurisdiction to the CTA over tax cases filed in and decided by the RTC carries with it the power to issue a writ of certiorari when necessary in aid of such appellate jurisdiction. The supervisory power or jurisdiction of the CTA to issue a writ of certiorari in aid of its appellate jurisdiction should co-exist with, and be a complement to, its appellate jurisdiction to review, by appeal, the final orders and decisions of the RTC, in order to have complete supervision over the acts of the latter.36

A grant of appellate jurisdiction implies that there is included in it the power necessary to exercise it effectively, to make all orders that will preserve the subject of the action, and to give effect to the final determination of the appeal. It carries with it the power to protect that jurisdiction and to make the decisions of the court thereunder effective. The court, in aid of its appellate jurisdiction, has authority to control all auxiliary and incidental matters necessary to the efficient and proper exercise of that jurisdiction.1âwphi1 For this purpose, it may, when necessary, prohibit or restrain the performance of any act which might interfere with the proper exercise of its rightful jurisdiction in cases pending before it.37

Lastly, it would not be amiss to point out that a court which is endowed with a particular jurisdiction should have powers which are necessary to enable it to act effectively within such jurisdiction. These should be regarded as powers which are inherent in its jurisdiction and the court must possess them in order to enforce its rules of practice and to suppress any abuses of its process and to defeat any attempted thwarting of such process.

In this regard, Section 1 of RA 9282 states that the CTA shall be of the same level as the CA and shall possess all the inherent powers of a court of justice.

Indeed, courts possess certain inherent powers which may be said to be implied from a general grant of jurisdiction, in addition to those expressly conferred on them. These inherent powers are such powers as are necessary for the ordinary and efficient exercise of jurisdiction; or are essential to the existence, dignity and functions of the courts, as well as to the due administration of justice; or are directly appropriate, convenient and suitable to the execution of their granted powers; and include the power to maintain the court's jurisdiction and render it effective in behalf of the litigants.38

Thus, this Court has held that "while a court may be expressly granted the incidental powers necessary to effectuate its jurisdiction, a grant of jurisdiction, in the absence of prohibitive legislation, implies the necessary and usual incidental powers essential to effectuate it, and, subject to existing laws and constitutional provisions, every regularly constituted court has power to do all things that are reasonably necessary for the administration of justice within the scope of its jurisdiction and for the enforcement of its judgments and mandates."39 Hence, demands, matters or questions ancillary or incidental to, or growing out of, the main action, and coming within the above principles, may be taken cognizance of by the court and determined, since such jurisdiction is in aid of its authority over the principal matter, even though the court may thus be called on to consider and decide matters which, as original causes of action, would not be within its cognizance.40

Based on the foregoing disquisitions, it can be reasonably concluded that the authority of the CTA to take cognizance of petitions for certiorari questioning interlocutory orders issued by the RTC in a local tax case is included in the powers granted by the Constitution as well as inherent in the exercise of its appellate jurisdiction.

Finally, it would bear to point out that this Court is not abandoning the rule that, insofar as quasi-judicial tribunals are concerned, the authority to issue writs of certiorari must still be expressly conferred by the Constitution or by law and cannot be implied from the mere existence of their appellate jurisdiction. This doctrine remains as it applies only to quasi-judicial bodies.

WHEREFORE, the petition is DENIED.

SO ORDERED.

DIOSDADO M. PERALTAAssociate Justice

Republic of the PhilippinesSUPREME COURT

Manila

FIRST DIVISION

G.R. Nos. 166309-10             March 9, 2007

REPUBLIC OF THE PHILIPPINES, represented by the COMMISSIONER OF CUSTOMS, Petitioner, vs.UNIMEX MICRO-ELECTRONICS GmBH, Respondent.

D E C I S I O N

CORONA, J.:

This is an appeal by certiorari under Rule 45 of the Rules of Court seeking to nullify and set aside the decision of the Court of Appeals (CA) dated August 30, 20041 and its amended decision of November 30, 20042 in CA-G.R. SP No. 75359 and CA-G.R. SP No. 75366.

The antecedent facts follow.

Sometime in April 1985, respondent Unimex Micro-Electronics GmBH (Unimex) shipped a 40-foot container and 171 cartons of Atari game computer cartridges, duplicators, expanders, remote controllers, parts and accessories to Handyware Phils., Inc. (Handyware). Don Tim Shipping Corporation transported the goods with Evergreen Marine Corporation as shipping agent.

After the shipment arrived in the Port of Manila on July 9, 1985, the Bureau of Customs (BOC) agents discovered that it did not tally with the description appearing on the cargo manifest. As a result, BOC instituted seizure proceedings against Handyware and later issued a warrant of seizure and detention against the shipment.

On June 5, 1987, the Collector of Customs issued a default order against Handyware for failing to appear in the seizure proceedings. After an ex parte hearing, the Collector of Customs forfeited the goods in favor of the government.

Subsequently, on June 15, 1987, respondent Unimex (as shipper and owner of the goods) filed a motion to intervene in the seizure proceedings. The Collector of Customs granted the motion but later on declared the June 5, 1987 default order against Handyware as final and executory, thus affirming the goods’ forfeiture in favor of the government.

Respondent filed a petition for review against petitioner Commissioner of Customs (BOC Commissioner) in the Court of Tax Appeals (CTA). This case was docketed as CTA Case No. 4317.3

In a decision4 dated June 15, 1992, the CTA reversed the forfeiture decree and ordered the release of the subject shipment to respondent subject to the payment of customs duties. The CTA decision became final and executory on July 20, 1992. The decision read:

WHEREFORE, the decree of forfeiture of [petitioner] Commissioner of Customs is hereby reversed and the subject shipment is hereby ordered released to [respondent] subject to the condition that the correct duties, taxes, fees and other charges thereon be paid to the Bureau of Customs based on the actual quality and condition of the shipments at the time of the filing of the corresponding import entry in compliance with this decision and further subject to the presentation of Central Bank Release Certificate.5

Unfortunately, however, respondent’s counsel failed to secure a writ of execution to enforce the CTA decision. Instead, it filed separate claims for damages against Don Tim Shipping Corporation and Evergreen Marine Corporation6 but both cases were dismissed.

On September 5, 2001, respondent filed in the CTA a petition for the revival of its June 15, 1992 decision. It prayed for the immediate release by BOC of its shipment or, in the alternative, payment of the shipment’s value plus damages. The BOC Commissioner failed to file his answer, hence, he was declared in default.

During the ex parte presentation of respondent’s evidence, BOC informed the court that the subject shipment could no longer be found at its warehouses.

In its decision of September 19, 2002,7 the CTA declared that its June 15, 1992 decision could no longer be executed due to the loss of respondent’s shipment so it ordered the BOC Commissioner to pay respondent the commercial value of the goods based on the prevailing exchange rate at the time of their importation. The dispositive portion of the decision read:

WHEREFORE, premises considered, the instant petition is PARTIALLY GRANTED. Accordingly, [petitioner] is ORDERED to PAY [respondent] the amount of P8,675,200.22 representing the commercial value of the shipment at the time of importation subject, however, to the payment of the proper taxes, duties, fees and other charges thereon. The payment shall be taken from the sale or sales of the goods or properties seized or forfeited by the Bureau of Customs.8

The BOC Commissioner and respondent filed their respective motions for reconsideration (MRs) of the above decision.

In his MR, the BOC Commissioner argued that the CTA altered its June 15, 1992 decision by converting it from an action for specific performance into a money judgment.9 On the other hand, respondent contended that the exchange rate prevailing at the time of actual payment should apply. It also argued that the CTA erred in not imposing legal interest on BOC’s obligation.

The CTA denied both MRs. The BOC Commissioner and the respondent then filed separate petitions in the CA. The BOC Commissioner’s appeal was docketed as CA-G.R. SP No. 75359 and respondent’s as CA-G.R. SP No. 75366. The CA consolidated the two cases.

On August 30, 2004, the CA dismissed the BOC Commissioner’s appeal and granted respondent’s.

In CA-G.R. SP No. 75359, the CA held that the BOC Commissioner was liable for the value of the subject shipment as the same was lost while in its custody. On the other hand, in CA-G.R. SP No. 75366, it ruled that the CTA erred in using as basis the prevailing peso-dollar exchange rate at the time of the importation instead of the prevailing rate at the time of actual payment pursuant to RA 4100.10 It added that respondent was also entitled to legal interest. According to the CA:

…Considering that the BOC was grossly negligent in handling the subject shipment, this Court finds Unimex entitled to legal interests. Accordingly, the actual damages thus awarded shall be subject to 6% interest per annum.

Be that as it may, such interest shall accrue only from the date of the CTA Decision on 19 September 2002 since it is from that the quantification of Unimex’s damages have been reasonably ascertained…

xxx xxx xxx

Finally, Unimex is likewise entitled to 12% interest per annum in lieu of 6% per annum from the time this Decision becomes final and executory until fully paid, in as much as the interim period is equivalent to a forbearance of credit.

xxx xxx xxx

WHEREFORE, the appealed Decision, dated 19 September 2002, is hereby AFFIRMED WITH MODIFICATION in that the Bureau of Customs is adjudged liable to Unimex for the value of the subject shipment in the amount of $466,885.54. The Bureau of Customs’ liability may be paid in Philippine currency, computed at the exchange rate prevailing at the time of actual payment with

legal interest thereon at the rate of 6% per annum from 19 September 2002 up to its finality. Upon finality of this Decision, the rate of legal interest shall be 12% per annum until the value of the subject shipment is fully paid.11

The BOC Commissioner and respondent again filed their respective MRs of the above decision. The Commissioner insisted that the BOC was not liable to respondent. On the other hand, respondent’s MR sought payment of the goods’ value in euros, not in US dollars.12 It also demanded that the 6% legal interest be reckoned from the date of its judicial demand on June 15, 1987.

On November 30, 2004, the CA denied the BOC Commissioner’s MR and granted respondent’s. Accordingly, the decretal portion of its amended decision read:

WHEREFORE, the appealed Decision, dated 19 September 2002, is hereby AFFIRMED WITH MODIFICATION in that the Bureau of Customs is adjudged liable to Unimex for the value of the subject shipment in the amount of Euro 669,982.565. The Bureau of Custom’s liability [may be] paid in the Philippine currency, computed at the exchange rate prevailing at the time of actual payment with legal interests thereon at the rate of 6% per annum from 15 June 1987 up to the finality of this Decision. In lieu of the 6% interest, the rate of legal interest shall be 12% per annum upon finality of this Decision until the value of the subject shipment is fully paid.13

The Republic of the Philippines, represented by the BOC Commissioner, now comes to us via this petition assailing the CTA decision on the following grounds: (1) the June 15, 1992 CTA judgment could not be altered after it became final and executory; (2) laches has already set in, hence, respondent’s case (reviving the June 15, 1992 CTA judgment) should have been dismissed outright; (3) the legal interest imposed was erroneous and (4) the government funds cannot be charged with respondent’s claim without a corresponding appropriation.

Modification of a Final And Executory Judgment

In support of its first argument, petitioner contends that once a judgment becomes final and executory, it becomes immutable and unalterable, thus the CTA erred in changing the tenor of its June 15, 1992 decision by ordering it to instead pay the value of the goods.14

We disagree.

Indeed, the general rule is that once a decision becomes final and executory, it cannot be altered or modified. However, this rule is not absolute. In some cases,15 we held that where facts or events transpire after a decision has become executory, which facts constitute a supervening cause rendering the final judgment unenforceable, said judgment may be modified. Also, a final judgment may be altered when its execution becomes impossible or unjust.

In the case at bar, parties do not dispute the fact that after the June 15, 1992 CTA decision became final and executory, respondent’s goods were inexplicably lost while under the BOC’s custody. Certainly, this fact presented a supervening event warranting the modification of the CTA decision. Even if the CTA had maintained its original decision, still petitioner would have been unable to comply with it for the obvious reason that there was nothing more to deliver to respondent.

Laches Did Not Set in to Frustrate Respondent’s Petition to Revive The June 15, 1992 CTA Decision

Regarding petitioner’s second argument, we hold that it cannot impugn respondent’s claim on the basis of laches. Laches is the failure or negligence to assert a right within a reasonable time, giving rise to a presumption that a party has abandoned it or declined to assert it.16 It is not a mere question of lapse or passage of time but is principally a question of the inequity or unfairness of permitting a right or claim to be asserted.17

It is clear from the records that respondent was not guilty of negligence or omission. Neither did it abandon its claim against petitioner. We agree with the CTA (as later affirmed by the CA) that:

There was never negligence or omission to assert its right within a reasonable period of time on the part of [respondent]. In fact, from the moment it intervened in the proceedings before the Bureau of Customs up to the present time, [respondent] is diligently trying to fight for what it believes is right. [Respondent] may have failed to secure a writ of execution with this court when the [CTA decision] became final and executory due to wrong legal advice, yet it does not mean that it was sleeping on its right for it filed a case against the shipping agent and/or the sub-agent. Therefore, there [was never] an occasion wherein petitioner had abandoned or declined to assert its right. 18

The rule is that the findings of fact by the lower court,19 if affirmed by the CA, are conclusive on us.20 Absent any reason that compels us to deviate from the rule, as in this case, we shall not disturb such findings.

Moreover, the doctrine of laches is based upon grounds of public policy and equity. It is invoked to discourage stale claims but is entirely addressed to the sound discretion of the court.21 Since it is an equitable doctrine, its application is likewise controlled by reasonable considerations. Thus, the better rule is that courts, under the principle of equity, should not be bound by the doctrine of laches if wrong or injustice will result.22

Given the attendant circumstances, laches cannot stall respondent’s right to recover what is due to it especially where BOC’s negligence in the safekeeping of the goods appears indubitable. There is no denying that BOC exhibited gross carelessness and ineptitude in the performance of its duty as it could not even explain why or how the goods vanished while in its custody. With this, it is difficult to exonerate petitioner from liability; otherwise, we would countenance a wrong and exacerbate respondent’s loss which to this day has remained unrecompensed.

More importantly, laches never set in because respondent filed its petition for revival of judgment within the period set by the Rules. In particular, Rule 39, Section 6 states:

SEC. 6. Execution by motion or by independent action. – A final and executory judgment or order may be executed on motion within five (5) years from the date of its entry. After the lapse of such time, and before it is barred by the statute of limitations, a judgment may be enforced by action. The revived judgment may also be enforced by motion within five (5) years from the date of its entry and thereafter by action before it is barred by the statute of limitations.

Furthermore, Article 1144 of the Civil Code, an action "upon a judgment" may be brought within ten (10) years from the time the right of action accrues.

The CTA judgment sought to be revived became final and executory on July 20, 199223 and was accordingly entered into the book of judgments on the same date. On the other hand, the petition to revive said judgment was filed on September 5, 2001. Clearly, the filing of the petition for the revival of judgment was well within the reglementary period provided by law.

Legal Interest May Be Imposed for Use of Money or as Compensatory Damages

Petitioner likewise argues that the CA erred in imposing the 6% p.a. legal interest. According to petitioner, the obligation to pay legal interest only arises by virtue of a contract or on account of damages due to delay or failure to pay the principal on which the interest is exacted. It added that since the June 15, 1992 CTA decision did not involve a monetary award but merely the release of the goods to respondent, there was no basis for the computation and/or imposition of the 6% p.a. legal interest.

We agree with petitioner.

Interest may be paid only either as compensation for the use of money (monetary interest)24 or as damages (compensatory interest).25 We quote in agreement the CTA’s disquisition in its decision dated September 19, 2002:

Interest may be paid either as compensation for the use of money (monetary interest) referred to in Article 1956 of the New Civil Code or as damages (compensatory interest) under Article 2209 above cited. As clearly provided in [Article 2209], interest is demandable if: a) there is monetary obligation and b) debtor incurs delay.

This case does not involve a monetary obligation to be covered by Article 2209. There is no dispute that this case was originally filed questioning the seizure of the shipment by the Bureau of Customs. Our decision subject of this action for revival [of judgment] did not refer to any monetary obligation by [petitioner] towards the [respondent]. In fact, if there was any monetary obligation mentioned, it referred to the obligation of [respondent] to pay the correct taxes, duties, fees and other charges before the release of the goods can be had. In one case, the Supreme Court held:

"In a comprehensive sense, the term "debt" embraces not merely money due by contract, but whatever one is bound to render to another, either for contract or the requirement of the law, such as tax where the law imposes personal liability therefor."

Therefore, the government was never a debtor to the petitioner in order that [Article] 2209 could apply. Nor was it in default for there was no monetary obligation to pay in the first place. There is default when after demand is made either judicially or extrajudicially. In other words, for interest to be demandable under Article 2209, there should be a monetary obligation and the debtor was in default…

In the instant case, [petitioner] was never under monetary obligation to [respondent], no demand can be made either judicially or extrajudicially. Parallel thereto, there could be no default… 26

No doubt, the present case does not fall within the first situation. Neither can it be considered as one involving interest based on damages under the second situation.

More importantly, interest is not chargeable against petitioner except when it has expressly stipulated to pay it or when interest is allowed by the legislature or in eminent domain cases where damages sustained by the owner take the form of interest at the legal rate.27 Consequently, the CA’s imposition of the 12% p.a. legal interest upon the finality of the decision of this case until the value of the goods is fully paid (as forbearance of credit) is likewise bereft of any legal anchor.

Government Liability For Actual Damages

Finally, petitioner argues that a money judgment or any charge against the government requires a corresponding appropriation and cannot be decreed by mere judicial order.

Although it may be gainsaid that the satisfaction of respondent’s demand will ultimately fall on the government, and that, under the political doctrine of "state immunity," it cannot be held liable for governmental acts (jus imperii),28 we still hold that petitioner cannot escape its liability. The circumstances of this case warrant its exclusion from the purview of the state immunity doctrine.

As previously discussed, the Court cannot turn a blind eye to BOC’s ineptitude and gross negligence in the safekeeping of respondent’s goods. We are not likewise unaware of its lackadaisical attitude in failing to provide a cogent explanation on the goods’ disappearance, considering that they were in its custody and that they were in fact the subject of litigation. The situation does not allow us to reject respondent’s claim on the mere invocation of the doctrine of state immunity. Succinctly, the doctrine must be fairly observed and the State should not avail itself of this prerogative to take undue advantage of parties that may have legitimate claims against it.29

In Department of Health v. C.V. Canchela & Associates,30 we enunciated that this Court, as the staunch guardian of the people’s rights and welfare, cannot sanction an injustice so patent in its face, and allow itself to be an instrument in the perpetration thereof. Over time, courts have recognized with almost pedantic adherence that what is inconvenient and contrary to reason is not allowed in law.31 Justice and equity now demand that the State’s cloak of invincibility against suit and liability be shredded.

Accordingly, we agree with the lower courts’ directive that, upon payment of the necessary customs duties by respondent, petitioner’s "payment shall be taken from the sale or sales of goods or properties seized or forfeited by the Bureau of Customs."32

WHEREFORE, the assailed decisions of the Court of Appeals in CA-G.R. SP Nos. 75359 and 75366 are herebyAFFIRMED with MODIFICATION. Petitioner Republic of the Philippines, represented by the Commissioner of the Bureau of Customs, upon payment of the necessary customs duties by respondent Unimex Micro-Electronics GmBH, is hereby ordered to pay respondent the value of the subject shipment in the amount of Euro 669,982.565. Petitioner’s liability may be paid in Philippine currency, computed at the exchange rate prevailing at the time of actual payment.

SO ORDERED.

RENATO C. CORONAAssociate Justice