THIRD DIVISION

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

THE PEOPLE OF THE PHILIPPINES, Respondent-Appellee, v. VICTOR COGAED Y ROMANA,AccusedAppellant.
DECISION
LEONEN, J.:
The mantle of protection upon ones person and ones 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 accuseds 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 marijuana3 from Barangay Lun-Oy, San Gabriel, La Union to the Poblacion of San Gabriel, La
Union.4
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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
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A passenger jeepney from Barangay Lun-Oy arrived at SPO1 Taracatacs 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
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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 bags16 inside the station.17
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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 Cogaeds sack was four (4) rolled pieces of suspected
marijuana fruiting tops,19 and inside Dayaos yellow bag was a brick of suspected marijuana. 20
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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 Cogaeds blue bag had a total weight of 8,091.5 grams. 24 The marijuana from
Cogaeds sack weighed 4,246.1 grams.25 The marijuana collected from Dayaos bag weighed 5,092 grams. 26
A total of 17,429.6 grams were collected from Cogaeds and Dayaos bags. 27
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According to Cogaeds testimony during trial, he was at Balbalayan, La Union, waiting for a jeepney to take
him28 to the Poblacion of San Gabriel so he could buy pesticide. 29 He boarded a jeepney and recognized
Dayao, his younger brothers friend.30 Upon arrival at the Poblacion of San Gabriel, Dayao and Cogaed
alighted from the jeepney.31 Dayao allegedly asked for [Cogaeds] 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
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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
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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:
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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:
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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
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The trial court judge initially found Cogaeds 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
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Cogaed appealed51 the trial courts decision. However, the Court of Appeals denied his appeal and affirmed
the trial courts 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 appellants brief:

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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
OFFICERS 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
OFFICERS 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
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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:
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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
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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:
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1.

Warrantless search incidental to a lawful arrest . . . ;

2.

Seizure of evidence in plain view, . . . ;

3.

Search of a moving vehicle. Highly regulated by the government, the vehicles 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;

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4.

Consented warrantless search;

5.

Customs search;

6.

Stop and frisk; and

7.

Exigent and emergency circumstances.62 (Citations omitted)

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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
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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
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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
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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:

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COURT:
Q
So you dont 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:

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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 ones basic right to security of ones 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:
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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)
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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
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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 reason91to serve the purposes of the
stop and frisk exception:92
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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 officers 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
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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:
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[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 street 105 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
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In Aruta, this court found that the search and seizure conducted was illegal. 109 There were no suspicious
circumstances that preceded Arutas 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
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Aruta is almost identical to this case, except that it was the jeepney driver, not the polices 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 Aminnudins 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
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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 parked123 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

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Like in Aruta, this court did not find anything unusual or suspicious about Chuas situation when the police
apprehended him and ruled that [t]here was no valid stop-and-frisk.129
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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:
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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 Cogaeds 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:
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Appellants 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)
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Cogaeds silence or lack of aggressive objection was a natural reaction to a coercive environment brought
about by the police officers 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:
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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, maam.
Q
And then without hesitation and voluntarily they just opened their
bags, is it not?
A
Yes, maam.
Q
So that there was not any order from you for them to open the bags?
A
None, maam.
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, maam.
Q
But you actually [claimed] that there was not any hesitation from
them in opening the bags, is it not?
A
Yes, maam 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 Taracatacs responses to Judge Florendos
questions:
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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, whats that, and he answered, I dont 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 persons constitutional right to privacy requires no less.
VIII
The Constitution provides:

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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 ones 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 societys 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.

ORDER OF RELEASE
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:
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"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."

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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 30th day of July 2014.

Very truly yours,

(SGD)
WILFREDO V. LAPITAN
Division Clerk of Court

Republic of the Philippines

SUPREME 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.
DECISION
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 Resolutions dated April 6, 2006 and November 29, 2006 of the Court of
Appeals (CA) in CA-G.R. SP No. 87948.
1

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 Order dated July 9, 2004, the RTC granted private respondents' application for a writ of
preliminary injunction.
3

Petitioners filed a Motion for Reconsideration but the RTC denied it in its Order dated October 15,
2004.
4

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, but the CA denied it in its Resolution dated November
29, 2006.
7

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 Decision in the
main case had already been rendered by the RTC on August 13, 2007, the dispositive portion of
which reads as follows:
9

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

To plaintiff Jollimart Phils., Corp.

140,908.54

To plaintiff Surplus Marketing Corp.

220,204.70

To plaintiff Signature Mktg. Corp.

94,906.34

P 19,316,458.77

Stores Phils., Inc.

TOTAL:

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 Finality issued by the same trial court on October
20, 2008. In fact, a Writ of Execution 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.
11

12

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. As such, it cannot be a substitute for a lost appeal.
16

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. 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.
18

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. Thus, in the cases of Pimentel v.
COMELEC, Garcia v. De Jesus, Veloria v. COMELEC, Department of Agrarian Reform
Adjudication Board v. Lubrica, and Garcia v. Sandiganbayan, this 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. It must be observed, however, that with the exception
of Garcia v. Sandiganbayan, these rulings pertain not to regular courts but to tribunals exercising
quasi-judicial powers. With respect to the Sandiganbayan, Republic Act No. 8249 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.
20

21

22

23

24

25

26

27

28

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. 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." This principle was affirmed in De Jesus v. Court of
Appeals, 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." The rulings in J.M. Tuason and De Jesus were reiterated in the more
recent cases of Galang, Jr. v. Geronimo and Bulilis v. Nuez.
29

30

31

32

33

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. 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
35

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. 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.
1wphi1

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." 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.
39

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 quasijudicial 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. PERALTA
Associate Justice

Republic of the Philippines

SUPREME 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.
DECISION
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, 2004 1 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, respondents 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 shipments value plus damages. The BOC Commissioner failed to file his answer, hence, he
was declared in default.
During the ex parte presentation of respondents 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 respondents 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 BOCs obligation.
The CTA denied both MRs. The BOC Commissioner and the respondent then filed separate petitions
in the CA. The BOC Commissioners appeal was docketed as CA-G.R. SP No. 75359 and
respondents as CA-G.R. SP No. 75366. The CA consolidated the two cases.
On August 30, 2004, the CA dismissed the BOC Commissioners appeal and granted respondents.
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 Unimexs 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, respondents
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 Commissioners MR and granted respondents.
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 Customs 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,
respondents 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
respondents 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, respondents goods were inexplicably lost while under the BOCs 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 Respondents Petition to Revive The June 15, 1992 CTA
Decision
Regarding petitioners second argument, we hold that it cannot impugn respondents 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 respondents right to recover what is due to it
especially where BOCs 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
respondents 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, 1992 23 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 CTAs 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 CAs
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 respondents 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 BOCs ineptitude and gross negligence
in the safekeeping of respondents 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
respondents 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 peoples 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 States 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, petitioners "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. Petitioners liability may be paid in Philippine
currency, computed at the exchange rate prevailing at the time of actual payment.
SO ORDERED.

RENATO C. CORONA
Associate Justice