ARNAULT V.

NAZARENO+

THE FACTS

The Senate investigated the purchase by the government of two parcels of land, known as Buenavista and Tambobong estates.
An intriguing question that the Senate sought to resolve was the apparent irregularity of the government’s payment to one Ernest Burt, a
non-resident American citizen, of the total sum of Php1.5 million for his alleged interest in the two estates that only amounted to
Php20,000.00, which he seemed to have forfeited anyway long before. The Senate sought to determine who were responsible for and
who benefited from the transaction at the expense of the government.

Petitioner Jean Arnault, who acted as agent of Ernest Burt in the subject transactions, was one of the witnesses summoned by
the Senate to its hearings. In the course of the investigation, the petitioner repeatedly refused to divulge the name of the person to whom
he gave the amount of Php440,000.00, which he withdrew from the Php1.5 million proceeds pertaining to Ernest Burt.

Arnault was therefore cited in contempt by the Senate and was committed to the custody of the Senate Sergeant-at-Arms for
imprisonment until he answers the questions. He thereafter filed a petition for habeas corpus directly with the Supreme Court questioning
the validity of his detention.

II. THE ISSUE

1. Did the Senate have the power to punish the petitioner for contempt for refusing to reveal the name of the person to whom he gave the
Php440,000.00?
2. Did the Senate have the authority to commit petitioner for contempt for a term beyond its period of legislative session?
3. May the petitioner rightfully invoke his right against self-incrimination?

III. THE RULING

[The Court DENIED the petition for habeas corpus filed by Arnault.]

1. Yes, the Senate had the power to punish the petitioner for contempt for refusing to reveal the name of the person
to whom he gave the Php440,000.00.

Although there is no provision in the [1935] Constitution expressly investing either House of Congress with power to make
investigations and exact testimony to the end that it may exercise its legislative functions as to be implied. In other words, the power of
inquiry – with process to enforce it – is an essential and appropriate auxiliary to the legislative function. A legislative body cannot legislate
wisely or effectively in the absence of information respecting the conditions which the legislation is intended to effect or change; and
where the legislative body does not itself possess the requisite information – which is not infrequently true – recourse must be had to
others who do possess it. Experience has shown that mere requests for such information are often unavailing, and also that information
which is volunteered is not always accurate or complete; so some means of compulsion is essential to obtain what is needed.

xxx xxx xxx

[W]e find that the question for the refusal to answer which the petitioner was held in contempt by the Senate is pertinent to the
matter under inquiry. In fact, this is not and cannot be disputed. Senate Resolution No. 8, the validity of which is not challenged by the
petitioner, requires the Special Committee, among other things, to determine the parties responsible for the Buenavista and Tambobong
estates deal, and it is obvious that the name of the person to whom the witness gave the P440,000 involved in said deal is pertinent to
that determination — it is in fact the very thing sought to be determined. The contention is not that the question is impertinent to the
subject of the inquiry but that it has no relation or materiality to any proposed legislation. We have already indicated that it is not
necessary for the legislative body to show that every question propounded to a witness is material to any proposed or possible
legislation; what is required is that is that it be pertinent to the matter under inquiry.
 xxx xxx xxx

If the subject of investigation before the committee is within the range of legitimate legislative inquiry and the proposed testimony
of the witness called relates to that subject, obedience, to its process may be enforced by the committee by imprisonment.

2. YES, the Senate had the authority to commit petitioner for contempt for a term beyond its period of legislative
session.

We find no sound reason to limit the power of the legislative body to punish for contempt to the end of every session and not to
the end of the last session terminating the existence of that body. The very reason for the exercise of the power to punish for contempt is
to enable the legislative body to perform its constitutional function without impediment or obstruction. Legislative functions may be and in
practice are performed during recess by duly constituted committees charged with the duty of performing investigations or conducting
hearing relative to any proposed legislation. To deny to such committees the power of inquiry with process to enforce it would be to
defeat the very purpose for which that the power is recognized in the legislative body as an essential and appropriate auxiliary to is
legislative function. It is but logical to say that the power of self-preservation is coexistent with the life to be preserved.

But the resolution of commitment here in question was adopted by the Senate, which is a continuing body and which does not
cease exist upon the periodical dissolution of the Congress . . . There is no limit as to time to the Senate’s power to punish for contempt
in cases where that power may constitutionally be exerted as in the present case.

3. NO, the petitioner may NOT rightfully invoke his right against self-incrimination.

Since according to the witness himself the transaction was legal, and that he gave the [P440,000.00] to a representative of Burt
in compliance with the latter’s verbal instruction, we find no basis upon which to sustain his claim that to reveal the name of that person
might incriminate him. There is no conflict of authorities on the applicable rule, to wit:

Generally, the question whether testimony is privileged is for the determination of the Court. At least, it is not enough for the
witness to say that the answer will incriminate him as he is not the sole judge of his liability. The danger of self-incrimination must appear
reasonable and real to the court, from all the circumstances, and from the whole case, as well as from his general conception of the
relations of the witness. Upon the facts thus developed, it is the province of the court to determine whether a direct answer to a question
may criminate or not. . . The fact that the testimony of a witness may tend to show that he has violated the law is not sufficient to entitle
him to claim the protection of the constitutional provision against self-incrimination, unless he is at the same time liable to prosecution and
punishment for such violation. The witness cannot assert his privilege by reason of some fanciful excuse, for protection against an
imaginary danger, or to secure immunity to a third person.

It is the province of the trial judge to determine from all the facts and circumstances of the case whether the witness is justified in
refusing to answer. A witness is not relieved from answering merely on his own declaration that an answer might incriminate him, but
rather it is for the trial judge to decide that question.

FACTS: In the latter part of October, 1949, the Philippine Government, through the Rural Progress Administration, bought two estates
known as Buenavista and Tambobong for the sums of P4,500,000 and P500,000, respectively. P1,000,000 was paid for the first sum and
P 500,000 to the second sum both to Ernest H. Burt, a nonresident American, thru his two attorney-in-fact in the Philippines, as
represented by Jean L. Arnault, for both estates respectively. However, Ernest H. Burt was not the original owner of the estate. He
bought the first from San Juan de Dios hospital and the second from the Philippine trust company. In both instances, Burt was not able to
pay the necessary amount of money to complete his payments. As such, his contract with said owners were cancelled.
On September 4, 1947, the Philippine Trust Company sold, conveyed, and delivered the Tambobong Estate to the Rural Progress
Administration by an abolute deed of sale in consideration of the sum of P750,000. The Philippine Government then, through the
Secretary of Justice as Chairman of the Board of Directors of the Rural Progress Administration and as Chairman of the Board of
Directors of the Philippine National Bank, from which the money was borrowed, accomplished the purchase of the two estates in the latter
part of October, 1949, as stated at the outset.

On February 27, 1950, the Senate adopted its Resolution No. 8, which created a special committee to investigate the transactions
surrounding the estates. The special committee created by the resolution called and examined various witnesses, among the most
important of whom was Jean L. Arnault. An intriguing question which the committee sought to resolve was the apparent unnecessariness
and irregularity of the Government’s paying to Burt the total sum of P1,500,000 for his alleged interest of only P20,000 in the two estates,
which he seemed to have forfeited anyway long before October, 1949. The committee sought to determine who were responsible for and
who benefited from the transaction at the expense of the Government.

Arnault testified that two checks payable to Burt aggregating P1,500,000 were delivered to him on the afternoon of October 29, 1949; that
on the same date he opened a new account in the name of Ernest H. Burt with the Philippine National Bank in which he deposited the
two checks aggregating P1,500,000; and that on the same occasion he drew on said account two checks; one for P500,000, which he
transferred to the account of the Associated Agencies, Inc., with the Philippine National Bank, and another for P440,000 payable to cash,
which he himself cashed.

It was the desire of the committee to determine the ultimate recipient of this sum of P440,000 that gave rise to the present case. As
Arnault resisted to name the recipient of the money, the senate then approved a resolution that cited him for contempt. It is this resolution
which brought him to jail and is being contested in this petition.

ISSUES:
1. WON the Senate has the power to punish Arnault for contempt for refusing to reveal the name of the person to whom he gave the
P440,000.
2. WON the Senate lacks authority to commit him for contempt for a term beyond its period of legislative session, which ended on May
18, 1950.
3. WON the privilege against self incrimination protects the petitioner from being questioned.

HELD:
1. YES. Once an inquiry is admitted or established to be within the jurisdiction of a legislative body to make, the investigating committee
has the power to require a witness to answer any question pertinent to that inquiry, subject of course to his constitutional right against
self-incrimination. The inquiry, to be within the jurisdiction of the legislative body to make, must be material or necessary to the exercise
of a power in it vested by the Constitution, such as to legislate, or to expel a Member; and every question which the investigator is
empowered to coerce a witness to answer must be material or pertinent to the subject of the inquiry or investigation. The materiality of the
question must be determined by its direct relation to the subject of the inquiry and not by its indirect relation to any proposed or possible
legislation. The reason is, that the necessity or lack of necessity for legislative action and the form and character of the action itself are
determined by the sum total of the information to be gathered as a result of the investigation, and not by a fraction of such information
elicited from a single question.

2. NO. Senate is a continuing body and which does not cease to exist upon the periodical dissolution of the Congress or of the House of
Representatives. There is no limit as to time to the Senate’s power to punish for contempt in cases where that power may constitutionally
be exerted as in the present case. Senate will not be disposed to exert the power beyond its proper bounds, i.e. abuse their power and
keep the witness in prison for life. If proper limitations are disregarded, Court isalways open to those whose rights might thus be
transgressed.
3. NO. Court is satisfied that those answers of the witness to the important question, which is the name of that person to whom witness
gave the P440,000, were obviously false. His insistent claim before the bar of the Senate that if he should reveal the name he would
incriminate himself, necessarily implied that he knew the name. Moreover, it is unbelievable that he gave P440,000 to a person to him
unknown. “Testimony which is obviously false or evasive is equivalent to a refusal to testify and is punishable as contempt, assuming that
a refusal to testify would be so punishable.” Since according to the witness himself the transaction was legal, and that he gave the
P440,000 to a representative of Burt in compliance with the latter’s verbal instruction, Court found no basis upon which to sustain his
claim that to reveal the name of that person might incriminate him.

BENGZON V SBRC

FACTS:

It was alleged that Benjamin “Kokoy” Romualdez and his wife together with the Marcoses unlawfully and unjustly enriched
themselves at the expense of the Filipino people. That they obtained with the help of the Bengzon Law Office and Ricardo Lopa –
Cory’s brother in law, among others, control over some of the biggest business enterprises in the country including MERALCO, PCI
Bank, Shell Philippines and Benguet Consolidated Mining Corporation.
Senator Juan Ponce Enrile subsequently delivered a privilege speech alleging that Lopa took over various government owned
corporations which is in violation of the Anti-Graft and Corrupt Practices Act. Contained in the speech is a motion to investigate on
the matter. The motion was referred to the Committee on Accountability of Public Officers or the Blue Ribbon Committee. After
committee hearing, Lopa refused to testify before the committee for it may unduly prejudice a pending civil case against him.
Bengzon likewise refused invoking his right to due process. Lopa however sent a letter to Enrile categorically denying his
allegations and that his allegations are baseless and malicious.
Enrile subsequently took advantage of the Senate’s privilege hour upon which he insisted to have an inquiry regarding the matter.
The SBRC rejected Lopa’s and Bengzon’s plea.
Claiming that the Senate Blue Ribbon Committee is poised to subpoena them and require their attendance and testimony in
proceedings before the Committee, in excess of its jurisdiction and legislative purpose, in clear and blatant disregard of their
constitutional rights, and to their grave and irreparable damage, prejudice and injury, and that there is no appeal nor any other
plain, speedy and adequate remedy in the ordinary course of law, Bengzon et al filed a petition for prohibition with a prayer for
temporary restraining order and/or injunctive relief against the SBRC.

*PCGG filed with the Sandiganbayan against Benjamin Romualdez, et al for engaging in devices, schemes and stratagems to unjustly
enrich themselves at the expense of plaintiff and the Filipino people.
The Senate Minority Floor Leader Enrile delivered a speech before the Senate on the alleged take-over personal privilege before the
Senate on the alleged "takeover of SOLOIL Inc," the FlagShip of the First Manila Management of Companies or FMMC by Ricardo Lopa
and called upon the Senate to look into the possible violation of the law in the case with regard to RA 3019 (Anti Graft and Corrupt
Practices Act).
The Senate Blue Ribbon Committee (Committee on Accountability of Public Officers [SBRC]) started its investigation on the matter.
Petitioners and Ricardo Lopa were subpoenaed by the SBRC to appear before it and testify on what they know regarding the sale of 36
corporations belonging to Benjamin Romualdez. Lopa and Bengzon refused to testify, invoking their rights to due process, and that their
testimony may unduly prejudice the defendants and petitioners in case before the Sandiganbayan.
SBRC rejected the petitioner's plea to be excused from testifying and the SBRC continued its investigation of the matter.

The petitioners filed for prohibition with a prayer for TRO and/or injunctive relief, claiming that the SBRC in requiring their attendance and
testimony, acted in excess of its jurisdiction and legislative purpose.
The Supreme Court intervened upon a motion for reconsideration filed by one of the defendants of the civil case.

ISSUES:
1. Whether or not the court has jurisdiction over the case.
2. Whether or not the SBRC's inquiry has valid legislative purpose.
3. whether or not the civil case of Sandiganbayan is beyond the power of the SBRC to inquire into.
4. Whether or not the inquiry violates the petitioners' right to due process.

RULING:

1. Yes. In Angara vs Electoral Commission, the Constitution provided for an elaborate system of checks and balances to secure
coordination in the workings of the various departments of the government. The Court has provided that the allocation of constitutional
boundaries is a task which the judiciary must perform under the Constitution. Moreover, as held in a recent case, "(t)he political question
doctrine neither interposes an obstacle to judicial determination of the rival claims. The jurisdiction to delimit constitutional boundaries has
been given to this Court. It cannot abdicate that obligation mandated by the 1987 Constitution, although said provision by no means does
away with the applicability of the principle in appropriate cases."
The Court is thus of the considered view that it has jurisdiction over the present controversy for the purpose of determining the scope and
extent of the power of the Senate Blue Ribbon Committee to conduct inquiries into private affairs in purported aid of legislation.

2. No.
The power to conduct formal inquiries or investigations is specifically provided for in Sec. 1 of the Senate Rules of Procedure Governing
Inquiries in Aid of Legislation. Such inquiries may refer to the implementation or re-examination of any law or in connection with any
proposed legislation or the formulation of future legislation. They may also extend to any and all matters vested by the Constitution in
Congress and/or in the Senate alone.

It appears, therefore, that the contemplated inquiry by respondent Committee is not really "in aid of legislation" because it is not related to
a purpose within the jurisdiction of Congress, since the aim of the investigation is to find out whether or not the relatives of the President
or Mr. Ricardo Lopa had violated Section 5 RA No. 3019, the "Anti-Graft and Corrupt Practices Act", a matter that appears more within
the province of the courts rather than of the legislature.

3. No. It cannot be said that the contemplated inquiry on the subject of the privilege speech of Senator Juan Ponce Enrile, i.e., the
alleged sale of the 36 (or 39) corporations belonging to Benjamin "Kokoy" Romualdez to the Lopa Group is to be conducted pursuant to
Senate Resolution No. 212 because, firstly, Senator Enrile did not indict the PCGG, and, secondly, neither Mr. Ricardo Lopa nor the
herein petitioners are connected with the government but are private citizens.

4. Yes. The Constitution expressly provides that "the rights of persons appearing in or affected by such inquiries shall be respected.
It should be emphasized that the constitutional restriction does not call for the banning or prohibition of investigations where a violation of
a basis rights is claimed. It only requires that in the course of the proceedings, the right of persons should be respected.
What the majority opinion mandates is a blanket prohibition against a witness testifying at all, simply because he is already facing
charges before the Sandiganbayan. To my mind, the Constitution allows him to interpose objections whenever an incriminating question
is posed or when he is compelled to reveal his court defenses, but not to refuse to take the witness stand completely .
G.R. No. 167173 December 27 2007
STANDARD CHARTERED BANK (Philippine Branch), PAUL SIMON MORRIS, SUNDARA RAMESH, OWEN BELMAN, SANJAY
AGGARWAL, RAJAMANI CHANDRASHEKAR, MARIVEL GONZALES, MA. ELLEN VICTOR, CHONA G. REYES, ZENAIDA
IGLESIAS, RAMONA BERNAD, MICHAELANGELO AGUILAR, and FERNAND TANSINGCO, Petitioners, vs. SENATE COMMITTEE
ON BANKS, FINANCIAL INSTITUTIONS AND CURRENCIES, as represented by its Chairperson, HON. EDGARDO J. ANGARA,
Respondent.

Facts: Before us is a Petition for Prohibition (With Prayer for Issuance of Temporary Restraining Order and/or Injunction) dated and filed
on March 11, 2005 by petitioners against respondent Senate Committee on Banks, Financial Institutions and Currencies, as represented
by Edgardo Angara.
Petitioner SCB is a bank instituted in England. Petitioners are Executive officers of said. Respondent is is one of the permanent
committees of the Senate of the Philippines. The petition seeks the issuance of a temporary restraining order (TRO) to enjoin respondent
from (1) proceeding with its inquiry pursuant to Philippine Senate (P.S.) Resolution No. 166; (2) compelling petitioners who are officers of
petitioner SCB-Philippines to attend and testify before any further hearing to be conducted by respondent, particularly that set on March
15, 2005; and (3) enforcing any hold-departure order (HDO) and/or putting the petitioners on the Watch List. It also prays that judgment
be rendered (1) annulling the subpoenae ad testificandum and duces tecum issued to petitioners, and (2) prohibiting the respondent from
compelling petitioners to appear and testify in the inquiry being conducted pursuant to P.S. Resolution No. 166.
Senator Juan Ponce Enrile, Vice Chairperson of respondent, delivered a privilege speech entitled “Arrogance of Wealth” before
the Senate based on a letter from Atty. Mark R. Bocobo denouncing SCB-Philippines for selling unregistered foreign securities in violation
of the Securities Regulation Code (R.A. No. 8799) and urging the Senate to immediately conduct an inquiry, in aid of legislation, to
prevent the occurrence of a similar fraudulent activity in the future. Upon motion of Senator Francis Pangilinan, the speech was referred
to respondent. Prior to the privilege speech, Senator Enrile had introduced P.S. Resolution No. 166, DIRECTING THE COMMITTEE ON
BANKS, FINANCIAL INSTITUTIONS AND CURRENCIES, TO CONDUCT AN INQUIRY, IN AID OF LEGISLATION, INTO THE ILLEGAL
SALE OF UNREGISTERED AND HIGH-RISK SECURITIES BY STANDARD CHARTERED BANK, WHICH RESULTED IN BILLIONS OF
PESOS OF LOSSES TO THE INVESTING PUBLIC.
Acting on the referral, respondent, through its Chairperson, Senator Edgardo J. Angara, set the initial hearing on February 28,
2005 to investigate, in aid of legislation, the subject matter of the speech and resolution filed by Senator Enrile.
Respondent invited petitioners to attend the hearing, requesting them to submit their written position paper. Petitioners, through
counsel, submitted to respondent a letter dated February 24, 2005 presenting their position, particularly stressing that there were cases
pending in court allegedly involving the same issues subject of the legislative inquiry, thereby posing a challenge to the jurisdiction of
respondent to continue with the inquiry.
On February 28, 2005, respondent commenced the investigation. Senator Enrile inquired who among those invited as resource
persons were present and who were absent. Thereafter, Senator Enrile moved that subpoenae be issued to those who did not attend the
hearing and that the Senate request the Department of Justice, through the Bureau of Immigration and Deportation, to issue an HDO
against them and/or include them in the Bureau’s Watch List. Senator Juan Flavier seconded the motion and the motion was approved.
Respondent then proceeded with the investigation proper. Towards the end of the hearing, petitioners, through counsel, made an
Opening Statement that brought to the attention of respondent the lack of proper authorization from affected clients for the bank to make
disclosures of their accounts and the lack of copies of the accusing documents mentioned in Senator Enrile's privilege speech, and
reiterated that there were pending court cases regarding the alleged sale in the Philippines by SCB-Philippines of unregistered foreign
securities.
Issue: petitioners claim that since the issue of whether or not SCB-Philippines illegally sold unregistered foreign securities is already
preempted by the courts that took cognizance of the foregoing cases, the respondent, by this investigation, would encroach upon the
judicial powers vested solely in these courts.

Ruling: Contention is UNTENABLE.

P.S. Resolution No. 166 is explicit on the subject and nature of the inquiry to be (and already being) conducted by the
respondent Committee, as found in the last three Whereas clauses thereof.
The unmistakable objective of the investigation, as set forth in the said resolution, exposes the error in petitioners’ allegation that
the inquiry, as initiated in a privilege speech by the very same Senator Enrile, was simply “to denounce the illegal practice committed by a
foreign bank in selling unregistered foreign securities x x x.” This fallacy is made more glaring when we consider that, at the conclusion
of his privilege speech, Senator Enrile urged the Senate “to immediately conduct an inquiry, in aid of legislation, so as to prevent
the occurrence of a similar fraudulent activity in the future.”
Indeed, the mere filing of a criminal or an administrative complaint before a court or a quasi-judicial body should not
automatically bar the conduct of legislative investigation. Otherwise, it would be extremely easy to subvert any intended inquiry by
Congress through the convenient ploy of instituting a criminal or an administrative complaint. Surely, the exercise of sovereign legislative
authority, of which the power of legislative inquiry is an essential component, cannot be made subordinate to a criminal or an
administrative investigation.
In Arnault vs. Nazareno, “the power of inquiry – with process to enforce it – is an essential and appropriate auxiliary to the
legislative function. A legislative body cannot legislate wisely or effectively in the absence of information respecting the conditions which
the legislation is intended to affect or change; and where the legislative body does not itself possess the requisite information – which is
not infrequently true – recourse must be had to others who possess it.”
The Court has already expounded on the essence of the contempt power of Congress and its committees in this wise –
The principle that Congress or any of its bodies has the power to punish recalcitrant witnesses is founded
upon reason and policy. Said power must be considered implied or incidental to the exercise of legislative power. How
could a legislative body obtain the knowledge and information on which to base intended legislation if it cannot require
and compel the disclosure of such knowledge and information, if it is impotent to punish a defiance of its power and
authority? When the framers of the Constitution adopted the principle of separation of powers, making each branch
supreme within the realm of its respective authority, it must have intended each department’s authority to be full and
complete, independently of each other’s authority or power. And how could the authority and power become complete
if for every act of refusal, every act of defiance, every act of contumacy against it, the legislative body must resort to the
judicial department for the appropriate remedy, because it is impotent by itself to punish or deal therewith, with affronts
committed against its authority or dignity.

The exercise by Congress or by any of its committees of the power to punish contempt is based on the principle of self-
preservation. As the branch of the government vested with the legislative power, independently of the judicial branch, it can assert its
authority and punish contumacious acts against it. Such power is sui generis, as it attaches not to the discharge of legislative functions
per se, but to the sovereign character of the legislature as one of the three independent and coordinate branches of government.
In this case, petitioners’ imputation that the investigation was “in aid of collection” is a direct challenge against the authority of
the Senate Committee, as it ascribes ill motive to the latter. In this light, we find the contempt citation against the petitioners reasonable
and justified.
the power of legislative investigation includes the power to compel the attendance of witnesses. Corollary to the power to
compel the attendance of witnesses is the power to ensure that said witnesses would be available to testify in the legislative
investigation. In the case at bench, considering that most of the officers of SCB-Philippines are not Filipino nationals who may easily
evade the compulsive character of respondent’s summons by leaving the country, it was reasonable for the respondent to request the
assistance of the Bureau of Immigration and Deportation to prevent said witnesses from evading the inquiry and defeating its purpose. In
any event, no HDO was issued by a court. The BID instead included them only in the Watch List, which had the effect of merely delaying
petitioners’ intended travel abroad for five (5) days, provided no HDO is issued against them.
NERI VS SENATE

On April 21, 2007, the Department of Transportation and Communication (DOTC) entered into a contract with Zhong Xing
Telecommunications Equipment (ZTE) for the supply of equipment and services for the National Broadband Network (NBN) Project in the
amount of U.S. $ 329,481,290 (approximately P16 Billion Pesos). The Project was to be financed by the People’s Republic of China.
The Senate passed various resolutions relative to the NBN deal. In the September 18, 2007 hearing Jose de Venecia III testified that
several high executive officials and power brokers were using their influence to push the approval of the NBN Project by the NEDA.
Neri, the head of NEDA, was then invited to testify before the Senate Blue Ribbon. He appeared in one hearing wherein he was
interrogated for 11 hrs and during which he admitted that Abalos of COMELEC tried to bribe him with P200M in exchange for his approval
of the NBN project. He further narrated that he informed President Arroyo about the bribery attempt and that she instructed him not to
accept the bribe.

However, when probed further on what they discussed about the NBN Project, petitioner refused to answer, invoking “executive
privilege”. In particular, he refused to answer the questions on:
(a) whether or not President Arroyo followed up the NBN Project,
(b) whether or not she directed him to prioritize it, and
(c) whether or not she directed him to approve.
He later refused to attend the other hearings and Ermita sent a letter to the senate averring that the communications between GMA and
Neri are privileged and that the jurisprudence laid down in Senate vs Ermita be applied. He was cited in contempt of respondent
committees and an order for his arrest and detention until such time that he would appear and give his testimony.

ISSUE:
Are the communications elicited by the subject three (3) questions covered by executive privilege?
HELD:
The communications are covered by executive privilege

The revocation of EO 464 (advised executive officials and employees to follow and abide by the Constitution, existing laws and
jurisprudence, including, among others, the case of Senate v. Ermita when they are invited to legislative inquiries in aid of legislation.),
does not in any way diminish the concept of executive privilege. This is because this concept has Constitutional underpinnings.

The claim of executive privilege is highly recognized in cases where the subject of inquiry relates to a power textually committed by the
Constitution to the President, such as the area of military and foreign relations. Under our Constitution, the President is the repository of
the commander-in-chief, appointing, pardoning, and diplomatic powers. Consistent with the doctrine of separation of powers, the
information relating to these powers may enjoy greater confidentiality than others.
Several jurisprudence cited provide the elements of presidential communications privilege:
1) The protected communication must relate to a “quintessential and non-delegable presidential power.”
2) The communication must be authored or “solicited and received” by a close advisor of the President or the President himself. The
judicial test is that an advisor must be in “operational proximity” with the President.

3) The presidential communications privilege remains a qualified privilege that may be overcome by a showing of adequate need, such
that the information sought “likely contains important evidence” and by the unavailability of the information elsewhere by an appropriate
investigating authority.

In the case at bar, Executive Secretary Ermita premised his claim of executive privilege on the ground that the communications elicited by
the three (3) questions “fall under conversation and correspondence between the President and public officials” necessary in “her
executive and policy decision-making process” and, that “the information sought to be disclosed might impair our diplomatic as well as
economic relations with the People’s Republic of China.” Simply put, the bases are presidential communications privilege and executive
privilege on matters relating to diplomacy or foreign relations.

Using the above elements, we are convinced that, indeed, the communications elicited by the three (3) questions are covered by the
presidential communications privilege. First, the communications relate to a “quintessential and non-delegable power” of the President,
i.e. the power to enter into an executive agreement with other countries. This authority of the President to enter into executive
agreements without the concurrence of the Legislature has traditionally been recognized in Philippine jurisprudence. Second, the
communications are “received” by a close advisor of the President. Under the “operational proximity” test, petitioner can be considered a
close advisor, being a member of President Arroyo’s cabinet. And third, there is no adequate showing of a compelling need that would
justify the limitation of the privilege and of the unavailability of the information elsewhere by an appropriate investigating authority.

Respondent Committees further contend that the grant of petitioner’s claim of executive privilege violates the constitutional provisions on
the right of the people to information on matters of public concern.50 We might have agreed with such contention if petitioner did not
appear before them at all. But petitioner made himself available to them during the September 26 hearing, where he was questioned for
eleven (11) hours. Not only that, he expressly manifested his willingness to answer more questions from the Senators, with the exception
only of those covered by his claim of executive privilege.
The right to public information, like any other right, is subject to limitation. Section 7 of Article III provides:
The right of the people to information on matters of public concern shall be recognized. Access to official records, and to documents, and
papers pertaining to official acts, transactions, or decisions, as well as to government research data used as basis for policy
development, shall be afforded the citizen, subject to such limitations as may be provided by law

GARCILLANO vs. HOUSE OF REPRESENTATIVES

(G.R. No. 170338 , December 23, 2008)

FACTS

-Garcillano (in G.R. No. 170338) filed a Petition for Prohibition to restrain the House Representatives Committees from using the tape
recordings of the "illegally obtained" wiretapped conversations in their committee reports and for any other purpose. He further implored
that the said recordings and any reference thereto be ordered stricken off the records of the inquiry, and the respondent House
Committees directed to desist from further using the recordings in any of the House proceedings.

-Ranada and Agcaoili (in G.R. No. 179275), retired justices of the CA, filed a Petition for Prohibition to bar the Senate from conducting its
scheduled legislative inquiry. They argued in the main that the intended legislative inquiry violates R.A. No. 4200 and Section 3, Article III
of the Constitution.

-Maj. Lindsay Rex Sagge, a member of the ISAFP and one of the resource persons summoned by the Senate to appear and testify at its
hearings, moved to intervene as petitioner in G.R. No. 179275.18

While both petitions involve the "Hello Garci" recordings, they have different objectives–the first is poised at preventing the playing of the
tapes in the House and their subsequent inclusion in the committee reports, and the second seeks to prohibit and stop the conduct of the
Senate inquiry on the wiretapped conversation.

ISSUES

(1) WON petitioners have legal standing. [YES]

(2) WON there is an actual case or controversy. [NO: against the House of Rep. YES: against the Senate]
HELD (The Court dismisses the first petition, G.R. No. 170338, and grants the second, G.R. No. 179275.)

LOCUS STANDI

General Rule: Legal standing or locus standi refers to a personal and substantial interest in a case such that the party has sustained or
will sustain direct injury because of the challenged governmental act x x x," thus, generally, a party will be allowed to litigate only when (1)
he can show that he has personally suffered some actual or threatened injury because of the allegedly illegal conduct of the government;
(2) the injury is fairly traceable to the challenged action; and (3) the injury is likely to be redressed by a favorable action.

Exception/Liberal application: However, considering that locus standi is a mere procedural technicality, the Court, in recent cases, has
relaxed the stringent direct injury test. David v. Macapagal-Arroyo articulates that a "liberal policy has been observed, allowing
ordinary citizens, members of Congress, and civic organizations to prosecute actions involving the constitutionality or validity of laws,
regulations and rulings.

Garcillano = direct injury. Ranada and Agcaoili = concerned citizens, taxpayers, and members of the IBP. Intervenor Sagge = alleges
violation of his right to due process considering that he is summoned to attend the Senate hearings without being apprised not only of his
rights therein through the publication of the Senate Rules of Procedure Governing Inquiries in Aid of Legislation, but also of the intended
legislation which underpins the investigation. He further intervenes as a taxpayer bewailing the useless and wasteful expenditure of
public funds involved in the conduct of the questioned hearings.

Given that petitioners Ranada and Agcaoili allege an interest in the execution of the laws and that intervenor Sagge asserts his
constitutional right to due process, they satisfy the requisite personal stake in the outcome of the controversy by merely being citizens of
the Republic.

Likewise, a reading of the petition in G.R. No. 179275 shows that the petitioners and intervenor Sagge advance constitutional issues
which deserve the attention of this Court in view of their seriousness, novelty and weight as precedents. The issues are of
transcendental and paramount importance not only to the public but also to the Bench and the Bar, and should be resolved for the
guidance of all.34

Thus, in the exercise of its sound discretion and given the liberal attitude it has shown in prior cases climaxing in the more recent case
of Chavez, the Court recognizes the legal standing of petitioners Ranada and Agcaoili and intervenor Sagge.

ACTUAL CASE OR CONTROVERSY

Versus House of Representatives

Court dismisses G.R. No. 170338 for being moot and academic. Repeatedly stressed in our prior decisions is the principle that the
exercise by this Court of judicial power is limited to the determination and resolution of actual cases and controversies. By actual
cases, we mean existing conflicts appropriate or ripe for judicial determination, not conjectural or anticipatory, for otherwise the decision
of the Court will amount to an advisory opinion. The power of judicial inquiry does not extend to hypothetical questions because any
attempt at abstraction could only lead to dialectics and barren legal questions and to sterile conclusions unrelated to actualities. Neither
will the Court determine a moot question in a case in which no practical relief can be granted. A case becomes moot when its purpose
has become stale. It is unnecessary to indulge in academic discussion of a case presenting a moot question as a judgment thereon
cannot have any practical legal effect or, in the nature of things, cannot be enforced.

The Court notes that the recordings were already played in the House and heard by its members. There is also the widely publicized
fact that the committee reports on the "Hello Garci" inquiry were completed and submitted to the House in plenary by the
respondent committees. Having been overtaken by these events, the Garcillano petition has to be dismissed for being moot and
academic. After all, prohibition is a preventive remedy to restrain the doing of an act about to be done, and not intended to provide a
remedy for an act already accomplished.
 Versus the Senate

As to the petition in G.R. No. 179275, the Court grants the same. The Senate cannot be allowed to continue with the conduct of the
questioned legislative inquiry without duly published rules of procedure, in clear derogation of the constitutional requirement.

Legislative Investigation

Sabio Vs. Gordon

FACTS:

On February 20, 2006, Sen. M. Defensor-Santiago introduced Philippine Senate Resolution No. 455 "directing an inquiry in aid of
legislation on the anomalous losses incurred by the Philippines Overseas Telecommunications Corporation (POTC), Philippine
Communications Satellite Corporation (PHILCOMSAT), and PHILCOMSAT Holdings Corporation (PHC) due to the alleged improprieties
in their operations by their respective Board of Directors."

Said Resolution was referred to the Committee on Accountability of Public Officers and Investigations and Committee on Public Services.
It was then transferred to the Committee on Government Corporations and Public Enterprises upon motion of Sen. F.Pangilinan.

On May 8, 2006, Chief of Staff Rio C. Inocencio, under the authority of Senator R. Gordon, wrote Chairman Camilo L. Sabio of the
PCGG, inviting him to be one of the resource persons in the public meeting jointly conducted by the Committee on Government
Corporations and Public Enterprises and Committee on Public Services for the deliberation of the Senate Resolution.

On May 9, 2006, Sabio declined the invitation because of prior commitment. At the same time, he invoked Section 4(b) of E.O. No. 1 that
“ No member or staff of the Commission shall be required to testify or produce evidence in any judicial, legislative or administrative
proceeding concerning matters within its official cognizance."

Sen. Gordon issued a Subpoena Ad Testificandum requiring Sabio and PCGG Commissioners Ricardo Abcede, Nicasio Conti, Tereso
Javier and Narciso Nario to appear in the public hearing and testify on what they know relative to the matters specified in Senate
Resolution.

Similar subpoenae were issued against the directors and officers of Philcomsat Holdings.

Again, Chairman Sabio refused to appear. He sent a letter to Sen. Gordon invoking Section 4(b) of E.O. No. 1. On the other hand, the
directors of Philcomstat Holdings raised the issues on the proper legislative inquiry.

Another notice was sent to Sabio requiring him to appear and testify on the same subject matter but the same did not comply. Sabio
again sent a letter reiterating his position.

This prompted Senator Gordon to issue an Order requiring Chairman Sabio and Commissioners Abcede, Conti, Javier and Nario to show
cause why they should not be cited in contempt of the Senate.

Unconvinced with the Compliance and Explanation, the Committee on Government Corporations and Public Enterprises and the
Committee on Public Services issued an Order directing Major General Jose Balajadia (Ret.), Senate Sergeant-At-Arms, to place
Chairman Sabio and his Commissioners under arrest for contempt of the Senate.

Sabio was arrested.

Hence, he filed with the Supreme Court a petition for habeas corpus against the Senate Committee on Government Corporations and
Public Enterprises and Committee on Public Services, their Chairmen, Senators Richard Gordon and Joker P. Arroyo and Members.
He together with Commissioners Abcede, Conti, Nario, and Javier, and the PCGG's nominees to Philcomsat Holdings Corporation,
Manuel Andal and Julio Jalandoni filed a petition for certiorari and prohibition against the same respondents, and also against Senate
President Manuel Villar, Senator Juan Ponce Enrile, the Sergeant-at-Arms, and the entire Senate.

Meanwhile, Philcomsat Holdings Corporation and its officers and directors, filed a petition for certiorari and prohibition against the Senate
Committees on Government Corporations and Public Enterprises and Public Services, their Chairmen, Senators Gordon and Arroyo, and
Members.

Sabio and the PCGG Commissioners alleged that:

1. Respondent Senate Committees disregarded Section 4(b) of E.O. No. 1 without any justifiable reason;
2. The inquiries conducted by respondent Senate Committees are not in aid of legislation;
3. The inquiries were conducted in the absence of duly published Senate Rules of Procedure Governing Inquiries in Aid of
Legislation; and
4. Respondent Senate Committees are not vested with the power of contempt.

Philcomsat Holdings Corporation and its directors and officers alleged:

1. Respondent Senate Committees have no jurisdiction over the subject matter stated in Senate Res. No. 455;
2. The same inquiry is not in accordance with the Senate's Rules of Procedure Governing Inquiries in Aid of Legislation;
3. The subpoenae against the individual petitioners are void for having been issued without authority;
4. The conduct of legislative inquiry pursuant to Senate Res. No. 455 constitutes undue encroachment by respondents into
justiciable controversies over which several courts and tribunals have already acquired jurisdiction; and
5. The subpoenae violated petitioners' rights to privacy and against self-incrimination.

In their Comment, the respondents countered the petitioners’ arguments:

1. the issues raised in the petitions involve political questions over which SC has no jurisdiction
2. Section 4(b) has been repealed by the Constitution;
3. Respondent Senate Committees are vested with contempt power;
4. Senate's Rules of Procedure Governing Inquiries in Aid of Legislation have been duly published;
5. Respondents have not violated any civil right of the individual petitioners, such as their (a) right to privacy; and (b) right against
self-incrimination; and
6. The inquiry does not constitute undue encroachment into justiciable controversies.

ISSUES:

WON Section 4(b) of E.O. No. 1 constitutes a limitation on the power of legislative inquiry, and a recognition by the State of the need to
provide protection to the PCGG in order to ensure the unhampered performance of its duties under its charter.

HELD:

Petition for Habeas Corpus has became moot because Sabio was allowed to go home.

Perched on one arm of the scale of justice is Article VI, Section 21 of the 1987 Constitution granting respondent Senate Committees the
power of legislative inquiry. It reads:

The Senate or the House of Representatives or any of its respective committees may conduct inquiries in aid of legislation in
accordance with its duly published rules of procedure. The rights of persons appearing in or affected by such inquiries shall be
respected.
On the other arm of the scale is Section 4(b) of E.O. No.1 limiting such power of legislative inquiry by exempting all PCGG members or
staff from testifying in any judicial, legislative or administrative proceeding, thus:

No member or staff of the Commission shall be required to testify or produce evidence in any judicial, legislative or
administrative proceeding concerning matters within its official cognizance.

Arnault vs. Nazareno :

“The power of inquiry – with process to enforce it – is an essential and appropriate auxiliary to the legislative function. A
legislative body cannot legislate wisely or effectively in the absence of information respecting the conditions which the legislation
is intended to affect or change; and where the legislation body does not itself possess the requisite information – which is not
infrequently true – recourse must be had to others who possess it."

The Court's high regard to such power is rendered more evident in Senate v. Ermita, where it categorically ruled that "the power of inquiry
is broad enough to cover officials of the executive branch." Verily, the Court reinforced the doctrine in Arnault that "the operation of
government, being a legitimate subject for legislation, is a proper subject for investigation" and that "the power of inquiry is co-extensive
with the power to legislate."

Considering these jurisprudential instructions, The Court find Section 4(b) directly repugnant with Article VI, Section 21.
Section 4(b) exempts the PCGG members and staff from the Congress' power of inquiry. This cannot be countenanced.
Nowhere in the Constitution is any provision granting such exemption. The Congress' power of inquiry, being broad,
encompasses everything that concerns the administration of existing laws as well as proposed or possibly needed statutes. It
even extends "to government agencies created by Congress and officers whose positions are within the power of Congress to
regulate or even abolish." PCGG belongs to this class.

Certainly, a mere provision of law cannot pose a limitation to the broad power of Congress, in the absence of any constitutional
basis.

Furthermore, Section 4(b) is also inconsistent with Article XI, Section 1 of the Constitution stating that: "Public office is a public trust.
Public officers and employees must at all times be accountable to the people, serve them with utmost responsibility, integrity, loyalty, and
efficiency, act with patriotism and justice, and lead modest lives."

Tolentino v. Secretary of Finance - 249 SCRA 635

FACTS:
Petitioners (Tolentino, Kilosbayan, Inc., Philippine Airlines, Roco, and Chamber of Real Estate and Builders Association) seek
reconsideration of the Court’s previous ruling dismissing the petitions filed for the declaration of unconstitutionality of R.A. No. 7716, the
Expanded Value-Added Tax Law. Petitioners contend that the R.A. did not “originate exclusively” in the HoR as required by Article 6,
Section 24 of the Constitution. The Senate allegedly did not pass it on second and third readings, instead passing its own version.
Petitioners contend that it should have amended the House bill by striking out the text of the bill and substituting it with the text of its own
bill, so as to conform with the Constitution.
RA 7716, otherwise known as the Expanded Value-Added Tax Law, is an act that seeks to widen the tax base of the existing VAT
system and enhance its administration by amending the National Internal Revenue Code. There are various suits questioning and
challenging the constitutionality of RA 7716 on various grounds.

Tolentino contends that RA 7716 did not originate exclusively from the House of Representatives but is a mere consolidation of HB.
No. 11197 and SB. No. 1630 and it did not pass three readings on separate days on the Senate thus violating Article VI, Sections
24 and 26(2) of the Constitution, respectively.
 Art. VI, Section 24: All appropriation, revenue or tariff bills, bills authorizing increase of the public debt, bills of local application, and
private bills shall originate exclusively in the House of Representatives, but the Senate may propose or concur with amendments.

Art. VI, Section 26(2): No bill passed by either House shall become a law unless it has passed three readings on separate days,
and printed copies thereof in its final form have been distributed to its Members three days before its passage, except when the
President certifies to the necessity of its immediate enactment to meet a public calamity or emergency. Upon the last reading of a
bill, no amendment thereto shall be allowed, and the vote thereon shall be taken immediately thereafter, and the yeas and nays
entered in the Journal.

ISSUE:
W/N the R.A. is unconstitutional for having “originated” from the Senate, and not the HoR.

HELD:
Petition is unmeritorious. The enactment of the Senate bill has not been the first instance where the Senate, in the exercise of its power
to propose amendments to bills (required to originate in the House), passed its own version. An amendment by substitution (striking out
the text and substituting it), as urged by petitioners, concerns a mere matter of form, and considering the petitioner has not shown what
substantial difference it would make if Senate applied such substitution in the case, it cannot be applied to the case at bar. While the
aforementioned Constitutional provision states that bills must “originate exclusively in the HoR,” it also adds, “but the Senate may
propose or concur with amendments.” The Senate may then propose an entirely new bill as a substitute measure. Petitioners erred in
assuming the Senate version to be an independent and distinct bill. Without the House bill, Senate could not have enacted the Senate
bill, as the latter was a mere amendment of the former. As such, it did not have to pass the Senate on second and third readings.

Petitioners question the signing of the President on both bills, to support their contention that such are separate and distinct. The
President certified the bills separately only because the certification had to be made of the version of the same revenue bill which AT THE
MOMENT was being considered.

Petitioners question the power of the Conference Committee to insert new provisions. The jurisdiction of the conference committee is not
limited to resolving differences between the Senate and the House. It may propose an entirely new provision, given that such are
germane to the subject of the conference, and that the respective houses of Congress subsequently approve its report.

Petitioner PAL contends that the amendment of its franchise by the withdrawal of its exemption from VAT is not expressed in the title of
the law, thereby violating the Constitution. The Court believes that the title of the R.A. satisfies the Constitutional Requirement.

Petitioners claim that the R.A. violates their press freedom and religious liberty, having removed them from the exemption to pay VAT.
Suffice it to say that since the law granted the press a privilege, the law could take back the privilege anytime without offense to the
Constitution. By granting exemptions, the State does not forever waive the exercise of its sovereign prerogative.

Lastly, petitioners contend that the R.A. violates due process, equal protection and contract clauses and the rule on taxation. Petitioners
fail to take into consideration the fact that the VAT was already provided for in E.O. No. 273 long before the R.A. was enacted. The latter
merely EXPANDS the base of the tax. Equality and uniformity in taxation means that all taxable articles or kinds of property of the same
class be taxed at the same rate, the taxing power having authority to make reasonable and natural classifications for purposes of
taxation. It is enough that the statute applies equally to all persons, forms and corporations placed in s similar situation.

Tolentino v Sec. of Finance

Facts:
- House of Rep. filed House Bill 11197 (An Act Restructuring the VAT System to Widen its Tax Base and Enhance its Admin., Amending
for these Purposes…)
- Upon receipt of Senate, Senate filed another bill completely different from that of the House Bill
- Senate finished debates on the bill and had the 2nd and 3rd reading of the Bill on the same day
- Bill was deliberated upon in the Conference Committee and become enrolled bill which eventually became the EVAT law.

Procedural Issue:
(1) WoN RA 7716 originated exclusively from the House of Rep. in accordance with sec 24, art 6 of Consti
(2) WoN the Senate bill violated the “three readings on separate days” requirement of the Consti
(3) WoN RA 7716 violated sec 26(1), art 6 - one subject, one title rule.
NOTE: This case was filed by PAL because before the EVAT Law, they were exempt from taxes. After the passage of EVAT, they were
already included. PAL contended that neither the House or Senate bill provided for the removal of the exemption from taxes of PAL and
that it was inly made after the meeting of the Conference Committee w/c was not expressed in the title of RA 7166

Held:
(1) YES! Court said that it is not the law which should originate from the House of Rep, but the revenue bill which was required to originate
from the House of Rep. The inititiative must ocme from the Lower House because they are elected in the district level – meaning they are
expected to be more sensitive to the needs of the locality.
Also, a bill originating from the Lower House may undergo extensive changes while in the Senate. Senate can introduce a separate and
distinct bill other than the one the Lower House proposed. The Constitution does not prohibit the filing in the Senate of a substitute bill in
anticipation of its receipt of the House bill, so long as action by Senate is withheld pending the receipt of the House bill.
(2) NO. The Pres. certified that the Senate bill was urgent. Presidential certification dispensed the requirement not only of printing but also
reading the bill in 3 separate days. In fact, the Senate accepted the Pres. certification
(3) No. Court said that the title states that the purpose of the statute is to expand the VAT system and one way of doing this is to widen its
base by withdrawing some of the exemptions granted before. It is also in the power of Congress to amend, alter, repeal grant of
franchises for operation of public utility when the common good so requires.
One subject rule is intended to prevent surprise upon Congress members and inform people of pending legislation. In the case of PAL,
they did not know of their situation not because of any defect in title but because they might have not noticed its publication until some
event calls attention to its existence.

TOLENTINO VS. THE SECRETARY OF FINANCE Case Digest

ARTURO M. TOLENTINO VS. THE SECRETARY OF FINANCE and THE COMMISSIONER OF INTERNAL REVENUE
1994 Aug 25
G.R. No. 115455
235 SCRA 630
FACTS: The valued-added tax (VAT) is levied on the sale, barter or exchange of goods and properties as well as on the sale or
exchange of services. It is equivalent to 10% of the gross selling price or gross value in money of goods or properties sold, bartered or
exchanged or of the gross receipts from the sale or exchange of services. Republic Act No. 7716 seeks to widen the tax base of the
existing VAT system and enhance its administration by amending the National Internal Revenue Code.

The Chamber of Real Estate and Builders Association (CREBA) contends that the imposition of VAT on sales and leases by virtue of
contracts entered into prior to the effectivity of the law would violate the constitutional provision of “non-impairment of contracts.”

ISSUE: Whether R.A. No. 7716 is unconstitutional on ground that it violates the contract clause under Art. III, sec 10 of the Bill of Rights.

RULING: No. The Supreme Court the contention of CREBA, that the imposition of the VAT on the sales and leases of real estate by
virtue of contracts entered into prior to the effectivity of the law would violate the constitutional provision of non-impairment of contracts, is
only slightly less abstract but nonetheless hypothetical. It is enough to say that the parties to a contract cannot, through the exercise of
prophetic discernment, fetter the exercise of the taxing power of the State. For not only are existing laws read into contracts in order to fix
obligations as between parties, but the reservation of essential attributes of sovereign power is also read into contracts as a basic
postulate of the legal order. The policy of protecting contracts against impairment presupposes the maintenance of a government which
retains adequate authority to secure the peace and good order of society. In truth, the Contract Clause has never been thought as a
limitation on the exercise of the State's power of taxation save only where a tax exemption has been granted for a valid consideration.

Such is not the case of PAL in G.R. No. 115852, and the Court does not understand it to make this claim. Rather, its position, as
discussed above, is that the removal of its tax exemption cannot be made by a general, but only by a specific, law.

Further, the Supreme Court held the validity of Republic Act No. 7716 in its formal and substantive aspects as this has been raised in the
various cases before it. To sum up, the Court holds:

(1) That the procedural requirements of the Constitution have been complied with by Congress in the enactment of the statute;

(2) That judicial inquiry whether the formal requirements for the enactment of statutes - beyond those prescribed by the Constitution -
have been observed is precluded by the principle of separation of powers;

(3) That the law does not abridge freedom of speech, expression or the press, nor interfere with the free exercise of religion, nor deny to
any of the parties the right to an education; and

(4) That, in view of the absence of a factual foundation of record, claims that the law is regressive, oppressive and confiscatory and that it
violates vested rights protected under the Contract Clause are prematurely raised and do not justify the grant of prospective relief by writ
of prohibition.
WHEREFORE, the petitions are DISMISSED.
Tolentino vs. Secretary of Finance G.R. No. 115455, August 25, 1994
Sunday, January 25, 2009 Posted by Coffeeholic Writes
Labels: Case Digests, Political Law

Facts: The value-added tax (VAT) is levied on the sale, barter or exchange of goods and properties as well as on the sale or exchange of
services. RA 7716 seeks to widen the tax base of the existing VAT system and enhance its administration by amending the National
Internal Revenue Code. There are various suits challenging the constitutionality of RA 7716 on various grounds.

One contention is that RA 7716 did not originate exclusively in the House of Representatives as required by Art. VI, Sec. 24 of the
Constitution, because it is in fact the result of the consolidation of 2 distinct bills, H. No. 11197 and S. No. 1630. There is also a
contention that S. No. 1630 did not pass 3 readings as required by the Constitution.

Issue: Whether or not RA 7716 violates Art. VI, Secs. 24 and 26(2) of the Constitution
Held: The argument that RA 7716 did not originate exclusively in the House of Representatives as required by Art. VI, Sec. 24 of the
Constitution will not bear analysis. To begin with, it is not the law but the revenue bill which is required by the Constitution to originate
exclusively in the House of Representatives. To insist that a revenue statute and not only the bill which initiated the legislative process
culminating in the enactment of the law must substantially be the same as the House bill would be to deny the Senate’s power not only to
concur with amendments but also to propose amendments. Indeed, what the Constitution simply means is that the initiative for filing
revenue, tariff or tax bills, bills authorizing an increase of the public debt, private bills and bills of local application must come from the
House of Representatives on the theory that, elected as they are from the districts, the members of the House can be expected to be
more sensitive to the local needs and problems. Nor does the Constitution prohibit the filing in the Senate of a substitute bill in
anticipation of its receipt of the bill from the House, so long as action by the Senate as a body is withheld pending receipt of the House
bill.

The next argument of the petitioners was that S. No. 1630 did not pass 3 readings on separate days as required by the Constitution
because the second and third readings were done on the same day. But this was because the President had certified S. No. 1630 as
urgent. The presidential certification dispensed with the requirement not only of printing but also that of reading the bill on separate days.
That upon the certification of a bill by the President the requirement of 3 readings on separate days and of printing and distribution can be
dispensed with is supported by the weight of legislative practice.

*****

Tolentino vs. Secretary of Finance

Facts: These are motions seeking reconsideration of our decision dismissing the petitions filed in these cases for the declaration of
unconstitutionality of R.A. No. 7716, otherwise known as the Expanded Value-Added Tax Law. Now it is contended by the PPI that by
removing the exemption of the press from the VAT while maintaining those granted to others, the law discriminates against the press. At
any rate, it is averred, "even nondiscriminatory taxation of constitutionally guaranteed freedom is unconstitutional."

Issue: Does sales tax on bible sales violative of religious freedom?

Held: No. The Court was speaking in that case of a license tax, which, unlike an ordinary tax, is mainly for regulation. Its imposition on the
press is unconstitutional because it lays a prior restraint on the exercise of its right. Hence, although its application to others, such those
selling goods, is valid, its application to the press or to religious groups, such as the Jehovah's Witnesses, in connection with the latter's
sale of religious books and pamphlets, is unconstitutional. As the U.S. Supreme Court put it, "it is one thing to impose a tax on income or
property of a preacher. It is quite another thing to exact a tax on him for delivering a sermon."

The VAT is, however, different. It is not a license tax. It is not a tax on the exercise of a privilege, much less a constitutional right. It is
imposed on the sale, barter, lease or exchange of goods or properties or the sale or exchange of services and the lease of properties
purely for revenue purposes. To subject the press to its payment is not to burden the exercise of its right any more than to make the
press pay income tax or subject it to general regulation is not to violate its freedom under the Constitution

PASCUAL vs. SECRETARY OF PUBLIC WORKS

110 PHIL 331
GR No. L-10405, December 29, 1960

"A law appropriating the public revenue is invalid if the public advantage or benefit, derived from such expenditure, is merely incidental in
the promotion of a particular enterprise."

FACTS: Governor Wenceslao Pascual of Rizal instituted this action for declaratory relief, with injunction, upon the ground that RA No.
920, which apropriates funds for public works particularly for the construction and improvement of Pasig feeder road terminals. Some of
the feeder roads, however, as alleged and as contained in the tracings attached to the petition, were nothing but projected and planned
subdivision roads, not yet constructed within the Antonio Subdivision, belonging to private respondent Zulueta, situated at Pasig, Rizal;
and which projected feeder roads do not connect any government property or any important premises to the main highway. The
respondents' contention is that there is public purpose because people living in the subdivision will directly be benefitted from the
construction of the roads, and the government also gains from the donation of the land supposed to be occupied by the streets, made by
its owner to the government.
ISSUE: Should incidental gains by the public be considered "public purpose" for the purpose of justifying an expenditure of the
government?

HELD: No. It is a general rule that the legislature is without power to appropriate public revenue for anything but a public purpose. It is the
essential character of the direct object of the expenditure which must determine its validity as justifying a tax, and not the magnitude of
the interest to be affected nor the degree to which the general advantage of the community, and thus the public welfare, may be
ultimately benefited by their promotion. Incidental to the public or to the state, which results from the promotion of private interest and the
prosperity of private enterprises or business, does not justify their aid by the use public money.
The test of the constitutionality of a statute requiring the use of public funds is whether the statute is designed to promote the public
interest, as opposed to the furtherance of the advantage of individuals, although each advantage to individuals might incidentally serve
the public.

Facts:
1. Petitioner was the governor of Rizal, filed a petition assailing the validity of R.A. 920 which contains an item providing for an
appropriation of P85,000.00 for the construction and repair of a feeder road in Pasig. The said law was passed in Congress and
approved by the President.

2. The property over which the feeder road will be constructed is however owned by Sen. Zulueta. The property was to be donated to the
local government, though the donation was made a few months after the appropriation was included in RA 920. The petition alleged that
the said planned feeder road would relieve Zulueta the responsibility of improving the road which is inside a private subdivision.

3. The lower court (RTC) ruled that the petitioner has standing to assail the validity of RA 920, due to the public interest involved in the
appropriation. However, he does not have a standing with respect to the donation since he does not have an interest that will be injured
by said donation, hence it dismissed the petition.

Issue: Whether or not the petitioner has the standing to file the petition

YES.

1. Petitioner has standing. He is not merely a taxpayer but the governor of the province of Rizal which is considered one of the most
populated biggest provinces during that time, its taxpayers bear a substantial portion of the burden of taxation in the country.

2. Public funds can only be appropriated for a public purpose. The test of the constitutionality of a statute requiring the use of public funds
is whether it is used to promote public interest. Moreover, the validity of a stature depends on the powers of the Congress at the time of
its passage or approval, not upon events occurring, or acts performed subsequent thereto, unless it is an amendment of the organic law.

FACTS:

The main target of this petition is **Section 35 of R.A. No. 7354. These measures withdraw the franking privilege from the SC, CA, RTC,
MTC and the Land Registration Commission and its Registers of Deeds, along with certain other government offices. The petitioners are
members of the lower courts who feel that their official functions as judges will be prejudiced by the above-named measures. The petition
assails the constitutionality of R.A. No. 7354 (see ISSUE for the grounds stated by the petitioners).

Section 35 of Republic Act No. 7354 authorized the Philippine Postal Corporation (PPC) to withdraw franking privileges from certain
government agencies. Franking privilege is a privilege granted to certain agencies to make use of the Philippine postal service free of
charge.
In 1992, a study came about where it was determined that the bulk of the expenditure of the postal service comes from the judiciary’s use
of the postal service (issuance of court processes). Hence, the postal service recommended that the franking privilege be withdrawn from
the judiciary. AS a result, the PPC issued a circular withdrawing the said franking privilege.
The Philippine Judges Association (PJA) assailed the circular and questioned the validity of Section 35 of RA 7354. PJA claimed that the
said provision is violative of the equal protection clause.

ISSUE:

WON RA No.7354 is unconstitutional based on the following grounds:

1) its *title embraces more than one subject and does not express its purposes;

(2) it did not pass the required readings in both Houses of Congress and printed copies of the bill in its final form were not distributed
among the members before its passage; and (3) it is discriminatory and encroaches on the independence of the Judiciary.

HELD:

1. The petitioners' contention is untenable. The title of the bill is not required to be an index to the body of the act, or to be as
comprehensive as to cover every single detail of the measure. It has been held that if the title fairly indicates the general subject, and
reasonably covers all the provisions of the act, and is not calculated to mislead the legislature or the people, there is sufficient compliance
with the constitutional requirement. In the case at bar, the repealing clause which includes the withdrawal of franking privileges is merely
the effect and not the subject of the statute; and it is the subject, not the effect of a law, which is required to be briefly expressed in its
title.

2. This argument is unacceptable. While a conference committee is the mechanism for compromising differences between the Senate
and the House, it is not limited in its jurisdiction to this question. It may propose an entirely new provision. The court also added that said
the bill in question was duly approved by the Senate and the House of Representatives. It was enrolled with its certification by Senate
President and Speaker of the House of Representatives. It was then presented to and approved by President the President. Under the
doctrine of separation powers, the Court may not inquire beyond the certification of the approval of a bill from the presiding officers of
Congress. An enrolled bill is conclusive upon the Judiciary. The court therefore declined to look into the petitioners' charges. Both the
enrolled bill and the legislative journals certify that the measure was duly enacted. The court is bound by such official assurances from a
coordinate department of the government.

3. Yes, the clause denies the Judiciary the equal protection of the laws guaranteed for all persons or things similarly situated. The
distinction made by the law is superficial. It is not based on substantial distinctions that make real differences between the Judiciary and
the grantees of the franking privilege (Pres, VP, Senators etc.). If the problem of the respondents is the loss of revenues from the franking
privilege, the remedy, it seems to us, is to withdraw it altogether from all agencies of government. The problem is not solved by retaining
it for some and withdrawing it from others, especially where there is no substantial distinction between those favored, which may or may
not need it at all, and the Judiciary, which definitely needs it.

Therefore, Sec 35 of RA 7345 is UNCONSTITUTIONAL.

-----------------------

* "An Act Creating the Philippine Postal Corporation, Defining its Powers, Functions and Responsibilities, Providing for Regulation of the
Industry and for Other Purposes Connected Therewith."
** Sec. 35. Repealing Clause. — All acts, decrees, orders, executive orders, instructions, rules and regulations or parts thereof
inconsistent with the provisions of this Act are repealed or modified accordingly.

All franking privileges authorized by law are hereby repealed, except those provided for under Commonwealth Act No. 265, Republic Acts
Numbered 69, 180, 1414, 2087 and 5059. The Corporation may continue the franking privilege under Circular No. 35 dated October 24,
1977 and that of the Vice President, under such arrangements and conditions as may obviate abuse or unauthorized use thereof.

Gonzales vs. Macaraig

G.R. No 87636 November 19, 1990

Ponente: J. Melencio – Herrera

Facts:

December 16, 1988, Congress passed House Bill No. 19186 aka General Appropriations Bill for Fiscal Year 1989. December 29, 1988,
President signed the Bill into law and had become Rep. Act No 6688. In the process, seven special provisions and Section 55 on
“General Provision” were vetoed.

Senate issued Resolution No. 381 expressing the veto by the president were unconstitutional.

"SEC. 55. Prohibition Against the Restoration or Increase of Recommended Appropriations Disapproved and/or Reduced by
Congress: No item of appropriation recommended by the President in the Budget submitted to Congress pursuant to Article VII, Section
22 of the Constitution which has been disapproved or reduced in this Act shall be restored or increased by the use of appropriations
authorized for other purposes by augmentation. An item of appropriation for any purpose recommended by the President in the Budget
shall be deemed to have been disapproved by Congress if no corresponding appropriation for the specific purpose is provided in this
Act."

Issue:

Whether or not veto made by the president is constitutional

Held:
Yes.
1) Article 6 Section 27 of the 1987 Constitution has 2 parts, 1) President generally can veto the entire bill as exercise of her power and 2)
president shall have the power to veto any particular item or items in an appropriation, revenue of tariff bill but the veto shall not affect the
item or items to which he does not object.
2) General provisions made in an appropriations bill shall ultimately refer to a specific appropriation for it to take effect; Section 55 did not
refer to any appropriations involved in the entire bill. Similarly, the contents of this section is concerned on Appropriation Disapproved
and/or reduced by Congress that is not included on the face of the bill.

Court ruled the constitutionality of the presidential veto and the petition was DISMISSED,

CIR v. Santos, 277 SCRA 617 (1997)

G.R. No. 119252 August 18, 1997

COMMISSIONER OF INTERNAL REVENUE and COMMISSIONER OF CUSTOMS, petitioners,

vs.
HON. APOLINARIO B. SANTOS, in his capacity as Presiding Judge of the Regional Trial Court, Branch 67, Pasig City; ANTONIO
M. MARCO; JEWELRY BY MARCO & CO., INC., and GUILD OF PHILIPPINE JEWELLERS, INC., respondents.

HERMOSISIMA, JR., J.:

Facts:

Guild of Phil. Jewelers, Inc. questions the constitutionality of certain provisions of the NIRC and Tariff and Customs Code of the
Philippines. It is their contention that the present Tariff and tax structure increases manufacturing costs and render local jewelry
manufacturers uncompetitive against other countries, in support of their position, they submitted what they purported to be an exhaustive
study of the tax rates on jewelry prevailing in other Asian countries, in comparison to tax rates levied in the country.

Judge Santos of RTC Pasig, ruled that the laws in question are confiscatory and oppressive and declared them INOPERATIVE and
WITHOUT FORCE AND EFFECT insofar as petitioners are concerned.

Petitioner CIR assailed decision rendered by respondent judge contending that the latter has no authority to pass judgment upon the
taxation policy of the Government. Petitioners also impugn the decision by asserting that there was no showing that the tax laws on
jewelry are confiscatory.

Issue:

I. Whether RTC has authority to pass judgment upon taxation policy of the government.

II. WON the state has the power to select the subjects of taxation.

Ruling:

I. The policy of the court is to avoid ruling on constitutional questions and to presume that the acts of the political departments are
valid in the absence of a clear and unmistakable showing to the contrary.

This is not to say that RTC has no power whatsoever to declare a law unconstitutional. But this authority does not extend to
deciding questions which pertain to legislative policy.

RTC have the power to declare the law unconstitutional but this authority does not extend to deciding questions which pertain to
legislative policy. RTC can only look into the validity of a provision, that is whether or not it has been passed according to the provisions
laid down by law, and thus cannot inquire as to the reasons for its existence.
 II. YES. The respondents presented an exhaustive study on the tax rates on jewelry levied by different Asian countries. This is
meant to convince us that compared to other countries; the tax rates imposed on said industry in the Philippines is oppressive and
confiscatory. This Court, however, cannot subscribe to the theory that the tax rates of other countries should be used as a yardstick in
determining what may be the proper subjects of taxation in our own country. It should be pointed out that in imposing the aforementioned
taxes and duties, the State, acting through the legislative and executive branches, is exercising its sovereign prerogative. It is inherent in
the power to tax that the State be free to select the subjects of taxation, and it has been repeatedly held that "inequalities which result
from a singling out or one particular class for taxation, or exemption, infringe no constitutional limitation." 25

Tan v Del Rosario

Facts:

1. Two consolidated cases assail the validity of RA 7496 or the Simplified Net Income Taxation Scheme ("SNIT"), which amended certain
provisions of the NIRC, as well as the Rules and Regulations promulgated by public respondents pursuant to said law.

2. Petitioners posit that RA 7496 is unconstitutional as it allegedlyviolates the following provisions of the Constitution:

-Article VI, Section 26(1) — Every bill passed by the Congress shall embrace only one subject which shall be expressed in the title
thereof.
- Article VI, Section 28(1) — The rule of taxation shall be uniform and equitable. The Congress shall evolve a progressive system of
taxation.
- Article III, Section 1 — No person shall be deprived of . . . property without due process of law, nor shall any person be denied the equal
protection of the laws.

3. Petitioners contended that public respondents exceeded their rule-making authority in applying SNIT to general professional partnerships.
Petitioner contends that the title of HB 34314, progenitor of RA 7496, is deficient for being merely entitled, "Simplified Net Income
Taxation Scheme for the Self-Employed and Professionals Engaged in the Practice of their Profession" (Petition in G.R. No. 109289)
when the full text of the title actually reads,
'An Act Adopting the Simplified Net Income Taxation Scheme For The Self-Employed and Professionals Engaged In The Practice of Their
Profession, Amending Sections 21 and 29 of the National Internal Revenue Code,' as amended. Petitioners also contend it violated due
process.

5. The Solicitor General espouses the position taken by public respondents.

6. The Court has given due course to both petitions.

ISSUE: Whether or not the tax law is unconstitutional for violating due process

NO. The due process clause may correctly be invoked only when there is a clear contravention of inherent or constitutional limitations in
the exercise of the tax power. No such transgression is so evident in herein case.

1. Uniformity of taxation, like the concept of equal protection, merely requires that all subjects or objects of taxation, similarly situated, are to
be treated alike both in privileges and liabilities. Uniformity does not violate classification as long as: (1) the standards that are used
therefor are substantial and not arbitrary, (2) the categorization is germane to achieve the legislative purpose, (3) the law applies, all
things being equal, to both present and future conditions, and (4) the classification applies equally well to all those belonging to the same
class.
2. What is apparent from the amendatory law is the legislative intent to increasingly shift the income tax system towards the schedular
approach in the income taxation of individual taxpayers and to maintain, by and large, the present global treatment on taxable
corporations. The Court does not view this classification to be arbitrary and inappropriate.

ISSUE 2: Whether or not public respondents exceeded their authority in promulgating the RR

No. There is no evident intention of the law, either before or after the amendatory legislation, to place in an unequal footing or in
significant variance the income tax treatment of professionals who practice their respective professions individually and of those who do it
through a general professional partnership.