February 27, 1971
Ponente: Villamor, J.
FACTS:
·
On February 24, 1970, Misael P. Vera,
Commissioner of Internal Revenue, wrote a letter addressed to Judge Vivencio M.
Ruiz requesting the issuance of a search warrant against Bache & Co.
(Phils.) for violation of Section 46(a) of the NIRC, in relation to all other
pertinent provisions thereof, particularly Sections 53, 72, 73, 208 and 209.
The said letter likewise authorized Revenue Examiner Rodolfo de Leon to make
and file the application for search warrant.
·
In the afternoon of the following day, De Leon
and his witness, Arturo Logronio, went to the CFI of Rizal. They brought with
them the following papers: Vera’s aforesaid letter-request; an application for
search warrant already filled up but still unsigned by De Leon; an affidavit of
Logronio subscribed before De Leon; a deposition in printed form of Logronio
already accomplished and signed by him but not yet subscribed; and a search
warrant already accomplished but still unsigned by Judge Ruiz.
·
At that time, Judge Ruiz was still hearing a
different case. So by means of a note, he instructed his Deputy Clerk of Court
to take the depositions of De Leon and Logronio.
·
After the session had adjourned, Judge Ruiz
was informed that the depositions had already been taken. The stenographer,
upon request of Judge Ruiz, read to him her stenographic notes; and thereafter,
Judge Ruiz asked Logronio to take the oath and warned him that if his
deposition was found to be false and without legal basis, he could be charged
for perjury. Judge Ruiz then signed De Leon’s application for search warrant
and Logronio’s deposition. Search Warrant No. 2-M-70 was then sign by Judge
Ruiz and accordingly issued.
·
Three days later, or on February 28, 1970,
which was a Saturday, the BIR agents served the search warrant against Bache
& Co. at their Ayala Avenue office in Makati. The company's lawyers
protested the search on the ground that no formal complaint or transcript of
testimony was attached to the warrant. The agents nevertheless proceeded with their
search which yielded six boxes of documents.
·
On March 3, 1970, Bache & Co. filed a
petition before the CFI of Rizal praying that the search warrant be quashed,
dissolved or recalled, that preliminary prohibitory and mandatory writs of
injunction be issued, that the search warrant be declared null and void, and
that the BIR and Judge Ruiz be ordered to pay Bache & Co. jointly and
severally, damages and attorney’s fees. This petition was denied.
·
On April 16, 1970, the BIR made tax
assessments on Bache & Co. in the total sum of P2,594,729.97, partly, if
not entirely, based on the documents thus seized.
·
Hence, the instant petition for certiorari,
prohibition and mandamus, with prayer for a writ of preliminary mandatory and
prohibitory injunction..
RULING:
Whether
the search warrant issued by Judge Ruiz is valid. – NO.
·
Search Warrant No. 2-M-70 issued by Judge Ruiz
is null and void on three grounds:
Judge Ruiz
failed to personally examine the complainant and his witness.
·
The participation of Judge Ruiz in the
proceedings which led to the issuance of Search Warrant No. 2-M-70 was limited
to listening to the stenographer’s readings of her notes, to a few words of warning
against the commission of perjury, and to administering the oath to the
complainant and his witness. This cannot be considered a personal examination.
If there was an examination at all of the complainant and his witness, it was
the one conducted by the Deputy Clerk of Court.
·
Judge Ruiz's omission was in violation of the
Constituion and the ROC. Art. III, Sec. 1, Constitution provides that:
The right of the people to be secure in their persons, houses,
papers and effects against unreasonable searches and seizures shall not be
violated, and no warrants shall issue but upon probable cause, to be determined
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.
·
Rule 126 of the Revised ROC provides that:
A search warrant shall not issue but upon probable cause in connection with one specific offense to be determined by the judge or justice of the peace 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 (Sec. 3) and that the judge or justice of the peace must, before issuing the warrant, personally examine on oath or affirmation the complainant and any witnesses he may produce and take their depositions in writing, and attach them to the record, in addition to any affidavits presented to him (Sec. 4).
·
The examination of the complainant and the
witnesses he may produce, required by Art. III, Sec. 1, par. 3, of the 1935
Constitution, and by Secs. 3 and 4, Rule 126 of the Revised Rules of Court,
should be conducted by the judge himself and not by others. The phrase
"which shall be determined by the judge after examination under oath or
affirmation of the complainant and the witnesses he may produce,"
appearing in the said constitutional provision, was introduced by Delegate
Francisco as an amendment to the draft submitted by the Sub-Committee of Seven.
Part of the deliberations provided that:
MR.
LAUREL. . . . The reason why we are in favor of this amendment is because we
are incorporating in our constitution something of a fundamental character.
Now, before a judge could issue a search warrant, he must be under the
obligation to examine personally under oath the complainant and if he has any
witness, the witnesses that he may produce . . .
·
It was
precisely on account of the intention of the delegates to the Constitutional
Convention to make it a duty of the issuing judge to personally examine the
complainant and his witnesses that the question of how much time would be
consumed by the judge in examining them came up before the Convention.
·
As applied in the instant case, the reading of
the stenographic notes to Judge Ruiz did not constitute sufficient compliance
with the constitutional mandate and the rule; for by that manner Judge Ruiz did
not have the opportunity to observe the demeanor of the complainant and his
witness, and to propound initial and follow-up questions which the judicial
mind, on account of its training, was in the best position to conceive. These
were important in arriving at a sound inference on the all-important question
of whether or not there was probable cause.
The search
warrant was issued for more than one specific offense.
·
Sec. 3 of Rule 126 of the Revised ROC provides
that "No search warrant shall issue for more than one specific
offense."
·
In the instant case, Search Warrant No. 2-M-70
was issued for "violation of Sec. 46(a) of the National Internal Revenue
Code in relation to all other pertinent provisions thereof particularly Secs.
53, 72, 73, 208 and 209."
·
As can be seen, the search warrant in question
was issued for at least four distinct offenses under the Tax Code. The first is
the violation of Sec. 46(a), Sec. 72 and Sec. 73 (the filing of income tax
returns), which are interrelated. The second is the violation of Sec. 53
(withholding of income taxes at source). The third is the violation of Sec. 208
(unlawful pursuit of business or occupation); and the fourth is the violation
of Sec. 209 (failure to make a return of receipts, sales, business or gross
value of output actually removed or to pay the tax due thereon). Even in their
classification the six above-mentioned provisions are embraced in two different
titles: Secs. 46(a), 53, 72 and 73 are under Title II (Income Tax); while Secs.
208 and 209 are under Title V (Privilege Tax on Business and Occupation).
The search
warrant does not particularly describe the things to be seized.
·
Art III, Sec. 1, of the 1935 Constitution, and
Sec. 3, Rule 126 of the Revised ROC require that the warrant should
particularly describe the things to be seized. The evident purpose and intent
of this requirement is to limit the things to be seized to those, and only
those, particularly described in the search warrant — to leave the officers of
the law with no discretion regarding what articles they shall seize, to the end
that "unreasonable searches and seizures" may not be made, — that
abuses may not be committed.
·
A search warrant may be said to particularly
describe the things to be seized when the description therein is as specific as
the circumstances will ordinarily allow; or when the description expresses a
conclusion of fact — not of law — by which the warrant officer may be guided in
making the search and seizure; or when the things described are limited to
those which bear direct relation to the offense for which the warrant is being
issued.
·
This requirement was not met by Judge Ruiz's
issuance of Search Warrant No. 2-M-70. In fact, the documents, papers and
effects sought to be seized are described in the Search Warrant in such general
terms as follows:
"Unregistered and private books of accounts (ledgers, journals,
columnars, receipts and disbursements books, customers ledgers); receipts for
payments received; certificates of stocks and securities; contracts, promissory
notes and deeds of sale; telex and coded messages; business communications,
accounting and business records; checks and check stubs; records of bank
deposits and withdrawals; and records of foreign remittances, covering the
years 1966 to 1970."
·
The Search Warrant tends to defeat the major
objective of the Bill of Rights, i.e., the elimination of general warrants, for
the language used therein is so all-embracing as to include all conceivable
records of Bache & Co., which, if seized, could possibly render its
business inoperative.
Whether
Bache & Co. is entitled to protection against unreasonable searches and
seizures. – YES.
·
BIR: A corporation is not entitled to
immunity against unreasonable searches and seizures. An officer of a
corporation which is charged with a violation of a statute of the country of its
creation, or of an act of Congress passed in the exercise of its constitutional
powers, cannot refuse to produce the books and papers of such corporation.
·
SC: A corporation is entitled to
immunity against unreasonable searches and seizures. A corporation is, after
all, but an association of individuals under an assumed name and with a
distinct legal entity. In organizing itself as a collective body it waives no
constitutional immunities appropriate to such body. Its property cannot be
taken without compensation. It can only be proceeded against by due process of
law, and is protected against unlawful discrimination.
·
The tax assessments made by the BIR against
Bache & Co. were entirely, or at least partly, based on the documents
seized by virtue of Search Warrant No. 2-M-70. Furthermore, the fact that the
assessments were made some one and one-half months after the search and seizure
on February 25, 1970, is a strong indication that the documents thus seized
served as basis for the assessments.
·
On account of the Court's findings that the
subject Search Warrant was issued in violation of the Constitution and the ROC,
the BIR's assessments springing from the illegally seized documents belonging
to Bache & Co. should necessarily be rendered invalid and should therefore
not be enforced.
Whether
certiorari lies in the instant case despite Bache & Co.'s failure to file a
motion for reconsideration of Judge Ruiz's order. – YES.
·
First, when the questions raised before the SC
are the same as those which were squarely raised in and passed upon by the
lower court, the filing of a motion for reconsideration in said court before
certiorari can be instituted in the SC is no longer a prerequisite.
·
Second, the rule requiring the filing of a
motion for reconsideration before an application for a writ of certiorari can
be entertained was never intended to be applied without considering the
circumstances. In the case at bar time is of the essence in view of the tax
assessments sought to be enforced by respondent officers of the Bureau of
Internal Revenue against petitioner corporation, On account of which immediate
and more direct action becomes necessary.
·
And third, the rule does not apply where, as
in this case, the deprivation of Bache & Co.'s fundamental right to due
process taints the proceeding against them in the CFI not only with
irregularity but also with nullity.