1

TITLE FOUR- CRIMES AGAINST PUBLIC INTEREST

MUTILTION OF COINS

1. PD 247

MALACAÑANG

M a n i l a

PRESIDENTIAL DECREE No. 247 July 18, 1973

PROHIBITING AND PENALIZING DEFACEMENT, MUTILATION, TEARING, BURNING OR DESTRUCTION OF CENTRAL BANK NOTES AND COINS.

WHEREAS, the Central Bank has the sole right and authority to issue currency within the territory of the Philippines under its issue power, and pursuant to Section 54 of Republic Act No. 265, otherwise known as the "Central Bank Act," as amended, by Presidential Decree No. 72 dated November 29, 1972, the notes and coins issued by the Central Bank shall be fully guaranteed by the Government of the Republic of the Philippines and shall be legal tender in the Philippines for all debts, both public and private;

WHEREAS, Central Bank notes and coins are issued for circulation as medium of exchange and to utilize them for other purposes does not speak well of the due respect and dignity befitting our currency; and

WHEREAS, defacing, mutilating, tearing, or partially burning or destroying our currency by any means renders it unfit for circulation, thereby unduly shortening its lifetime, and such acts unfavorably reflect on the discipline of our people and create a bad image for our country;

NOW, THEREFORE, I, FERDINAND E. MARCOS, President of the Philippines, by virtue of the powers vested in me by the Constitution as Commander-in-Chief of all the Armed Forces of the Philippines and pursuant to Proclamation No. 1081 dated September 21, 1972, Proclamation No. 1104 dated January 17, 1973, and General Order No. 1 dated September 22, 1972, and in order to effect the desired changes and reforms in the social, economic and political structure of our society, do hereby order and decree:

1. That it shall be unlawful for any person to willfully deface, mutilate, tear, burn or destroy, in any manner whatsoever, currency notes and coins issued by the Central Bank of the Philippines; and

2. That any person who shall violate this Decree shall, upon conviction, be punished by a fine of not more than twenty thousand pesos and/or by imprisonment of not more than five years.

All laws, orders and regulations, or parts thereof, inconsistent herewith are hereby modified or repealed accordingly.

This Decree is hereby made part of the law of the land and shall take effect immediately after the publication thereof in a newspaper of general circulation.

Done in the City of Manila, this 18th day of July, in the year of Our Lord, nineteen hundred and seventy-three.

2

FORGERY

DEL ROSARIO vs PEOPLE

Republic of the Philippines SUPREME COURT

Manila

FIRST DIVISION

G.R. No. 142295 May 31, 2001

VICENTE DEL ROSARIO y NICOLAS, petitioner, vs. PEOPLE OF THE PHILIPPINES, respondent.

PARDO, J.:

Petitioner Vicente del Rosario y Nicolas appeals via certiorari from a decision of the Court of Appeals1 affirming with modification the decision of the Regional Trial Court, Bulacan, Branch 20, Malolos, and finding him guilty beyond reasonable doubt of violation of P. D. No. 1866, as amended, by Republic Act No. 8294 (illegal possession of firearms), sentencing him to four (4) years, nine (9) months and eleven (11) days of prision correccional, as minimum, to six (6) years, eight (8) months and one (1) day of prision mayor, as maximum, and to pay a fine of P30,000.00.1âwphi1.nêt

On June 17, 1996, Assistant Provincial Prosecutor Eufracio S. Marquez of Bulacan filed with the Regional Trial Court, Bulacan, Malolos an Information charging petitioner Vicente del Rosario y Nicolas with violation of P. D. No. 1866, as follows:

"That on or about the 15th day of June 1996, in the municipality of Norzagaray, Province of Bulacan, Philippines, and within the jurisdiction of this Honorable Court, the above-named accused, did then and there wilfully, unlawfully and feloniously have in his possession under his custody and control, the following, to wit:

"a) One (1) pc. Pistol Cal. 45 SN:70G23792 (w/o license)

"b) One (1) pc. Revolver Cal. 22 SN:48673 (w/o license)

"c) Twenty Seven (27) rds live ammos. For cal. .45

"d) Five (5) pcs. Magazines for cal. .45

"e) Eight (8) rds live ammunitions for cal. 22

"f) Five (5) pcs. Magazines short for cal. 5.56 (M16)

"g) Twenty (20) rds live ammunitions for cal 5.56.

"without first having obtained" a proper license therefor.

"Contrary to law."2

On June 25, 1996, the trial court arraigned the petitioner. He pleaded not guilty.3 Trial ensued.

The facts, as found by the Court of Appeals, are as follows:

"Sometime in May 1996, the police received a report that accused-appellant Vicente del Rosario was in possession of certain firearms without the necessary licenses. Acting upon the report, P/Sr. Insp. Jerito Adique of the PNP Criminal Investigation Group at Camp Olivas, Pampanga inquired from the PNP Firearms and Explosive Division "whether or not the report was true. On May 10, 1996, P/Sr. Insp. Edwin C. Roque of the PNP Firearms and Explosives Division issued a certification (Exhibit L) stating that per records in his office, the appellant is not a licensed/registered firearm holder of any kind and caliber. Armed with the said certification, P/Sr. Insp. Adique applied for a search warrant to enable his team to search the house of appellant.1âwphi1.nêt

"On June 13, 1996, a search warrant (Exhibit A) was issued by Judge Gil Femandez, Sr. of the Regional Trial Court of Quezon City, Branch 217, authorizing the search of the residence of appellant at Barangay Tigbe, Norzagaray, Bulacan.4 On June 15, 1996, at about 7:00 o'clock in the morning, a team led by P/Sr. Insp. Adique went to Norzagaray to serve the warrant. Before proceeding to the residence of the appellant, the police officers requested Barangay Chairman Rogelio de Silva and Barangay Councilman Aurelio Panteleon to accompany them in the implementation of the warrant. Upon arrival at the house of appellant, the police officers introduced themselves to the wife of appellant. When the appellant came out, P/Sr. Insp. Adique informed him that they had a search warrant and that they were authorized to search his house. After appellant gave his permission, the police officers conducted a search of the house. The search yielded the following items: (a) a caliber .45 pistol with Serial No. 703792 with five magazines of caliber .45 (Exhibits B and H) found at the master's bedroom; (b) five magazines of 5.56 M-16 rifle and two radios (Exhibits C to C-4) found in the room of appellant's daughter; and (c) a caliber .22 revolver with Serial No. 48673 (Exhibit F) containing 8 pieces of live ammunition (Exhibit M) found in the kitchen of the house. When asked about his license

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to possess the firearms, the appellant failed to produce any. This prompted the police officers to seize the subject firearms.

"SPO2 Marion Montezon, one of the searching officers, prepared three separate inventories of the seized items (Exhibits H, M and N). The inventories were signed by P/Sr. Insp. Adique, the appellant and the barangay officials who witnessed the search. Thereafter SPO2 Montezon prepared a certification of orderly search (Exhibit I) which was signed by the appellant and the barangay officials attesting to the orderly conduct of the search.

"For his defense, appellant contends that he had a license for the caliber .45 pistol recovered in his bedroom and that the other items seized during the search including the caliber .22 revolver, were merely planted by the police officers. Appellant likewise assails the manner in which the search was carried out, claiming that the police officers just barged into his house without asking permission. Furthermore, he claimed that the barangay officials arrived only after the police already had finished the search.

"After trial and on July 2, 1998, the trial court rendered a judgment of conviction, the dispositive portion of which reads:

"WHEREFORE, premises considered, the Court finds the accused VICENTE DEL ROSARIO y NICOLAS guilty beyond reasonable doubt of violation of P. D. No. 1866 as charged under the Information dated June 17, 1996.

"Conformably with the provisions of said law, as amended by Republic Act No. 8294, and pursuant to the provisions, of the Indeterminate Sentence Law, the Court hereby sentences the accused to suffer imprisonment of six (6) months of arresto mayor, as minimum, to six (6) years of prision correctional, as maximum, and to pay a fine of Fifteen. Thousand Pesos (P15,000.00).

On July 20, 1998, petitioner appealed to the Court of Appeals, assailing the decision for being contrary to facts and the law.6

On July 9, 1999, the Court of Appeals promulgated its decision affirming with modification the decision of the trial court as set out in the opening paragraph of this decision.7

On August 10, 1999, petitioner filed with the Court of Appeals a motion for reconsideration and/or new trial.8 He contended that the certification issued by the Chief, Firearms and Explosives Division, Philippine National Police stating that the person named therein had not been issued a firearm license referred to a certain Vicente "Vic" del Rosario of barangay Bigte, Norzagaray, Bulacan, not to him. He

comes from barangay Tigbe, Norzagaray, Bulacan, and that he has a valid firearm license.

On February 22, 2000, the Court of Appeals denied the motion for reconsideration for lack of merit.9

Hence, this appeal.10

Petitioner submits that the search conducted at his residence was illegal the search warrant was issued in violation of the Constitution11 and consequently, the evidence seized was inadmissible. He also submits that he had a license for the .45 caliber firearm and ammunition seized in his bedroom. The other firearm, a .22 caliber revolver seized in a drawer at the kitchen of his house, a magazine for 5.56 mm. cal. Armalite rifle, and two 2-way radios found in his daughter's bedroom, were either planted by the police or illegally seized, as they were not mentioned in the search warrant.

We find the petition impressed with merit. We define the issues as follows:

First: whether petitioner had a license for the .45 caliber Colt pistol and ammunition seized in his bedroom; and

Second: whether the .22 caliber revolver seized in a drawer at the kitchen of his

house, a magazine for 5.56 mm. cal. Armalite rifle and two 2-way radios found in his daughter's bedroom, were planted by the police or were illegally seized.

We shall resolve the issues in seriatim.

First: The .45 cal. Colt pistol in question was duly licensed.

Normally, we do not review the factual findings of the Court of Appeals and the trial courts.12 However, this case comes within the exceptions.13 The "findings of fact by the Court of Appeals will not be disturbed by the Court unless these findings are not supported by evidence."14 In this case, the findings of the lower courts even directly contradict the evidence. Hence, we review the evidence. The trial court held that the copy of the license presented was blurred, and that in any event, the court could rely on the certification dated May 10, 1996, of P/Sr. Inspector Edwin C. Roque, Chief, Records Branch, Firearms and Explosives Division, Philippine National Police stating that Vicente "Vic" del Rosario of Barangay Bigte, Norzagaray, Bulacan is not a

licensed/registered firearm holder of any kind and caliber.15 As against this, petitioner submitted that he was not the person referred to in the said certification because he is Vicente del Rosario y Nicolas from Barangay Tigbe, Norzagaray, Bulacan. The Court

takes judicial notice of the existence of both barangay Tigbe and barangay Bigte, in Norzagaray, Bulacan.16 In fact, the trial court erred grievously in not taking judicial notice of the barangays within its territorial jurisdiction, believing the prosecution's submission that there was only barangay Tigbe, and that barangay Bigte in the

4 certification was a typographical error.17 Petitioner presented to the head of the raiding team, Police Senior Inspector Jerito A. Adique, Chief, Operations Branch, PNP Criminal Investigation Command, a valid firearm license. The court is duty bound to examine the evidence assiduously to determine the guilt or innocence of the accused. It is true that the court may rely on the certification of the Chief, Firearms and Explosives Division, PNP on the absence of a firearm license.18 However, such certification referred to another individual and thus, cannot prevail over a valid firearm license duly issued to petitioner. In this case, petitioner presented the printed computerized copy of License No. RCL 1614021915 issued to him on July 13, 1993, expiring in January 1995, by the Chief, Firearms and Explosives Division, PNP under the signature of Reynaldo V. Velasco, Sr. Supt. (GSC) PNP, Chief, FEO.19 On the dorsal side of the printed computerized license, there is stamped the words "Validity of computerized license is extended until renewed license is printed" dated January 17, 1995, signed by Police Chief Inspector Franklin S. Alfabeto, Chief, Licence Branch, FEO.20 Coupled with this indefinite extension, petitioner paid the license fees for the extension of the license for the next two-year period.21

Consequently, we find that petitioner was the holder of a valid firearm license for the .45 caliber Colt pistol seized in the bedroom of his house on June 15, 1996.22 As required, petitioner presented the license to the head of the raiding team, Police Senior Inspector Jerito A. Adique of the Criminal Investigation Division Group, PNP.23 As a senior police officer, Senior Inspector Adique could easily determine the genuineness and authenticity of the computerized printed license presented. He must know the computerized license printed form. The stamp is clearly visible. He could decipher the words and the signature of the authorized signing official of the Firearms and Explosives Division, PNP. He belonged to the same national police organization.

Nevertheless, Senior Insp. Adique rejected the license presented because, according to him, it was expired. However, assuming that the license presented was expired during the period January 1995 to January 1997, still, possession of the firearm in question, a .45 caliber Colt pistol with serial No. 70G23792, during that period was not illegal. The firearm was kept at home, not carried outside residence. On June 15, 1996, at the time of the seizure of the firearm in question, possession of firearm with an expired license was not considered unlawful,provided that the license had

not been cancelled or revoked. Republic Act No. 8294, providing that possession of a firearm with an expired license was unlawful took effect only on July 7, 1997.24 It

could not be given retroactive effect.25

According to firearm licensing regulations, the renewal of a firearm license was automatically applied for upon payment of the license fees for the renewal period. The expired license was not cancelled or revoked. It served as temporary authority to possess the firearm until the renewed license was issued. Meantime, the applicant may keep the gun at home pending renewal of the firearm license and issuance of a printed computerized license. He was not obliged to surrender the weapon. Printed at the dorsal side of the computerized license is a notice reading:

"IMPORTANT

1. This firearm license is valid for two (2) years. Exhibit this license whenever demanded by proper authority.

2. Surrender your firearm/s to the nearest PNP Unit upon revocation or termination of this license. Under any of the following instances, your license shall be revoked for which reason your firearm/s is/are subject to confiscation and its/their forfeiture in favor of the government.

a. Failure to notify the Chief of PNP in writing of your change of address, and/or qualification.

b. Failure to renew this license by paying annual license, fees, within six (6) months from your birth month. Renewal of your license can be made within your birth month or month preceding your birth month. Late renewal shall be penalized with 50% surcharge for the first month (from the first day to the last day of this month) followed by an additional 25% surcharge for all of the succeeding five (5) months compounded monthly.

c. Loss of firearm/s through negligence.

d. Carrying of firearm/s outside of residence without appropriate permit and/or carrying firearm/s in prohibited places.

e. Conviction by competent court for a crime involving moral turpitude or for any offense where the penalty carries an imprisonment of more than six (6) months or fine of at least Pl,000.00.

f. Dismissal for cause from, the service.

g. Failure to sign license, or sign ID picture or affix right thumb mark.

3. Unauthorized loan of firearm/s to another person is punishable by permanent disqualification and forfeiture of the firearm in favor of the government.

4. If termination is due to death, your next of kin should surrender your firearm/s to the nearest PNP Unit. For those within Metro, Manila, surrender should be made with FEO, Camp Crame.

5. When firearms become permanently unserviceable, they should be deposited with the nearest PNP Unit and ownership should be relinquished in writing so that firearms may be disposed of in accordance with law.

6. Application for the purchase of ammunition should be made in case of a resident of Metro Manila direct to the Chief, FEO and for residents of a

5

Province to secure recommendation letter to the nearest PNP Provincial Command who will thereafter endorse same to CHIEF, FEO for issuance of the permit. License must be presented before an authority to purchase ammo could be obtained."26

Indeed, as heretofore stated, petitioner duly paid the license fees for the automatic renewal of the firearm license for the next two years upon expiration of the license in January, 1995, as evidenced by official receipt No. 7615186, dated January 17, 1995.27 The license would be renewed, as it was, because petitioner still possessed the required qualifications. Meantime, the validity of the license was extended until the renewed computerized license was printed. In fact, a renewed license was issued on January 17, 1997, for the succeeding two-year period.28

Aside from the clearly valid and subsisting license issued to petitioner, on January 25, 1995, the Chief, Philippine National Police issued to him a permit to carry firearm outside residence valid until January 25, 1996, for the firearm in question.29 The Chief, Philippine National Police would not issue a permit to carry firearm outside residence unless petitioner had a valid and subsisting firearm license. Although the permit to carry firearm outside residence was valid for only one year, and expired on January 25, 1996, such permit is proof that the regular firearm license was renewed and subsisting within the two-year term up to January 1997." A Permit to Carry Firearm Outside Residence presupposes that the party to whom it is issued is duly licensed to possess the firearm in question."30 Unquestionably, on January 17, 1997, the Chief, Firearms and Explosives Division, PNP renewed petitioner's license for the .45 cal. Colt pistol in question.31

Clearly then; petitioner had a valid firearm license during the interregnum between January 17, 1995, to the issuance of his renewed license on January 17, 1997.

Finally, there is no rhyme or reason why the Court of Appeals and the trial court did not accept with alacrity the certification dated June 25, 1996, of P/Sr. Inspector Edwin C. Roque,32 Chief, Records Branch, Firearms and Explosives Division, PNP that Vicente N. del Rosario of Barangay Tigbe, Norzagaray, Bulacan is a licensed/registered holder of Pistol, Colt caliber .45 with serial number 70G23792, covered by computerized license issued dated June 15, 1995, with an expiry date January 1997.33 Reinforcing the aforementioned certification, petitioner submitted another certification dated August 27, 1999, stating that Vicente N. del Rosario of Barangay Tigbe, Norzagaray, Bulacan, was issued firearm license No. RL-C1614021915, for caliber .45 Pistol with Serial Number 70G23792, for the years covering the period from July 13, 1993 to January 1995, and the extension appearing at the back thereof for the years 1995 to 1997.34 Had the lower courts given full probative value to these official issuances, petitioner would have been correctly acquitted, thus sparing this Court of valuable time and effort.

"In crimes involving illegal possession of firearm, the prosecution has the burden of proving the elements thereof, viz.: (a) the existence of the subject firearm and (b) the fact that the accused who owned or possessed it does not have the license or permit

to possess the same.35 The essence of the crime of illegal possession is the possession, whether actual or constructive, of the subject firearm, without which there can be no conviction for illegal possession. After possession is established by the prosecution, it would only be a matter of course to determine whether the accused has a license to possess the firearm."36 "Possession of any firearm becomes unlawful only if the necessary permit or license therefor is not first obtained. The absence of license and legal authority constitutes an essential ingredient of the offense of illegal possession of firearm and every ingredient or essential element of an offense must be shown by the prosecution by proof beyond reasonable doubt. Stated otherwise, the negative fact of lack or absence of license constitutes an essential ingredient of the offense which the prosecution has the duty not only to allege but also, to prove beyond reasonable doubt."37 "To convict an accused for illegal possession of firearms and explosives under P. D. 1866, as amended, two (2) essential elements must be indubitably established, viz.: (a) the existence of the subject firearm or explosive which may be proved by the presentation of the subject firearm or explosive or by the testimony of witnesses who saw accused in possession of the same, and (b) the negative fact that the accused had no license or permit to own or possess the firearm or explosive which fact may be established by the testimony or certification of a representative of the PNP Firearms and Explosives Unit that the accused has no license or permit to possess the subject firearm or explosive." x x x We stress that the essence of the crime penalized under P. D. 1866 is primarily the accused's lack of license or permit to carry or possess the firearm, ammunition or explosive as possession by itself is not prohibited by law."38 Illegal possession of firearm is a crime punished by special law, a malum prohibitum, and no malice or intent to commit a crime need be proved.39 To support a conviction, however, there must be possession coupled with intent to possess (animus possidendi) the firearm.40

In upholding the prosecution and giving credence to the testimony of police officer Jerito A. Adigui, the trial court relied on the presumption of regularity in the performance of official duties by the police officers.41 This is a flagrant error because his testimony is directly contradictory to the official records of the Firearms and Explosives Division, PNP, which must prevail. Morever, the presumption of regularity can not prevail over the Constitutional presumption of innocence.42 Right from the start, P/Sr. Insp. Jerito A. Adigue was aware that petitioner possessed a valid license for the caliber .45 Colt pistol in question. Despite this fact, P/Sr. Insp. Adigue proceeded to detain petitioner and charged him with illegal possession of firearms. We quote pertinent portions of the testimony of petitioner:

Q: What else did Adigue tell you after showing to him the license of your cal. .45 pistol and the alleged cal. .22 found in a drawer in your kitchen?

A: He told me that since my firearm is licensed, he will return my firearm, give him ten thousand pesos (P10,000.00) and for me to tell who

among the people in our barangay have unlicensed firearm, sir.

Q: How did he say about the ten thousand pesos?

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A: He said "palit kalabaw na lang tayo" sir.

Q: And what did you answer him?

A: I told him my firearm is licensed and I do not have money, if I have, I will not give him, sir, because he was just trying to squeeze something from me.

Q: How about the unlicensed firearms in your barangay which he asked, from you?

A: I said I do not know any unlicensed firearm in our barangay, sir.

Q: About the .22 cal. pistol, what was your answer to him?

A: I told him that it was not mine, they planted it, sir.

Q: What did he say next?

A: He said that it is your word against mine, the Court will believe me because I am a police officer, sir.

Q: What was your comment to what he said?

A: I said my firearm is licensed and we have Courts of law who do not conform with officials like you and then he laughed and laughed, sir."43

The trial court was obviously misguided when it held that "it is a matter of judicial notice that a caliber .45 firearm can not be licensed to a private individual."44 This ruling has no basis either in law or in jurisprudence.45

Second issue. The seizure of items not mentioned in the search warrant was illegal.

With respect to the .22 caliber revolver with Serial No. 48673, that the police raiding team found in a drawer at the kitchen of petitioner's house, suffice it to say that the firearm was not mentioned in the search warrant applied for and issued for the search of petitioner's house. "Section 2, Article III of the Constitution lays down the general rule that a search and seizure must be carried out through or on the strength of a judicial warrant, absent which such search and seizure becomes 'unreasonable' within the meaning of said constitutional provision."46 "Supporting jurisprudence thus outlined the following requisites for a search warrant's validity, the absence of even one will cause" its downright nullification: (1) it must be issued upon probable cause; (2) the probable cause must be determined by the judge himself and not by the applicant or any other person; (3) in the determination of probable cause, the judge

must examine, under oath or affirmation, the complainant and such witnesses as the latter may produce; and (4) the warrant issued must particularly describe the place to be searched and persons or things to be seized."47 Seizure is limited to those items particularly described in a valid search warrant. Searching officers are without discretion regarding what articles they shall seize.48 Evidence seized on the occasion of such an unreasonable search and seizure is tainted and excluded for being the proverbial "fruit of a poisonous tree." In the language of the fundamental law, it shall be inadmissible in evidence for any purpose in any proceeding.49

In this case, the firearm was not found inadvertently and in plain view. It was found as a result of a meticulous search in the kitchen of petitioner's house. This firearm, to emphasize, was not mentioned in the search warrant. Hence, the seizure was illegal.50 The seizure without the requisite search warrant was in plain violation of the law and the Constitution.51 True that as an exception, the police may seize without warrant illegally possessed firearm or any contraband for that matter, inadvertently found in plain view. However, "[t]he seizure of evidence in 'plain view' applies only where the police officer is not searching for evidence against the accused, but inadvertently comes across an incriminating object."52 Specifically, seizure of evidence in "plain view" is justified when there is:

(a) a prior valid intrusion based on the valid warrantless arrest in which the police are legally present in the pursuit of their official duties;

(b) the evidence was inadvertently discovered by the police who had the right to be where they are.

(c) the evidence must be immediately apparent, and

(d) "plain view" justified mere seizure of evidence without further search.53

Hence, the petitioner rightly rejected the firearm as planted and not belonging to him. The prosecution was not able to prove that the firearm was in the effective possession or control of the petitioner without a license. In illegal possession of firearms, the possessor must know of the existence of the subject firearm in his possession or control. "In People v. de Gracia,54 we clarified the meaning of possession for the purpose of convicting a person under P. D. No.1866, thus: x x x 'In the present case, a distinction should be made between criminal intent and intent to possess. While mere possession without criminal intent is sufficient to convict a person for illegal possession of a firearm, it must still be shown that there was animus possidendi or an intent to possess on the part of the accused.' x x x x Hence, the kind of possession punishable under P. D. No. 1866 is one where the accused possessed a firearm either physically or constructively with animus possidendi or intention to possess the same."55 That is the meaning of animus possidendi. In the absence of animus possidendi, the possessor of a firearm incurs no criminal liability.

The same is true with respect to the 5.56 cal. magazine found in the bedroom of petitioner's daughter. The seizure was invalid and the seized items were inadmissible

7 in evidence. As explained in People v. Doria,56 the "plain view" doctrine applies when the following requisites concur: (1) the law if enforcement officer is in a position where he has a clear view of a particular area or alias prior justification for an intrusion; (2) said officer inadvertently comes across (or sees in plain view) a piece of incriminating evidence; and (3) it is, immediately apparent to such officer that the item he sees may be evidence of a crime or a contraband or is otherwise subject to seizure."

With particular reference to the two 2-way radios that the raiding policemen also seized in the bedroom of petitioner's daughter, there was absolutely no reason for the seizure. The if radios were not contraband per se.The National Telecommunications Commission may license two-way radios at its discretion.57 The burden is on the prosecution to show that the two-way radios were not licensed. The National Telecommunication Commission is the sole agency authorized to seize unlicensed two-way radios. More importantly, admittedly, the two-way radios were not mentioned in the search warrant. We condemn the seizure as illegal and a plain violation of a citizen's right. Worse, the petitioner was not charged with illegal possession of the two-way radios.1âwphi1.nêt

Consequently, the confiscation of the two 2-way radios was clearly illegal. The possession of such radios is not even included in the charge of illegal possession of firearms (violation of P. D. No. 1866, as amended) alleged in the Information.

WHEREFORE, the Court hereby REVERSES the decision of the Court of Appeals in

CA-G. R. CR No. 22255, promulgated on July 09, 1999.

The Court ACQUITS petitioner Vicente del Rosario y Nicolas of the charge of

violation of P. D. No. 1866, as amended by R. A. No. 8294 (illegal possession of firearms and ammunition), in Criminal Case No. 800-M-96, Regional Trial Court, Bulacan, Branch 20, Malolos.

Costs de oficio.

The Chief; Firearms and Explosives Division, PNP shall return to petitioner his caliber .45 Colt pistol, with Serial Number No. 70023792, the five (5) extra magazines and twenty seven (27) rounds of live ammunition, and the two 2-way radios confiscated from him. The Chief, Philippine National Police, or his duly authorized representative shall show to this Court proof of compliance herewith within fifteen (15) days from notice. The .22 caliber revolver with Serial No. 48673, and eight (8) live ammunition and the magazine for 5.56 mm. caliber Armalite rifle are confiscated in favor of the government.1âwphi1.nêt

SO ORDERED.

8

FALSIFICATION

1. SIQUIAN vs PEOPLE

Republic of the Philippines SUPREME COURT

Manila

THIRD DIVISION

G.R. No. 82197 March 13, 1989

MANUEL L. SIQUIAN petitioner, vs. THE PEOPLE OF THE PHILIPPINES, and THE COURT OF APPEALS, respondents.

Cortes & Reyna Law Firm for petitioner.

The Solicitor General for respondents.

CORTES, J.:

The information charging petitioner Manuel L. Siquian, the then municipal mayor of Angadanan, Isabela, of the crime of falsification of public document under Art. 171, p. 4 of the Revised Penal Code filed by Second Assistant Provincial Fiscal before Branch XX of the Regional Trial Court of Cauayan, Isabela reads as follows:

That on or about the lst day of July, 1975, in the Municipality of Angadanan, Province of Isabela, and within the preliminary jurisdiction of this Honorable court, the accused Manuel L. Siquian, being then the Municipal Mayor of Angadanan, Isabela, taking advantage of his position as such Municipal Mayor did then and there wilfully, unlawfully and feloniously prepare and, sign a false document, knowing it to be false, to wit. An official communication to the Civil Service Commissioner, dated July 1, 1975, which is required by law in order to support the appointment of a certain Jesusa B. Carreon to the position of clerk in the Office of the Municipal Secretary which (sic) he appointed as such by stating and making it appear in said document that there was such a position existing and that funds therefore were available. When in truth and in fact, as said accused well-know (sic), there was no such position or item and no funds were available for said position in the Fiscal Budget of Angadanan for 1975-76, nor was there any special ordinance creating said position and appropriating the necessary funds therefor.

x x x

[Rollo, pp. 23-24.]

Upon arraignment, petitioner pleaded not guilty to the offense charged and the trial of the case ensued. The facts as found by the Regional Trial Court (RTC) are as follows:

It appears from the evidence that sometime in June 1975, Jesusa Carreon, 20 years old, single and a resident of Ilagan, Isabela, went to the accused Manuel L. Siquian, Mayor of the Municipality of Angadanan, Province of Isabela, to apply for employment in the office of the Mayor. Earlier, she and her friends went to the Municipal Hall of Angadanan to ask information if there was any vacancy. When she was informed that there was, she went to see the accused in his house.

The accused must have agreed to appoint her because he accompanied her to the office of the Municipal Secretary, Emilio Valenzuela. The latter, however, was not there. Even so, the accused told Jesusa Carreon to report for work the following day and that she should be included in the budget. The accused then accompanied her to the Office of the Municipal Treasurer, Calo Battung the treasurer agreed that she could report for work.

One week after, Jesusa Carreon went alone to the Office of the Municipal Secretary. He was there. When she went to the accused, she was told to go back to the Municipal Secretary to work for her appointment papers.

She was appointed clerk to the Municipal Secretary in the Office of the Municipal Secretary, on July 1, 1975 by the accused.

x x x

Accompanying her appointment is the certification, among others, of the availability of funds CS Form No. 203) dated July 1, 1975, issued by the accused Manuel L. Siquian, pursuant to the requirements of Memorandum Circular No. 5, Series of 1975, addressed to the Commissioner of Civil Service, Manila (Exh. "C").

x x x

Jesusa Carreon took her oath of Office (Exh. "A-l") on July 1, 1975, and promptly began to work on the same day. Her monthly salary was P 120.00. She rendered services for the months of July, August, September, October, November and December 1975 (Exhibits "B", "B-l" to "B-5"). She was not, however, paid. As early as October 1975, she went to the Municipal Treasurer to receive her salary, but she was told that there was no money yet. In November 1975, she went to see the accused, but the latter told her to see the treasurer. She went to the treasurer who told her that there was no money. because of this, she went to the Sangguniang Panlalawigan at the Provincial Capitol in Ilagan, Isabela, to ask (sic) information regarding her unpaid

9 salaries. She was interviewed by Atty. Efren Ambrosia Provincial Administrator. Atty. Ambrosio asked her if she had complete appointment papers. hereafter, she filed her verified complaint dated April 20, 1976, against the accused. Her complaint is addressed to Governor Faustino N. Dy (Exhibit "G" and "G-1").

It also appears from the evidence that the Municipal council of Angadanan, Isabela, failed to enact the annual budget for the municipality for the Fiscal Year 1975-1976 (Exhs. "H", "H-l", and "H-2"). Accordingly, and pursuant to PD No. 477, the annual budget for the previous Fiscal Year 1974-1975, was deemed re-enacted (Exh. "H- l"). Thus, the Municipal Plantilla of Personnel for the Fiscal Year 1975-1976 is the same as the Plantilla of Personnel for the Fiscal Year 1975-1976. No supplemental budget was enacted by the municipal council of Angadanan.

In the Plantilla of Personnel for 1974-1975, which was deemed re-enacted for the Fiscal Year 1975-1976, there was no new item or appropriation for the position of clerk in the Office of the Municipal Secretary of Angadanan, Isabela. The new position of clerk in the office of the Municipal Council appearing in the Municipal Plantilla for Personnel (Exhibit "H-2") for 1974- 1975, was filled up as early as October 16, 1974 by the accused when he appointed Clarita G. Ramirez to that position (Exhibits "J" and "J-2"). With respect to the new position of a Clerk to the office of the Municipal Mayor in the Plantilla for 1974-1975, it was already filled-up by the appointment of Miss Marivic A. Tallod on June 16, 1975, by the accused (Exhibits "K" and "K-4"). As early as June 28, 1974, the same position was held by Miss Felicidad Visitacion who was appointed by the accused, but she resigned (Exhs. "K" and "K-l").

x x x

[Rollo, pp. 26, 28, 29-30.]

After trial, the Court found the petitioner guilty beyond reasonable doubt of the crime charged and decreed:

WHEREFORE, finding the accused Manuel L. Siquian guilty beyond reasonable doubt of the crime of falsification of public document as charged in the information, the Court hereby sentences said accused to suffer an indeterminate penalty of from FIVE (5) YEARS, EIGHT (8) MONTHS and ONE (1) DAY of prision correctional (sic) as minimum to SEVEN YEARS of prision mayor as maximum and to pay a fine of THREE THOUSAND (P 3,000.00) PESOS.

SO ORDERED. [Rollo, p. 35.]

On appeal, the respondent Court of Appeals ruled as follows:

WHEREFORE, the decision appealed from is in accordance with law and the evidence and is hereby therefore affirmed. Costs against the accused- appellant.

SO ORDERED. [Rollo, p. 42.]

Hence, this petition for review seeking reversal of the CA decision and the acquittal of petitioner Manuel L. Siquian. Petitioner contends that the respondent court has decided a question of substance not in accord with law and jurisprudence when it affirmed the decision of the trial court convicting him of the crime of falsification despite the following

A. The evidence on record which consists of the testimony of the prosecution's principal witness, shows the absence of criminal intent on the part of the accused.

B. There is no evidence that the accused took advantage of his position as Municipal Mayor when he made the allegedly falsified certification.

C. The statement that "Funds for the position are available" is not a narration of facts but a conclusion of law.

D. The petitioner was deprived of his right to due process of law when the trial court proceeded with the trial in his absence despite a pending petition for change of venue with the Supreme Court. [Rollo, p. 13.]

Petitioner's arguments, however, are bereft of any merit.

The offense of falsification by a public officer under Article 171 of the Revised Penal Code is committed by "any public officer, employee or notary who, taking advantage of his official position, shall falsify a document by committing any of the following acts: . . . 4. Making untruthful statements in a narration of fact; . . .' It is settled that in this fourth kind of falsification, the following requisites must concur:

(a) That the offender makes in a document untruthful statements in a narration of facts;

(b) hat he has a legal obligation to disclose the truth of the facts narrated by him; and

(c) That the facts narrated by the offender are absolutely false Cabigas v. People, G.R. No. 67472, July 3, 1987, 152 SCRA 18.

All these requisites had been fully met in the case at bar. Petitioner, a public officer, being then the mayor of the municipality of Angadanan, Isabela, made an untruthful statement in the narration of facts contained in the certification which he issued in connection with the appointment of complainant Jesusa Carreon. The certification, having been issued by a public official in the exercise of the function of his office is a public document [U.S. v. Asensi, 34 Phil. 765 (1915)]. It is immaterial whether or not the Civil Service Commissioner to whom the certification was addressed received the document issued by petitioner. Since the certification was prepared by petitioner in

10 accordance with the standard forms prescribed by the government (specifically the Civil Service Commission) pursuant to law, the certification was invested with the character of a public document [People v. Asensi, supra citing U.S. v. Vy Guico, 12 Phil. 209 (1908)] falsification of which is punishable under Article 171 of the Revised Penal Code. Here, falsification of such document was committed when the petitioner stated that funds were available for the position to which Jesusa Carreon was appointed when he knew that, in reality, the position itself did not even exist and no funds had been appropriated therefor.

Petitioner's stance that the certification which he issued contained no narration of facts but rather a conclusion of law is not meritorious. The respondent court, upholding the Solicitor General's arguments, correctly ruled as follows:

Conclusion of law" is defined as a proposition not arrived at by any process of natural reasoning from a fact or combination of facts stated but by the application of the artificial rules of law to the facts pleaded [Levins v. Rovegno, 71 Cal. 273, 12 p. 161; Black's Law Dict., p. 362].

From the above-cited definition, it can be deduced that the certification by the appellant that 'funds for the position are available' does not require the application of the artificial rules of law. To certify that funds are available for the position what one should do was (sic) to refer to the budget and plantilla of personnel of the applicable fiscal year and ascertain if such item exists and funds are allocated therefor.

In the present case, despite the presence of the records which shows that there is no position and funds therefor referred to in the certification, the appellant, fully aware of the data provided by the records, certified falsely that "funds for the position are available" [Rollo, p. 41).

It is undisputed that the Municipal Council of Angadanan failed to enact the annual budget of the municipality for the Fiscal Year 1975-1976 and therefore, the annual budget for the last fiscal year, 1974-1975, was deemed re-enacted under P.D. No. 477. In the Municipal Plantilla of Personnel (Exh. "B-2") accompanying the Annual Budget for the Municipality of Angadanan, Isabela for the Fiscal Year 1974-1975, there is no such position as Clerk to the Municipal Secretary in the Office of the Municipal Secretary, the position to which Jesusa Carreon was appointed. Accordingly, there is no appropriation made in the Annual Budget for the Fiscal Year 1974-1975 for such position, thus rendering petitioner's statement in his certification utterly false. The requisite of absolute falsity of the statement made in the document is met when there exists not even an iota of colorable truth in what is declared in the narration of facts [U.S. v. Bayot, 10 Phil. 518 (1908)], as in this case. From the foregoing, it can be seen that the first and third requirements laid down in the Cabigas case, supra, are fully satisfied.

The second element of the offense is likewise present. Under the civil service rules and regulations, specifically the Guidelines in the Preparation of Appointment for Original Appointment (Exhs. "D" and "D-3"), a certification of the availability of funds

for the position to be filled up is required to be signed by the head of office or any officer who has been delegated the authority to sign. As an officer authorized by law to issue this certification which is designated as Civil Service Form No. 203, as revised, the petitioner has a legal obligation to disclose the truth of the facts narrated by him in said certification which includes information as to the availability of the funds for the position being filled up.

Contrary to petitioner's claim, the existence of a wrongful intent to injure a third person is not necessary when the falsified document is a public document. This has already been authoritatively decreed in the 1955 case of People v. Po Giok To [96 Phil. 913 (1955)]. The Court in the aforementioned case explicitly stated that wrongful intent on the part of the accused to injure a third person is not an essential element of the crime of falsification of public document. The rationale for this principal distinction between falsification of public and private documents has been stated by the Court in this wise: "In the falsification of public or official documents, whether by public officials or private persons, it is unnecessary that there be present the Idea of gain or the intent to injure a third person, for the reason that, in contradistinction to private documents, the principal thing punished is the violation of the public faith and the destruction of truth as therein solemnly proclaimed" [People v. Po Giok To, supra at 918, citing People v. Pacana, 47 Phil. 48 (1924)]. In falsification of public documents therefore, the controlling consideration is the public character of a document and the existence of any prejudice caused to third persons or, at least, the intent to cause such damage becomes immaterial [People v. Pacana, supra].

Petitioner's plea for acquittal on the ground that the evidence for the prosecution shows the absence of criminal intent on his part must be denied. While this Court has declared good faith as a valid defense to falsification of public documents by making untruthful statements in a narration of facts [U.S. v. San Jose, 7 Phil. 604 (1907)], such defense cannot serve to exonerate the petitioner since the element of good faith has not clearly been shown to exist in the case at bar.

Under the applicable law at the time, petitioner, as municipal mayor of Angadanan, Isabela presides at all meetings of the municipal council [Section 2621 (d), Revised Administrative Code] and signs all ordinances and resolutions passed by the municipal council [Section 2624 (c), Revised Administrative Code]. He was thus aware that (1) for failure to enact a budget for the Fiscal Year 1975-1976, Ordinance No. V of the Municipal Council of Angadanan, Isabela which was the Municipal Annual Budget of Angadanan, Isabela for Fiscal Year 1974-1975 was re-enacted and (2) that under the Municipal Plantilla of Personnel for that fiscal year, there were no funds appropriated for the position of clerk to the municipal secretary. His knowledge of these facts is shown by the fact that he even affixed his signature in attestation to the correctness of these documents; i.e. Ordinance No. V and Municipal Plantilla of Personnel. [See Exhs. "H-1" and "H-2", Folder of Exhibits, pp. 27-32]. He cannot claim good faith in issuing a certification of the availability of funds for the questioned position since at the time he issued such certification on July 1, 1975, the fiscal year 1975- 1976 had already commenced and no new ordinance creating the new position to which he appointed Jesusa Carreon had been enacted by the municipal council.

11 In view of the foregoing considerations, petitioner must be held criminally liable for his act of issuing the absolutely false certification as to the availability of funds for the subject position. The law considers his act criminal since it amounts to an untruthful statement in a narration of facts in a public document [Article 171 (4), Revised Penal Code]. Criminal intent and the will to commit a crime are presumed to exist on the part of the person who executes an act which the law punishes, unless the contrary shall appear [United States v. Apostol, 14 Phil. 92 (1909)]. In this case, the presumption that petitioner committed the act with criminal intention, which arose from proof of his commission of the unlawful act, stands unrebutted.

Petitioner's claim that there was no showing that he took advantage of his official position in falsifying the document should likewise be rejected. This essential element of falsification of a public document by public officer requires that the offender "abuse his office or use the influences prestige or ascendancy which his office gives him, in committing the crime" [U.S. v. Rodriguez, 19 Phil. 150 (1911)]. Abuse of public office is considered present when the offender falsifies a document in connection with the duties of his office which consist of either making or preparing or otherwise intervening in the preparation of a document [U.S. v. Inosanto 20 Phil. 376 (1911); People v. Santiago Uy, 101 Phil. 159 (1957)], as in the case of petitioner who was charged with the duty of issuing the certification necessary for the appointment of Jesusa Carreon.

Finally, the alleged denial of due process of law committed by the trial court when it proceeded with the trial of the case in the absence of the petitioner despite a pending petition for change of venue with the Supreme Court is totally unfounded. A careful and thorough review of the record reveals that petitioner had been afforded due process when the trial court, in view of the absence of petitioner, granted continuances to enable the defense to present its evidence although the prosecution had rested its case as early as December 7, 1978. [See Original Records, p. 253, et seq.]

It is a basic postulate in law that what is repugnant to due process is not lack of previous notice but absolute lack of opportunity to be heard [Tajonera v. Lamaroza, G.R. Nos. L-48097 & 49035, December 19, 1981, 110 SCRA 438]. Hence, this Court laid down this criterion to determine whether an accused in a criminal case has been properly accorded due process of law:

. . . (I)f an accused has been heard in a court of competent jurisdiction and proceeded against under the orderly processes of law, and only punished after inquiry and investigation, upon notice to him,with an opportunity to be heard, and a judgment awarded within the authority of a constitutional law, then he has had due process of law. . . . [People v. Muit G.R. No. L-48875, October 21, 1982, 117 SCRA 696 citing People v. Castillo, 776 Phil. 73 (1946); Emphasis supplied.]

Thus, there is no denial of due process when an accused is afforded the chance to present evidence on his behalf but due to his repeated, unjustifiable failure to appear at the hearings, the trial court ordered the case to be deemed submitted upon the evidence presented by the prosecution. For under such circumstances, he will be deemed to have waived his right to be present during the trial [Section 1 (c), Rule 115 of the Revised Rules of Court] and his right to adduce evidence on his behalf [People v. Angco, 103 Phil. 33 (1958).]

It is true that he filed a petition for change of venue with the Supreme Court. However, on the date set for the hearing of the petitioner's urgent motion to suspend the proceedings in the trial court due to the pendency of the petition for change of venue, he also failed to appear [See Order dated January 18, 1985, Original Records, p. 428]. In fact, Atty. Romeo Calixto, one of the counsel for the petitioner, manifested before the trial court that he was - withdrawing as counsel for his client for the reason that he has lost contact with the latter who already went abroad [See Original Records, p. 435]. Hence, the trial court cannot be faulted for rendering its decision on the basis solely of the evidence presented by the prosecution.

WHEREFORE, the appealed decision being in conformity with law and settled jurisprudence, the same is AFFIRMED and the instant petition is hereby DENIED.

SO ORDERED.

12

2. PEOPLE vs VILLALON

Republic of the Philippines SUPREME COURT

Manila

SECOND DIVISION

G.R. No. 113092 September 1, 1994

MARTIN CENTENO, petitioner,

vs. HON. VICTORIA VILLALON-PORNILLOS, Presiding Judge of the Regional Trial Court of Malolos, Bulacan, Branch 10, and THE PEOPLE OF THE PHILIPPINES, respondents.

Santiago V. Marcos, Jr. for petitioner.

REGALADO, J.:

It is indeed unfortunate that a group of elderly men, who were moved by their desire to devote their remaining years to the service of their Creator by forming their own civic organization for that purpose, should find themselves enmeshed in a criminal case for making a solicitation from a community member allegedly without the required permit from the Department of Social Welfare and Development.

The records of this case reveal that sometime in the last quarter of 1985, the officers of a civic organization known as the Samahang Katandaan ng Nayon ng Tikay launched a fund drive for the purpose of renovating the chapel of Barrio Tikay, Malolos, Bulacan. Petitioner Martin Centeno, the chairman of the group, together with Vicente Yco, approached Judge Adoracion G. Angeles, a resident of Tikay, and solicited from her a contribution of P1,500.00. It is admitted that the solicitation was made without a permit from the Department of Social Welfare and Development.

As a consequence, based on the complaint of Judge Angeles, an information 1 was

filed against petitioner Martin Centeno, together with Religio Evaristo and Vicente Yco, for violation of Presidential Decree No. 1564, or the Solicitation Permit Law, before the Municipal Trial Court of Malolos, Bulacan, Branch 2, and docketed as Criminal Case No. 2602. Petitioner filed a motion to quash the information 2 on the

ground that the facts alleged therein do not constitute an offense, claiming that Presidential Decree No. 1564 only covers solicitations made for charitable or public

welfare purposes, but not those made for a religious purpose such as the construction of a chapel. This was denied 3 by the trial court, and petitioner's motion for

reconsideration having met the same fate, trial on the merits ensued.

On December 29, 1992, the said trial court rendered judgment 4 finding accused Vicente Yco and petitioner Centeno guilty beyond reasonable doubt and sentencing them to each pay a fine of P200.00. Nevertheless, the trial court recommended that the accused be pardoned on the basis of its finding that they acted in good faith, plus the fact that it believed that the latter should not have been criminally liable were it not for the existence of Presidential Decree No. 1564 which the court opined it had the duty to apply in the instant case.

Both accused Centeno and Yco appealed to the Regional Trial Court of Malolos, Bulacan, Branch 10. However, accused Yco subsequently withdrew his appeal, hence the case proceeded only with respect to petitioner Centeno. On May 21, 1993, respondent Judge Villalon-Pornillos affirmed the decision of the lower court but modified the penalty, allegedly because of the perversity of the act committed which caused damage and prejudice to the complainant, by sentencing petitioner Centeno to suffer an increased penalty of imprisonment of 6 months and a fine of P1,000.00, without subsidiary imprisonment in case of insolvency. 5 The motion for reconsideration of the decision was denied by the court. 6

Thus it is that a fine of P200.00 imposed as a penalty by the lowest court in the judicial hierarchy eventually reached this highest tribunal, challenged on the sole issue of whether solicitations for religious purposes are within the ambit of Presidential Decree No. 1564. Quantitatively, the financial sanction is a nominal imposition but, on a question of principle, it is not a trifling matter. This Court is gratified that it can now grant this case the benefit of a final adjudication.

Petitioner questions the applicability of Presidential Decree No. 1564 to solicitations for contributions intended for religious purposes with the submissions that (1) the term "religious purpose" is not expressly included in the provisions of the statute, hence what the law does not include, it excludes; (2) penal laws are to be construed strictly against the State and liberally in favor of the accused; and (3) to subject to State regulation solicitations made for a religious purpose would constitute an abridgment of the right to freedom of religion guaranteed under the Constitution.

Presidential Decree No. 1564 (which amended Act No. 4075, otherwise known as the Solicitation Permit Law), provides as follows:

Sec. 2. Any person, corporation, organization, or association desiring to solicit or receive contributions for charitable or public welfare purposes shall first secure a permit from the Regional Offices of the Department of Social Services and Development as provided in the Integrated Reorganization Plan. Upon the filing of a written application for a permit in the form prescribed by the

13

Regional Offices of the Department of Social Services and Development, the Regional Director or his duly authorized representative may, in his discretion, issue a permanent or temporary permit or disapprove the application. In the interest of the public, he may in his discretion renew or revoke any permit issued under Act 4075.

The main issue to be resolved here is whether the phrase "charitable purposes" should be construed in its broadest sense so as to include a religious purpose. We hold in the negative.

I. Indeed, it is an elementary rule of statutory construction that the express mention of one person, thing, act, or consequence excludes all others. This rule is expressed in the familiar maxim "expressio unius est exclusio alterius." Where a statute, by its terms, is expressly limited to certain matters, it may not, by interpretation or construction, be extended to others. The rule proceeds from the premise that the legislature would not have made specified enumerations in a statute had the intention been not to restrict its meaning and to confine its terms to those expressly mentioned. 7

It will be observed that the 1987 Constitution, as well as several other statutes, treat the words "charitable" and "religious" separately and independently of each other. Thus, the word "charitable" is only one of three descriptive words used in Section 28 (3), Article VI of the Constitution which provides that "charitable institutions, churches and personages . . ., and all lands, buildings, and improvements, actually, directly, and exclusively used for religious, charitable, or educational purposes shall be exempt from taxation." There are certain provisions in statutes wherein these two terms are likewise dissociated and individually mentioned, as for instance, Sections 26 (e) (corporations exempt from income tax) and 28 (8) (E) (exclusions from gross income) of the National Internal Revenue Code; Section 88 (purposes for the organization of non-stock corporations) of the Corporation Code; and Section 234 (b) (exemptions from real property tax) of the Local Government Code.

That these legislative enactments specifically spelled out "charitable" and "religious" in an enumeration, whereas Presidential Decree No. 1564 merely stated "charitable or public welfare purposes," only goes to show that the framers of the law in question never intended to include solicitations for religious purposes within its coverage. Otherwise, there is no reason why it would not have so stated expressly.

All contributions designed to promote the work of the church are "charitable" in nature, since religious activities depend for their support on voluntary contributions. 8 However, "religious purpose" is not interchangeable with the

expression "charitable purpose." While it is true that there is no religious purpose which is not also a charitable purpose, yet the converse is not equally true, for there may be a "charitable" purpose which is not "religious" in the legal sense of the term. 9 Although the term "charitable" may include matters which are "religious," it is a

broader term and includes matters which are not "religious," and, accordingly, there is

a distinction between "charitable purpose" and "religious purpose," except where the two terms are obviously used synonymously, or where the distinction has been done away with by statute.10 The word "charitable," therefore, like most other words, is

capable of different significations. For example, in the law, exempting charitable uses from taxation, it has a very wide meaning, but under Presidential Decree No. 1564 which is a penal law, it cannot be given such a broad application since it would be prejudicial to petitioners.

To illustrate, the rule is that tax exemptions are generally construed strictly against the taxpayer. However, there are cases wherein claims for exemption from tax for "religious purposes" have been liberally construed as covered in the law granting tax exemptions for "charitable purposes." Thus, the term "charitable purposes," within the meaning of a statute providing that the succession of any property passing to or for the use of any institution for purposes only of public charity shall not be subject to succession tax, is deemed to include religious purposes. 11A gift for "religious

purposes" was considered as a bequest for "charitable use" as regards exemption from inheritance tax.12

On the other hand, to subsume the "religious" purpose of the solicitation within the concept of "charitable" purpose which under Presidential Decree No. 1564 requires a prior permit from the Department of Social Services and Development, under paid of penal liability in the absence thereof, would be prejudicial to petitioner. Accordingly, the term "charitable" should be strictly construed so as to exclude solicitations for "religious" purposes. Thereby, we adhere to the fundamental doctrine underlying virtually all penal legislations that such interpretation should be adopted as would favor the accused.

For, it is a well-entrenched rule that penal laws are to be construed strictly against the State and liberally in favor of the accused. They are not to be extended or enlarged by implications, intendments, analogies or equitable considerations. They are not to be strained by construction to spell out a new offense, enlarge the field of crime or multiply felonies. Hence, in the interpretation of a penal statute, the tendency is to subject it to careful scrutiny and to construe it with such strictness as to safeguard the rights of the accused. If the statute is ambiguous and admits of two reasonable but contradictory constructions, that which operates in favor of a party accused under its provisions is to be preferred. The principle is that acts in and of themselves innocent and lawful cannot be held to be criminal unless there is a clear and unequivocal expression of the legislative intent to make them such. Whatever is not plainly within the provisions of a penal statute should be regarded as without its intendment. 13

The purpose of strict construction is not to enable a guilty person to escape punishment through a technicality but to provide a precise definition of forbidden acts. 14 The word "charitable" is a matter of description rather than of precise definition, and each case involving a determination of that which is charitable must be decided on its own particular facts and circumstances. 15 The law does not operate in

vacuo nor should its applicability be determined by circumstances in the abstract.

14 Furthermore, in the provisions of the Constitution and the statutes mentioned above, the enumerations therein given which include the words "charitable" and "religious" make use of the disjunctive "or." In its elementary sense, "or" as used in a statute is a disjunctive article indicating an alternative. It often connects a series of words or propositions indicating a choice of either. When "or" is used, the various members of the enumeration are to be taken separately. 16 Accordingly, "charitable" and

"religious," which are integral parts of an enumeration using the disjunctive "or" should be given different, distinct, and disparate meanings. There is no compelling consideration why the same treatment or usage of these words cannot be made applicable to the questioned provisions of Presidential Decree No. 1564.

II. Petitioner next avers that solicitations for religious purposes cannot be penalized under the law for, otherwise, it will constitute an abridgment or restriction on the free exercise clause guaranteed under the Constitution.

It may be conceded that the construction of a church is a social concern of the people and, consequently, solicitations appurtenant thereto would necessarily involve public welfare. Prefatorily, it is not implausible that the regulatory powers of the State may, to a certain degree, extend to solicitations of this nature. Considering, however, that such an activity is within the cloak of the free exercise clause under the right to freedom of religion guaranteed by the Constitution, it becomes imperative to delve into the efficaciousness of a statutory grant of the power to regulate the exercise of this constitutional right and the allowable restrictions which may possibly be imposed thereon.

The constitutional inhibition of legislation on the subject of religion has a double aspect. On the one hand, it forestalls compulsion by law of the acceptance of any creed or the practice of any form of worship. Freedom of conscience and freedom to adhere to such religious organization or form of worship as the individual may choose cannot be restricted by law. On the other hand, it safeguards the free exercise of the chosen form of religion. Thus, the constitution embraces two concepts, that is, freedom to believe and freedom to act. The first is absolute but, in the nature of things, the second cannot be. Conduct remains subject to regulation for the protection of society. The freedom to act must have appropriate definitions to preserve the enforcement of that protection. In every case, the power to regulate must be so exercised, in attaining a permissible end, as not to unduly infringe on the protected freedom. 17

Whence, even the exercise of religion may be regulated, at some slight inconvenience, in order that the State may protect its citizens from injury. Without doubt, a State may protect its citizens from fraudulent solicitation by requiring a stranger in the community, before permitting him publicly to solicit funds for any purpose, to establish his identity and his authority to act for the cause which he purports to represent. The State is likewise free to regulate the time and manner of solicitation generally, in the interest of public safety, peace, comfort, or convenience. 18

It does not follow, therefore, from the constitutional guaranties of the free exercise of religion that everything which may be so called can be tolerated. 19 It has been said

that a law advancing a legitimate governmental interest is not necessarily invalid as one interfering with the "free exercise" of religion merely because it also incidentally has a detrimental effect on the adherents of one or more religion. 20 Thus, the general

regulation, in the public interest, of solicitation, which does not involve any religious test and does not unreasonably obstruct or delay the collection of funds, is not open to any constitutional objection, even though the collection be for a religious purpose. Such regulation would not constitute a prohibited previous restraint on the free exercise of religion or interpose an inadmissible obstacle to its exercise. 21

Even with numerous regulative laws in existence, it is surprising how many operations are carried on by persons and associations who, secreting their activities under the guise of benevolent purposes, succeed in cheating and defrauding a generous public. It is in fact amazing how profitable the fraudulent schemes and practices are to people who manipulate them. The State has authority under the exercise of its police power to determine whether or not there shall be restrictions on soliciting by unscrupulous persons or for unworthy causes or for fraudulent purposes. That solicitation of contributions under the guise of charitable and benevolent purposes is grossly abused is a matter of common knowledge. Certainly the solicitation of contributions in good faith for worthy purposes should not be denied, but somewhere should be lodged the power to determine within reasonable limits the worthy from the unworthy. 22 The objectionable practices of unscrupulous persons are prejudicial to

worthy and proper charities which naturally suffer when the confidence of the public in campaigns for the raising of money for charity is lessened or destroyed. 23 Some regulation of public solicitation is, therefore, in the public interest. 24

To conclude, solicitation for religious purposes may be subject to proper regulation by the State in the exercise of police power. However, in the case at bar, considering that solicitations intended for a religious purpose are not within the coverage of Presidential Decree No. 1564, as earlier demonstrated, petitioner cannot be held criminally liable therefor.

As a final note, we reject the reason advanced by respondent judge for increasing the penalty imposed by the trial court, premised on the supposed perversity of petitioner's act which thereby caused damage to the complainant. It must be here emphasized that the trial court, in the dispositive portion of its decision, even recommended executive clemency in favor of petitioner and the other accused after finding that the latter acted in good faith in making the solicitation from the complainant, an observation with which we fully agree. After all, mistake upon a doubtful and difficult question of law can be the basis of good faith, especially for a layman.

There is likewise nothing in the findings of respondent judge which would indicate, impliedly or otherwise, that petitioner and his co-accused acted abusively or malevolently. This could be reflective upon her objectivity, considering that the complainant in this case is herself a judge of the Regional Trial Court at Kalookan City. It bears stressing at this point that a judge is required to so behave at all times as to promote public confidence in the integrity and impartiality of the

15 judiciary, 25 should be vigilant against any attempt to subvert its independence, and must resist any pressure from whatever source. 26

WHEREFORE, the decision appealed from is hereby REVERSED and SET ASIDE, and petitioner Martin Centeno is ACQUITTED of the offense charged, with costs de oficio.

SO ORDERED.

16

3. US vs CAPULE

Republic of the Philippines SUPREME COURT

Manila

EN BANC

G.R. No. L-7447 January 2, 1913

THE UNITED STATES, plaintiff-appellee, vs. NICASIO CAPULE, defendant-appellant.

Luciano de la Rosa, for appellant. Attorney-General Villamor, for appellee.

TORRES, J.:

Appeal by the defendant from a judgment of conviction rendered in this case by the Honorable Vicente Jocson, judge.

On September 2, 1903, Nicasio Capule, for the purpose of appropriating to himself a tract of coconut land, situated in the town of San Pablo, Laguna, without the knowledge or consent of the owners thereof, the married couple Aniceto Maghirang and Isabel Pili, by agreement and cooperation with the notary public, Inocente Martinez, who later died, prepared and drew up a document setting forth the sale in his favor of the said land, pretending that it was made and executed by the said owners of the tract, stating in the document that they had made the declaration that they had sold said land for the sum of 550 pesos paid at the time of the sale to the vendors, and Jacinto Peñaflor and Jorge Tolentino appear in said document as witnesses of the execution thereof; and Eulogio Ortega and Doroteo Guia as the signers of the deed of sale, because the alleged vendors did not know how to do so. Recorded at the bottom of the document was their ratification of its contents in the presence of said notary, before whom the said married couple appeared. The defendant Capule exhibited said document later, although he had been assured that it was false, in a trial before the justice of the peace of that town in the attempt to sustain his alleged right to the said piece of land.

For this reason a complaint was filed on February 3, 1910, by the provincial fiscal in the Court of First Instance of Laguna, charging Nicasio Capule with the crimes of falsification of a public document and estafa. After due trial the judge rendered judgment therein on March 21, 1911, sentencing Nicasio Capule to the penalty of eight years ofpresidio mayor, to payment of a fine of 2,000 pesetas, the accessories, and the costs; from which judgment the defendant appealed.

The document whose falsification is here in question, Exhibit A, the original whereof appears at pages 17 and 148 of the file exhibits and has been attached to the complaint, seems to have been executed on September 2, 1903, by Aniceto Maghirang y Espiritu and Isabel Pili y Emnaceno, of legal age, residents of San Pablo, who declare therein that they have agreed with the accused Capule on the real and absolute sale of a piece of land planted with 42 fruit-bearing coconut trees and approximately 300 not bearing fruit, for the sum of P550, which the purchaser has paid them to their entire satisfaction, which land is located in the place called Quinayoan, barrio of Dolores of the said town, with its boundaries and situation stated; and further setting forth that the land is the property of Isabel Pili, who acquired it by inheritance from her deceased niece, Claudia Reyes, according to a certified copy of some affidavit proceedings; that the land described had not been sold, ceded or encumbered in favor of any person other than Nicasio Capule, to whom then and thenceforth they delivered the possession and usufruct of said land as its legitimate owner, with right to alienate it, they being responsible to Capule, his heirs and successors in interest for the ownership, and agreeing to defend him against any just claims that might be presented; and Nicasio Capule y Capitulo, informed of the contents of the document by the vendor married couple, accepted it on his part; and as the vendors do not know how to sign Eulogio Ortega and Doroteo Guia do so at their request, as does also the purchaser, who signs the document in duplicate and to the same effect in the town hall of San Pablo, and there furthermore appear therein the signatures of Jacinto Peñaflor and Jorge Tolentino as witnesses. On the same date appears the certificate of the notary public, whose commission extended to January 1, 1905, wherein it is recorded that personally appeared before him the married couple Maghirang and Pili, whom he knew as the executors of the foregoing document and they ratified it as executed of their own free will, the husband, as well as the purchaser, exhibiting his cedula, but not the woman because she was exempt from payment thereof.

It likewise appears from the evidence adduced in this case that said married couple Maghirang and Pili were the owners of said land, which they possessed and had the usufruct of and for which they paid to the Government the corresponding land tax; that on January 31, 1904, said married couple sold a portion of said land with 150 coconut trees to Esteban Reyes and his wife Elisea Maghirang for 250 pesos, according to Exhibit B, and since then Reyes has possessed and had the usufruct of the portion of land he had bought, and made declaration before the land-tax board in May, 1906, as of land belonging to him, according to Exhibit E, which sale was ratified by the vendors in favor of Reyes before the notary Segundo Abrera on May 2, 1908, Exhibit C.

On May 2, 1908, the married couple Aniceto Maghirang and Isabel Pili likewise sold the remaining portion of the said land with its coconut trees to Melecio Briñas for the sum of 650 pesos, before the notary public Segundo Abrera, according to Exhibit J, and since then Briñas has possessed and had the usufruct of the land purchased, although in the tax list the tract continues in the name of the vendor, who had made declaration in May, 1906, Exhibit K, and had been paying the tax from 1903, Exhibit P, although Reyes, the owner of one part which he had bought in 1904, appears to have paid the tax up to 1910, Exhibit F.

17 Although Esteban Reyes was in lawful possession of a portion of the land he had purchased, on February 2, 1909, Nicasio Capule filed a complaint before the justice of the peace of San Pablo accusing him of the theft of coconuts from the land he possessed and of which Reyes was the owner; but the court dismissed the case for lack of evidence of the right alleged by the plaintiff, with the costs against him, Exhibit D, page 17 of the record.

On April 16, 1909, Nicasio Capule, claiming to be the owner of the coconut land situated in Dolores, the subject matter of an alleged sale, accused the married couple Maghirang and Pili and Eusebio Soriano of theft, and in spite of the fact that he exhibited the document marked "Exhibit A", setting forth the said sale made in his favor by that married couple, the justice of the peace acquitted the accused of the crime of theft, Exhibit 1, page 67; and on June 4, 1909, according to Exhibit I, page 107 of said record, Aniceto Maghirang and Guadalupe Javier were also acquitted of the crime of coercion with which they were accused.

On October 21, 1909, Nicasio Capule and his wife were accused by Nemesio Briñas of the crime of theft in the justice of the peace court of San Pablo and upon trial were sentenced to two months of arresto mayor and payment of P14.25 with the costs, from which judgment they appealed to the Court of First Instance, page 54 of the record, although at the request of the fiscal the case was dismissed, because the action exercised by the complainant had to be settled in a civil suit.

Although Capule presented, in some of the said hearings before the justice of the peace court of San Pablo, the deed of sale, Exhibit A, for the purpose of proving that he was the owner of the land in question, yet in the judgments rendered therein said instrument was held to be false and no probative value whatever was attached to it.

Aniceto Maghirang denies that he sold the said land to Nicasio Capule or that he executed in his favor any document of sale, stating that he had conferred a power of attorney upon him so that he might represent himself and his wife, who later died, in a suit they had with Maximino Reyes, because of the absolute confidence they had in the defendant, just as it was the latter himself who drew up the document that was later signed in his stead by Eulogio Ortega, because he could not read or write; but he denied that he or his wife had ever been in the house of the notary Inocente Martinez to execute or ratify any document or that he and his wife Isabel Pili, when she was alive, had told the defendant Capule that they wished to sell the said land and that he had offered to buy it.

Nicasio Capule avers that the said document, Exhibit A, was drawn up in his own house in the presence of the married couple, Aniceto Maghirang and Isabel Pili, for whom he had to translate the contents of the document into Tagalog, and they then signified their agreement; and as they could not sign, Eulogio Ortega and Doroteo Guia did so in their stead, and at that time Jacinto Peñaflor and Jorge Tolentino, also signed it as witnesses; and that on the afternoon of that day the married couple Maghirang and Pili appeared in the house of the notary Martinez and ratified before him the said document in the presence of the witness testifying; all of which Aniceto

Maghirang denies, asserting that he did not execute said document, or ratify it before the notary Martinez, for he had never been in the latter's house nor had he ever seen the document, Exhibit `A. His wife, Isabel Pili, did not testify, for she had died in the meantime.

Let us examine the statements of the persons who appear to have signed the document, impugned as false, in place of the married couple executing it, and one of the witnesses to the execution of the said document, for it does not appear that the other, Jorge Tolentino, testified.

Upon making his statement and after having been informed of the contents of the document, Exhibit A, Doroteo Guia denied that he had been present in the drawing up and execution thereof, or that he had ever known that the married couple Aniceto Maghirang and Isabel Pili had sold any land to the defendant, Nicasio Capule, although he remembered that on a certain occasion said married couple had asked him to sign for them in the defendant Capules's house a document of power of attorney made out in Capule's favor, so that the latter might represent them in a suit they were prosecuting against Maximino Reyes, and believing that it was in fact a question of a power of attorney, as they had assured him, went to the defendant's house and without informing himself of the contents of the document that Capule spread out on a table, signed it, but he denies that Eulogio Ortega, Jacinto Peñaflor, and Jorge Tolentino with whom he was acquainted, were present in that house.

Eulogio Ortega likewise denied that he signed any document of sale of land or that he had ever been informed that the married couple Maghirang and Pili had sold any land to the defendant Nicasio Capule, although he remembers that one day about seven years ago Nicasio Capule and Isabel Pili came to his house and the latter told him that as she did not know how to write she begged him to do the favor of signing in her stead a power of attorney, whereupon the defendant told him that as he did not know Spanish the contents of said document would be translated to him so that he might understand them, stating at the same time that a power of attorney was conferred upon him, Capule, by Aniceto Maghirang and Isabel Pili in the suit against Maximino Reyes, the attorney thus authorized responding for its result, without the necessity for the intervention of the married couple granting the power; and that after being informed of the of the contents of the document presented to him he signed it, and he asserts that said document is Exhibit A; that on that occasion Doroteo Guia, Jacinto Peñaflor, and Jorge Tolentino were not present; and that one Sunday, when he was passing a tienda with Jorge Tolentino and Domingo Capuno, the defendant Capule, who was there, called to him and after offering them wine told him that they should understand each other for that document which he, Capule, had said was a power of attorney was really a deed of sale executed in his favor by Aniceto Maghirang and in case of winning the suit Capule would give him P200.

Jacinto Peñaflor, who figures in said document as a witness, having the same before him, stated that the signature which appears therein with his name and surname looks like his, but he could not assert definitely whether such signature was his or not, for he does not remember having signed such a document in the presence of the married couple Maghirang and Pili and the individuals Eulogio Ortega, Doroteo Guia,

18 and Jorge Tolentino, setting forth the sale of a tract of lands to Nicasio Capule, and that he did not recognize the signatures of Doroteo Guia and Eulogio Ortega.

From the result of taking these statements and the conduct of the accused together, it is logically inferred that after preparing the document, Exhibit A, he tried by all the means he thought expedient to assert his ownership of the land which, under an alleged title of acquisition, had come to be his property and to that end he tried to dispose of the products of the young trees that there were on the tract, even daring to trample upon the legitimate rights of its original owners and of the new ones who had later acquired it, up to the point of accusing them as perpetrators of crimes directed against his pretended and false right of ownership, which he claimed to have acquired through the said false instrument.

Believing that with the document, Exhibit A, he could get the courts to override the true owners of the land, which he pretended its original owners had sold, in the various complaints he presented before the justice of the peace of San Pablo against the offended alleged owners and one of the new owners who acquired part of the land in question, as well as when he was accused of theft by the owner of the remaining part of the tract, the defendant dared to assert that he was the owner thereof and of the coconut trees growing thereon, even to the point of exhibiting said false instrument, but in spite of his allegations and his documentary evidence the persons accused by him were acquitted, while Capule himself was convicted of theft of coconuts on a complaint of one of the owners of said land. The notary, Inocente Martinez, was not examined, for he had died in the meantime.

It therefore appears to be plainly proven that the crime of falsification of a document has been committed, and while it may not be public still it is of an official or notarial character, provided for and penalized in articles 300 and 301, because the defendant executed upon said notarial document of an official character acts constituting falsification, by counterfeiting therein the intervention of the married couple Aniceto Maghirang and Isabel Pili, to whom he ascribed statements different from what they had made to him and by perverting the truth in the narration of facts, getting two persons to sign in the name of said married couple through deceit, after giving them to understand that the document contained a commission or power of attorney, when in fact it was a deed of sale of a piece of land, the legitimate owners whereof had never intended or consented to its alienation.

None of the persons who appear to have signed said document and seem to have been present at its execution were informed of its true contents, because they all confided with the greatest good faith in the false and deceitful statements of the defendant, believing what he said to the effect that said instrument was a commission voluntarily conferred upon him by the couple executing it, who never intended to execute any document of sale of their property to the defendant, who went to the extreme of getting a notary to certify to its ratification before him, made apparently by the alleged vendors in the contents of the said false document.

The fact that the married couple Maghirang and Pili did not know how to read and write certainly reveals great ignorance and lack of culture in them, but when they got to be landowners and acquired property of some value, they cannot be absolutely denied the ability to distinguish a deed of sale from a power of attorney, because they have demonstrated well enough that they understood their purpose to be that the defendant should represent them in a suit pending in a court and that they had never intended or executed any fact for the alienation of a tract of land belonging to them in favor of the defendant, and it is therefore unquestionable that he took advantage of the opportunity when he was to have executed a document or instrument of power of attorney, which the married couple desired, to draw up maliciously and deceitfully a deed of sale in his favor, deceiving the alleged vendors and the two persons who signed for them and making them believe that the document executed was a power of attorney or commission, when it fact it was a deed of sale and is the Exhibit A, wherein, if he did not forge the signatures of the two witnesses Peñaflor and Tolentino, he must have obtained them in an equally deceitful way.

If it were true that the vendors had really alienated their coconut land to the defendant, their continuing to pay the land tax is unexplained. In January, 1904, a part of said land with its coconut trees was sold to Esteban Reyes and in May, 1908, the rest of the tract was sold to Melecio Briñas. Persons so simple, even ignorant and of little culture, as the offended parties, would not have dared to sell successively to two of their neighbors in two portions the said land, if it had been in fact already sold to the defendant Capule; while the latter, by profession a clerk and acting as such for the notary Martinez, who made sworn statements before the assessment board and paid the land tax for the year 1906, never complied with these obligations of landowner in connection with the land which, according to Exhibit A, he had acquired on September 2, 1903, yet on the other hand it does not appear why he did not enter in possession of the tract if he had really bought it in September of that year, which indicates that although he dared to draw up a false document with the connivance of the notary, his boldness did not prevail to the extent of depriving in a frank and open manner its legitimate owners of the possession of the land by appealing to the courts to assert his right, provided he was sure that it was legitimate.

Although under article 535 of the Penal Code those who commit fraud by causing another to subscribe a document by the use of deceit, as the defendant has done, incur, according to paragraph 7 thereof, the penalties set forth in the preceding article; still when as in the present case the crime of falsification was committed for the purpose of getting a piece of real property, which is the profit its perpetrator sought to obtain, he is regarded as duly punished as guilty of falsification of a notarial document, in which crime fraud or estafa is held to be included, with the penalties indicated in said article 301 of the Code.

The defendant pleaded not guilty and alleged that the married couple Maghirang and Pili had positively sold him the land to which Exhibit A refers for the sum of P500 which he forthwith delivered to them, Eulogio Ortega and Doroteo Guia and two other eyewitnesses to the execution of the document having signed the instrument which he drew up in his house in the presence of all of them, and that it was he who drew up the certificate of ratification authorized by the notary and interpreted the contents

19 of the document with its ratification before the notary to the vendors, who really did not know or understand Spanish, on the afternoon of the same date on which said instrument was drawn up; further stating that immediately afterwards he took possession, in the same month of September, 1903, of the land he had bought and from that time on picked the fruit the coconut trees produced, although he was disturbed in his possession by the vendors themselves and the neighbors Esteban Reyes and Melecio Briñas; that it was true that he had not in 1906 made any declaration of ownership of said land, as is ordered for the purposes of assessment, but he paid the land tax for that time by delivering the money to Isabel Pili, although he did not know whether the receipts had been made out in her name. The defendant, who is a person of more education and knowledge than the offended parties, even alleged other defenses which were in like manner as those stated completely unsupported.

He tried to prove that in January, 1906, he sold said land under pacto de retro for two years to Andres Borja, who possessed it during those two years, although the alleged purchaser Borja said that only a private document was made out for the sale nor did he require of the defendant any previous document of ownership to evidence the defendant's right to the land sold, which private document was not exhibited in the case and no proof was adduced to show Borja's possession of the land sold to him; and what is stranger still is that in the declaration of ownership of the land, Exhibit K, page 116, presented by the offended party Aniceto Maghirang in May of the same year, 1906, the alleged Andres Borja appears to have signed as a witness, attesting that the land was Aniceto Maghirang's and thus Andres Borja signs at page 87 of his statement, in spite of the alleged previous purchase, nor does it appear that the defendant redeemed the tract.

An attempt was also made to prove that in November, 1908, the defendant Capule sold the same land absolutely to Marcelino Capiriña with another tract, which is set forth in the document, Exhibit B, ratified before a notary, for the sum of P2,500, and the purchaser forthwith took possession of the lands sold. If this absolute sale is true it is incomprehensible why the purchaser Capiriña did not ever attempt to enter into possession of the land in question sold to him in November, 1908, on which date the original owners, Maghirang and Pili, had already got rid of said land, having sold a part thereof to Esteban Reyes on January 31, 1904, and the remainder on May 2, 1908, to Melecio Briñas. These new owners took possession from that time on of the respective portions of the land they had acquired, nor does it all appear in the case that the purchaser Capiriña asked the alleged vendor to make delivery of the land sold to him, or that he ever appealed in any way to the courts. Moreover, in presenting his complaints years later against the married couple Maghirang and Pili and others, the defendant Capule did so in the capacity of owner of that very land, so it is not true that he had previously sold it to the said Capiriña.

These two alleged sales to Borja and Capiriña were ways and means chosen by the defendant to see if he could effectually deprive the married couple Maghirang and Pili of their right to the land in question, since at that time he did not yet dare to exhibit the false instrument he had maliciously and fraudulently drawn up and he did not secure

from said document the results he expected and intended to become the owner of the land by means of a false instrument.

Likewise the alleged transaction that he says Eulogio Ortega proposed to him to allow rescission of the alleged sale in the document, Exhibit A, through return of the price by the vendors, a transaction proposed, according to the accused and his witness Silvestre Capiriña, one day in the month of July, 1909, is in every way unlikely to have been made in the name of Aniceto Maghirang, because the land had already been sold some years before to Esteban Reyes and Melecio Briñas, and therefore the offended party could not get Ortega to talk with the defendant to propose said transaction for the return of a piece of land that had never been sold to him but to the said Reyes and Briñas in 1904 and 1908, and in 1909 he no longer had any interest or right in the land in question, aside from the fact that he has not proved that the offended party Maghirang ever intrusted such a commission to Eulogio Ortega or authorized him to make the proposition. Eulogio Ortega denied having interviewed the defendant Capule on behalf of Aniceto Maghirang. Such allegations are nothing more than ingenious quibbles and tricks invented by the defendant's counsel to save him from the punishment he deserves as the proven perpetrator of the crime of falsification.

Starting from the hypothesis that the defendant really obtained in a fraudulent and deceitful manner the consent of the married couple Maghirang and Pili to the execution of said false instrument, his counsel argues that still he was not guilty of the crime of falsification of a public document, in accordance with the finding of this court in the decision of the case against Geronimo Milla (4 Phil. Rep., 391), wherein the following principle was laid down:

The fact that one's consent to a contract may be obtained by mistake, violence, intimidation, or fraud does not make the contract a false contract, and therefore a person who has obtained such contract by those means, whatever be the crime he may be guilty of, is not guilty of the crime of falsification either of a public or of a private document.

This was the question of a contract wherein the offended parties gave their consent to the execution of the document that was later impugned as false, although this consent was obtained through intimidation which the defendants in that case, Juan Cardona and Geronimo Milla, had used upon them, and for this reason the court, in view of the fact that the contracting parties consented to the terms of the instrument, could not find that there was falsification in the statement of the facts, according to article 300 of the Penal Code, merely because the consent had been secured through intimidation.

As has been seen, there was no contract in the present case, nor any consent to the contract pretended to have been stipulated in the instrument, Exhibit A, wherein the defendant entered statements ascribed to the alleged vendors, who proposed and intended to execute an instrument of commission or power of attorney in favor of the defendant, but not a deed of sale, as in bad faith and with evident perverseness the

20 defendant did, perverting the truth in the statement of facts and ascribing to the offended parties statements different from those they made to him in the counterfeited document, since the statements set forth therein were not characteristic and constitutive of an instrument of power of attorney in his favor in order that he might represent them in a suit against Maximino Reyes.

Finally, the decision of the Supreme Court of the United States in the case of Weems vs. U.S. (217 U.S., 349) is vainly invoked, for Nicasio Capule is not a public officer and, moreover, as he is accused of the crime of falsification of a notarial document of official character equivalent to a public document the principle laid down in said decision is totally inapplicable in his favor. The defendant Capule does not come within the purview of article 300 of the Penal Code, but of 301, which fixes the penalty, not of cadena temporal but of presidio mayor; further keeping in mind that the act of falsification of a public document in itself constitutes a crime, morally and legally punishable, even though to date the penal law with respect to falsification of a public document committed by public officers, in lieu of said article 300 of the code, has not yet been promulgated; but article 301, applicable to the present case, has not been repealed and subsists in all its force.

The concurrence of neither extenuating nor aggravating circumstances can be found in the commission of the crime, and therefore the penalty fixed in said article 301 of the code must be imposed in its medium degree.

For these reasons, whereby the errors assigned to the judgment appealed from are found to be refuted, we hold that it should be affirmed; provided, however, that Nicasio Capule be sentenced to the penalty of eight years and one day of presidio mayor, to the accessories fixed in article 57 of the code, to the payment of a fine of 5,000pesetas, without subsidiary imprisonment in case of insolvency, according to article 51; and to the costs in the case. So ordered.

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4. PEOPLE vs MANANSALA

Republic of the Philippines SUPREME COURT

Manila

EN BANC

G.R. No. L-38948 November 18, 1933

THE PEOPLE OF THE PHILIPPINE ISLANDS, plaintiff-appellee, vs. TOMAS MANANSALA, ET AL., defendants. GALICANO ALON and RICARDO CABRALES, appellants.

Roman Gesmundo for appellants. Office of the Solicitor-General for appellee.

VICKERS, J.:

The appellants Galicano Alon (alias Grego), and Ricardo Cabrales (alias Maning), together with Tomas Manansala, Generoso Jacinto, and Isidro Mendoza, were prosecuted in the Court of First Instance of Manila for the crime of estafa, committed as follows:

That on or about the 19th day of February, 1932, in the municipalities of Pasay and Caloocan, Province of Rizal, within two and a half miles from the city limits and within the jurisdiction of this court, and in the City of Manila proper, Philippine Islands, the said accused conspiring and confederating together and helping one another, did then and there wilfully, unlawfully, and feloniously defraud one Perfecto Abordo in the following manner, to wit: the said accused by means of false and fraudulent representations which may made to the said Perfecto Abordo to the effect that they had for sale six hundred (600) tins of opium, a prohibited drug, and that they would deliver the same to him upon paying them P600 in advance and by means of other similar deceit, induced the said Perfecto Abordo to give and deliver to them, as in fact he gave and delivered to them, the said sum of P600, in consideration of which the accused gave him a gasoline can which they represented to contain the 600 tins of opium, when in truth and in fact, as the said accused well knew, the said can contained only six small tin cans containing a black substance which was not opium, the accused thereby wilfully, unlawfully, and feloniously defrauding the said Perfecto Abordo in the sum of P600 to his damage and prejudice in said amount.

That the accused Tomas Manansala y Velasco and Galicano Alon y Ponce (alias Grego) have each once been convicted of the crime of estafa; and the accused Ricardo Cabrales y Pelorina (alias Maning) and Isidro Mendoza y Santos Sollo are habitual delinquents, the first having been convicted once for robbery, once for theft and three times for estafa, having served his last sentence on February 4, 1927, and the second having been convicted one of estafa and once of robbery, having served his last sentenced on October 30, 1922, all of said convictions having been rendered by virtue of final judgments of competent courts.

After the prosecution had rested, the information was dismissed as to the defendants Tomas Manansala, Generoso Jacinto, and Isidro Mendoza for lack of evidence to show that they had taken part in the commission of the crime. Upon the termination of the trial, Judge Pedro Concepcion found the defendants Galicano Alon and Ricardo Cabrales guilty of estafa, in accordance with the provisions of article 354, No. 2, of the Penal Code, as amended by Act No. 3244, and sentenced each of them to suffer four months and one day of arresto mayor, with the accessory penalties prescribed by law, to indemnify the offended party, Perfecto Abordo, in the sum of P600, with subsidiary imprisonment in case of insolvency, and to pay the proportionate part of the costs.

The trial judge's findings as to the facts as follows:

With respect to the other accused, Galicano Alon and Ricardo Cabrales, the evidence for the prosecution sufficiently shows that about a week prior to February 19, 1932, the former who gave his name as "Grego" and the latter known by the name of "Maning" in company with another person whom they called "Pepe" offered to sell Attorney Perfecto Abordo 17,000 tins of opium at P1.50 each telling him that he could sell them for P10 a tin. Tempted with the prospect of an enormous profit, Mr. Perfecto Abordo agreed to buy the merchandise, and the accused agreed to sell it to him in lots of 1,000 tins at P600 lot. It was agreed that the delivery of P1,000 tins would take place at P5.30 p. m., at the corner of Taft Avenue Extension and Vito Cruz within the jurisdiction of this city. Attorney Perfecto Abordo accordingly went to the place indicated with the money, and there waited for them. The accused Galicano Alon arrived alone in an automobile and invited Abordo to go with him to the place where the 1,00 tins of opium were kept. trusting Gallicano Alon, who always called Abordo "brother" because he claimed to be a Mason like Mr. Abordo, the latter went with him in his automobile to the rotunda of Rizal Avenue Extension. Chauffeur Jose Jonsay was at the wheel. It was already twilight when they arrived at the rotunda, and there they met Maning, or the accused Ricardo Cabrales, who, in company with others, was waiting for Abordo in another automobile. The accused Cabrales alighted and shortly thereafter appeared Pepe who was ordered by Cabrales to get the tins of opium. Pepe got from a lot nearby the can Exhibit A, the top of which was ordered by Cabrales in order to show Abordo the six tins of opium contained in a wooden box, Exhibit B, which Abordo saw when the top of said Exhibit A was opened. Finding that said tins really contained

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opium, Abordo believed that the rest of the contents of the can also consisted of tins of opium. He handed the six hundred pesos to Maning, who, after receiving the money, immediately went to the automobile where his companions were waiting. At the same time Abordo returned to his car with the accused Galicano Alon and the person named Pepe, carrying the can. While proceeding towards Taft Avenue Extension Abordo noticed that the accused Cabrales was following in his automobile, and that when they were nearing the corner of Taft Avenue Extension and Vito Cruz the car in which Cabrales was riding attempted to block Abordo's way, while Galicano Alon told Attorney Abordo that those in the other automobile were constabulary men and it would be better to get rid of the can Exhibit A. The accused Cabrales, whom Attorney Abordo was able to recognize very well, and the companions of the former whom Abordo was not able to identify because it was already dark, approached his car saying that they were constabulary agents and told Abordo that he was under arrest. Knowing that they were not constabulary agents and that their purpose was to get possession of the can Exhibit A, Abordo drew his revolver and ordered his chauffeur to proceed. Cabrales and his companions again followed him in their car and for the second time tried to head off Abordo somewhere before the intersection of F. B. Harrison and Vito Cruz streets, but Abordo proceeded until he arrived at his house. There he opened the can Exhibit A and inside he found the wooden box Exhibit B, but the rest of the contents of the can was sand. He bore a hole in one of the tins and found that it only contained molasses.

The accused tried to give, by their testimony and that of Miguel Rosales, who had been convicted twelve times of estafa, a long story to the effect that Abordo engaged the accused Cabrales, through the intervention of Miguel Rosales, to prepare 1,000 tins of molasses resembling tins of opium, that on the afternoon agreed upon for the payment of the value of said tins, Abordo refused to deliver the money on the pretext that the purchaser of said tins had not arrived, and invited the accused to his house in Pasay in order to make the payment inasmuch as they insisted upon collecting from him; but before arriving in Pasay Cabrales stopped Abordo's automobile and required the latter to hand over the money, at the same time placing at the side of Abordo's automobile a sack which he said contained the 1,000 tins of molasses asked for by Abordo.

It is hardly necessary to state that this story is a sheer fabrication.

The attorney for the appellants makes the following assignments of error:

I. El Juzgado incurrio en error al declarar que las pruebas demuestran que Ricardo Cabrales y Galicano Alon, en compañia de otro individuo llamado "Pepe", vendieron al abogado Perfecto Abordo mil latas de opio falsificado por el precio de P600.

II. El Juzgado incurrio en eror al no declarar que el supuesto ofendido, Perfecto Abordo, por medio de Miguel Rosales, encomendo a Ricardo Cabrales la confeccion de mil latas de opio al precio de P0.60 cada lata poniendo como contenido melaza, para venderlas como opio legitimo.

III. El Juzgado incurrio en error al no declarar que aun en el supuesto de que realidad Ricardo Cabrales vendio a Perfecto Abordo dichas mil latas de opio por el precio de P600, el acusado Galicano Alon nada tiene que ver con dicha venta.

IV. El Juzgado incurrio en error al no absolver a los acusados apelantes, apreciando cuando menos en favor de los mismos y sobre todo en favor del apelante Galicano Alon, el beneficio de la duda racional.

The assignments of error raise only questions of fact, depending on the credibility of the witnesses. No reason has been adduced that would justify us in disturbing the findings of the trial judge. As to the contention of the appellants, the trial judge found it to be a mere fabrication and worthy of no credit. The witnesses for the defense were Miguel Rosales and the appellants themselves. The evidence shows that Miguel Rosales had been convicted of the falsification of commercial documents in twelve cases. The appellant Galicano Alon had been convicted ofestafa, and the other appellant, Ricardo Cabrales, had been convicted once of robbery, once of theft, and three times of estafa. The trial judge was fully justified in disbelieving the improbable story of said witnesses.

The crime committed by the appellants is that of estafa as defined in article 315, paragraph 1 (a) of the Revised Penal Code, which provides that any person who shall defraud another through unfaithfulness or abuse of confidence by altering the substance, quantity, or quality of anything of value which the offender shall deliver by virtue of an obligation to do so, even though such obligation be based on an immoral or illegal consideration. The amount of the fraud being P600, the penalty applicable is arresto mayor in its maximum period to prison correccional in its minimum period, and it appearing that the appellant Galicano Alon has already been convicted of estafa, he is therefore a recidivist, and the penalty applicable to him should be imposed in the maximum degree.

It was alleged in the information that Ricardo Cabrales was a habitual delinquent because he had been convicted once of robbery, once of theft, and three times of estafa, and that the last penalty for estafa was extinguished by him on February 4, 1927. These prior convictions were admitted by him in open court. He is therefore a habitual delinquent, but his prior convictions can not be taken into consideration also as an aggravating circumstance for the purpose of increasing the principal penalty, which should therefore be imposed in the medium degree.

As the additional penalty, the Solicitor-General recommends the medium degree of prision mayor in its minimum and medium periods, or from six years and one day to seven years and four months. This is erroneous. It is apparently based upon the

23 mistaken idea that only the prior convictions of this appellant for estafa are to be taken into account. The correct interpretation of the law is that all prior convictions of any of the crimes of theft, robbery,estafa, or falsification should be taken into account when a person is convicted of any one of these crimes and of being habitual delinquent. To hold otherwise, a person might be twice convicted of each of these four crimes, and still not be a habitual delinquent.

For the foregoing reasons, the appellant Galicano Alon is sentenced to suffer one year, eight months, and one day of prision correccional, and the appellant Ricardo Cabrales is sentenced to suffer one year and one day ofprision correccional, and said defendants are jointly and severally sentenced to indemnify the offended party in the sum of P600, with the corresponding subsidiary imprisonment in case of insolvency. The appellant Ricardo Cabrales having been previously convicted five times of theft, robbery, or estafa, he is sentenced as a habitual delinquent to suffer an additional penalty of eleven years, six months, and twenty-one days of prision mayor.

As thus modified, the decision appealed from is affirmed, with the costs against the appellants.

24

USE OF FALSIFIED DOCUMENT

1. US vs CASTILLO

EN BANC

G.R. No. 2829 September 19, 1906

THE UNITED STATES, Plaintiff-Appellee, vs. PIO CASTILLO, Defendant-Appellant.

T.L. Hartigan, for appellant. Office of the Solicitor-General, Araneta, for appellee.

CARSON, J.:

It was proven at the trial of the case on the morning of the 2d of December, 1905, the appellant Pio Castillo, presented a check for the sum of 56 pesos, Philippine currency, to Chinese merchant named Lim Ponso; that the said check was made payable to bearer and purported to be drawn by one James J. Watkins; that the amount of the check was paid to Pio Castillo; that the signature of the drawer upon said check was a forgery made in imitation of the genuine signature of James J. Watkins, sheriff of the city of Iloilo, and that, in fact, the said James J. Watkins never signed or issued the said check; that the blank upon which the check was written was stolen from a book of blank checks between the hours of 12 noon on the 1st of December, 1903, and 11 a. m. on the 2d of December, 1903, when the check was presented for payment; that this blank check book was kept in a drawer in the office of the said James J. Watkins, and that Pio Castillo was one of three clerks employed by Watkins in the office; that Castillo was in the office on the evening of December 1 and early in the morning of December 2, and that he was the last person let alone in the office on the evening of December 1, he having locked the office after all the other clerks had gone.chanroblesvirtualawlibrary chanrobles virtual law library

Castillo went on the witness stand in his own behalf and swore that he had never seen the forged check prior to the trial; that he was not at the business place of the Chinese merchant, Lim Ponso, on the 2d of December, 1903; and that he never received the money which it is alleged was paid him upon the check; but the falsity of all these statements, in every particular, was conclusively established by the testimony of a number of disinterested witnesses for the prosecution.chanroblesvirtualawlibrary chanrobles virtual law library

Upon this evidence the trial court held that the prosecution had failed to establish the charge of falsification, but found the accused guilty of the crime of knowingly using with intent to gain a falsified merchantile document as defined and penalized in article 302 of the Penal Code, and sentenced him to five months imprisonment ( arresto mayor) with the accessory penalties.chanroblesvirtualawlibrary chanrobles virtual law library

We think the evidence in the case was sufficient to sustain a finding that the accused was guilty of the crime of falsification as charged. The question involved is stated as follows in Wharton's Criminal Law (vol. 1, par. 726):

Does the uttering of a forged instruments by the particular person justify a jury in convicting such a person of forgery? The question, if nakedly put, must, like the kindred one as to the proof of larceny by evidence of possession of stolen goods, be answered in the negative. The defendant is presumed to be innocent until otherwise proved. In larceny this presumption is overcome by proof that the possession is so recent that it becomes difficult to conceive how the defendant could have got the property without being in some way concerned in the stealing. So it is with uttering. The uttering may be so closely connection with the forgers that it becomes when so accomplished, probable proof of complicity in the forgery.

See, as the main substantiating this view, U. S. vs. Britton (2 Mason, 464, 1826); Spencer vs. Com. (2 Leigh, 751, 1830); State vs. Morgan (2 Dev. & Bat., 348, 1837); State vs. Outs (30 La. An., Pt. II, 1155, 1878); Cohn vs. People [(Colo.) 2 West Coast Rep., 528, 1884].chanroblesvirtualawlibrary chanrobles virtual law library

In Massachusetts, wherein it has been held that the mere fact of uttering is not proof of forgery (Com. vs. Parmenter, 5 Pick., 279, 1827), it has been decided, nevertheless, that "possession of a forged instrument by a person claiming under it is strong evidence tending to prove that he forged it or caused it to be forged." (Com. vs. Talbot, 84 Mass. (2 Allen), 161.) In several jurisdiction it has been held that one found in the possession of a forged order issued in his own favor is presumed either to have forged it or procured it to be forged. (Hobbs vs. State, 75 Ala., 1; State vs. Britt, 14 N. C. (3 Div.), 122.)chanrobles virtual law library

For the purposes of this case it is not necessary to hold, and we do not hold, that the mere fact that the accused uttered the check in question is proof of the fact that he also forged it or caused it to be forged, but we do hold that the utterance of such an instrument, when unexplained, is strong evidence tending to establish the fact that the utterer either himself forged the instrument or caused it to be forged, and that this evidence, taken together with the further evidence set out above and brought out on the trial of the case, establishes the guilt of the accused of the crime with which he was charged beyond a reasonable doubt

It is urged on appeal that the information filed in this case is fatally deficient because it charges the accused with falsification and further alleges that he received the sum of money realized as a result of said falsification, and it is contended that the accused was thus charged as principal and as accessory after the fact. It is sufficient answer to this connection to say no objection was raised on this ground at the trial; and it is further to be observed that this allegation was not in fact or intention a charge against the accused as accessory after the fact, and appears to have been set out in the information merely to fix the civil responsibility upon which the court is required to pass, under the provisions of the Spanish Penal Code

25 The trial court was of opinion that the aggravating circumstances of premeditation and abuse of confidence should be taken into consideration in fixing the penalty to be imposed, but we agree with the Solicitor-General that premedition is inherently involved in crimes of this nature, and since it does not appear that the check book was under the control or intrusted to the care of the accused, the crime can not be said to have been committed with "abuse of confidence" within the meaning of circumstance 10 of article 10 of the Penal Code.

We therefore reverse the judgment and sentence of the trial court and find the accused, Pio Castillo, guilty of the crime of "falsification of a mercantile instrument," as charged, and it appearing that the accused, at the time of the commission of the crime, was less than 18 though more than 15 years old, we impose upon him the penalty immediately inferior to that prescribed for that offense, and there being no aggravating or extenuating circumstances, we sentence the said Pio Castillo to four years' imprisonment (presidio correccional) with the accessory penalties prescribed by law, and to the payment of the costs in both instance and the indemnification of the injured party in the sum of 56 pesos, Philippine currency

After the expiration of ten days let judgment be entered in accordance herewith and at the proper time let the case be remanded to the court below for proper action. So ordered.ch

26

2. PEOPLE vs DAVA

Republic of the Philippines SUPREME COURT

Manila

THIRD DIVISION

G.R. No. 73905 September 30, 1991

MICHAEL T. DAVA, petitioner, vs. THE PEOPLE OF THE PHILIPPINES and the INTERMEDIATE APPELLATE COURT, respondents.

KV. Faylona & Associates for petitioner.

FERNAN, C.J.:p

On October 19, 1975, while driving a car along Shaw Boulevard, Mandaluyong, Rizal, petitioner Michael T. Dava, then holder of non-professional driver's license No. 1474427 1 with official receipt No. 7023037, 2 bumped pedestrians Bernadette Roxas

Clamor and Dolores E. Roxas, causing death to former and physical injuries to the latter.

As a consequence of said incident, Dava was brought to Mandaluyong Police headquarters where his driver's license was confiscated by Cpl. Daniel Severino who later submitted Dava's driver's license to the fiscal's office in Pasig, Rizal. license was thereafter presented as prosecution evidence in criminal case for homicide and serious physical injuries reckless imprudence filed against Dava in the then Court First Instance of Rizal in Pasig. 3

On April 12, 1978, Antonio Roxas, the brother of Bernadette and the father of Dolores, saw Dava driving a maroon Volkswagen (beetle-type) car with plate No. AD-902 B. Knowing that Dava's driver's license was used as an exhibit in court and that no traffic violation receipt had been issued to Dava, Roxas sought the help of then Minister of Defense Juan Ponce Enrile in apprehending Dava for driving without a license. 4 The Ministry of Defense later indorsed Roxas' request for assistance to the Constabulary Highway Patrol Group (CHPG).

At around 7:30 in the evening of July 21, 1978, M/Sgt. Domingo Lising and S/Sgt. Arturo Viduya of the CHPG saw the maroon Volkswagen car described by Roxas parked in front of the Uniwide Department Store near the then Nation theater in Cubao, Quezon City. When the driver and his companion arrived, Lising and Viduya confronted them and asked the driver for his license. They were shown non-professional driver's license No. 2706887 5 with official receipt No. 0605870 6 issued

by Agency 2L Pampanga in the name of Michael T. Dava. When asked about the source of his license, Dava informed them that his officemate had secured it for him.

Lising and Viduya invited Dava to the CHPG office in Camp Crame, Quezon City for questioning. Dava refused to give a statement upon the advice of his lawyer. Lising then submitted a spot report to Col. Maristela stating therein that "subject had violated Section 31 of RA 4136 for false representation in the application of a driver's license intended to be used as a legal license." 7 In his affidavit of apprehension dated

November 16, 1978, Lising stated that he was 'about to book him for violation of Section 31 of Rep. Act 4136, when subsequent investigation revealed that the Driver's License above-mentioned is a Fake and a Falsity' and therefore a case for falsification and use of falsified documents under Section 172 of the Revised Penal Code should be filed against Dava. 8 Lising concluded that Dava's driver's license

was fake because when he compared it with the xerox copy of Dava's license which was attached to the record of the criminal case in Pasig, the signatures and the dates of birth indicated in the two licenses did "not tally." 9

Accordingly, an information for falsification of a public document was filed against Dava in the then Court of First Instance of Rizal, Branch V at Quezon City. 10 One of the prosecution witnesses was Caroline Vinluan of the Angeles City branch of the Bureau of Land Transportation (BLT). He testified that hen was then the registrar of the said office when Dava's driver' license was brought to him by lawyer Jose Francisco who was interested in knowing whether it was genuine or fake and if was issued by the Angeles City agency of the BLT. He examine it and found out that it was "fake or illegally issued" because form No. 2706887 was one of the fifty (50) forms which had been reported missing from their office sometime in November, 1976 and that it was never issued to any applicant for a license. 11 He added that any license that was not included their office index card was considered as "coming from illegal source' and "not legally issued by any agency." 12

Vinluan stated that although the form used for the license was genuine, 13 the signature of the issuing official was fake. 14 He "believed" certain persons had been apprehended for "plasticization" of licenses outside their office 15 and that sometime

November, 1976, agents of the National Bureau of Investigation raided the house of a certain person who had in his possession some of the forms which had been missing from office. 16 He concluded that the license was fake because the form was issued by the central office to the Angeles agency, the license appeared on its face to have been issued the San Fernando, Pampanga agency. 17

Dava was convicted of the crime charged. He appealed to then Court of Appeals 18 which affirmed the lower court's decision on January 29, 1982. Dava filed a motion for reconsideration of the said decision contending that the lower court had

27 no jurisdiction to try the case. On April 27, 1982, the Court of Appeals reversed and set aside its decision and issued a resolution the dispositive portion of which reads:

WHEREFORE, as prayed for, our decision is hereby reconsidered and set aside, and another judgment shall be entered annulling the proceedings in the court a quo without prejudice to the refiling of the charges with the proper court. (Rollo, pp. 35-36.)

Consequently, the case was refiled with the Regional Trial Court of Pampanga, Branch 47 at San Fernando as Criminal Case No. 2422. The information for falsification of a public document reads as follows:

That on or about the 12th day of April, 1978, and for sometime prior thereto, in the municipality of San Fernando, province of Pampanga, Philippines, and within the jurisdiction of this Honorable Court, the above-named accused MICHAEL T. DAVA, a private individual, did then and there willfully, unlawfully and feloniously falsify or cause to be falsified, a Non-Professional Driver's license with Serial No. 2706887 covered by Official Receipt No. 0605870, dated January 24, 1978, a public document, by making it appear that the signatories therein who are officials of the Pampanga LTC Agency participated in the preparation thereof, when in truth and in fact they did not so participate and the accused made use of the same knowing it to be falsified.

ALL CONTRARY TO LAW.

At the trial, the prosecution presented Antonio Roxas who testified on how he saw Dava driving a car and that, knowing that Dava's license had been confiscated as a result of the filing of the homicide and serious physical injuries through reckless imprudence case, he thereafter sought the assistance of then Minister Enrile in apprehending Dava for driving without a license. 19 For his part, Domingo Lising, who apprehended Dava, narrated in court how he first saw Daya driving a car along Banahaw and N. Domingo Sts. in Quezon City until he finally confronted Dava at the vicinity of the Araneta Coliseum and confiscated his driver's license. As earlier stated, he conclude that the driver's license shown to him by Dava was fake because he noticed that, when compared with the license attached to record of the criminal case filed against Dava, the license confiscated bore a different signature and date of birth. 20

Daniel Severino, a sergeant of the Mandaluyong police, testified that he investigated the traffic incident along Shaw Boulevard on October 19, 1975 which involved Dava and the two relatives of Antonio Roxas. He himself confiscated Dava's no professional driver's license No. 1474427 which he later turn over to the fiscal's office. 21

In the course of Severino's testimony, the defense counsel informed the court that, upon a resolution of the Court of Appeals, Dava was allowed by the lower court having jurisdiction over Criminal Case No. 16474 to withdraw his driver's license 1474427 from the records of said case. 22 When confronted by the court, Dava volunteered that he withdrew said license in December, 1982 and surrendered it to the BLT Western District Office so that he could renew his license. 23 Hence, the evidence presented before the Court was a mere xerox copy of said license 24 which also bears a notation that Dava received original driver's license and its receipt on December 15, 1982. 25

Victor Martin, who had been the head of the San Fernando Pampanga branch of the BLT and whose name appears registrar thereof in official receipt No. 0605870 which was supposed to be attached to Dava's driver's license No. 270688 admitted that the form of the said license was genuine although he could not tell whether its contents were likewise genuine because it was "opened" and "spliced." 26 He asserted,

however, that since the said form "did not emanate" from his office and "a facsimile was not printed" over his name, said license was "not OK". 27

Martin said that he was informed by the property section of the BLT regional office that the number in the license was one of "the numbers requisitioned by (the) Angeles City agency." 28 He affirmed that drivers license No. 2706887 "was not issued by (their) agency" 29 although when recalled to the stand, he admitted that the "2L" filled

in the space for "Agency Code No." on the face of license No. 2706887 referred to the San Fernando agency. 30 Martin also confirmed the genuineness of official receipt No. 0605870 although it was his assistant who signed it for him 31 and affirmed that the amount of P10.00 indicated therein had been collected and received by his office. 32

Lawyer Jose Francisco testified that he went to the Angeles City office of the BLT to see its chief and inquire about the number of driver's license issued to Dava and whether said office had indeed issued them. According to him, the head of the office, Caroline Vinluan, advised him to verify from the index card in the possession of the License Division head whether the Angeles City agency had indeed issued Dava's license. 33 Thereafter, the officer-in-charge of the License Division of the BLT in East

Avenue, Quezon City, Leonardo R. Medina, issued a certification dated December 24, 1979 to the effect that non-professional drivers license No. 2706887 in the name of Dava was "not registered in (their) Index Card." 34

Francisco also informed the court that Carolino Vinluan, the former head of the Angeles City BLT agency, had died on May 12, 1980. 35 He offered in evidence Vinluan's death certificate as Exh. J.

Another evidence presented by the prosecution was the transcript of stenographic notes of the testimony of Carolino Vinluan which was taken on January 8, 1980 at the trial of Criminal Case No. Q-10759 before the then Court of First Instance Rizal, Branch V at Quezon City. It was marked as Exh. K said exhibit was part of the record of Criminal Case No. 10759 which was transmitted to the Regional Trial Court Pampanga. 36

28 The defense presented only one witness: Felizardo Manalili. A friend of Dava and his former co-trainee at the Sandoz Philippines, a pharmaceutical firm, Manalili testified that Dava quested him to secure a driver's license for him because he had none. Manalili went to the San Fernando office of the Land Transportation Commission (LTC) where he used to secure own license. At the LTC branch office, he was "approached" 37 the fixers who roamed around the compound. When he as them how

much it would cost to secure a driver's license, he told that it would amount to P70 .00. 38 He agreed to pay amount and gave the fixers the personal data of Dava. 39

After an hour, the fixers gave Manalili the license which was inside a plastic jacket. (Manalili identified the license as Exh. B.) He examined it and found out that it looked "like a genuine and authentic driver's license" to him. The license, which opened and unsealed, bore a signature in the portion which showed the name Romeo Edu and contained all the personal data of Dava. Because it did not bear the signature of Dava Manalili immediately gave the license to Dava and told him to sign it immediately. Dava did so in Manalili's presence. 40

On March 22, 1984, the lower court rendered a decision 41 finding that the license in

question was "fake or spurious", that was not duly issued by any proper government licensing age and that the accused directly participated in the commission of the falsification or caused said falsification. The court took into account the facts that Dava was "in dire need' of a license because of his work as a detailman; that he received his genuine license from the court only on December 15, 1982, and that Dava himself personally requested his friend, Manalili, to secure the license for him. It arrived at the conclusion that since Dava was the possessor or user of the fake license, he himself was the forger or the one who caused its forgery or falsification. The dispositive portion of the decision reads:

IN VIEW OF THE FOREGOING, this Court finds the accused Michael T. Dava guilty beyond reasonable doubt, as principal of the came of Falsification of a Public Document, as defined and penalized under the provisions of Article 172 of the Revised Penal Code, and considering the absence of any mitigating or aggravating circumstance, hereby sentences him under the Indeterminate Sentence Law to suffer an indeterminate imprisonment of one (1) year and eight (8) months of prision correecional as minimum, to four (4) years, nine (9) months and ten (10) days ofprision correccional as maximum; and to pay a fine of Two Thousand Five Hundred (P2,500.00) Pesos, Philippine Currency, plus the costs of this suit.

IT IS SO ORDERED.

Dava appealed to the then Intermediate Appellate Court, 42 which on September 30, 1985 affirmed in in toto the decision of the trial court. On February 27, 1986, the appellate court denied Dava's motion for the reconsideration of said decision finding

that no new grounds had been raised therein. Hence, the instant petition for review on certiorari.

Petitioner assails herein the reliance of the courts below on the testimony of Carolino Vinluan on the ground that being a part of the annulled proceedings in Criminal Case No. Q-10759, it may not be considered as admissible in evidence as it cannot qualify as a "testimony at a former trial" under the provisions of Section 41, Rule 130 of the Rules of Court.

We find petitioner's contention to be meritorious. The resolution of the then Intermediate Appellate Court in CA-G.R. No. 24312-CR, expressly annulled the proceedings had in Criminal Case No. Q-10759 for lack of jurisdiction of the Quezon City court over the case. That ruling is founded on solid jurisprudence. We had time and again held that in the absence of proof that the party raising the issue of lack of jurisdiction is barred by estoppel, 43 a decision rendered by a court without jurisdiction is a total nullity. 44 Being worthless in itself, all the proceedings founded upon it are equally worthless. 45 Hence, the testimony of Vinluan is not only inadmissible in evidence but may well be considered as totally nonexistent.

With the testimony of the late Carolino Vinluan out of the way, is there sufficient evidence to warrant the conviction of petitioner for the crime charged?

The information specifically charges the petitioner with having made it appear in his driver's license No. 2706887 that "officials of the Pampanga LTC agency participated" in in-preparation and with having used the said driver's license knowing that it was falsified. The charges therefore are found on the provisions of Article 172 (1) of the Revised Penal Code which punishes any private individual who shall commit any the falsification enumerated in Article 171 specifically paragraph 2 thereof which penalizes the act of causing it to appear that persons (public officials) have participated in any act proceeding when they did not in fact so participate. The information also charges Dava with having knowingly used a false document under the last paragraph of Article 172.

The evidence at hand proves that petitioner, misrepresenting that he had no driver's license, asked his friend, Manalili, to secure one for him. Sometime in November, 1976, Manalili, who used to get his own driver's license in San Fernando, Pampanga, was able to secure petitioner's driver's license No. 2706887 through fixers at the Land Transportation Commission (LTC) agency in said locality. 46 On January 24, 1978,

petitioner renewed his license at the said office by paying the amount of P10.00 for which he was issued official receipt No. 0605870. 47

In the renewal of drivers' license, the practice then was simply to present an official receipt showing that at the previous year the licensee had paid for his driver's license to any agency of the LTC, and to pay the renewal fee. As long as the transaction did not involve the issuance of "another form," a driver did not have to fill up an application form for the renewal of a license. The said agency would then issue an

29 official receipt evidencing the renewal of the license but the driver's license itself would not be changed. 48

Thus. on January 24,1978, when driver's license No. 2706887 together with official receipt No. 864321 49 were presented to the San Fernando LTC agency, the personnel therein issued official-receipt No. 0605870 in the name of petitioner. Although the receipt was not personally signed by office registrar Victor Martin but by his assistant, the receipt 50was genuine and the amount indicated therein was actually paid to and collected by the San Fernando agency. 51 The driver's license itself may not have been issued by said agency 52 but its form was likewise genuine. However,

according to Martin, it was 'not OK' because it "did not emanate" from his office and "a facsimile was not printed over" his name therein.53 Moreover, according to the officer-in-charge of the license Division of the Bureau of Land Transportation in East Avenue, Quezon City, non-professional driver's license No. 2706887 in the name of Michael Dava Tolosa "is not registered" in their index card. 54

Hence, while there is no doubt that driver's license No. 2706887 was a spurious one, the evidence do not pinpoint the petition as the actual falsifier. Unfortunately, however, there are pieces of evidence which prove beyond reasonable doubt at he caused the falsification and made use of the falsified driver's license knowing it to be so.

The elements of the crime of using a falsified document in transaction (other than as evidence in a judicial proceed penalized under the last paragraph of Article 172 are following: (a) the offender knew that a document was falsified by another person; (b) the false document is embraced in Article 171 or in any of subdivisions Nos. 1 and 2 of Article 172; (c he used such document (not in judicial proceedings), and (d) the use of the false document caused damage to another or at last it was used with intent to cause such damage. 55 Except for last, all of these elements have been proven

beyond reason doubt in this case.

It is not disputed that it was petitioner himself who requested Manalili to get him a license. He misrepresented to Manalili that he has not at any time been issued a driver's license. 56 Through this misrepresentation and capitalizing on Manalili

awareness of the dire necessity of obtaining a driver's license the shortest time possible to enable petitioner to perform duties as detailman, petitioner was able, in a very subtle clever manner, to induce Manalili to deal with "fixers" in securing the subject driver's license. For indeed, there was no way Manalili could obtain a drivers license in so short a without having to deal with "fixers." Thus, as petitioner calculated, Manalili, who appeared to have been motivated by a sincere desire to help a friend, did not hesitate to deal with three fixers whom he knew were not employees of the LTC to whom he paid P70.00 for the license even if the legal fee then was only P15.00. 57 As it was in truth petitioner who induced and left Manalili with no choice but to seek the aid of fixers, the fact that it was Manalili and not petitioner who dealt directly with said fixers cannot exculpate petitioner from the charge of falsification. He is, beyond reasonable doubt, a principal by inducement in the commission of said crime.

Petitioner cannot feign ignorance of the spurious character of his second driver's license No. 2706887. Having already obtained a driver's license, he knew that it was not legally possible for him to secure another one. Otherwise, there would have been no need for him to misrepresent to his friend Manalili that he was not then a holder of a driver's license. But even with this misrepresentation, petitioner cannot even begin to believe that Manalili would be able to secure a driver's license through legal means in about an hour's time. 58 The patent irregularity in obtaining driver's license No. 2706887 was more than sufficient to arouse the suspicion of an ordinary cautious and prudent man as to its genuineness and authenticity. In fact, Manalili testified that he himself was surprised when the fixer handed to him the plastic jacket of the driver's license of Michael Dava on November 4, 1976, a few hours after he had sought the fixer's assistance. 59 In those days, all plastic jackets emanated from the LTC Central

Office, which accounted for the delay in the release of the license applied for. Under these circumstances, no "reasonable and fairminded man" would say that petitioner did not know that his license was a fake. 60

A driver's license is a public document within the purview of Articles 171 and 172. The blank form of the drivers license becomes a public document the moment it is accomplished. 61 Thus, when driver's license No. 2706887 was filled up with

petitioner's personal data and the signature of the region of the San Fernando LTC agency was affixed therein, even if the same was simulated, the driver's license became a public document.

The third element of use of the falsified document is proven by the fact that when petitioner was apprehended by Lising on April 12, 1978 it was in his possession and it was what he presented Lising to show that he had a license. Because he was a detailman who did his job with the use of a car, it is probable that from November 4, 1976 (its date of issuance) until April 12, 1978, petitioner used driver's license No. 2706887.

The driver's license being a public document, proof of the fourth element of damage caused to another person or at least an intent to cause such damage has become immaterial. In falsification of public or official documents, the principal thing being punished is the violation of the public faith and the destruction of the truth proclaimed therein.62

In his attempt at exculpation, petitioner asserts that the following ruling in People vs. Sendaydiego, 63 should be applied in his favor:

The rule is that if a person had in his possession a falsified document and he made use of it (uttered it), taking advantage of it and profiting thereby, the presumption is that he is the material author of the falsification. This is especially true if the use or uttering of the forged documents was so closely connected in time with the forgery that the user or possessor may be proven to have the capacity of committing the forgery, or to have close connection with the forgers, and therefore, had complicity in the forgery (U.S.

30

vs. Castillo, 6 Phil. 453; People vs. De Lara, 45 PMI. 754; People vs. Domingo, 49 Phil. 28: People vs. Astudillo, 60 Phil. 338; People vs. Manansala, 105 Phil. 1253). In the absence of a satisfactory explanation, one who is found in possession of a forged document and who used or uttered it is presumed to be the forger (Alarcon vs. Court of Appeals, L-21846, March 31, 1967, 19 SCRA 688; People vs. Caragao, L-28258, December 27, 1969, 30 SCRA 993). (Emphasis supplied.)

We agree with the petitioner that the presumption enunciated in the Sendaydiego case is not absolute as it is subject to the exception that the accused should have a satisfactory explanation why he is in possession of a false document. 64 His explanation, however, is unsatisfactory as it consists mainly in passing the buck to his friend, Manalili. As stated above, Manalili himself could not have acted on his own accord without the prodding of petitioner.

We cannot help but comment on petitioner's allegations on the role of fixers in government agencies. To him, a fixer is a "necessary evil" who could do things fast for the right amount. He is "not necessarily involved in the commission of forgery or falsification of official documents" and he shares his fees with "insiders." 65

Fixers indeed appear as undetachable fixtures in government licensing agencies. Why they proliferate is a sad commentary not only on our bureaucracy but also on our own people. While not all fixers are engaged in illegal activities for some simple serve as "facilitators," they nonetheless provide sources for exploitation of the unknowing common people who transact business with the government and for corruption of the gullible government employees. Their unwanted presence must be dealt with accordingly and the soonest this is undertaken by our government agencies the better for all of us.

WHEREFORE, the decision of the respondent appellate court is hereby affirmed. Let a copy of this decision be served on that Department of Transportation and Communication. Cost against the petitioner.

SO ORDERED.

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USURPATION

1. GIGANTONI vs PEOPLE

Republic of the Philippines SUPREME COURT

Manila

SECOND DIVISION

G.R. No. 74727 June 16, 1988

MELENCIO GIGANTONI y JAVIER, petitioner, vs. PEOPLE OF THE PHILIPPINES and INTERMEDIATE APPELLATE COURT, respondents.

YAP, C.J.:

This is an appeal by certiorari from the decision of the then Intermediate Appellate Court in AC-G.R. No. 01119 entitled "People of the Philippines v. Melencio Gigantoni y Javier," promulgated on November 13, 1985, which affirmed the decision of the Regional Trial Court, Branch 159, Pasig, Metro Manila, finding the accused guilty of usurpation of authority under Article 177 of the Revised Penal Code with modification of the penalty by reducing the same to one (1) month and one (1) day of arresto mayor to one (1) year and one (1) day of prision correccional, after crediting the accused with a mitigating circumstance analogous to voluntary confession of guilt.

Petitioner Melencio Gigantoni y Javier, was charged before the Regional Trial Court of Rizal, Pasig, with the crime of usurpation of authority in violation of Article 177 of the Revised Penal Code upon an information alleging that the crime was committed as follows:

That on or about the 14th and 15th day of May, 1981, in the Municipality of Makati, Metro Manila, Philippines, and within the jurisdiction of this Honorable Court, the above-named accused, who is not a bonafide agent of the CIS, Philippine Constabulary, did then and there willfully, unlawfully, knowingly and falsely represented himself as a bonafide agent of the CIS, Philippine Constabulary, said accused, knowing fully well his representation to be false.

After arraignment during which the accused pleaded not guilty and after trial, the lower court rendered judgment finding the accused guilty as charged. On appeal to

the appellate court, the judgment was affirmed with modification only as to the penalty imposed.

The facts of the case, as recited in the decision of the appellate court, are as follows:

During the period material to this case, or in 1981, accused-appellant Melencio Gigantoni was an employee of Black Mountain Mining Inc. and Tetra Management Corporation, which are both private companies doing business in the Philippines .... On May 14, 1981, as an employee of said companies, Gigantoni went to the office of the Philippine Air Lines (PAL) at Vernida Building, Legaspi Street, Makati, Metro Manila, allegedly to conduct verification of some travels made by Black Mountain's officials. Upon reaching the said PAL office, he falsely represented himself to the PAL legal officer as a PC-CIS agent investigating a kidnapping case, and requested that he be shown the PAL records particularly the passenger manifests for Manila-Baguio-Manila flights covering the period February 1 to 3 1981. He explained that he was then at the tracking stage of aforementioned kidnapping case. ... To further convince the PAL officials of his supposed mission, Gigantoni exhibited his Identification card purporting to show that he was a PC-CIS agent. ... Thereupon, his aforesaid request was granted, and PAL legal officer Atty. Conrado A. Boro showed to him the requested PAL records. Gigantoni then secured xerox copies of the requested manifest ...and the used PAL tickets of one Cesar (Philippe) Wong, an SGV auditor, and that of a certain Daisy Britanico, an employee of Black Mountain. Thereafter, he left the PAL premises.

When Gigantoni was no longer around, PAL general counsel Ricardo Puno, Jr., inquired from Atty. Boro about Gigantoni's purpose in securing copies of PAL records. They then became suspicious of the accused" real identity prompting them to conduct verification from the PC-CIS office. They subsequently learned from General Uy of PC-CIS that Gigantoni was no longer a CIS agent since June 30, 1980 as he had been dismissed from the service for gross misconduct ... brought about by the extortion charges filed against him and his final conviction by the Sandiganbayan for the said offense.... Upon discovering the foregoing, Atty. Puno immediately alerted the NBI as Gigantoni would be coming back to the PAL office the following day. ...

On May 15, 1981, when Gigantoni returned to the Makati PAL office, he was brought by Atty. Puno to their conference room while awaiting for the arrival of the NBI agents who were earlier contacted. In the presence of Atty. Boro and a PAL security, Gigantoni was confronted by Atty. Puno as to his real Identity. He later admitted that he was no longer with the CIS; that he was

32

working for the Black Mountain Mining Corporation; and that he was just checking on a claim for per diem of one of their employees who had travelled. ...

Upon the arrival of NBI agents Teodoro Pangilinan, Lolito Utitco and Dante Crisologo, Attys. Puno and Boro turned over the person of Gigantoni to the NBI. They also submitted a complaint affidavit against Gigantoni .... On that same day, after the investigation, arrest and booking conducted by the NBI, Gigantoni was charged before the Office of the Provincial Fiscal of Rizal, thru its office in Makati, with the crime of Usurpation of Authority.

The petitioner-accused raised substantially the same errors on appeal to respondent appellate court, to wit:

1. The appellate court erred in interpreting that presumption that official duty has been regularly performed, its applicable in the case at bar;

2. The appellate court erred in its interpretation of the difference between suspension and dismissal.

The gist of petitioner's contention is that he could not be guilty of the crime charged because at the time of the alleged commission of the offense, he was still a CIS agent who was merely suspended and was not yet informed of his termination from the service. Furthermore, he avers that the receipt by him of the notice of dismissal, if there was any, could not be established on mere presumption of law that official duty has been regularly performed.

Article 177 of the Revised Penal Code on usurpation of authority or official functions, under which the petitioner was charged, punishes any person: (a) who knowingly and falsely represents himself to be an officer, agent or representative of any department or agency of the Philippine Government or of any foreign government; or (b) who, under pretense of official position, performs any act pertaining to any person in authority or public officer of the Philippine Government or any foreign government or any agency thereof, without being lawfully entitled to do so. The former constitutes the crime of usurpation of authority under which the petitioner stands charged, while the latter act constitutes the crime of usurpation of official functions.

The question before us is—did petitioner knowingly and falsely represent himself as an agent of the CIS, Philippine Constabulary? Petitioner admits that he received a notice of his suspension from the CIS effective June 20, 1980. This admission is supported by the record (Annex "D") which shows the letter of Lt. Col. Sabas Edades to petitioner, dated June 23, 1980, regarding said action. Said official letter was also sent to the Commissioner of the Merit Systems Board, Civil Service Commission, the Minister of National Defense and the Commanding General of the CIS. However, as to petitioner's alleged dismissal effective June 20, 1980, he denies having been informed thereof. The record is bereft of any evidence or proof adduced by the

prosecution showing that the dismissal was actually conveyed to petitioner. That is why the court, in convicting him, relied on the disputable presumption that official duty has been regularly performed, that is, that it is presumed that he was duly notified of his dismissal.

The failure of the prosecution to prove that petitioner was duly notified of his dismissal from the service negatives the charge that he "knowingly and falsely" represented himself to be a CIS agent. The constitutional presumption of innocence can only be overturned by competent and credible proof and never by mere disputable presumptions, as what the lower and appellate courts did when they presumed that petitioner was duly notified of his dismissal by applying the disputable presumption "that official duty has been regularly performed." It was not for the accused to prove a negative fact, namely, that he did not receive the order of dismissal. In criminal cases, the burden of proof as to the offense charged lies on the prosecution. Hence, it was incumbent upon the prosecution to establish by positive evidence the allegation that the accused falsely represented himself as a CIS agent, by presenting proof that he knew that he was no longer a CIS agent, having been duly notified of his dismissal. It is essential to present proof that he actually knew at the time of the alleged commission of the offense that he was already dismissed from the service. A mere disputable presumption that he received notice of his dismissal would not be sufficient.

The Solicitor General has argued in his memorandum, that it makes no difference whether the accused was suspended or dismissed from the service, "for both imply the absence of power to represent oneself as vested with authority to perform acts pertaining to an office to which he knowingly was deprived of " (Emphasis supplied). The observation of the Solicitor General is correct if the accused were charged with usurpation of official function (second part of Article 177), but not if he is charged merely with usurpation of authority (first part of Article 177). The information charges the accused with the crime of usurpation of authority for "knowingly and falsely representing himself to be an officer, agent or representative of any department or agency of the Philippine Government."

Petitioner is not accused of usurpation of official functions. It has not been shown that the information given by PAL to the accused was confidential and was given to him only because he was entitled to it as part of the exercise of his official function. He was not charged in the information for such an offense. In fact, it appears from the record of the case that the information, which was not claimed to be secret and confidential, was readily made available to the accused because PAL officials believed at the time that he was a CIS agent. And this was the only offense with which he was charged in the information, that he knowingly and falsely represented himself to be a CIS agent.

Premises considered, the decision of the respondent Appellate Court affirming the judgment of conviction of the Regional Trial Court is reversed and set aside. Petitioner-accused, Melencio Gigantoni y Javier is hereby aquitted of the crime charged. SO ORDERED.

33

2. ESTRADA vs DESIERTO

Republic of the Philippines SUPREME COURT

Manila

EN BANC

G.R. No. 156160 December 9, 2004

JOSEPH E. ESTRADA, petitioner, vs. HON. ANIANO A. DESIERTO, in his capacity as Ombudsman, PAUL ELMER CLEMENTE, JENNIFER A. AGUSTIN-SE, PELAGIO S. APOSTOL and ROBERTO E. KALLOS, in their capacities as EPIB officers, LILIAN B. HEFTI, PACITA M. EQUILLOS, ARCHANGEL A. ALBIENTO, ANICETO T. DAGDAG, JR., RIZA P. DEL ROSARIO, VICTOR Q. LIM and CATHERINE WEIR. respondents.

D E C I S I O N

CHICO-NAZARIO, J.:

Before Us is an Appeal by Certiorari filed by former President Joseph Ejercito Estrada on 20 December 2002 from the 20 November 2002 resolution of the Court of Appeals1 dismissing his motion for reconsideration of the resolution of the appellate court dated 29 July 2002,2 which in turn, dismissed for lack of jurisdiction his petition forcertiorari. The petition with the Court of Appeals questioned the Office of the Ombudsman's dismissal of petitioner's criminal complaint against the private respondents herein.

Culled from the respective pleadings of the parties herein, the following antecedent facts are undisputed:3

1. On 23 January 2001, the Bureau of Internal Revenue (BIR) placed petitioner's foreign currency deposit account at Citibank Greenhills Branch under constructive distraint;

2. Contending that the BIR action was unlawful, petitioner filed on 31 January 2001 a complaint against respondent BIR officials (Deputy

Commissioner Lilian Hefti, Revenue Officer I Archangel A. Albiento and Revenue Officer II Aniceto T. Dagdag, Jr.) and respondent Citibank officers (Riza P. Del Rosario, Victor Q. Lim and Catherine Weir) before the Office of the Ombudsman for allegedly violating (a) Section 8 of the Foreign Currency Deposits Act (Republic Act No. 6426); (b) Article 177 of the Revised Penal Code; and (c) Section 3(e) of the Anti-Graft and Corrupt Practices Act (Rep. Act No. 3019);

3. On 17 September 2001, the Evaluation and Preliminary Investigation Bureau (EPIB) of the Office of the Ombudsman issued a Resolution recommending the dismissal of the aforesaid complaint for want of probable cause to indict respondent bank and BIR officials;

4. On 19 November 2001, Paul Elmer Clemente, Legal Counsel, Acting Director–Office of the Chief Legal Counsel (OCLC), issued a Memorandum approving EPIB's recommendation, a copy of which was received by petitioner on 01 February 2002;

5. On 15 February 2002, petitioner filed a Motion for Reconsideration of said Resolution, upon the ground that errors of fact and law were committed prejudicial to the interest of petitioner;

6. On 26 February 2002, respondents EPIB officers issued an order, approved by respondent Desierto, denying petitioner's Motion for Reconsideration, a copy of which was received by petitioner on 06 June 2002;

7. On 12 July 2002, petitioner filed a petition for certiorari under Rule 654 before the Court of Appeals;

8. On 29 July 2002, the Court of Appeals promulgated the assailed resolution dismissing the petition on the ground that it did not fall under its jurisdiction pursuant to Rep. Act No. 6770. The Court of Appeals held --

Considering the allegations of the petition for certiorari, the Court Resolved to DISMISS the same in the light of Our view that the petition does not fall

under any law as coming within the jurisdiction of the Court of Appeals.

. . .

Under the Fabian versus Desierto case (295 SCRA 470), there is

the remedy of appeal from the Office of the Ombudsman in administrative disciplinary cases, in line with the regulatory philosophy adopted in appeals from quasi-judicial agencies in Rule 43 of the 1997 Rules of Civil Procedure. Stated in another way, the Court of Appeals is now vested with exclusive appellate jurisdiction

34

involving a review of decisions or orders of the Office of the Ombudsman in administrative disciplinary cases only.

. . .

Since jurisdiction must exist as a matter of law, and there is no law whatsoever expressly extending the remedy of this so-called special civil action of certiorari from the Office of the Ombudsman to the Court of Appeals, petitioner in this case could not invoke this remedy of certiorari. By the passage of Republic Act No. 6770, this Court is expressly divested of any jurisdiction over the subject matter of these controversies.5

9. On 15 August 2002, petitioner moved for the reconsideration of the Court of Appeals resolution;

10. On 20 November 2002, the Court of Appeals dismissed the motion for reconsideration reiterating its earlier ruling on the ground that petitioner's arguments were not substantial enough to warrant the reversal of the earlier resolution;

11. On 11 December 2002, petitioner filed with this Court a Motion for Extension of Time of fifteen (15) days to file Petition for Review which was granted on 14 January 2003; and

12. The instant petition for review on certiorari was filed on 20 December 2002 praying that the Court of Appeals take cognizance of the petition for certiorari under Rule 65 filed therein by petitioner.

On 06 May 2003, after the parties filed their respective comments6 and after petitioner filed his reply7 thereto, this Court gave due course to the petition and required the parties to submit their respective memoranda.8

Petitioner postulates that the Court of Appeals has concurrent jurisdiction with this Court in original actions forcertiorari concerning dispositions made by the Office of the Ombudsman of criminal cases that underwent preliminary investigation. In support thereof, petitioner argues that Section 14 of Rep. Act No. 6770 (The Ombudsman Act of 1989), which was made the basis by the Court of Appeals in dismissing his petition, is unconstitutional as it allegedly provides for direct appeal to this Court in contravention of Section 5(2), Article VIII of the Constitution which contains an exclusive list of cases falling under the appellate jurisdiction of the Supreme Court. Following the ruling in Fabian v. Desierto,9 petitioner concludes that Section 14 has effectively increased the appellate jurisdiction of this Court without its advice and concurrence in violation of Section 30, Article VI of the Constitution. Petitioner then went on to state that the proper recourse from an adverse decision of the Ombudsman in criminal cases is a petition for certiorari under Rule 65 before the

Court of Appeals pursuant toTirol, Jr. v. Del Rosario10 where we declared that a party aggrieved by a resolution of the Ombudsman in criminal cases may avail himself of such remedy. Petitioner contends that as the doctrine of hierarchy of courts precludes the immediate invocation of this Court's power of review, he correctly filed his petition for certiorari with the Court of Appeals.

The threshold legal issue to be resolved in the instant petition, therefore, is whether or not the Court of Appeals has jurisdiction to entertain original petitions for certiorari from decisions of the Office of the Ombudsman in criminal cases.

In Tirol, Jr. v. Del Rosario,11 we had occasion to rule that Rep. Act No. 6770 does not provide for the remedy of appeal from decisions of the Ombudsman in criminal or non-administrative cases. The aggrieved party may instead avail himself of the original petition for certiorari when the circumstances would warrant the use thereof:

. . . As we ruled in Fabian, the aggrieved party is given the right to appeal to the Court of Appeals. Such right of appeal is not granted to parties aggrieved by orders and decisions of the Ombudsman in criminal cases, like finding probable cause to indict accused persons.

However, an aggrieved party is not without recourse where the finding of the Ombudsman as to the existence of probable cause is tainted with grave abuse of discretion, amounting to lack or excess of jurisdiction. An aggrieved party may file a petition for certiorari under Rule 65 of the 1997 Rules of Civil Procedure. (Emphasis supplied)

But in which court should this special civil action be filed?

Petitioner contends that certiorari under Rule 65 should first be filed with the Court of Appeals as the doctrine of hierarchy of courts precludes the immediate invocation of this Court's jurisdiction. Unfortunately for petitioner, he is flogging a dead horse as this argument has already been shot down in Kuizon v. Ombudsman12 where we decreed –

In dismissing petitioners' petition for lack of jurisdiction, the Court of Appeals cited the case of Fabian vs. Desierto. The appellate court correctly ruled that its jurisdiction extends only to decisions of the Office of the Ombudsman in administrative cases. In the Fabian case, we ruled that appeals from decisions of the Office of the Ombudsman in administrative disciplinary cases should be taken to the Court of Appeals under Rule 43 of the 1997 Rules of Civil Procedure. It bears stressing that when we declared Section 27 of Republic Act. No. 6770 as unconstitutional, we categorically stated that said provision is involved only whenever an appeal by certiorari under Rule 45 is taken from a decision in an administrative disciplinary action. It cannot be taken into account where an original action for certiorari under Rule 65 is resorted to as a remedy for judicial review, such as from an incident in a

35

criminal action. In fine, we hold that the present petition should have been filed with this Court.13

Kuizon and the subsequent case of Mendoza-Arce v. Office of the Ombudsman (Visayas)14 drove home the point that the remedy of aggrieved parties from resolutions of the Office of the Ombudsman finding probable cause in criminal cases or non-administrative cases, when tainted with grave abuse of discretion, is to file an original action for certiorari with this Court and not with the Court of Appeals.15 In cases when the aggrieved party is questioning the Office of the Ombudsman's finding of lack of probable cause, as in this case, there is likewise the remedy ofcertiorari under Rule 65 to be filed with this Court and not with the Court of Appeals following our ruling in Perez v. Office of the Ombudsman.16

As this Court had already resolved said issue of jurisdiction in the above-cited cases, it is a salutary and necessary judicial practice to apply the rulings therein to the subject petition. Stare decisis et non quieta movere. Stand by the decisions and disturb not what is settled.17 Undaunted, petitioner now harps on the validity of Section 14 of Rep. Act No. 6770 claiming it to be unconstitutional. The Court of Appeals, it must be recalled, relied quite heavily on Section 14 of Rep. Act No. 6770 in relation to Fabian v. Desierto18 in ruling that it had no jurisdiction to entertain the petition filed thereat.

Section 14 of Rep. Act No. 6770 states –

Sec. 14. Restrictions. - . . .

No court shall hear any appeal or application for remedy against the decision or findings of the Ombudsman, except the Supreme Court, on pure question of law.

Basic is the principle that a constitutional issue may only be passed upon if essential to the decision of a case or controversy.19 Even if all the requisites for judicial review are present, this Court will not entertain a constitutional question unless it is the very lis mota of the case or if the case can be disposed of on some other grounds, such as the application of a statute or general law.20 Thus, in Sotto v. Commission on Elections,21 we held –

. . . It is a well-established rule that a court should not pass upon a constitutional question and decide a law to be unconstitutional or invalid, unless such question is raised by the parties, and that when it is raised, if the record also presents some other ground upon which the court may rest its judgment, that course will be adopted and the constitutional question will be left for consideration until a case arises in which a decision upon such question will be unavoidable. (Emphasis supplied)

In herein case, the question of who has jurisdiction to entertain petitions for certiorari questioning the Ombudsman's orders or resolutions in criminal cases can be answered by resorting to the aforecited cases ofKuizon v. Ombudsman,22 Mendoza-Arce v. Office of the Ombudsman23 and Perez v. Office of the Ombudsman.24Consequently, there is no need to delve into the constitutionality of Section 14 of Rep. Act No. 6770 as case law already supplies the key.

Applying the foregoing, the Court of Appeals did not err in dismissing petitioner's original action for certiorari for lack of jurisdiction. Petitioner should have filed the same directly with this Court.

Even if the petition for certiorari had been correctly filed in this Court, we would have dismissed it just the same25as we do not perceive any clear case of abuse of discretion on the part of the public respondents when they issued the Resolution dated 17 September 2001 and the Order dated 19 September 2001 recommending the approval of the 17 September 2001 resolution dismissing, for lack of probable cause, petitioner's complaint for Usurpation of Official Function under Article 177 of the Revised Penal Code, for violation of Section 3(e) of Rep. Act No. 3019, and for violation of Section 8 of Rep. Act No. 6426. The same holds true for the Order dated 26 February 2002 which denied petitioner's motion for reconsideration of the 19 September 2001 resolution.

By grave abuse of discretion is meant such capricious and whimsical exercise of judgment which is equivalent to an excess or lack of jurisdiction. The abuse of discretion must be so patent and gross as to amount to an evasion of a positive duty or a virtual refusal to perform a duty enjoined by law, or to act at all in contemplation of law as where the power is exercised in an arbitrary and despotic manner by reason of passion or hostility.26

In dismissing petitioner's complaint for Usurpation of Official Function against private respondents, public respondents reasoned27 --

Under Art. 177 of the Revised Penal Code, in order for one to be held liable for Usurpation of Official Function, there must be a clear showing that the person being charged had performed an act pertaining to any person in authority or public officer of the Philippine government or any agency thereof, under pretense of official position, and without being lawfully entitled to do so.

In this instant case, respondent Hefti was the one specifically charged with Usurpation of Official Function, in view of her act of issuing the notice of constructive distraint against the foreign currency deposit of complainant with the Citibank. The rest of the public respondents and all the private respondents were merely charged in conspiracy with the said respondent. Hence, the issue that must be resolved is whether or not respondent Hefti being the Deputy Commissioner of BIR had indeed usurped the duty of the BIR Commissioner when she issued the notice of distraint.

36

While it is true that under Sec. 206 of the NIRC as amended, the Commissioner of the BIR and not any Officer of the BIR was the one granted with the power to issue a notice of distraint, it bears to stress, however, that when respondent Hefti exercised such function of the BIR Commissioner, she was then designated Officer-In-Charge of the BIR by President Gloria Macapagal-Arroyo, as evidenced by a photocopy of her Memorandum of Appointment dated January 23, 2001. By virtue of her appointment as Officer-In-Charge of BIR, it necessary follows that respondent Hefti can now legally exercise the duties and functions pertaining to the BIR Commissioner, including the issuance of a constructive distraint. Whether the issuance of the notice of distraint is valid or not, such issue is no longer within the power of this Office to decide inasmuch as the power to review the decision of the BIR Commissioner on matters of distraint lies within the jurisdiction of the Court of Tax Appeals. Suffice it to say that when respondent Hefti issued the notice of distraint, she was clothed with authority to issue the same in view of her appointment as the then Officer-In-Charge of the BIR. Hence, the charge for Usurpation of Official Function does not apply to said respondent.

With the establishment of respondent Hefti's authority in the issuance of the constructive distraint, the subsequent act of respondent Dagdag in serving the said distraint to the Citibank, as well as the act of respondents Equillos and Albiento in witnessing the service of the same to the said bank, can not be construed as act in agreement to commit the crime of Usurpation of Authority in the light of the foregoing discussion.

The same thing holds true to the bank officers who were made respondents in this case, considering that their act in informing complainant regarding the existence of the constructive distraint as well as in implementing the said distraint against the latter's account with the said bank, [were] merely in compliance to an order issued by a competent authority.

And:28

As the officer-in-charge of the BIR duly-designated by the President, respondent Hefti was the incumbent head of BIR. By operation of law, she was the possessor of the office of the Commissioner by virtue of her lawful designation and was thus legally authorized to discharge the duties of such office (cf. Black's Law Dictionary, 6th Ed., at 768). In other words, she was authorized to temporarily act as the head of the said bureau until the appointment of the regular Commissioner. Her official acts as the duly-designated head of the BIR are deemed as acts of the bureau's Commissioner, and enjoy the presumptions of legality, validity and regularity.

With respect to the alleged violation of Sec. 3(e) of Rep. Act No. 3019, the resolution29 of public respondents states in part:

Under Sec. 3(e) of R.A. 3019, the concurrence of the following elements are essential for the commission of the said offense.

1. The respondent is a public officer discharging administrative, judicial or official functions, or any private individual in conspiracy with the public officer;

2. The respondent must have acted with manifest partiality, evident bad faith, or gross inexcusable negligence; and

3. The respondent's action has caused any undue injury to any party including the government, or has given any party unwarranted benefits, advantage or preference in the discharge of his functions.

In this present case, public respondents are public officers within the contemplation of the law, and private respondents are charged in conspiracy with public respondents. Thus, the first element for the commission of the said offense is present.

Be it emphasized, however, that the issuance of the notice of distraint by respondent Hefti was done in accordance with her function as the then Officer-In-Charge of the BIR. In issuing the said distraint, it appears that said respondent was guided not by her own unilateral and whimsical act as what the complainant is trying to impress to this Office, but on her observation regarding the huge disparity of complainant's income as declared by him in his Annual Income Tax Return, and the amount of his income as established in the impeachment trial, which is said to be concealed under fictitious name. In addition thereto, there are various news reports about the plan of complainant to flee the country bringing with him the money he amassed during his presidency.

Clearly, the foregoing circumstance are matters that this Office can not simply ignore for this are informations already known to the public, and the cognizance of it by respondent Hefti which led to the issuance of the subject distraint is just a prudent act expected from somebody tasked to protect the coffers of the government, and such can not be considered as an act tainted with manifest partiality, evident bad faith, and gross inexcusable negligence.

Furthermore, complainant failed to show the alleged undue injury he suffered because of the said distraint. There is nowhere in the records of this case to show that he was deprived by the Citibank Greenhills branch to withdraw any amount from his own foreign currency account deposit, nor was there a record of his attempt to withdraw from his foreign currency deposit with the said bank. The failure of the complainant to establish the actual injury he suffered by virtue of the subject distraint will necessarily give rise to a reasonable conclusion that the injury he claimed to have suffered is merely illusory and imaginary. Hence, the charge for violation of Sec. 3(e)

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under R.A. 3019 can not prosper for failure to establish the actual damage or injury suffered by the complainant.

Finally, with respect to the complaint for violation of Section 8 of Rep. Act No. 6426 (Foreign Currency Deposits Act of the Philippines), public respondents ratiocinated30 --

At this point, it is worth stressing, that this office in its previous Order dated 20 February 2001, ruled that the absolute confidentiality of foreign currency deposit account provided for under R.A. 6426 does not apply to the foreign currency deposit accounts of herein complainant, since the protection under the said law is intended only for depositors who are non residents and are not engaged in trade and business in the Philippines. In coming out with such ruling, this office has as its basis one of the Whereas clauses of P.D. 1246 which amended Sec. 8 of R.A. 6426. For emphasis, the pertinent provision of the said law is hereby quoted:

WHEREAS, in order to assure the development and speedy growth of the Foreign Currency Deposit System and offshore Banking System in the Philippines, certain incentives were provided for under the two systems such as confidentiality of deposits subject to certain exceptions and tax exemptions on the interest of the income of depositors who are nonresidents and are not engaged in trade or business in the Philippines.

Considering the previous Order of this Office, it necessarily follows that the accusation for violation of Sec. 8 of R.A. 6426 against herein respondents has no leg to stand on, thus, the dismissal of the charge for violation of Sec. 8 of R.A. 6426 is therefore in order.

And:31

In Salvacion v. Central Bank and China Bank, 278 SCRA 27 (1997), the Highest Tribunal adopted the opinion of the Office of the Solicitor General (OSG) that only foreign currency deposits of foreign lenders and investors are given protection and incentives by the law, and further ruled that the Foreign Currency Deposits Act cannot be utilized to perpetuate injustice.32 Following such pronouncements, it is respectfully submitted that foreign currency deposits of Filipino depositors, including herein complainant, are not covered by the Foreign Currency Deposits Act, and are thus not exempt from the processes duly-issued by the BIR.

We do not perceive any grave abuse of discretion on the part of the public respondents when they issued the aforecited rulings. We, thus, defer to the policy of non-interference in the conduct of preliminary investigations. We have invariably stated that it is not sound practice to depart from the policy of non-interference in the Ombudsman's exercise of discretion to determine whether or not to file information

against an accused. The rule is based not only upon respect for the investigatory and prosecutory powers granted by the Constitution to the Office of the Ombudsman but upon practicality as well.33 Otherwise, the functions of the courts will be grievously hampered by innumerable petitions assailing the dismissal of investigatory proceedings conducted by the Office of the Ombudsman with regard to complaints filed before it, in much the same way that the courts would be absolutely swamped if they could be compelled to review the exercise of discretion on the part of the fiscals or prosecuting attorneys each time they decided to file an information in court or dismissed a complaint by a private complainant.34 Thus, in the absence of a clear case of abuse of discretion, this Court will not interfere with the discretion of the Ombudsman, who, depending on his own findings and considered evaluation of the case, either dismisses a complaint or proceeds with it.35

A cautionary word. A declaration by this Court that the public respondents did not gravely abuse their discretion in issuing the resolutions dismissing petitioner's complaint does not necessarily translate to a declaration of assent in the findings of fact and conclusions of law contained therein. With respect specifically to the resolution for violation of Section 8 of Rep. Act. No. 6426, public respondents relied on the "whereas" clause of P.D. No. 1246 which amended Rep. Act No. 6426 and on the Salvacion case to conclude that only non-residents who are not engaged in trade and business are under the mantle of protection of Section 8 of Rep. Act. No. 6426. Assuming that such reliance is erroneous as contended by petitioner,36 this Court, on petition for certiorari, cannot correct the sameas the error is not of a degree that would amount to a clear case of abuse of discretion of the grave and malevolent kind. It is axiomatic that not every erroneous conclusion of law or fact is abuse of discretion.37 As adverted to earlier, this Court will interfere in the Ombudsman's findings of fact and conclusions of law only in clear cases of grave abuse of discretion.

WHEREFORE, premises considered, the instant petition is hereby DISMISSED for

lack of merit and the resolutions of the Court of Appeals in CA-G.R. SP No. 71722 dated 29 July 2002 and 20 November 2002 are hereby AFFIRMED. Costs against petitioner.

SO ORDERED.

38

USING FICTITIOUS NAME

1. CA NO. 142 as amended by RA NO. 6085

REPUBLIC ACT No. 6085

AN ACT AMENDING COMMONWEALTH ACT NUMBERED ONE HUNDRED FORTY-TWO REGULATING THE USE OF ALIASES.

Section 1. Section one of Commonwealth Act Numbered One hundred forty-two is

hereby amended to read as follows:

"Sec. 1. Except as a pseudonym solely for literary, cinema, television, radio or other entertainment purposes and in athletic events where the use of pseudonym is a normally accepted practice, no person shall use any name different from the one with which he was registered at birth in the office of the local civil registry, or with which he was baptized for the first time, or, in case of an alien, with which he was registered in the bureau of immigration upon entry; or such substitute name as may have been authorized by a competent court: Provided, That persons, whose births have not been registered in any local civil registry and who have not been baptized, have one year from the approval of this act within which to register their names in the civil registry of their residence. The name shall comprise the patronymic name and one or two surnames."

Section 2. Section Two of Commonwealth Act Numbered One hundred forty-two is hereby amended to read as follows:

"Sec. 2. Any person desiring to use an alias shall apply for authority therefor in proceedings like those legally provided to obtain judicial authority for a change of name, and no person shall be allowed to secure such judicial authority for more than one alias. The petition for an alias shall set forth the person's baptismal and family name and the name recorded in the civil registry, if different, his immigrant's name, if an alien, and his pseudonym, if he has such names other than his original or real name, specifying the reason or reasons for the use of the desired alias. The judicial authority for the use of alias the Christian name and the alien immigrant's name shall be recorded in the proper local civil registry, and no person shall use any name or names other, than his original or real name unless the same is or are duly recorded in the proper local civil registry."

Section 3. Section three of Commonwealth Act Numbered One hundred forty-two, is

hereby amended to read as Follows:

"Sec. 3. No person having been baptized with a name different from that with which he was registered at birth in the local civil registry, or in case of an alien, registered in the bureau of immigration upon entry, or any person who obtained judicial authority to use an alias, or who uses a pseudonym, shall represent himself in any public or

private transaction or shall sign or execute any public or private document without stating or affixing his real or original name and all names or aliases or pseudonym he is or may have been authorized to use."

Section 4. Commonwealth Act Numbered One hundred forty-two is hereby amended by the insertion of the following new section to be designated Section four to read as follows:

"Sec. 4. Six months from the approval of this act and subject to the provisions of section 1 hereof, all persons who have used any name and/or names and alias or aliases different from those authorized in section one of this act and duly recorded in the local civil registry, shall be prohibited to use such other name or names and/or alias or aliases."

Section 5. Section four of Commonwealth Act Numbered One hundred forty-two is

hereby amended to read as Section five, as follows:

"Sec. 5. Any violation of this Act shall be punished with imprisonment of from one year to five years and a fine of P5,000 to P10,000."

Section 6. This Act shall take effect upon its approval, and all Acts, rules or

regulations of laws inconsistent herewith are hereby repealed.

Approved: August 4, 1969.

39

2. HOCK LIAN vs REPUBLIC

Republic of the Philippines SUPREME COURT

Manila

EN BANC

G.R. No. L-21197 May 19, 1966

IN THE MATTER OF THE PETITION OF ONG HOCK LIAN alias JULIAN ONG TO BE ADMITTED A CITIZEN OF THE PHILIPPINES. ONG HOCK LIAN alias JULIAN ONG, petitioner-appellee,

vs. REPUBLIC OF THE PHILIPPINES, oppositor-appellant.

Office of the Solicitor General Arturo A. Alafriz, Assistant Solicitor General Pacifico P. de Castro and Solicitor Camilo D. Quiason for oppositor-appellant. Cristino V. Pinili for petitioner-appellee.

MAKALINTAL, J.:

This is an appeal by the Solicitor General from the decision of the Court of First Instance of Negros Oriental which granted the petition for naturalization of Ong Hock Lian alias Julian Ong.

Appellant contends that the lower court erred (1) in holding that the petition was published in a newspaper of general circulation; (2) in not holding that appellee uses an alias without court authority and in violation of the Anti-Alias Law; (3) in not holding that appellee had failed to report his true income; and (4) in not holding that appellee has no lucrative occupation.

Appellee, a citizen of the Republic of China, arrived in the Philippines on April 30, 1927. He used to reside in Zamboanga City but since March 1, 1940 he has been living in Dumaguete City. He is married to Tan Ko Kiem, also known as Alice Tan, a Chinese national, by whom he has three children, two of whom are school age and are enrolled at the St. Paul's College, Dumaguete City, an educational institution recognized by the government, not limited to any particular race or nationality and where subjects on Philippine history, government and civics are part of the curriculum. Appellee himself finished his first year high school education at the Zamboanga Chinese High School, Zamboanga City. He speaks the English, language and the Cebuano-Visayan dialect. A merchant by occupation, he has a store in Colon Street, Dumaguete City where he sells rice, corn and general merchandise. He has two cargo trucks worth P17,000 and office equipment worth about P200. His net income was P5,939.36 in 1958; P4,114.49 in 1959, and P5,659.30 in 1960. To prove that he has none of the disqualifications enumerated in

the Naturalization Law, he presented tax and police clearances; clearances from the Philippine Constabulary, the City Fiscal, the Provincial Fiscal, the Court of First Instance of Negros Oriental and the Municipal Court of Dumaguete City; and a medical certificate of the City Health Officer.1äwphï1.ñët

For the purposes of this appeal only the second, third and fourth errors assigned by appellant need be considered. The first of them refers to appellee's use of alias. Under the law, except as a pseudonym for literary purposes, no person shall use any name different from the one with which he was christened or by which he has been known since childhood, or such substitute name as may have been authorized by a competent court (Section 1, Commonwealth Act 142). Aside from the name "Ong Hock Lian," appellee is using the alias "Julian Ong." There is no evidence that appellee has been baptized with the latter name or that he has been known by it since childhood, or that the court has authorized the use thereof. Appellee has therefore committed a violation of the Anti-Alias Law.

On the question of income, it appears that with a wife and three children to support, appellee earns less than P6,000 a year. This does not satisfy the requirement of lucrative occupation. Note that his income in 1958 (P5,939.36) was even more than his income for 1959 (P4,114.49) and 1960 (P5,659.30), so that instead of growing bigger his income actually decreased. It may be observed that at the trial appellee testified that his average annual net profit from his business was P4,200, which is less than that declared in his income tax returns. We have previously held that an income of P6,300, where the applicant supports a wife and a child, falls short of the requirement of law (Tan vs. Republic, L-16013, March 30, 1963).

Aside from his net profits, appellee also testified, he was drawing from his store a salary of P300 a month, which amount he entered as a deduction from his gross earnings from business in his income tax returns. If this were true then appellee should have reported this amount as salary in the same returns. This he did not do. He may not be permitted, after failing to report said amount in the computation of his net earnings for income tax purposes to have the same considered by this Court as salary and therefore part of his income to satisfy the legal requirement of lucrative occupation. Such failure to report places grave doubt on the truth of his testimony on this point.

Wherefore, the judgment appealed from is reversed and the petition is denied, with costs.

40

3. LEGAMIA vs IAC

Republic of the Philippines SUPREME COURT

Manila

SECOND DIVISION

G.R. No. L-63817 August 28, 1984

CORAZON LEGAMIA y RIVERA, petitioner, vs. INTERMEDIATE APPELLATE COURT AND PEOPLE OF THE PHILIPPINES, respondents.

Felipe O. Pascual for petitioner.

The Solicitor General for respondent Appellate Court.

ABAD SANTOS, J.:

This is an appeal by certiorari to review and reverse a decision of the Intermediate Appellate Court.

In the defunct Court of First Instance of Manila, Corazon Legamia was accused of using an alias in violation of Commonwealth Act No. 142, as amended. The information against her reads:

That on or about November 4th, 1974, and for sometime prior and subsequent thereto, in the City of Manila, Philippines, the said accused did then and there wilfully and unlawfully use the substitute or alias name CORAZON L. REYES, which is different from Corazon Legamia y Rivera with which she was christened or by which she has been known since childhood, nor as a pseudonym for literary purpose and without having been previously authorized by a competent Court to do so; that it was discovered only on or about November 4th, 1974. (Rollo, pp. 11-12.)

She was convicted by the trial court which sentenced her to an indeterminate prison term of only (1) year, as minimum, to two (2) years, as maximum; to pay a fine a fine of P5,000.00, with subsidiary imprisonment; and to pay the costs. The trial court recommended, however, that she be extended executive clemency. On appeal to the

Intermediate Appellate Court, the sentence was affirmed in toto. Hence the instant petition.

The facts:

Corazon Legamia lived with Emilio N. Reyes for 19 years from November 8, 1955 to September 26, 1974, when Emilio died. During their live-in arrangement they produced a boy who was named Michael Raphael Gabriel L. Reyes. He was born on October 18, 1971.

From the time Corazon and Emilio lived together until the latter's death, Corazon was known as Corazon L. Reyes; she styled herself as Mrs. Reyes; and Emilio introduced her to friends as Mrs. Reyes.

Emilio was Branch Claim Manager Naga Branch, of the Agricultural Credit Administration when he died. On October 29, 1974, or shortly after Emilio's death, Corazon filed a letter in behalf of Michael with the Agricultural Credit Administration for death benefits. The letter was signed "Corazon L. Reyes." The voucher evidencing payment of Michael's claim in the amount of P2,648.76 was also signed "Corazon L. Reyes."

For using the name Reyes although she was not married to Emilio, Felicisima Reyes who was married to Emilio filed a complaint which led to Corazon's prosecution. Parenthetically, the amount paid to Michael is "equivalent to 2/5 of that which is due to each legitimate child in accordance with the provisions of the Civil Code" per advice given by Atty. Diomedes A. Bragado of the Agricultural Credit Administration to Felicisima. (Rollo, pp. 14-15.)

The law:

Commonwealth Act No. 142 provides in Section 1:

Section 1. Except as a pseudonym solely for literary, cinema, television, radio or other entertainment purposes and in athletic events where the use of pseudonym is a normally accepted practice, no person shall use any name different from the one with which he was registered at birth in the office of the local civil registry, or with which he was baptized for the first time, or in case of an alien, with which he was registered in the Bureau of Immigration upon entry; or such substitute name as may have been authorized by a competent court: Provided, That persons, whose births have not been registered in any local civil registry and who have not been baptized have one year from the approval of this act within which to register their names in the civil registry of their residence. The name shall comprise the patronymic name and one or two surnames. (As amended by R.A. No. 6085.)

41 The issue:

Did the petitioner violate the law in the light of the facts abovestated?

The resolution:

It is not uncommon in Philippine society for a woman to represent herself as the wife and use the name of the man she is living with despite the fact that the man is married to another woman. The practice, to be sure, is not encouraged but neither is it unduly frowned upon. A number of women can be Identified who are living with men prominent in political, business and social circles. The woman publicly holds herself out as the man's wife and uses his family name blithely ignoring the fact that he is not her husband. And yet none of the women has been charged of violating the C.A. No. 142 because ours is not a bigoted but a tolerant and understanding society. It is in the light of our cultural environment that the law must be construed.

In the case at bar, Corazon had been living with Emilio for almost 20 years. He introduced her to the public as his wife and she assumed that role and his name without any sinister purpose or personal material gain in mind. She applied for benefits upon his death not for herself but for Michael who as a boy of tender years was under her guardianship. Surely, the lawmakers could not have meant to criminalize what Corazon had done especially because some of them probably had their own Corazons.

WHEREFORE, the decision under review is hereby set aside; the petitioner is acquitted of the charge. No costs.

SO ORDERED.

42

4. REVELINA LIMSON vs EUGENIO JUAN GONZALES

FIRST DIVISION

G.R. No. 162205, March 31, 2014

REVELINA LIMSON, Petitioner, v. EUGENIO JUAN GONZALEZ, Respondent.

D E C I S I O N

BERSAMIN, J.:

Under review is the decision promulgated on July 31, 2003,1 whereby the Court of Appeals dismissed petitioner Revelina Limson’s petition for certiorari assailing the denial by the Secretary of Justice of her petition for review vis–à–vis the adverse resolutions of the Office of the City Prosecutor of Mandaluyong City (OCP) of her charges for falsification and illegal use of aliases against respondent Eugenio Juan Gonzalez.

Antecedents

The antecedents as found by the CA are as follows: On or about December 1, 1997, Limson filed a criminal charge against Gonzalez for falsification, before the Prosecutor’s Office of Mandaluyong City. The charge for [sic] falsification of [sic] Limson is based on Limson’s assertion that in the records of the Professional Regulatory Commission (PRC), a certain ‘EUGENIO GONZALEZ’ is registered as an architect and that Gonzalez, who uses, among others, the name ‘EUGENIO JUAN GONZALEZ’, and who pretends to be said architect. Registered [sic] with the PRC, is an impostor and therefore, guilty [sic] of falsification x x x.” Gonzalez filed his Counter–Affidavit, wherein he explained in detail that his full name is EUGENIO (first given name) JUAN (second given name) GONZALEZ (father’s family name) y REGALADO (mother’s family name). He alleges that in his youth, while he was still in grade school and high school, he used the name EUGENIO GONZALEZ y REGALADO and/or EUGENIO GONZALEZ and that thereafter, he transferred to the University of Santo Tomas and therein took up architecture and that upon commencement of his professional practice in 1943, he made use of his second name, JUAN. Consequently, in his professional practice, he has identified himself as much as possible as Arch. Eugenio Juan Gonzalez, because the surname GONZALEZ was and is still, a very common surname throughout the Philippines and he wanted to distinguish himself with his second given name, JUAN, after his first given name, EUGENIO. Gonzalez supposed [sic] his allegations with various supporting documents x x x. After receiving pertinent Affidavits and evidentiary documents from Limson and

Gonzalez, respectively, the Prosecutor dismissed the criminal charge against Gonzalez, finding that indeed EUGENIO JUAN R. GONZALES [sic] is the architect registered in the PRC. Said Resolution was issued on March 30, 1998 x x x. Limson elevated the Resolution of the Prosecutor x x x to the Secretary of Justice. Before the Secretary of Justice, she utilized the basic arguments she had raised before the Prosecutor’s Office, with slight variations, in assailing said adverse Resolution of the Prosecutor. After Opposition by Gonzalez, the Secretary of Justice dismissed the appeal of Limson. The Secretary of Justice affirmed and even expanded the findings of the Prosecutor x x x. Not content with said Resolution of the Secretary of Justice, Limson filed a motion for reconsideration therefrom; which, after Opposition by Gonzalez, was dismissed by the Secretary of Justice, on September 15, 2000 x x x. Said dismissal was with finality. Notwithstanding the foregoing, on or about September 25, 2000, Limson filed a new letter complaint against Gonzalez, with the Secretary of Justice. She alleged the same basic facts, evidence, and charges, as already resolved by the Prosecutor and affirmed with finality, by the Secretary of Justice; but adding the accusation that because Gonzalez used various combinations of his name, in different signature, on the [sic] different occasions, Gonzalez had also violated Republic Act No. 6085 (the Anti–Alias Law). Limson, in said letter complaint of September 25, 2000, suppressed from the Secretary of Justice, the extant before–mentioned Resolutions, already decreed and adverse to her. The Secretary of Justice referred this letter complaint of Limson x x x to the Prosecutor’s Office of Mandaluyong City for investigation. This new investigation was docketed as I.S. No. 01–44001–B and assigned to Honorable Susante J. Tobias x x x. After submission of Affidavits, Counter–Affidavits and other pertinent pleadings, and evidences [sic], by the respective parties, before the Prosecutor, the Prosecutor rendered a Resolution, dismissing the new complaint x x x which Resolution reads as follows: ‘After a careful evaluation of the letter complaint of Revelina Limson dated September 25, 2000 addressed to the Secretary of Justice and endorsed to this Office x x x and the evidence adduced by the contending parties, we find the issues raised in the aforesaid letter to be a rehashed (sic) of a previous complaint filed by the same complainant which has already been long resolved with finality by this Office and the Department of Justice more particularly under I.S. No. 97–11929. WHEREFORE, it is most respectfully recommended that the instant case be considered closed and dismissed.’

Not content with said Resolution x x x, Limson filed a motion for reconsideration; [sic]which was again opposed by Gonzalez and which was denied by the Prosecutor

43 x x x. Not agreeable to said Resolution x x x, Limson filed a Petition for Review with the Secretary of Justice x x x, to which x x x Gonzalez filed an Answer/Opposition x x x. The Secretary of Justice denied said Petition for Review of Limson, on April 3, 2002 x x x as follows: ‘Section 12, in relation to Section 7, of Department Circular No. 70 dated July 3, 2000, provides that the Secretary of Justice may, motu propio, dismiss outright the petition if there is no showing of any reversible error in the assailed resolution or when issued [sic] raised therein are too unsubstantial to require consideration. We carefully examined the petition and its attachments and we found no such error committed by the prosecutor that would justify the reversal of the assailed resolution which is in accord with the evidence and law on the matter. Moreover, there was no showing that a copy of the petition was furnished the Prosecution Office concerned pursuant to Section 5 of said Department Circular.2

Although Limson sought the reconsideration of the adverse resolution of April 3, 2002, the Secretary of Justice denied her motion for reconsideration on October 15, 2002.

Decision of the CA

Limson assailed on certiorari the adverse resolutions of the Secretary of Justice in the CA, claiming that the Secretary of Justice had thereby committed grave abuse of discretion amounting to lack or excess of jurisdiction for misappreciating her evidence establishing her charges of falsification and violation of the Anti–Alias Law against respondent. On July 31, 2003, the CA promulgated its assailed decision dismissing the petition for certiorari, disposing as follows: WHEREFORE, in light of the foregoing discussions, the instant Petition is perforceDENIED. Accordingly, the Resolutions subject of this petition are AFFIRMED. SO ORDERED.3

On January 30, 2004, the CA denied Limson’s motion for reconsideration.

Issues

In her petition for review, Limson avers the following errors, namely:

I THE FINDINGS OF FACT OF THE HONORABLE COURT OF APPEALS DO NOT CONFORM TO THE EVIDENCE ON RECORD. MOREOVER, THERE WAS A MISAPPRECIATION AND/OR MISAPPREHENSION OF FACTS AND THE HONORABLE COURT FAILED TO NOTICE CERTAIN RELEVANT POINTS WHICH IF CONSIDERED WOULD JUSTIFY A DIFFERENT CONCLUSION

II THE CONCLUSION OF THE COURT OF APPEALS IS A FINDING BASED ON SPECULATION AND/OR SURMISE AND THE INFERENCES MADE WERE MANIFESTLY MISTAKEN.4

Limson insists that the names “Eugenio Gonzalez” and “Eugenio Juan Gonzalez y Regalado” did not refer to one and the same individual; and that respondent was not a registered architect contrary to his claim. According to her, there were material discrepancies between the graduation photograph of respondent taken in 1941 when he earned his degree in Architecture from the University of Sto. Tomas, Manila,5 and another photograph of him taken for his driver’s license in 1996,6 arguing that the person in the latter photograph was not the same individual depicted in the 1941 photograph. She submits documents showing that respondent used aliases from birth, and passed himself off as such persons when in fact he was not. She prays that the decision of the CA be set aside, and that the proper criminal cases for falsification of public document and illegal use of alias be filed against respondent In his comment,7 respondent counters that the petition for review should be denied due course for presenting only factual issues; that the factual findings of the OCP, the Secretary of Justice, and the CA should remain undisturbed; that he did not commit any falsification; that he did not use any aliases; that his use of conflicting names was the product of erroneous entry, inadvertence, and innocent mistake on the part of other people; that Limson was motivated by malice and ill will, and her charges were the product of prevarication; and that he was a distinguished architect and a respected member of the community and society.

Ruling of the Court

The appeal has no merit. To start with, the petition for review of Limson projects issues of fact. It urges the Court to undo the findings of fact of the OCP, the Secretary of Justice and the CA on the basis of the documents submitted with her petition. But the Court is not a trier of facts, and cannot analyze and weigh evidence. Indeed, Section 1 of Rule 45, Rules of Court explicitly requires the petition for review oncertiorari to raise only questions of law, which must be distinctly set forth. Accordingly, the petition for review of Limson is outrightly rejected for this reason. Secondly, Limson appears to stress that the CA erred in concluding that the Secretary of Justice did not commit grave abuse of discretion in the appreciation of the evidence submitted to the OCP. She would now have us reverse the CA. We cannot reverse the CA. We find that the conclusion of the CA about the Secretary of Justice not committing grave abuse of discretion was fully warranted. Based on the antecedents earlier rendered here, Limson did not persuasively demonstrate to the CA how the Secretary of Justice had been gravely wrong in upholding the dismissal by the OCP of her charges against respondent. In contrast, the assailed resolutions of the Secretary of Justice were quite exhaustive in their exposition of the reasons for

44 the dismissal of the charges. And, even assuming that the Secretary of Justice thereby erred, she should have shown to the CA that either arbitrariness or capriciousness or whimsicality had tainted the error. Yet, she tendered no such showing. She should be reminded, indeed, that grave abuse of discretion meant either that the judicial or quasi–judicial power was exercised by the Secretary of Justice in an arbitrary or despotic manner by reason of passion or personal hostility, or that the Secretary of Justice evaded a positive duty, or virtually refused to perform the duty enjoined or to act in contemplation of law, such as when the Secretary of Justice, while exercising judicial or quasi–judicial powers, acted in a capricious or whimsical manner as to be equivalent to lack of jurisdiction.8 Thirdly, the discrepancy between photographs supposedly taken in 1941 and in 1996 of respondent did not support Limson’s allegation of grave abuse of discretion on the part of the Secretary of Justice. It is really absurd to expect respondent, the individual depicted on the photographs, to look the same after 55 long years. And, fourthly, on the issue of the alleged use of illegal aliases, the Court observes that respondent’s aliases involved the names “Eugenio Gonzalez”, “Eugenio Gonzales”, “Eugenio Juan Gonzalez”, “Eugenio Juan Gonzalez y Regalado”, “Eugenio C.R. Gonzalez”, “Eugenio J. Gonzalez”, and – per Limson – “Eugenio Juan Robles Gonzalez.” But these names contained his true names, albeit at times joined with an erroneous middle or second name, or a misspelled family name in one instance. The records disclose that the erroneous middle or second names, or the misspelling of the family name resulted from error or inadvertence left unchecked and unrectified over time. What is significant, however, is that such names were not fictitious names within the purview of the Anti–Alias Law; and that such names were not different from each other. Considering that he was not also shown to have used the names for unscrupulous purposes, or to deceive or confuse the public, the dismissal of the charge against him was justified in fact and in law. An alias is a name or names used by a person or intended to be used by him publicly and habitually, usually in business transactions, in addition to the real name by which he was registered at birth or baptized the first time, or to the substitute name authorized by a competent authority; a man’s name is simply the sound or sounds by which he is commonly designated by his fellows and by which they distinguish him, but sometimes a man is known by several different names and these are known as aliases.9 An alias is thus a name that is different from the individual’s true name, and does not refer to a name that is not different from his true name. In Ursua v. Court of Appeals,10 the Court tendered an enlightening discourse on the history and objective of our law on aliases that is worth including here, viz: Time and again we have decreed that statutes are to be construed in the light of the purposes to be achieved and the evils sought to be remedied. Thus in construing a statute the reason for its enactment should be kept in mind and the statute should be construed with reference to the intended scope and purpose. The court may consider the spirit and reason of the statute, where a literal meaning would lead to absurdity, contradiction, injustice, or would defeat the clear purpose of the lawmakers. For a clear understanding of the purpose of C.A. No. 142 as amended, which was

allegedly violated by petitioner, and the surrounding circumstances under which the law was enacted, the pertinent provisions thereof, its amendments and related statutes are herein cited. C.A. No.142, which was approved on 7 November 1936, and before its amendment by R. A. No. 6085, is entitled An Act to Regulate the Use of Aliases. It provides as follows: Section 1. Except as a pseudonym for literary purposes, no person shall use any name different from the one with which he was christened or by which he has been known since his childhood, or such substitute name as may have been authorized by a competent court. The name shall comprise the patronymic name and one or two surnames. Section 2. Any person desiring to use an alias or aliases shall apply for authority therefor in proceedings like those legally provided to obtain judicial authority for a change of name. Separate proceedings shall be had for each alias, and each new petition shall set forth the original name and the alias or aliases for the use of which judicial authority has been obtained, specifying the proceedings and the date on which such authority was granted. Judicial authorities for the use of aliases shall be recorded in the proper civil register x x x.

The above law was subsequently amended by R. A. No. 6085, approved on 4 August 1969. As amended, C.A. No. 142 now reads: Section 1. Except as a pseudonym solely for literary, cinema, television, radio or other entertainment purposes and in athletic events where the use of pseudonym is a normally accepted practice, no person shall use any name different from the one with which he was registered at birth in the office of the local civil registry or with which he was baptized for the first time, or in case of an alien, with which he was registered in the bureau of immigration upon entry; or such substitute name as may have been authorized by a competent court: Provided, That persons whose births have not been registered in any local civil registry and who have not been baptized, have one year from the approval of this act within which to register their names in the civil registry of their residence. The name shall comprise the patronymic name and one or two surnames. Sec. 2. Any person desiring to use an alias shall apply for authority therefor in proceedings like those legally provided to obtain judicial authority for a change of name and no person shall be allowed to secure such judicial authority for more than one alias. The petition for an alias shall set forth the person’s baptismal and family name and the name recorded in the civil registry, if different, his immigrant’s name, if an alien, and his pseudonym, if he has such names other than his original or real name, specifying the reason or reasons for the desired alias. The judicial authority for the use of alias, the Christian name and the alien immigrant’s name shall be recorded in the proper local civil registry, and no person shall use any name or names other than his original or real name unless the same is or are duly recorded in the proper local civil registry.

The objective and purpose of C. A. No. 142 have their origin and basis in Act No. 3883, An Act to Regulate the Use in Business Transactions of Names other than True Names, Prescribing the Duties of the Director of the Bureau of Commerce And Industry in its Enforcement, Providing Penalties for Violations thereof, and for other purposes, which was approved on 14 November 1931 and amended by Act No. 4147,

45 approved on 28 November 1934. The pertinent provisions of Act No. 3883 as amended follow – Section 1. It shall be unlawful for any person to use or sign, on any written or printed receipt including receipt for tax or business or any written or printed contract not verified by a notary public or on any written or printed evidence of any agreement or business transactions, any name used in connection with his business other than his true name, or keep conspicuously exhibited in plain view in or at the place where his business is conducted, if he is engaged in a business, any sign announcing a firm name or business name or style without first registering such other name, or such firm name, or business name or style in the Bureau of Commerce together with his true name and that of any other person having a joint or common interest with him in such contract agreement, business transaction, or business x x x. For a bit of history, the enactment of C.A. No. 142 as amended was made primarily to curb the common practice among the Chinese of adopting scores of different names and aliases which created tremendous confusion in the field of trade. Such a practice almost bordered on the crime of usingfictitious names which for obvious reasons could not be successfully maintained against the Chinese who, rightly or wrongly, claimed they possessed a thousand and one names. CA. No. 142 thus penalized the act of using an alias name, unless such alias was duly authorized by proper judicial proceedings and recorded in the civil register.

In Yu Kheng Chiau v. Republic the Court had occasion to explain the meaning, concept and ill effects of the use of an alias within the purview of C.A. No. 142 when we ruled – There can hardly be any doubt that petitioner’s use of alias ‘Kheng Chiau Young’ in addition to his real name ‘Yu Cheng Chiau’ would add to more confusion. That he is known in his business, as manager of the Robert Reid, Inc., by the former name, is not sufficient reason to allow him its use. After all, petitioner admitted that he is known to his associates by both names. In fact, the Anselmo Trinidad, Inc., of which he is a customer, knows him by his real name. Neither would the fact that he had encountered certain difficulties in his transactions with government offices which required him to explain why he bore two names, justify the grant of his petition, for petitioner could easily avoid said difficulties by simply using and sticking only to his real name ‘Yu Cheng Chiau.’ The fact that petitioner intends to reside permanently in the Philippines, as shown by his having filed a petition for naturalization in Branch V of the abovementioned court, argues the more against the grant of his petition, because if naturalized as a Filipino citizen, there would then be no necessity for his further using said alias, as it would be contrary to the usual Filipino way and practice of using only one name in ordinary as well as business transactions. And, as the lower court correctly observed, if he believes (after he is naturalized) that it would be better for him to write his name following the Occidental method, ‘he can easily file a petition for change of name, so that in lieu of the name ‘Yu Kheng Chian,’ he can, abandoning the same, ask for authority to adopt the name ‘Kheng Chiau Young.’ (Emphasis and underscoring supplied)

WHEREFORE, the Court DENIES the petition for review on certiorari; AFFIRMS the decision promulgated on July 31, 2003; and ORDERS petitioner to pay the costs of

suit. SO ORDERED.

46

ILLEGAL USE OF UNIFORMS OR INSIGNIA

1. RA 75

REPUBLIC ACT No. 75

AN ACT TO PENALIZE ACTS WHICH WOULD IMPAIR THE PROPER OBSERVANCE BY THE REPUBLIC AND INHABITANTS OF THE PHILIPPINES

OF THE IMMUNITIES, RIGHT, AND PRIVILEGES OF DULY ACCREDITED FOREIGN DIPLOMATIC AND CONSULAR AGENTS IN THE PHILIPPINES

Section 1. Any person who shall falsely assume and take upon himself to act as a diplomatic, consular, or any other official of a foreign government duly accredited as such to the Government of the Republic of the Philippines with intent to defraud such foreign government or the Government of the Philippines, or any person, or in such pretended character shall demand or obtain, or attempt to obtain from person or from said foreign government or the Government of the Philippines, or from any officer thereof, any money, paper, document, or other thing, of value, shall be fined not more than five thousand pesos, or shall be imprisoned for not more than five years, or both, in addition to the penalties that may be imposed under the Revised Penal Code.

Section 2. Any person, other than a diplomatic or consular officer or attaché, who

shall act in the Republic of the Philippines as an agent of a foreign government without prior notification to, and registration with, the Secretary of Foreign Affairs shall be fined not more than five thousand pesos, or imprisoned not more than five years, or both, aside from other penalties that may be imposed by law.

Section 3. Any person, who with intent to deceive or mislead, within the jurisdiction of

the Republic, wear any naval, military, police, or other official uniform, decoration, or regalia of any foreign State, nation or government with which the Republic of the Philippines is at peace, or any uniform, decoration or regalia so nearly resembling the same as to be calculated to deceive, unless such wearing thereof be authorized by such State, nation, or government, shall upon conviction, be punished by a fine not exceeding two hundred pesos or imprisonment not exceeding six months, or by both such fine and imprisonment.1awphil-itc-alf

Section 4. Any writ or process sued out or prosecuted by any person in any court of

the Republic of the Philippines, or by any judge or justice, whereby the person of any ambassador or public minister of any foreign State, authorized and received as such by the President, or any domestic or domestic servant of any such ambassador or minister is arrested or imprisoned, or his goods or chattels are distrained, seized, or attached, shall be deemed void, and every person by whom the same is obtained or prosecuted, whether as party or as attorney, and every officer concerned in executing it, shall upon conviction, be punished by imprisonment for not more than three years and a fine of not exceeding two hundred pesos in the discretion of the court.

Section 5. The provisions of section four hereof shall not apply to any case where the

person against whom the process is issued is a citizen or inhabitant of the Republic of the Philippines, in the service of an ambassador or a public minister, and the process is founded upon a debt contracted before he entered upon such service; nor shall the said section apply to any case where the person against whom the process is issued is a domestic servant of an ambassador or a public minister, unless the name of the servant has, before the issuing thereof, been registered in the Department of Foreign Affairs, and transmitted by the Secretary of Foreign Affairs to the Chief of Police of the City of Manila, who shall upon receipt thereof post the same in some public place in his office. All persons shall have resort to the list of names so posted in the office of the Chief of Police, and take copies without fee.

Section 6. Any person who assaults, strikes, wounds, imprisons or in any other

manner offers violence to the person of an ambassador or a public minister, in violation of the law of nations, shall be imprisoned not more than three years, and fined not exceeding two hundred pesos, in the discretion of the court, in addition to the penalties that may be imposed under the Revised Penal Code.

Section 7. The provisions of this Act shall be applicable only in case where the

country of the diplomatic or consular representative adversely affected has provided for similar protection to duly accredited diplomatic or consular representatives of the Republic of the Philippines by prescribing like or similar penalties for like or similar offenses herein contained.itc-alf

Section 8. This Act shall take effect upon its approval.

Approved: October 21, 1946

47

2. RA 493

REPUBLIC ACT NO. 493

REPUBLIC ACT NO. 493 - AN ACT TO PROHIBIT THE USE OR CONFERRING OF MILITARY OR NAVAL GRADES OR TITLES BY OR UPON PERSONS NOT IN THE SERVICE OF THE ARMED FORCES OF THE PHILIPPINES OR THE PHILIPPINE CONSTABULARY, TO REGULATE THE WEARING, USE, MANUFACTURE AND SALE OF INSIGNIAS, DECORATIONS AND MEDALS, BADGES, PATCHES AND IDENTIFICATION CARDS PRESCRIBED FOR THE SAID ARMED FORCES OR CONSTABULARY, AND FOR OTHER PURPOSES

Section 1. Hereafter it shall be unlawful for any person or association or persons not in the service of the Armed Forces of the Philippines of the Philippine Constabulary to use, or confer upon himself or another who is not in the service of the said Armed Forces or Constabulary, any military or naval grade or title which is, or may hereafter be, prescribed by laws and regulations for the use of the Armed Forces or Constabulary: Provided, That the foregoing shall not be construed as prohibiting the use of such military or naval grades or title by personnel or persons now authorized by law and by the following persons:

(a) All veterans of any war when recognized by the Philippine or United States Government and only for the ranks for which they are recognized;

(b) Commissioned officers and personnel, retired or in active duty, of the Bureau of Coast and Geodetic Survey, of the quarantine service, and of the customs service;

(c) Commissioned and enlisted reservists including recognized guerrilla officers on inactive status when using their authorized grades for a purely military purposes;

(d) Trainees in the Armed Forces while undergoing any period of trainee instruction pursuant to law.

Sec. 2. Hereafter it shall be unlawful for any person not in the service of the Armed Forces of the Philippines or the Philippine Constabulary, except those excluded from the prohibition in section one of this Act, to use or wear the duly prescribed insignia, badge or emblem or rank of the members of the Armed Forces of the Philippines or the Philippine Constabulary, or any colorable imitation thereof: Provided, That the foregoing shall not be construed as prohibiting any person from using or wearing any military or naval insignia, badge or emblem of rank in any play-house or theater or in moving-picture films while actually engaged in representing therein a military or naval character not tending to bring discredit or reproach upon the Armed Forces of the

Philippines, the Philippine Constabulary or the Bureau of Coast and Geodetic Survey: Provided, further, That the use or wearing of any military or naval insignia, badge or emblem of rank while engaged in representing a military or naval character as hereinabove described, shall be subject to supervision and regulation by the Secretary of National Defense. The phrase "duly prescribed insignia, badge or emblem of rank" shall, for the purpose of this Act, mean any insignia, badge or emblem of rank which is, or may hereafter be, prescribed by Congress, the Secretary of National Defense or the Chief of Constabulary.

Sec. 3. Hereafter the use, wearing, manufacture and sale of any medal or decoration, badge, insignia, patch, or identification card which has been, or may hereafter be, authorized by Congress or prescribed or awarded by the President of the Philippines or the Secretary of National Defense for the members of the Armed Forces of the Philippines, or any colorable imitation thereof, is prohibited, except when authorized under such regulations as the Secretary of National Defense shall prescribe.

Sec. 4. Any person who confers upon himself or another any military or naval grade or title in violation of section one of this Act shall, upon conviction, be punished by a fine of not less than two thousand pesos and not exceeding five thousand pesos or by imprisonment for not less than two years and not exceeding five years, or both. Any person who violates any other provision of this Act shall, upon conviction, be punished by a fine of not less than one hundred pesos and not exceeding two thousand pesos, or by imprisonment for not less than one month and not exceeding two years, or both. In case the violation is committed by a corporation, the manager and all the members of the board of directors or governing body thereof, shall be liable individually in accordance with this section.

Sec. 5. All laws or portions thereof inconsistent with the provisions of this Act, are hereby repealed.

Sec. 6. This Act shall take effect upon its approval.

Approved: June 12, 1950

48

PERJURY

DIAZ vs PEOPLE

Republic of the Philippines SUPREME COURT

Manila

SECOND DIVISION

G.R. No. L-65006 October 31, 1990

REOLANDI DIAZ, petitioner, vs. PEOPLE OF THE PHILIPPINES and INTERMEDIATE APPELLATE COURT, respondents.

Paterno R. Canlas Law Offices for petitioner.

PARAS, J.:

In Criminal Case No. 934 of the Court of First Instance of Pampanga, Fifth Judicial District, Branch VI, San Fernando, Pampanga, petitioner Reolandi Diaz was charged with the crime of Falsification of Official Document committed as follows:

That on or about the 5th day of December 1972, in the Municipality of San Fernando, Province of Pampanga, Philippines, and within the jurisdiction of this Honorable Court, the above-named accused, Reolandi M. DIAZ, then a Senior Clerk at the Jose Abad Santos High School and, therefore, a public employee, did then and there willfully, unlawfully and feloniously commit falsification of official documents, to wit: by executing and filing in the office of the Civil Service Commission of said municipality a Personal Data Sheet, CS Form No. 212(65), an official document, stating and malting it appear therein that he was a fourth year Bachelor of Arts student in 1950-54 at the Cosmopolitan and Harvardian Colleges which document is a requirement for his reappointment as School Administrative Assistant I of the Jose Abad Santos High School and wherein the academic requirement to said Position is at least a fourth year college undergraduate, when in truth and in fact, the said accused well knew that the statement is false and he did not reach the fourth year in a Bachelor of Arts degree course, and consequently, by reason of said untruthful narration of facts, his

appointment to the said position was approved by the Civil Service Commission.

All contrary to law. (p. 44, Rollo)

After trial following a plea of not guilty upon arraignment, petitioner was found guilty as charged. The dispositive portion of the trial court's decision is as follows:

WHEREFORE and in view of all the foregoing, this Court finds the accused Reolandi M. Diaz guilty as charged of the crime of falsification of official document penalized under Article 171, paragraph 4, of the Revised Penal Code, and he is therefore sentenced to suffer the indeterminate penalty of imprisonment of two (2) years, four (4) months and one (1) day of prision correccional, as minimum, to six (6) years and (1) day of prision mayor, as maximum, and to pay a fine of ONE THOUSAND (P1,000.00) PESOS without subsidiary imprisonment in case of insolvency.

Costs against the accused. (pp. 55-56, Rollo)

Petitioner appealed the aforesaid judgment of conviction to the Intermediate Appellate Court, said appeal being docketed thereat as CA-G.R. No. 24580- Cr.

In its Decision promulgated on April 7,1983, the respondent court modified the trial court's decision by increasing the maximum of the indeterminate penalty of imprisonment in the event of non-payment of the fine due to insolvency, but affirmed the verdict of conviction in all other respects. The pertinent and dispositive portions of respondent court's decision read:

The penalty for the offense of falsification of an official document committed under Article 171, paragraph 4 of the Revised Penal Code is (prision mayor) and a fine not to exceed P5,000.00. The correct penalty that should be imposed on the appellant applying the Indeterminate Sentence Law is imprisonment of Two (2) Years, Four (4) Months and One (1) Day of (prison correctional) as minimum to Eight (8) Years and One (1) Day of (prision mayor) as maximum In cam of non-payment of the fine of P1,000.00 due to insolvency, the appellant should be subject to subsidiary imprisonment.

WHEREFORE, with the above modification as to the penalty and the imposition of subsidiary imprisonment in case of insolvency, the decision appealed from is affirmed in all other respects with costs against accused- appellant' (P. 68, Rollo)

49 Petitioner's motion for reconsideration was denied, hence, the present recourse.

It is the contention of petitioner that he is entitled to an acquittal because—

1. The findings of the lower court adopted by the respondent intermediate Appellate Court that he was not a fourth year A-B. College student is contrary to the evidence presented.

2. The respondent intermediate Appellate Court gravely commuted an error of law in convicting him as he did not have any legal obligation to state in CS Form 212 that he was a fourth year college student.

3. The Intermediate Appellate Court committed a grave abuse of discretion in finding that the transcript of records (Exhibit I) is spurious.

Upon the following facts, found by both the trial court and respondent Intermediate Appellate Court, to have been sufficiently and satisfactorily established by the evidence on record, it appears that petitioner Reolandi Diaz was a senior clerk at the Jose Abad Santos High School in San Fernando, Pampanga.

In 1972 he sought appointment as School Administrative Assistant I of the same school and as one of the requirements for appointment to said position, filled up the prescribed personal information sheet, Civil Service Form 212, and swore to the truth and veracity of the data and information therein furnished by him before the proper administering officer. As one of the required informations, he indicated in Exh "A" that his highest educational attainment was Fourth Year A.B. (Liberal Arts) allegedly pursued or obtained at the Cosmopolitan and Harvardian Colleges, respectively, during the years 1950 to 1954 inclusive. On the basis thereof, he was extended an appointment as School Administrative Assistant I (Exh. "B"). His personal information sheet (Exh. "A") together with his appointment paper (Exh. "B"), the certification as to the availability of funds for the position (Exh. "C") and the resolution of the Provincial Board of Pampanga creating the position (Exh. "D") were all forwarded to the Civil Service Commission for the approval of petitioner's appointment.

But contrary to petitioner's claim that his highest educational attainment was Fourth Year A.B. which he allegedly took at the Cosmopolitan and Harvardian Colleges during the years 1950 to 1954, he was never enrolled at the Cosmopolitan Colleges which later became the Abad Santos Educational Institution and still later the Ortanez University-at any time during the period covering the years from 1950 to 1954, inclusive as certified to by the Registrar of Ortanez University, Mr. Atilano D. Solomon. Likewise, petitioner was never a student at the Harvardian Colleges in Tondo, during the first quarter of school year 1953-1954, inclusive, as certified to by the school's President, Mrs. Virginia King vda. de Yap.

Neither did petitioner ever enroll as a collegiate student at the Harvardian Colleges in San Fernando, Pampanga after he finished his secondary course in the same school in June 1950, as certified to by its Executive Director, Atty. Arnulfo Garcia.

Also, the name of petitioner was not included in all the enrollment lists of college students submitted to the then Bureau of Private Schools of the Department of Education by the Harvardian Colleges at San Fernando, Pampanga and at Tondo, Manila, during the period during which petitioner claimed to have been enrolled. The same thing is true with the list submitted by the Cosmopolitan Colleges to the said bureau.

The petitioner did not take the witness stand. He only presented in evidence an alleged transcript of record (Exh. 1) purporting to show that he took up collegiate courses at the Philippine Harvardian College in Tondo, Manila, beginning from the first quarter of the school year 1951-1952 up to the first quarter of school year 1953-1954 which transcript of record was allegedly signed by Mrs. Virginia King vda. de Yap, for and in behalf of the then President of the school, Ildefonso Yap. But Mrs. Virginia Yap, testifying for the prosecution disowned the said signature. Besides, at the bottom portion of the transcript is a printed notation reading — this is only valid with the college seal and signature of Pres. Ildefonso D. Yap. Exhibit "I" lacks the imprint of the college seal and the signature of President Ildefonso Yap himself. No other corroborating piece of evidence was presented by petitioner.

Contrary to petitioner's posture, there was ample, solid and conclusive evidence adduced by the prosecution to prove that he was not a fourth year A.B. undergraduate.

It was clearly established that the statement made by the accused — that he reached fourth year A.B. and that he studied for this course (Liberal Arts) at the Cosmopolitan Colleges and the Harvardian Colleges from the years 1950-1954, is devoid of truth. The records of these colleges do not at all reveal that petitioner was even enrolled at any time from 1950 to 1954 in its College of Liberal Arts. His name does not appear and could not be found in the enrollment lists submitted to the Bureau of Private Schools by these colleges.

While the petitioner in his defense presented an alleged transcript (Exh. purporting to show that he took up collegiate course at the Philippine Harvardian College in Tondo, Manila, beginning from the first quarter of the school year 1951-1952 up to the first quarter of the school year 1953-1954, both the trial court and the respondent court correctly disregarded said transcript as having emanated from a spurious source. The transcript presented lacks the authenticating marks-the imprint of the college seal and the signature of the President of the college.

As correctly observed by the trial court —

It is also quite significant to note in this score that the accused in his defense failed to present any corroborating piece of evidence

50

which will show that he was indeed enrolled in the Philippine Harvardian Colleges from the first quarter of the school year 1953- 1954. If he had enrolled as a student during this period of time and he was positive that the transcript of records issued to him and in his possession is genuine and valid, it could have been easy for him to introduce corroborating evidence, i.e., the testimony of any of his classmates or teachers in the different subjects that he took to support his claim that he studied and passed these collegiate courses at the said school. But this he failed to do despite all the opportunities open to him and in the face of damning evidence all showing that he had not really enrolled in this school or in the other school mentioned by him the personal information sheet that he filed up as requirement for his appointment. (p. 53, Rollo)

Following the doctrine laid down, however, in the case of People v. Rufo B. Cruz, No. L-15132, May 25,1960,108 Phil. 255 and the earlier case of United States v. Tupasi Molina, 29 Phil. 119, the crime committed under the foregoing facts, is perjury. This offense, as defined in Article 183 of the Revised Penal Code is the willful and corrupt assertion of a falsehood under oath or affirmation administered by authority of law on a material matter. The said article provides —

Art. 183. False testimony in other cases and perjury in solemn affirmation. The penalty of arresto mayor in its maximum period to prision correccional in its minimum period shall be imposed upon any person who, knowingly making untruthful statements and not being included in the provisions of the next preceding articles, shall testify under oath or make an affidavit upon any material matter before a competent person authorized to administer an oath in cases in which the law so requires.

Any person who, in case of a solemn affirmation made in lieu of an oath, shall commit any of the falsehoods mentioned in this and the three preceding articles of this section shall suffer respective penalties provided therein.

In that case of People v. Cruz, supra, the accused Rufo B. Cruz failed up an application form (Civil Service Form No. 2) for the patrolman examination. He stated therein that he had never been accused, indicted or tried for violation of any law, ordinance or regulation before any court, when in truth and in fact, as the accused well knew, he had been prosecuted and tried before the Justice of the Peace of Cainta, Rizal, for different crimes. The application was signed and sworn to by him before the municipal mayor of Cainta, Rizal.

This Court in that case held:

This article is similar to Section 3 of Act No. 1697 of the Philippine Commission, which was formerly the law punishing perjury. Under

said section 3 of that Act, this Court, in the case of United States v. Tupasi Molina (29 Phil. 119), held that a person, who stated under oath in his application to take police examination that he had never been convicted of any crime, when as a matter of fact he has previous convictions, committed perjury. The facts in that case are almost exactly analogous to those in the present, and we find no reason, either in law or in the arguments of the Solicitor General to modify or reverse the conclusion of this Court therein. More so, because all the elements of the offense of perjury defined in Art. 183 of the Revised Penal Code concur in the present case.

The elements of the crime of perjury are —

(a) That the accused made a statement under oath or executed an affidavit upon a material matter.

(b) That the statement or affidavit was made before a competent officer, authorized to receive and administer oath.

(c) That in that statement or affidavit, the accused made a and deliberate assertion of a falsehood.

(d) That the sworn statement or affidavit containing the falsity is required by law or made for a legal purpose.

All the foregoing elements are present in the case at bar.

Perjury under Art. 183 of the Revised Penal Code carries a lesser penalty. The penalty for this crime is arresto mayor in its maximum period to prision correccional in its minimum period. Since there is no mitigating and aggravating circumstance the penalty should be imposed in its medium period. Applying the Indeterminate Sentence Law, the penalty should be from four (4) months of arresto mayor as minimum to one (1) year and one (1) day of prision correccional as maximum.

WHEREFORE, in view of the foregoing considerations, the decision appealed from is modified as follows:

(a) The accused Reolandi Diaz is found guilty of the crime of perjury defined and penalized under Art. 183 of the Revised Penal Code; and

(b) The accused is hereby sentenced to suffer the penalty of from four (4) months of arrests mayor as minimum to one (1) year and one (1) day of prision correccional as maximum.

SO ORDERED

51

SUBORDINATION OF PERJURY

PEOPLE vs PADOL

Republic of the Philippines SUPREME COURT

Manila

EN BANC

G.R. No. L-45618 October 18, 1938

THE PEOPLE OF THE PHILIPPINES, plaintiff-appellant, vs. ESMINIA PUDOL and ALBERTO REYES, defendants. ALBERTO REYES, appellee.

Solicitor-General Tuason for appellant. Jose F. Singson, Eloy Bello, Maximo Savellano and M. H. de Joya for appellee.

CONCEPCION, J.:

An information had been filed in the Court of First Instance of Ilocos Sur charging Esminia Pudol and Alberto Reyes with having committed the crime of perjury, the former by subscribing a false affidavit by induction and with the further cooperation of the latter.

When the case was called for trial, the provincial fiscal filed a motion asking for the discharge of Esminia Pudol in order to utilized as a witness for the prosecution against her coaccused. Upon arraignment, Alberto Reyes pleaded not guilty, although his plea was withdrawn shortly thereafter. The court, acting on the fiscal's motion, dismissed the case as to Esminia Pudol for the purpose intended by said fiscal. The accused Alberto Reyes, in turn, asked for the dismissal of the case as to him, alleging: (1) That once the case is dismissed as to Pudol, the alleged principally direct participation, there is no longer any ground for prosecuting the case against the subowner Reyes, and (2) that the Revised Penal Code does not penalize subornation of perjury, as it was formerly penalized by section 4 of Act No. 1697, which has expressly been repealed by article 367 of said Revised Penal Code. The court favorably sustaining the first ground of the motion and deeming it unnecessary to pass upon the second ground, also dismissed the case as to the accused Alberto Reyes, in an order of December 16, 1936, from which the fiscal appealed.

The first question to be decided in this appeal is that raised indirectly by the accused in his memorandum citing authorities, to the effect that the order appealed from is an order of dismissal of the case upon its merits, from which the fiscal cannot appeal. Such contention is untenable: (1) Because as the accused withdrew his plea of not guilty, he has not yet pleaded to the information, and in such condition of the case it is legally impossible to decide it upon its merits, and (2) because the order of dismissal of the court is not an acquittal of the accused. Therefore, it is appealable (sec. 44, General Orders, No. 58; U.S. vs. Ballentine, 4 Phil., 672).

The second question is that discussed by the Solicitor-General in the two errors attributed to the court. The order of dismissal is based on the following considerations:

In the above-quoted motion of the fiscal, it is stated "that there is absolute necessity of the testimony of said accused" Esminia Pudol, because "there is no other direct evidence to support the information." This allegation assumes that it cannot be proven and there is no means of showing that Esminia Pudol has committed perjury or has given false testimony. If the principal act, which must be the result of the subornation, cannot be proven, it seems clear that even if it should be shown that there has been subornation, after the latter does not constitute a crime.

In the first place, it cannot be inferred from the motion of the fiscal that "there is no means of showing that Esminia Pudol has committed perjury or has given false testimony." The only thing stated in the motion is "that there is no other direct evidence to support the information except the testimony of said accused." And continuing, it adds: "that the testimony of said accused can be substantially corroborated in its material points." Consequently, there is no basis for the conclusion laid down by the court that: "If the principal act, which must be the result of the subornation, cannot be proven, it seems clear — according to it — that even if it should be shown that there has been subornation, after all the latter does not constitute a crime.

The court further states: "if the guilt of the latter (Pudol) cannot be proven and the dismissal of this case, as to her, restores and places her under the protection of a strong presumption of innocence, it would seem soundly logical that her said innocence cannot be made the basis of a judgment of guilt for Reyes."

The court was not right in affirming that the order of dismissal restores to the accused (Pudol) the presumption of innocence. The fiscal did not ask for the dismissal of the case on the ground of Pudol's innocence, but because she did not appear to be the most guilty. The fiscal has asked for her discharge in order to be utilized as a witness for the prosecution against the accused. If she really testifies in support of the allegations of the information, Act No. 2709 affords her certain immunity, but this is not tantamount to restoring the presumption of her innocence, and her discharge does not effect the status of the accused Reyes (U.S. vs. Abanzado, 37 Phil., 658).

52 As to the second point of the motion of the accused, that is, that the Revised Penal Code does not penalize subornation of perjury, as it was formerly penalized by section 4 of Act No. 1697, which has expressly been repealed by article 367 of the Revised Penal Code, suffice it to state that, according to article 17 of said Code, the following are considered principals:

1. . . .

2. Those who directly force or induce others to commit it. (Emphasis ours.)

3. Those who cooperate in the commission of the offense by another act without which it would not have been accomplished.lâwphi1.nêt

The information charges Alberto Reyes not only with having directly induced Esminia Pudol to testify falsely under oath and to subscribe the affidavit before a person authorized by law to administer oath, but also with having cooperate and taken a direct part in the execution of said false affidavit, without which induction, cooperation and participation the false affidavit in question would not have been accomplished.

Therefore, the fact that subornation of perjury is not expressly penalized in the Revised Penal Code does not mean that the direct induction of a person by another to commit perjury has ceased to be a crime, because said crime is fully within the scope of that defined in article 17, subsection 2, of the Revised Penal Code. Furthermore, Alberto Reyes, as already stated, is charged in the present case not only as subowner of the perjury committed by his coaccused but also as principal by cooperation and participation in the preparation of the false affidavit subscribed by Esminia Pudol.

The order appealed from is reversed and this case is ordered remanded to the Court of First Instance of Ilocos Sur, so that it may proceed with the hearing thereof and decide the same in accordance with law, with the costs to the appellee. So ordered.

53

MACHINATIONS IN PUBLIC AUCTIONS

1. OUANO vs CA

Republic of the Philippines SUPREME COURT

Manila

FIRST DIVISION

G.R. No. L-40203 August 21, 1990

PATERNO J. OUANO, petitioner, vs. COURT OF APPEALS and FRANCISCO B. ECHAVEZ, respondents.

De Castro & Cagampang Law Offices and Fiel Manalo for petitioner.

Arturo M. Tolentino and Asuncion, Asuncion, Arcol & Kapunan Law Offices for respondents.

NARVASA, J.:

The appellate proceedings at bar treat of a parcel of land with an area of about 3,710 square meters, situated in Mandawe, Cebu, Identified as Philippine Railway Lot No. 3-A-1 It was covered by Torrens Title No. 7618 in the name of the registered owner, Rehabilitation 'Finance Corporation (RFC), now the Development Bank of the Philippines (DBP). Adjoining Lot 3-A-1 are lands belonging to Francisco Echavez, private respondent herein, and petitioner Paterno J. Ouano. What will have to be resolved are the conflicting claims over this lot by the vendee thereof, Echavez, and Ouano.

The property was offered for sale by public bidding by the RFC on April 1, 1958. 1 Actually this was the second public bidding scheduled for the property. The first 2 in which both Ouano and Echavez participated, together with others was nullified on account of a protest by Ouano. 3

Now, it appears that prior to the second bidding, Ouano and Echavez orally agreed that only Echavez would make a bid, and that if it was accepted, they would divide the property in proportion to their adjoining properties. To ensure success of their enterprise, they also agreed to induce the only other party known to be interested in the property-a group headed by a Mrs. Bonsucan to desist from presenting a bid. 4 They broached the matter to Mrs. Bonsucan's group. The latter agreed to

withdraw, as it did in fact withdraw from the sale; and Ouano's wife paid it P2,000 as reimbursement for its expenses. 5

As expected, the highest bid submitted, and thus accepted by the RFC, was that of Francisco Echavez, who offered P27,826.00 for the land . 6 Echavez paid the sum of P5,565.00 representing 20% deposit of the prefferred price. 7

A week later, Echavez sent a letter to Ouano regarding the P2,000.00 paid by the latter's wife to the Bonsucan group. 8 It said:

Because the owner of the money which I deposited for your share has stipulated that today is the last day for the return of his money ... I would like to request you that for the P2,000.00 which you have advanced to Mrs. Bonsucan and company, I will just give you 250 sq. meters right in front of your house at P8.05 per sq. meter ... (N.B. 250 x P8.05 equals P2,012.50.)

Still later, or two weeks after Echavez won the bid, a document simply entitled "Agreement," was signed by him and Ouano. 9 That document, prepared by Echavez in his own handwriting, reads as follows:10 |par KNOW ALL MEN BY THESE PRESENTS:

Inasmuch as it was Francisco B. Echavez who won in the public bidding held at the RFC office for Lot 3-A-1 last April, 1958, it is hereby agreed between us, Francisco B. Echavez and Paterno J. Ouano, that we share the said lot between us according to the herein sketch:

(Sketch omitted ...)

That each of us takes care in paying direct to the RFC office Cebu Branch, the installments, interests and amortizations on a ten-year plan in our respective names, such that we would request the RFC to have the said Lot 3-A-1 subdivided into two portions: A portion of Lot 3-A-1 for Francisco B. Echavez to contain 1882.5 sq. m. more or less depending on the actual survey based on the above sketch, and another portion of Lot 3-A-1 for Paterno J. Ouano to contain 1827.5 sq. m. more or less also based on the above sketch.

That they have agreed to share proportionately all legal expenses that may be assessed and incurred in connection with the acquisition of the said lot in case such expenses are levied as a whole against Francisco B. Echavez, but if such expenses are levied separately after the RFC consents to the subdivision and registration in our respective names our share of the said lot, then we take care individually of paying such expenses if there be any.

54

In witness whereof, we hereby set our hand and sign this agreement this 15th day of April, 1958 at Mandawe, Cebu, Philippines, subject to the approval of the RFC, Cebu Branch and Manila.

On the same day that the "Agreement" was executed, Echavez set down in writing a computation of the sharing of expenses of his joint venture with Ouano, viz.: 11

1827.5 — No. of sq. meters for Paterno Ouano 7.50 91375 127925

P13706.25 .20 P 2741.25

-1016.55 — Share of Echavez for the P2,000.00 given to Mrs. Bonsucan & Companions

P1,724.70 — Balance payable by Mr. Ouano to FB Echavez for the deposit made by the latter at the RFC. This is subject to the approval of the RFC, Cebu Branch.

Mandawe, April 15, 1958.

(Sgd.) F.B. ECHAVEZ.

Thereafter, on various dates, Ouano and/or his wife delivered sums of money to Echavez aggregating P1,725.00, obviously in payment of the balance indicated in Echavez's computation just mentioned, viz.: P500.00 on April 19,1958, another P500.00 on April 20, and P725.00 on April 27,1958. Receipts therefor were given by Echavez, all similarly worded to the effect that the money was being received "as part of their reimbursement for the deposit (of P5,565.00) I have made with the RFC for Lot 3-A-1 which I won in the bidding and which lot I have consented to share with Mr. Paterno J. Ouano, subject to the approval of the RFC. 12

However, the RFC never approved the sharing agreement between Echavez and Ouano concerning Lot 3-A-1. It approved the sale of the lot to Echavez only, on May 9, 1958, on the condition that the purchase price of P27,825.00 be paid in cash. Apparently Echavez found great initial difficulty in complying with this condition. It took all of four years, and patient negotiation and diligent effort on his part, for him ultimately to acquire title to the property, which came about in December, 1963. His travails are succinctly narrated by the Trial Court as follows:13

... Apparently, the successful bidder was caught flatfooted, for he was not able to comply with this condition, notwithstanding the fact that he has been making efforts to acquire the property (See Exhibit 21, letter of March 29, 1958; also Exhibit 22). So, he exerted much effort to change the terms of the sale from cash to monthly amortization plan (Exhs. 24 and 10). But the Rehabilitation Finance

Corporation was adamant. The terms of the bid giving the option to pay the balance of the purchase price either in cash or within ten years on monthly amortization plan at 6% interest notwithstanding, said Corporation denied defendant's request in a letter dated September 18, 1958 signed by Chairman Romualdez (Exh. 11). This went on for more than 4-½ years, with none of the parties herein having secured the conformity of the RFC or DBP to a novation of the original terms of the sale. Thus, the said sale was finally cancelled, and the deposit of P5,549.72 made by the defendant to the RFC forfeited as of April 4, 1962 (Exh. 12). However, on July 18, 1962, upon request of the defendant, this cancellation was considered under the condition, among others, that the price of the sale of P27,825.00 be payable 20% down and the balance in 5 years at 8% interest per annum on the monthly amortization plan, commencing retroactively on June 9, 1958, and that a payment of P2,000.00 be applied to the total arrearages of P25,799.00, which had to be paid within 90 days. The defendant paid on August 28, 1962 a further amount of P2,000.00. On September 3, 1962, the deed of conditional sale, covering the property in question, was entered into by the DBP and the defendant (Exh. D, same as Exh. 4), culminating in the signing of the corresponding promissory note dated September 7,1962 (Exh. E, same as Exh. 5). It is admitted that the defendant is now the registered owner of the property, after having fully paid P29,3218.87 on account of the price to the Development Bank of the Philippines, as per Deed of Absolute Sale dated December 9,1963 (Exhs. 14 and 34).

It was pursuant to the absolute sale of December 9, 1963 just mentioned, that a Torrens title (TCT No. 10776) was issued in Echavez's name. 14

Ouano, in his turn, tried to have DBP either accept and implement his sharing agreement with Echavez, or allow him to pay the full price of the lot in Echavez's behalf. By his own account, he sent a letter dated June 3, 1 963 to the DBP, "handcarried by his wife," "requesting among others, that he be permitted to pay immediately either for his share in the aforesaid lot comprising 1,828 sq. meters at the bid price of P7.50 per sq. meter including charges, or for the whole lot;" and that he in fact tried to make such payment but the Bank turned down his request. 15

Shortly after his representation with the DBP were rebuffed more precisely on June 24, 1963, months before the deed of absolute sale was executed by the DBP in Echavez's favor Paterno J. Ouano filed suit for "specific performance and reconveyance" in the Court of First Instance of Cebu against Francisco Echavez and the Development Bank of the Philippines (DBP). 16

In his complaint, 17 Ouano recited substantially the facts just related, and further

alleged that —

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... on June 3, 1963 plaintiffs wife and his attorney conferred with defendant ... Echavez for the purpose of again requesting said defendant to sign a document which would be notarized and to permit plaintiff to pay for his share direct to the defendant DBP, but said defendant refused and instead informed them that there had been no agreement regarding joint bidding and joint ownership of Lot 3-A-l.

The complaint was amended a few weeks later, chiefly to allege that DBP was on the point of rescinding its contract with Echavez; and that Ouano's offer to the DBP to pay in Echavez's behalf the price of the lot in full (P28,206.61), had been rejected; and that consequently, and "to show his good faith," he had consigned the amount with the Court "for and in behalf of defendant ... Echavez. 18 The amended complaint

specifically prayed that —

1) pending trial, and upon such bond as may be fixed by the Court, a writ of preliminary injunction issue to restrain Echavez and RFC "from rescinding, cancelling or in any way terminating the conditional sale contract with respect to Lot 3-A-1 TCT 7618;"

2) after trial, Echavez be ordered" to sign an agreement in accord with Annex A and the foregoing allegations which should be notarized;"

3) by virtue of aforesaid agreement and his deposit in Court of P28,206.61, Ouano be declared as "legally subrogated to the rights, interest and participation of defendant ... Echavez in Lot 3-A-1 to the extent of 1,828.5 sq. m.

4) Echavez be ordered to reimburse Ouano P14,358.37 corresponding to defendant ... Echavez' share of 1,882.5 sq. m.

5) should Echavez be unable to pay said amount within 15 days, Ouano be declared "legally subrogated to the rights, interest and participation of ... Echavez in Lot 3-A-1 to the extent of 1,882.5 sq. m.;"

6) DBP be ordered to consider the deposit made by Ouano for and in behalf of Echavez as "complete and valid payment of Lot 3 — A-1 and to execute the necessary documents of sale in (the former's) favor ... for 1,827.5 sq. m. and in favor of ... Echavez for 1,882.5 sq. m.

7) DBP be ordered to hold the deed of sale in favor of Echavez for 1,882 sq. m. in abeyance until the latter has reimbursed Ouano "the amount of P14,385.3 7 corresponding to ... Echavez's share of

1,882.5 sq. m and should Echavez be unable to do so within 15 days, DBP be ordered to "execute said deed of sale in favor of plaintiff and

8) Echavez be ordered to pay Ouano P1,000.00 as attorney's fees, P5,000.00 as moral damages, and P5,000.00 as exemplary damages, as well as the costs of suit.

The DBP moved to dismiss the amended complaint, alleging that no cause of action was therein stated against it.19 The Court found the motion to be well taken, overruled

Ouano's opposition thereto, dismissed the amended complaint and dissolved the writ of preliminary injunction, by Order dated August 27, 1963. 20 It subsequently denied Ouano's motion for reconsideration. 21 Ouano appealed but on learning of the absolute sale of Lot 3-A-1 executed by DBP in Echavez's favor on December 9, 1963-which according to him rendered moot the case for legal subrogation and injunction as far as DBP was concerned he withdrew the appeal and moved instead for admission of a second amended complaint, 22 which the Court admitted in the absence of opposition thereto. In the second amended complaint, dated January 4, 1964, 23 the DBP was no longer included as a party. Echavez was the sole defendant.

The second amended complaint adverted to the dismissal of the case as against the DBP and additionally alleged that Echavez, "in gross and evident bad faith, mortgaged the whole of Lot 3-A-1 to one Dr. Serafica." It prayed particularly that Echavez be commanded:

1. To execute a public document embodying and confirming the oral contract of joint ownership of Lot 3-A-1, TCT 7618, of April 1, 1958 between plaintiff and defendant...;

2. To execute a deed of reconveyance of 1,827.5 sq. m. of Lot 3-A-1 ... after reimbursement of the sum of P14,821.24 by the plaintiff;

3. To pay plaintiff P1,000 as attorney's fees, P5,000.00 as moral damages, P5,000.00 as exemplary damages and the expenses of litigation; and

4. To pay the costs.

Trial ensued after which the Trial Court rendered judgment on June 29,1968. It found that the sharing agreement between Ouano and Echavez could not be enforced in view of the absence of consent of the RFC (DBP) which the latter never gave; apart from this, the agreement had an unlawful cause and hence could "Produce no effect whatever" in accordance with Article 1352 of the Civil Code, because involving a felony defined in Article 185 of the Revised Penal Code, to wit:

ART. 185. Machinations in public auctions. — any person who shall solicit any gift or promise as a consideration for refraining from

56

taking part in any public auction, and any person who shall attempt to cause bidders to stay away from an auction by threats, gifts, promises, or any other artifice, with intent to cause the reduction of the price of the thing auctioned, shall suffer the penalty of prision correccional in its minimum period and a fine ranging from 10 to 50 per centum of the value of the thing auctioned.

The decision accordingly dismissed the Second Amended Complaint, ordered Ouano, "to vacate the portion of Lot No. 3-A-1 he occupied pursuant to Exhibit C," and also dismissed Echavez's counterclaim.

Ouano appealed to the Court of Appeals. Here he fared no better. He enjoyed initial success, to be sure. Judgment was promulgated on February 28, 1974" setting aside the Trial Court's judgment, and directing: (a) Echavez "to execute a deed of conveyance in favor of plaintiff of 1827. 5 square meters as the latter's share in the property in controversy and (b) Ouano "to pay defendant the amount of P14,821. 24 representing the cost of his share." However, on a second motion for reconsideration presented by Echavez, the Appellate Court, on November 21, 1974, reconsidered its decision of February 28, 1974 and entered another "affirming in toto the decision appealed from without costs. 25 This second decision found that the documentary evidence 26 preponderantly established that "the parties have manifested their intention to subordinate their agreement to the approval of the RFC." "Consequently," the decision stated,

... had the plaintiffs and defendant's proposal been accepted by the RFC (DBP) two separate contracts, covering the two segregated lots according to the sketch would have come into existence, to be executed by the RFC separately in favor of the pi plaintiff and the defendant. But unfortunately, the RFC disapproved the proposal as the sale was to be for cash. As a result, the obligatory force of the 'agreement' or the consent of the parties, which was subordinated to the taking effect of the suspensive condition that the agreement be subject to the approval of the RFC never happened. This being the case, the agreement never became effective. The rule is settled that:

When the consent of a party to a contract is given subject to the fulfillment of a suspensive condition, the contract is not perfected unless the condition is first complied with' (Ruperto vs. Cosca 26 Phil. 227).

And when the obligation assumed by a party to a contract is expressly subjected to a condition, the obligation cannot be enforced against him unless the condition is complied with (Wise & Co. vs.

Kelly, 37 Phil. 696; Philippine National Bank vs. Philippine Trust Co., 68 Phil. 48).

At best, the non-fulfillment of the suspensive condition has the effect of negating the conditional obligation. It has been held that what characterizes a conditional obligation is the fact that its efficacy or obligatory force is subordinated to the happening of a future and uncertain event, so that if the suspensive condition does not take place, the parties would stand as if the conditional obligation had never existed Gaite vs. Fonacier, L-11827, July 31, 1961, 2 SCRA 831).

Motions for reconsideration and for oral argument filed by Ouano were denied by Resolutions dated February 6, February 11, and February 21, 1975, the last containing a suggestion "that appellant go to the Higher Court for relief. 27

Ouano is now before this Court, on appeal by certoriari to seek the relief that both the Trial Court and the Court of Appeals have declined to concede to him. In this Court, he attempts to make the following points, to wit:

1. The verbal agreement between the parties to acquire and share the land in proportion to their respective abutting properties, and executed by the immediate occupation by the parties of their respective shares in the land, is a perfected consensual contract and not "a mere promise to deliver something subject to a suspensive condition" (as ruled in the second decision of the Court of Appeals); hence the petitioner is entitled to compel private respondent to execute a public document for the registration in his name of the petitioner's share in the land in question pursuant to Art. 1315 of the Civil Code (as held in the first decision of the Court of Appeals).

2. The agreement to acquire and share the land was not subject to a suspensive condition.

3. Assuming in gratia argumenti the agreement to be subject to a suspensive condition, since the condition consisted in obtaining the approval of the RFC-a third party who could not in any way be compelled to give such approval the condition is deemed constructively fulfilled because petitioner had done all in his power to comply with the condition, and private respondent, who also had the duty to get such approval, in effect prevented the fulfillment of the condition by doing nothing to secure the approval.

4. The circumstances show that Echavez clearly acted in bad faith, and it is unjust to allow him to benefit from his bad faith and ingenious scheme.

57 Two material facts, however, about which Ouano and Echavez are in agreement, render these questions of academic interest only, said facts being determinative of this dispute on an altogether different ground. These facts are:

1) that they bad both orally agreed that only Echavez would make a bid at the second bidding called by the RFC, and that if it was accepted, they would divide the property in proportion to their adjoining properties; and

2) that to ensure success of their scheme, they had also agreed to induce the only other party known to be interested in the property a group headed by a Mrs. Bonsucan to desist from presenting a bid, 28 as they did succeed in inducing Mrs.

Bonsucan's group to withdraw from the sale, paying said group P2,000 as reimbursement for its expenses. 29

These acts constitute a crime, as the Trial Court has stressed. Ouano and Echavez had promised to share in the property in question as a consideration for Ouano's refraining from taking part in the public auction, and they had attempted to cause and in fact succeeded in causing another bidder to stay away from the auction. in order to cause reduction of the price of the property auctioned In so doing, they committed the felony of machinations in public auctions defined and penalized in Article 185 of the Revised Penal Code, supra.

That both Ouano and Echavez did these acts is a matter of record, as is the fact that thereby only one bid that of Echavez was entered for the 'land in consequence of which Echavez eventually acquired it. The agreement therefore being criminal in character, the parties not only have no action against each other but are both liable to prosecution and the things and price of their agreement subject to disposal according to the provisions of the criminal code. This, in accordance with the so-called pari delicto principle set out in the Civil Code.

Article 1409 of said Code declares as "inexistent and void from the beginning" those contracts, among others, "whose cause, object or purpose is contrary to law, morals, good customs, public order or public policy," or "expressly prohibited ... by law." Such contracts "cannot be ratified "the right to set up the defense of illegality (cannot) be waived;" and, Article 1410 adds, the "action or defense for the declaration of the inexistence ... (thereof) does not prescribe." Furthermore, according to Article 1411 of the same Code 30 —

... When the nullity proceeds from the illegality of the cause or object of the contract, and the act constitutes a criminal offense, both parties being in pari delicto, they shall have no action against each other, and both shall be prosecuted. Moreover, the provisions of the Penal Code relative to the disposal of effects or instruments of a crime shall be applicable to the things or the price of the contract.

xxx xxx xxx

The dismissal of Ouano's action by both the Trial Court and the Court of Appeals was thus correct, being plainly in accord with the Civil Code provisions just referred to. 31 Article 1411 also dictates the proper disposition of the land involved, i.e., "the

forfeiture of the proceeds of the crime and the instruments or tools with which it was committed," as mandated by the provisions of Article 45 of the Revised Penal Code, this being obviously the provision "of the Penal Code relative to the disposal of effects or instruments of a crime" that Article 1411 makes "applicable to the things or the price of the contract."

WHEREFORE, the appealed decision of the Court of Appeals is MODIFIED, so that in addition to affirming the Trial Court's judgment dismissing Ouano's complaint and Echavez's counterclaim in Civil Case No. R-8011, Lot No. 3-A-1 subject of said case is ordered FORFEITED in its entirety in favor of the Government of the Philippines. No pronouncement as to costs. Let copy of this Decision be furnished the Solicitor General.

SO ORDERED.

58

2. RA 8293

Republic of the Philippines Congress of the Philippines

Metro Manila

Tenth Congress

Republic Act No. 8293 June 6, 1997

AN ACT PRESCRIBING THE INTELLECTUAL PROPERTY CODE AND ESTABLISHING THE INTELLECTUAL PROPERTY OFFICE, PROVIDING FOR ITS

POWERS AND FUNCTIONS, AND FOR OTHER PURPOSES

Be it enacted by the Senate and House of Representatives of the Philippines in Congress assembled::

PART I THE INTELLECTUAL PROPERTY OFFICE

Section 1. Title. - This Act shall be known as the "Intellectual Property Code of the

Philippines."

Section 2. Declaration of State Policy. - The State recognizes that an effective

intellectual and industrial property system is vital to the development of domestic and creative activity, facilitates transfer of technology, attracts foreign investments, and ensures market access for our products. It shall protect and secure the exclusive rights of scientists, inventors, artists and other gifted citizens to their intellectual property and creations, particularly when beneficial to the people, for such periods as provided in this Act.

The use of intellectual property bears a social function. To this end, the State shall promote the diffusion of knowledge and information for the promotion of national development and progress and the common good.

It is also the policy of the State to streamline administrative procedures of registering patents, trademarks and copyright, to liberalize the registration on the transfer of technology, and to enhance the enforcement of intellectual property rights in the Philippines. (n)

Section 3. International Conventions and Reciprocity. - Any person who is a national

or who is domiciled or has a real and effective industrial establishment in a country

which is a party to any convention, treaty or agreement relating to intellectual property rights or the repression of unfair competition, to which the Philippines is also a party, or extends reciprocal rights to nationals of the Philippines by law, shall be entitled to benefits to the extent necessary to give effect to any provision of such convention, treaty or reciprocal law, in addition to the rights to which any owner of an intellectual property right is otherwise entitled by this Act. (n)

Section 4. Definitions. - 4.1. The term "intellectual property rights" consists of:

a) Copyright and Related Rights;

b) Trademarks and Service Marks;

c) Geographic Indications;

d) Industrial Designs;

e) Patents;

f) Layout-Designs (Topographies) of Integrated Circuits; and

g) Protection of Undisclosed Information (n, TRIPS).

4.2. The term "technology transfer arrangements" refers to contracts or agreements involving the transfer of systematic knowledge for the manufacture of a product, the application of a process, or rendering of a service including management contracts; and the transfer, assignment or licensing of all forms of intellectual property rights, including licensing of computer software except computer software developed for mass market.

4.3. The term "Office" refers to the Intellectual Property Office created by this Act.

4.4. The term "IPO Gazette" refers to the gazette published by the Office under this Act. (n)

Section 5. Functions of the Intellectual Property Office (IPO). - 5.1. To administer and

implement the State policies declared in this Act, there is hereby created the Intellectual Property Office (IPO) which shall have the following functions:

a) Examine applications for grant of letters patent for inventions and register utility models and industrial designs;

b) Examine applications for the registration of marks, geographic indication, integrated circuits;

59

c) Register technology transfer arrangements and settle disputes involving technology transfer payments covered by the provisions of Part II, Chapter IX on Voluntary Licensing and develop and implement strategies to promote and facilitate technology transfer;

d) Promote the use of patent information as a tool for technology development;

e) Publish regularly in its own publication the patents, marks, utility models and industrial designs, issued and approved, and the technology transfer arrangements registered;

f) Administratively adjudicate contested proceedings affecting intellectual property rights; and

g) Coordinate with other government agencies and the private sector efforts to formulate and implement plans and policies to strengthen the protection of intellectual property rights in the country.

5.2. The Office shall have custody of all records, books, drawings, specifications, documents, and other papers and things relating to intellectual property rights applications filed with the Office. (n)

Section 6. The Organizational Structure of the IPO. - 6.1. The Office shall be headed

by a Director General who shall be assisted by two (2) Deputies Director General.

6.2. The Office shall be divided into six (6) Bureaus, each of which shall be headed by a Director and assisted by an Assistant Director. These Bureaus are:

a) The Bureau of Patents;

b) The Bureau of Trademarks;

c) The Bureau of Legal Affairs;

d) The Documentation, Information and Technology Transfer Bureau;

e) The Management Information System and EDP Bureau; and

f) The Administrative, Financial and Personnel Services Bureau.

6.3. The Director General, Deputies Director General, Directors and Assistant Directors shall be appointed by the President, and the other officers and employees

of the Office by the Secretary of Trade and Industry, conformably with and under the Civil Service Law. (n)

Section 7. The Director General and Deputies Director General. - 7.1. Functions. -

The Director General shall exercise the following powers and functions:

a) Manage and direct all functions and activities of the Office, including the promulgation of rules and regulations to implement the objectives, policies, plans, programs and projects of the Office: Provided, That in the exercise of the authority to propose policies and standards in relation to the following: (1) the effective, efficient, and economical operations of the Office requiring statutory enactment; (2) coordination with other agencies of government in relation to the enforcement of intellectual property rights; (3) the recognition of attorneys, agents, or other persons representing applicants or other parties before the Office; and (4) the establishment of fees for the filing and processing of an application for a patent, utility model or industrial design or mark or a collective mark, geographic indication and other marks of ownership, and for all other services performed and materials furnished by the Office, the Director General shall be subject to the supervision of the Secretary of Trade and Industry;

b) Exercise exclusive appellate jurisdiction over all decisions rendered by the Director of Legal Affairs, the Director of Patents, the Director of Trademarks, and the Director of the Documentation, Information and Technology Transfer Bureau. The decisions of the Director General in the exercise of his appellate jurisdiction in respect of the decisions of the Director of Patents, and the Director of Trademarks shall be appealable to the Court of Appeals in accordance with the Rules of Court; and those in respect of the decisions of the Director of Documentation, Information and Technology Transfer Bureau shall be appealable to the Secretary of Trade and Industry; and

c) Exercise original jurisdiction to resolve disputes relating to the terms of a license involving the author's right to public performance or other communication of his work. The decisions of the Director General in these cases shall be appealable to the Secretary of Trade and Industry.

7.2. Qualifications. - The Director General and the Deputies Director General must be natural born citizens of the Philippines, at least thirty-five (35) years of age on the day of their appointment, holders of a college degree, and of proven competence, integrity, probity and independence: Provided, That the Director General and at least one (1) Deputy Director General shall be members of the Philippine Bar who have engaged in the practice of law for at least ten (10) years: Provided further, That in the selection of the Director General and the Deputies Director General, consideration shall be given to such qualifications as would result, as far as practicable, in the balanced representation in the Directorate General of the various fields of intellectual property.

60 7.3. Term of Office. - The Director General and the Deputies Director General shall be appointed by the President for a term of five (5) years and shall be eligible for reappointment only once: Provided, That the first Director General shall have a first term of seven (7) years. Appointment to any vacancy shall be only for the unexpired term of the predecessor.

7.4. The Office of the Director General. - The Office of the Director General shall consist of the Director General and the Deputies Director General, their immediate staff and such Offices and Services that the Director General will set up to support directly the Office of the Director General. (n)

Section 8. The Bureau of Patents. - The Bureau of Patents shall have the following

functions:

8.1. Search and examination of patent applications and the grant of patents;

8.2. Registration of utility models, industrial designs, and integrated circuits; and

8.3. Conduct studies and researches in the field of patents in order to assist the Director General in formulating policies on the administration and examination of patents. (n)

Section 9. The Bureau of Trademarks. - The Bureau of Trademarks shall have the

following functions:

9.1. Search and examination of the applications for the registration of marks, geographic indications and other marks of ownership and the issuance of the certificates of registration; and

9.2. Conduct studies and researches in the field of trademarks in order to assist the Director General in formulating policies on the administration and examination of trademarks. (n)

Section 10. The Bureau of Legal Affairs. - The Bureau of Legal Affairs shall have the

following functions:

10.1. Hear and decide opposition to the application for registration of marks; cancellation of trademarks; subject to the provisions of Section 64, cancellation of patents, utility models, and industrial designs; and petitions for compulsory licensing of patents;

10.2. (a) Exercise original jurisdiction in administrative complaints for violations of laws involving intellectual property rights: Provided, That its jurisdiction is limited to complaints where the total damages claimed are not less than Two hundred thousand pesos (P200,000): Provided further, That availment of the provisional remedies may

be granted in accordance with the Rules of Court. The Director of Legal Affairs shall have the power to hold and punish for contempt all those who disregard orders or writs issued in the course of the proceedings. (n)

(b) After formal investigation, the Director for Legal Affairs may impose one (1) or more of the following administrative penalties:

(i) The issuance of a cease and desist order which shall specify the acts that the respondent shall cease and desist from and shall require him to submit a compliance report within a reasonable time which shall be fixed in the order;

(ii) The acceptance of a voluntary assurance of compliance or discontinuance as may be imposed. Such voluntary assurance may include one or more of the following:

(1) An assurance to comply with the provisions of the intellectual property law violated;

(2) An assurance to refrain from engaging in unlawful and unfair acts and practices subject of the formal investigation;

(3) An assurance to recall, replace, repair, or refund the money value of defective goods distributed in commerce; and

(4) An assurance to reimburse the complainant the expenses and costs incurred in prosecuting the case in the Bureau of Legal Affairs.

The Director of Legal Affairs may also require the respondent to submit periodic compliance reports and file a bond to guarantee compliance of his undertaking;

(iii) The condemnation or seizure of products which are subject of the offense. The goods seized hereunder shall be disposed of in such manner as may be deemed appropriate by the Director of Legal Affairs, such as by sale, donation to distressed local governments or to charitable or relief institutions, exportation, recycling into other goods, or any combination thereof, under such guidelines as he may provide;

(iv) The forfeiture of paraphernalia and all real and personal properties which have been used in the commission of the offense;

61

(v) The imposition of administrative fines in such amount as deemed reasonable by the Director of Legal Affairs, which shall in no case be less than Five thousand pesos (P5,000) nor more than One hundred fifty thousand pesos (P150,000). In addition, an additional fine of not more than One thousand pesos (P1,000) shall be imposed for each day of continuing violation;

(vi) The cancellation of any permit, license, authority, or registration which may have been granted by the Office, or the suspension of the validity thereof for such period of time as the Director of Legal Affairs may deem reasonable which shall not exceed one (1) year;

(vii) The withholding of any permit, license, authority, or registration which is being secured by the respondent from the Office;

(viii) The assessment of damages;

(ix) Censure; and

(x) Other analogous penalties or sanctions. (Secs. 6, 7, 8, and 9, Executive Order No. 913 [1983]a)

10.3. The Director General may by Regulations establish the procedure to govern the implementation of this Section. (n)

Section 11. The Documentation, Information and Technology Transfer Bureau. - The Documentation, Information and Technology Transfer Bureau shall have the following functions:

11.1. Support the search and examination activities of the Office through the following activities:

(a) Maintain and upkeep classification systems whether they be national or international such as the International Patent Classification (IPC) system;

(b) Provide advisory services for the determination of search patterns;

(c) Maintain search files and search rooms and reference libraries; and

(d) Adapt and package industrial property information.

11.2. Establish networks or intermediaries or regional representatives;

11.3. Educate the public and build awareness on intellectual property through the conduct of seminars and lectures, and other similar activities;

11.4. Establish working relations with research and development institutions as well as with local and international intellectual property professional groups and the like;

11.5. Perform state-of-the-art searches;

11.6. Promote the use of patent information as an effective tool to facilitate the development of technology in the country;

11.7. Provide technical, advisory, and other services relating to the licensing and promotion of technology, and carry out an efficient and effective program for technology transfer; and

11.8. Register technology transfer arrangements, and settle disputes involving technology transfer payments. (n)

Section 12. The Management Information Services and EDP Bureau. - The

Management Information Services and EDP Bureau shall:

12.1. Conduct automation planning, research and development, testing of systems, contracts with firms, contracting, purchase and maintenance of equipment, design and maintenance of systems, user consultation, and the like; and

12.2. Provide management information support and service to the Office. (n)

Section 13. The Administrative, Financial and Human Resource Development Service Bureau. - 13.1. The Administrative Service shall: (a) Provide services relative to procurement and allocation of supplies and equipment, transportation, messengerial work, cashiering, payment of salaries and other Office's obligations, office maintenance, proper safety and security, and other utility services; and comply with government regulatory requirements in the areas of performance appraisal, compensation and benefits, employment records and reports;

(b) Receive all applications filed with the Office and collect fees therefor, and

(c) Publish patent applications and grants, trademark applications, and registration of marks, industrial designs, utility models, geographic indication, and lay-out-designs of integrated circuits registrations.

13.2. The Patent and Trademark Administration Services shall perform the following functions among others:

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(a) Maintain registers of assignments, mergings, licenses, and bibliographic on patents and trademarks;

(b) Collect maintenance fees, issue certified copies of documents in its custody and perform similar other activities; and

(c) Hold in custody all the applications filed with the office, and all patent grants, certificate of registrations issued by the office, and the like.

13.3. The Financial Service shall formulate and manage a financial program to ensure availability and proper utilization of funds; provide for an effective monitoring system of the financial operations of the Office; and

13.4. The Human Resource Development Service shall design and implement human resource development plans and programs for the personnel of the Office; provide for present and future manpower needs of the organization; maintain high morale and favorable employee attitudes towards the organization through the continuing design and implementation of employee development programs. (n)

Section 14. Use of Intellectual Property Rights Fees by the IPO. - 14.1. For a more effective and expeditious implementation of this Act, the Director General shall be authorized to retain, without need of a separate approval from any government agency, and subject only to the existing accounting and auditing rules and regulations, all the fees, fines, royalties and other charges, collected by the Office under this Act and the other laws that the Office will be mandated to administer, for use in its operations, like upgrading of its facilities, equipment outlay, human resource development, and the acquisition of the appropriate office space, among others, to improve the delivery of its services to the public. This amount, which shall be in addition to the Office's annual budget, shall be deposited and maintained in a separate account or fund, which may be used or disbursed directly by the Director General.

14.2. After five (5) years from the coming into force of this Act, the Director General shall, subject to the approval of the Secretary of Trade and Industry, determine if the fees and charges mentioned in Subsection 14.1 hereof that the Office shall collect are sufficient to meet its budgetary requirements. If so, it shall retain all the fees and charges it shall collect under the same conditions indicated in said Subsection 14.1 but shall forthwith, cease to receive any funds from the annual budget of the National Government; if not, the provisions of said Subsection 14.1 shall continue to apply until such time when the Director General, subject to the approval of the Secretary of Trade and Industry, certifies that the above-stated fees and charges the Office shall collect are enough to fund its operations. (n)

Section 15. Special Technical and Scientific Assistance. - The Director General is

empowered to obtain the assistance of technical, scientific or other qualified officers and employees of other departments, bureaus, offices, agencies and instrumentalities of the Government, including corporations owned, controlled or operated by the

Government, when deemed necessary in the consideration of any matter submitted to the Office relative to the enforcement of the provisions of this Act. (Sec. 3, R.A. No. 165a)

Section 16. Seal of Office. - The Office shall have a seal, the form and design of which shall be approved by the Director General. (Sec. 4, R.A. No. 165a)

Section 17. Publication of Laws and Regulations. - The Director General shall cause

to be printed and make available for distribution, pamphlet copies of this Act, other pertinent laws, executive orders and information circulars relating to matters within the jurisdiction of the Office. (Sec. 5, R.A. No. 165a)

Section 18. The IPO Gazette. - All matters required to be published under this Act

shall be published in the Office's own publication to be known as the IPO Gazette. (n)

Section 19. Disqualification of Officers and Employees of the Office. - All officers and

employees of the Office shall not apply or act as an attorney or patent agent of an application for a grant of patent, for the registration of a utility model, industrial design or mark nor acquire, except by hereditary succession, any patent or utility model, design registration, or mark or any right, title or interest therein during their employment and for one (1) year thereafter. (Sec. 77, R.A. No. 165a)

PART II THE LAW ON PATENTS

CHAPTER I GENERAL PROVISIONS

Section 20. Definition of Terms Used in Part II, The Law on Patents. - As used in Part

II, the following terms shall have the following meanings:

20.1. "Bureau" means the Bureau of Patents,

20.2. "Director" means the Director of Patents;

20.3. "Regulations" means the Rules of Practice in Patent Cases formulated by the Director of Patents and promulgated by the Director General;

20.4. "Examiner" means the patent examiner;

20.5. "Patent application" or "application" means an application for a patent for an invention except in Chapters XII and XIII, where "application" means an application for a utility model and an industrial design, respectively; and

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20.6. "Priority date" means the date of filing of the foreign application for the same invention referred to in Section 31 of this Act. (n)

CHAPTER II PATENTABILITY

Section 21. Patentable Inventions. - Any technical solution of a problem in any field

of human activity which is new, involves an inventive step and is industrially applicable shall be Patentable. It may be, or may relate to, a product, or process, or an improvement of any of the foregoing. (Sec. 7, R.A. No. 165a)

Section 22. Non-Patentable Inventions. - The following shall be excluded from patent

protection:

22.1. Discoveries, scientific theories and mathematical methods;

22.2. Schemes, rules and methods of performing mental acts, playing games or doing business, and programs for computers;

22.3. Methods for treatment of the human or animal body by surgery or therapy and diagnostic methods practiced on the human or animal body. This provision shall not apply to products and composition for use in any of these methods;

22.4. Plant varieties or animal breeds or essentially biological process for the production of plants or animals. This provision shall not apply to micro-organisms and non-biological and microbiological processes.

Provisions under this subsection shall not preclude Congress to consider the enactment of a law providing sui generis protection of plant varieties and animal breeds and a system of community intellectual rights protection:

22.5. Aesthetic creations; and

22.6. Anything which is contrary to public order or morality. (Sec. 8, R.A. No. 165a)

Section 23. Novelty. . - An invention shall not be considered new if it forms part of a

prior art. (Sec. 9, R.A. No. 165a)

Section 24. Prior Art. - Prior art shall consist of:

24.1. Everything which has been made available to the public anywhere in the world, before the filing date or the priority date of the application claiming the invention; and

24.2. The whole contents of an application for a patent, utility model, or industrial design registration, published in accordance with this Act, filed or effective in the Philippines, with a filing or priority date that is earlier than the filing or priority date of the application: Provided, That the application which has validly claimed the filing date of an earlier application under Section 31 of this Act, shall be prior art with effect as of the filing date of such earlier application: Provided further, That the applicant or the inventor identified in both applications are not one and the same. (Sec. 9, R.A. No. 165a)

Section 25. Non-Prejudicial Disclosure. . - 25.1. The disclosure of information

contained in the application during the twelve (12) months preceding the filing date or the priority date of the application shall not prejudice the applicant on the ground of lack of novelty if such disclosure was made by:

(a) The inventor;

(b) A patent office and the information was contained (a) in another application filed by the inventor and should not have been disclosed by the office, or (b) in an application filed without the knowledge or consent of the inventor by a third party which obtained the information directly or indirectly from the inventor; or

(c) A third party which obtained the information directly or indirectly from the inventor.

25.2. For the purposes of Subsection 25.1, "inventor" also means any person who, at the filing date of application, had the right to the patent. (n)

Section 26. Inventive Step. - An invention involves an inventive step if, having regard to prior art, it is not obvious to a person skilled in the art at the time of the filing date or priority date of the application claiming the invention. (n)

Section 27. Industrial Applicability. - An invention that can be produced and used in

any industry shall be industrially applicable. (n)

CHAPTER III RIGHT TO A PATENT

Section 28. Right to a Patent. - The right to a patent belongs to the inventor, his

heirs, or assigns. When two (2) or more persons have jointly made an invention, the right to a patent shall belong to them jointly. (Sec. 10, R.A. No. 165a)

Section 29. First to File Rule. - If two (2) or more persons have made the invention

separately and independently of each other, the right to the patent shall belong to the person who filed an application for such invention, or where two or more applications

64 are filed for the same invention, to the applicant who has the earliest filing date or, the earliest priority date. (3rd sentence, Sec. 10, R.A. No. 165a.)

Section 30. Inventions Created Pursuant to a Commission. - 30.1. The person who

commissions the work shall own the patent, unless otherwise provided in the contract.

30.2. In case the employee made the invention in the course of his employment contract, the patent shall belong to:

(a) The employee, if the inventive activity is not a part of his regular duties even if the employee uses the time, facilities and materials of the employer.

(b) The employer, if the invention is the result of the performance of his regularly-assigned duties, unless there is an agreement, express or implied, to the contrary. (n)

Section 31. Right of Priority. . - An application for patent filed by any person who has

previously applied for the same invention in another country which by treaty, convention, or law affords similar privileges to Filipino citizens, shall be considered as filed as of the date of filing the foreign application: Provided, That: (a) the local application expressly claims priority; (b) it is filed within twelve (12) months from the date the earliest foreign application was filed; and (c) a certified copy of the foreign application together with an English translation is filed within six (6) months from the date of filing in the Philippines. (Sec. 15, R.A. No. 165a)

CHAPTER IV PATENT APPLICATION

Section 32. The Application. - 32.1. The patent application shall be in Filipino or

English and shall contain the following:

(a) A request for the grant of a patent;

(b) A description of the invention;

(c) Drawings necessary for the understanding of the invention;

(d) One or more claims; and

(e) An abstract.

32.2. No patent may be granted unless the application identifies the inventor. If the applicant is not the inventor, the Office may require him to submit said authority. (Sec. 13, R.A. No. 165a)

Section 33. Appointment of Agent or Representative. - An applicant who is not a

resident of the Philippines must appoint and maintain a resident agent or representative in the Philippines upon whom notice or process for judicial or administrative procedure relating to the application for patent or the patent may be served. (Sec. 11, R.A. No. 165a)

Section 34. The Request. - The request shall contain a petition for the grant of the

patent, the name and other data of the applicant, the inventor and the agent and the title of the invention. (n)

Section 35. Disclosure and Description of the Invention. - 35.1. Disclosure. - The

application shall disclose the invention in a manner sufficiently clear and complete for it to be carried out by a person skilled in the art. Where the application concerns a microbiological process or the product thereof and involves the use of a micro-organism which cannot be sufficiently disclosed in the application in such a way as to enable the invention to be carried out by a person skilled in the art, and such material is not available to the public, the application shall be supplemented by a deposit of such material with an international depository institution.

35.2. Description. - The Regulations shall prescribe the contents of the description and the order of presentation. (Sec. 14, R.A. No. 165a)

Section 36. The Claims. - 36.1. The application shall contain one (1) or more claims which shall define the matter for which protection is sought. Each claim shall be clear and concise, and shall be supported by the description.

36.2. The Regulations shall prescribe the manner of the presentation of claims. (n)

Section 37. The Abstract. - The abstract shall consist of a concise summary of the disclosure of the invention as contained in the description, claims and drawings in preferably not more than one hundred fifty (150) words. It must be drafted in a way which allows the clear understanding of the technical problem, the gist of the solution of that problem through the invention, and the principal use or uses of the invention. The abstract shall merely serve for technical information. (n)

Section 38. Unity of Invention. - 38.1. The application shall relate to one invention

only or to a group of inventions forming a single general inventive concept.

38.2. If several independent inventions which do not form a single general inventive concept are claimed in one application, the Director may require that the application be restricted to a single invention. A later application filed for an invention divided out shall be considered as having been filed on the same day as the first application: Provided, That the later application is filed within four (4) months after the requirement to divide becomes final or within such additional time, not exceeding four (4) months, as may be granted: Provided further, That each divisional application shall not go beyond the disclosure in the initial application.

65 38.3. The fact that a patent has been granted on an application that did not comply with the requirement of unity of invention shall not be a ground to cancel the patent. (Sec. 17, R.A. No. 165a)

Section 39. Information Concerning Corresponding Foreign Application for Patents. - The applicant shall, at the request of the Director, furnish him with the date and number of any application for a patent filed by him abroad, hereafter referred to as the "foreign application," relating to the same or essentially the same invention as that claimed in the application filed with the Office and other documents relating to the foreign application. (n)

CHAPTER V PROCEDURE FOR GRANT OF PATENT

Section 40. Filing Date Requirements. - 40.1. The filing date of a patent application

shall be the date of receipt by the Office of at least the following elements:

(a) An express or implicit indication that a Philippine patent is sought;

(b) Information identifying the applicant; and

(c) Description of the invention and one (1) or more claims in Filipino or English.

40.2. If any of these elements is not submitted within the period set by the Regulations, the application shall be considered withdrawn. (n)

Section 41. According a Filing Date. - The Office shall examine whether the patent

application satisfies the requirements for the grant of date of filing as provided in Section 40 hereof. If the date of filing cannot be accorded, the applicant shall be given an opportunity to correct the deficiencies in accordance with the implementing Regulations. If the application does not contain all the elements indicated in Section 40, the filing date should be that date when all the elements are received. If the deficiencies are not remedied within the prescribed time limit, the application shall be considered withdrawn. (n)

Section 42. Formality Examination. - 42.1. After the patent application has been

accorded a filing date and the required fees have been paid on time in accordance with the Regulations, the applicant shall comply with the formal requirements specified by Section 32 and the Regulations within the prescribed period, otherwise the application shall be considered withdrawn.

42.2. The Regulations shall determine the procedure for the re-examination and revival of an application as well as the appeal to the Director of Patents from any final action by the examiner. (Sec. 16, R.A. No. 165a)

Section 43. Classification and Search. - An application that has complied with the

formal requirements shall be classified and a search conducted to determine the prior art. (n)

Section 44. Publication of Patent Application. - 44.1. The patent application shall be published in the IPO Gazette together with a search document established by or on behalf of the Office citing any documents that reflect prior art, after the expiration of eighteen ( 18) months from the filing date or priority date.

44.2. After publication of a patent application, any interested party may inspect the application documents filed with the Office.

44.3. The Director General subject to the approval of the Secretary of Trade and Industry, may prohibit or restrict the publication of an application, if in his opinion, to do so would be prejudicial to the national security and interests of the Republic of the Philippines. (n)

Section 45. Confidentiality Before Publication. - A patent application, which has not

yet been published, and all related documents, shall not be made available for inspection without the consent of the applicant. (n)

Section 46. Rights Conferred by a Patent Application After Publication. - The

applicant shall have all the rights of a patentee under Section 76 against any person who, without his authorization, exercised any of the rights conferred under Section 71 of this Act in relation to the invention claimed in the published patent application, as if a patent had been granted for that invention: Provided, That the said person had:

46.1. Actual knowledge that the invention that he was using was the subject matter of a published application; or

46.2. Received written notice that the invention that he was using was the subject matter of a published application being identified in the said notice by its serial number: Provided, That the action may not be filed until after the grant of a patent on the published application and within four (4) years from the commission of the acts complained of. (n)

Section 47. Observation by Third Parties. - Following the publication of the patent

application, any person may present observations in writing concerning the patentability of the invention. Such observations shall be communicated to the applicant who may comment on them. The Office shall acknowledge and put such observations and comment in the file of the application to which it relates. (n)

Section 48. Request for Substantive Examination. - 48.1. The application shall be

deemed withdrawn unless within six (6) months from the date of publication under Section 41, a written request to determine whether a patent application meets the

66 requirements of Sections 21 to 27 and Sections 32 to 39 and the fees have been paid on time.

48.2. Withdrawal of the request for examination shall be irrevocable and shall not authorize the refund of any fee. (n)

Section 49. Amendment of Application. - An applicant may amend the patent

application during examination: Provided, That such amendment shall not include new matter outside the scope of the disclosure contained in the application as filed. (n)

Section 50. Grant of Patent. - 50.1. If the application meets the requirements of this

Act, the Office shall grant the patent: Provided, That all the fees are paid on time.

50.2. If the required fees for grant and printing are not paid in due time, the application shall be deemed to be withdrawn.

50.3. A patent shall take effect on the date of the publication of the grant of the patent in the IPO Gazette. (Sec. 18, R.A. No. 165a)

Section 51. Refusal of the Application. - 51.1. The final order of refusal of the examiner to grant the patent shall be appealable to the Director in accordance with this Act.

51.2. The Regulations shall provide for the procedure by which an appeal from the order of refusal from the Director shall be undertaken. (n)

Section 52. Publication Upon Grant of Patent. - 52.1. The grant of the patent together

with other related information shall be published in the IPO Gazette within the time prescribed by the Regulations.

52.2. Any interested party may inspect the complete description, claims, and drawings of the patent on file with the Office. (Sec. 18, R.A. No. 165a)

Section 53. Contents of Patent. - The patent shall be issued in the name of the

Republic of the Philippines under the seal of the Office and shall be signed by the Director, and registered together with the description, claims, and drawings, if any, in books and records of the Office. (Secs. 19 and 20, R.A. No. 165a)

Section 54. Term of Patent. - The term of a patent shall be twenty (20) years from the

filing date of the application. (Sec. 21, R.A. No. 165a)

Section 55. Annual Fees. - 55.1. To maintain the patent application or patent, an annual fee shall be paid upon the expiration of four (4) years from the date the application was published pursuant to Section 44 hereof, and on each subsequent

anniversary of such date. Payment may be made within three (3) months before the due date. The obligation to pay the annual fees shall terminate should the application be withdrawn, refused, or cancelled.

55.2. If the annual fee is not paid, the patent application shall be deemed withdrawn or the patent considered as lapsed from the day following the expiration of the period within which the annual fees were due. A notice that the application is deemed withdrawn or the lapse of a patent for non-payment of any annual fee shall be published in the IPO Gazette and the lapse shall be recorded in the Register of the Office.

55.3. A grace period of six (6) months shall be granted for the payment of the annual fee, upon payment of the prescribed surcharge for delayed payment. (Sec. 22, R.A. No. 165a)

Section 56. Surrender of Patent. - 56.1. The owner of the patent, with the consent of

all persons having grants or licenses or other right, title or interest in and to the patent and the invention covered thereby, which have been recorded in the Office, may surrender his patent or any claim or claims forming part thereof to the Office for cancellation.

56.2. A person may give notice to the Office of his opposition to the surrender of a patent under this section, and if he does so, the Bureau shall notify the proprietor of the patent and determine the question.

56.3. If the Office is satisfied that the patent may properly be surrendered, he may accept the offer and, as from the day when notice of his acceptance is published in the IPO Gazette, the patent shall cease to have effect, but no action for infringement shall lie and no right compensation shall accrue for any use of the patented invention before that day for the services of the government. (Sec. 24, R.A. No. 165a)

Section 57. Correction of Mistakes of the Office. - The Director shall have the power

to correct, without fee, any mistake in a patent incurred through the fault of the Office when clearly disclosed in the records thereof, to make the patent conform to the records. (Sec. 25, R.A. No. 165)

Section 58. Correction of Mistake in the Application. - On request of any interested

person and payment of the prescribed fee, the Director is authorized to correct any mistake in a patent of a formal and clerical nature, not incurred through the fault of the Office. (Sec. 26, R.A. No. 165a)

Section 59. Changes in Patents. - 59.1. The owner of a patent shall have the right to

request the Bureau to make the changes in the patent in order to:

(a) Limit the extent of the protection conferred by it;

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(b) Correct obvious mistakes or to correct clerical errors; and

(c) Correct mistakes or errors, other than those referred to in letter (b), made in good faith: Provided, That where the change would result in a broadening of the extent of protection conferred by the patent, no request may be made after the expiration of two (2) years from the grant of a patent and the change shall not affect the rights of any third party which has relied on the patent, as published.

59.2. No change in the patent shall be permitted under this section, where the change would result in the disclosure contained in the patent going beyond the disclosure contained in the application filed.

59.3. If, and to the extent to which the Office changes the patent according to this section, it shall publish the same. (n)

Section 60. Form and Publication of Amendment. - An amendment or correction of a

patent shall be accomplished by a certificate of such amendment or correction, authenticated by the seal of the Office and signed by the Director, which certificate shall be attached to the patent. Notice of such amendment or correction shall be published in the IPO Gazette and copies of the patent kept or furnished by the Office shall include a copy of the certificate of amendment or correction. (Sec. 27, R.A. No. 165)

CHAPTER VI CANCELLATION OF PATENTS AND SUBSTITUTION OF PATENTEE

Section 61. Cancellation of Patents. - 61.1. Any interested person may, upon

payment of the required fee, petition to cancel the patent or any claim thereof, or parts of the claim, on any of the following grounds:

(a) That what is claimed as the invention is not new or Patentable;

(b) That the patent does not disclose the invention in a manner sufficiently clear and complete for it to be carried out by any person skilled in the art; or

(c) That the patent is contrary to public order or morality.

61.2. Where the grounds for cancellation relate to some of the claims or parts of the claim, cancellation may be effected to such extent only. (Secs. 28 and 29, R.A. No. 165a)

Section 62. Requirement of the Petition. - The petition for cancellation shall be in

writing, verified by the petitioner or by any person in his behalf who knows the facts, specify the grounds upon which it is based, include a statement of the facts to be

relied upon, and filed with the Office. Copies of printed publications or of patents of other countries, and other supporting documents mentioned in the petition shall be attached thereto, together with the translation thereof in English, if not in the English language. (Sec. 30, R.A. No. 165)

Section 63. Notice of Hearing. - Upon filing of a petition for cancellation, the Director

of Legal Affairs shall forthwith serve notice of the filing thereof upon the patentee and all persons having grants or licenses, or any other right, title or interest in and to the patent and the invention covered thereby, as appears of record in the Office, and of notice of the date of hearing thereon on such persons and the petitioner. Notice of the filing of the petition shall be published in the IPO Gazette. (Sec. 31, R.A. No. 165a)

Section 64. Committee of Three. - In cases involving highly technical issues, on motion of any party, the Director of Legal Affairs may order that the petition be heard and decided by a committee composed of the Director of Legal Affairs as chairman and two (2) members who have the experience or expertise in the field of technology to which the patent sought to be cancelled relates. The decision of the committee shall be appealable to the Director General. (n)

Section 65. Cancellation of the Patent. - 65.1. If the Committee finds that a case for

cancellation has been proved, it shall order the patent or any specified claim or claims thereof cancelled.

65.2. If the Committee finds that, taking into consideration the amendment made by the patentee during the cancellation proceedings, the patent and the invention to which it relates meet the requirement of this Act, it may decide to maintain the patent as amended: Provided, That the fee for printing of a new patent is paid within the time limit prescribed in the Regulations.

65.3. If the fee for the printing of a new patent is not paid in due time, the patent should be revoked.

65.4. If the patent is amended under Subsection 65.2 hereof, the Bureau shall, at the same time as it publishes the mention of the cancellation decision, publish the abstract, representative claims and drawings indicating clearly what the amendments consist of. (n)

Section 66. Effect of Cancellation of Patent or Claim. - The rights conferred by the patent or any specified claim or claims cancelled shall terminate. Notice of the cancellation shall be published in the IPO Gazette. Unless restrained by the Director General, the decision or order to cancel by Director of Legal Affairs shall be immediately executory even pending appeal. (Sec. 32, R.A. No. 165a)

CHAPTER VII REMEDIES OF A PERSON WITH A RIGHT TO A PATENT

68 Section 67. Patent Application by Persons Not Having the Right to a Patent. . - 67.1.

If a person referred to in Section 29 other than the applicant, is declared by final court order or decision as having the right to the patent, such person may, within three (3) months after the decision has become final:

(a) Prosecute the application as his own application in place of the applicant;

(b) File a new patent application in respect of the same invention;

(c) Request that the application be refused; or

(d) Seek cancellation of the patent, if one has already been issued.

67.2. The provisions of Subsection 38.2 shall apply mutatis mutandis to a new application filed under Subsection 67. 1(b). (n)

Section 68. Remedies of the True and Actual Inventor. - If a person, who was deprived of the patent without his consent or through fraud is declared by final court order or decision to be the true and actual inventor, the court shall order for his substitution as patentee, or at the option of the true inventor, cancel the patent, and award actual and other damages in his favor if warranted by the circumstances. (Sec. 33, R.A. No. 165a)

Section 69. Publication of the Court Order. - The court shall furnish the Office a copy

of the order or decision referred to in Sections 67 and 68, which shall be published in the IPO Gazette within three (3) months from the date such order or decision became final and executory, and shall be recorded in the register of the Office. (n)

Section 70. Time to File Action in Court. - The actions indicated in Sections 67 and

68 shall be filed within one (1) year from the date of publication made in accordance with Sections 44 and 51, respectively. (n)

CHAPTER VIII RIGHTS OF PATENTEES AND INFRINGEMENT OF PATENTS

Section 71. Rights Conferred by Patent. - 71.1. A patent shall confer on its owner the

following exclusive rights:

(a) Where the subject matter of a patent is a product, to restrain, prohibit and prevent any unauthorized person or entity from making, using, offering for sale, selling or importing that product;

(b) Where the subject matter of a patent is a process, to restrain, prevent or prohibit any unauthorized person or entity from using the process, and from

manufacturing, dealing in, using, selling or offering for sale, or importing any product obtained directly or indirectly from such process.

71.2. Patent owners shall also have the right to assign, or transfer by succession the patent, and to conclude licensing contracts for the same. (Sec. 37, R.A. No. 165a)

Section 72. Limitations of Patent Rights. - The owner of a patent has no right to

prevent third parties from performing, without his authorization, the acts referred to in Section 71 hereof in the following circumstances:

72.1. Using a patented product which has been put on the market in the Philippines by the owner of the product, or with his express consent, insofar as such use is performed after that product has been so put on the said market;

72.2. Where the act is done privately and on a non-commercial scale or for a non-commercial purpose: Provided, That it does not significantly prejudice the economic interests of the owner of the patent;

72.3. Where the act consists of making or using exclusively for the purpose of experiments that relate to the subject matter of the patented invention;

72.4. Where the act consists of the preparation for individual cases, in a pharmacy or by a medical professional, of a medicine in accordance with a medical prescription or acts concerning the medicine so prepared;

72.5. Where the invention is used in any ship, vessel, aircraft, or land vehicle of any other country entering the territory of the Philippines temporarily or accidentally: Provided, That such invention is used exclusively for the needs of the ship, vessel, aircraft, or land vehicle and not used for the manufacturing of anything to be sold within the Philippines. (Secs. 38 and 39, R.A. No. 165a)

Section 73. Prior User. - 73.1. Notwithstanding Section 72 hereof, any prior user,

who, in good faith was using the invention or has undertaken serious preparations to use the invention in his enterprise or business, before the filing date or priority date of the application on which a patent is granted, shall have the right to continue the use thereof as envisaged in such preparations within the territory where the patent produces its effect.

73.2. The right of the prior user may only be transferred or assigned together with his enterprise or business, or with that part of his enterprise or business in which the use or preparations for use have been made. (Sec. 40, R.A. No. 165a)

Section 74. Use of Invention by Government. - 74.1. A Government agency or third

person authorized by the Government may exploit the invention even without agreement of the patent owner where:

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(a) The public interest, in particular, national security, nutrition, health or the development of other sectors, as determined by the appropriate agency of the government, so requires; or

(b) A judicial or administrative body has determined that the manner of exploitation, by the owner of the patent or his licensee is anti-competitive.

74.2. The use by the Government, or third person authorized by the Government shall be subject, mutatis mutandis, to the conditions set forth in Sections 95 to 97 and 100 to 102. (Sec. 41, R.A. No. 165a)

Section 75. Extent of Protection and Interpretation of Claims. - 75.1. The extent of

protection conferred by the patent shall be determined by the claims, which are to be interpreted in the light of the description and drawings.

75.2. For the purpose of determining the extent of protection conferred by the patent, due account shall be taken of elements which are equivalent to the elements expressed in the claims, so that a claim shall be considered to cover not only all the elements as expressed therein, but also equivalents. (n)

Section 76. Civil Action for Infringement. - 76.1. The making, using, offering for sale,

selling, or importing a patented product or a product obtained directly or indirectly from a patented process, or the use of a patented process without the authorization of the patentee constitutes patent infringement.

76.2. Any patentee, or anyone possessing any right, title or interest in and to the patented invention, whose rights have been infringed, may bring a civil action before a court of competent jurisdiction, to recover from the infringer such damages sustained thereby, plus attorney's fees and other expenses of litigation, and to secure an injunction for the protection of his rights.

76.3. If the damages are inadequate or cannot be readily ascertained with reasonable certainty, the court may award by way of damages a sum equivalent to reasonable royalty.

76.4. The court may, according to the circumstances of the case, award damages in a sum above the amount found as actual damages sustained: Provided, That the award does not exceed three (3) times the amount of such actual damages.

76.5. The court may, in its discretion, order that the infringing goods, materials and implements predominantly used in the infringement be disposed of outside the channels of commerce or destroyed, without compensation.

76.6. Anyone who actively induces the infringement of a patent or provides the infringer with a component of a patented product or of a product produced because of a patented process knowing it to be especially adopted for infringing the patented

invention and not suitable for substantial non-infringing use shall be liable as a contributory infringer and shall be jointly and severally liable with the infringer. (Sec. 42, R.A. No. 165a)

Section 77. Infringement Action by a Foreign National. - Any foreign national or juridical entity who meets the requirements of Section 3 and not engaged in business in the Philippines, to which a patent has been granted or assigned under this Act, may bring an action for infringement of patent, whether or not it is licensed to do business in the Philippines under existing law. (Sec. 41-A, R.A. No. 165a)

Section 78. Process Patents; Burden of Proof . - If the subject matter of a patent is a

process for obtaining a product, any identical product shall be presumed to have been obtained through the use of the patented process if the product is new or there is substantial likelihood that the identical product was made by the process and the owner of the patent has been unable despite reasonable efforts, to determine the process actually used. In ordering the defendant to prove that the process to obtain the identical product is different from the patented process, the court shall adopt measures to protect, as far as practicable, his manufacturing and business secrets. (n)

Section 79. Limitation of Action for Damages. - No damages can be recovered for

acts of infringement committed more than four (4) years before the institution of the action for infringement. (Sec. 43, R.A. No. 165)

Section 80. Damages, Requirement of Notice. - Damages cannot be recovered for

acts of infringement committed before the infringer had known, or had reasonable grounds to know of the patent. It is presumed that the infringer had known of the patent if on the patented product, or on the container or package in which the article is supplied to the public, or on the advertising material relating to the patented product or process, are placed the words "Philippine Patent" with the number of the patent. (Sec. 44, R.A. No. 165a)

Section 81. Defenses in Action for Infringement. - In an action for infringement, the

defendant, in addition to other defenses available to him, may show the invalidity of the patent, or any claim thereof, on any of the grounds on which a petition of cancellation can be brought under Section 61 hereof. (Sec. 45, R.A. No. 165)

Section 82. Patent Found Invalid May be Cancelled. - In an action for infringement, if

the court shall find the patent or any claim to be invalid, it shall cancel the same, and the Director of Legal Affairs upon receipt of the final judgment of cancellation by the court, shall record that fact in the register of the Office and shall publish a notice to that effect in the IPO Gazette. (Sec. 46, R.A. No. 165a)

Section 83. Assessor in Infringement Action. - 83.1. Two (2) or more assessors may

be appointed by the court. The assessors shall be possessed of the necessary scientific and technical knowledge required by the subject matter in litigation. Either party may challenge the fitness of any assessor proposed for appointment.

70 83.2. Each assessor shall receive a compensation in an amount to be fixed by the court and advanced by the complaining party, which shall be awarded as part of his costs should he prevail in the action. (Sec. 47, R.A. No. 165a)

Section 84. Criminal Action for Repetition of Infringement. - If infringement is repeated by the infringer or by anyone in connivance with him after finality of the judgment of the court against the infringer, the offenders shall, without prejudice to the institution of a civil action for damages, be criminally liable therefor and, upon conviction, shall suffer imprisonment for the period of not less than six (6) months but not more than three (3) years and/or a fine of not less than One hundred thousand pesos (P100,000) but not more than Three hundred thousand pesos (P300,000), at the discretion of the court. The criminal action herein provided shall prescribe in three (3) years from date of the commission of the crime. (Sec. 48, R.A. No. 165a)

CHAPTER IX VOLUNTARY LICENSING

Section 85. Voluntary License Contract. - To encourage the transfer and dissemination of technology, prevent or control practices and conditions that may in particular cases constitute an abuse of intellectual property rights having an adverse effect on competition and trade, all technology transfer arrangements shall comply with the provisions of this Chapter. (n)

Section 86. Jurisdiction to Settle Disputes on Royalties. - The Director of the

Documentation, Information and Technology Transfer Bureau shall exercise quasi-judicial jurisdiction in the settlement of disputes between parties to a technology transfer arrangement arising from technology transfer payments, including the fixing of appropriate amount or rate of royalty. (n)

Section 87. Prohibited Clauses. - Except in cases under Section 91, the following

provisions shall be deemed prima facie to have an adverse effect on competition and trade:

87.1. Those which impose upon the licensee the obligation to acquire from a specific source capital goods, intermediate products, raw materials, and other technologies, or of permanently employing personnel indicated by the licensor;

87.2. Those pursuant to which the licensor reserves the right to fix the sale or resale prices of the products manufactured on the basis of the license;

87.3. Those that contain restrictions regarding the volume and structure of production;

87.4. Those that prohibit the use of competitive technologies in a non-exclusive technology transfer agreement;

87.5. Those that establish a full or partial purchase option in favor of the licensor;

87.6. Those that obligate the licensee to transfer for free to the licensor the inventions or improvements that may be obtained through the use of the licensed technology;

87.7. Those that require payment of royalties to the owners of patents for patents which are not used;

87.8. Those that prohibit the licensee to export the licensed product unless justified for the protection of the legitimate interest of the licensor such as exports to countries where exclusive licenses to manufacture and/or distribute the licensed product(s) have already been granted;

87.9. Those which restrict the use of the technology supplied after the expiration of the technology transfer arrangement, except in cases of early termination of the technology transfer arrangement due to reason(s) attributable to the licensee;

87.10. Those which require payments for patents and other industrial property rights after their expiration, termination arrangement;

87.11. Those which require that the technology recipient shall not contest the validity of any of the patents of the technology supplier;

87.12. Those which restrict the research and development activities of the licensee designed to absorb and adapt the transferred technology to local conditions or to initiate research and development programs in connection with new products, processes or equipment;

87.13. Those which prevent the licensee from adapting the imported technology to local conditions, or introducing innovation to it, as long as it does not impair the quality standards prescribed by the licensor;

87.14. Those which exempt the licensor for liability for non-fulfilment of his responsibilities under the technology transfer arrangement and/or liability arising from third party suits brought about by the use of the licensed product or the licensed technology; and

87.15. Other clauses with equivalent effects. (Sec. 33-C (2), R.A 165a)

Section 88. Mandatory Provisions. - The following provisions shall be included in

voluntary license contracts:

88.1. That the laws of the Philippines shall govern the interpretation of the same and in the event of litigation, the venue shall be the proper court in the place where the licensee has its principal office;

71 88.2. Continued access to improvements in techniques and processes related to the technology shall be made available during the period of the technology transfer arrangement;

88.3. In the event the technology transfer arrangement shall provide for arbitration, the Procedure of Arbitration of the Arbitration Law of the Philippines or the Arbitration Rules of the United Nations Commission on International Trade Law (UNCITRAL) or the Rules of Conciliation and Arbitration of the International Chamber of Commerce (ICC) shall apply and the venue of arbitration shall be the Philippines or any neutral country; and

88.4. The Philippine taxes on all payments relating to the technology transfer arrangement shall be borne by the licensor. (n)

Section 89. Rights of Licensor. - In the absence of any provision to the contrary in the

technology transfer arrangement, the grant of a license shall not prevent the licensor from granting further licenses to third person nor from exploiting the subject matter of the technology transfer arrangement himself. (Sec. 33-B, R.A. 165a)

Section 90. Rights of Licensee. - The licensee shall be entitled to exploit the subject

matter of the technology transfer arrangement during the whole term of the technology transfer arrangement. (Sec. 33-C (1), R.A. 165a)

Section 91. Exceptional Cases. - In exceptional or meritorious cases where substantial benefits will accrue to the economy, such as high technology content, increase in foreign exchange earnings, employment generation, regional dispersal of industries and/or substitution with or use of local raw materials, or in the case of Board of Investments, registered companies with pioneer status, exemption from any of the above requirements may be allowed by the Documentation, Information and Technology Transfer Bureau after evaluation thereof on a case by case basis. (n)

Section 92. Non-Registration with the Documentation, Information and Technology

Transfer Bureau. - Technology transfer arrangements that conform with the provisions of Sections 86 and 87 need not be registered with the Documentation, Information and Technology Transfer Bureau. Non-conformance with any of the provisions of Sections 87 and 88, however, shall automatically render the technology transfer arrangement unenforceable, unless said technology transfer arrangement is approved and registered with the Documentation, Information and Technology Transfer Bureau under the provisions of Section 91 on exceptional cases. (n)

CHAPTER X COMPULSORY LICENSING

Section 93. Grounds for Compulsory Licensing. - The Director of Legal Affairs may

grant a license to exploit a patented invention, even without the agreement of the

patent owner, in favor of any person who has shown his capability to exploit the invention, under any of the following circumstances:

93.1. National emergency or other circumstances of extreme urgency;

93.2. Where the public interest, in particular, national security, nutrition, health or the development of other vital sectors of the national economy as determined by the appropriate agency of the Government, so requires; or

93.3. Where a judicial or administrative body has determined that the manner of exploitation by the owner of the patent or his licensee is anti-competitive; or

93.4. In case of public non-commercial use of the patent by the patentee, without satisfactory reason;

93.5. If the patented invention is not being worked in the Philippines on a commercial scale, although capable of being worked, without satisfactory reason: Provided, That the importation of the patented article shall constitute working or using the patent. (Secs. 34, 34-A, 34-B, R.A. No. 165a)

Section 94. Period for Filing a Petition for a Compulsory License. - 94.1. A compulsory license may not be applied for on the ground stated in Subsection 93.5 before the expiration of a period of four (4) years from the date of filing of the application or three (3) years from the date of the patent whichever period expires last.

94.2. A compulsory license which is applied for on any of the grounds stated in Subsections 93.2, 93.3, and 93.4 and Section 97 may be applied for at any time after the grant of the patent. (Sec. 34(1), R.A. No. 165)

Section 95. Requirement to Obtain a License on Reasonable Commercial Terms. - 95.1. The license will only be granted after the petitioner has made efforts to obtain authorization from the patent owner on reasonable commercial terms and conditions but such efforts have not been successful within a reasonable period of time.

95.2. The requirement under Subsection 95.1 shall not apply in the following cases:

(a) Where the petition for compulsory license seeks to remedy a practice determined after judicial or administrative process to be anti-competitive;

(b) In situations of national emergency or other circumstances of extreme urgency;

(c) In cases of public non-commercial use.

72 95.3. In situations of national emergency or other circumstances of extreme urgency, the right holder shall be notified as soon as reasonably practicable.

95.4. In the case of public non-commercial use, where the government or contractor, without making a patent search, knows or has demonstrable grounds to know that a valid patent is or will be used by or for the government, the right holder shall be informed promptly. (n)

Section 96. Compulsory Licensing of Patents Involving Semi-Conductor Technology. - In the case of compulsory licensing of patents involving semi-conductor technology, the license may only be granted in case of public non-commercial use or to remedy a practice determined after judicial or administrative process to be anti-competitive. (n)

Section 97. Compulsory License Based on Interdependence of Patents. - If the invention protected by a patent, hereafter referred to as the "second patent," within the country cannot be worked without infringing another patent, hereafter referred to as the "first patent," granted on a prior application or benefiting from an earlier priority, a compulsory license may be granted to the owner of the second patent to the extent necessary for the working of his invention, subject to the following conditions:

97.1. The invention claimed in the second patent involves an important technical advance of considerable economic significance in relation to the first patent;

97.2. The owner of the first patent shall be entitled to a cross-license on reasonable terms to use the invention claimed in the second patent;

97.3. The use authorized in respect of the first patent shall be non-assignable except with the assignment of the second patent; and

97.4. The terms and conditions of Sections 95, 96 and 98 to 100 of this Act. (Sec. 34-C, R.A. No. 165a)

Section 98. Form and Contents of Petition. - The petition for compulsory licensing

must be in writing, verified by the petitioner and accompanied by payment of the required filing fee. It shall contain the name and address of the petitioner as well as those of the respondents, the number and date of issue of the patent in connection with which compulsory license is sought, the name of the patentee, the title of the invention, the statutory grounds upon which compulsory license is sought, the ultimate facts constituting the petitioner's cause of action, and the relief prayed for. (Sec. 34-D, R.A. No. 165)

Section 99. Notice of Hearing. - 99.1. Upon filing of a petition, the Director of Legal

Affairs shall forthwith serve notice of the filing thereof upon the patent owner and all persons having grants or licenses, or any other right, title or interest in and to the patent and invention covered thereby as appears of record in the Office, and of notice of the date of hearing thereon, on such persons and petitioner. The resident agent or

representative appointed in accordance with Section 33 hereof, shall be bound to accept service of notice of the filing of the petition within the meaning of this Section.

99.2. In every case, the notice shall be published by the said Office in a newspaper of general circulation, once a week for three (3) consecutive weeks and once in the IPO Gazette at applicant's expense. (Sec. 34-E, R.A. No. 165)

Section 100. Terms and Conditions of Compulsory License. - The basic terms and

conditions including the rate of royalties of a compulsory license shall be fixed by the Director of Legal Affairs subject to the following conditions:

100.1. The scope and duration of such license shall be limited to the purpose for which it was authorized;

100.2. The license shall be non-exclusive;

100.3. The license shall be non-assignable, except with that part of the enterprise or business with which the invention is being exploited;

100.4. Use of the subject matter of the license shall be devoted predominantly for the supply of the Philippine market: Provided, That this limitation shall not apply where the grant of the license is based on the ground that the patentee's manner of exploiting the patent is determined by judicial or administrative process, to be anti-competitive.

100.5. The license may be terminated upon proper showing that circumstances which led to its grant have ceased to exist and are unlikely to recur: Provided, That adequate protection shall be afforded to the legitimate interest of the licensee; and

100.6. The patentee shall be paid adequate remuneration taking into account the economic value of the grant or authorization, except that in cases where the license was granted to remedy a practice which was determined after judicial or administrative process, to be anti-competitive, the need to correct the anti-competitive practice may be taken into account in fixing the amount of remuneration. (Sec. 35-B, R.A. No. 165a)

Section 101. Amendment, Cancellation, Surrender of Compulsory License. - 101.1.

Upon the request of the patentee or the licensee, the Director of Legal Affairs may amend the decision granting the compulsory license, upon proper showing of new facts or circumstances justifying such amendment.

101.2. Upon the request of the patentee, the said Director may cancel the compulsory license:

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(a) If the ground for the grant of the compulsory license no longer exists and is unlikely to recur;

(b) If the licensee has neither begun to supply the domestic market nor made serious preparation therefor;

(c) If the licensee has not complied with the prescribed terms of the license;

101.3. The licensee may surrender the license by a written declaration submitted to the Office.

101.4. The said Director shall cause the amendment, surrender, or cancellation in the Register, notify the patentee, and/or the licensee, and cause notice thereof to be published in the IPO Gazette. (Sec. 35-D, R.A. No. 165a)

Section 102. Licensee's Exemption from Liability. - Any person who works a patented product, substance and/or process under a license granted under this Chapter, shall be free from any liability for infringement: Provided however, That in the case of voluntary licensing, no collusion with the licensor is proven. This is without prejudice to the right of the rightful owner of the patent to recover from the licensor whatever he may have received as royalties under the license. (Sec. 35-E, R.A. No. 165a)

CHAPTER XI ASSIGNMENT AND TRANSMISSION OF RIGHTS

Section 103. Transmission of Rights. - 103.1. Patents or applications for patents and invention to which they relate, shall be protected in the same way as the rights of other property under the Civil Code.

103.2. Inventions and any right, title or interest in and to patents and inventions covered thereby, may be assigned or transmitted by inheritance or bequest or may be the subject of a license contract. (Sec. 50, R.A. No. 165a)

Section 104. Assignment of Inventions. - An assignment may be of the entire right,

title or interest in and to the patent and the invention covered thereby, or of an undivided share of the entire patent and invention, in which event the parties become joint owners thereof. An assignment may be limited to a specified territory. (Sec. 51, R.A. No. 165)

Section 105. Form of Assignment. - The assignment must be in writing,

acknowledged before a notary public or other officer authorized to administer oath or perform notarial acts, and certified under the hand and official seal of the notary or such other officer. (Sec. 52, R.A. No. 165)

Section 106. Recording. - 106.1. The Office shall record assignments, licenses and

other instruments relating to the transmission of any right, title or interest in and to inventions, and patents or application for patents or inventions to which they relate, which are presented in due form to the Office for registration, in books and records kept for the purpose. The original documents together with a signed duplicate thereof shall be filed, and the contents thereof should be kept confidential. If the original is not available, an authenticated copy thereof in duplicate may be filed. Upon recording, the Office shall retain the duplicate, return the original or the authenticated copy to the party who filed the same and notice of the recording shall be published in the IPO Gazette.

106.2. Such instruments shall be void as against any subsequent purchaser or mortgagee for valuable consideration and without notice, unless, it is so recorded in the Office, within three (3) months from the date of said instrument, or prior to the subsequent purchase or mortgage. (Sec. 53, R.A. No. 165a)

Section 107. Rights of Joint Owners. - If two (2) or more persons jointly own a patent and the invention covered thereby, either by the issuance of the patent in their joint favor or by reason of the assignment of an undivided share in the patent and invention or by reason of the succession in title to such share, each of the joint owners shall be entitled to personally make, use, sell, or import the invention for his own profit: Provided, however, That neither of the joint owners shall be entitled to grant licenses or to assign his right, title or interest or part thereof without the consent of the other owner or owners, or without proportionally dividing the proceeds with such other owner or owners. (Sec. 54, R.A. No. 165)

CHAPTER XII REGISTRATION OF UTILITY MODELS

Section 108. Applicability of Provisions Relating to Patents. - 108.1. Subject to

Section 109, the provisions governing patents shall apply, mutatis mutandis, to the registration of utility models.

108.2. Where the right to a patent conflicts with the right to a utility model registration in the case referred to in Section 29, the said provision shall apply as if the word "patent" were replaced by the words "patent or utility model registration". (Sec. 55, R.A. No. 165a)

Section 109. Special Provisions Relating to Utility Models. - 109.1. (a) An invention

qualifies for registration as a utility model if it is new and industrially applicable.

(b) Section 21, "Patentable Inventions", shall apply except the reference to inventive step as a condition of protection.

109.2. Sections 43 to 49 shall not apply in the case of applications for registration of a utility model.

74 109.3. A utility model registration shall expire, without any possibility of renewal, at the end of the seventh year after the date of the filing of the application.

109.4. In proceedings under Sections 61 to 64, the utility model registration shall be canceled on the following grounds:

(a) That the claimed invention does not qualify for registration as a utility model and does not meet the requirements of registrability, in particular having regard to Subsection 109.1 and Sections 22, 23, 24 and 27;

(b) That the description and the claims do not comply with the prescribed requirements;

(c) That any drawing which is necessary for the understanding of the invention has not been furnished;

(d) That the owner of the utility model registration is not the inventor or his successor in title. (Secs. 55, 56, and 57, R.A. No. 165a)

Section 110. Conversion of Patent Applications or Applications for Utility Model

Registration. - 110.1. At any time before the grant or refusal of a patent, an applicant for a patent may, upon payment of the prescribed fee, convert his application into an application for registration of a utility model, which shall be accorded the filing date of the initial application. An application may be converted only once.

110.2. At any time before the grant or refusal of a utility model registration, an applicant for a utility model registration may, upon payment of the prescribed fee, convert his application into a patent application, which shall be accorded the filing date of the initial application. (Sec. 58, R.A. No. 165a)

Section 111. Prohibition against Filing of Parallel Applications. - An applicant may not file two (2) applications for the same subject, one for utility model registration and the other for the grant of a patent whether simultaneously or consecutively. (Sec. 59, R.A. No. 165a)

CHAPTER XIII INDUSTRIAL DESIGN

Section 112. Definition of Industrial Design. - An industrial design is any composition

of lines or colors or any three-dimensional form, whether or not associated-with lines or colors: Provided, That such composition or form gives a special appearance to and can serve as pattern for an industrial product or handicraft. (Sec. 55, R.A. No. 165a)

Section 113. Substantive Conditions for Protection. - 113.1. Only industrial designs

that are new or original shall benefit from protection under this Act.

113.2. Industrial designs dictated essentially by technical or functional considerations to obtain a technical result or those that are contrary to public order, health or morals shall not be protected. (n)

Section 114. Contents of the Application. - 114.1. Every application for registration of an industrial design shall contain:

(a) A request for registration of the industrial design;

(b) Information identifying the applicant;

(c) An indication of the kind of article of manufacture or handicraft to which the design shall be applied;

(d) A representation of the article of manufacture or handicraft by way of drawings, photographs or other adequate graphic representation of the design as applied to the article of manufacture or handicraft which clearly and fully discloses those features for which design protection is claimed; and

(e) The name and address of the creator, or where the applicant is not the creator, a statement indicating the origin of the right to the industrial design registration.

114.2. The application may be accompanied by a specimen of the article embodying the industrial design and shall be subject to the payment of the prescribed fee.(n)

Section 115. Several Industrial Designs in One Application. - Two (2) or more industrial designs may be the subject of the same application: Provided, That they relate to the same sub-class of the International Classification or to the same set or composition of articles. (n)

Section 116. Examination. - 116.1. The Office shall accord as the filing date the date of receipt of the application containing indications allowing the identity of the applicant to be established and a representation of the article embodying the industrial design or a pictorial representation thereof.

116.2. If the application does not meet these requirements the filing date should be that date when all the elements specified in Section 105 are filed or the mistakes corrected. Otherwise if the requirements are not complied within the prescribed period, the application shall be considered withdrawn.

116.3. After the application has been accorded a filing date and the required fees paid on time, the applicant shall comply with the requirements of Section 114 within the prescribed period, otherwise the application shall be considered withdrawn.

75 116.4. The Office shall examine whether the industrial design complies with requirements of Section 112 and Subsections 113.2 and 113.3. (n)

Section 117. Registration. - 117.1. Where the Office finds that the conditions referred

to in Section 113 are fulfilled, it shall order that registration be effected in the industrial design register and cause the issuance of an industrial design certificate of registration, otherwise, it shall refuse the application.

117.2. The form and contents of an industrial design certificate shall be established by the Regulations: Provided, That the name and address of the creator shall be mentioned in every case.

117.3. Registration shall be published in the form and within the period fixed by the Regulations.

117.4. The Office shall record in the register any change in the identity of the proprietor of the industrial design or his representative, if proof thereof is furnished to it. A fee shall be paid, with the request to record the change in the identity of the proprietor. If the fee is not paid, the request shall be deemed not to have been filed. In such case, the former proprietor and the former representative shall remain subject to the rights and obligations as provided in this Act.

117.5. Anyone may inspect the Register and the files of registered industrial designs including the files of cancellation proceedings. (n)

Section 118. The Term of Industrial Design Registration. - 118.1 The registration of

an industrial design shall be for a period of five (5) years from the filing date of the application.

118.2. The registration of an industrial design may be renewed for not more than two (2) consecutive periods of five (5) years each, by paying the renewal fee.

118.3. The renewal fee shall be paid within twelve (12) months preceding the expiration of the period of registration. However, a grace period of six (6) months shall be granted for payment of the fees after such expiration, upon payment of a surcharge

118.4. The Regulations shall fix the amount of renewal fee, the surcharge and other requirements regarding the recording of renewals of registration.

Section 119. Application of Other Sections and Chapters. - 119.1. The following provisions relating to patents shall apply mutatis mutandis to an industrial design registration:

Section 21 - Novelty:

Section 24 - Prior art: Provided, That the disclosure is contained in printed documents or in any tangible form;

Section 25 - Non-prejudicial Disclosure;

Section 27 - Inventions Created Pursuant to a Commission;

Section 28 - Right to a Patent;

Section 29 - First to File Rule;

Section 31

-

Right of Priority: Provided, That the application for industrial design shall be filed within six (6) months from the earliest filing date of the corresponding foreign application;

Section 33 - Appointment of Agent or Representative;

Section 51 - Refusal of the Application;

Sections 56 to 60 - Surrender, Correction of and Changes in Patent;

CHAPTER VII - Remedies of a Person with a Right to Patent;

CHAPTER VIII -

Rights of Patentees and Infringement of Patents; and

CHAPTER XI - Assignment and Transmission of Rights.

119.2. If the essential elements of an industrial design which is the subject of an application have been obtained from the creation of another person without his consent, protection under this Chapter cannot be invoked against the injured party. (n)

Section 120. Cancellation of Design Registration. - 120.1. At any time during the term

of the industrial design registration, any person upon payment of the required fee, may petition the Director of Legal Affairs to cancel the industrial design on any of the following grounds:

(a) If the subject matter of the industrial design is not registrable within the terms of Sections 112 and 113;

(b) If the subject matter is not new; or

(c) If the subject matter of the industrial design extends beyond the content of the application as originally filed.

120.2. Where the grounds for cancellation relate to a part of the industrial design, cancellation may be effected to such extent only. The restriction may be effected in the form of an alteration of the effected features of the design. (n)

PART III THE LAW ON TRADEMARKS, SERVICE MARKS AND TRADE NAMES

76 Section 121. Definitions. - As used in Part III, the following terms have the following

meanings:

121.1. "Mark" means any visible sign capable of distinguishing the goods (trademark) or services (service mark) of an enterprise and shall include a stamped or marked container of goods; (Sec. 38, R.A. No. 166a)

121.2. "Collective mark" means any visible sign designated as such in the application for registration and capable of distinguishing the origin or any other common characteristic, including the quality of goods or services of different enterprises which use the sign under the control of the registered owner of the collective mark; (Sec. 40, R.A. No. 166a)

121.3. "Trade name" means the name or designation identifying or distinguishing an enterprise; (Sec. 38, R.A. No. 166a)

121.4. "Bureau" means the Bureau of Trademarks;

121.5. "Director" means the Director of Trademarks;

121.6. "Regulations" means the Rules of Practice in Trademarks and Service Marks formulated by the Director of Trademarks and approved by the Director General; and

121.7. "Examiner" means the trademark examiner. (Sec. 38, R.A. No. 166a)

Section 122. How Marks are Acquired. - The rights in a mark shall be acquired

through registration made validly in accordance with the provisions of this law. (Sec. 2-A, R A. No. 166a)

Section 123. Registrability. - 123.1. A mark cannot be registered if it:

(a) Consists of immoral, deceptive or scandalous matter, or matter which may disparage or falsely suggest a connection with persons, living or dead, institutions, beliefs, or national symbols, or bring them into contempt or disrepute;

(b) Consists of the flag or coat of arms or other insignia of the Philippines or any of its political subdivisions, or of any foreign nation, or any simulation thereof;

(c) Consists of a name, portrait or signature identifying a particular living individual except by his written consent, or the name, signature, or portrait of a deceased President of the Philippines, during the life of his widow, if any, except by written consent of the widow;

(d) Is identical with a registered mark belonging to a different proprietor or a mark with an earlier filing or priority date, in respect of:

(i) The same goods or services, or

(ii) Closely related goods or services, or

(iii) If it nearly resembles such a mark as to be likely to deceive or cause confusion;

(e) Is identical with, or confusingly similar to, or constitutes a translation of a mark which is considered by the competent authority of the Philippines to be well-known internationally and in the Philippines, whether or not it is registered here, as being already the mark of a person other than the applicant for registration, and used for identical or similar goods or services: Provided, That in determining whether a mark is well-known, account shall be taken of the knowledge of the relevant sector of the public, rather than of the public at large, including knowledge in the Philippines which has been obtained as a result of the promotion of the mark;

(f) Is identical with, or confusingly similar to, or constitutes a translation of a mark considered well-known in accordance with the preceding paragraph, which is registered in the Philippines with respect to goods or services which are not similar to those with respect to which registration is applied for: Provided, That use of the mark in relation to those goods or services would indicate a connection between those goods or services, and the owner of the registered mark: Provided further, That the interests of the owner of the registered mark are likely to be damaged by such use;

(g) Is likely to mislead the public, particularly as to the nature, quality, characteristics or geographical origin of the goods or services;

(h) Consists exclusively of signs that are generic for the goods or services that they seek to identify;

(i) Consists exclusively of signs or of indications that have become customary or usual to designate the goods or services in everyday language or in bona fide and established trade practice;

(j) Consists exclusively of signs or of indications that may serve in trade to designate the kind, quality, quantity, intended purpose, value, geographical origin, time or production of the goods or rendering of the services, or other characteristics of the goods or services;

(k) Consists of shapes that may be necessitated by technical factors or by the nature of the goods themselves or factors that affect their intrinsic value;

77

(l) Consists of color alone, unless defined by a given form; or

(m) Is contrary to public order or morality.

123.2. As regards signs or devices mentioned in paragraphs (j), (k), and (l), nothing shall prevent the registration of any such sign or device which has become distinctive in relation to the goods for which registration is requested as a result of the use that have been made of it in commerce in the Philippines. The Office may accept as prima facie evidence that the mark has become distinctive, as used in connection with the applicant's goods or services in commerce, proof of substantially exclusive and continuous use thereof by the applicant in commerce in the Philippines for five (5) years before the date on which the claim of distinctiveness is made.

123.3. The nature of the goods to which the mark is applied will not constitute an obstacle to registration. (Sec. 4, R.A. No. 166a)

Section 124. Requirements of Application. - 124.1. The application for the registration

of the mark shall be in Filipino or in English and shall contain the following:

(a) A request for registration;

(b) The name and address of the applicant;

(c) The name of a State of which the applicant is a national or where he has domicile; and the name of a State in which the applicant has a real and effective industrial or commercial establishment, if any;

(d) Where the applicant is a juridical entity, the law under which it is organized and existing;

(e) The appointment of an agent or representative, if the applicant is not domiciled in the Philippines;

(f) Where the applicant claims the priority of an earlier application, an indication of:

i) The name of the State with whose national office the earlier application was filed or if filed with an office other than a national office, the name of that office,

ii) The date on which the earlier application was filed, and

iii) Where available, the application number of the earlier application;

(g) Where the applicant claims color as a distinctive feature of the mark, a statement to that effect as well as the name or names of the color or colors claimed and an indication, in respect of each color, of the principal parts of the mark which are in that color;

(h) Where the mark is a three-dimensional mark, a statement to that effect;

(i) One or more reproductions of the mark, as prescribed in the Regulations;

(j) A transliteration or translation of the mark or of some parts of the mark, as prescribed in the Regulations;

(k) The names of the goods or services for which the registration is sought, grouped according to the classes of the Nice Classification, together with the number of the class of the said Classification to which each group of goods or services belongs; and

(l) A signature by, or other self-identification of, the applicant or his representative.

124.2. The applicant or the registrant shall file a declaration of actual use of the mark with evidence to that effect, as prescribed by the Regulations within three (3) years from the filing date of the application. Otherwise, the application shall be refused or the mark shall be removed from the Register by the Director.

124.3. One (1) application may relate to several goods and/or services, whether they belong to one (1) class or to several classes of the Nice Classification.

124.4. If during the examination of the application, the Office finds factual basis to reasonably doubt the veracity of any indication or element in the application, it may require the applicant to submit sufficient evidence to remove the doubt. (Sec. 5, R.A. No. 166a)

Section 125. Representation; Address for Service. - If the applicant is not domiciled

or has no real and effective commercial establishment in the Philippines, he shall designate by a written document filed in the Office, the name and address of a Philippine resident who may be served notices or process in proceedings affecting the mark. Such notices or services may be served upon the person so designated by leaving a copy thereof at the address specified in the last designation filed. If the person so designated cannot be found at the address given in the last designation, such notice or process may be served upon the Director. (Sec. 3, R.A. No. 166a)

Section 126. Disclaimers. - The Office may allow or require the applicant to disclaim

an unregistrable component of an otherwise registrable mark but such disclaimer shall not prejudice or affect the applicant's or owner's rights then existing or thereafter arising in the disclaimed matter, nor such shall disclaimer prejudice or affect the

78 applicant's or owner's right on another application of later date if the disclaimed matter became distinctive of the applicant's or owner's goods, business or services. (Sec. 13, R.A. No. 166a)

Section 127. Filing Date. - 127.1. Requirements. - The filing date of an application shall be the date on which the Office received the following indications and elements in English or Filipino:

(a) An express or implicit indication that the registration of a mark is sought;

(b) The identity of the applicant;

(c) Indications sufficient to contact the applicant or his representative, if any;

(d) A reproduction of the mark whose registration is sought; and

(e) The list of the goods or services for which the registration is sought.

127.2. No filing date shall be accorded until the required fee is paid. (n)

Section 128. Single Registration for Goods and/or Services. - Where goods and/or

services belonging to several classes of the Nice Classification have been included in one (1) application, such an application shall result in one registration. (n)

Section 129. Division of Application. - Any application referring to several goods or

services, hereafter referred to as the "initial application," may be divided by the applicant into two (2) or more applications, hereafter referred to as the "divisional applications," by distributing among the latter the goods or services referred to in the initial application. The divisional applications shall preserve the filing date of the initial application or the benefit of the right of priority. (n)

Section 130. Signature and Other Means of Self-Identification. - 130.1. Where a

signature is required, the Office shall accept:

(a) A hand-written signature; or

(b) The use of other forms of signature, such as a printed or stamped signature, or the use of a seal instead of a hand-written signature: Provided, That where a seal is used, it should be accompanied by an indication in letters of the name of the signatory.

130.2. The Office shall accept communications to it by telecopier, or by electronic means subject to the conditions or requirements that will be prescribed by the Regulations. When communications are made by telefacsimile, the reproduction of

the signature, or the reproduction of the seal together with, where required, the indication in letters of the name of the natural person whose seal is used, appears. The original communications must be received by the Office within thirty (30) days from date of receipt of the telefacsimile.

130.3. No attestation, notarization, authentication, legalization or other certification of any signature or other means of self-identification referred to in the preceding paragraphs, will be required, except, where the signature concerns the surrender of a registration. (n)

Section 131. Priority Right. - 131.1. An application for registration of a mark filed in

the Philippines by a person referred to in Section 3, and who previously duly filed an application for registration of the same mark in one of those countries, shall be considered as filed as of the day the application was first filed in the foreign country.

131.2. No registration of a mark in the Philippines by a person described in this section shall be granted until such mark has been registered in the country of origin of the applicant.

131.3. Nothing in this section shall entitle the owner of a registration granted under this section to sue for acts committed prior to the date on which his mark was registered in this country: Provided, That, notwithstanding the foregoing, the owner of a well-known mark as defined in Section 123.1(e) of this Act, that is not registered in the Philippines, may, against an identical or confusingly similar mark, oppose its registration, or petition the cancellation of its registration or sue for unfair competition, without prejudice to availing himself of other remedies provided for under the law.

131.4. In like manner and subject to the same conditions and requirements, the right provided in this section may be based upon a subsequent regularly filed application in the same foreign country: Provided, That any foreign application filed prior to such subsequent application has been withdrawn, abandoned, or otherwise disposed of, without having been laid open to public inspection and without leaving any rights outstanding, and has not served, nor thereafter shall serve, as a basis for claiming a right of priority. (Sec. 37, R.A. No. 166a)

Section 132. Application Number and Filing Date. - 132.1. The Office shall examine

whether the application satisfies the requirements for the grant of a filing date as provided in Section 127 and Regulations relating thereto. If the application does not satisfy the filing requirements, the Office shall notify the applicant who shall within a period fixed by the Regulations complete or correct the application as required, otherwise, the application shall be considered withdrawn.

132.2 Once an application meets the filing requirements of Section 127, it shall be numbered in the sequential order, and the applicant shall be informed of the application number and the filing date of the application will be deemed to have been abandoned. (n)

79 Section 133. Examination and Publication. - 133.1. Once the application meets the

filing requirements of Section 127, the Office shall examine whether the application meets the requirements of Section 124 and the mark as defined in Section 121 is registrable under Section 123.

133.2. Where the Office finds that the conditions referred to in Subsection 133.1 are fulfilled, it shall upon payment of the prescribed fee, forthwith cause the application, as filed, to be published in the prescribed manner.

133.3. If after the examination, the applicant is not entitled to registration for any reason, the Office shall advise the applicant thereof and the reasons therefor. The applicant shall have a period of four (4) months in which to reply or amend his application, which shall then be re-examined. The Regulations shall determine the procedure for the re-examination or revival of an application as well as the appeal to the Director of Trademarks from any final action by the Examiner.

133.4. An abandoned application may be revived as a pending application within three (3) months from the date of abandonment, upon good cause shown and the payment of the required fee.

133.5. The final decision of refusal of the Director of Trademarks shall be appealable to the Director General in accordance with the procedure fixed by the Regulations. (Sec. 7, R.A. No. 166a)

Section 134. Opposition. - Any person who believes that he would be damaged by

the registration of a mark may, upon payment of the required fee and within thirty (30) days after the publication referred to in Subsection 133.2, file with the Office an opposition to the application. Such opposition shall be in writing and verified by the oppositor or by any person on his behalf who knows the facts, and shall specify the grounds on which it is based and include a statement of the facts relied upon. Copies of certificates of registration of marks registered in other countries or other supporting documents mentioned in the opposition shall be filed therewith, together with the translation in English, if not in the English language. For good cause shown and upon payment of the required surcharge, the time for filing an opposition may be extended by the Director of Legal Affairs, who shall notify the applicant of such extension. The Regulations shall fix the maximum period of time within which to file the opposition. (Sec. 8, R.A. No. 165a)

Section 135. Notice and Hearing. - Upon the filing of an opposition, the Office shall

serve notice of the filing on the applicant, and of the date of the hearing thereof upon the applicant and the oppositor and all other persons having any right, title or interest in the mark covered by the application, as appear of record in the Office. (Sec. 9, R.A. No. 165)

Section 136. Issuance and Publication of Certificate. - When the period for filing the

opposition has expired, or when the Director of Legal Affairs shall have denied the opposition, the Office upon payment of the required fee, shall issue the certificate of

registration. Upon issuance of a certificate of registration, notice thereof making reference to the publication of the application shall be published in the IPO Gazette. (Sec. 10, R.A. No. 165)

Section 137. Registration of Mark and Issuance of a Certificate to the Owner or his Assignee. - 137.1. The Office shall maintain a Register in which shall be registered marks, numbered in the order of their registration, and all transactions in respect of each mark, required to be recorded by virtue of this law.

137.2. The registration of a mark shall include a reproduction of the mark and shall mention: its number; the name and address of the registered owner and, if the registered owner's address is outside the country, his address for service within the country; the dates of application and registration; if priority is claimed, an indication of this fact, and the number, date and country of the application, basis of the priority claims; the list of goods or services in respect of which registration has been granted, with the indication of the corresponding class or classes; and such other data as the Regulations may prescribe from time to time.

137.3. A certificate of registration of a mark may be issued to the assignee of the applicant: Provided, That the assignment is recorded in the Office. In case of a change of ownership, the Office shall at the written request signed by the owner, or his representative, or by the new owner, or his representative and upon a proper showing and the payment of the prescribed fee, issue to such assignee a new certificate of registration of the said mark in the name of such assignee, and for the unexpired part of the original period.

137.4. The Office shall record any change of address, or address for service, which shall be notified to it by the registered owner.

137.5. In the absence of any provision to the contrary in this Act, communications to be made to the registered owner by virtue of this Act shall be sent to him at his last recorded address and, at the same, at his last recorded address for service. (Sec. 19, R.A. No. 166a)

Section 138. Certificates of Registration. - A certificate of registration of a mark shall

be prima facie evidence of the validity of the registration, the registrant's ownership of the mark, and of the registrant's exclusive right to use the same in connection with the goods or services and those that are related thereto specified in the certificate. (Sec. 20, R.A. No. 165)

Section 139. Publication of Registered Marks; Inspection of Register. - 139.1. The

Office shall publish, in the form and within the period fixed by the Regulations, the marks registered, in the order of their registration, reproducing all the particulars referred to in Subsection 137.2.

80 139.2. Marks registered at the Office may be inspected free of charge and any person may obtain copies thereof at his own expense. This provision shall also be applicable to transactions recorded in respect of any registered mark. (n)

Section 140. Cancellation upon Application by Registrant; Amendment or Disclaimer of Registration. - Upon application of the registrant, the Office may permit any registration to be surrendered for cancellation, and upon cancellation the appropriate entry shall be made in the records of the Office. Upon application of the registrant and payment of the prescribed fee, the Office for good cause may permit any registration to be amended or to be disclaimed in part: Provided, That the amendment or disclaimer does not alter materially the character of the mark. Appropriate entry shall be made in the records of the Office upon the certificate of registration or, if said certificate is lost or destroyed, upon a certified copy thereof (Sec. 14, R.A. No. 166)

Section 141. Sealed and Certified Copies as Evidence. - Copies of any records,

books, papers, or drawings belonging to the Office relating to marks, and copies of registrations, when authenticated by the seal of the Office and certified by the Director of the Administrative, Financial and Human Resource Development Service Bureau or in his name by an employee of the Office duly authorized by said Director, shall be evidence in all cases wherein the originals would be evidence; and any person who applies and pays the prescribed fee shall secure such copies. (n)

Section 142. Correction of Mistakes Made by the Office. - Whenever a material

mistake in a registration incurred through the fault of the Office is clearly disclosed by the records of the Office, a certificate stating the fact and nature of such mistake shall be issued without charge, recorded and a printed copy thereof shall be attached to each printed copy of the registration. Such corrected registration shall thereafter have the same effect as the original certificate; or in the discretion of the Director of the Administrative, Financial and Human Resource Development Service Bureau a new certificate of registration may be issued without charge. All certificates of correction heretofore issued in accordance with the Regulations and the registration to which they are attached shall have the same force and effect as if such certificates and their issuance had been authorized by this Act. (n)

Section 143. Correction of Mistakes Made by Applicant. - Whenever a mistake is made in a registration and such mistake occurred in good faith through the fault of the applicant, the Office may issue a certificate upon the payment of the prescribed fee: Provided, That the correction does not involve any change in the registration that requires republication of the mark. (n)

Section 144. Classification of Goods and Services. - 144.1. Each registration, and

any publication of the Office which concerns an application or registration effected by the Office shall indicate the goods or services by their names, grouped according to the classes of the Nice Classification, and each group shall be preceded by the number of the class of that Classification to which that group of goods or services belongs, presented in the order of the classes of the said Classification.

144.2. Goods or services may not be considered as being similar or dissimilar to each other on the ground that, in any registration or publication by the Office, they appear in different classes of the Nice Classification. (Sec. 6, R.A. No. 166a)

Section 145. Duration. - A certificate of registration shall remain in force for ten (10) years: Provided, That the registrant shall file a declaration of actual use and evidence to that effect, or shall show valid reasons based on the existence of obstacles to such use, as prescribed by the Regulations, within one (1) year from the fifth anniversary of the date of the registration of the mark. Otherwise, the mark shall be removed from the Register by the Office. (Sec. 12, R.A. No. 166a)

Section 146. Renewal. - 146.1. A certificate of registration may be renewed for

periods of ten (10) years at its expiration upon payment of the prescribed fee and upon filing of a request. The request shall contain the following indications:

(a) An indication that renewal is sought;

(b) The name and address of the registrant or his successor-in-interest, hereafter referred to as the "right holder";

(c) The registration number of the registration concerned;

(d) The filing date of the application which resulted in the registration concerned to be renewed;

(e) Where the right holder has a representative, the name and address of that representative;

(f) The names of the recorded goods or services for which the renewal is requested or the names of the recorded goods or services for which the renewal is not requested, grouped according to the classes of the Nice Classification to which that group of goods or services belongs and presented in the order of the classes of the said Classification; and

(g) A signature by the right holder or his representative.

146.2. Such request shall be in Filipino or English and may be made at any time within six (6) months before the expiration of the period for which the registration was issued or renewed, or it may be made within six (6) months after such expiration on payment of the additional fee herein prescribed.

146.3. If the Office refuses to renew the registration, it shall notify the registrant of his refusal and the reasons therefor.

81 146.4. An applicant for renewal not domiciled in the Philippines shall be subject to and comply with the requirements of this Act. (Sec. 15, R.A. No. 166a)

Section 147. Rights Conferred. - 147.1. The owner of a registered mark shall have

the exclusive right to prevent all third parties not having the owner's consent from using in the course of trade identical or similar signs or containers for goods or services which are identical or similar to those in respect of which the trademark is registered where such use would result in a likelihood of confusion. In case of the use of an identical sign for identical goods or services, a likelihood of confusion shall be presumed.

147.2. The exclusive right of the owner of a well-known mark defined in Subsection 123.1(e) which is registered in the Philippines, shall extend to goods and services which are not similar to those in respect of which the mark is registered: Provided, That use of that mark in relation to those goods or services would indicate a connection between those goods or services and the owner of the registered mark: Provided further, That the interests of the owner of the registered mark are likely to be damaged by such use. (n)

Section 148. Use of Indications by Third Parties for Purposes Other than those for

which the Mark is Used. - Registration of the mark shall not confer on the registered owner the right to preclude third parties from using bona fide their names, addresses, pseudonyms, a geographical name, or exact indications concerning the kind, quality, quantity, destination, value, place of origin, or time of production or of supply, of their goods or services: Provided, That such use is confined to the purposes of mere identification or information and cannot mislead the public as to the source of the goods or services. (n)

Section 149. Assignment and Transfer of Application and Registration. - 149.1. An

application for registration of a mark, or its registration, may be assigned or transferred with or without the transfer of the business using the mark. (n)

149.2. Such assignment or transfer shall, however, be null and void if it is liable to mislead the public, particularly as regards the nature, source, manufacturing process, characteristics, or suitability for their purpose, of the goods or services to which the mark is applied.

149.3. The assignment of the application for registration of a mark, or of its registration, shall be in writing and require the signatures of the contracting parties. Transfers by mergers or other forms of succession may be made by any document supporting such transfer.

149.4. Assignments and transfers of registrations of marks shall be recorded at the Office on payment of the prescribed fee; assignment and transfers of applications for registration shall, on payment of the same fee, be provisionally recorded, and the mark, when registered, shall be in the name of the assignee or transferee.

149.5. Assignments and transfers shall have no effect against third parties until they are recorded at the Office. (Sec. 31, R.A. No. 166a)

Section 150. License Contracts. - 150.1. Any license contract concerning the

registration of a mark, or an application therefor, shall provide for effective control by the licensor of the quality of the goods or services of the licensee in connection with which the mark is used. If the license contract does not provide for such quality control, or if such quality control is not effectively carried out, the license contract shall not be valid.

150.2. A license contract shall be submitted to the Office which shall keep its contents confidential but shall record it and publish a reference thereto. A license contract shall have no effect against third parties until such recording is effected. The Regulations shall fix the procedure for the recording of the license contract. (n)

Section 151. Cancellation. - 151.1. A petition to cancel a registration of a mark under

this Act may be filed with the Bureau of Legal Affairs by any person who believes that he is or will be damaged by the registration of a mark under this Act as follows:

(a) Within five (5) years from the date of the registration of the mark under this Act.

(b) At any time, if the registered mark becomes the generic name for the goods or services, or a portion thereof, for which it is registered, or has been abandoned, or its registration was obtained fraudulently or contrary to the provisions of this Act, or if the registered mark is being used by, or with the permission of, the registrant so as to misrepresent the source of the goods or services on or in connection with which the mark is used. If the registered mark becomes the generic name for less than all of the goods or services for which it is registered, a petition to cancel the registration for only those goods or services may be filed. A registered mark shall not be deemed to be the generic name of goods or services solely because such mark is also used as a name of or to identify a unique product or service. The primary significance of the registered mark to the relevant public rather than purchaser motivation shall be the test for determining whether the registered mark has become the generic name of goods or services on or in connection with which it has been used. (n)

(c) At any time, if the registered owner of the mark without legitimate reason fails to use the mark within the Philippines, or to cause it to be used in the Philippines by virtue of a license during an uninterrupted period of three (3) years or longer.

151.2. Notwithstanding the foregoing provisions, the court or the administrative agency vested with jurisdiction to hear and adjudicate any action to enforce the rights to a registered mark shall likewise exercise jurisdiction to determine whether the registration of said mark may be cancelled in accordance with this Act. The filing of a

82 suit to enforce the registered mark with the proper court or agency shall exclude any other court or agency from assuming jurisdiction over a subsequently filed petition to cancel the same mark. On the other hand, the earlier filing of petition to cancel the mark with the Bureau of Legal Affairs shall not constitute a prejudicial question that must be resolved before an action to enforce the rights to same registered mark may be decided. (Sec. 17, R.A. No. 166a)

Section 152. Non-use of a Mark When Excused. - 152.1. Non-use of a mark may be excused if caused by circumstances arising independently of the will of the trademark owner. Lack of funds shall not excuse non-use of a mark.

152.2. The use of the mark in a form different from the form in which it is registered, which does not alter its distinctive character, shall not be ground for cancellation or removal of the mark and shall not diminish the protection granted to the mark.

152.3. The use of a mark in connection with one or more of the goods or services belonging to the class in respect of which the mark is registered shall prevent its cancellation or removal in respect of all other goods or services of the same class.

152.4. The use of a mark by a company related with the registrant or applicant shall inure to the latter's benefit, and such use shall not affect the validity of such mark or of its registration: Provided, That such mark is not used in such manner as to deceive the public. If use of a mark by a person is controlled by the registrant or applicant with respect to the nature and quality of the goods or services, such use shall inure to the benefit of the registrant or applicant. (n)

Section 153. Requirements of Petition; Notice and Hearing. - Insofar as applicable,

the petition for cancellation shall be in the same form as that provided in Section 134 hereof, and notice and hearing shall be as provided in Section 135 hereof.

Section 154. Cancellation of Registration. - If the Bureau of Legal Affairs finds that a

case for cancellation has been made out, it shall order the cancellation of the registration. When the order or judgment becomes final, any right conferred by such registration upon the registrant or any person in interest of record shall terminate. Notice of cancellation shall be published in the IPO Gazette. (Sec. 19, R.A. No. 166a)

Section 155. Remedies; Infringement. - Any person who shall, without the consent of

the owner of the registered mark:

155.1. Use in commerce any reproduction, counterfeit, copy, or colorable imitation of a registered mark or the same container or a dominant feature thereof in connection with the sale, offering for sale, distribution, advertising of any goods or services including other preparatory steps necessary to carry out the sale of any goods or services on or in connection with which such use is likely to cause confusion, or to cause mistake, or to deceive; or

155.2. Reproduce, counterfeit, copy or colorably imitate a registered mark or a dominant feature thereof and apply such reproduction, counterfeit, copy or colorable imitation to labels, signs, prints, packages, wrappers, receptacles or advertisements intended to be used in commerce upon or in connection with the sale, offering for sale, distribution, or advertising of goods or services on or in connection with which such use is likely to cause confusion, or to cause mistake, or to deceive, shall be liable in a civil action for infringement by the registrant for the remedies hereinafter set forth: Provided, That the infringement takes place at the moment any of the acts stated in Subsection 155.1 or this subsection are committed regardless of whether there is actual sale of goods or services using the infringing material. (Sec. 22, R.A. No 166a)

Section 156. Actions, and Damages and Injunction for Infringement. - 156.1. The

owner of a registered mark may recover damages from any person who infringes his rights, and the measure of the damages suffered shall be either the reasonable profit which the complaining party would have made, had the defendant not infringed his rights, or the profit which the defendant actually made out of the infringement, or in the event such measure of damages cannot be readily ascertained with reasonable certainty, then the court may award as damages a reasonable percentage based upon the amount of gross sales of the defendant or the value of the services in connection with which the mark or trade name was used in the infringement of the rights of the complaining party. (Sec. 23, first par., R.A. No. 166a)

156.2. On application of the complainant, the court may impound during the pendency of the action, sales invoices and other documents evidencing sales. (n)

156.3. In cases where actual intent to mislead the public or to defraud the complainant is shown, in the discretion of the court, the damages may be doubled. (Sec. 23, first par., R.A. No. 166)

156.4. The complainant, upon proper showing, may also be granted injunction. (Sec. 23, second par., R.A. No. 166a)

Section 157. Power of Court to Order Infringing Material Destroyed. - 157.1 In any

action arising under this Act, in which a violation of any right of the owner of the registered mark is established, the court may order that goods found to be infringing be, without compensation of any sort, disposed of outside the channels of commerce in such a manner as to avoid any harm caused to the right holder, or destroyed; and all labels, signs, prints, packages, wrappers, receptacles and advertisements in the possession of the defendant, bearing the registered mark or trade name or any reproduction, counterfeit, copy or colorable imitation thereof, all plates, molds, matrices and other means of making the same, shall be delivered up and destroyed.

157.2. In regard to counterfeit goods, the simple removal of the trademark affixed shall not be sufficient other than in exceptional cases which shall be determined by the Regulations, to permit the release of the goods into the channels of commerce. (Sec. 24, R.A. No. 166a)

83 Section 158. Damages; Requirement of Notice. - In any suit for infringement, the

owner of the registered mark shall not be entitled to recover profits or damages unless the acts have been committed with knowledge that such imitation is likely to cause confusion, or to cause mistake, or to deceive. Such knowledge is presumed if the registrant gives notice that his mark is registered by displaying with the mark the words '"Registered Mark" or the letter R within a circle or if the defendant had otherwise actual notice of the registration. (Sec. 21, R.A. No. 166a)

Section 159. Limitations to Actions for Infringement. - Notwithstanding any other

provision of this Act, the remedies given to the owner of a right infringed under this Act shall be limited as follows:

159.1. Notwithstanding the provisions of Section 155 hereof, a registered mark shall have no effect against any person who, in good faith, before the filing date or the priority date, was using the mark for the purposes of his business or enterprise: Provided, That his right may only be transferred or assigned together with his enterprise or business or with that part of his enterprise or business in which the mark is used.

159.2. Where an infringer who is engaged solely in the business of printing the mark or other infringing materials for others is an innocent infringer, the owner of the right infringed shall be entitled as against such infringer only to an injunction against future printing.

159.3. Where the infringement complained of is contained in or is part of paid advertisement in a newspaper, magazine, or other similar periodical or in an electronic communication, the remedies of the owner of the right infringed as against the publisher or distributor of such newspaper, magazine, or other similar periodical or electronic communication shall be limited to an injunction against the presentation of such advertising matter in future issues of such newspapers, magazines, or other similar periodicals or in future transmissions of such electronic communications. The limitations of this subparagraph shall apply only to innocent infringers: Provided, That such injunctive relief shall not be available to the owner of the right infringed with respect to an issue of a newspaper, magazine, or other similar periodical or an electronic communication containing infringing matter where restraining the dissemination of such infringing matter in any particular issue of such periodical or in an electronic communication would delay the delivery of such issue or transmission of such electronic communication is customarily conducted in accordance with the sound business practice, and not due to any method or device adopted to evade this section or to prevent or delay the issuance of an injunction or restraining order with respect to such infringing matter. (n)

Section 160. Right of Foreign Corporation to Sue in Trademark or Service Mark

Enforcement Action. - Any foreign national or juridical person who meets the requirements of Section 3 of this Act and does not engage in business in the Philippines may bring a civil or administrative action hereunder for opposition, cancellation, infringement, unfair competition, or false designation of origin and false

description, whether or not it is licensed to do business in the Philippines under existing laws. (Sec. 21-A, R.A. No. 166a)

Section 161. Authority to Determine Right to Registration. - In any action involving a

registered mark, the court may determine the right to registration, order the cancellation of a registration, in whole or in part, and otherwise rectify the register with respect to the registration of any party to the action in the exercise of this. Judgment and orders shall be certified by the court to the Director, who shall make appropriate entry upon the records of the Bureau, and shall be controlled thereby. (Sec. 25, R.A. No. 166a)

Section 162. Action for False or Fraudulent Declaration. - Any person who shall

procure registration in the Office of a mark by a false or fraudulent declaration or representation, whether oral or in writing, or by any false means, shall be liable in a civil action by any person injured thereby for any damages sustained in consequence thereof (Sec. 26, R.A. No. 166)

Section 163. Jurisdiction of Court. - All actions under Sections 150, 155, 164, and 166 to 169 shall be brought before the proper courts with appropriate jurisdiction under existing laws. (Sec. 27, R.A. No. 166)

Section 164. Notice of Filing Suit Given to the Director. - It shall be the duty of the

clerks of such courts within one (1) month after the filing of any action, suit, or proceeding involving a mark registered under the provisions of this Act, to notify the Director in writing setting forth: the names and addresses of the litigants and designating the number of the registration or registrations and within one (1) month after the judgment is entered or an appeal is taken, the clerk of court shall give notice thereof to the Office, and the latter shall endorse the same upon the filewrapper of the said registration or registrations and incorporate the same as a part of the contents of said filewrapper. (n)

Section 165. Trade Names or Business Names. - 165.1. A name or designation may not be used as a trade name if by its nature or the use to which such name or designation may be put, it is contrary to public order or morals and if, in particular, it is liable to deceive trade circles or the public as to the nature of the enterprise identified by that name.

165.2.(a) Notwithstanding any laws or regulations providing for any obligation to register trade names, such names shall be protected, even prior to or without registration, against any unlawful act committed by third parties.

(b) In particular, any subsequent use of the trade name by a third party, whether as a trade name or a mark or collective mark, or any such use of a similar trade name or mark, likely to mislead the public, shall be deemed unlawful.

84 165.3. The remedies provided for in Sections 153 to 156 and Sections 166 and 167 shall apply mutatis mutandis.

165.4. Any change in the ownership of a trade name shall be made with the transfer of the enterprise or part thereof identified by that name. The provisions of Subsections 149.2 to 149.4 shall apply mutatis mutandis.

Section 166. Goods Bearing Infringing Marks or Trade Names. - No article of

imported merchandise which shall copy or simulate the name of any domestic product, or manufacturer, or dealer, or which shall copy or simulate a mark registered in accordance with the provisions of this Act, or shall bear a mark or trade name calculated to induce the public to believe that the article is manufactured in the Philippines, or that it is manufactured in any foreign country or locality other than the country or locality where it is in fact manufactured, shall be admitted to entry at any customhouse of the Philippines. In order to aid the officers of the customs service in enforcing this prohibition, any person who is entitled to the benefits of this Act, may require that his name and residence, and the name of the locality in which his goods are manufactured, a copy of the certificate of registration of his mark or trade name, to be recorded in books which shall be kept for this purpose in the Bureau of Customs, under such regulations as the Collector of Customs with the approval of the Secretary of Finance shall prescribe, and may furnish to the said Bureau facsimiles of his name, the name of the locality in which his goods are manufactured, or his registered mark or trade name, and thereupon the Collector of Customs shall cause one (1) or more copies of the same to be transmitted to each collector or to other proper officer of the Bureau of Customs. (Sec. 35, R.A. No. 166)

Section 167. Collective Marks. - 167.1. Subject to Subsections 167.2 and 167.3,

Sections 122 to 164 and 166 shall apply to collective marks, except that references therein to "mark" shall be read as "collective mark".

167.2.(a) An application for registration of a collective mark shall designate the mark as a collective mark and shall be accompanied by a copy of the agreement, if any, governing the use of the collective mark.

(b) The registered owner of a collective mark shall notify the Director of any changes made in respect of the agreement referred to in paragraph (a).

167.3. In addition to the grounds provided in Section 149, the Court shall cancel the registration of a collective mark if the person requesting the cancellation proves that only the registered owner uses the mark, or that he uses or permits its use in contravention of the agreements referred to in Subsection 166.2 or that he uses or permits its use in a manner liable to deceive trade circles or the public as to the origin or any other common characteristics of the goods or services concerned.

167.4. The registration of a collective mark, or an application therefor shall not be the subject of a license contract. (Sec. 40, R.A. No. 166a)

Section 168. Unfair Competition, Rights, Regulation and Remedies. - 168.1. A

person who has identified in the mind of the public the goods he manufactures or deals in, his business or services from those of others, whether or not a registered mark is employed, has a property right in the goodwill of the said goods, business or services so identified, which will be protected in the same manner as other property rights.

168.2. Any person who shall employ deception or any other means contrary to good faith by which he shall pass off the goods manufactured by him or in which he deals, or his business, or services for those of the one having established such goodwill, or who shall commit any acts calculated to produce said result, shall be guilty of unfair competition, and shall be subject to an action therefor.

168.3. In particular, and without in any way limiting the scope of protection against unfair competition, the following shall be deemed guilty of unfair competition:

(a) Any person, who is selling his goods and gives them the general appearance of goods of another manufacturer or dealer, either as to the goods themselves or in the wrapping of the packages in which they are contained, or the devices or words thereon, or in any other feature of their appearance, which would be likely to influence purchasers to believe that the goods offered are those of a manufacturer or dealer, other than the actual manufacturer or dealer, or who otherwise clothes the goods with such appearance as shall deceive the public and defraud another of his legitimate trade, or any subsequent vendor of such goods or any agent of any vendor engaged in selling such goods with a like purpose;

(b) Any person who by any artifice, or device, or who employs any other means calculated to induce the false belief that such person is offering the services of another who has identified such services in the mind of the public; or

(c) Any person who shall make any false statement in the course of trade or who shall commit any other act contrary to good faith of a nature calculated to discredit the goods, business or services of another.

168.4. The remedies provided by Sections 156, 157 and 161 shall apply mutatis mutandis. (Sec. 29, R.A. No. 166a)

Section 169. False Designations of Origin; False Description or Representation. -

169.1. Any person who, on or in connection with any goods or services, or any container for goods, uses in commerce any word, term, name, symbol, or device, or any combination thereof, or any false designation of origin, false or misleading description of fact, or false or misleading representation of fact, which:

85

(a) Is likely to cause confusion, or to cause mistake, or to deceive as to the affiliation, connection, or association of such person with another person, or as to the origin, sponsorship, or approval of his or her goods, services, or commercial activities by another person; or

(b) In commercial advertising or promotion, misrepresents the nature, characteristics, qualities, or geographic origin of his or her or another person's goods, services, or commercial activities, shall be liable to a civil action for damages and injunction provided in Sections 156 and 157 of this Act by any person who believes that he or she is or is likely to be damaged by such act.

169.2. Any goods marked or labelled in contravention of the provisions of this Section shall not be imported into the Philippines or admitted entry at any customhouse of the Philippines. The owner, importer, or consignee of goods refused entry at any customhouse under this section may have any recourse under the customs revenue laws or may have the remedy given by this Act in cases involving goods refused entry or seized. (Sec. 30, R.A. No. 166a)

Section 170. Penalties. - Independent of the civil and administrative sanctions

imposed by law, a criminal penalty of imprisonment from two (2) years to five (5) years and a fine ranging from Fifty thousand pesos (P50,000) to Two hundred thousand pesos(P200,000), shall be imposed on any person who is found guilty of committing any of the acts mentioned in Section 155, Section 168 and Subsection 169.1. (Arts. 188 and 189, Revised Penal Code)

PART IV THE LAW ON COPYRIGHT

CHAPTER I PRELIMINARY PROVISIONS

Section 171. Definitions. - For the purpose of this Act, the following terms have the following meaning:

171.1. "Author" is the natural person who has created the work;

171.2. A "collective work" is a work which has been created by two (2) or more natural persons at the initiative and under the direction of another with the understanding that it will be disclosed by the latter under his own name and that contributing natural persons will not be identified;

171.3. "Communication to the public" or "communicate to the public" means the making of a work available to the public by wire or wireless means in such a way that members of the public may access these works from a place and time individually chosen by them;

171.4. A "computer" is an electronic or similar device having information-processing capabilities, and a "computer program" is a set of instructions expressed in words, codes, schemes or in any other form, which is capable when incorporated in a medium that the computer can read, of causing the computer to perform or achieve a particular task or result;

171.5. "Public lending" is the transfer of possession of the original or a copy of a work or sound recording for a limited period, for non-profit purposes, by an institution the services of which are available to the public, such as public library or archive;

171.6. "Public performance", in the case of a work other than an audiovisual work, is the recitation, playing, dancing, acting or otherwise performing the work, either directly or by means of any device or process; in the case of an audiovisual work, the showing of its images in sequence and the making of the sounds accompanying it audible; and, in the case of a sound recording, making the recorded sounds audible at a place or at places where persons outside the normal circle of a family and that family's closest social acquaintances are or can be present, irrespective of whether they are or can be present at the same place and at the same time, or at different places and/or at different times, and where the performance can be perceived without the need for communication within the meaning of Subsection 171.3;

171.7. "Published works" means works, which, with the consent of the authors, are made available to the public by wire or wireless means in such a way that members of the public may access these works from a place and time individually chosen by them: Provided, That availability of such copies has been such, as to satisfy the reasonable requirements of the public, having regard to the nature of the work;

171.8. "Rental" is the transfer of the possession of the original or a copy of a work or a sound recording for a limited period of time, for profit-making purposes;

171.9. "Reproduction" is the making of one (1) or more copies of a work or a sound recording in any manner or form (Sec. 41 (E), P.D. No. 49 a);

171.10. A "work of applied art" is an artistic creation with utilitarian functions or incorporated in a useful article, whether made by hand or produced on an industrial scale;

171.11. A "work of the Government of the Philippines" is a work created by an officer or employee of the Philippine Government or any of its subdivisions and instrumentalities, including government-owned or controlled corporations as a part of his regularly prescribed official duties.

CHAPTER II ORIGINAL WORKS

86 Section 172. Literary and Artistic Works. - 172.1. Literary and artistic works,

hereinafter referred to as "works", are original intellectual creations in the literary and artistic domain protected from the moment of their creation and shall include in particular:

(a) Books, pamphlets, articles and other writings;

(b) Periodicals and newspapers;

(c) Lectures, sermons, addresses, dissertations prepared for oral delivery, whether or not reduced in writing or other material form;

(d) Letters;

(e) Dramatic or dramatico-musical compositions; choreographic works or entertainment in dumb shows;

(f) Musical compositions, with or without words;

(g) Works of drawing, painting, architecture, sculpture, engraving, lithography or other works of art; models or designs for works of art;

(h) Original ornamental designs or models for articles of manufacture, whether or not registrable as an industrial design, and other works of applied art;

(i) Illustrations, maps, plans, sketches, charts and three-dimensional works relative to geography, topography, architecture or science;

(j) Drawings or plastic works of a scientific or technical character;

(k) Photographic works including works produced by a process analogous to photography; lantern slides;

(l) Audiovisual works and cinematographic works and works produced by a process analogous to cinematography or any process for making audio-visual recordings;

(m) Pictorial illustrations and advertisements;

(n) Computer programs; and

(o) Other literary, scholarly, scientific and artistic works.

172.2. Works are protected by the sole fact of their creation, irrespective of their mode or form of expression, as well as of their content, quality and purpose. (Sec. 2, P.D. No. 49a)

CHAPTER III DERIVATIVE WORKS

Section 173. Derivative Works. - 173.1. The following derivative works shall also be

protected by copyright:

(a) Dramatizations, translations, adaptations, abridgments, arrangements, and other alterations of literary or artistic works; and

(b) Collections of literary, scholarly or artistic works, and compilations of data and other materials which are original by reason of the selection or coordination or arrangement of their contents. (Sec. 2, [P] and [Q], P.D. No. 49)

173.2. The works referred to in paragraphs (a) and (b) of Subsection 173.1 shall be protected as new works: Provided however, That such new work shall not affect the force of any subsisting copyright upon the original works employed or any part thereof, or be construed to imply any right to such use of the original works, or to secure or extend copyright in such original works. (Sec. 8, P.D. 49; Art. 10, TRIPS)

Section 174. Published Edition of Work. - In addition to the right to publish granted by the author, his heirs, or assigns, the publisher shall have a copyright consisting merely of the right of reproduction of the typographical arrangement of the published edition of the work. (n)

CHAPTER IV WORKS NOT PROTECTED

Section 175. Unprotected Subject Matter. - Notwithstanding the provisions of

Sections 172 and 173, no protection shall extend, under this law, to any idea, procedure, system, method or operation, concept, principle, discovery or mere data as such, even if they are expressed, explained, illustrated or embodied in a work; news of the day and other miscellaneous facts having the character of mere items of press information; or any official text of a legislative, administrative or legal nature, as well as any official translation thereof (n)

Section 176. Works of the Government. - 176.1. No copyright shall subsist in any

work of the Government of the Philippines. However, prior approval of the government agency or office wherein the work is created shall be necessary for exploitation of such work for profit. Such agency or office may, among other things, impose as a condition the payment of royalties. No prior approval or conditions shall be required for the use of any purpose of statutes, rules and regulations, and

87 speeches, lectures, sermons, addresses, and dissertations, pronounced, read or rendered in courts of justice, before administrative agencies, in deliberative assemblies and in meetings of public character. (Sec. 9, first par., P.D. No. 49)

176.2. The author of speeches, lectures, sermons, addresses, and dissertations mentioned in the preceding paragraphs shall have the exclusive right of making a collection of his works. (n)

176.3. Notwithstanding the foregoing provisions, the Government is not precluded from receiving and holding copyrights transferred to it by assignment, bequest or otherwise; nor shall publication or republication by the Government in a public document of any work in which copyright is subsisting be taken to cause any abridgment or annulment of the copyright or to authorize any use or appropriation of such work without the consent of the copyright owner. (Sec. 9, third par., P.D. No. 49)

CHAPTER V COPYRIGHT OR ECONOMIC RIGHTS

Section 177. Copyright or Economic Rights. - Subject to the provisions of Chapter VIII, copyright or economic rights shall consist of the exclusive right to carry out, authorize or prevent the following acts:

177.1. Reproduction of the work or substantial portion of the work;

177.2. Dramatization, translation, adaptation, abridgment, arrangement or other transformation of the work;

177.3. The first public distribution of the original and each copy of the work by sale or other forms of transfer of ownership;

177.4. Rental of the original or a copy of an audiovisual or cinematographic work, a work embodied in a sound recording, a computer program, a compilation of data and other materials or a musical work in graphic form, irrespective of the ownership of the original or the copy which is the subject of the rental; (n)

177.5. Public display of the original or a copy of the work;

177.6. Public performance of the work; and

177.7. Other communication to the public of the work. (Sec. 5, P. D. No. 49a)

CHAPTER VI OWNERSHIP OF COPYRIGHT

Section 178. Rules on Copyright Ownership. - Copyright ownership shall be

governed by the following rules:

178.1 Subject to the provisions of this section, in the case of original literary and artistic works, copyright shall belong to the author of the work;

178.2. In the case of works of joint authorship, the co-authors shall be the original owners of the copyright and in the absence of agreement, their rights shall be governed by the rules on co-ownership. If, however, a work of joint authorship consists of parts that can be used separately and the author of each part can be identified, the author of each part shall be the original owner of the copyright in the part that he has created;

178.3. In the case of work created by an author during and in the course of his employment, the copyright shall belong to:

(a) The employee, if the creation of the object of copyright is not a part of his regular duties even if the employee uses the time, facilities and materials of the employer.

(b) The employer, if the work is the result of the performance of his regularly-assigned duties, unless there is an agreement, express or implied, to the contrary.

178.4. In the case of a work commissioned by a person other than an employer of the author and who pays for it and the work is made in pursuance of the commission, the person who so commissioned the work shall have ownership of the work, but the copyright thereto shall remain with the creator, unless there is a written stipulation to the contrary;

178.5. In the case of audiovisual work, the copyright shall belong to the producer, the author of the scenario, the composer of the music, the film director, and the author of the work so adapted. However, subject to contrary or other stipulations among the creators, the producer shall exercise the copyright to an extent required for the exhibition of the work in any manner, except for the right to collect performing license fees for the performance of musical compositions, with or without words, which are incorporated into the work; and

178.6. In respect of letters, the copyright shall belong to the writer subject to the provisions of Article 723 of the Civil Code. (Sec. 6, P.D. No. 49a)

Section 179. Anonymous and Pseudonymous Works. - For purposes of this Act, the

publishers shall be deemed to represent the authors of articles and other writings published without the names of the authors or under pseudonyms, unless the contrary appears, or the pseudonyms or adopted name leaves no doubt as to the

88 author's identity, or if the author of the anonymous works discloses his identity. (Sec. 7, P.D. 49)

CHAPTER VII TRANSFER OR ASSIGNMENT OF COPYRIGHT

Section 180. Rights of Assignee. - 180.1. The copyright may be assigned in whole or

in part. Within the scope of the assignment, the assignee is entitled to all the rights and remedies which the assignor had with respect to the copyright.

180.2. The copyright is not deemed assigned inter vivos in whole or in part unless there is a written indication of such intention.

180.3. The submission of a literary, photographic or artistic work to a newspaper, magazine or periodical for publication shall constitute only a license to make a single publication unless a greater right is expressly granted. If two (2) or more persons jointly own a copyright or any part thereof, neither of the owners shall be entitled to grant licenses without the prior written consent of the other owner or owners. (Sec. 15, P.D. No. 49a)

Section 181. Copyright and Material Object. - The copyright is distinct from the

property in the material object subject to it. Consequently, the transfer or assignment of the copyright shall not itself constitute a transfer of the material object. Nor shall a transfer or assignment of the sole copy or of one or several copies of the work imply transfer or assignment of the copyright. (Sec. 16, P.D. No. 49)

Section 182. Filing of Assignment or License. - An assignment or exclusive license

may be filed in duplicate with the National Library upon payment of the prescribed fee for registration in books and records kept for the purpose. Upon recording, a copy of the instrument shall be returned to the sender with a notation of the fact of record. Notice of the record shall be published in the IPO Gazette. (Sec. 19, P.D. No. 49a)

Section 183. Designation of Society. - The copyright owners or their heirs may

designate a society of artists, writers or composers to enforce their economic rights and moral rights on their behalf. (Sec. 32, P.D. No. 49a)

CHAPTER VIII LIMITATIONS ON COPYRIGHT

Section 184. Limitations on Copyright. - 184.1. Notwithstanding the provisions of Chapter V, the following acts shall not constitute infringement of copyright:

(a) The recitation or performance of a work, once it has been lawfully made accessible to the public, if done privately and free of charge or if made strictly for a charitable or religious institution or society; (Sec. 10(1), P.D. No. 49)

(b) The making of quotations from a published work if they are compatible with fair use and only to the extent justified for the purpose, including quotations from newspaper articles and periodicals in the form of press summaries: Provided, That the source and the name of the author, if appearing on the work, are mentioned; (Sec. 11, third par., P.D. No. 49)

(c) The reproduction or communication to the public by mass media of articles on current political, social, economic, scientific or religious topic, lectures, addresses and other works of the same nature, which are delivered in public if such use is for information purposes and has not been expressly reserved: Provided, That the source is clearly indicated; (Sec. 11, P.D. No. 49)

(d) The reproduction and communication to the public of literary, scientific or artistic works as part of reports of current events by means of photography, cinematography or broadcasting to the extent necessary for the purpose; (Sec. 12, P.D. No. 49)

(e) The inclusion of a work in a publication, broadcast, or other communication to the public, sound recording or film, if such inclusion is made by way of illustration for teaching purposes and is compatible with fair use: Provided, That the source and of the name of the author, if appearing in the work, are mentioned;

(f) The recording made in schools, universities, or educational institutions of a work included in a broadcast for the use of such schools, universities or educational institutions: Provided, That such recording must be deleted within a reasonable period after they were first broadcast: Provided, further, That such recording may not be made from audiovisual works which are part of the general cinema repertoire of feature films except for brief excerpts of the work;

(g) The making of ephemeral recordings by a broadcasting organization by means of its own facilities and for use in its own broadcast;

(h) The use made of a work by or under the direction or control of the Government, by the National Library or by educational, scientific or professional institutions where such use is in the public interest and is compatible with fair use;

(i) The public performance or the communication to the public of a work, in a place where no admission fee is charged in respect of such public performance or communication, by a club or institution for charitable or educational purpose only, whose aim is not profit making, subject to such other limitations as may be provided in the Regulations; (n)

89

(j) Public display of the original or a copy of the work not made by means of a film, slide, television image or otherwise on screen or by means of any other device or process: Provided, That either the work has been published, or, that the original or the copy displayed has been sold, given away or otherwise transferred to another person by the author or his successor in title; and

(k) Any use made of a work for the purpose of any judicial proceedings or for the giving of professional advice by a legal practitioner.

184.2. The provisions of this section shall be interpreted in such a way as to allow the work to be used in a manner which does not conflict with the normal exploitation of the work and does not unreasonably prejudice the right holder's legitimate interests.

Section 185. Fair Use of a Copyrighted Work. - 185.1. The fair use of a copyrighted

work for criticism, comment, news reporting, teaching including multiple copies for classroom use, scholarship, research, and similar purposes is not an infringement of copyright. Decompilation, which is understood here to be the reproduction of the code and translation of the forms of the computer program to achieve the inter-operability of an independently created computer program with other programs may also constitute fair use. In determining whether the use made of a work in any particular case is fair use, the factors to be considered shall include:

(a) The purpose and character of the use, including whether such use is of a commercial nature or is for non-profit educational purposes;

(b) The nature of the copyrighted work;

(c) The amount and substantiality of the portion used in relation to the copyrighted work as a whole; and

(d) The effect of the use upon the potential market for or value of the copyrighted work.

185.2. The fact that a work is unpublished shall not by itself bar a finding of fair use if such finding is made upon consideration of all the above factors.

Section 186. Work of Architecture. - Copyright in a work of architecture shall include

the right to control the erection of any building which reproduces the whole or a substantial part of the work either in its original form or in any form recognizably derived from the original: Provided, That the copyright in any such work shall not include the right to control the reconstruction or rehabilitation in the same style as the original of a building to which that copyright relates. (n)

Section 187. Reproduction of Published Work. - 187.1. Notwithstanding the provision of Section 177, and subject to the provisions of Subsection 187.2, the private

reproduction of a published work in a single copy, where the reproduction is made by a natural person exclusively for research and private study, shall be permitted, without the authorization of the owner of copyright in the work.

187.2. The permission granted under Subsection 187.1 shall not extend to the reproduction of:

(a) A work of architecture in the form of building or other construction;

(b) An entire book, or a substantial part thereof, or of a musical work in graphic form by reprographic means;

(c) A compilation of data and other materials;

(d) A computer program except as provided in Section 189; and

(e) Any work in cases where reproduction would unreasonably conflict with a normal exploitation of the work or would otherwise unreasonably prejudice the legitimate interests of the author. (n)

Section 188. Reprographic Reproduction by Libraries. - 188.1. Notwithstanding the

provisions of Subsection 177.6, any library or archive whose activities are not for profit may, without the authorization of the author of copyright owner, make a single copy of the work by reprographic reproduction:

(a) Where the work by reason of its fragile character or rarity cannot be lent to user in its original form;

(b) Where the works are isolated articles contained in composite works or brief portions of other published works and the reproduction is necessary to supply them, when this is considered expedient, to persons requesting their loan for purposes of research or study instead of lending the volumes or booklets which contain them; and

(c) Where the making of such a copy is in order to preserve and, if necessary in the event that it is lost, destroyed or rendered unusable, replace a copy, or to replace, in the permanent collection of another similar library or archive, a copy which has been lost, destroyed or rendered unusable and copies are not available with the publisher.

188.2. Notwithstanding the above provisions, it shall not be permissible to produce a volume of a work published in several volumes or to produce missing tomes or pages of magazines or similar works, unless the volume, tome or part is out of stock: Provided, That every library which, by law, is entitled to receive copies of a printed work, shall be entitled, when special reasons so require, to reproduce a copy of a

90 published work which is considered necessary for the collection of the library but which is out of stock. (Sec. 13, P.D. 49a)

Section 189. Reproduction of Computer Program. - 189.1. Notwithstanding the

provisions of Section 177, the reproduction in one (1) back-up copy or adaptation of a computer program shall be permitted, without the authorization of the author of, or other owner of copyright in, a computer program, by the lawful owner of that computer program: Provided, That the copy or adaptation is necessary for:

(a) The use of the computer program in conjunction with a computer for the purpose, and to the extent, for which the computer program has been obtained; and

(b) Archival purposes, and, for the replacement of the lawfully owned copy of the computer program in the event that the lawfully obtained copy of the computer program is lost, destroyed or rendered unusable.

189.2. No copy or adaptation mentioned in this Section shall be used for any purpose other than the ones determined in this Section, and any such copy or adaptation shall be destroyed in the event that continued possession of the copy of the computer program ceases to be lawful.

189.3. This provision shall be without prejudice to the application of Section 185 whenever appropriate. (n)

Section 190. Importation for Personal Purposes. - 190.1. Notwithstanding the

provision of Subsection 177.6, but subject to the limitation under the Subsection 185.2, the importation of a copy of a work by an individual for his personal purposes shall be permitted without the authorization of the author of, or other owner of copyright in, the work under the following circumstances:

(a) When copies of the work are not available in the Philippines and:

(i) Not more than one (1) copy at one time is imported for strictly individual use only; or

(ii) The importation is by authority of and for the use of the Philippine Government; or

(iii) The importation, consisting of not more than three (3) such copies or likenesses in any one invoice, is not for sale but for the use only of any religious, charitable, or educational society or institution duly incorporated or registered, or is for the encouragement of the fine arts, or for any state school, college, university, or free public library in the Philippines.

(b) When such copies form parts of libraries and personal baggage belonging to persons or families arriving from foreign countries and are not intended for sale: Provided, That such copies do not exceed three (3).

190.2. Copies imported as allowed by this Section may not lawfully be used in any way to violate the rights of owner the copyright or annul or limit the protection secured by this Act, and such unlawful use shall be deemed an infringement and shall be punishable as such without prejudice to the proprietor's right of action.

190.3. Subject to the approval of the Secretary of Finance, the Commissioner of Customs is hereby empowered to make rules and regulations for preventing the importation of articles the importation of which is prohibited under this Section and under treaties and conventions to which the Philippines may be a party and for seizing and condemning and disposing of the same in case they are discovered after they have been imported. (Sec. 30, P.D. No. 49)

CHAPTER IX DEPOSIT AND NOTICE

Section 191. Registration and Deposit with National Library and the Supreme Court

Library. - After the first public dissemination of performance by authority of the copyright owner of a work falling under Subsections 172.1, 172.2 and 172.3 of this Act, there shall, for the purpose of completing the records of the National Library and the Supreme Court Library, within three (3) weeks, be registered and deposited with it, by personal delivery or by registered mail two (2) complete copies or reproductions of the work in such form as the directors of said libraries may prescribe. A certificate of deposit shall be issued for which the prescribed fee shall be collected and the copyright owner shall be exempt from making additional deposit of the works with the National Library and the Supreme Court Library under other laws. If, within three (3) weeks after receipt by the copyright owner of a written demand from the directors for such deposit, the required copies or reproductions are not delivered and the fee is not paid, the copyright owner shall be liable to pay a fine equivalent to the required fee per month of delay and to pay to the National Library and the Supreme Court Library the amount of the retail price of the best edition of the work. Only the above mentioned classes of work shall be accepted for deposit by the National Library and the Supreme Court Library. (Sec. 26, P.D. No. 49a)

Section 192. Notice of Copyright. - Each copy of a work published or offered for sale

may contain a notice bearing the name of the copyright owner, and the year of its first publication, and, in copies produced after the creator's death, the year of such death. (Sec. 27, P.D. No. 49a)

CHAPTER X MORAL RIGHTS

91 Section 193. Scope of Moral Rights. - The author of a work shall, independently of

the economic rights in Section 177 or the grant of an assignment or license with respect to such right, have the right:

193.1. To require that the authorship of the works be attributed to him, in particular, the right that his name, as far as practicable, be indicated in a prominent way on the copies, and in connection with the public use of his work;

193.2. To make any alterations of his work prior to, or to withhold it from publication;

193.3. To object to any distortion, mutilation or other modification of, or other derogatory action in relation to, his work which would be prejudicial to his honor or reputation; and

193.4. To restrain the use of his name with respect to any work not of his own creation or in a distorted version of his work. (Sec. 34, P.D. No. 49)

Section 194. Breach of Contract. - An author cannot be compelled to perform his

contract to create a work or for the publication of his work already in existence. However, he may be held liable for damages for breach of such contract. (Sec. 35, P.D. No. 49)

Section 195. Waiver of Moral Rights. - An author may waive his rights mentioned in

Section 193 by a written instrument, but no such waiver shall be valid where its effects is to permit another:

195.1. To use the name of the author, or the title of his work, or otherwise to make use of his reputation with respect to any version or adaptation of his work which, because of alterations therein, would substantially tend to injure the literary or artistic reputation of another author; or

195.2. To use the name of the author with respect to a work he did not create. (Sec. 36, P.D. No. 49)

Section 196. Contribution to Collective Work. - When an author contributes to a

collective work, his right to have his contribution attributed to him is deemed waived unless he expressly reserves it. (Sec. 37, P.D. No. 49)

Section 197. Editing, Arranging and Adaptation of Work. - In the absence of a

contrary stipulation at the time an author licenses or permits another to use his work, the necessary editing, arranging or adaptation of such work, for publication, broadcast, use in a motion picture, dramatization, or mechanical or electrical reproduction in accordance with the reasonable and customary standards or requirements of the medium in which the work is to be used, shall not be deemed to contravene the author's rights secured by this chapter. Nor shall complete destruction

of a work unconditionally transferred by the author be deemed to violate such rights. (Sec. 38, P.D. No. 49)

Section 198. Term of Moral Rights. - 198.1. The rights of an author under this

chapter shall last during the lifetime of the author and for fifty (50) years after his death and shall not be assignable or subject to license. The person or persons to be charged with the posthumous enforcement of these rights shall be named in writing to be filed with the National Library. In default of such person or persons, such enforcement shall devolve upon either the author's heirs, and in default of the heirs, the Director of the National Library.

198.2. For purposes of this Section, "Person" shall mean any individual, partnership, corporation, association, or society. The Director of the National Library may prescribe reasonable fees to be charged for his services in the application of provisions of this Section. (Sec. 39, P.D. No. 49)

Section 199. Enforcement Remedies. - Violation of any of the rights conferred by this

Chapter shall entitle those charged with their enforcement to the same rights and remedies available to a copyright owner. In addition, damages which may be availed of under the Civil Code may also be recovered. Any damage recovered after the creator's death shall be held in trust for and remitted to his heirs, and in default of the heirs, shall belong to the government. (Sec. 40, P D No. 49)

CHAPTER XI RIGHTS TO PROCEEDS IN SUBSEQUENT TRANSFERS

Section 200. Sale or Lease of Work. - In every sale or lease of an original work of

painting or sculpture or of the original manuscript of a writer or composer, subsequent to the first disposition thereof by the author, the author or his heirs shall have an inalienable right to participate in the gross proceeds of the sale or lease to the extent of five percent (5%). This right shall exist during the lifetime of the author and for fifty (50) years after his death. (Sec. 31, P.D. No. 49)

Section 201. Works Not Covered. - The provisions of this Chapter shall not apply to

prints, etchings, engravings, works of applied art, or works of similar kind wherein the author primarily derives gain from the proceeds of reproductions. (Sec. 33, P.D. No. 49)

CHAPTER XII RIGHTS OF PERFORMERS, PRODUCERS OF SOUNDS RECORDINGS AND

BROADCASTING ORGANIZATIONS

Section 202. Definitions. - For the purpose of this Act, the following terms shall have the following meanings:

92 202.1. "Performers" are actors, singers, musicians, dancers, and other persons who act, sing, declaim, play in, interpret, or otherwise perform literary and artistic work;

202.2. "Sound recording" means the fixation of the sounds of a performance or of other sounds, or representation of sound, other than in the form of a fixation incorporated in a cinematographic or other audiovisual work;

202.3. An "audiovisual work or fixation" is a work that consists of a series of related images which impart the impression of motion, with or without accompanying sounds, susceptible of being made visible and, where accompanied by sounds, susceptible of being made audible;

202.4. "Fixation" means the embodiment of sounds, or of the representations thereof, from which they can be perceived, reproduced or communicated through a device;

202. 5. "Producer of a sound recording" means the person, or the legal entity, who or which takes the initiative and has the responsibility for the first fixation of the sounds of a performance or other sounds, or the representation of sounds;

202.6. "Publication of a fixed performance or a sound recording" means the offering of copies of the fixed performance or the sound recording to the public, with the consent of the right holder: Provided, That copies are offered to the public in reasonable quality;

202.7. "Broadcasting" means the transmission by wireless means for the public reception of sounds or of images or of representations thereof; such transmission by satellite is also "broadcasting" where the means for decrypting are provided to the public by the broadcasting organization or with its consent;

202.8. "Broadcasting organization" shall include a natural person or a juridical entity duly authorized to engage in broadcasting; and

202.9 "Communication to the public of a performance or a sound recording" means the transmission to the public, by any medium, otherwise than by broadcasting, of sounds of a performance or the representations of sounds fixed in a sound recording. For purposes of Section 209, "communication to the public" includes making the sounds or representations of sounds fixed in a sound recording audible to the public.

Section 203. Scope of Performers' Rights. - Subject to the provisions of Section 212,

performers shall enjoy the following exclusive rights:

203.1. As regards their performances, the right of authorizing:

(a) The broadcasting and other communication to the public of their performance; and

(b) The fixation of their unfixed performance.

203.2. The right of authorizing the direct or indirect reproduction of their performances fixed in sound recordings, in any manner or form;

203.3. Subject to the provisions of Section 206, the right of authorizing the first public distribution of the original and copies of their performance fixed in the sound recording through sale or rental or other forms of transfer of ownership;

203.4. The right of authorizing the commercial rental to the public of the original and copies of their performances fixed in sound recordings, even after distribution of them by, or pursuant to the authorization by the performer; and

203.5. The right of authorizing the making available to the public of their performances fixed in sound recordings, by wire or wireless means, in such a way that members of the public may access them from a place and time individually chosen by them. (Sec. 42, P.D. No. 49a)

Section 204. Moral Rights of Performers. - 204.1. Independently of a performer's

economic rights, the performer, shall, as regards his live aural performances or performances fixed in sound recordings, have the right to claim to be identified as the performer of his performances, except where the omission is dictated by the manner of the use of the performance, and to object to any distortion, mutilation or other modification of his performances that would be prejudicial to his reputation.

204.2. The rights granted to a performer in accordance with Subsection 203.1 shall be maintained and exercised fifty (50) years after his death, by his heirs, and in default of heirs, the government, where protection is claimed. (Sec. 43, P.D. No. 49)

Section 205. Limitation on Right. - 205.1. Subject to the provisions of Section 206, once the performer has authorized the broadcasting or fixation of his performance, the provisions of Sections 203 shall have no further application.

205.2. The provisions of Section 184 and Section 185 shall apply mutatis mutandis to performers. (n)

Section 206. Additional Remuneration for Subsequent Communications or

Broadcasts. - Unless otherwise provided in the contract, in every communication to the public or broadcast of a performance subsequent to the first communication or broadcast thereof by the broadcasting organization, the performer shall be entitled to an additional remuneration equivalent to at least five percent (5%) of the original compensation he or she received for the first communication or broadcast. (n)

Section 207. Contract Terms. - Nothing in this Chapter shall be construed to deprive

performers of the right to agree by contracts on terms and conditions more favorable for them in respect of any use of their performance. (n)

93

CHAPTER XIII PRODUCERS OF SOUND RECORDINGS

Section 208. Scope of Right. - Subject to the provisions of Section 212, producers of

sound recordings shall enjoy the following exclusive rights:

208.1. The right to authorize the direct or indirect reproduction of their sound recordings, in any manner or form; the placing of these reproductions in the market and the right of rental or lending;

208.2. The right to authorize the first public distribution of the original and copies of their sound recordings through sale or rental or other forms of transferring ownership; and

208.3. The right to authorize the commercial rental to the public of the original and copies of their sound recordings, even after distribution by them by or pursuant to authorization by the producer. (Sec. 46, P.D. No. 49a)

Section 209. Communication to the Public. - If a sound recording published for

commercial purposes, or a reproduction of such sound recording, is used directly for broadcasting or for other communication to the public, or is publicly performed with the intention of making and enhancing profit, a single equitable remuneration for the performer or performers, and the producer of the sound recording shall be paid by the user to both the performers and the producer, who, in the absence of any agreement shall share equally. (Sec. 47, P.D. No. 49a)

Section 210. Limitation of Right. - Sections 184 and 185 shall apply mutatis mutandis

to the producer of sound recordings. (Sec. 48, P.D. No. 49a)

CHAPTER XIV BROADCASTING ORGANIZATIONS

Section 211. Scope of Right. - Subject to the provisions of Section 212, broadcasting

organizations shall enjoy the exclusive right to carry out, authorize or prevent any of the following acts:

211.1. The rebroadcasting of their broadcasts;

211.2. The recording in any manner, including the making of films or the use of video tape, of their broadcasts for the purpose of communication to the public of television broadcasts of the same; and

211.3. The use of such records for fresh transmissions or for fresh recording. (Sec. 52, P.D. No. 49)

CHAPTER XV LIMITATIONS ON PROTECTION

Section 212. Limitations on Rights. - Sections 203, 208 and 209 shall not apply

where the acts referred to in those Sections are related to:

212.1. The use by a natural person exclusively for his own personal purposes;

212.2. Using short excerpts for reporting current events;

212.3. Use solely for the purpose of teaching or for scientific research; and

212.4. Fair use of the broadcast subject to the conditions under Section 185. (Sec. 44, P.D. No. 49a)

CHAPTER XVI TERM OF PROTECTION

Section 213. Term of Protection. - 213.1. Subject to the provisions of Subsections

213.2 to 213.5, the copyright in works under Sections 172 and 173 shall be protected during the life of the author and for fifty (50) years after his death. This rule also applies to posthumous works. (Sec. 21, first sentence, P.D. No. 49a)

213.2. In case of works of joint authorship, the economic rights shall be protected during the life of the last surviving author and for fifty (50) years after his death. (Sec. 21, second sentence, P.D. No. 49)

213.3. In case of anonymous or pseudonymous works, the copyright shall be protected for fifty (50) years from the date on which the work was first lawfully published: Provided, That where, before the expiration of the said period, the author's identity is revealed or is no longer in doubt, the provisions of Subsections 213.1. and 213.2 shall apply, as the case may be: Provided, further, That such works if not published before shall be protected for fifty (50) years counted from the making of the work. (Sec. 23, P.D. No. 49)

213.4. In case of works of applied art the protection shall be for a period of twenty-five (25) years from the date of making. (Sec. 24(B), P.D. No. 49a)

213.5. In case of photographic works, the protection shall be for fifty (50) years from publication of the work and, if unpublished, fifty (50) years from the making. (Sec. 24(C), P.D. 49a)

213.6. In case of audio-visual works including those produced by process analogous to photography or any process for making audio-visual recordings, the term shall be

94 fifty (50) years from date of publication and, if unpublished, from the date of making. (Sec. 24(C), P.D. No. 49a)

Section 214. Calculation of Term. - The term of protection subsequent to the death of

the author provided in the preceding Section shall run from the date of his death or of publication, but such terms shall always be deemed to begin on the first day of January of the year following the event which gave rise to them. (Sec. 25, P.D. No. 49)

Section 215. Term of Protection for Performers, Producers and Broadcasting

Organizations. - 215.1. The rights granted to performers and producers of sound recordings under this law shall expire:

(a) For performances not incorporated in recordings, fifty (50) years from the end of the year in which the performance took place; and

(b) For sound or image and sound recordings and for performances incorporated therein, fifty (50) years from the end of the year in which the recording took place.

215.2. In case of broadcasts, the term shall be twenty (20) years from the date the broadcast took place. The extended term shall be applied only to old works with subsisting protection under the prior law. (Sec. 55, P.D. No. 49a)

CHAPTER XVII INFRINGEMENT

Section 216. Remedies for Infringement. - 216.1. Any person infringing a right

protected under this law shall be liable:

(a) To an injunction restraining such infringement. The court may also order the defendant to desist from an infringement, among others, to prevent the entry into the channels of commerce of imported goods that involve an infringement, immediately after customs clearance of such goods.

(b) Pay to the copyright proprietor or his assigns or heirs such actual damages, including legal costs and other expenses, as he may have incurred due to the infringement as well as the profits the infringer may have made due to such infringement, and in proving profits the plaintiff shall be required to prove sales only and the defendant shall be required to prove every element of cost which he claims, or, in lieu of actual damages and profits, such damages which to the court shall appear to be just and shall not be regarded as penalty.

(c) Deliver under oath, for impounding during the pendency of the action, upon such terms and conditions as the court may prescribe, sales invoices

and other documents evidencing sales, all articles and their packaging alleged to infringe a copyright and implements for making them.

(d) Deliver under oath for destruction without any compensation all infringing copies or devices, as well as all plates, molds, or other means for making such infringing copies as the court may order.

(e) Such other terms and conditions, including the payment of moral and exemplary damages, which the court may deem proper, wise and equitable and the destruction of infringing copies of the work even in the event of acquittal in a criminal case.

216.2. In an infringement action, the court shall also have the power to order the seizure and impounding of any article which may serve as evidence in the court proceedings. (Sec. 28, P.D. No. 49a)

Section 217. Criminal Penalties. - 217.1. Any person infringing any right secured by

provisions of Part IV of this Act or aiding or abetting such infringement shall be guilty of a crime punishable by:

(a) Imprisonment of one (1) year to three (3) years plus a fine ranging from Fifty thousand pesos (P50,000) to One hundred fifty thousand pesos (P150,000) for the first offense.

(b) Imprisonment of three (3) years and one (1) day to six (6) years plus a fine ranging from One hundred fifty thousand pesos (P150,000) to Five hundred thousand pesos (P500,000) for the second offense.

(c) Imprisonment of six (6) years and one (1) day to nine (9) years plus a fine ranging from five hundred thousand pesos (P500,000) to One million five hundred thousand pesos (P1,500,000) for the third and subsequent offenses.

(d) In all cases, subsidiary imprisonment in cases of insolvency.

217.2. In determining the number of years of imprisonment and the amount of fine, the court shall consider the value of the infringing materials that the defendant has produced or manufactured and the damage that the copyright owner has suffered by reason of the infringement.

217.3. Any person who at the time when copyright subsists in a work has in his possession an article which he knows, or ought to know, to be an infringing copy of the work for the purpose of:

95

(a) Selling, letting for hire, or by way of trade offering or exposing for sale, or hire, the article;

(b) Distributing the article for purpose of trade, or for any other purpose to an extent that will prejudice the rights of the copyright owner in the work; or

(c) Trade exhibit of the article in public, shall be guilty of an offense and shall be liable on conviction to imprisonment and fine as above mentioned. (Sec. 29, P.D. No. 49a)

Section 218. Affidavit Evidence. - 218.1. In an action under this Chapter, an affidavit

made before a notary public by or on behalf of the owner of the copyright in any work or other subject matter and stating that:

(a) At the time specified therein, copyright subsisted in the work or other subject matter;

(b) He or the person named therein is the owner of the copyright; and

(c) The copy of the work or other subject matter annexed thereto is a true copy thereof, shall be admitted in evidence in any proceedings for an offense under this Chapter and shall be prima facie proof of the matters therein stated until the contrary is proved, and the court before which such affidavit is produced shall assume that the affidavit was made by or on behalf of the owner of the copyright.

218.2. In an action under this Chapter:

(a) Copyright shall be presumed to subsist in the work or other subject matter to which the action relates if the defendant does not put in issue the question whether copyright subsists in the work or other subject matter; and

(b) Where the subsistence of the copyright is established, the plaintiff shall be presumed to be the owner of the copyright if he claims to be the owner of the copyright and the defendant does not put in issue the question of his ownership.

(c) Where the defendant, without good faith, puts in issue the questions of whether copyright subsists in a work or other subject matter to which the action relates, or the ownership of copyright in such work or subject matter, thereby occasioning unnecessary costs or delay in the proceedings, the court may direct that any costs to the defendant in respect of the action shall not be allowed by him and that any costs occasioned by the defendant to other parties shall be paid by him to such other parties. (n)

Section 219. Presumption of Authorship. - 219.1. The natural person whose name is

indicated on a work in the usual manner as the author shall, in the absence of proof to the contrary, be presumed to be the author of the work. This provision shall be applicable even if the name is a pseudonym, where the pseudonym leaves no doubt as to the identity of the author.

219.2. The person or body corporate whose name appears on a audio-visual work in the usual manner shall, in the absence of proof to the contrary, be presumed to be the maker of said work. (n)

Section 220. International Registration of Works. - A statement concerning a work,

recorded in an international register in accordance with an international treaty to which the Philippines is or may become a party, shall be construed as true until the contrary is proved except:

220.1. Where the statement cannot be valid under this Act or any other law concerning intellectual property.

220.2. Where the statement is contradicted by another statement recorded in the international register. (n)

CHAPTER XVIII SCOPE OF APPLICATION

Section 221. Points of Attachment for Works under Sections 172 and 173. - 221.1. The protection afforded by this Act to copyrightable works under Sections 172 and 173 shall apply to:

(a) Works of authors who are nationals of, or have their habitual residence in, the Philippines;

(b) Audio-visual works the producer of which has his headquarters or habitual residence in the Philippines;

(c) Works of architecture erected in the Philippines or other artistic works incorporated in a building or other structure located in the Philippines;

(d) Works first published in the Philippines; and

(e) Works first published in another country but also published in the Philippines within thirty days, irrespective of the nationality or residence of the authors.

96 221.2. The provisions of this Act shall also apply to works that are to be protected by virtue of and in accordance with any international convention or other international agreement to which the Philippines is a party. (n)

Section 222. Points of Attachment for Performers. - The provisions of this Act on the protection of performers shall apply to:

222.1. Performers who are nationals of the Philippines;

222.2. Performers who are not nationals of the Philippines but whose performances:

(a) Take place in the Philippines; or

(b) Are incorporated in sound recordings that are protected under this Act; or

(c) Which has not been fixed in sound recording but are carried by broadcast qualifying for protection under this Act. (n)

Section 223. Points of Attachment for Sound Recordings. - The provisions of this Act

on the protection of sound recordings shall apply to:

223.1. Sound recordings the producers of which are nationals of the Philippines; and

223.2. Sound recordings that were first published in the Philippines. (n)

Section 224. Points of Attachment for Broadcasts. - 224.1. The provisions of this Act

on the protection of broadcasts shall apply to:

(a) Broadcasts of broadcasting organizations the headquarters of which are situated in the Philippines; and

(b) Broadcasts transmitted from transmitters situated in the Philippines.

224.2. The provisions of this Act shall also apply to performers who, and to producers of sound recordings and broadcasting organizations which, are to be protected by virtue of and in accordance with any international convention or other international agreement to which the Philippines is a party. (n)

CHAPTER XIX INSTITUTION OF ACTIONS

Section 225. Jurisdiction. - Without prejudice to the provisions of Subsection 7.1(c), actions under this Act shall be cognizable by the courts with appropriate jurisdiction under existing law. (Sec. 57, P.D. No. 49a)

Section 226. Damages. - No damages may be recovered under this Act after four (4)

years from the time the cause of action arose. (Sec. 58, P.D. No. 49)

CHAPTER XX MISCELLANEOUS PROVISIONS

Section 227. Ownership of Deposit and Instruments. - All copies deposited and

instruments in writing filed with the National Library and the Supreme Court Library in accordance with the provisions of this Act shall become the property of the Government. (Sec. 60, P.D. No. 49)

Section 228. Public Records. - The section or division of the National Library and the

Supreme Court Library charged with receiving copies and instruments deposited and with keeping records required under this Act and everything in it shall be opened to public inspection. The Director of the National Library is empowered to issue such safeguards and regulations as may be necessary to implement this Section and other provisions of this Act. (Sec. 61, P.D. No. 49)

Section 229. Copyright Division; Fees. - The Copyright Section of the National Library shall be classified as a Division upon the effectivity of this Act. The National Library shall have the power to collect, for the discharge of its services under this Act, such fees as may be promulgated by it from time to time subject to the approval of the Department Head. (Sec. 62, P.D. 49a)

PART V FINAL PROVISIONS

Section 230. Equitable Principles to Govern Proceedings. - In all inter partes

proceedings in the Office under this Act, the equitable principles of laches, estoppel, and acquiescence where applicable, may be considered and applied. (Sec. 9-A, R.A. No. 165)

Section 231. Reverse Reciprocity of Foreign Laws. - Any condition, restriction,

limitation, diminution, requirement, penalty or any similar burden imposed by the law of a foreign country on a Philippine national seeking protection of intellectual property rights in that country, shall reciprocally be enforceable upon nationals of said country, within Philippine jurisdiction. (n)

Section 232. Appeals. - 232.1. Appeals from decisions of regular courts shall be governed by the Rules of Court. Unless restrained by a higher court, the judgment of the trial court shall be executory even pending appeal under such terms and conditions as the court may prescribe.

232.2. Unless expressly provided in this Act or other statutes, appeals from decisions of administrative officials shall be provided in the Regulations. (n)

97 Section 233. Organization of the Office; Exemption from the Salary Standardization

Law and the Attrition Law. - 233.1. The Office shall be organized within one (1) year after the approval of this Act. It shall not be subject to the provisions of Republic Act No. 7430.

233.2. The Office shall institute its own compensation structure: Provided, That the Office shall make its own system conform as closely as possible with the principles provided for under Republic Act No. 6758. (n)

Section 234. Abolition of the Bureau of Patents, Trademarks, and Technology

Transfer. - The Bureau of Patents, Trademarks, and Technology Transfer under the Department of Trade and Industry is hereby abolished. All unexpended funds and fees, fines, royalties and other charges collected for the calendar year, properties, equipment and records of the Bureau of Patents, Trademarks and Technology Transfer, and such personnel as may be necessary are hereby transferred to the Office. Personnel not absorbed or transferred to the Office shall enjoy the retirement benefits granted under existing law, otherwise, they shall be paid the equivalent of one month basic salary for every year of service, or the equivalent nearest fractions thereof favorable to them on the basis of the highest salary received.(n)

Section 235. Applications Pending on Effective Date of Act. - 235.1. All applications

for patents pending in the Bureau of Patents, Trademarks and Technology Transfer shall be proceeded with and patents thereon granted in accordance with the Acts under which said applications were filed, and said Acts are hereby continued to be enforced, to this extent and for this purpose only, notwithstanding the foregoing general repeal thereof: Provided, That applications for utility models or industrial designs pending at the effective date of this Act, shall be proceeded with in accordance with the provisions of this Act, unless the applicants elect to prosecute said applications in accordance with the Acts under which they were filed.

235.2. All applications for registration of marks or trade names pending in the Bureau of Patents, Trademarks and Technology Transfer at the effective date of this Act may be amended, if practicable to bring them under the provisions of this Act. The prosecution of such applications so amended and the grant of registrations thereon shall be proceeded with in accordance with the provisions of this Act. If such amendments are not made, the prosecution of said applications shall be proceeded with and registrations thereon granted in accordance with the Acts under which said applications were filed, and said Acts are hereby continued in force to this extent for this purpose only, notwithstanding the foregoing general repeal thereof (n)

Section 236. Preservation of Existing Rights. - Nothing herein shall adversely affect

the rights on the enforcement of rights in patents, utility models, industrial designs, marks and works, acquired in good faith prior to the effective date of this Act. (n)

Section 237. Notification on Berne Appendix. - The Philippines shall by proper compliance with the requirements set forth under the Appendix of the Berne Convention (Paris Act, 1971) avail itself of the special provisions regarding

developing countries, including provisions for licenses grantable by competent authority under the Appendix. (n)

Section 238. Appropriations. - The funds needed to carry out the provisions of this

Act shall be charged to the appropriations of the Bureau of Patents, Trademarks, and Technology Transfer under the current General Appropriations Act and the fees, fines, royalties and other charges collected by the Bureau for the calendar year pursuant to Sections 14.1 and 234 of this Act. Thereafter such sums as may be necessary for its continued implementations shall be included in the annual General Appropriations Act. (n)

Section 239. Repeals. - 239.1. All Acts and parts of Acts inconsistent herewith, more

particularly Republic Act No. 165, as amended; Republic Act No. 166, as amended; and Articles 188 and 189 of the Revised Penal Code; Presidential Decree No. 49, including Presidential Decree No. 285, as amended, are hereby repealed.

239.2. Marks registered under Republic Act No. 166 shall remain in force but shall be deemed to have been granted under this Act and shall be due for renewal within the period provided for under this Act and, upon renewal shall be reclassified in accordance with the International Classification. Trade names and marks registered in the Supplemental Register under Republic Act No. 166 shall remain in force but shall no longer be subject to renewal.

239.3. The provisions of this Act shall apply to works in which copyright protection obtained prior to the effectivity of this Act is subsisting: Provided, That the application of this Act shall not result in the diminution of such protection. (n)

Section 240. Separability. - If any provision of this Act or the application of such provision to any circumstances is held invalid, the remainder of the Act shall not be affected thereby. (n)

Section 241. Effectivity. - This Act shall take effect on 1 January 1998. (n)

Approved: June 6, 1997

98

MONEY LAUNDERING

1. RA 9160

Congress of the Philippines Twelfth Congress

REPUBLIC ACT NO. 9160 September 29, 2001

AN ACT DEFINING THE CRIME OF MONEY LAUNDERING, PROVIDING PENALTIES THEREFOR AND FOR OTHER PURPOSES

Be it enacted by the Senate and House of Representatives of the Philippines in Congress assembled:

Section 1. Short Title. – This Act shall be known as the "Anti-Money Laundering Act

of 2001."

Section 2. Declaration of Policy. – It is hereby declared the policy of the State to protect and preserve the integrity and confidentiality of bank accounts and to ensure that the Philippines shall not be used as a money laundering site for the proceeds of any unlawful activity. Consistent with its foreign policy, the State shall extend cooperation in transnational investigations and prosecutions of persons involved in money laundering activities whenever committed.

Section 3. Definitions. For purposes of this Act, the following terms are hereby

defined as follows:

(a) "Covered Institution" refers to:

(1) banks, non-banks, quasi-banks, trust entities, and all other institutions and their subsidiaries and affiliates supervised or regulated by the Bangko Sentral ng Pilipinas (BSP);

(2) Insurance companies and all other institutions supervised or regulated by the Insurance Commission; and

(3) (i) securities dealers, brokers, salesmen, investment houses and other similar entities managing securities or rendering services as investment agent, advisor, or consultant, (ii) mutual funds, close and investment companies, common trust funds, pre-need companies and other similar entities, (iii) foreign exchange corporations, money changers, money payment, remittance, and transfer companies and other similar entities, and (iv) other entities administering or otherwise dealing in currency, commodities or

financial derivatives based thereon, valuable objects, cash substitutes and other similar monetary instruments or property supervised or regulated by Securities and Exchange Commission.

(b) "Covered transaction" is a single, series, or combination of transactions involving a total amount in excess of Four million Philippine pesos (Php4,000,000.00) or an equivalent amount in foreign currency based on the prevailing exchange rate within five (5) consecutive banking days except those between a covered institution and a person who, at the time of the transaction was a properly identified client and the amount is commensurate with the business or financial capacity of the client; or those with an underlying legal or trade obligation, purpose, origin or economic justification.

It likewise refers to a single, series or combination or pattern of unusually large and complex transactions in excess of Four million Philippine pesos (Php4,000,000.00) especially cash deposits and investments having no credible purpose or origin, underlying trade obligation or contract.

(c) "Monetary Instrument" refers to:

(1) coins or currency of legal tender of the Philippines, or of any other country;

(2) drafts, checks and notes;

(3) securities or negotiable instruments, bonds, commercial papers, deposit certificates, trust certificates, custodial receipts or deposit substitute instruments, trading orders, transaction tickets and confirmations of sale or investments and money marked instruments; and

(4) other similar instruments where title thereto passes to another by endorsement, assignment or delivery.

(d) "Offender" refers to any person who commits a money laundering offense.

(e) "Person" refers to any natural or juridical person.

(f) "Proceeds" refers to an amount derived or realized from an unlawful activity.

(g) "Supervising Authority" refers to the appropriate supervisory or regulatory agency, department or office supervising or regulating the covered institutions enumerated in Section 3(a).

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(h) "Transaction" refers to any act establishing any right or obligation or giving rise to any contractual or legal relationship between the parties thereto. It also includes any movement of funds by any means with a covered institution.

(l) "Unlawful activity" refers to any act or omission or series or combination thereof involving or having relation to the following:

(1) Kidnapping for ransom under Article 267 of Act No. 3815, otherwise known as the Revised Penal Code, as amended;

(2) Sections 3, 4, 5, 7, 8 and 9 of Article Two of Republic Act No. 6425, as amended, otherwise known as the Dangerous Drugs Act of 1972;

(3) Section 3 paragraphs B, C, E, G, H and I of Republic Act No. 3019, as amended; otherwise known as the Anti-Graft and Corrupt Practices Act;

(4) Plunder under Republic Act No. 7080, as amended;

(5) Robbery and extortion under Articles 294, 295, 296, 299, 300, 301 and 302 of the Revised Penal Code, as amended;

(6) Jueteng and Masiao punished as illegal gambling under Presidential Decree No. 1602;

(7) Piracy on the high seas under the Revised Penal Code, as amended and Presidential Decree No. 532;

(8) Qualified theft under, Article 310 of the Revised Penal Code, as amended;

(9) Swindling under Article 315 of the Revised Penal Code, as amended;

(10) Smuggling under Republic Act Nos. 455 and 1937;

(11) Violations under Republic Act No. 8792, otherwise known as the Electronic Commerce Act of 2000;

(12) Hijacking and other violations under Republic Act No. 6235; destructive arson and murder, as defined under the Revised Penal

Code, as amended, including those perpetrated by terrorists against non-combatant persons and similar targets;

(13) Fraudulent practices and other violations under Republic Act No. 8799, otherwise known as the Securities Regulation Code of 2000;

(14) Felonies or offenses of a similar nature that are punishable under the penal laws of other countries.

Section 4. Money Laundering Offense. – Money laundering is a crime whereby the

proceeds of an unlawful activity are transacted, thereby making them appear to have originated from legitimate sources. It is committed by the following:

(a) Any person knowing that any monetary instrument or property represents, involves, or relates to the proceeds of any unlawful activity, transacts or attempts to transact said monetary instrument or property.

(b) Any person knowing that any monetary instrument or property involves the proceeds of any unlawful activity, performs or fails to perform any act as a result of which he facilitates the offense of money laundering referred to in paragraph (a) above.

(c) Any person knowing that any monetary instrument or property is required under this Act to be disclosed and filed with the Anti-Money Laundering Council (AMLC), fails to do so.

Section 5. Jurisdiction of Money Laundering Cases. – The regional trial courts shall

have jurisdiction to try all cases on money laundering. Those committed by public officers and private persons who are in conspiracy with such public officers shall be under the jurisdiction of the Sandiganbayan.

Section 6. Prosecution of Money Laundering. –

(a) Any person may be charged with and convicted of both the offense of money laundering and the unlawful activity as herein defined.

(b) Any proceeding relating to the unlawful activity shall be given precedence over the prosecution of any offense or violation under this Act without prejudice to the freezing and other remedies provided.

Section 7. Creation of Anti-Money Laundering Council (AMLC). – The Anti-Money Laundering Council is hereby created and shall be composed of the Governor of the Bangko Sentral ng Pilipinas as chairman, the Commissioner of the Insurance Commission and the Chairman of the Securities and Exchange Commission as

100 members. The AMLC shall act unanimously in the discharge of its functions as defined hereunder:

(1) to require and receive covered transaction reports from covered institutions;

(2) to issue orders addressed to the appropriate Supervising Authority or the covered institution to determine the true identity of the owner of any monetary instrument or property subject of a covered transaction report or request for assistance from a foreign State, or believed by the Council, on the basis of substantial evidence to be in whole or in part, whenever located, representing, involving, or related to, directly or indirectly, in any manner or by any means, the proceeds of an unlawful activity;

(3) to institute civil forfeiture proceedings and all other remedial proceedings through the Office of the Solicitor General;

(4) to cause the filing of complaints with the Department of Justice or the Ombudsman for the prosecution of money laundering offenses;

(5) to initiate investigations of covered transactions, money laundering activities and other violations of this Act;

(6) to freeze any monetary instrument or property alleged to be proceed of any unlawful activity;

(7) to implement such measures as may be necessary and justified under this Act to counteract money laundering;

(8) to receive and take action in respect of, any request from foreign states for assistance in their own anti-money laundering operations provided in this Act;

(9) to develop educational programs on the pernicious effects of money laundering, the methods and techniques used in money laundering, the viable means of preventing money laundering and the effective ways of prosecuting and punishing offenders; and

(10) to enlist the assistance of any branch, department, bureau, office, agency or instrumentality of the government, including government-owned and –controlled corporations, in undertaking any and all anti-money laundering operations, which may include the use of its personnel, facilities and resources for the more resolute prevention, detection and investigation of money laundering offenses and prosecution of offenders.

Section 8. Creation of a Secretariat. – The AMLC is hereby authorized to establish a

secretariat to be headed by an Executive Director who shall be appointed by the Council for a term of five (5) years. He must be a member of the Philippine Bar, at least thirty-five (35) years of age and of good moral character, unquestionable integrity and known probity. All members of the Secretariat must have served for at least five (5) years either in the Insurance Commission, the Securities and Exchange Commission or the Bangko Sentral ng Pilipinas (BSP) and shall hold full-time permanent positions within the BSP.

Section 9. Prevention of Money Laundering; Customer Identification Requirements

and Record Keeping. –

(a) Customer Identification, - Covered institutions shall establish and record the true identity of its clients based on official documents. They shall maintain a system of verifying the true identity of their clients and, in case of corporate clients, require a system of verifying their legal existence and organizational structure, as well as the authority and identification of all persons purporting to act on their behalf.

The provisions of existing laws to the contrary notwithstanding, anonymous accounts, accounts under fictitious names, and all other similar accounts shall be absolutely prohibited. Peso and foreign currency non-checking numbered accounts shall be allowed. The BSP may conduct annual testing solely limited to the determination of the existence and true identity of the owners of such accounts.

(b) Record Keeping – All records of all transactions of covered institutions shall be maintained and safely stored for five (5) years from the date of transactions. With respect to closed accounts, the records on customer identification, account files and business correspondence, shall be preserved and safety stored for at least five (5) years from the dates when they were closed.

(c) Reporting of Covered Transactions. – Covered institutions shall report

to the AMLC all covered transactions within five (5) working days from occurrence thereof, unless the Supervising Authority concerned prescribes a longer period not exceeding ten (10) working days.

When reporting covered transactions to the AMLC, covered institutions and their officers, employees, representatives, agents, advisors, consultants or associates shall not be deemed to have violated Republic Act No. 1405, as amended; Republic Act No. 6426, as amended; Republic Act No. 8791 and other similar laws, but are prohibited from communicating, directly or indirectly, in any manner or by any means, to any person the fact that a covered transaction report was made, the contents thereof, or any other information in relation thereto. In case of violation thereof, the concerned officer, employee, representative, agent, advisor, consultant or associate of the covered institution, shall be criminally liable. However, no administrative,

101 criminal or civil proceedings, shall lie against any person for having made a covered transaction report in the regular performance of his duties and in good faith, whether or not such reporting results in any criminal prosecution under this Act or any other Philippine law.

When reporting covered transactions to the AMLC, covered institutions and their officers, employees, representatives, agents, advisors, consultants or associates are prohibited from communicating, directly or indirectly, in any manner or by any means, to any person, entity, the media, the fact that a covered transaction report was made, the contents thereof, or any other information in relation thereto. Neither may such reporting be published or aired in any manner or form by the mass media, electronic mail, or other similar devices. In case of violation thereof, the concerned officer, employee, representative, agent, advisor, consultant or associate of the covered institution, or media shall be held criminally liable.

Section 10. Authority to Freeze. – Upon determination that probable cause exists that

any deposit or similar account is in any way related to an unlawful activity, the AMLC may issue a freeze order, which shall be effective immediately, on the account for a period not exceeding fifteen (15) days. Notice to the depositor that his account has been frozen shall be issued simultaneously with the issuance of the freeze order. The depositor shall have seventy-two (72) hours upon receipt of the notice to explain why the freeze order should be lifted. The AMLC has seventy-two (72) hours to dispose of the depositor's explanation. If it falls to act within seventy-two (72) hours from receipt of the depositor's explanation, the freeze order shall automatically be dissolved. The fifteen (15)-day freeze order of the AMLC may be extended upon order of the court, provided that the fifteen (15)-day period shall be tolled pending the court's decision to extend the period.

No court shall issue a temporary restraining order or writ of injunction against any freeze order issued by the AMLC except the Court of Appeals or the Supreme Court.

Section 11. Authority to inquire into Bank Deposits. – Notwithstanding the provisions

of Republic Act No. 1405, as amended; Republic Act No. 6426, as amended; Republic Act No. 8791, and other laws, the AMLC may inquire into or examine any particular deposit or investment with any banking institution or non-bank financial institution upon order of any competent court in cases of violation of this Act when it has been established that there is probable cause that the deposits or investments involved are in any way related to a money laundering offense: Provided, That this provision shall not apply to deposits and investments made prior to the effectivity of this Act.

Section 12. Forfeiture Provisions. –

(a) Civil Forfeiture. – When there is a covered transaction report made, and

the court has, in a petition filed for the purpose ordered seizure of any monetary instrument or property, in whole or in part, directly or indirectly,

related to said report, the Revised Rules of Court on civil forfeiture shall apply.

(b) Claim on Forfeited Assets. – Where the court has issued an order of

forfeiture of the monetary instrument or property in a criminal prosecution for any money laundering offense defined under Section 4 of this Act, the offender or any other person claiming an interest therein may apply, by verified petition, for a declaration that the same legitimately belongs to him and for segregation or exclusion of the monetary instrument or property corresponding thereto. The verified petition shall be filed with the court which rendered the judgment of conviction and order of forfeiture, within fifteen (15) days from the date of the order or forfeiture, in default of which the said order shall become final and executory. This provision shall apply in both civil and criminal forfeiture.

(c) Payment in Lieu of Forfeiture. – Where the court has issued an order of

forfeiture of the monetary instrument or property subject of a money laundering offense defined under Section 4, and said order cannot be enforced because any particular monetary instrument or property cannot, with due diligence, be located, or it has been substantially altered, destroyed, diminished in value or otherwise rendered worthless by any act or omission, directly or indirectly, attributable to the offender, or it has been concealed, removed, converted or otherwise transferred to prevent the same from being found or to avoid forfeiture thereof, or it is located outside the Philippines or has been placed or brought outside the jurisdiction of the court, or it has been commingled with other monetary instruments or property belonging to either the offender himself or a third person or entity, thereby rendering the same difficult to identify or be segregated for purposes of forfeiture, the court may, instead of enforcing the order of forfeiture of the monetary instrument or property or part thereof or interest therein, accordingly order the convicted offender to pay an amount equal to the value of said monetary instrument or property. This provision shall apply in both civil and criminal forfeiture.

Section 13. Mutual Assistance among States. –

(a) Request for Assistance from a Foreign State. – Where a foreign State

makes a request for assistance in the investigation or prosecution of a money laundering offense, the AMLC may execute the request or refuse to execute the same and inform the foreign State of any valid reason for not executing the request or for delaying the execution thereof. The principles of mutuality and reciprocity shall, for this purpose, be at all times recognized.

(b) Power of the AMLC to Act on a Request for Assistance from a Foreign State. – The AMLC may execute a request for assistance from a

foreign State by: (1) tracking down, freezing, restraining and seizing assets alleged to be proceeds of any unlawful activity under the procedures laid

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down in this Act; (2) giving information needed by the foreign State within the procedures laid down in this Act; and (3) applying for an order of forfeiture of any monetary instrument or property in the court: Provided, That the court shall not issue such an order unless the application is accompanied by an authenticated copy of the order of a court in the requesting State ordering the forfeiture of said monetary instrument or properly of a person who has been convicted of a money laundering offense in the requesting State, and a certification of an affidavit of a competent officer of the requesting State stating that the conviction and the order of forfeiture are final and then no further appeal lies in respect or either.

(c) Obtaining Assistance from Foreign States. – The AMLC may make a request to any foreign State for assistance in (1) tracking down, freezing, restraining and seizing assets alleged to be proceeds of any unlawful activity; (2) obtaining information that it needs relating to any covered transaction, money laundering offense or any other matter directly or indirectly, related thereto; (3) to the extent allowed by the law of the Foreign State, applying with the proper court therein for an order to enter any premises belonging to or in the possession or control of, any or all of the persons named in said request, and/or search any or all such persons named therein and/or remove any document, material or object named in said request:Provided, That the documents accompanying the request in support of the application have been duly authenticated in accordance with the applicable law or regulation of the foreign State; and (4) applying for an order of forfeiture of any monetary instrument or property in the proper court in the foreign State:Provided, That the request is accompanied by an authenticated copy of the order of the regional trial court ordering the forfeiture of said monetary instrument or property of a convicted offender and an affidavit of the clerk of court stating that the conviction and the order of forfeiture are final and that no further appeal lies in respect of either.

(d) Limitations on Request for Mutual Assistance. – The AMLC may

refuse to comply with any request for assistance where the action sought by the request contravenes any provision of the Constitution or the execution of a request is likely to prejudice the national interest of the Philippines unless there is a treaty between the Philippines and the requesting State relating to the provision of assistance in relation to money laundering offenses.

(e) Requirements for Requests for Mutual Assistance from Foreign State. – A request for mutual assistance from a foreign State must (1)

confirm that an investigation or prosecution is being conducted in respect of a money launderer named therein or that he has been convicted of any money laundering offense; (2) state the grounds on which any person is being investigated or prosecuted for money laundering or the details of his conviction; (3) gives sufficient particulars as to the identity of said person; (4) give particulars sufficient to identity any covered institution believed to have any information, document, material or object which may be of assistance to the investigation or prosecution; (5) ask from the covered institution

concerned any information, document, material or object which may be of assistance to the investigation or prosecution; (6) specify the manner in which and to whom said information, document, material or object detained pursuant to said request, is to be produced; (7) give all the particulars necessary for the issuance by the court in the requested State of the writs, orders or processes needed by the requesting State; and (8) contain such other information as may assist in the execution of the request.

(f) Authentication of Documents. – For purposes of this Section, a

document is authenticated if the same is signed or certified by a judge, magistrate or equivalent officer in or of, the requesting State, and authenticated by the oath or affirmation of a witness or sealed with an official or public seal of a minister, secretary of State, or officer in or of, the government of the requesting State, or of the person administering the government or a department of the requesting territory, protectorate or colony. The certificate of authentication may also be made by a secretary of the embassy or legation, consul general, consul, vice consul, consular agent or any officer in the foreign service of the Philippines stationed in the foreign State in which the record is kept, and authenticated by the seal of his office.

(g) Extradition. – The Philippines shall negotiate for the inclusion of money laundering offenses as herein defined among extraditable offenses in all future treaties.

Section 14. Penal Provisions. –

(a) Penalties for the Crime of Money Laundering. The penalty of imprisonment ranging from seven (7) to fourteen (14) years and a fine of not less than Three million Philippine pesos (Php 3,000,000.00) but not more than twice the value of the monetary instrument or property involved in the offense, shall be imposed upon a person convicted under Section 4(a) of this Act.

The penalty of imprisonment from four (4) to seven (7) years and a fine of not less than One million five hundred thousand Philippine pesos (Php 1,500,000.00) but not more than Three million Philippine pesos (Php 3,000,000.00), shall be imposed upon a person convicted under Section 4(b) of this Act.

The penalty of imprisonment from six (6) months to four (4) years or a fine of not less than One hundred thousand Philippine pesos (Php 100,000.00) but not more than Five hundred thousand Philippine pesos (Php 500,000.00), or both, shall be imposed on a person convicted under Section 4(c) of this Act.

(b) Penalties for Failure to Keep Records. The penalty of imprisonment

from six (6) months to one (1) year or a fine of not less than One hundred thousand Philippine pesos (Php 100,000.00) but not more than Five hundred

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thousand Philippine pesos (Php 500,000.00), or both, shall be imposed on a person convicted under Section 9(b) of this Act.

(c) Malicious Reporting. Any person who, with malice, or in bad faith,

report or files a completely unwarranted or false information relative to money laundering transaction against any person shall be subject to a penalty of six (6) months to four (4) years imprisonment and a fine of not less than One hundred thousand Philippine pesos (Php 100,000.00) but not more than Five hundred thousand Philippine pesos (Php 500,000.00), at the discretion of the court: Provided, That the offender is not entitled to avail the benefits of the Probation Law.

If the offender is a corporation, association, partnership or any juridical person, the penalty shall be imposed upon the responsible officers, as the case may be, who participated in the commission of the crime or who shall have knowingly permitted or failed to prevent its commission. If the offender is a juridical person, the court may suspend or revoke its license. If the offender is an alien, he shall, in addition to the penalties herein prescribed, be deported without further proceedings after serving the penalties herein prescribed. If the offender is a public official or employee, he shall, in addition to the penalties prescribed herein, suffer perpetual or temporary absolute disqualification from office, as the case may be;

Any public official or employee who is called upon to testify and refuses to do the same or purposely fails to testify shall suffer the same penalties prescribed herein.

(d) Breach of Confidentiality. The punishment of imprisonment ranging

from three (3) to eight (8) years and a fine of not less than Five hundred thousand Philippine pesos (Php 500,000.00) but not more than One million Philippine pesos (Php 1,000,000.00), shall be imposed on a person convicted for a violation under Section 9(c).

Section 15. System of Incentives and Rewards. – A system of special incentives and

rewards is hereby established to be given to the appropriate government agency and its personnel that led and initiated an investigation, prosecution and conviction of persons involved in the offense penalized in Section 4 of this Act.

Section 16. Prohibitions Against Political Harassment. – This Act shall not be used

for political prosecution or harassment or as an instrument to hamper competition in trade and commerce.

No case for money laundering may be filed against and no assets shall be frozen, attached or forfeited to the prejudice of a candidate for an electoral office during an election period.

Section 17. Restitution. – Restitution for any aggrieved party shall be governed by

the provisions of the New Civil Code.

Section 18. Implementing Rules and Regulations. – Within thirty (30) days from the

effectivity of this Act, the Bangko Sentral ng Pilipinas, the Insurance Commission and the Securities and Exchange Commission shall promulgate the rules and regulations to implement effectivity the provisions of this Act. Said rules and regulations shall be submitted to the Congressional Oversight Committee for approval.

Covered institutions shall formulate their respective money laundering prevention programs in accordance with this Act including, but not limited to, information dissemination on money laundering activities and its prevention, detection and reporting, and the training of responsible officers and personnel of covered institutions.

Section 19. Congressional Oversight Committee. – There is hereby created a

Congressional Oversight Committee composed of seven (7) members from the Senate and seven (7) members from the House of Representatives. The members from the Senate shall be appointed by the Senate President based on the proportional representation of the parties or coalitions therein with at least two (2) Senators representing the minority. The members from the House of Representatives shall be appointed by the Speaker also based on proportional representation of the parties or coalitions therein with at least two (2) members representing the minority.

The Oversight Committee shall have the power to promulgate its own rules, to oversee the implementation of this Act, and to review or revise the implementing rules issued by the Anti-Money Laundering Council within thirty (30) days from the promulgation of the said rules.

Section 20. Appropriations Clause. – The AMLC shall be provided with an initial

appropriation of Twenty-five million Philippine pesos (Php 25,000,000.00) to be drawn from the national government. Appropriations for the succeeding years shall be included in the General Appropriations Act.

Section 21. Separability Clause. – If any provision or section of this Act or the

application thereof to any person or circumstance is held to be invalid, the other provisions or sections of this Act, and the application of such provision or section to other persons or circumstances, shall not be affected thereby.

Section 22. Repealing Clause. – All laws, decrees, executive orders, rules and

regulations or parts thereof, including the relevant provisions of Republic Act No. 1405, as amended; Republic Act No. 6426, as amended; Republic Act No. 8791, as amended and other similar laws, as are inconsistent with this Act, are hereby repealed, amended or modified accordingly.

104 Section 23. Effectivity. – This Act shall take effect fifteen (15) days after its complete

publication in the Official Gazette or in at least two (2) national newspapers of general circulation.

The provisions of this Act shall not apply to deposits and investments made prior to its effectivity.

Approved.

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2. RA 10365

Republic of the Philippines CONGRESS OF THE PHILIPPINES

Metro Manila

Fifteenth Congress Third Regular Session

Begun and held in Metro Manila, on Monday, the twenty-third day of July, two thousand twelve.

REPUBLIC ACT NO. 10365

AN ACT FURTHER STRENGTHENING THE ANTI-MONEY LAUNDERING LAW, AMENDING FOR THE PURPOSEREPUBLIC ACT NO. 9160, OTHERWISE KNOWN AS THE "ANTI-MONEY LAUNDERING ACT OF 2001″, AS AMENDED

Be it enacted by the Senate and House of Representatives of the Philippines in Congress assembled:

Section 1. Section 3(a) of Republic Act No. 9160, as amended, is hereby amended to read as follows:

"(a) ‘Covered persons’, natural or juridical, refer to:

"(1) banks, non-banks, quasi-banks, trust entities, foreign exchange dealers, pawnshops, money changers, remittance and transfer companies and other similar entities and all other persons and their subsidiaries and affiliates supervised or regulated by the Bangko Sentral ng Pilipinas (BSP);

"(2) insurance companies, pre-need companies and all other persons supervised or regulated by the Insurance Commission (IC);

"(3) (i) securities dealers, brokers, salesmen, investment houses and other similar persons managing securities or rendering services as investment agent, advisor, or consultant, (ii) mutual funds, close-end investment companies, common trust funds, and other similar persons, and (iii) other entities administering or otherwise dealing in currency, commodities or financial derivatives based thereon, valuable objects, cash substitutes and other similar monetary instruments or property supervised or regulated by the Securities and Exchange Commission (SEC);

"(4) jewelry dealers in precious metals, who, as a business, trade in precious metals, for transactions in excess of One million pesos (P1,000,000.00);

"(5) jewelry dealers in precious stones, who, as a business, trade in precious stones, for transactions in excess of One million pesos (P1,000,000.00);

"(6) company service providers which, as a business, provide any of the following services to third parties: (i) acting as a formation agent of juridical persons; (ii) acting as (or arranging for another person to act as) a director or corporate secretary of a company, a partner of a partnership, or a similar position in relation to other juridical persons; (iii) providing a registered office, business address or accommodation, correspondence or administrative address for a company, a partnership or any other legal person or arrangement; and (iv) acting as (or arranging for another person to act as) a nominee shareholder for another person; and

"(7) persons who provide any of the following services:

(i) managing of client money, securities or other assets;

(ii) management of bank, savings or securities accounts;

(iii) organization of contributions for the creation, operation or management of companies; and

(iv) creation, operation or management of juridical persons or arrangements, and buying and selling business entities.

"Notwithstanding the foregoing, the term ‘covered persons’ shall exclude lawyers and accountants acting as independent legal professionals in relation to information concerning their clients or where disclosure of information would compromise client confidences or the attorney-client relationship: Provided, That these lawyers and accountants are authorized to practice in the Philippines and shall continue to be subject to the provisions of their respective codes of conduct and/or professional responsibility or any of its amendments."

Section 2. Section 3(i) of the same Act is hereby amended to read as follows:

"(i) ‘Unlawful activity’ refers to any act or omission or series or combination thereof involving or having direct relation to the following:

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"(1) Kidnapping for ransom under Article 267 of Act No. 3815, otherwise known as the Revised Penal Code, as amended;

"(2) Sections 4, 5, 6, 8, 9, 10, 11, 12, 13, 14, 15 and 16 of Republic Act No. 9165, otherwise known as the Comprehensive Dangerous Drugs Act of 2002;

"(3) Section 3 paragraphs B, C, E, G, H and I of Republic Act No. 3019, as amended, otherwise known as the Anti-Graft and Corrupt Practices Act;

"(4) Plunder under Republic Act No. 7080, as amended;

"(5) Robbery and extortion under Articles 294, 295, 296, 299, 300, 301 and 302 of the Revised Penal Code, as amended;

"(6) Jueteng and Masiao punished as illegal gambling under Presidential Decree No. 1602;

"(7) Piracy on the high seas under the Revised Penal Code, as amended and Presidential Decree No. 532;

"(8) Qualified theft under Article 310 of the Revised Penal Code, as amended;

"(9) Swindling under Article 315 and Other Forms of Swindling under Article 316 of the Revised Penal Code, as amended;

"(10) Smuggling under Republic Act Nos. 455 and 1937;

"(11) Violations of Republic Act No. 8792, otherwise known as the Electronic Commerce Act of 2000;

"(12) Hijacking and other violations under Republic Act No. 6235; destructive arson and murder, as defined under the Revised Penal Code, as amended;

"(13) Terrorism and conspiracy to commit terrorism as defined and penalized under Sections 3 and 4 of Republic Act No. 9372;

"(14) Financing of terrorism under Section 4 and offenses punishable under Sections 5, 6, 7 and 8 of Republic Act No. 10168, otherwise known as the Terrorism Financing Prevention and Suppression Act of 2012:

"(15) Bribery under Articles 210, 211 and 211-A of the Revised Penal Code, as amended, and Corruption of Public Officers under Article 212 of the Revised Penal Code, as amended;

"(16) Frauds and Illegal Exactions and Transactions under Articles 213, 214, 215 and 216 of the Revised Penal Code, as amended;

"(17) Malversation of Public Funds and Property under Articles 217 and 222 of the Revised Penal Code, as amended;

"(18) Forgeries and Counterfeiting under Articles 163, 166, 167, 168, 169 and 176 of the Revised Penal Code, as amended;

"(19) Violations of Sections 4 to 6 of Republic Act No. 9208, otherwise known as the Anti-Trafficking in Persons Act of 2003;

"(20) Violations of Sections 78 to 79 of Chapter IV, of Presidential Decree No. 705, otherwise known as the Revised Forestry Code of the Philippines, as amended;

"(21) Violations of Sections 86 to 106 of Chapter VI, of Republic Act No. 8550, otherwise known as the Philippine Fisheries Code of 1998;

"(22) Violations of Sections 101 to 107, and 110 of Republic Act No. 7942, otherwise known as the Philippine Mining Act of 1995;

"(23) Violations of Section 27(c), (e), (f), (g) and (i), of Republic Act No. 9147, otherwise known as the Wildlife Resources Conservation and Protection Act;

"(24) Violation of Section 7(b) of Republic Act No. 9072, otherwise known as the National Caves and Cave Resources Management Protection Act;

"(25) Violation of Republic Act No. 6539, otherwise known as the Anti-Carnapping Act of 2002, as amended;

"(26) Violations of Sections 1, 3 and 5 of Presidential Decree No. 1866, as amended, otherwise known as the decree Codifying the Laws on Illegal/Unlawful Possession, Manufacture, Dealing In, Acquisition or Disposition of Firearms, Ammunition or Explosives;

"(27) Violation of Presidential Decree No. 1612, otherwise known as the Anti-Fencing Law;

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"(28) Violation of Section 6 of Republic Act No. 8042, otherwise known as the Migrant Workers and Overseas Filipinos Act of 1995, as amended by Republic Act No. 10022;

"(29) Violation of Republic Act No. 8293, otherwise known as the Intellectual Property Code of the Philippines;

"(30) Violation of Section 4 of Republic Act No. 9995, otherwise known as the Anti-Photo and Video Voyeurism Act of 2009;

"(31) Violation of Section 4 of Republic Act No. 9775, otherwise known as the Anti-Child Pornography Act of 2009;

"(32) Violations of Sections 5, 7, 8, 9, 10(c), (d) and (e), 11, 12 and 14 of Republic Act No. 7610, otherwise known as the Special Protection of Children Against Abuse, Exploitation and Discrimination;

"(33) Fraudulent practices and other violations under Republic Act No. 8799, otherwise known as the Securities Regulation Code of 2000; and

"(34) Felonies or offenses of a similar nature that are punishable under the penal laws of other countries."

Section 3. Section 3 of the same Act shall have new paragraphs (j) and (k).

"(j) Precious metals’ shall mean gold, silver, platinum, palladium, rhodium, ruthenium, iridium and osmium. These include alloys of precious metals, solders and plating chemicals such as rhodium and palladium plating solutions and potassium gold cyanide and potassium silver cyanide and silver cyanide in salt solution.

"(k) ‘Precious stones’ shall mean diamond, ruby, emerald, sapphire, opal, amethyst, beryl, topaz, and garnet that are used in jewelry making, including those formerly classified as semi-precious stones."

Section 4. Section 4 of the same Act is hereby amended to read as follows:

"SEC. 4. Money Laundering Offense. – Money laundering is committed by any person who, knowing that any monetary instrument or property represents, involves, or relates to the proceeds of any unlawful activity:

"(a) transacts said monetary instrument or property;

"(b) converts, transfers, disposes of, moves, acquires, possesses or uses said monetary instrument or property;

"(c) conceals or disguises the true nature, source, location, disposition, movement or ownership of or rights with respect to said monetary instrument or property;

"(d) attempts or conspires to commit money laundering offenses referred to in paragraphs (a), (b) or (c);

"(e) aids, abets, assists in or counsels the commission of the money laundering offenses referred to in paragraphs (a), (b) or (c) above; and

"(f) performs or fails to perform any act as a result of which he facilitates the offense of money laundering referred to in paragraphs (a), (b) or (c) above.

"Money laundering is also committed by any covered person who, knowing that a covered or suspicious transaction is required under this Act to be reported to the Anti-Money Laundering Council (AMLC), fails to do so."

Section 5. Section 6(a) of the same Act is hereby amended to read as follows:

"SEC. 6. Prosecution of Money Laundering. –

"(a) Any person may be charged with and convicted of both the offense of money laundering and the unlawful activity as herein defined.

"(b) The prosecution of any offense or violation under this Act shall proceed independently of any proceeding relating to the unlawful activity."

Section 6. Section 7 of the same Act is hereby amended to read as follows:

"SEC. 7. Creation of Anti-Money Laundering Council (AMLC). – The Anti-Money Laundering Council is hereby created and shall be composed of the Governor of the Bangko Sentral ng Pilipinas as Chairman, the Commissioner of the Insurance Commission and the Chairman of the Securities and Exchange Commission, as members. The AMLC shall act unanimously in the discharge of its functions as defined hereunder:

"x x x

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"(6) to apply before the Court of Appeals, ex parte, for the freezing of any monetary instrument or property alleged to be laundered, proceeds from, or instrumentalities used in or intended for use in any unlawful activity as defined in Section 3(i) hereof;

"x x x

"(12) to require the Land Registration Authority and all its Registries of Deeds to submit to the AMLC, reports on all real estate transactions involving an amount in excess of Five hundred thousand pesos (P500,000.00) within fifteen (15) days from the date of registration of the transaction, in a form to be prescribed by the AMLC. The AMLC may also require the Land Registration Authority and all its Registries of Deeds to submit copies of relevant documents of all real estate transactions."

Section 7. Section 9(c), paragraphs 1 and 4 of the same Act are hereby amended to

read as follows:

"SEC. 9. Prevention of Money Laundering; Customer Identification Requirements and Record Keeping. –

"(a) x x x

"(b) x x x

"(c) Reporting of Covered and Suspicious Transactions. – Covered persons shall report to the AMLC all covered transactions and suspicious transactions within five (5) working days from occurrence thereof, unless the AMLC prescribes a different period not exceeding fifteen (15) working days.

"Lawyers and accountants acting as independent legal professionals are not required to report covered and suspicious transactions if the relevant information was obtained in circumstances where they are subject to professional secrecy or legal professional privilege.

"x x x

"x x x

"When reporting covered or suspicious transactions to the AMLC, covered persons and their officers and employees are prohibited from communicating, directly or indirectly, in any manner or by any means, to any person or entity, the media, the fact that a covered or suspicious transaction has been reported or is about to be reported, the contents of the report, or any other information in relation thereto. Neither may such reporting be

published or aired in any manner or form by the mass media", electronic mail, or other similar devices. In case of violation thereof, the concerned officer and employee of the covered person and media shall be held criminally liable."

Section 8. Section 10 of the same Act, as amended by Republic Act No. 10167, is

hereby amended to read as follows:

"SEC. 10. Freezing of Monetary Instrument or Property. – Upon a verified ex parte petition by the AMLC and after determination that probable cause exists that any monetary instrument or property is in any way related to an unlawful activity as defined in Section 3(i) hereof, the Court of Appeals may issue a freeze order which shall be effective immediately, and which shall not exceed six (6) months depending upon the circumstances of the case: Provided, That if there is no case filed against a person whose account has been frozen within the period determined by the court, the freeze order shall be deemed ipso facto lifted:Provided, further, That this new rule shall not apply to pending cases in the courts. In any case, the court should act on the petition to freeze within twenty-four (24) hours from filing of the petition. If the application is filed a day before a nonworking day, the computation of the twenty-four (24)-hour period shall exclude the nonworking days.

"A person whose account has been frozen may file a motion to lift the freeze order and the court must resolve this motion before the expiration of the freeze order.

"No court shall issue a temporary restraining order or a writ of injunction against any freeze order, except the Supreme Court."

Section 9. Section 12 of the same Act is hereby amended to read as follows:

"(a) Civil Forfeiture. – Upon determination by the AMLC that probable cause exists that any monetary instrument or property is in any way related to an unlawful activity as defined in Section 3(i) or a money laundering offense under Section 4 hereof, the AMLC shall file with the appropriate court through the Office of the Solicitor General, a verified ex parte petition for forfeiture, and the Rules of Court on Civil Forfeiture shall apply.

"The forfeiture shall include those other monetary instrument or property having an equivalent value to that of the monetary instrument or property found to be related in any way to an unlawful activity or a money laundering offense, when with due diligence, the former cannot be located, or it has been substantially altered, destroyed, diminished in value or otherwise rendered worthless by any act or omission, or it has been concealed, removed, converted, or otherwise transferred, or it is located outside the Philippines or has been placed or brought outside the jurisdiction of the

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court, or it has been commingled with other monetary instrument or property belonging to either the offender himself or a third person or entity, thereby rendering the same difficult to identify or be segregated for purposes of forfeiture.

"(b) Claim on Forfeited Assets. – Where the court has issued an order of forfeiture of the monetary instrument or property in a criminal prosecution for any money laundering offense defined under Section 4 of this Act, the offender or any other person claiming an interest therein may apply, by verified petition, for a declaration that the same legitimately belongs to him and for segregation or exclusion of the monetary instrument or property corresponding thereto. The verified petition shall be filed with the court which rendered the judgment of forfeiture, within fifteen (15) days from the date of the finality of the order of forfeiture, in default of which the said order shall become final and executor. This provision shall apply in both civil and criminal forfeiture.

"(c) Payment in Lieu of Forfeiture. – Where the court has issued an order of forfeiture of the monetary instrument or property subject of a money laundering offense defined under Section 4, and said order cannot be enforced because any particular monetary instrument or property cannot, with due diligence, be located, or it has been substantially altered, destroyed, diminished in value or otherwise rendered worthless by any act or omission, directly or indirectly, attributable to the offender, or it has been concealed, removed, converted, or otherwise transferred to prevent the same from being found or to avoid forfeiture thereof, or it is located outside the Philippines or has been placed or brought outside the jurisdiction of the court, or it has been commingled with other monetary instruments or property belonging to either the offender himself or a third person or entity, thereby rendering the same difficult to identify or be segregated for purposes of forfeiture, the court may, instead of enforcing the order of forfeiture of the monetary instrument or property or part thereof or interest therein, accordingly order the convicted offender to pay an amount equal to the value of said monetary instrument or property. This provision shall apply in both civil and criminal forfeiture."

Section 10. Section 14 of the same Act, as amended, is hereby further amended to

read as follows:

"SEC. 14. Penal Provisions. – (a) Penalties for the Crime of Money Laundering. The penalty of imprisonment ranging from seven (7) to fourteen (14) years and a fine of not less than Three million Philippine pesos (Php3,000,000.00) but not more than twice the value of the monetary instrument or property involved in the offense, shall be imposed upon a person convicted under Section 4(a), (b), (c) and (d) of this Act.

"The penalty of imprisonment from four (4) to seven (7) years and a fine of not less than One million five hundred thousand Philippine pesos (Php1,500,000.00) but not more than Three million Philippine pesos (Php3,000,000.00), shall be imposed upon a person convicted under Section 4(e) and (f) of this Act.

"The penalty of imprisonment from six (6) months to four (4) years or a fine of not less than One hundred thousand Philippine pesos (Php100,000.00) but not more than Five hundred thousand Philippine pesos (Php500,000.00), or both, shall be imposed on a person convicted under the last paragraph of Section 4 of this Act.

"(b) x x x

"(c) x x x

"(d) x x x

"(e) The penalty of imprisonment ranging from four (4) to seven (7) years and a fine corresponding to not more than two hundred percent (200%) of the value of the monetary instrument or property laundered shall be imposed upon the covered person, its directors, officers or pesonnel who knowingly participated in the commission of the crime of money laundering.

"(f) Imposition of Administrative Sanctions. The imposition of the administrative sanctions shall be without prejudice to the filing of criminal charges against the persons responsible for the violation.

"After due notice and hearing, the AMLC shall, at its discretion, impose sanctions, including monetary penalties, warning or reprimand, upon any covered person, its directors, officers, employees or any other person for the violation of this Act, its implementing rules and regulations, or for failure or refusal to comply with AMLC orders, resolutions and other issuances. Such monetary penalties shall be in amounts as may be determined by the AMLC to be appropriate, which shall not be more than Five hundred thousand Philippine pesos (P500,000.00) per violation.1âwphi1

"The AMLC may promulgate rules on fines and penalties taking into consideration the attendant circumstances, such as the nature and gravity of the violation or irregularity.

"(g) The provision of this law shall not be construed or implemented in a manner that will discriminate against certain customer types, such as politically-exposed persons, as well as their relatives, or against a certain religion, race or ethnic origin, or such other attributes or profiles when used as the only basis to deny these persons access to the services provided by

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the covered persons. Whenever a bank, or quasi-bank, financial institution or whenever any person or entity commits said discriminatory act, the person or persons responsible for such violation shall be subject to sanctions as may be deemed appropriate by their respective regulators."

Section 11. New sections are hereby inserted after Section 19 of the same Act, as

amended, to read as follows:

"SEC. 20. Non-intervention in the Bureau of Internal Revenue (BIR) Operations. – Nothing contained in this Act nor in related antecedent laws or existing agreements shall be construed to allow the AMLC to participate in any manner in the operations of the BIR."

"SEC. 21. The authority to inquire into or examine the main account and the related accounts shall comply with the requirements of Article III, Sections 2 and 3 of the 1987 Constitution, which are hereby incorporated by reference. Likewise, the constitutional injunction against ex post facto laws and bills of attainder shall be respected in the implementation of this Act."

Section 12. The succeeding sections are hereby renumbered accordingly.

Section 13. Separability Clause. – If any provision of this Act is declared

unconstitutional, the same shall not affect the validity and effectivity of the other provisions hereof.

Section 14. Repealing Clause. – All laws, decrees, orders, and issuances or portions

thereof, which are inconsistent with the provisions of this Act, are hereby repealed, amended or modified accordingly.

Section 15. Effectivity. – This Act shall take effect fifteen (15) days following its publication in at least two (2) national newspapers of general circulation.

Approved.