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G.R. No. L-22734 September 15, 1967 COMMISSIONER OF INTERNAL REVENUE, petitioner, vs. MANUEL B. PINEDA, as one of the heirs of deceased ATANASIO PINEDA, respondent. On May 23, 1945 Atanasio Pineda died, survived by his wife, Felicisima Bagtas, and 15 children, the eldest of whom is Manuel B. Pineda, a lawyer. Estate proceedings were had in the Court of First Instance of Manila (Case No. 71129) wherein the surviving widow was appointed administratrix. The estate was divided among and awarded to the heirs and the proceedings terminated on June 8, 1948. Manuel B. Pineda's share amounted to about P2,500.00. After the estate proceedings were closed, the Bureau of Internal Revenue investigated the income tax liability of the estate for the years 1945, 1946, 1947 and 1948 and it found that the corresponding income tax returns were not filed. Thereupon, the representative of the Collector of Internal Revenue filed said returns for the estate on the basis of information and data obtained from the aforesaid estate proceedings and issued an assessment for the following: 1. Deficiency income 1945 P135.83 1946 436.95 1947 1,206.91 P1,779.69 Add: 5% surcharge 88.98 1% monthly interest from November 30, 1953 to April 15, 1957 720.77 Compromise for late filing 80.00 Compromise for late payment 40.00 Total amount due P2,707.44 =========== 2. Additional residence tax for 1945 P14.50 =========== 3. Real Estate dealer's tax for the fourth quarter of 1946 and the whole year of 1947 P207.50 =========== Manuel B. Pineda, who received the assessment, contested the same. Subsequently, he appealed to the Court of Tax Appeals alleging that he was appealing "only that proportionate part or portion pertaining to him as one of the heirs." After hearing the parties, the Court of Tax Appeals rendered judgment reversing the decision of the Commissioner on the ground that his right to assess and collect the tax has prescribed. The Commissioner appealed and this Court affirmed the findings of the Tax Court in respect to the assessment for income tax for the year 1947 but held that the right to assess and collect the taxes for 1945 and 1946 has not prescribed. For 1945 and 1946 the returns were filed on August 24, 1953; assessments for both taxable years were made within five years therefrom or on October 19, 1953; and the action to collect the tax was filed within five years from the latter date, on August 7, 1957. For taxable year 1947, however, the return was filed on March 1, 1948; the assessment was made on October 19, 1953, more than five years from the date the return was filed; hence, the right to assess income tax for 1947 had prescribed. Accordingly, We remanded the case to the Tax Court for further appropriate proceedings. 1 In the Tax Court, the parties submitted the case for decision without additional evidence. On November 29, 1963 the Court of Tax Appeals rendered judgment holding Manuel B. Pineda liable for the payment corresponding to his share of the following taxes: Deficiency income tax 1945 P135.8 3 1946 436.95 Real estate dealer's fixed tax 4th quarter of 1946 and whole year of 1947 P187.50 The Commissioner of Internal Revenue has appealed to Us and has proposed to hold Manuel B. Pineda liable for the payment of all the taxes found by the Tax Court to be due from the estate in the total amount of P760.28 instead of only for the amount of taxes corresponding to his share in the estate.1awphîl.nèt Manuel B. Pineda opposes the proposition on the ground that as an heir he is liable for unpaid income tax due the estate only up to the extent of and in proportion to any share he received. He relies on Government of the Philippine Islands v. Pamintuan 2 where We held that "after the partition of an estate, heirs and distributees are liable individually for the payment of all lawful outstanding claims against the estate in proportion to the amount or value of the property they have respectively received from the estate." We hold that the Government can require Manuel B. Pineda to pay the full amount of the taxes assessed. Pineda is liable for the assessment as an heir and as a holder-transferee of property belonging to the estate/taxpayer. As an heir he is individually answerable for the part of the tax proportionate to the share he received from the inheritance. 3 His liability, however, cannot exceed the amount of his share. 4 As a holder of property belonging to the estate, Pineda is liable for he tax up to the amount of the property in his possession. The reason is that the Government has a lien on the P2,500.00 received by him from the estate as his share in the inheritance, for unpaid income taxes 4a for which said estate is liable, pursuant to the last paragraph of Section 315 of the Tax Code, which we quote hereunder: If any person, corporation, partnership, joint-account (cuenta en participacion), association, or insurance company liable to pay the income tax, neglects or refuses to pay the same after demand, the amount shall be a lien in favor of the Government of the Philippines from the time when the assessment was made by the Commissioner of Internal Revenue until paid with interest, penalties, and costs that may accrue in addition thereto upon all property and rights to property belonging to the taxpayer: . . . By virtue of such lien, the Government has the right to subject the property in Pineda's possession, i.e., the P2,500.00, to satisfy the income tax assessment in the sum of P760.28. After such payment, Pineda will have a right of contribution from his co-heirs, 5 to achieve an adjustment of the proper share of each heir in the distributable estate. All told, the Government has two ways of collecting the tax in question. One, by going after all the heirs and collecting from each one of them the amount of the tax proportionate to the inheritance received. This remedy was adopted in Government of the Philippine Islands v. Pamintuan, supra. In said case, the Government filed an action against all the heirs for the collection of the tax. This action rests on the concept that hereditary property consists only of that part which remains after the settlement of all lawful claims against the estate, for the settlement of which the entire estate is first liable. 6 The reason why in case suit is filed against all the heirs the tax due from the estate is levied proportionately against them is to achieve thereby two results: first, payment of the tax; and second, adjustment of the shares of each heir in the distributed estate as lessened by the tax. Another remedy, pursuant to the lien created by Section 315 of the Tax Code upon all property and rights to property belonging to the taxpayer for unpaid income tax, is by subjecting said property of the estate which is in the hands of an heir or transferee to the payment of the tax due, the estate. This second remedy is the very avenue the Government took in this case to collect the tax. The Bureau of Internal Revenue should be given, in instances like the case at bar, the necessary discretion to avail itself of the most expeditious way to collect the tax as may be envisioned in the particular provision of the Tax Code above quoted, because taxes are the lifeblood of government and their prompt and certain availability is an imperious need. 7 And as afore-stated in this case the suit seeks to achieve only one objective: payment of the tax. The adjustment of the respective shares due to the heirs from the inheritance, as lessened by the tax, is left to await the suit for contribution by the heir from whom the Government recovered said tax. WHEREFORE, the decision appealed from is modified. Manuel B. Pineda is hereby ordered to pay to the Commissioner of Internal Revenue the sum of P760.28 as deficiency income tax for 1945 and 1946, and real estate dealer's fixed tax for the fourth quarter of 1946 and for the whole year 1947, without prejudice to his right of contribution for his co-heirs. No costs. So ordered. Concepcion, C.J., Reyes, J.B.L., Dizon, Makalintal, Zaldivar, Sanchez, Castro, Angeles and Fernando, JJ., concur. G.R. No. L-19495 November 24, 1966 COMMISSIONER OF INTERNAL REVENUE, petitioner, vs. LILIA YUSAY GONZALES and THE COURT OF TAX APPEALS, respondents. Matias Yusay, a resident of Pototan, Iloilo, died intestate on May 13, 1948, leaving two heirs, namely, Jose S. Yusay, a legitimate child, and Lilia Yusay Gonzales, an acknowledged natural child. Intestate proceedings for the settlement of his estate were instituted in the Court of First Instance of Iloilo (Special Proceedings No. 459). Jose S. Yusay was therein appointed administrator. On May 11, 1949 Jose S. Yusay filed with the Bureau of Internal Revenue an estate and inheritance tax return declaring therein the following properties: Personal properties Palay Carabaos P6,444.00 1,000.00 P7,444.00 Real properties: Capital, 74 parcels ) Conjugal 19 parcels) assessed at P179,760.00 Total gross estate P187,204.00 The return mentioned no heir. Upon investigation however the Bureau of Internal Revenue found the following properties: Personal properties: Palay Carabaos Packard Automobile 2 Aparadors P6,444.00 1,500.00 2,000.00 500.00 P10,444.00 Real properties: Capital, 25 parcels assessed at P87,715.32 1/2 of Conjugal, 130 parcels assessed at P121,425.00 P209,140.32 Total P219,584.32 The fair market value of the real properties was computed by increasing the assessed value by forty percent. Based on the above findings, the Bureau of Internal Revenue assessed on October 29, 1953 estate and inheritance taxes in the sums of P6,849.78 and P16,970.63, respectively. On January 25, 1955 the Bureau of Internal Revenue increased the assessment to P8,225.89 as estate tax and P22,117.10 as inheritance tax plus delinquency interest and demanded payment thereof on or before February 28, 1955. Meanwhile, on February 16, 1955, the Court of First Instance of Iloilo required Jose S. Yusay to show proof of payment of said estate and inheritance taxes. On March 3, 1955 Jose S. Yusay requested an extension of time within which to pay the tax. He posted a surety bond to guarantee payment of the taxes in question within one year. The Commissioner of Internal Revenue however denied the request. Then he issued a warrant of distraint and levy which he transmitted to the Municipal Treasurer of Pototan for execution. This warrant was not enforced because all the personal properties subject to distraint were located in Iloilo City. On May 20, 1955 the Provincial Treasurer of Iloilo requested the BIR Provincial Revenue Officer to furnish him copies of the assessment notices to support a motion for payment of taxes which the Provincial Fiscal would file in Special Proceedings No. 459 before the Court of First Instance of Iloilo. The papers requested were sent by the Commissioner of Internal Revenue to the Provincial Revenue Officer of Iloilo to be transmitted to the Provincial Treasurer. The records do not however show whether the Provincial Fiscal filed a claim with the Court of First Instance for the taxes due. On May 30, 1956 the commissioner appointed by the Court of First Instance for the purpose, submitted a reamended project of partition which listed the following properties: Personal properties: Buick Sedan Packard car Aparadors Cash in Bank (PNB) Palay Carabaos P8,100.00 2,000.00 500.00 8,858.46 6,444.00 1,500.00 P27,402.46 Real properties: Land, 174 parcels assessed at Buildings P324,797.21 4,500.00 P329,297.21 Total P356,699.67 More than a year later, particularly on July 12, 1957, an agent of the Bureau of Internal Revenue apprised the Commissioner of Internal Revenue of the existence of said reamended project of partition. Whereupon, the Internal Revenue Commissioner caused the estate of Matias Yusay to be reinvestigated for estate and inheritance tax liability. Accordingly, on February 13, 1958 he issued the following assessment: Estate tax P16,246.04 5% surcharge 411.29 Delinquency interest 11,868.90 Compromise No notice of death Late payment P15.00 40.00 55.00 Total P28,581.23 Inheritance Tax P38,178.12 5% surcharge 1,105.86 Delinquency interest 28,808.75 Compromise for late payment 50.00 Total P69,142.73 Total estate and inheritance taxes P97,723.96 Like in previous assessments, the fair market value of the real properties was arrived at by adding 40% to the assessed value. In view of the demise of Jose S. Yusay, said assessment was sent to his widow, Mrs. Florencia Piccio Vda. de Yusay, who succeeded him in the administration of the estate of Matias Yusay. No payment having been made despite repeated demands, the Commissioner of Internal Revenue filed a proof of claim for the estate and inheritance taxes due and a motion for its allowance with the settlement court in voting priority of lien pursuant to Section 315 of the Tax Code. On June 1, 1959, Lilia Yusay, through her counsel, Ramon Gonzales, filed an answer to the proof of claim alleging non-receipt of the assessment of February 13, 1958, the existence of two administrators, namely Florencia Piccio Vda. de Yusay who administered two-thirds of the estate, and Lilia Yusay, who administered the remaining one-third, and her willingness to pay the taxes corresponding to her share, and praying for deferment of the resolution on the motion for the payment of taxes until after a new assessment corresponding to her share was issued. On November 17, 1959 Lilia Yusay disputed the legality of the assessment dated February 13, 1958. She claimed that the right to make the same had prescribed inasmuch as more than five years had elapsed since the filing of the estate and inheritance tax return on May 11, 1949. She therefore requested that the assessment be declared invalid and without force and effect. This request was rejected by the Commissioner in his letter dates January 20, 1960, received by Lilia Yusay on March 14, 1960, for the reasons, namely, (1) that the right to assess the taxes in question has not been lost by prescription since the return which did not name the heirs cannot be considered a true and complete return sufficient to start the running of the period of limitations of five years under Section 331 of the Tax Code and pursuant to Section 332 of the same Code he has ten years within which to make the assessment counted from the discovery on September 24, 1953 of the identity of the heirs; and (2) that the estate's administrator waived the defense of prescription when he filed a surety bond on March 3, 1955 to guarantee payment of the taxes in question and when he requested postponement of the payment of the taxes pending determination of who the heirs are by the settlement court. On April 13, 1960 Lilia Yusay filed a petition for review in the Court of Tax Appeals assailing the legality of the assessment dated February 13, 1958. After hearing the parties, said Court declared the right of the Commissioner of Internal Revenue to assess the estate and inheritance taxes in question to have prescribed and rendered the following judgment: WHEREFORE, the decision of respondent assessing against the estate of the late Matias Yusay estate and inheritance taxes is hereby reversed. No costs. The Commissioner of Internal Revenue appealed to this Court and raises the following issues: 1. Was the petition for review in the Court of Tax Appeals within the 30-day period provided for in Section 11 of Republic Act 1125? 2. Could the Court of Tax Appeals take cognizance of Lilia Yusay's appeal despite the pendency of the "Proof of Claim" and "Motion for Allowance of Claim and for an Order of Payment of Taxes" filed by the Commissioner of Internal Revenue in Special Proceedings No. 459 before the Court of First Instance of Iloilo? 3. Has the right of the Commissioner of Internal Revenue to assess the estate and inheritance taxes in question prescribed? On November 17, 1959 Lilia Yusay disputed the legality of the assessment of February 13, 1958. On March 14, 1960 she received the decision of the Commissioner of Internal Revenue on the disputed assessment. On April 13, 1960 she filed her petition for review in the Court of Tax Appeals. Said Court correctly held that the appeal was seasonably interposed pursuant to Section 11 of Republic Act 1125. We already ruled in St. Stephen's Association v. Collector of Internal Revenue, 1 that the counting of the thirty days within which to institute an appeal in the Court of Tax Appeals should commence from the date of receipt of the decision of the Commissioner on the disputed assessment, not from the date the assessment was issued. Accordingly, the thirty-day period should begin running from March 14, 1960, the date Lilia Yusay received the appealable decision. From said date to April 13, 1960, when she filed her appeal in the Court of Tax Appeals, is exactly thirty days. Hence, the appeal was timely. Next, the Commissioner attacks the jurisdiction of the Court of Tax Appeals to take cognizance of Lilia Yusay's appeal on the ground of lis pendens. He maintains that the pendency of his motion for allowance of claim and for order of payment of taxes in the Court of First Instance of Iloilo would preclude the Court of Tax Appeals from acquiring jurisdiction over Lilia Yusay's appeal. This contention lacks merit. Lilia Yusay's cause seeks to resist the legality of the assessment in question. Should she maintain it in the settlement court or should she elevate her cause to the Court of Tax Appeals? We say, she acted correctly by appealing to the latter court. An action involving a disputed assessment for internal revenue taxes falls within the exclusive jurisdiction of the Court of Tax Appeals. 2 It is in that forum, to the exclusion of the Court of First Instance, 3 where she could ventilate her defenses against the assessment. Moreover, the settlement court, where the Commissioner would wish Lilia Yusay to contest the assessment, is of limited jurisdiction. And under the Rules, 4 its authority relates only to matters having to do with the settlement of estates and probate of wills of deceased persons. 5 Said court has no jurisdiction to adjudicate the contentions in question, which — assuming they do not come exclusively under the Tax Court's cognizance — must be submitted to the Court of First Instance in the exercise of its general jurisdiction. 6 We now come to the issue of prescription. Lilia Yusay claims that since the latest assessment was issued only on February 13, 1958 or eight years, nine months and two days from the filing of the estate and inheritance tax return, the Commissioner's right to make it has expired. She would rest her stand on Section 331 of the Tax Code which limits the right of the Commissioner to assess the tax within five years from the filing of the return. The Commissioner claims that fraud attended the filing of the return; that this being so, Section 332(a) of the Tax Code would apply. 7 It may be well to note that the assessment letter itself (Exhibit 22) did not impute fraud in the return with intent to evade payment of tax. Precisely, no surcharge for fraud was imposed. In his answer to the petition for review filed by Lilia Yusay in the Court of Tax Appeals, the Commissioner alleged no fraud. Instead, he broached the insufficiency of the return as barring the commencement of the running of the statute of limitations. He raised the point of fraud for the first time in the proceedings, only in his memorandum filed with the Tax Court subsequent to resting his case. Said Court rejected the plea of fraud for lack of allegation and proof, and ruled that the return, although not accurate, was sufficient to start the period of prescription. Fraud is a question of fact. 8 The circumstances constituting it must be alleged and proved in the court below. 9 And the finding of said court as to its existence and non-existence is final unless clearly shown to be erroneous. 10 As the court a quo found that no fraud was alleged and proved therein, We see no reason to entertain the Commissioner's assertion that the return was fraudulent. The conclusion, however, that the return filed by Jose S. Yusay was sufficient to commence the running of the prescriptive period under Section 331 of the Tax Code rests on no solid ground. Paragraph (a) of Section 93 of the Tax Code lists the requirements of a valid return. It states: (a) Requirements.—In all cases of inheritance or transfers subject to either the estate tax or the inheritance tax, or both, or where, though exempt from both taxes, the gross value of the estate exceeds three thousand pesos, the executor, administrator, or anyone of the heirs, as the case may be, shall file a return under oath in duplicate, setting forth (1) the value of the gross estate of the decedent at the time of his death, or, in case of a nonresident not a citizen of the Philippines ; (2) the deductions allowed from gross estate in determining net estate as defined in section eighty-nine; (3) such part of such information as may at the time be ascertainable and such supplemental data as may be necessary to establish the correct taxes. A return need not be complete in all particulars. It is sufficient if it complies substantially with the law. There is substantial compliance (1) when the return is made in good faith and is not false or fraudulent; (2) when it covers the entire period involved; and (3) when it contains information as to the various items of income, deduction and credit with such definiteness as to permit the computation and assessment of the tax. 11 There is no question that the state and inheritance tax return filed by Jose S. Yusay was substantially defective. First, it was incomplete. It declared only ninety-three parcels of land representing about 400 hectares and left out ninety-two parcels covering 503 hectares. Said huge under declaration could not have been the result of an over-sight or mistake. As found in L-11378, supra note 7, Jose S. Yusay very well knew of the existence of the ommited properties. Perhaps his motive in under declaring the inventory of properties attached to the return was to deprive Lilia Yusay from inheriting her legal share in the hereditary estate, but certainly not because he honestly believed that they did not form part of the gross estate. Second, the return mentioned no heir. Thus, no inheritance tax could be assessed. As a matter of law, on the basis of the return, there would be no occasion for the imposition of estate and inheritance taxes. When there is no heir - the return showed none - the intestate estate is escheated to the State. 12 The State taxes not itself. In a case where the return was made on the wrong form, the Supreme Court of the United States held that the filing thereof did not start the running of the period of limitations. 13 The reason is that the return submitted did not contain the necessary information required in the correct form. In this jurisdiction, however, the Supreme Court refrained from applying the said ruling of the United States Supreme Court in Collector of Internal Revenue v. Central Azucarera de Tarlac, L-11760-61, July 31, 1958, on the ground that the return was complete in itself although inaccurate. To our mind, it would not make much difference where a return is made on the correct form prescribed by the Bureau of Internal Revenue if the data therein required are not supplied by the taxpayer. Just the same, the necessary information for the assessment of the tax would be missing. The return filed in this case was so deficient that it prevented the Commissioner from computing the taxes due on the estate. It was as though no return was made. The Commissioner had to determine and assess the taxes on data obtained, not from the return, but from other sources. We therefore hold the view that the return in question was no return at all as required in Section 93 of the Tax Code. The law imposes upon the taxpayer the burden of supplying by the return the information upon which an assessment would be based. 14 His duty complied with, the taxpayer is not bound to do anything more than to wait for the Commissioner to assess the tax. However, he is not required to wait forever. Section 331 of the Tax Code gives the Commissioner five years within which to make his assessment. 15 Except, of course, if the taxpayer failed to observe the law, in which case Section 332 of the same Code grants the Commissioner a longer period. Non-observance consists in filing a false or fraudulent return with intent to evade the tax or in filing no return at all. Accordingly, for purposes of determining whether or not the Commissioner's assessment of February 13, 1958 is barred by prescription, Section 332(a) which is an exception to Section 331 of the Tax Code finds application. 16 We quote Section 332(a): SEC. 332. Exceptions as to period of limitation of assessment and collection of taxes.— (a) In the case of a false or fraudulent return with intent to evade tax or of a failure to file a return, the tax may be assessed, or a proceeding in court for the collection of such tax may be begun without assessment, at any time within ten years after the discovery of the falsity, fraud or omission. As stated, the Commissioner came to know of the identity of the heirs on September 24, 1953 and the huge underdeclaration in the gross estate on July 12, 1957. From the latter date, Section 94 of the Tax Code obligated him to make a return or amend one already filed based on his own knowledge and information obtained through testimony or otherwise, and subsequently to assess thereon the taxes due. The running of the period of limitations under Section 332(a) of the Tax Code should therefore be reckoned from said date for, as aforesaid, it is from that time that the Commissioner was expected by law to make his return and assess the tax due thereon. From July 12, 1957 to February 13, 1958, the date of the assessment now in dispute, less than ten years have elapsed. Hence, prescription did not abate the Commissioner's right to issue said assessment. Anent the Commissioner's contention that Lilia Yusay is estopped from raising the defense of prescription because she failed to raise the same in her answer to the motion for allowance of claim and for the payment of taxes filed in the settlement court (Court of First Instance of Iloilo), suffice it to state that it would be unjust to the taxpayer if We were to sustain such a view. The Court of First Instance acting as a settlement court is not the proper tribunal to pass upon such defense, therefore it would be but futile to raise it therein. Moreover, the Tax Code does not bar the right to contest the legality of the tax after a taxpayer pays it. Under Section 306 thereof, he can pay the tax and claim a refund therefor. A fortiori his willingness to pay the tax is no waiver to raise defenses against the tax's legality. WHEREFORE, the judgment appealed from is set aside and another entered affirming the assessment of the Commissioner of Internal Revenue dated February 13, 1958. Lilia Yusay Gonzales, as administratrix of the intestate estate of Matias Yusay, is hereby ordered to pay the sums of P16,246.04 and P39,178.12 as estate and inheritance taxes, respectively, plus interest and surcharge for delinquency in accordance with Section 101 of the National Internal Revenue Code, without prejudice to reimbursement from her co-administratrix, Florencia Piccio Vda. de Yusay for the latter's corresponding tax liability. No costs. So ordered. Concepcion, C.J., Reyes, J.B.L., Barrera, Dizon, Regala, Makalintal, Sanchez and Castro, JJ., concur. Zaldivar, J., took no part. G.R. No. L-27745 October 18, 1977 MISAEL P. VERA, as Commissioner of Internal Revenue, petitioner, vs. Hon. Judge PEDRO C. NAVARRO, in his capacity as Judge of the Court of First Instance of Pasig, Rizal (Branch V MAGDALENA ABANTO and CAMILO ERIBAL, as voluntary residual heirs of the Estate of the deceased ELSIE M. GACHES; DELIA P. MEDINA, as attorney-in-fact of said heirs; BIENVENIDO A. TAN, SR., as Executor of the Estate of ELSIE M. GACHES; PHILIPPINE NATIONAL BANK; PHILIPPINE BANKING CORPORATION; THE OVERSEAS BANK OF MANILA; and BANCO FILIPINO SAVINGS AND MORTGAGE BANK, respondents. This is a petition for certiorari, mandamus, prohibition and injunction filed by the herein petitioner Misael P. Vera, in his capacity as Commissioner of Internal Revenue (hereinafter referred to as "Commissioner"), against the Honorable Judge Pedro C. Navarro, in his capacity as Judge of the Court of First Instance of Pasig, Rizal (hereinafter referred to as "respondent Judge"), on account of three orders dated June 5, 8 and 9, 1967, which the latter issued in Special Proceedings No. 5249 entitled "In the Matter of the Testate Estate of Elsie M. Gaches — Bienvenido Tan, Executor," which the Commissioner maintains were issued without or in excess of jurisdiction or with grave abuse of discretion. It appears that one Elsie M. Gaches died on March 9, 1966 without a child. The deceased, however, left a last will and testament in which she made the following relevant disposition of her estate, to wit: ñé+.£ªwph!1 3. After payment of my just debts and funeral expenses I intact that the balance of my property, both real and personal in the Philippines, he distributed as follows: ñé+.£ªwph!1 'a) to my driver, PACITO TROCIO — Ten Thousand Pesos (P10,000.00); b) to my lavandero, VICENTE JERODIAS — One Thousand Pesos (P1,000.00); c) to my gardener, CRISANTO SALIPOT, JR. — Five Hundred Pesos (P500.00); d) the balance of my estate in the Philippines shall then be divided in half; One-half (1/2) to be given to CAMILO ERIBAL and the other half to MISS MAGDALENA ABANTO; e) to MISS CONSUELO L. TAN — My office table and chair now in the library of my house, and one of the carpets in my house to be selected by her;' 4. All my property in the United States consisting of furs, jewelry and stocks I leave to my sister BESS LAUER widow, and at present a resident of San Francisco, California. On March 11, 1966, the herein respondent Judge Bienvenido Tan, Sr. (hereinafter referred to as "Judge Tan") filed with the Court of First instance of Pasig, Rizal a petition for the probate of the aforesaid will On Aped 21, Judge Tan was appointed as executor of the testate estate of Elsie M. Gaches without a bond. In a letter, dated June 3, 1966, Judge Tan informed the Commissioner that the testate estate was worth about ten million (P10 million) pesos and that the estate and inheritance taxes due thereon were about P9.5 million. On June 11, 1966, the herein respondent Atty. Delia P. Medina (hereinafter referred to as "Atty. Medina"), representing herself as the attorney-in-fact of the herein respondents Camilo Eribal and Magdalena Abanto, filed with the probate court a motion praying that the executor of the estate be authority to give a monthly allowance to the voluntary heirs Abanto and Eribal from the month of May, 1966 until "the receipt of the recommended advance of inheritance of P100,000.00 each recommended by the Executor in his motion of June 6, 1966 and/or final distribution has been made to said heirs of their respective shares in the estate." This prayer was granted by the probate court in an order dated June 25, 1966 (subsequently clarified in an order dated August 11, 1966). On July 9, 1966, the Commissioner filed with the probate court a proof of claim for the sum "of P192,364.00 as income tax for 1965 and 1% monthly interest due from the d Elsie M. Gaches." On July 19, 1966, Judge Tan filed with the probate court a motion praying for authority to make the following additional advance payments — (1) To Abanto and Eribal, P150,000.00; (2) To Bess Lauer, $75,000.00; (3) To Judge Tan as advance executor's fees, P50,000.00; and (4) To Attys. Medina and Bienvenido Tan, Jr., P75,000.00 each as advance attomey's fees. In this motion, Judge Tan claimed that the estate was very liquid and that "any claims whatsoever against the Estate and the Government shall be amply protected since over P7,000,000.00 worth of shares shall still remain to answer therefor (Sec. 1, Rule 90, Rules of Court)." The respondent Judge granted Judge Tan's prayer in an order dated July 23, 1966, In a letter, dated November 4, 1966, the Commissioner advised Judge Tan to Pay to the Bureau of Internal Revenue the sum of P1,398,436.30 as estate tax and P7,140,060.69 as inheritance tax, the investigation of his office having allegedly disclosed that the next value of the testate estate was P10,212,899.20. 1 Judge Tan disputed the correctness of the assessment in a letter sent to the Commissioner. On November 26, 1966, the Commissioner filed with the probate court a proof of claim for the death taxes stated in the assessment notice sent to Judge Tan. On the same date, the Commissioner also submitted to the probate court for its resolution a motion praying: (1) for the revocation of the court's orders dated June 25, July 6, July 23 and August 11, 1966 and all other orders granting the payment of advance inheritance, allowances and fees; (2) for the appointment of a co-administrator of the estate to represent the Government; and (3) for the non-disbursement of funds of the estate without prior notice to the Commissioner. Although the records do not disclose that the probate court specifically disposed of this motion, the said court, from its subsequent actuations, may be considered to have impliedly denied the Commissioner's prayers for the appointment of a co-administrator and the non-payment of advance allowances and fees. On January 19, 1967, the probate court authorized the conversion of the amount of P75,000.00 previously ruled to be paid to Atty. Medina as advance attomey's fees in its order of July 23, 1966 into allowances for Eribal and Abanto. On April 14, 1967, with the Probate court's approval, Judge Tan paid to the Bureau of Internal Revenue the amount of ?185,286.93 as estate tax and, on April 24, 1967, the amount of P1,055,776.00 as inheritance tax. These payments were based on a tax return filed by Atty. Medina on March 8, 1967 with the Bureau of Internal Revenue. On June 3, 1967, Judge Tan submitted to the probate court for approval a final accounting and project of partition of the testate estate. Acting thereon, the respondent Judge issued an order, dated June 5, 1967, for the partial distribution of the estate as follows: ñé+.£ªwph!1 Submitted for resolution of this Court is the Amended Final Accounting and Project of Partition dated May 27, 1967, presented by The executor. Atty. Paredes manifested that he has no objection to the approval thereof provided that certain items enumerated therein be corrected or modified, as follows: the amount of shares in the Lepanto consolidated Mining Co. should be 6,105,429 instead of 6,015,429, as reported; the amount of P11,537.60 reported as expenses made on January 30, 1967 should be cancelled or excluded . . . and that the time appearing as expenses made on May 10, 1967 payable to Apolonio manifastation illegal should be only P114,000.00 instead of P135,000.00 . . . which manifestations were also adopted by Atty. Virgilio Saldajeno of the Bureau of Internal Revenue, and in addition, he objected in principle to the Executor Fees and to the Attorney's Fees as excessive but left the matter to the discretion of the Court. Considering, further, the manifestations of Atty. Saidajeno that him has no objection to the partial distribution of the estate as long as it an he shown that the rights and interests of the government can be full protected, and it appearing from the subsequent manifestation of Atty. Paredes, counsel for the heirs, that sufficient assets with a nutrient market value of at least P8,000,000.00 will be left to the estate even if a partial distribution in the amount of P3,000,000.00 is made for which reason the rights of the government to collect whatever deficiency, taxes, if any may be asses it may be assessed in the future the heirs have already paid in good faith even ahead of its due dates transfer taxes in the total amount of P1,241,062.93, the Amended Final Accounting and Project of Partition dated May 27, 1967 may be approved, subject Lo this following, terms and conditions: 1. The Executor is hereby discharged from any and all responsibilities that lie has pertaining to the estate; 2. The voluntary heirs Magdalena Abanto and Camilo Eribal shill be responsible for all taxes of any nature whatsoever which may be due the government arising out of the transaction of the properties ol' the estate and the environment can, if it so desires, register its tax lien in the remaining assets after a partial distribution of the estate; 3. Bess Lauer, sister and heir of the deceased shall be fully for, all United States taxes pertaining to her share in the estate. WHEREFORE, subject to the above terms and conditions, entitled Final Accounting and Project of Partition dated May 27, 1967 submitted by the Executor. as modified in the, manifestation of Atty. Paredes and Saidajeno, is hereby approved. 1 . Pacita Trocio P10,000.00 2. To Vicente Jerodias 1,000.00 3. To Vicente Crisanto salipot, Jr. 500.00 4. To Magdalena Abanto and Camilo Eribal, share and share alike thru their attorney-in-fact Delia P. Medina, cash in the amont of 2,330.00 5. To Judge Bienvenido A. Tan, Sr. 120,000.00 6. To Atty. Bienvenido A. Tan, Jr. 150,000.00 The aforesaid amount is hereby ordered to be taken from the funds of the estate deposited with the Philippine National bank. As to the other properties remaining after this partial distribution, consisting of the following: A. BANK DEPOSITS: 1 . Philippine 559,147.41 2. Philippine 238,5000.00 3. Overseas Bank of Manila 700,000.00 4. Banco Filipino Savings & 581.00 5. Refund from 32,537.60 B. HOUSE AND LOT LOCATED AT NO. 50 TAMARIND ROAD, FORBES PARK, MAKATI, RIZAL; C. SHARES OF STOCK IN THE FOLLOWING: 1 . Lepanto Consolidated Mining Co. 1,105,429 shares 2. San Miguel Corp. 16,692 shares (common) 3. San Miguel Corp. 500 shares (preferred) 4. Central Azucarera del Pilar 17,755 shares 5. Manufacturas Textile Industriales de Filipinas, Inc. 10,368 shares 6. Consolidated Mines, Inc. 85,858 shares 7. Mayon Metal Corporation 5,000 shares 8. Soliangco & Co Inc. 25 shares 9. San Juan Heights 5 shares 10. Metropolitan Insurance Co. 443 shares 11. Realty Investment Inc. 652 shares (10 shares, management & 642 common) The same shall be turned over and delivered to the attorney-in-fact of the voluntary heirs. Atty. Delia P. Medina, to be held by her to answer for whatever deficiency estate and inheritance taxes may still be due from the estate and the heirs in favor of the government. SO ORDERED. Pasig, Rizal, June 5,1967.ñé+.£ªwph!1 (Sgd.) PEDRO C. ñé+.£ªwph! 1 J u d g e On the same day (that is, June 5, 1967), the Commissioner, having been informed in advance about the foregoing order by certain undisclosed sources, issued warrants of garnishment against the funds of the estate deposited with the Philippine National Manial, the overseas Bank of Manila, and the Philippine Banking Corporation, on the strength of sections 315-330 of the National Internal Revenue Code. On June 7, 1967, Atty. Medina filed in the probate court a petition for the discharge of the writs of punishment issued by the commissioner. On June 8, 1967, the respondent Judge issued an order lifting the wants in question. On June 9, 1967, the Philippine National Bank filed a motion in the probate court praying that it be authority to deposit with the said court the money in its hands in view of the conflicting claims of the parties over the funds in dispute. On the same day (that is, June 9, 1967), the respondent Judge issued an order denying the said motion and threatening the bank officials who refuse to implement its orders of June 5 and 8, 1967 with contempt. Atty. Medina was consequently able to withdraw the sum of P2,330,000.00 from the PNB. A copy of this order of June 9, 1967 as well as the orders of June 5 and 8, 1967 were received by the Commissioner on June 13, 1967. On June 16, 1967, the Commissioner filed a motion for reconsideration (supplemented on June 22, 1967) of the orders of the probate court dated June 5, 8 and 9, 1967. On July 6, 1967, however, the Commissioner, on the belief that the probate court's resolution on its motion was not legally necessary, filed with this Court the instant petition for certiorari, mandamus, prohibition and injunction against the aforesaid orders of the respondent Judge. The petition at bar is based on the following propositions: (1) That the distributive shares of an heir can only be paid after full payment of the death taxes. As this case subsequently progressed before this Court, the position of the Commissioner would seem to be that the deficiency income taxes due and payable during the lifetime of the deceased should also be paid first. (2) While partial distribution of the estate of a deceased may allowed, a bond must be filed by the distributees to secure the payment of the transfer taxes. Subsequently, however, the Commissioner changed his position, stating that such distribute may be made so long as the payment of the taxes due the government is "provided for," citing section 1, rule go of the Rules of Court in relation to sections 95 (c), 97, 103, 106 and 107 (c) the National lnternal Revenue Code. (3) That the executor of an estate cannot be discharged without the payment of estate and inheritance taxes. The Commissioner later modified his stand on this ProPosition in line with the view that it is sufficient if the payment of the said taxes is "Provided for.,, (4) That the delivery of properties of the estate to a stranger [that is, to the voluntary heirs herein] is not sanctioned by law. Later, as the case at bar Progressed, and in view of a compromise offer made by the respondents Abanto and Eribal to pay the taxes being claimed by the Bureau of Internal Revenue, the Commissioner advanced the view that this proposition is already moot and academic. (5) That the respondent Judge has no authority to quash or dissolve writs of garnishment issued by the Commissioner. Subsequently, however, the Commissioner reversed his stand on this point and stated that the probate court may so dissolve said writs of punishment as the assets in question were then in custodia legis, citing Collector vs. Vda. de Codeniera L-9675, Sept. 28, 1957. Taking stock of the Commissioner's complaint that the disputed orders Were issued without or in excess of jurisdiction or with grave abuse of discretion, the herein respondents Atty. Medina and Judge Tan put up a number of factual and legal arguments, the material ones of which may be stated, in sum, as follows: (1) The Commissioner's notice of assessment, dated November 10, 966, was based on wrong premises and valuation of the assets in question; in fact, the Commissioner had agreed during the pretrial conference in the probate court to reconsider certain items therein; (2) The allowance granted to Abanto and Eribal were taken solely from the income of the estate, a fact admitted by Atty. Saldajeno of the Bureau of Internal Revenue; it is claimed that in 1965 the estate had an income of P41 1,000.00 and over P750,000.00 in 1966, which could more than cover the questioned allowances; (3) Eribal and Abanto are willing and bound themselves to assume the responsibility for the payment of the taxes due against the estate except for the properties located in the United States which should be charged against Bess Lauer; (4) The Commissioner does not object to the partition of the estate in question provided that enough assets are left to pay the taxes against the estate; (5) The estate has sufficient assets with which to pay the taxes being claimed by the government; (6) There was nothing unusual in the institution of Abanto and Eribal as residual heirs of the deceased; Abanto was the testator's special nurse, companion, secretary and cook from 1945 until Elsie M. Gaches death in March, 1966; Eribal, on the other hand, was the deceased's cook, caretaker, companion and driver since 1929; (7) The grant of allowances was never contested below and cannot now be raised in the-instant proceedings; (8) Adequate safeguards were specified in the probate court's order of June 5, 1967 to cover the tax claims; and (9) There had been no full distribution of the estate in question without payment of the transfer taxes since the said taxes are being disputed by the heirs. In a reply filed on September 7, 1967, the Commissioner stated that he had issued a revised assessment dated August 24, 1967 and that, furthermore, there were due from the estate deficiency income taxes for the years 1961 to 1965 in the total sum of P1,182,296.16, for which reason the estate should not be ordered distributed until the same is fully satisfied. In a rejoinder, Judge Tan claimed that the August 24, 1967 assessment could still be reduced considerably. The contents of the mentioned revised assessment which was addressed to Atty. Medina are, inter alia, as follows: ñé+.£ªwph!1 Madam: ... I have the honor to advise that in a reinvestigation conducted by this Office, for transfer tax purposes, it was ascertained that she left real and personal properties in the sums of P377,912.50 and P5,963,822.31 respectively, or a gross estate of P9,341,734.81. The amounts of P193,892.38, P462,022.83 and Pl,226,783.53, representing accrued household and medical expenses, funeral expenses and income taxes (1961-1965) payable, respectively, or a total of P1,882,198.74, were allowed as deductions resulting in a net taxable estate in,the sum of P7,459.536.07 subject to estate and inheritance taxes. In view thereof, there are hereby further assessed the sums of P891,673.68 and P4,353,972.87 as deficiency estate and inheritance taxes and penalty still due on the transmission of the decedent's estate, after, crediting the sums of P185,286.73 and P1,055,776.00, which were paid on April 4, 1967 and April 24, 1967, details of which are shown hereunder: Estate tax Pl,076.960.41 Less: Amount Paid 185,286.7 Total P891,673.69 Inheritance tax 5,448.87 Corporation CPA Certificate 300.00 Total P5,409,748.87 Less Amount Paid 1,055,776.00 Deficiency Inheritance Tax & Penalty P4,353,972.87 xxx xxx xxx The deadlines for the payment of the aforementioned transfer taxes without penalty were December 9, 1967 for the estate tax and March 9, 1968 for the inherit tax. On Sepember 9, 1967, Atty. Medina riled with this Court a pleading captioned "Compliance and Offer of Compromise to Terminate this Case" in which she stated the following:ñé+.£ªwph!1 xxx xxx xxx 4. Although respondents voluntary heirs intend to assail and question the correctness of said assessment only insofar as the same has disallowed the deductions claimed by them for personal services rendered by various persons in the total sum of P366,800.00, foregoing thereby other possible objections to the other items just so this case can be earlier disposed of, said repondents, nevertheless, are willing to pay even before these due dates the entire amount-specified in said assessment, but under protest insofar as the same has disallowance is concerned, in order to already terminate and dispose of this case before this Honorable Court. To pay the taxes in question, Atty. Medina prayed in her offer of that she and Abanto and Eribal be authorize to make use of the funds of the estate on deposit with the Philippine National (P238,500.00), the Banking Corporation (P559,147.41), the Banco Filipino savings and Mortgage Bank (P581.00), and the Bank of Manila (P700,000.00), and to gradually dispose of and sell the shares of stock representing of the delegate with an estimated market value of P2,154,026.36. Also included among the assets for which authority to sell was being procured in the said offer of were 2,442,000 Lepanto Consolidated Co. which Abanto and Eribal with the probate court niether this Court issued a pre injunction in the case at bar on july 10, 1967 ordering, among others, Atty. Medina, Abanto and Eribal to restore to the court a quo the amount of P2,330,000.00 withdrawn from the Philippine National Bank pursuant to the questioned orders of the probate court, and every other money or property revived by them by of said questioned orders. The mentioned Lepanto shares had then an estimated market value of P2,588,520.00. It should bear mention, at this point, that the money withdrawn from the Philippine National Bank was not returned by Atty. Medina, Abanto or Eribal to the probate court, these respondents having prayed this Court that the deposit of the mentioned stocks be as full compliance by them with the writ of pre injunction issued by this Court. On September 19, 1967, this Court issued a resolution requiring the Commissioner to submit a memorandum on how he arrived at his original assessment of more than ?8.83 million and the revised assessment of only about ?6.48 million, showing a reduced difference of more than P2 million. The Commissioner submitted to this Court the required memorandum on May 25, 1968, the important items and figures described in which may be summed up comparatively as follows: ñé+.£ªwph!1 ESTATE OF ELSIER GACHES ASSETS ORIGINAL REVISED ASSESSMENT ASSESSMENT Cash in bank - Philippine Pl,172.635.62 P1,172,635.62 Foreign (US$ P3.95) 559,335.00 559,335.00 Cars- Lincoln — Pl8,000.00 Volkswagen 7,000.00 (Vauxhalll) 25.000.00 12,000.00 Furnitures 30,000.00 30,000.00 Shares of stock 7,923,576.23 7,189,851.69 Forbes Park lot — (at P144.73/sq. in.) 383,202.35 (at P97.50/sq.m.) 258,862.50 House ------- P111,850.00 Swimming Pool — 5,000.00 Fence -------- 2,200.00 119,050.00 119,050.00 TOTAL ASSETS P10,212,899.20 P9,341,734.81 ñé+.£ªwph!1 LIABILITIES AND DEDUCTIONS Estimated Income Tax Payable (1965) P192,364.00 (1961-1965) P1,882,783.53 Aaccrued medical expenses 13,000.00) Funeral expenses 73,320.00) 193,392.38 Judicial exercises 331,026.40 462,022.83 TOTAL LIABS. & DEDUCTIONS P610,190.60 P1,882,198.74 TRANSFER TAXES PAYABLE Gross Estate P10,212,899.20 P9,341,734.81 Less: Laibs. & Deductions 610,190.60 1,882,198.74 Net Taxable Estate P9,602,708.60 P7,459,536.07 Less Estate'tax Due P 1,398,436.30 Pl,076,960.41 Estate Subj. to Inh. Tax P 8,204,272.30 P6,382,575.66 Distribution of Hereditary Estate C. Salipot, Jr. P 500.00 P 500.00 V. Jerodias 1,000.00 1,000.00 P. Trocio 10,000.00 10,000.00 Bess Lauer 672,305.00 672,305.00 M. Abanto 3,760,233.65 2,849,385.33 C. Eribal 3,760,233.65 2,849,385.33 Inheritance Tax Due C. Salipot, Jr. P10.00 P 10.00 V. Jerodias 20.00 20.00 P. Trocio 600.00 600.00 Bess Lauer 192,186.75 192,186.75 M. Abanto 3,473,621.97 2,608,316.06 C. Eribal 3,473,621.97 2,698,316.06 Total inheritance Tax due P 7,140,060.69 P5,409,448.87 Add: Estate Tax Due P 1,398,436.30 Pl,076,960.41 TOTAL TRANSFER TAXES DUE P8,538,496.99 P6,486,409.28 On November 17, 1967, this Court authorized the herein respondents Abanto, Eribal and Atty. Medina to withdraw funds of the estate deposited with the Philippine Banking Corporation (P191,673,68) and the Overseas Bank of Manila (P700,000.00) in the form of cashier's checks payable to the Commissioner for the payment of the estate tax still unpaid under the terms of the revised assessment. On November 23, 1967, the Solicitor General filed with this court a manifestation expressing his conformity, in behalf of the Commissioner, to the offer of compromise dated September 9, 1967 made by Atty. Medina, subject to certain conditions, such as, that the cash in the banks of the estate as well as the proceeds to be realized from the sale of the shares of stock should be turned over to the Commissioner for the payment of the taxes due against the estate and the heirs thereof. This manifestation was first opposed by the Acting Commissioner of Internal Revenue on the ground that the Commissioner (who was then abroad) had actually requested the Solicitor General not to agree to the mentioned offer of compromise; however, the Solicitor General subsequently said that the Commissioner's conformity was given to him orally. On December 5, 1967, Atty. Medina filed with this Court a petition to declare the Overseas Bank of Manila in contempt for allowing the renewal, without court authority, of the time deposit of P700,000.00 with the said bank for another year. In a supplemental motion filed on December 8, 1967, Atty. Medina also prayed that the said bank and those responsible for extending the maturity date of said time deposit be held liable for the payment of whatever surcharges, interest and penalties may be imposed as a consequence of the late payment of the balance of the estate tax assessed against the estate. It appears that the time deposit in question was held by the said bank under two certificates, one for P100,000.00 to mature on May 12, 1967, and the other, for P600,000.00 to mature on June 16, 1967. Judge Tan, however, extended the maturity date of said time deposits to May 12, 1968. The certificates of time deposit covering the said funds had been endorsed in favor of the Commissioner in payment of the unpaid balance of the estate then December 7, 1967) amounted to P700,000.00. Commmoner, however. mentioned the respondents End an Abanto through their counsel that his Office - ñé+.£ªwph!1 ... regrets that the same cannot be accepted as payment of the deficiency estate tax in this case since they cannot, at present or on before December 9, 1967, be. converted into cash. However, we are holding said certificates of time deposit for possible application in payment of the unpaid balance of the deficiency estate tax in this case as soon as said certificates can be converted into cash. It will be understood in this connection that if the balance of the deficiency estate tax in this case is not paid on or before December 9, 1967, the same shall be subject to the interest on deficiency, 5% surcharge and 1% monthly interest for deliquency. According to Judge Tan, he caused the extension of the maturity date of the said deposit but that in doing so he acted in good faith in that the testate estate then had ample funds and assets and the said time deposit earned a higher interest than a savings deposit; that he needed no specific court authority for the purpose; and that he had a gentleman's agreement with the officials of the bank that said deposit could be withdrawn in advance, such being the custom in banking circles. The Overseas Bank of Manila, on the other hand, in answer to Atty. Medina's mentioned petition, claimed that the deposit in question was renewed before the bank received any letter demanding its release. In view of this impasse and the fast approaching deadline for the payment of the estate tax, Atty. Medina requested the Commissioner to credit P700,000.00 to the amount previously paid as inheritance tax; but, apparently, this request was not honored by the Commissioner. On January 26, 1968, Atty. Medina filed with this Court a manifestation in which she alleged that even as the proposed joint manifestation between the parties which was supposed to describe the matters agreed upon between them and the Commissioner during a conference hearing held on January 24, 1968 had not yet been shown to her, she already wished to express her principals, conformity to pay, but under protest, the deficiency estate tax of P700,000.00 plus surcharges, interest and penalties due thereon and the inheritance tax in the amount of P4,161,986.12 appearing, to Atty. Medina, in the mentioned assessment notice dated August 24, 1967; that she was likewise agreeable to pay, under protest however, the income taxes for 1961 to 1965 against the estate in the demand letter of the Commissioner dated August 29, 1967 in the amount of P1,175,974.51 plus whatever interest, surcharges and penalties were due'thereon; and that she was also agreeable to being authority to sell such properties of the estate as may be necessary for the mentioned - On the following day, however, that is, January 27, 1968, the herein respondents Eribal, Abanto and Atty. Medina, on the one hand, and the Commissioner and the Solicitor General, on the other, filed with this Court a joint manifestation which, inter alia, reads as follows:ñé+.£ªwph!1 l. That the respondent taxpayers will pay the estate, inheritance and deficiency income taxes covered by existing assessments; which are due and collectible from the estate of Elsie M. Gaches, including the delinquency penaltiesthereon, but without prejudice to any right of the taxpayer to contest or protest the said assessments at the proper time and in the proper court; 2. That the respondents Delia P. Medina, Magdalena Abanto and Camilo Eribal shall submit to this Honorable Court an inventory of all the properties and assets of the estate ... ; 3. That is order to generate the necessary funds for the purpose of paying the said taxes and delinquency penalties, so much of the assets of the estate ... shall be sold ... 4. That respondent Delia P. Medina, . and. Mr. Rodolfo U. Arrano Supervising Revenue Examiner of the Bureau of Internal Revenue, ... are hereby proposed to be constituted as the authorized agents of the parties herein to effect the sale ...; 5. That the said agents shall be direct to sell the assets of the estate ... ; 6. That all negotiations and transactions for the sale of the assets of the estate shall be made jointly by the authorized agents ... ; 7. That no disposition of any property or assets of the estate shall be effected except for the foregoing purpose; 8. That this case shall not be terminated until ... the above mentioned ... taxes and delinquency penalties are fully paid; and liquidated; 9. That the parties pray for the approval of the foregoing propositions. On February 6, 1968, this Court, acting on the abovement manifestation of Atty. Medina and the at manifestation of the Parties, issued a resolution authorizing Atty. Medina to pay, amt, under at, the transfer and in taxes collectible from the estate, including the accopanying delinquency penalties. A Medina was given the necessary authority to collect and receive funds payable to the estate in question and to sell such a thereof as may be necessary. On February 10, 1968, a motion to declare in contempt Lepanto Consolidated Mining Co. was filed by Atty. Medina on t ground that the said corporation refused to tum over to dividends payable to the testate estate unless the Commissioner first lifted his garnishment order on said dividends. On February 16, 1968, this Court issued a resolution suspendi the writs to preliminary junction issued by this Court on July and 17, 1967 and all warrants of garnishment issued by the Commissioner relative to the estate of Elsie M. Gaches, said suspension to be effective until such time that Atty. Medina, End and Abanto shall save fully paid the transfer and income tax including the penalties thereon, covered by existing assessment Atty. Medina thereafter submitted to this Court performance reports on her activities relative to the authority given her. On March 9, 1968, Atty. Medina filed with this Court manifestation stating that she received a demand letter dated March 9, 1968 from the Commissioner for the payment of the following 1'756 900- 00 as estate tax, including penalties; (2) P192,186.75 as inheritance tax corresponding to the share of Bess Lauer; and (3) P451.435.91 as balance of the income tax for the years 1961 to 1965 Atty. Medina claimed the said demands to be erroneous for the following reasons' (1) as to the estate tax, the time deposit in the Overseas Bank of Manila of P700,000.00 plus interest earned of P60,000.00 as of March 9, 1968 would more than cover the said tax and the certificates of time deposits were already endorsed to the Cmmissioner on December 6, 1967; (2) as to the inheritance tax, she (that is. he principals Abanto and Eribal) was not responsible therefore, as the resolution of this Court dated February 6, 1968 required her "to pay only the estate, inheritance and in income taxes, under protest covered by existing assessments, against the Estate, and against the heirs Magdalena Abanto and Camilo Eribal;" in a supplemental motion, Atty. medina further argued that Bess Lauer alone was solely responsible for the payment of the inheritance tax on her share and not the decedent's estate in the Philippines, and that the properties of the testate estate in the United States of America which consisted of shares of stock and deposits in banks, being personal properties, were to be excluded from the computation of the gross estate of the deceased in the Philippines and the computation of the Philippine estate and inheritance taxes because, under philippine law, the sites of those properties is the place where they are located, citing Article 16 of the new Civil Code which she she argued, abandoned the doctrine of mobilia sequuntur personal embodied in Article 19 of the old Civil Code; and (3) as to tile deficiency income tax for 1961-1965, she had paid the same in the total amount of P1,182,296.16 as of March 9, 1968, which was the amount stated in the assessment letter of the Commissioner cited August 9, 1967. According to Atty. Medina, the payment of the taxes was made in the following manner: on February 27, she paid a total of ?838,518.62 as follows: the income tax (P715,619.46) in full; interest (P106,855.29) in full, compromise penalty (P5.,000.00) in full and surcharges P1,052.07) in. part only; and, on March 8, 1968. the amount of P343,773.54 as payment of the remaining surcharges, Consequently, she argued the the surcharges and interest, if any were still due, could legally, accrue only from September 29, 1967 up to February 27, 1968 and only on the tax proper. On April 16, 1968, a counter-manifestation was filed with this court by the Commissiorner to the above-metioned manifestation according to the Commissioner, (that is under existing assessments that is under the letter of demand of August 24 and 29, 1967) Estate tax (Balance- P700,000.00 (x) Inheritance tax 4,353,927.87 (xx) Total Estate and Inheritance taxes P5,053,927.87 Deficiency income taxes for 1961 to 1965 P1,175,974.51 (xxx) Delinquency penalties for late filing of income tax return and late payment of income tax for 1965 per return filed- 6,321.65 (xxxx) Total deficiency income taxes for 1961 to 1965 and the delinquency penalties of income tax 1965 per return P1,182,296.16 GRAND TOTAL P6,236,269.03 ñé+.£ªwph!1 (x) pIus 5% surcharge and 1% monthly interest thereon from December 9, 1967 until full payment thereof; (xx) plus 5% surcharge and 1%, monthly interest thereon, if the same is not paid in full on or before March 9, 1968; (xxx) plus 5% surcharge and 1% monthly interest thereon from August 29, 1967 until full payment thereof; and (xxxx) pIus additional 1% monthly interest from September 29, 1967 until full payment thereof. Further, the Commissioner alleged that after taking into consideration the payments made by Atty. Medina, the balances as of March 9, 1968 of the death and income taxes still compatible were as follows: Estate Tax Balance of the estate tax P700,000.00 5%, surcharge 35,000.00 1% monthly interest from 12/9/67 to 3/9/68 21,000.00 Total P 756,000.00 plus additional 1% monthly interest from March 9, 1968 until full payment thereof. Inheritance Tax Inheritance tax due and collectible per letter of demand dated August 24, 1967 (Annex "A") P4,353,972.87 Less: Payments of inheritance Tax on March 1 and March 6, 1968 per O.R. 2519938 and 2520026, respectively 4,161,986.12 Inheritance taxs due and collectible P191,986.75 plus 5% surcharge and 1% monthly interest thereon from March 8, 1968 until full payment. Deficiency Income Taxes Deficiency income taxes from 1961 to 1965 per letter of demand dated August 29, 1967 plus 5% surcharge and 1% monthly interest up to March 1968 P1,289,818.17 Less: Payments made on February 27, 1968 and March 8, 1968 under O.R. 207001 and 207002 P1,182,296.16 Deficiency income taxes still due and collectivele P107,522.01 plus additional 1% monthly interest thereon from March 8, 1968 until full payment. The Commissioner also explained that the i taxes paid by Atty. Medina in the total amount of P1,182,296.16 "included only the 1/2% monthly interest On deficiency with respect to the deficiency income taxes for 1961 to 1965 and the 1% monthly Interest for delinquency up to September 29, 1967 with respect to the income tax for 1965 which was paid per return, Out did not include the 5% surcharge and 1% monthly interest for delinquency from August 29, 1967 until full Payment with respect to the income tax for the 1965 return." The Commissioner consequently prayed that Atty. Medina be ordered to pay: ñé+.£ªwph!1 (1) The amount of P756,000.00 as balance of the estate tax, 5% surcharge and 1% monthly interest from December 9, 1967 to March 9, 1968, plus additional 1% monthly interest from March 9, 1968 until full payment; (2) The amount of P191,986.75 as balance of the inheritance tax, plus 5% surcharge and 1% monthly interest thereon from March 9, 1968 until full payment; and (3) The amount of P107,522.01 as balance of the deficiency income taxes, 5% surcharge and 1% monthly interest for delinquency up to M arch 8, 1968, plus additional 1% monthly interest thereon from March 8, 1968 until full payment ... ; On August 23, 1968, Atty. Medina filed a manifestation with this Court adverting to the refusal of the Overseas Bank of Manila to permit the withdrawal of the time deposit of the testate estate in the said bank in spite of the fact that the extended maturity date of said deposit had may expired. Atty. Medina payed that the bank Ida as one boss able the deposit of the funds of is well as the who made i of the estate of Elsie M. Gaches with the said bank be declared in contempt. on September 18, 1968, the Central Bank Of the Philippines filed with this Court a comment on the urgent manifestation of Atty. Medina concerning the deposit in question. The Central Bank, which according to the Overseas Bank of Manila had restrained it from paying its time deposits to the bank's depositors, averred that this Court's resolution of November 17, 1967 merely authorized Atty. Medina to withdraw the deposit from the said bank and did not order the bank to pay the time deposit in question. Moreover, according to the Central Bank, the nonpayment of the said deposit was not wilful as the Overseas Bank of Manila was in a state of insolvency. A comment was filed on October 11 1968 by the Overseas Bank of Manila stating that the majority stockholders of the bank filed a petition against the Central Bank for certiorari. prohibition and mandamus in this Court in L-29352 entitled "Emerito M. Ramos, et at. vs. Central Bank;" 2 that the time deposit in question was an unrecorded transaction; and that the Central Bank prohibited the bank to do business due to its distressed financial condition, for which reason it could not give preference of the payment of the said deposit as it might prejudice other creditors of the bank. On November 11, 19681, Atty. Medina filed with this Court a M. motion ,- reiterating a previous one to allow the payment of the announced of P6.000.00 to Atty. Manuel M. Paredes whom she and tile other herein respondent herein — Abanto and Eribal — hired as counsel in collection with the settlement proceedings of Elsie M. Gaches estate. On March 29, 1969. pursuant to a resolution of this Court, Atty. Paredes ssubmitted knitted a memorandum on the nature and extent for the legal services he had rendered to tile herein respondents Atty. Medina Eribal and Abanto. On June 26, 1971, Abanto and Eribal Jointly wrote the Chief Justice, expressing willingness and agreement to pay the amount due tile government as taxes against the estate and the heirs thereof, however, the two respondents herein subsequently retracted their statement in the said letter, claiming they signed and sent the same without knowing and understanding its effect and consequences. A perusal in depth of the facts of the instant case discloses quite plainly that the respondent Judge committed a grave abuse of discretion amounting to lack of jurisdiction in issuing its orders of June 5, 8 and 9, 1967. Section 103 of the National Internal Revenue Code (hereinafter referred to as "Tax Code") unequivocally provides that "No judge shall authorize the executor or judicial administrator to deliver a distributive share to any party interested in the estate unless it shall appear that the estate tax has been paid." 3 The aforesaid orders of the respondent Judge are clearly in diametric opposition to the mentioned Section 103 of the Tax Code and, consequently, the same cannot merit approval of this Court. While this Court thus holds that the questioned orders are not in accordance with statutory requirements, the fundamental question raised herein regarding the objectionable character of the probate court's mentioned orders has opened other issues which, not alone their importance to jurisprudence, but the indispensability of forestalling needless delays when those issues are raised anew, have, perforce, persuaded this Court that their complete and final adjudication here and now is properly called for. Said issues may be specificaly framed as follows: (1) Should the herein respondent heirs be required to pay first the inheritance tax before the probate court may authorize the delivery of the hereditary share pertaining to each of them? (2) Are the respondent heirs herein who are citizens and residents of the Philippines liable for the payment of the Philippine inheritance tax corresponding to the hereditary share of another heir who is a citizen and resident of the United States of America. said share of the latter consisting of personal (cash deposits and, shares) properties located in the mentioned court (3) Does the assignment of a certificate of time deposit to the comissioner of Internal Revenue for the purpose of paying t I hereby the estate tax constitute payment of such tax? (4) Should the herein respondent heirs be held liable for the payment of surcharge and interest on the amount (P700,000.00) representing the face value of time deposit certificates assigned to the Commissioner which could not be converted into cash? Aside from the foregoing, there are also other incidental questions which are raised in the present recourse, viz., (5) What should be the liability of the respondents herein on the contempt charges respectively lodged against them? (6) What should be a reasonable fee for the counsel of the respondents Atty. Medina, Eribal and Abanto for professional services rendered In connection with the settlement of the estate of Elsie M. Gaches? 1. On the matter of the authority of a probate court to allow distribution of an estate prior to the complete Nuidation of the inheritance tax, the Tax Code apparently lacks any provision substantially Identical to the mentioned Section 103 thereof. There are provisions of the Tax Code, e.g., Section 104, which makes it the duty of registers of deeds not to register the transfer to any new owner of a hereditary estate unless payment of the death taxes sham be shown; Section 106, which imposes a similar obligation on business establishments; and Section 107, which penalizes the executor who delivers to an heir or devise, and the officers and employees of business establishments who transfer in their books to any new owner, any property forming part of a hereditary estate without the payment of the death taxes first being shown; but those provisions by themselves do not clearly establish that the purchase and object of the statute is to make the payment of the inheritance tax a pre-condition to an order for the distribution and delivery of the decedent's estate to the lawful heirs there. The cloud of vagueness in the statute, however, is not entirely unreachable. Section 1, Rule 90 of the Rules of Court erases this hiatus in the statute by providing thus: ñé+.£ªwph!1 Section 1. When order for distribution of residue made. — When the debts, funeral charges, and expenses of administration, the allowance to the widow, and inheritance tax, if any, chargeable to the estate in accordance with law, have been paid, the court, on the application of the executor or administrator, or of a person interested in the estate, and after hearing upon notice, shall assign the residue of the estate to the persons entitled to the same, naming them and the proportions, or parts, to which each is entitled, and such persons may demand and recover their respective shares from the executor or administrator, or any person having the same in his possession. If there is a controversy before the court as to who are the lawful heirs of the deceased person or as to the distributive shares to which each person is entitled under the law, the controversy shall be beard and decided as in ordinary cases. No distribution shall be allowed until the payment of the obligations above mentioned has been made or provided for, unless the distributees, or any of them, give a bond, in a sum to be fixed by the court, conditioned for the payment of said obligations within such time as the court directs. Under the provisions Of the aforequoted Rule, the distribution of a decedent's assets may only be ordered under any of the following three circumstances, namely, (1) when the inheritance tax, among others, is paid; (2) who bond a suffered bond is given to meet the payment of the tax and all the other options of the nature enumerated in the above- cited provision; or (3) when the payment of the said tax and at the other obligations mentioned in the said Rule has been provided for one of these thru camar as the satisfaction of the when tax due from the festate is were present when the question orders were issued in the case at bar. Although the respondent Judo did make a condition in its order of June 5, 1967 that the distribution of the estate of Elsie M. Gaches (except the cash deposits of more than P2 million) shall be trusted to Atty. Medina for the payment of whatever taxes may be due to the government from the estate and the heirs them to, this Court cannot subscribe to the proposition that the payment of the tax due was thereby adequately provided for. In the first place, the order of June 5, l967 was, for all intents and , a complete distribution of the estate to the heirs for, the executor who is supposed to take care of the estate was absolutely discharged the attorney's fees for the of a lawyer who presumably acted as legal counsel for the estate in the court below were ordered paid as were also the fees for the executor's the cash funds of the estate were red paid to the cash and the non-cash (real property and shares of stock) properties were likewise ordered delivered to Atty. Medina whose participation in the said proceedings was in the capacity of an attorney-in-fact of the herein respondent Eribal and Abanto. In short, the probate court virtually withdrew its custodial jurisdiction over the estate which is the subject of settlement before it. In the second place the respondent Judge, in the distribution of the properties of the estate in question, relief solely upon the mere mandestation of the counsel for the heirs Eribal and Abanto that them were affiant of the estate with which to pay the taxes due to the government. There is no evidence on record that would show that the probate court ever made a serious attempt to de what the values of the different assets the correctness of that such properties shall be preserved for the satisfaction of those case In the third place that main of pesos taxes were being called by the Bureau of Inc. Revenue, the least reasonable thing that the probate court should have done was to require the heirs to deposit the amount of inheritance tax being claimed in a suitable institution or to authorize the sale of non-cash assets under the court's control and supervision. The record is likewise bereft of any evidence to show that sufficient bond has been filed to meet this particular outstanding obligation. 2. The liability of the herein respondents Eribal and Abanto to pay the inheritance tax corresponding to the share of Bess Lauer in the inheritance must be negated, The inheritance tax is an imposition created by law on the privilege to receive property. 4 Consequently, the scope and subjects of this tax and other related matters in which it is involved must be traced and sought in the law itself. An analysis of our tax statutes supplies no sufficient indication that the inheritance tax, as a rule, was meant to be the joint and solidary liability of the heirs of a decedent. Section 95(c) of the Tax Code, in fact, indicates that the general presumption must be otherwise. The said subsection reads thus: ñé+.£ªwph!1 (c) xxx xxx xxx The inheritance tax imposed by Section 86 shall, in the absence of contrary disposition by the predecessor, be charged to the account of each beneficiary, in proportion to the value of the benefit received, and in accordance with the scale fixed for the class or group to which is pertains: Provided, That in cases where the heirs divide extrajudicially the property left to them by their predecessor or otherwise convey, sell, transfer, mortgage, or encumber the same without being the estate or inheritance taxes within the period prescribed in the preceding subsections (a) and (b), they shall be solidarity liable for the payment of the said taxes to the extent of the estate they have received. The statute's enumeration of the specific cases when the heirs may be held solidarity liable for the payment of the inheritance tax is, in the opinion of this Court, a clear indication that beyond those cases, the payment of the inheritance tax should be taken as'the individual responsibility, to the extent of the benefits received, of each heir. 3. And the effect of the indorsement of the time deposit certificates to the Commissioner, the same cannot be held to have extinguished the estate's liability for the estate tax. In the first place,in accepting the indorsement and delivery of the said certificates, the Commissioner expressly gave notice that his Office — ñé+.£ªwph!1 ... Regrets that the same cannot be accepted as payment of the deficiency estate tax in this case may they cannot, at present or on or therefore December 9, 1967, be converted into cash. However, we are holding said certificates of time deposit for possible application in payment of the unpaid balance of the deficiency estate tax in this case ,is soon as said certificates can be converted into cash. ... In the second place, a time deposit certificate is a mercantile document and is essentially a promissory note. 5 By the express terms of Article 1249 of the Civil Code of the Philippines, the use of this medium to clear an obligation will "produce the effect of payment only when they have been cashed, or when through the fault of the creditor they have been impaired." From the records of the case at bar, the Commissioner as well as the herein respondents Atty. Medina, Eribal and Abanto spared no time trying to collect the value of said certificates from the Overseas Bank of Manila but all to no avail. Consequently, the value of the said certificates (P700,000.00) should still be considered outstanding. 4. The estate of Elsie M. Gaches is likewise liable for the payment of the interest and surcharges on the said amount of P700.000.00 imposed under Section 101 (a) (1) and (c), respectively, of the Tax Code. 6 The Interest charge for 1% per month imposed under Section 101 (a) (1) of the Tax Code is essentially a commotion to the State for delay in the payment of the tax due thereto 7 As for the accountant use by the tax payer of funds that nightday shall be in the government's funds. 8 As the indorsement and delivery of the mentioned time deposit certificates to the did not result in the payment of the estate tax (for which it was in the respondents estate is fluently liable for the interest charge imposed in the Tax Code. The estate cannot likewise be exempted from the payment of the 5% surcharge imposed by Section 101 (c) of the Tax Code. While there are cases in this jurisdiction holding that a surcharge shall not be visited upon a taxpayer whose failure to pay the tax on time is in good faith, 9 this element does not appear to be present in the case at bar. The Commissioner, as aforesaid, fully informed the respondents Atty. Medina, Eribal and Abanto of the condition to this acceptance of the said time deposit certificates. The Commissioner, in fact, advised them in the same letter that "It will be understood in this connection that if the balance of the deficiency estate tax in this case is not paid on or before December 9, 1967, the name shall be subject to the interest on deficiency, 5% surcharge and 1% monthly interest for deficiency." Moreover, Judge Tan himself, as executor of the estate of Elsie M. Gaches, specifically admitted that he was the one who caused the extension (and consolidation) of the maturity dates of the two time deposit certificates in question (one for P100,000.00 to mature on May 12, 1967 and the other for P600,000.00 to mature on June 16, 1967) to May 12, 1968, It will be worthwhile to mention also, in this connection, that when Atty. Medina applied to this Court for authorize to the amount of P700,000.00 from the Overseas Bank of Manila on September 9, 1967, the resolution of this Court dated November 17, 1967, approve her request authorized her to withdraw the said amount in the form of cashier's checks payable to the Commissioner. Apparently, because the Overseas Bank of Manila refused to issue such checks or to allow her to withdraw said amount in view of the extension of the nuturity date of the deposit in question, Atty. Medina thought that by simply assigning the time deposit certificates to the Commissioner, she would be deemed to have paid the estate's obligation in its corresponding amount. However, as aforesaid the Commissioner was also unable to convert said amount to cash and he gave announce to that effect to Atty. Medina. Since the refusal of the Overseas Bank of Manila to snow the withdrawal of the said deposit was then well-known to the parties, it saw to reas that the tentatives of the estate who stand to be benefited. therefrom, such as the respondents Eribal and Abanto, should have forthwith asked for authority to pay the from other funds of the estate. Atty. Medina was, in fact, given the authority by this Court to sell assets of the estate for the payment of the taxes due to the State, but she never tried to pay the equivalent amount of P700,000.00 in question from the proceeds of the Wm she made afterwards. Moreover, it will also be noted that the respondents EAbal and Abanto, during the pendency of this case, had in their actual ion at least P2.3 million (the amount they were able to withdraw from the Philippine National Bank on account of the questioned orders) which they could have very well used for the payment of the estate tax. They, however, opted to put the same to other uses. 5. We now consider the several petitions for contempt riled in the case at bar, namely, (a) against the Philippine National Bank on account for allowing Atty. Medina to withdraw P2,330,000.00 in contravention of the writ of punishment issued by the Commissioner; (b) against the officer of the Overseas Bank of Manila for allowing the extension of the maturity date of the mentioned time deposit of P700,000.00 and for refusing to pay the same after the extended term expired; (c) against Judge Tan who renewed the maturity date of the said time deposits; (d) against the Lepanto Consolidated Mining Co. for refusing to turn over dividends payable to the estate of Elsie M. Gaches unless the Commissioner first lifted his punishment order; and (e) against the herein respondents Atty. Medina, Eribal and Abonto for citing shares of stock with the probate court instead of the cash amount of P2,330,000.00 which they withdrew from the renewed National Bank on account of the questioned orders of the probate court, contrary to the resolutions of this Court dated July 10 and 17, 1967. (a) The contempt charge against the officials of the Philippine National Bank is without merit, it appearing to the satisfaction of this Court that they excited reasonable efforts not to disobey the writ of garnishing issued by the Commissioner. Indeed, said officials merely acted in obedience to the order of the probate court which threatened them with contempt of court after they moved to be allowed to deposit with the said probate court the money of the of Elsie Gaches deposited with the said bank. The commssioner himself, through the Solicitor General, admitted later that its writ of garnishment cannot be superior to that of the probate court,s order as the estate in Question was then in custodia legis. (b) The contempt charges against the officials of the Overseas Bank of Manila likewise merit dismissal. In the case of the renewal of the term of the time deposits in question, the said extension was made by no less than the executor of the estate himself- The renewal of said term may be considered as purely an act of administration for the enhancement (due to the higher interest rates) of the value of the estate, and the officials of the bank cannot consequently be blamed or acting favorably on the executor's application. Judge Tan himself explained that he did what he did honest the belief that it would redound to the benefit of the estate on the account of the higher interest rate on time deposits. With reference, to the refuse of the bank's officials to allow the witldrawal of time deposit in question after the extended term expired on May 12, 1968, this Court takes notice of the fact, as stated in our decision in Ramos vs. Central Bank (L-293250, Oct. 4, 1971; 41 SCRA 565), that as early as November 20, 1967 the Central Bank required the Overseas Bank of Manila, in view of its distressed financial condition, to execute a voting trust agreement in order to bail it out through a change of management and the promise of fresh funds to replenish the bank's financial portfolio. The Overseas Bank of Manila was not able to normalize its operations in spite of the voting trust agreement — for, on July 31, 1968, it was excluded by the Central Bank from inter-bank clearing; on August 1, 1968, its operations were suspended; and on August 13, 1968, it was completely forbidden by the Central Bank to do business preparatory to its forcible liquidation. Under the circumstances, this Court is satisfied with the explanation that to allow Atty. Medina to withdraw the said time deposits after the extended term would have worked an undue prejudice to the other depositors and creditors of the bank. (c) The contempt charge against Judge Tan is also not meritorious. There is no sufficient and convincing evidence to show that he renewed the maturity date of the time deposits in question maliciously or to the prejudice of the interest of the estate. (d) The Lepanto Consolidated Mining Company is likewise entitled to exoneration from the contempt charge lodged against it. It is refusing to turn over to Atty. Medina stock dividends payable to the estate of Elsie M. Gaches, it is evident that the said corporation acted in good faith in view of the writ of garnishment issued to it by the Commissioner. Moreover, on February 16, 1968, this Court passed a resolution suspending temporarily the warrants of punishment issued by the Commissioner, and it does not appear that thereafter the turnover of the stock dividends to the estate was refused. (e) With reference to the charge for contempt against the respondents Atty. Medina, Eribal and Abanto, although admittedly the resolutions of this Court dated July 10 and 17, 1967 were not strictly complied with by the said respondents, it appears clearly that they immediately deposited with the probate court shares of stock with a fairly stable liquidity value of P2,588,520.00. In any case, the main objective of the instant petition is to assure the State that the assessed tax obligations shall be paid and, from the records, more than P2 million had already been paid to the State during the pendency of the instant proceeding, in this Court. 6. With reference to the attorney's fees to be paid to Atty. Manuel M. Paredes, this court is of the opinion, after a careful study of the statement of services rendered by said counsel to the respondents Eribal and Abanto which was submitted to this Court, that the amount of Fifty Thousand Pesos (P50,000.00) is fair and reasonable. The payment of this amount, however, is the personal liability of the said respondents Eribal and Abanto. and not that of the estate of Elsie M. Gaches, as the said counsel was hired by the said respondents to give legal aid to them in connection with the settlement of the various claims preferred in the probate court and in this Court. 7. The Court's intended adjudication of the main issue has been rendered academic by supervening events which dictate that the court refrain from issuing any further order relating thereto. On July 18, 1977 a "Manifestation and Compliance" was filed by the, respondent Delia P. Medina which states that a compromise payment of P700,000 as all estate tax, evidence by an official receipt (annex A of the Manifestation), was accepted and duly approved by Acting Commissioner of Internal Revenue Efren I. Plana (annex B of the same Manifestation), and that "with the said compromise payment of P700,000, all estate, inheritance and deficiency income taxes . . . including pertinent delinquency penalties thereof have been fully paid and liquidated, aggregating to P7,929,498.55 ..." No objection thereto was interpored by any of this parties concerned despite due notice thereof. This was further supplemented by a communication, dated July 19, 1977, of Deputy Commissioner Conrado P. Diaz, informing the Register of Deeds of Pasig, Metro Manila, that the Gaches estate has already paid all the estate and inheritance taxes assessed against it, and that, consequently, the notice of tax then inscribed on the property and property rights of the estate can now be considered cancelled. With the full settlement of the tax claims, the requirements of the law have been fully met, and it has unnecessary for the Court to issue orders relative to the main issue. ACCORDINGLY, the respondent Delia P. Medina is to deliver the remaining assets of the estate to the voluntary heirs in the proportions adjudicated in the will and to submit a report of compliance. On the incidental issues, the Court renders judgment as for: (1) The amount of FIFTY THOUSAND (P50,000.00) PESOS is hereby awarded to Manuel M. Paredes as legal fee for his services, the same to be Paid by the respondent End will the estate of Abanto, now (2) The contempt charges against the officials of the Philippine National Bank and the Overseas Bank of Manila, Judge Bienvenido Tan, Sr., and Lepanto Consolidated Co. are hereby ordered dismissed; (3) The authority given to the respondent Delia P. Medina in the resolution of the court dated February 6, 1968, to pay the death and income taxes, including delinquency penalties, claimed by the State and, for that, to withdraw all cash deposits in various banks and sell such properties of the estate as my be necessary, is hereby terminated; and (4) The writs of preliminary injunction issued by the Court pursuant to its resolutions dated July 10 and 17, 1967 are hereby dissolved. No costs. G.R. No. L-36770 November 4, 1932 LUIS W. DISON, plaintiff-appellant, vs. JUAN POSADAS, JR., Collector of Internal Revenue, defendant-appellant. This is an appeal from the decision of the Court of First Instance of Pampanga in favor of the defendant Juan Posadas, Jr., Collector of Internal Revenue, in a suit filed by the plaintiffs, Luis W. Dison, for the recovery of an inheritance tax in the sum of P2,808.73 paid under protest. The petitioner alleged in his complaint that the tax is illegal because he received the property, which is the basis of the tax, from his father before his death by a deed of gift inter vivos which was duly accepted and registered before the death of his father. The defendant answered with a general denial and with a counterdemand for the sum of P1,245.56 which it was alleged is a balance still due and unpaid on account of said tax. The plaintiff replied to the counterdemand with a general denial. The court a quo held that the cause of action set up in the counterdemand was not proven and dismissed the same. Both sides appealed to this court, but the cross-complaint and appeal of the Collector of Internal Revenue were dismissed by this court on March 17, 1932, on motion of the Attorney-General.1awphil.net The only evidence introduced at the trial of this cause was the proof of payment of the tax under protest, as stated, and the deed of gift executed by Felix Dison on April 9, 1928, in favor of his sons Luis W. Dison, the plaintiff- appellant. This deed of gift transferred twenty-two tracts of land to the donee, reserving to the donor for his life the usufruct of three tracts. This deed was acknowledged by the donor before a notary public on April 16, 1928. Luis W. Dison, on April 17, 1928, formally accepted said gift by an instrument in writing which he acknowledged before a notary public on April 20, 1928. At the trial the parties agreed to and filed the following ingenious stipulation of fact: 1. That Don Felix Dison died on April 21, 1928; 2. That Don Felix Dison, before his death, made a gift inter vivos in favor of the plaintiff Luis W. Dison of all his property according to a deed of gift (Exhibit D) which includes all the property of Don Felix Dizon; 3. That the plaintiff did not receive property of any kind of Don Felix Dison upon the death of the latter; 4. That Don Luis W. Dison was the legitimate and only child of Don Felix Dison. It is inferred from Exhibit D that Felix Dison was a widower at the time of his death. The theory of the plaintiff-appellant is that he received and holds the property mentioned by a consummated gift and that Act No. 2601 (Chapter 40 of the Administrative Code) being the inheritance tax statute, does not tax gifts. The provision directly here involved is section 1540 of the Administrative Code which reads as follows: Additions of Gifts and Advances. — After the aforementioned deductions have been made, there shall be added to the resulting amount the value of all gifts or advances made by the predecessor to any of those who, after his death, shall prove to be his heirs, devises, legatees, or donees mortis causa. The question to be resolved may be stated thus: Does section 1540 of the Administrative Code subject the plaintiff-appellant to the payment of an inheritance tax? The appellant argues that there is no evidence in this case to support a finding that the gift was simulated and that it was an artifice for evading the payment of the inheritance tax, as is intimated in the decision of the court below and the brief of the Attorney-General. We see no reason why the court may not go behind the language in which the transaction is masked in order to ascertain its true character and purpose. In this case the scanty facts before us may not warrant the inference that the conveyance, acknowledged by the donor five days before his death and accepted by the donee one day before the donor's death, was fraudulently made for the purpose of evading the inheritance tax. But the facts, in our opinion, do warrant the inference that the transfer was an advancement upon the inheritance which the donee, as the sole and forced heir of the donor, would be entitled to receive upon the death of the donor. The argument advanced by the appellant that he is not an heir of his deceased father within the meaning of section 1540 of the Administrative Code because his father in his lifetime had given the appellant all his property and left no property to be inherited, is so fallacious that the urging of it here casts a suspicion upon the appellants reason for completing the legal formalities of the transfer on the eve of the latter's death. We do not know whether or not the father in this case left a will; in any event, this appellant could not be deprived of his share of the inheritance because the Civil Code confers upon him the status of a forced heir. We construe the expression in section 1540 "any of those who, after his death, shall prove to be his heirs", to include those who, by our law, are given the status and rights of heirs, regardless of the quantity of property they may receive as such heirs. That the appellant in this case occupies the status of heir to his deceased father cannot be questioned. Construing the conveyance here in question, under the facts presented, as an advance made by Felix Dison to his only child, we hold section 1540 to be applicable and the tax to have been properly assessed by the Collector of Internal Revenue. This appeal was originally assigned to a Division of five but referred to the court in banc by reason of the appellant's attack upon the constitutionality of section 1540. This attack is based on the sole ground that insofar as section 1540 levies a tax upon gifts inter vivos, it violates that provision of section 3 of the organic Act of the Philippine Islands (39 Stat. L., 545) which reads as follows: "That no bill which may be enacted into law shall embraced more than one subject, and that subject shall be expressed in the title of the bill." Neither the title of Act No. 2601 nor chapter 40 of the Administrative Code makes any reference to a tax on gifts. Perhaps it is enough to say of this contention that section 1540 plainly does not tax gifts per se but only when those gifts are made to those who shall prove to be the heirs, devisees, legatees or donees mortis causa of the donor. This court said in the case of Tuason and Tuason vs. Posadas 954 Phil., 289):lawphil.n When the law says all gifts, it doubtless refers to gifts inter vivos, and not mortis causa. Both the letter and the spirit of the law leave no room for any other interpretation. Such, clearly, is the tenor of the language which refers to donations that took effect before the donor's death, and not to mortis causa donations, which can only be made with the formalities of a will, and can only take effect after the donor's death. Any other construction would virtually change this provision into: ". . . there shall be added to the resulting amount the value of all gifts mortis causa . . . made by the predecessor to those who, after his death, shall prove to be his . . . donees mortis causa." We cannot give to the law an interpretation that would so vitiate its language. The truth of the matter is that in this section (1540) the law presumes that such gifts have been made in anticipation of inheritance, devise, bequest, or gift mortis causa, when the donee, after the death of the donor proves to be his heir, devisee or donee mortis causa, for the purpose of evading the tax, and it is to prevent this that it provides that they shall be added to the resulting amount." However much appellant's argument on this point may fit his preconceived notion that the transaction between him and his father was a consummated gift with no relation to the inheritance, we hold that there is not merit in this attack upon the constitutionality of section 1540 under our view of the facts. No other constitutional questions were raised in this case. The judgment below is affirmed with costs in this instance against the appellant. So ordered. G.R. No. L-62831-32 July 31, 1986 PHILIPPINE NATIONAL BANK, petitioner, vs. HON. INTERMEDIATE APPELLATE COURT and SPS. TEODORO and VICTORIA FLORENDO, respondents. GUTIERREZ, JR., J .: These petitions ask for the review of the Court of Appeals decisions in CA-G.R. No. 13913-CAR entitled Teodoro N. and Victoria B. Florendo, plaintiffs-appellants v. Land Bank of the Philippines, et al., defendants-appellees, Philippine National Bank, et al. defendants-appellants and CA-G.R. No. 13689-SP, entitled Philippine National Bank, petitioner- appellant v. Hon. Court of Agrarian Relations (12th Regional District, Branch IV, Dumaguete City), et al. The subject matter of both cases was the decision of the Court of Agrarian Relations in CAR Case No. 494 for specific performance and damages filed by spouses Teodoro N. Florendo and Victoria B. Florendo against the Land Bank of the Philippines and the Philippine National Bank and some officers of the two government banks. Plaintiffs-spouses Teodoro N. Florendo and Victoria B. Florendo are the registered owners of three parcels of land covered by OCT No. S-V-97, TCT No. F-T-11 and TCT No. M-T-98 of the Register of Deeds, Negros Oriental. These properties were mortgaged with the Philippine National Bank to secure a loan obtained by the Florendos. Upon the promulgation of Presidential Decree No. 27, the property covered by OCT-S-V-97 was subjected to operation land transfer of the land reform program. This parcel of land was, therefore, redistributed to 31 tenants. The value of the land was assessed at P148,716.48. The Florendos were paid under Section 80 of Republic Act 3844 as amended by Section 7 of Presidential Decree 251. Pursuant to this law, the Land Bank on August 9, 1979 remitted to the Philippine National Bank P94,500.00 in bonds and a check in the amount of P332.31 for a total of P94,832.31 to pay the outstanding obligation of the Florendos so that the lot covered by OCT No. S-V97 could be released to the Land Bank and the "assignment of rights" could be accomplished by the Florendos. The Philippine National Bank, however, notified the Florendos, that of the total Land Bank bonds of P94,500.00 the bank was willing to accept only P15,500.00 at face value, and the balance of P79,400.00 at a 40% discount for a total discount of P31,600.00 thus crediting the Florendos with a total sum of P53,232.31. Included in said amount was the Land Bank check of P332.31. The Philippine National Bank stated that it had a policy of accepting Land Bank bonds on a one to one basis only in so far as property subjected to the agrarian land reform was concerned. All others were accepted at a discounted rate. The Florendos, in a letter dated October 25, 1979, express their non-conformity with the Philippine National Bank's policy. The Philippine National Bank maintained its stand and refused to approve for registration with the Register of Deeds of Negros Oriental the "Assignment of Rights" and the release of lot No. S-V-97 to the Land Bank. After trial on the merits, the trial court rendered a decision, the dispositive portion of which reads: WHEREFORE, judgment is hereby rendered as follows: 1. Declaring plaintiff's loan and/or indebtedness with the defendant PNB secured by OCT S-V-97; TCT T-H-98 and TCT F-T-11 to have been duly paid and satisfied as of August, 1979; 2. Declaring the plaintiffs entitled to the release of all the above- mentioned collaterals held by the defendant PNB; 3. Declaring the Land Bank bonds worth 194,832.31 and check in the amount of P332.31 as full satisfaction of plaintiffs account with the PNB; 4. Ordering the defendant PNB to deliver and release unto the plaintiffs OCT S-V-97, TCT T-H-98 and TCT F-T-11 held by them as securities for the plaintiffs loan; 5. Ordering defendant Land Bank to settle and pay the accounts of the herein plaintiffs with the Development Bank of the Philippines from the remaining balance of the value of the subject property; 6. Dismissing authorizing other claims of plaintiffs for lack of evidence; and 7. Dismissing the counterclaim of defendant PNB for lack of merit. No pronouncement as to COSTS. The Florendos and the Philippine National Bank appealed the lower court's decision to the Court of Appeals where the case was docketed as CA-G.R. No. 13913-CAR. In the meantime upon motion of the Florendos, the trial court ordered the issuance of a writ of execution to enforce the decision. Consequently, the Philippine National Bank filed a petition for certiorari with preliminary prohibitory injunction to stay the execution and enforcement of the court's decision during the pendency of the appeal. This petition was docketed as CA-G.R. No. 13913-CAR. The Court of Appeals then issued the prayed for restraining order. In its joint decision of the two cases, the Court of Appeals affirmed the judgment. The temporary restraining order earlier issued by the court was lifted to enable the immediate enforcement of the writ of execution issued in CAR Case No. 494 by the Court of Agrarian Relations. On January 12, 1983, we issued a temporary restraining order enjoining the Sheriff of the Court of Agrarian Relations, Dumaguete City from enforcing or implementing the writ of execution issued by the Court of Agrarian Relations dated January 5, 1982 and/or the decision of the respondent Court of Appeals in CA-G.R. No. 13913-CAR and CA-G.R. No. 13689-SP until otherwise ordered by us. The Philippine National Bank (PNB) alleges that the respondent Court of Appeals erred in not finding that: A SECTION 80 OF THE AGRARIAN REFORM CODE, AS AMENDED, DOES NOT APPLY TO LANDS NOT SUBJECTED TO P.D. NO. 27 AND THEREFORE NOT COVERED BY AGRARIAN REFORM, IN WHICH CASE, ACCEPTANCE OF LAND BANK BONDS AS PAYMENTS IS NOT COMPULSORY. B P.D. NO. 694 (PNB CHARTER) INSTEAD APPLIES TO LANDS OR TO THAT PORTION OF THE MORTGAGE LIEN/ENCUMBRANCE NOT SUBJECTED TO AGRARIAN REFORM, PARTICULARLY SECTION 80 OF THE AGRARIAN REFORM CODE, IN WHICH CASE, PNB MAY VALIDLY DETERMINE THE MANNER AND CONDITIONS IN WHICH LAND BANK BONDS MAY BE ACCEPTED AS PAYMENTS. C EVEN IF THE LAND BANK BONDS IN QUESTION WERE TAKEN BY PNB FULLY AT THEIR FACE VALUE, PRIVATE RESPONDENTS WOULD STILL REMAIN INDEBTED TO PNB. D SINCE PRIVATE RESPONDENT's LOAN WITH PNB REMAINS UNPAID, THE LATTER IS IN NO POSITION TO DISCHARGE OR RELEASE THE MORTGAGE CONSTITUTED ON OCT-S-V-97, MUCH LESS ON THE TWO OTHER TITLES. E COURT OF AGRARIAN RELATIONS IS WITHOUT JURISDICTION OVER SUBJECT MATTER OF THE CASE INSOFAR AS THE LANDS NOT SUBJECTED TO P.D. NO. 27 ARE CONCERNED. SAID LANDS ARE NOT COVERED BY AGRARIAN REFORM. The issues raised above are as follows: (1) whether or not the Court of Agrarian Relations had jurisdiction over CAR Case No. 494; (2) whether or not Section 80, Republic Act 3844 as amended by Presidential Decree 251 applies to lands not covered by Presidential Decree No. 27; and (3) whether or not the Land Bank bonds of P94,500.00 and the Land Bank cheek of P332.31 remitted to the PNB are sufficient to pay the fun outstanding obligation of the Florendos to the PNB. The issue of jurisdiction was first raised in the Court of Appeals. In the Court of Agrarian Relations, the PNB filed an answer setting up its special and affirmative defenses with counterclaim. The PNB through its counsel and representative actively participated in all the hearings. In fact, the parties agreed upon the issues of the case and the PNB never raised the issue on the alleged lack of jurisdiction of the Court of Agrarian Relations. On this score alone, the PNB is precluded from raising for the first time on appeal the issue of lack of jurisdiction of the Court of Agrarian Relations over C.A.R. Case No. 494. As we held in Royales v. Intermediate (127 SCRA 470) citing the earlier case of Tijam v. Sibonghanoy (23 SCRA 29): While petitioners could have prevented the trial court from exercising jurisdiction over the case by seasonably taking exception thereto, they instead invoked the very same jurisdiction by filing an answer and seeking affirmative relief from it. What is more, they participated in the trial of the case by cross-examining respondent Planas. Upon this premise, petitioners cannot now be allowed belatedly to adopt an inconsistent posture by attacking the jurisdiction of the court to which they had submitted themselves voluntarily. More important, however, is that the Court of Agrarian Relation had jurisdiction over C.A.R. No. 494. The main issue raised in the case was whether or not the PNB should apply the face value of the Land Bank bonds to the outstanding obligation of the Florendos in consonance with Presidential Decree No. 251. It is to be recalled that while the PNB loan of the Florendos was secured by the mortgage of three lots, only one of the lots was placed under the land reform program and subjected to operation land transfer. Following the rule that a mortgage obligation is indivisible and that it cannot be divided among the different lots which are mortgaged to secure it (Gonzales v. GSIS, 107 SCRA 492), the inevitable effect of the placing of only one lot under the land reform program is that all the lots mortgaged, without distinction, are subject to the jurisdiction of the Court of Agrarian Relations. This is specially true in this case because the mode of payment chosen by the Florendos under Presidential Decree No. 251 subjects not only the loan value but also the outstanding balance of the obligation to settlement with Land Bank bonds. (Gonzales v. GSIS supra) The case, therefore, clearly falls under Section 12(b) of Presidential Decree No. 946 (Reorganizing the Court of Agrarian Relations, Stream lining their Procedures and For Other Purposes) which provides: Section 12. Jurisdiction over Subject Matter. — The Court of Agrarian Relations shall have original and exclusive jurisdiction over. xxx xxx xxx (b) Questions involving rights granted and obligations imposed by laws, Presidential Decrees, Orders, Instructions, Rules and Regulations issued and promulgated in relation to the agrarian reform program. The issue raised in relation to Section 80, Republic Act 3844 as amended by Presidential Decree 251 stems from the PNB's refusal to apply the Land Bank bonds worth P94,500.00 at face value to the entire outstanding obligation of the Florendos to the former. Section 80, Republic Act 3844, as amended provides for the modes of payment through the Land Bank of lands placed under the land reform program. The pertinent portion reads: Section 80. Modes of payment. — The Bank shall finance the acquisition of farm lots under any of the following modes of settlement: xxx xxx xxx In the event there is an existing lien or encumbrance on the land in favor of any Government tending institution at the time of acquisition by the Bank, the landowner shall be paid the net value of the land (i.e., the value of the land determined under Proclamation (sic) No. 27 minus the outstanding balance/s of the obligation/s secured by the lien/s or encumbrance/s), and the outstanding balance is of the obligations to the lending institutionals shall be paid by the Land Bank in Land Bank bonds or other securities; existing charters of those institutions to the contrary notwithstanding. A similar settlement may be negotiated by the Land Bank in the case of obligations secured by liens or encumbrances in favor of private parties or institutions. (Emphasis supplied) The PNB maintains that under this provision the Land Bank bond payments should be applied at face value only to that extent of the proportionate loan value of the collateral subjected to Presidential Decree No. 27 and the balance of the bonds, if any, should be accepted as payments to release the mortgage on the lands not covered by the land reform program at market value or market price pursuant to the PNB Charter. Under this premise, the PNB submits that the Land Bank bonds worth P94,500.00 should be applied to the outstanding obligation of the Florendos as follows: (1)P15,600.00 (loan value of the land placed under PD 27) at face value and the remaining (2) P79,000.00 at a discount of 40% reducing its value to only P 47,400.00. The posture taken by PNB is not well-taken. This issue has been squarely resolved in the case of Gonzales v. GSIS, earlier cited. The spouses Gonzales obtained a housing loan of P80,000.00 from the respondent GSIS repayable in installments within fifteen years with interest using as collaterals residential lots and two parcels of agricultural land. The Gonzaleses were able to pay only a few monthly installments leaving an unpaid obligation of P135,884.82, including accumulated interest. The mortgaged agricultural lands were placed under the land reform program. The Land Bank took over and tried to pay the GSIS by remitting P23,505.00 in cash and P93,500.00 in Land Bank bonds. The GSIS refused acceptance unless the payment in bonds was to be discounted. The Gonzales spouses, therefore, filed a case to compel the GSIS to accept the Land Bank bonds at their face value as payment for their outstanding housing loan. The GSIS' refusal to apply the Land Bank bonds at face value to the outstanding obligation of the Gonzales spouses was premised on the argument that the GSIS is not compelled to accept Land Bank bonds for the discharge of existing encumbrances on lands given as security to the GSIS but not acquired by the Land Bank under Presidential Decree No. 27. Like the PNB in the instant petition, the GSIS asserted that their Land Bank bonds payments should be applied at face value only to that portion of the loan secured by the land covered by Presidential Decree No. 27. In resolving the issue, we ruled: We find the foregoing asseverations self-serving and in contravention of Presidential Decree No. 251, which ordains that "the outstanding balance of the obligations to the lending institution/s shall be paid by the Land Bank in Land Bank bonds or other securities." (emphasis supplied). It is clear then that it is not only the loan value but the outstanding balance of the obligation that has to be settled with Land Bank bonds, and as discussed above, at their par or face value, The fact that only one agricultural land of the four securities was placed under land reform should make no difference. Although it may be conceded that the obligation of the petitioners is, in a sense, divisible because it can be settled partially according to current practice, it does not render the mortgage of four (4) parcels of land also divisible. Generally, the divisibility of the principal obligation is not affected by the indivisibility of the mortgage. The mortgage obligation is indivisible; that is, it cannot be divided among the different lots. A real estate mortgage voluntarily constituted by the debtor on two or more parcels of land is one and indivisible. Each and every parcel under mortgage answers for the totality of the debt. Being indivisible, the full value of the one parcel being paid for by the land Bank should be applied in full to the outstanding loan obligation without any discounting. (Gonzales v. GSIS, 107 SCRA 492, 501- 502). The P94,500.00 Land Bank bonds remitted by the Land Bank to the PNB to pay the Florendos' obligation should, therefore, be applied at their face value. The PNB, however, insists that the P94,500.00 bonds even if applied at face value and the Land Bank check worth P332.31 would not be sufficient to pay the outstanding obligation of the Florendos which, according to its computation, was P152,499.29 as of July 10, 1979. The record is clear that at the time the Land Bank remitted the P94,500.00 bonds and the check worth P332.31, the outstanding obligation of the Florendos to the PNB as agreed upon by both barks was only P94,832.31. In fact that PNB insistence that after the discounting of P94,500.00, there would still be an excess of more than P30,000.00 on the outstanding obligation of the Florendos was based on the reason behind their refusal to surrender the titles of the mortgaged properties. Thus, Atty. Remollo, the PNB representative testified: ATTY. REMOLLO: The trouble is the plaintiff is asking for the release of the property. Assuming for the sake of argument that we will accept the bond who well pay the excess? The excess is more than P130,000.00? (TSN, June 24, 1980, p. 13) The more than P130,000.00 alleged excess was based on the P94,500.00 land bank bonds being valued by PNB at only P 63,232.31. Adding the check worth P332.31 would yield the amount of P 63,564.62 thus leaving an excess of P31,267.69, from Florendos outstanding obligation of P94,832.31. The Court of Appeals did not err, in rejecting the unilateral computation of the PNB on the amount of the Florendos' total obligation. Considering the foregoing, we rule that the P94,500.00 bonds and the check worth P332.31 remitted by the Land Bank totally discharge the outstanding obligation of the Florendos to the PNB. On the other hand, the Florendos challenge the decision of the then Court of Appeals on two grounds, namely, (1) the denial of their claim to moral and exemplary damages and (2) the failure of the appellate court to order the Land Bank to pay their indebtedness to the Development Bank of the Philippines (DBP) and release to them their torrens title (OCT-Q-V-22) over another parcel of land free from all liens and encumbrances. The challenge is not wen taken. We agree with the appellate court about there being no clear evidence that the named officers of the two banks acted in a wanton or willful manner in their dealings with Teodoro Florendo which would warrant the award for moral and exemplary damages. On the second issue, we rule that the Land Bank has no responsibility to pay the Florendos' outstanding obligation to the DBP. The DBP loan was a separate transaction and has nothing to do with the PNB loan. Moreover, the loan of the Florendos' with the DBP was secured by a parcel of land different from those mortgaged with the PNB. The DBP is not a party in these two petitions. It is to be noted, however, that the then Court of Appeals "affirmed in full" the decision of the Court of Agrarian Relations. Paragraph 5 of the dispositive portion of the decision of the lower court states: WHEREFORE, judgment is hereby rendered as follows: xxx xxx xxx 5. Ordering the defendant Land Bank to settle and pay the amounts of the herein plaintiffs with the Development Bank of the Philippines from the remaining balance of subject property. xxx xxx xxx Considering our findings on this matter, this part of the decision of the lower court affirmed by the then Court of Appeals should be deleted. WHEREFORE, the instant petitions are DISMISSED for lack of merit. The questioned decision of the then Court of Appeals is MODIFIED in that Number 5 of the dispositive portion of the decision of the Court of Agrarian Relations which was affirmed by the then Court of Appeals is hereby DELETED. The decision is AFFIRMED in all other respects. The temporary restraining order we issued dated January 5, 1982 is DISSOLVED. SO ORDERED. G.R. No. 72074 April 30, 1987 ATLAS FERTILIZER CORPORATION, petitioner, vs. HON. EXALTACION NAVARRO in her capacity as Presiding Judge of Branch XX of the Regional Trial Court of Cebu, and EMILIANO BELLEZA, respondents, GUTIERREZ, JR., J .: This is a petition for certiorari and prohibition with preliminary injunction to review and annul the orders of the Regional Trial Court of Cebu, Branch XX, dated November 7, 1983 and April 25, 1985, which respectively denied the petitioner's motion to dismiss and motion for reconsideration in Civil Case No. 17740. Private respondent Emiliano C. Beneza was employed by petitioner Atlas Fertilizer Corporation in May, 1968 as a salesman and later as a sales supervisor for eastern Visayas and northern Mindanao. On December 26, 1978, the petitioner in a memorandum sent through Mr. Rosendo Estoye, its Cebu branch manager and Visayas/Mindanao supervisor, advised the private respondent of his impending termination on the grounds of inefficiency and loss of trust and confidence. In the same memorandum, he was given the option to resign and possibly receive a little gratuity or wait for the termination order and risk criminal charges. On January 4, 1979, the private respondent filed his resignation letter addressed to the petitioner's executive vice- president and vice-president for sales. The resignation was proposed to take effect on February 15, 1979. On January 8, 1979, Rosendo Estoye sent to the respondent a memorandum giving the latter seventy-two (72) hours to explain why he should not be terminated on the grounds of acts inimical to the interest of the petitioner and gross dishonesty, all amounting to loss of trust and confidence. On January 22, 1979, the respondent filed with the Regional Trial Court of Cebu, Branch XX, a complaint against the petitioner for injunction with damages with a prayer for a writ of preliminary injunction and/or restraining order. The complaint urged the court to prevent the respondent's termination on the grounds that the causes alleged by the petitioner were false and fabricated and that any termination would be unlawful because he had already tendered his resignation. Summons was served on the petitioner on February 9, 1979. Thereafter, the petitioner duly filed its Answer and Amended Answer. Meanwhile, on February 6, 1979, the petitioner accepted respondent's resignation effective at the close of business hours on February 15, 1979. The petitioner likewise informed the respondent that his claim for termination pay was denied, being incompatible with his resignation. After the effectivity of respondent's resignation, the petitioner, in compliance with the then legal requirement filed with the former Department of Labor, Regional Office No. 7, its report docketed as TFU Case No. 2974. On March 20, 1979, the Regional Office issued an order finding the submitted report in order and declaring that the employer-employee relationship between the parties was legally severed and that the respondent was not entitled to separation pay benefits. The respondent's motion for reconsideration was denied in an order dated August 1, 1979. This order was subsequently affirmed by the National Labor Relations Commission. On November 29, 1982, the petitioner filed with the Regional Trial Court a motion to dismiss on the ground that the court lacked jurisdiction over the subject matter of the complaint. The motion to dismiss cited the provisions of Presidential Decree No. 1691, promulgated on May 1, 1980, which transferred to the National Labor Relations Commission the jurisdiction over "all money claims of workers, including those based on non-payment or underpayment of wages, overtime compensation, separation pay and other benefits provided by law or appropriate agreement, except claims for employee's compensation, social security, medicare and maternity benefits." An opposition was filed by the respondent on the grounds that the instant case had been consolidated with Civil Case No. R-18595, entitled "Atlas Fertilizer Corporation v. Emiliano C. Belleza" and a joint trial thereof had been started and that at the time Presidential Decree No. 1691 was approved, this case had already been filed with the respondent court. On November 7, 1983, the lower court denied the petitioner's motion to dismiss. The subsequent motion for reconsideration was denied by the lower court on April 25, 1985. After the lower court issued an order on August 20, 1985, resetting the hearing of the joint cases on October 7 and 8, 1985, the petitioner went to this Court on petition for certiorari and prohibition with pre injunction on September 23, 1985. The issue put forward by the petitioner is whether or not regular courts have jurisdiction to entertain labor cases including those involving claims for moral and other damages. The petitioner alleges that although the case was filed during the effectivity of Presidential Decree No. 1367 wherein the courts were vested with jurisdiction over claims for moral and other forms of damages arising from employer-employee relationship, the same jurisdiction was divested when Presidential Decree No 1691 superseded Presidential Decree No. 1367 during the pendency of the case. Against this view, the respondent maintains that jurisdiction once acquired by a court over a case remains with it until the full termination of the case. The following considerations impel us to uphold the petitioner's view. It is a general rule that the jurisdiction of a court is determined by the statute enforced at the time of the commencement of the action (People v. Mariano, 71 SCRA 600; People v. Fontanilla, 23 SCRA 1227). However, in the case of Bengzon v. Inciong (91 SCRA 248, 256), this Court held: The rule is that where a court has already obtained and is exercising jurisdiction over a controversy, its jurisdiction to proceed to the final determination of the cause is not affected by new legislation placing jurisdiction over such proceedings in another tribunal (lburan v. Labes, 87 Phil. 234; Insurance Company of North America v. United States Lines Company, et al. 17 SCRA 301). The exception to the rule is where the statute expressly provides, or is construed to the effect that it is intended to operate as to actions pending before its enactment (20 Am. Jur. 2d, Section 150). Where a statute change the jurisdiction of a court has no retroactive effect, it cannot be applied to a case that was pending prior to the enactment of the statute (Mullen v. Renzleman, 31 Okla, 53, 119 P. 641). ... Admittedly, at the time when the respondent filed this case with the respondent lower court, the applicable law was Section 1 of Presidential Decree No. 1367, which provides as follows: Section 1. Paragraph (a) of Article 217 of the Labor Code as amended is hereby further amended to read as follows: a) The Labor Arbiter shall have exclusive jurisdiction to hear and decide the following cases involving all workers, whether agricultural or non-agricultural: b) Unfair labor practice cases; c) Unresolved cases in collective bargaining, including those which involve wages, hours of work and other terms and conditions of employment; and d) All other cases arising from employer-employee relations duly indorsed by the Regional Directors in accordance with the provisions of this code; Provided, that the Regional Directors shall not indorse and Labor Arbiters shall not entertain claims for moral or other forms of damages. However, on May 1, 1980, during the pendency of this case, Presidential Decree No, 1691 was promulgated. It amended the above-quoted provisions as follows: Sec. 3. Articles 217, 222 and 262 of Book V of the labor Code are hereby amended to read as follows: ART. 217. Jurisdiction of Labor Arbiters and the, Commission. -(a) The Labor Arbiters shall have the original and exclusive jurisdiction to hear and decide the following cases involving 11 workers, whether a agricultural cultural or non-agricultural: 1. Unfair labor practice cases: 2. Unresolved issues in collective bargaining, including those Chat involve wages, hours, of work and other terms and conditions of employment; 3. All money claims of workers, including those based on non-payment or underpayment of wages, overtime compensation, separation pay and other benefits provided by law or appropriate agreement, except claim s for employees compensation, social security, medicare and maternity benefits; 4. Cases involving household services; and 5. All other claims arising from employer- employee-relations, unless expressly excluded by this Code. (b) The Commission shall have exclusive appellate-jurisdiction over all cases decided by Labor Arbiters, compulsory arbitrators,and voluntary arbitrators in appropriate cases provided in Article 263 of this Code. xxx xxx xxx Presidential Decree No. 1691 was again amended by Batas Pambansa Blg. 130 which took effect on August 21, 1981. On June 1, 1982, said Article was amended anew by Batas Pambansa Blg. 227, vesting on the labor arbiters jurisdiction over cases that workers may file involving wages, hours of work and other terms and conditions of employment and all money claims of workers, except money claims for employees' compensation, social security, medicare and maternity benefits (Sentinel Insurance Co., Inc. v. Bautista, 127 SCRA 623,,629). Does Presidential Decree No. 1691 have a retroactive effect in the instant case? In conflicts of jurisdiction between the courts and the labor agencies arising from the amendments effected by P.D. 1691 on P.D. 1367, this Court held in the cases of Ebon v. De Guzman (113 SCRA 52), Aguda v. Vallejos (113 SCRA 69), and Sentinel Insurance Co., Inc. v. Bautista, (supra), that P.D. 1691 is a curative statute which corrected the lack of jurisdiction of the Labor Arbiter at the start of the proceedings and, therefore, should be given a retrospective application to the pending proceedings. P.D. 1691 merely restored a jurisdiction earlier vested in Labor Arbiters before the enactment of P.D. 1367. It was intended to correct a situation where two tribunals would have jurisdiction over separate issues arising from the same labor conflict. This is also our ruling in the case of Getz Corp., Phils., Inc. v. Court of Appeals (116 SCRA 86), cited by the petitioner. In said case, the complaint for recovery of termination pay, other employment benefits, and damages was filed on March 20, 1979 with the Court of First Instance of Negros Oriental. The complaint was dismissed for lack of jurisdiction on December 5, 1980. On April 9, 1981, the dismissal order was set aside on a motion for reconsideration. On review, this Court ordered the dismissal of the complaint on the ground that "P.D. 1367 was no longer applicable when the trial court dismissed the case for lack of jurisdiction on December 5, 1980 End when it reconsider dered and set aside said Order of dismissal on April 9, 1981 and reinstated the case on its docket." This construction of law is not new. It must be noted that the amendatory provision of P.D. 1367 itself was given retroactive application, for also being curative in nature, in the case of Garcia v. Martinez (90 SCRA 331) where this Court ruled that the Court of First Instance of Davao City had jurisdiction over the complaint for actual, moral, and exemplary damages arising from the plaintiff's dismissal as a manager of a radio station, which was filed on August 2, 1976. This ruling was reiterated in the more recent case of Calderon Sr. v. Court of Appeals, (100 SCRA 459) where we held that the Court of First Instance of Rizal had jurisdiction over the complaint for recovery of unpaid salaries, allowances, other reimburseable expenses, and damages, which was filed on March 3, 1978 (Abad v. The Philippine American General Incs., Co., Inc., 108 SCRA 717). P.D. 1691 should, therefore, be given a retroactive application to this pending case as the precise purpose of the amendment was to hopefully settle once and for all the conflict of jurisdiction between regular courts and labor agencies (Sentinel Incs., Co., Inc. v. Bautista, supra). In Ebon v. De Guzman supra, this Court held: The lawmaker in divesting the Labor Arbiters and the NIRC of jurisdiction to award moral and other forms of damages in labor cases could have assumed that the Labor Arbiters' position-paper procedure of ascertaining the facts in dispute might not be an adequate tool for arriving at a just and accurate assessment of damages, as distinguished from backwages and separation pay, and that the trial procedure in the Court of First Instance would be a more effective means of determining such damages (See Resolution of May 28, 1979 in Garcia v. Martinez, 90 SCRA 331; Calderon v. Amor, et al. and Court of Appeals, SCRA 459 and Abad v. Philippine American General Inc., Co., 108 SCRA 717). Evidently, the lawmaking authority had second thoughts about depriving the Labor Arbiters and the NLRC of the jurisdiction to award damages in labor cases because that setup would mean duplicity of suits, splitting the cause of action and possible conflicting findings and conclusions by two tribunals on one and the same claim. So, on May 1, 1980, Presidential Decree No. 1691 (which substantially reenacted Article 217 in its original form) nullified Presidential Decree No. 1367 and restored to the Labor Arbiters and the NLRC their jurisdiction to award all kinds of damages in cases arising from employer-employee relations (Pepsi-Cola Bottling Company of the Philippines v. Martinez, G.R. No. 58877). Furthermore, in the case of National Federation of Labor v. Eisma (127 SCRA 419), this Court held: The issuance of Presidential Decree No. 1691 and the enactment of Batas Pambansa Blg. 130, made clear that the exclusive and original jurisdiction for damages would once again be vested in labor arbiters, It can be affirmed that even if they were not that explicit, history has vindicated the view that in the appraisal of what was referred to by Philippine American Management & Financing Co., Inc. v. Management & Supervisors Association of the Philippine-American Management & Financing Co., Inc. (L-27953, November 29, 1972, 48 SCRA 187) as 'the rather thorny question as to where in labor matters the dividing line is to be drawn' (lbid, 91) between the power lodged in an administrative body and a court, the unmistakable trend has been to refer it to the former. Thus: 'Increasingly, this Court has been committed to the view that unless the law speaks clearly and unequivocably, the choice should fan on [an administrative agency]. Certainly, the present Labor Code is even more committed to the view that on policy grounds, and equally so in the interest of greater promptness in the disposition of labor matters, a court is spared the often onerous task of determining what essentially is a factual matter, namely, the damages that may be incurred by either labor or management as a result of disputes or controversies arising from employer-employee relations. During the deliberations on this petition, the ruling in Philippine Overseas Drilling and Oil Development Corporation (PODCO) v. Ministry of Labor, et al (G.R. No. 55703, November 27, 1986) was discussed. In the abovecited PODCO case, we sustained the jurisdiction of the Director, Bureau of Labor Relations to hear and decide a claim for separation pay arising from employer-employee relations inspire of the enactment of an amendatory decree granting Labor Arbiters the original and exclusive jurisdiction over all money claims arising out of such relationships. There are certain factual and other differences between the PODCO case and this petition. The PODCO case involved a clearance to terminate an employee. The money claim came about only because the employee interposed an opposition to the application for clearance. In his opposition, the employee charged the employer with unfair labor practise and undue discrimination arising from its refusal to grant separation pay, Apart from the factual differences, the tribunals involved in the PODCO case are both labor tribunals, with expertise in matters involving employer-employee relations. More important, however, the petitioner in that case did not raise any question of jurisdiction in its motion for reconsideration or in its appeal to the Minister of Labor. Only in its petition before this Court was the issue of jurisdiction raised. We, therefore, ruled that regardless of the merits of the jurisdiction issue, the petitioner was barred by estoppel from raising it before us, applying the Tijam v. Sibonghanoy (23 SCRA 29) doctrine. In the instant petition, jurisdiction was raised as the issue from the very start. IN VIEW OF THE FOREGOING, the petition is GRANTED and the orders of the respondent court are hereby SET ASIDE. The respondent judge is directed to dismiss Civil Case No. 17740 without prejudice to the right of the respondent to refile his case with the proper labor agency. SO ORDERED. G.R. No. 128096 January 20, 1999 PANFILO M. LACSON, petitioner, vs. THE EXECUTIVE SECRETARY, THE SANDIGANBAYAN, OFFICE OF THE SPECIAL PROSECUTOR, THE DEPARTMENT OF JUSTICE, MYRNA ABALORA, NENITA ALAP-AP, IMELDA PANCHO MONTERO, and THE PEOPLE OF THE PHILIPPINES, respondent. ROMEO M. ACOP AND FRANCISCO G. ZUBIA, JR., petitioner-intervenors. MARTINEZ, J .: The constitutionality of Sections 4 and 7 of Republic Act No. 8249 — an act which further defines the jurisdiction of the Sandiganbayan — is being challenged in this petition for prohibition and mandamus. Petitioner Panfilo Lacson, joined by petitioners-intervenors Romeo Acop and Francisco Zubia, Jr., also seeks to prevent the Sandiganbayan from proceedings with the trial of Criminal Cases Nos. 23047-23057 (for multiple murder) against them on the ground of lack of jurisdiction. The antecedents of this case, as gathered from the parties' pleadings and documentary proofs, are as follows: In the early morning of May 18, 1995, eleven (11) persons believed to be members of the Kuratong Baleleng gang, reportedly an organized crime syndicate which had been involved in a spate of bank robberies in Metro Manila, where slain along Commonwealth Avenue in Quezon City by elements of the Anti-Bank Robbery and Intelligence Task Group (ABRITG) headed by Chieff Superintendent Jewel Canson of the Philippine National Police (PNP). The ABRITG was composed of police officers from the Traffic Management Command (TMC) led by petitioner-intervenor Senior Superintendent Francisco Zubia, Jr.; Presidential Anti-Crime Commission — Task Force Habagat (PACC-TFH) headed by petitioner Chief Superintendent Panfilo M. Lacson; Central Police District Command (CPDC) led by Chief Superintendent Ricardo de Leon; and the Criminal Investigation Command (CIC) headed by petitioner-intervenor Chief Superintendent Romeo Acop. Acting on a media expose of SPO2 Eduardo delos Reyes, a member of the CIC, that what actually transpired at dawn of May 18, 1995 was a summary execution (or a rub out) and not a shoot-out between the Kuratong Baleleng gang members and the ABRITG, Ombudsman Aniano Desierto formed a panel of investigators headed by the Deputy Ombudsman for Military Affairs, Bienvenido Blancaflor, to investigate the incident. This panel later absolved from any criminal liability all the PNP officers and personal allegedly involved in May 18, 1995 incident, with a finding that the said incident was a legitimate police operation. 1 However, a review board led by Overall Deputy Ombudsman Francisco Villa modified modified the Blancaflor panel's finding and recommended the indictment for multiple murder against twenty-six (26) respondents, including herein petitioner and intervenors. The recommendation was approved by the Ombudsman except for the withdrawal of the charges against Chief Supt. Ricardo de Leon. Thus, on November 2, 1995, petitioner Panfilo Lacson was among those charged as principal in eleven (11) information for murder 2 before the Sandiganbayan's Second Division, while intervenors Romeo Acop and Francisco Zubia, Jr. were among those charged in the same informations as accessories after-in-the-fact. Upon motion by all the accused in the 11 information, 3 the Sandiganbayan allowed them to file a motion for reconsideration of the Ombudsman's action. 4 After conducting a reinvestigation, the Ombudsman filed on March 1, 1996 eleven (11) amended informations 5 before the Sandiganbayan, wherein petitioner was charged only as an accessory, together with Romeo Acop and Francisco Zubia, Jr. and other. One of the accused 6 was dropped from the case. On March 5-6, 1996, all the accused filed separate motions questioning the jurisdiction of the Sandiganbayan, asserting that under the amended informations, the cases fall within the jurisdiction of the Regional Trial Court pursuant to Section 2 (paragraphs a and c) of Republic Act No. 7975. 7 They contend that the said law limited the jurisdiction of the Sandiganbayan to cases where one or more of the "principal accused" are government officials with Salary Grade (SG) 27 or higher, or PNP officials with the rank of Chief Superintendent (Brigadier General) or higher. The highest ranking principal accused in the amended informations has the rank of only a Chief Inspector, and none has the equivalent of at least SG 27. Thereafter, in a Resolution 8 dated May 8, 1996 (promulgated on May 9, 1996), penned by Justice Demetriou, with Justices Lagman and de Leon concurring, and Justices Balajadia and Garchitorena dissenting, 9 the Sandiganbayan admitted the amended information and ordered the cases transferred to the Quezon City Regional Trial Court which has original and exclusive jurisdiction under R.A. 7975, as none of the principal accused has the rank of Chief Superintendent or higher. On May 17, 1996, the Office of the Special Prosecutor moved for a reconsideration, insisting that the cases should remain with the Sandiganbayan. This was opposed by petitioner and some of the accused. While these motions for reconsideration were pending resolution, and even before the issue of jurisdiction cropped up with the filing of the amended informations on March 1, 1996, House Bill No. 2299 10 and No. 1094 11 (sponsored by Representatives Edcel C. Lagman and Lagman and Neptali M. Gonzales II, respectively), as well as Senate Bill No. 844 12 (sponsored by Senator Neptali Gonzales), were introduced in Congress, defining expanding the jurisdiction of the Sandiganbayan. Specifically, the said bills sought, among others, to amend the jurisdiction of the Sandiganbayan by deleting the word "principal" from the phrase "principal accused" in Section 2 (paragraphs a and c) of R.A. No. 7975. These bills were consolidated and later approved into law as R.A. No. 8249 13 by the President of the Philippines on February 5, 1997. Subsequently, on March 5, 1997, the Sandiganbayan promulgated a Resolution 14 denying the motion for reconsideration of the Special Prosecutor, ruling that it "stands pat in its resolution dated May 8, 1996." On the same day 15 the Sandiganbayan issued and ADDENDUM to its March 5, 1997 Resolution, the pertinent portion of which reads: After Justice Lagman wrote the Resolution and Justice Demetriou concurred in it, but before Justice de Leon. Jr. rendered his concurring and dissenting opinion, the legislature enacted Republic Act 8249 and the President of the Philippines approved it on February 5, 1997. Considering the pertinent provisions of the new law, Justices Lagman and Demetriou are now in favor of granting, as they are now granting, the Special Prosecutor's motion for reconsideration. Justice de Leon has already done so in his concurring and dissenting opinion. xxx xxx xxx Considering that three of the accused in each of these cases are PNP Chief Superintendents: namely, Jewel T. Canson, Romeo M. Acop and Panfilo M. Lacson, and that trial has not yet begun in all these cases — in fact, no order of arrest has been issued — this court has competence to take cognizance of these cases. To recapitulate, the net result of all the foregoing is that by the vote of 3 of 2, the court admitted the Amended Informations in these cases by the unanimous vote of 4 with 1 neither concurring not dissenting, retained jurisdiction to try and decide the cases 16 (Empahasis supplied) Petitioner now questions the constitutionality of Section 4 of R.A. No. 8249, including Section 7 thereof which provides that the said law "shall apply to all cases pending in any court over which trial has not begun as to the approval hereof." Petitioner argues that: a) The questioned provisions of the statute were introduced by the authors thereof in bad faith as it was made to precisely suit the situation in which petitioner's cases were in at the Sandiganbayan by restoring jurisdiction thereof to it, thereby violating his right to procedural due process and the equal protection clause of the Constitution. Further, from the way the Sandiganbayan has foot- dragged for nine (9) months the resolution of a pending incident involving the transfer of the cases to the Regional Trial Court, the passage of the law may have been timed to overtake such resolution to render the issue therein moot, and frustrate the exercise of petitioner's vested rights under the old Sandiganbayan law (RA 7975) b) Retroactive application of the law is plan from the fact that it was again made to suit the peculiar circumstances in which petitioner's cases were under, namely, that the trial had not yet commenced, as provided in Section 7, to make certain that those cases will no longer be remanded to the Quezon City Regional Trial Court, as the Sandiganbayan alone should try them, thus making it an ex post facto legislation and a denial of the right of petitioner as an accused in Criminal Case Nos. 23047-23057 to procedural due process. c) The title of the law is misleading in that it contains the aforesaid "innocuous" provisions in Sections 4 and 7 which actually expands rather than defines the old Sandiganbayan law (RA 7975), thereby violating the one-title one-subject requirement for the passage of statutes under Section 26 (1), Article VI of the Constitution. 17 For their part, the intervenors, in their petition-in-intervention, add that "while Republic Act No. 8249 innocuously appears to have merely expanded the jurisdiction of the Sandiganbayan, the introduction of Section 4 and 7 in said statute impressed upon it the character of a class legislation and an ex-post facto statute intended to apply specifically to the accused in the Kuratong Baleleng case pending before the Sandiganbayan. 18 They further argued that if their case is tried before the Sandiganbayan their right to procedural due process would be violated as they could no longer avail of the two-tiered appeal to the Sandiganbayan, which they acquired under R.A. 7975, before recourse to the Supreme Court. Both the Office of the Ombudsman and the Solicitor-General filed separate pleadings in support of the constitutionality of the challenged provisions of the law in question and praying that both the petition and the petition-in-intervention be dismissed. This Court then issued a Resolution 19 requiring the parties to file simultaneously within a nonextendible period of ten (10) days from notice thereof additional memoranda on the question of whether the subject amended informations filed a Criminal Case Nos. 23047-23057 sufficiently allege the commission by the accused therein of the crime charged within the meaning Section 4 b of Republic Act No. 8249, so as to bring the said cases within the exclusive original jurisdiction of the Sandiganbayan. The parties, except for the Solicitor General who is representing the People of the Philippines, filed the required supplemental memorandum within the nonextendible reglementary period. The established rule is that every law has in its favor the presumption of constitutionality, and to justify its nullification there must be a clear and unequivocal breach of the Constitution, not a doubtful and argumentative one. 20 The burden of proving the invalidity of the law lies with those who challenge it. That burden, we regret to say, was not convincingly discharged in the present case. The creation of the Sandiganbayn was mandated in Section 5, Article XIII of the 1973 Constitution, which provides: Sec. 5. The Batasang Pambansa shall create a special court, to be known as Sandiganbayan, which shall have jurisdiction over criminal and civil cases involving graft and corrupt practices and such other offenses committed by public officers and employees including those in government-owned or controlled corporations, in relation to their office as may be determined by law. The said special court is retained in the new (1987) Constitution under the following provisions in Article XI, Section 4: Sec. 4. The present anti-graft court known as the Sandiganbayan shall continue to function and exercise its jurisdiction as now or hereafter may be provided by law. Pursuant to the constitutional mandate, Presidential Decree No. 1486 21 created the Sandiganbayan. Thereafter, the following laws on the Sandiganbayan, in chronological order, were enacted: P.D. No. 1606, 22 Section 20 of Batas Pambansa Blg. 123, 23 P.D. No. 1860, 24 P.D. No. 1861, 25 R.A. No. 7975, 26 and R.A. No. 8249. 27 Under the latest amendments introduced by Section 4 of R.A. No. 8249, the Sandiganbayan has jurisdiction over the following cases: Sec 4. Section 4 of the same decree [P.D. No. 1606, as amended] is hereby further amended to read as follows: Sec. 4. Jurisdiction — The Sandiganbayan shall exercise exclusive original jurisdiction in all cases involving: a. Violations of Republic Act No. 3019, as amended, otherwise known as the Anti-Graft and Corrupt Practices Act, Republic Act No. 1379, and Chapter II, Section 2, Titile VII, Book II of the Revised Penal Code, where one or more of the accused are officials occupying the following positions in the government, whether in a permanent, acting or interim capacity, at the time of the commission of the offense: (1) Officials of the executive branch occupying the positions of regional director and higher, otherwise classified as Grade "27" and higher, of the Compensation and Position Classification Act of 1989 (Republic Act No. 6758), specifically including: (a) Provincial governors, vice-governors, members of the sangguniang panlalawigan, and provincial treasurers, assessors, engineers, and other provincial department heads; (b) City mayors, vice-mayors, members of the sangguniang panlungsod, city treasurers, assessors, engineers, and other city department heads; (c) Officials of the diplomatic service occupying the position of consul and higher; (d) Philippine Army and air force colonels, naval captains, and all officers of higher rank; (e) Officers of the Philippines National Police while occupying the position of provincial director and those holding the rank of senior superintendent or higher. (f) City of provincial prosecutors and their assistants, and officials and prosecutors in the Office of the Ombudsman and special prosecutor; (g) Presidents, directors or trustees or managers of government-owned or controlled corporations, state universities or educational institutions or foundations; (2) Members of Congress or officials thereof classified as-Grade "27" and up under the Compensation and Position Classification Act of 1989; (3) Members of the judiciary without prejudice to the provisions of the Constitution; (4) Chairman and members of the Constitutional Commissions, without prejudice to the provisions of the Constitution; (5) All other national and local officials classified as Grade "27" or higher under the Compensation and Position Classification Act of 1989. b. Other offenses or felonies whether simple or complexed with other crimes committed by the public officials and employees mentioned in Subsection a of this section in relation to their office. c. Civil and criminal cases filed pursuant to and connection with Executive Orders Nos. 1,2, 14 and 14-A, issued in 1986. In cases where none of the accused are occupying positions corresponding to salary Grade "27" or higher, as prescribed in the said Republic Act 6758, or military and PNP officers mentioned above, exclusive original jurisdiction thereof shall be vested in the proper regional trial court, metropolitan trial court, municipal trial court, and municipal circuit trial court, as the case may be, pursuant to their jurisdictions as privided in Batas Pambansa Blg. 129, as amended. The Sandiganbayan shall exercise exclusive appellate jurisdiction over final judgments, resolutions or orders of regional trial courts whether in the exercise of their own original jurisdiction or of their appellate jurisdiction as herein provided. The Sandiganbayan shall have exclusive original jurisdiction over petitions of the issuance of the writs of mandamus, prohibition, certiorari, habeas corpus, injunctions, and other ancillary writs and processes in aid of its appellate jurisdiction and over petitions of similar nature, including quo warranto, arising or that may arise in cases filed or which may be filed under Executive Order Nos. 1, 2, 14 and 14-A, issued in 1986: Provided, That the jurisdiction over these petitions shall not be exclusive of the Supreme Court. The procedure prescribed in Batas Pambansa Blg. 129, as well as the implementing rules that the Supreme Court has promulgated and may hereafter promulgate, relative to appeals/petitions for review to the Court of Appeals, shall apply to appeals and petitions for review filed with the Sandiganbayan. In all cases elevated to the Sandiganbayan and from the Sandiganbayan to the Supreme Court, the Office of the Ombudsman, through its special prosecutor, shall represent the People of the Philippines, except in cases filed pursuant to Executive Order Nos. 1, 2, 14, and 4-A, issued in 1986. In case private individuals are charged as co-principals, accomplices or accessories with the public officers or employee, including those employed in government-owned or controlled corporations, they shall be tried jointly with said public officers and employees in the proper courts which shall exercise exclusive jurisdiction over them. xxx xxx xxx (Emphasis supplied) Sec. 7 of R.A. No. 8249 states: Sec. 7. Transitory provision — This act shall apply to all cases pending in any court over which trial has not begun as of the approval hereof. (Emphasis supplied) The Sandiganbayan law prior to R.A. 8249 was R.A. 7975. Section 2 of R.A. 7975 provides: Sec. 2. Section 4 of the same decree [Presidential Decree No. 1606, as amended) is hereby further amended to read as follows: Sec 4. Jurisdiction — The Sandiganbayan shall exercise exclusive original jurisdiction in all cases involving: a. Violations of Republic Act No. 3019, as amended, otherwise known as the Anti-Graft and Corrupt Practices Act, Republic Act No. 1379, and Chapter II, Section 2, Title VII, Book II of the Revised Penal Code, where one or more of the pricipal accused are afficials occupying the following positions in the government, whether in a permanent, acting or interim capacity, at the time of the commission of the offense: (1) Officials of the executive branch occupying the positions of regional director and higher, otherwise classified as Grade "27" and higher, of the Compensation and Position Classification Act of 1989 (Republic Act No. 6758), specifically including: (a) Provincial governors, vice-governors, members of the sangguniang panlalawigan, and provincial treasurers, assessors, engineer, and other provincial department heads; (b) City mayors, vice-mayors, members of the sangguniang panlungsod, city treasurers, assessors, engineers, and other city department heads; (c) Officials of the diplomatic service occupying the position of consul and higher; (d) Philippine Army and air force colonels, naval captains, and all officers of higher rank; (e) PNP chief superintendent and PNP officers of higher rank; (f) City and provincial prosecutors and their assistants, and officials and prosecutors in the Office of the Ombudsman and special prosecutor; (g) Presidents, directors or trustees, or managers of government-owned or controlled corporations, state universities or educational institutions or foundations; (2) Members of Congress or officials thereof classified as Grade "27" and up under the Compensation and Position Classification Act of 1989; (3) Members of the judiciary without prejudice to the provisions of the Constitution; (4) Chairman and members of the Constitutional Commissions, without prejudice to the provisions of the Constitution; (5) All other national and local officials classified as Grade "27" or higher under the Compensation and Position Classification Act of 1989. b. Other offenses or felonies committed by the public officials and employees mentioned in Subsection a of this section in relation to their office. c. Civil and criminal cases files pursuant to and in connection with Executive Order Nos. 1, 2, 14, and 4-A. In cases where none of the principal accused are occupying positions corresponding to salary Grade "27" or higher, as presribed in the said Republic Act 6758, or PNP officers occupying the rank of superintendent or higher, or their equivalent, exclusive jurisdiction thereof shall be vested in the proper regional trial court, metropolitan trial court, municipal trial court, and municipal circuit trial court, as the case may be, pursuant to their respective jurisdictions as provided in Batas Pambansa Blg. 129. The Sandiganbayan shall exercise exclusive appellate jurisdiction on appelas from the final judgment, resolutions or orders of regular court where all the accused are occupying positions lower than grade "27," or not otherwise covered by the preceding enumeration. xxx xxx xxx In case private individuals are charged as co-principals, accomplices or accessories with the public officers or employees, including those employed in government-owned or controlled corporations, they shall be tried jointly with said public officers and employees in the proper courts which shall have exclusive jurisdiction over them. xxx xxx xxx (Emphasis supplied) Sec. 7 of R.A. No. 7975 reads: Sec. 7. Upon the effectivity of this Act, all criminal cases in which trial has not begun in the Sandiganbayan shall be referred to the proper courts. Under paragraphs a and c, Section 4 of R.A. 8249, the word "principal" before the word "accused" appearing in the above-quoted Section 2 (paragraphs a and c) of R.A. 7975, was deleted. It is due to this deletion of the word "principal" that the parties herein are at loggerheads over the jurisdiction of the Sandiganbayan. Petitioner and intervenors, relying on R.A. 7975, argue that the Regional Trial Court, not the Sandiganbayan, has jurisdiction over the subject criminal cases since none of the principal accused under the amended information has the rank of Superintendent 28 or higher. On the other hand, the Office of the Ombudsman, through the Special Prosecutor who is tasked to represent the People before the Supreme Court except in certain cases, 29 contends that the Sandiganbayan has jurisdiction pursuant to R.A. 8249. A perusal of the aforequoted Section 4 of R.A. 8249 reveals that to fall under the exclusive original jurisdiction of the Sandiganbayan, the following requisites must concur: (1) the offense committed is a violation of (a) R.A. 3019, as amended (the Anti-Graft and Corrupt Practices Act), (b) R.A. 1379 (the law on ill-gotten wealth), (c) Chapter II, Section 2, Title VII, Book II of the Revised Penal Code (the law on bribery), 30 (d) Executive Order Nos. 1, 2, 14, and 14-A, issued in 1986 (sequestration cases), 31 or (e) other offenses or felonies whether simple or complexed with other crimes; (2) the offender comitting the offenses in items (a), (b), (c) and (e) is a public official or employee 32 holding any of the positions enumerated in paragraph a of Section 4; and (3) the offense committed is in relation to the office. Considering that herein petitioner and intervenors are being charged with murder which is a felony punishable under Title VIII of the Revised Penal Code, the governing on the jurisdictional offense is not paragraph a but paragraph b, Section 4 of R.A. 8249. This paragraph b pertains to "other offenses or felonies whether simple or complexed with other crimes committed by the public officials and employees mentioned in subsection a of (Section 4, R.A. 8249) in relation to their office. "The phrase" other offenses or felonies" is too broad as to include the crime of murder, provided it was committed in relation to the accused's officials functions. Thus, under said paragraph b, what determines the Sandiganbayan's jurisdiction is the official position or rank of the offender — that is, whether he is one of those public officers or employees enumerated in paragraph a of Section 4. The offenses mentioned in pargraphs a, b and c of the same Section 4 do not make any reference to the criminal participation of the accused public officer as to whether he is charged as a principal, accomplice or accessory. In enacting R.A. 8249, the Congress simply restored the original provisions of P.D. 1606 which does not mention the criminal participation of the public officer as a requisite to determine the jurisdiction of the Sandiganbayan. Petitioner and entervenors' posture that Section 4 and 7 of R.A. 8249 violate their right to equal protection of the law 33 because its enactment was particularly directed only to the Kuratong Baleleng cases in the Sandiganbayan, is a contention too shallow to deserve merit. No concrete evidence and convincing argument were presented to warrant a declaration of an act of the entire Congress and signed into law by the highest officer of the co-equal executive department as unconstitutional. Every classification made by law is presumed reasonable. Thus, the party who challenges the law must present proof of arbitrariness. 34 It is an established precept in constitutional law that the guaranty of the equal protection of the laws is not violated by a legislation based on reasonable classification. The classification is reasonable and not arbitrary when there is concurrence of four elements, namely: (1) it must rest on substantial distinction; (2) it must be germane to the purpose of the law; (3) must not be limited to existing conditions only, and (4) must apply equaly to all members of the same class, 35 all of which are present in this case. The challengers of Sections 4 and 7 of R.A. 8249 failed to rebut the presumption of constitutionality and reasonables of the questioned provisions. The classification between those pending cases involving the concerned public officials whose trial has not yet commence and whose cases could have been affected by the amendments of the Sandiganbayan jurisdiction under R.A. 8249, as against those cases where trial had already started as of the approval of the law, rests on substantial distinction that makes real differences. 36 In the first instance, evidence against them were not yet presented, whereas in the latter the parties had already submitted their respective proofs, examined witnesses and presented documents. Since it is within the power of Congress to define the jurisdiction of courts subject to the constitutional limitations, 37 it can be reasonably anticipated that an alteration of that jurisdiction would necessarily affect pending cases, which is why it has to privide for a remedy in the form of a transitory provision. Thus, petitioner and intervenors cannot now claim that Sections 4 and 7 placed them under a different category from those similarly situated as them. Precisely, paragraph a of Section 4 provides that it shall apply to "all case involving" certain public officials and, under the transitory provision in Section 7, to "all cases pending in any court." Contrary to petitioner and intervenors' argument, the law is not particularly directed only to the Kuratong Baleleng cases. The transitory provision does not only cover cases which are in the Sandiganbayan but also in "any court." It just happened that Kuratong Baleleng cases are one of those affected by the law. Moreover, those cases where trial had already begun are not affected by the transitory provision under Section 7 of the new law (R.A. 8249). In their futile attempt to have said sections nullified, heavy reliance is premised on what is perceived as bad faith on the part of a Senator and two Justices of the Sandiganbaya 38 for their participation in the passage of the said provisions. In particular, it is stressed that the Senator had expressed strong sentiments against those officials involved in the Kuratong Baleleng cases during the hearings conducted on the matter by the committee headed by the Senator. Petitioner further contends that the legislature is biased against him as he claims to have been selected from among the 67 million other Filipinos as the object of the deletion of the word "principal" in paragraph a, Section 4 of P.D. 1606, as amended, and of the transitory provision of R.A. 8249. 39 R.A 8249, while still a bill, was acted, deliberated, considered by 23 other Senators and by about 250 Representatives, and was separately approved by the Senate and House of Representatives and, finally, by the President of the Philippines. On the perceived bias that the Sandiganbayan Justices allegedly had against petitioner during the committe hearings, the same would not constitute sufficient justification to nullify an otherwise valid law. Their presence and participation in the legislative hearings was deemed necessary by Congress since the matter before the committee involves the graft court of which one is the head of the Sandiganbayan and the other a member thereof. The Congress, in its plenary legislative powers, is particularly empowered by the Constitution to invite persons to appear before it whenever it decides to conduct inquiries in aid of legislation. 40 Petitioner and entervenors further further argued that the retroactive application of R.A. 8249 to the Kuratong Baleleng cases constitutes an ex post facto law 41 for they are deprived of their right to procedural due process as they can no longer avail of the two-tiered appeal which they had allegedly acquired under R.A. 7975. Again, this contention is erroneous. There is nothing ex post facto in R.A. 8249. In Calder v. Bull, 42 an ex post facto law is one — (a) which makes an act done criminal before the passing of the law and which was innocent when committed, and punishes such action; or (b) which aggravates a crime or makes it greater than when it was committed; or (c) which changes the punishment and inflicts a greater punishment than the law annexed to the crime when it was committed. (d) which alters the legal rules of evidence and recieves less or different testimony that the law required at the time of the commission of the offense on order to convict the defendant. 43 (e) Every law which, in relation to the offense or its consequences, alters the situation of a person to his disadvantage. 44 This Court added two more to the list, namely: (f) that which assumes to regulate civil rights and remedies only but in effect imposes a penalty or deprivation of a right which when done was lawful; (g) deprives a person accussed of crime of some lawful protection to which he has become entitled, such as the protection of a former conviction or acquittal, or a proclamation of a amnesty. 45 Ex post facto law, generally, prohibits retrospectivity of penal laws. 46 R.A. 8249 is not penal law. It is a substantive law on jurisdiction which is not penal in character. Penal laws are those acts of the Legislature which prohibit certain acts and establish penalties for their violations; 47 or those that define crimes, treat of their nature, and provide dor their punishment. 48 R.A 7975, which amended P.D. 1606 as regards the Sandiganbayan's jurisdiction, its mode of appeal and other procedural matters, has been declared by the Court as not a penal law, but clearly a procedural statute, i.e. one which prescribes rules of procedure by which courts applying laws of all kinds can properly administer justice. 49 Not being a penal law, the retroactive application of R.A. 8249 cannot be challenged as unconstitutional. Petitioner's and entervenors' contention that their right to a two-tiered appeal which they acquired under R.A. 7975 has been diluted by the enactment of R.A. 8249, is incorrect. The same contention has already been rejected by the court several times 50 considering that the right to appeal is not a natural right but statutory in nature that can be regulated by law. The mode of procedure provided for in the statutory right of appeal is not included in the prohibition against ex post facto laws. 51 R.A. 8249 pertains only to matters of procedure, and being merely an amendatory statute it does not partake the nature of an ex post facto law. It does not mete out a penalty and, therefore, does not come within the prohibition. 52 Moreover, the law did not alter the rules of evidence or the mode of trial. 53 It has been ruled that adjective statutes may be made applicable to actions pending and unresolved at the time of their passage. 54 In any case; R.A. 8249 has preserved the accused's right to appeal to the Supreme Court to review questions of law. 55 On the removal of the intermediate review of facts, the Supreme Court still has the power of review to determine if he presumption of innocence has been convincing overcome. 56 Another point. The challenged law does not violate the one-title-one-subject provision of the Constitution. Much emphasis is placed on the wording in the title of the law that it "defines" the Sandiganbayan jurisdiction when what it allegedly does is to "expand" its jurisdiction. The expantion in the jurisdiction of the Sandiganbayan, if it can be considered as such, does not have to be expressly stated in the title of the law because such is the necessary consequence of the amendments. The requirement that every bill must only have one subject expressed in the title 57 is satisfied if the title is comprehensive enough, as in this case, to include subjects related to the general purpose which the statute seeks to achieve. 58 Such rule is liberally interpreted and should be given a practical rather than a technical construction. There is here sufficient compliance with such requirement, since the title of R.A. 8249 expresses the general subject (involving the jurisdiction of the Sandiganbayan and the amendment of P.D. 1606, as amended) and all the provisions of the law are germane to that general subject. 59 The Congress, in employing the word "define" in the title of the law, acted within its power since Section 2, Article VIII of the Constitution itself empowers the legislative body to "define, prescribe, and apportion the jurisdiction of various courts. 60 There being no unconstitutional infirmity in both the subject amendatory provision of Section 4 and the retroactive procedural application of the law as provided in Section 7 of R.A. No. 8249, we shall now determine whether under the allegations in the Informations, it is the Sandiganbayan or Regional Trial Court which has jurisdictions over the multiple murder case against herein petitioner and entervenors. The jurisdiction of a court is defined by the Constitution or statute. The elements of that definition must appear in the complaint or information so as to ascertain which court has jurisdiction over a case. Hence the elementary rule that the jurisdiction of a court is determined by the allegations in the complaint or informations, 61 and not by the evidence presented by the parties at the trial. 62 As stated earlier, the multiple murder charge against petitioner and intervenors falls under Section 4 [paragraph b] of R.A. 8249. Section 4 requires that the offense charged must be committed by the offender in relation to his office in order for the Sandiganbayan to have jurisdiction over it. 63 This jurisdictional requirement is in accordance with Section 5, Article XIII of the 1973 Constitution which mandated that the Sandiganbayan shall have jurisdiction over criminal cases committed by the public officers and employees, including those in goverment-owned or controlled corporations, "in relation to their office as may be determined by law." This constitutional mandate was reiterated in the new (1987) Constitution when it declared in Section 4 thereof that the Sandiganbayan shall continue to function and exercise its jurisdiction as now or hereafter may be provided by law. The remaining question to be resolved then is whether the offense of multiple murder was committed in relation to the office of the accussed PNP officers. In People vs. Montejo, 64 we held that an offense is said to have been committed in relation to the office if it (the offense) is "intimately connected" with the office of the offender and perpetrated while he was in the performance of his official functions. 65 This intimate relation between the offense charged and the discharge of official duties "must be alleged in the informations." 66 As to how the offense charged be stated in the informations, Section 9, Rule 110 of the Revised Rules of Court mandates: Sec. 9 Couse of accusation — The acts or omissions complied of as constituting the offense must be stated in ordinary and concise language without repetition not necessarily in the terms of the statute defining the offense, but in such from as is sufficient to enable a person of common understanding to know what offense is intended to be charged, and enable the court to pronounce proper judgment. (Emphasis supplied) As early as 1954 we pronounced that "the factor that characterizes the charge is the actual recital of the facts." 67 The real nature of the criminal charge is determined not from the caption or preamble of the informations nor from the specification of the provision of law alleged to have been violated, they being conclusions of law, but by the actual recital of facts in the complaint or information. 68 The noble object or written accusations cannot be overemphasized. This was explained in U.S. v. Karelsen: 69 The object of this written accusations was — First; To furnish the accused with such a descretion of the charge against him as will enable him to make his defense and second to avail himself of his conviction or acquittal for protection against a further prosecution for the same cause and third, to inform the court of the facts alleged so that it may decide whether they are sufficient in law to support a conviction if one should be had. In order that the requirement may be satisfied, facts must be stated, not conclusions of law. Every crime is made up of certain acts and intent these must be set forth in the complaint with reasonable particularly of time, place, names (plaintiff and defendant) and circumstances. In short, the complaint must contain a specific allegation of every fact and circumstance necessary to constitute the crime charged. (Emphasis supplied) It is essential, therefore, that the accused be informed of the facts that are imputed to him as "he is presumed to have no indefendent knowledge of the facts that constitute the offense." 70 Applying these legal principles and doctrines to the present case, we find the amended informations for murder against herein petitioner and intervenors wanting of specific factual averments to show the intimate relation/connection between the offense charged and the discharge of official function of the offenders. In the present case, one of the eleven (11) amended informations 71 for murder reads: AMENDED INFORMATIONS The undersigned Special Prosecution Officer III. Office of the Ombudsman hereby accuses CHIEF INSP. MICHAEL RAY AQUINO, CHIEF INSP. ERWIN T. VILLACORTE, SENIOR INSP. JOSELITO T. ESQUIVEL, INSP. RICARDO G. DANDAN, SPO4 VICENTE P. ARNADO, SPO4 ROBERTO F. LANGCAUON, SPO2 VIRGILIO V. PARAGAS, SPO2 ROLANDO R. JIMENEZ, SPO1 WILFREDO C. CUARTERO, SPO1 ROBERTO O. AGBALOG, SPO1 OSMUNDO B. CARINO, CHIEF SUPT. JEWEL F. CANSON, CHIEF SUPT. ROMEO M. ACOP, CHIEF SUPT. PANFILO M. LACSON, SENIOR SUPT. FRANCISCO G. ZUBIA JR., SUPT. ALMARIO A. HILARIO, CHIEF INSP. CESAR O. MANCAO III, CHIEF INSP. GIL L. MENESES, SENIOR INSP. GLENN DUMLAO, SENIOR INSP. ROLANDO ANDUYAN, INSP. CEASAR TANNAGAN, SPO3 WILLY NUAS, SPO3 CICERO S. BACOLOD, SPO2 NORBERTO LASAGA, PO2 LEONARDO GLORIA, and PO2 ALEJANDRO G. LIWANAG of the crime of Murder as defined and penalize under Article 248 of the Revised Penal Code committed as follows That on or about May 18, 1995 in Mariano Marcos Avenue, Quezon City Philippines and within the jurisdiction of his Honorable Court, the accused CHIEF INSP. MICHAEL RAY AQUINO, CHIEF INSP. ERWIN T. VILLACORTE, SENIOR INSP. JOSELITO T. ESQUIVEL, INSP. RICARDO G. DANDAN, SPO4 VICENTE ARNADO, SPO4 ROBERTO F. LANGCAUON, SPO2 VIRGILIO V. PARAGAS, SPO2 ROLANDO R. JIMENEZ, SPO1 WILFREDO C. CUARTERO, SPO1 ROBERTO O. AGBALOG, and SPO1 OSMUNDO B. CARINO, all taking advantage of their public and official positions as officers and members of the Philippine National Police and committing the acts herein alleged in relation to their public office, conspiring with intent to kill and using firearms with treachery evident premeditation and taking advantage of their superior strenghts did then and there willfully unlawfully and feloniously shoot JOEL AMORA, thereby inflicting upon the latter mortal wounds which caused his instantaneous death to the damage and prejudice of the heirs of the said victim. That accused CHIEF SUPT. JEWEL F. CANSON, CHIEF SUPT. ROMOE M. ACOP, CHIEF SUPT. PANFILO M. LACSON, SENIOR SUPT. FRANCISCO G. ZUBIAM JR., SUPT. ALMARIO A. HILARIO, CHIEF INSP. CESAR O. MANCAO II, CHIEF INSP. GIL L. MENESES, SENIOR INSP. GLENN DUMLAO, SENIOR INSP. ROLANDO ANDUYAN, INSP. CEASAR TANNAGAN, SPO3 WILLY NUAS, SPO3 CICERO S. BACOLOD, PO2 ALEJANDRO G. LIWANAG committing the acts in relation to office as officers and members of the Philippine National Police are charged herein as accessories after-the-fact for concealing the crime herein above alleged by among others falsely representing that there where no arrest made during the read conducted by the accused herein at Superville Subdivision, Paranaque, Metro Manila on or about the early dawn of May 18, 1995. CONTRARY LAW. While the above-quoted information states that the above-named principal accused committed the crime of murder "in relation to thier public office, there is, however, no specific allegation of facts that the shooting of the victim by the said principal accused was intimately related to the discharge of their official duties as police officers. Likewise, the amended information does not indicate that the said accused arrested and investigated the victim and then killed the latter while in their custody. Even the allegations concerning the criminal participation of herein petitioner and intevenors as among the accessories after-the-facts, the amended information is vague on this. It is alleged therein that the said accessories concelead "the crime herein-above alleged by, among others, falsely representing that there were no arrests made during the raid conducted by the accused herein at Superville Subdivision, Paranaque Metro Manila, on or about the early dawn of May 18, 1995." The sudden mention of the "arrests made during the raid conducted by the accused" surprises the reader. There is no indication in the amended information that the victim was one of those arrested by the accused during the "raid." Worse, the raid and arrests were allegedly conducted "at Superville Subdivision, Paranaque, Metro Manila" but, as alleged in the immediately preceding paragraph of the amended information, the shooting of the victim by the principal accused occurred in Mariano Marcos Avenue, Quezon City." How the raid, arrests and shooting happened in the two places far away from each other is puzzling. Again, while there is the allegation in the amended information that the said accessories committed the offense "in relation to office as officers and members of the (PNP)," we, however, do not see the intimate connection between the offense charged and the accused's official functions, which, as earlier discussed, is an essential element in determining the jurisdiction of the Sandiganbayan. The stringent requirement that the charge be set forth with such particularly as will reasonably indicate the exact offense which the accused is alleged to have committed in relation to his office was, sad to say, not satisfied. We believe that the mere allegation in the amended information that the offense was committed by the accused public officer in relation to his office is not sufficient. That phrase is merely a conclusion between of law, not a factual avernment that would show the close intimacy between the offense charged and the discharge of the accused's official duties. In People vs. Magallanes, 72 where the jurisdiction between the Regional Trial Court and the Sandiganbayan was at issue, we ruled: It is an elementary rule that jurisdiction is determined by the allegations in the complaint or information and not by the result of evidence after trial. In (People vs) Montejo (108 Phil 613 (1960), where the amended information alleged Leroy S. Brown City Mayor of Basilan City, as such, has organized groups of police patrol and civilian commandoes consisting of regular policeman and . . . special policemen appointed and provided by him with pistols and higher power guns and then established a camp . . . at Tipo-tipo which is under his command . . . supervision and control where his co-defendants were stationed entertained criminal complaints and conducted the corresponding investigations as well as assumed the authority to arrest and detain person without due process of law and without bringing them to the proper court, and that in line with this set-up established by said Mayor of Basilan City as such, and acting upon his orders his co-defendants arrested and maltreated Awalin Tebag who denied in consequence thereof. we held that the offense charged was committed in relation to the office of the accused because it was perpetreated while they were in the performance, though improper or irregular of their official functions and would not have been committed had they not held their office, besides, the accused had no personal motive in committing the crime thus, there was an intimate connection between the offense and the office of the accused. Unlike in Montejo the informations in Criminal Cases Nos. 15562 and 15563 in the court below do not indicate that the accused arrested and investigated the victims and then killed the latter in the course of the investigation. The informations merely allege that the accused for the purpose of extracting or extortin the sum of P353,000.00 abducted, kidnapped and detained the two victims, and failing in their common purpose they shot; and killed the said victims. For the purpose of determining jurisdiction, it is these allegations that shall control, and not the evidence presented by the prosecution at the trial. In the aforecited case of People vs. Montejo, it is noteworthy that the phrase committed in relation to public office "does not appear in the information, which only signifies that the said phrase is not what determines the jurisdiction of the Sandiganbayan. What is controlling is the specific factual allegations in the information that would indicate the close intimacy between the discharge of the accused's official duties and the commission of the offense charged, in order to qualify the crime as having been committed in relation to public office. Consequently, for failure to show in the amended informations that the charge of murder was intimately connected with the discharge of official functions of the accused PNP officers, the offense charged in the subject criminal cases is plain murder and, therefore, within the exclusive original jurisdiction of the Regional Trial Court, 73 not the Sandiganbayan. WHEREFORE, the constitutionality of Sections 4 and 7 of R.A. 8249 is hereby sustained. The Addendum to the March 5, 1997 Resolution of the Sandiganbayan is REVERSED. The Sandiganbayan is hereby directed to transfer Criminal Cases Nos. 23047 to 23057 (for multiple murder) to the Regional Trial Court of Quezon City which has exclusive original jurisdiction over the said cases.1âwphi1.nêt SO ORDERED. Davide, Jr., CJ., Romero, Bellosillo, Melo, Puno, Vitug, Kapunan, Mendoza, Panganiban, Quisumbing, Purisima, Pardo, Buena and