A Critical Analysis of Revenue Regulations No. 18-2013

Presented below is the Position Paper I wrote when I was still studying Taxation Review under Atty. Vic Cañoneo:

A Critical Analysis of Revenue Regulations No. 18-2013

“Taxes are the lifeblood of the government and so should be collected without unnecessary hindrance. On the other hand, such collection should be made in accordance with law as any arbitrariness will negate the very reason for government itself. It is therefore necessary to reconcile the apparently conflicting interests of the authorities and the taxpayers so that the real purpose of taxation, which is the promotion of the common good, may be achieved.

But even as we concede the inevitability and indispensability of taxation, it is a requirement in all democratic regimes that it be exercised reasonably and in accordance with the prescribed procedure. If it is not, then the taxpayer has a right to complain and the courts will then come to his succor. For all the awesome power of the tax collector, he may still be stopped in his tracks if the taxpayer can demonstrate x x x that the law has not been observed.” (CIR vs. Metro Star Superama, Inc., G.R. No. 185371, December 8, 2010)

I.       Statement of the Facts

On November 28, 2013, upon the recommendation of the Commissioner of Internal Revenue Kim s. Jacinto-Henares, Secretary Cesar V. Purisima of the Department of Finance promulgated Revenue Regulations (RR) No. 18-2013, amending certain sections of RR No. 12-99 relative to the due process requirement in the issuance of a deficiency tax assessment.

To summarize, below are the changes introduced by RR No. 18-2013 that amended RR No. 12-99:

1. It deleted Section 3.1.1 of RR No. 12-99, which provides the requirement for the preparation of a Notice of Informal Conference before a Preliminary Assessment Notice (PAN) is issued.

2. Mandates the issuance of a Final Assessment (FAN) within 15 days from receipt of the protest to PAN.

3. Provides distinctions between a reconsideration and reinvestigation. In this regard, RR 13-2013 requires the taxpayer to identify the nature of the protest filed – whether a reconsideration or reinvestigation.  The submission of additional documents within 60 days from filing of protest is allowed only in the case of reinvestigation.  For motion for reconsideration, the decision of the BIR will be based only on documents already submitted to the BIR prior to the issuance of FAN and no new evidence will be accepted.

4. Mandates that protest should include the facts, law, rules, regulations on which the protest is based. Otherwise, the protest is void and of no effect.  For items in the assessment not properly protested, these shall become final and demandable and collection letters shall be issued immediately.

5. Section 5.5 now requires the imposition of a 20% delinquency interest per annum on assessments unpaid which shall be computed from the time stated for its payment in the FAN until paid.  This shall be in addition to the 20% deficiency interests imposed on assessments from time it is due until it is paid.

6. Final Decision on Disputed Assessment (FDDA) issued by an authorized representative of the Commissioner (such as the Regional Directors or Assistant Commissioner in the case of the Large Taxpayers Service) may be appealed to the Court of Tax Appeals (in a judicial appeal) or to the Commissioner (in an administrative appeal) within 30 days from receipt of decision. For administrative appeal, no new or additional evidence may be introduced.

7. Service of the PAN/FAN/FDDA may be done by personal service, substituted service or by registered mail.

II.    Statement of Issue

This now leads to the question: Is the removal of the preparation of a Notice of Informal Conference before a Preliminary Assessment Notice (PAN) is issued tantamount to a denial of due process? Specifically, are the requirements of due process satisfied if only the PAN and FAN stating the computation of tax liabilities and a final demand to pay within the prescribed period was sent to the taxpayer?

III. Arguments/Discussion

It is an elementary rule enshrined in the 1987 Philippine Constitution that no person shall be deprived of property without due process of law. In balancing the scales between the power of the State to tax and its inherent right to prosecute perceived transgressors of the law on one side, and the constitutional rights of a citizen to due process of law and the equal protection of the laws on the other, the scales must tilt in favor of the individual in case of doubt, for a citizen’s right is amply protected by the Bill of Rights under the Constitution.^[1]

However, it is worthy to note at this juncture, that Section 228 of the Tax Code only requires that the taxpayer must first be informed that he is liable for deficiency taxes through the sending of a PAN. He must be informed of the facts and the law upon which the assessment is made. This is the substantive requirement of the law. Thus, to proceed heedlessly with tax collection without first establishing a valid assessment is evidently violative of the cardinal principle in administrative investigations—that taxpayers should be able to present their case and adduce supporting evidence.^[2]

The Notice of Informal Conference is a mere superfluity. The removal of such process does not constitute a denial of due process because the kernel of Section 228, which is being implemented by RR No. 12-99, as amended by RR No. 18-2013, is the issuance of the PAN which contains the facts and the law upon which the assessment is made.

In administrative proceedings, such as the one contemplated by RR 18-2013, procedural due process simply means the opportunity to explain one’s side. The requirement of due process is satisfactorily met as long as the parties are given the opportunity to present their side.^[3]

Therefore, as long as a party is given the opportunity to defend his interests in due course, he would have no reason to complain, for it is this opportunity to be heard that makes up the essence of due process.^[4]

It is crystal clear that the removal of the Notice of Informal Conference as a precondition to the issuance of the PAN is intended to streamline the process of assessment. Instead of being violative of the due process, the removal of such requirement will be beneficial to both the BIR and the taxpayer because this will mean that disputes on assessments will be resolved expeditiously. As a consequence of this, the BIR can collect taxes more efficiently.

The taxpayer, on the other hand, will be able to prove his/its claims much faster. If he loses, because of the speedy disposition of the disputed assessments, the interests and surcharges may be reduced.

As one of the fundamental powers of a sovereign, taxation is designed to ensure that sufficient revenues must be collected by the government to defray its expenses. As such, tax administration and regulations should be continually updated and revisited, in keeping with the ever changing demands of time, in accordance with and pursuant to the fiscal policy set by the administration.^[5]

But let us not forget, that, while “taxes are the lifeblood of the government,” the power to tax has its limits, in spite of all its plenitude it must abide by the fundamental law of the land.

---

[1] Commissioner of Internal Revenue vs. Algue, 241 Phil. 829 (1988)

[2] Ang Tibay v. Court of Industrial Relations, 69 Phil. 635 (1940)

[3] Milwaukee Industries, Corp. vs. CTA, et al., G.R. No. 173815, 24 November 2010

[4] RCBC vs. CIR, G.R. No. 168498, 16 June 2006

[5] See No PAN Intended by Atty. Deo D. Saludario at http://www.bdblaw.com.ph/index.php?option=com_dms&task=doc_download&id=455&Itemid=164

Komersyo ng mga Trapo

Muntik ko nang makalimutan yung sinulat kong tula nung 2010 Presidential Elections. Dahil nalalapit na ang eleksyon 'eto o. ;p hihi

Akala mo trapo pero hindi ka nagkamali TRAPO talaga!
Lalaban daw tayo! Maniniwala naman kayo?!

Gano ba kalaki sweldo ng Pangulo?
Syempre ipwera mo ang galing sa 'di wasto. 

E ang gastos nila sa mga komersyal magkano? 
Malamang bawiin nila ito kapag nakaupo na sa puwesto!

VIDALLON-MAGTOLIS vs. SALUD (A.M. No. CA-05-20-P, September 9, 2005)

Facts: 

Melchor Lagua was found guilty of homicide in Criminal Case Nos. 118032-H and 118033-H before the Regional Trial Court of Pasig City, Branch 163. On appeal, the case was assigned to the Sixth Division of the Court of Appeals, docketed as CA-G.R. CR No. 27423. Lagua, who was then detained at the Bureau of Prisons National Penitentiary in Muntinlupa City, filed a Very Urgent Petition for Bail. Finding the petition well-taken, the appellate court issued a Resolution on October 9, 2003, directing him to post a P200,000.00 bond.

Lagua’s bond was approved in a Resolution dated November 6, 2003, where the appellate court also directed the issuance of an order of release in favor of Lagua. The resolution was then brought to the Office of the Division Clerk of Court, Atty. Maria Isabel M. Pattugalan-Madarang, for promulgation.

Irma Del Rosario, Utility Worker, noticed the respondent’s unusual interest in the Lagua case. The respondent had apparently been making inquiries whether the appellate court had already directed the issuance of an order of release in the said case and was initially told there was none yet. Due to his persistence, the records of the case were eventually found. Atty. Madarang then directed the typing of the Order of Release Upon Bond, and to notify the mailing section that there were orders requiring personal service. At around 4:00 p.m., the respondent then went to Atty. Madarang’s office and assisted in arranging and stapling the papers for release. He brought the said resolutions and other papers himself to the Mailing Section.

On November 7, 2003, the respondent went to the National Penitentiary to serve the resolution and order of release in the Lagua case. The respondent left the prison compound at around 2:30 p.m. 

In the meantime, Atty. Madarang received a telephone call from a certain Melissa Melchor, who introduced herself as Lagua’s relative. It was about 2:00 p.m. The caller asked her how much more they had to give to facilitate Lagua’s provisional liberty. The caller also told Atty. Madarang that they had sought the help of a certain Rhodora Valdez of the Regional Trial Court (RTC) of Pasig, where the criminal case originated, but were told that they still had a balance to be given to Justice Magtolis and Atty. Madarang through the respondent. Atty. Madarang then called the said court and asked to speak to Ms. Valdez, pretending to be Lagua’s relative.

What transpired thereafter is contained in Atty. Madarang’s Affidavit dated December 8, 2003, as follows:

xxx xxx

6.      That I got Salud’s mobile phone number from Ms. Secarro and started texting him at about the same time Ms. Secarro did. I represented myself as Arlyn, Lagua’s relative. Most of his text messages are still stored in my mobile phone. In fact, I received one text message from him while I was at the office of Justice Magtolis, (the Chairman of the 6^th Division and the ponente of C.R. No. 27423) in the late afternoon of November 7, 2003 while reporting to her this incident. Those stored in my phone are the following:

1. bkit, C rhodora to. 639204439082. – Nov. 2003, 15:36:15

2. CNO KAMAGANAK AT ANONG PANGALAN MO – 639204439082, 7 Nov 2003 16:14:47

3. SINO K KC NAGHIWALAY N KAMI – 639204439082, 7 Nov 2003 16:40:21

4. TAWAG K S AKIN – 639204439082 – 7 Nov 2003 17:18:47

5. NARELEASE N C MR. LAGUA. NAGKITA N B KAYO – 639204439082-7 Nov 2003 19:44:52

6. Magkano b and binigay nyo sa middle nyo. Puede bang malaman – 639184470111-7 Nov 2003 20:32:05

7. Gud evening. May gusto lng akong malaman. Sana alang makaalam kahit cino. Lito – 639184470111–7 Nov. 2003 19:54:20

8. Cno ang kausap n Rhodora. Pwede bang malaman – 639184470111-7 Nov 2003 20:37:57

9. May landline ka. Tawagan kta bukas nang umaga – 639184470111-7 Nov 2003 20:56:31

10. Wag s Court of Appeal. Txt na lang kta kung saan. – 639184470111-7 Nov 2003 20:52:58

11. Gusto mo bukas nang umaga magkita tyo. 639184470111 – 7 Nov 2003 20:57:10

12. D ba pwede bukas tyo kita. May gusto lang ako malaman – 639184470111 7 Nov 2003 21:02:41

13. D 2ngkol kay rhodora duon sa kasama ko kaninang lalakeng pinsan – 639184470111 – 7 Nov 2003, 21:04:28

14. Ala po ako sa Lunes sa opis. Sa hapon po puede kyo – 639184470111, 7 Nov  2003 21:07:23

15. Kay Melchor Lagua 639184470111 – 7 Nov 2003 21:08:19

16. Kasama ko cya kanina nang lumabas – 639184470111 – 7 Nov. 2003 21:13:05

17. Ano m ba Melchor Lagua – 639184470111 – 7 Nov 2003 21:15:52

18. Between 5 and 5:30 ng hapon. Bkit. 639184470111 – 7 Nov. 2003 21:54:24

19. 3 PM PUWEDE KB – 639004039082 10 Nov 2003 12:09:32

20. Kilala mo b c rhodora. Nagkita na b kayo. Ala naman problema sa kanya. Ok naman 639184470111 – 7 Nov 2003, 21:57:13

21. MAGKITA N LANG TAYO – 639204439082 – 10 Nov. 2003, 12:20:16

22. A, OK, NAGKITA N B KAYO NG KAMAGANAK MO – 639204439082 – 10 Nov 2003 15:12:14

23. D TALAGA AKO DARATING DAHIL WALA AKONG KAILANGAN S IYO. – 639204439082 – 10 Nov 2003 18:36:03

7.      That Salud called me up in the morning of November 8, 2003 at around 7:33 but I purposely did not answer him. Why did he need to call me up?

8.      That I personally called up the Bureau of Prisons for the exact time the Order of Release was delivered and when accused appellant Lagua was released. I learned that the Order of Release was received at 9:15 A.M. and that Lagua was released between 5-5:30 P.M. of November 7, 2003.

9.      That I was able to talk to Rhodora Valdez the following Monday, November 10, 2003. Again, I introduced myself as Lagua’s relative, Arlyn and told her I only wanted to know how much more we had to pay for Lagua’s release. She refused to entertain me because according to her, “Hindi ikaw ang kausap ko. Duda ako sa yo. Kung gusto mo, puntahan mo ako dito bukas, para magkita tayo. Pero lumabas na si Lagua. Itinawag sa akin ni Lito Salud.” Then, she [hung] up.

10.  That on Tuesday, November 11, 2003, I brought Salud, accompanied by Ms. Secarro to Justice Magtolis. Out of the confrontation, we discovered that Salud did not properly serve the copies of the Resolution and Order of Release upon the accused-appellant and his counsel, Atty. Salvador C. Quimpo of the Quimpo Dingayan-Quimpo and Associates. He gave them to a certain Art, allegedly Lagua’s relative who he claimed approached him at the Bureau of Prisons in the morning of November 7, 2003. He told Justice Magtolis that he gave these documents to Art, who promised to take care of them, even before he could deliver the copy addressed to the Director of Prisons. He never mentioned that this Art was connected with the office of accused-appellant’s counsel. Because of this information from Salud himself, I did not sign the Certificate of Service, Annex “C”.

11.  That several days later, Salud accompanied by Ms. Secarro, came to my office to apologize. But before he could even say a word, he broke down in [wails]. In between his loud cries, he uttered, “Boss, patawad po, alang-alang sa aking mga anak.”

On November 11, 2003, Justice Magtolis called the respondent to her office. When confronted, the respondent denied extorting or receiving money for Lagua’s release, or in any other case. He, however, admitted serving the copies of resolution and order of release intended for Lagua and his counsel to Art Baluran. Justice Magtolis then called the respondent to a meeting with Clerk of Court Atty. Tessie L. Gatmaitan, who stated that she would transfer the respondent to another office which has nothing to do with cases.

Justice Magtolis lodged the complaint against the respondent in a Letter dated November 14, 2003.

ISSUE:

Whether or not the admission of the text messages as evidence against Salud constitutes a violation of his right to privacy?

DECISION:

Indeed, the complainant in administrative proceedings has the burden of proving the allegations in the complaint by substantial evidence. If a court employee is to be disciplined for a grave offense, the evidence against him must be competent and derived from direct knowledge; as such, charges based on mere suspicion and speculation cannot be given credence. Thus, if the complainant fails to substantiate a claim of corruption and bribery, relying on mere conjectures and suppositions, the administrative complaint must be dismissed for lack of merit. However, in administrative proceedings, the quantum of proof required to establish malfeasance is not proof beyond reasonable doubt but substantial evidence, i.e., that amount of relevant evidence that a reasonable mind might accept as adequate to support a conclusion, is required.  The findings of investigating magistrates on the credibility of witnesses are given great weight by reason of their unmatched opportunity to see the deportment of the witnesses as they testified.

To determine the credibility and probative weight of the testimony of a witness, such testimony must be considered in its entirety and not in truncated parts. To determine which contradicting statements of a witness is to prevail as to the truth, the other evidence received must be considered. Thus, while it is true that there is no direct evidence that the respondent received any money to “facilitate” the release of detained Lagua, the following circumstances must be taken as contrary to the respondent’s plea of innocence:

First. The respondent admitted that he was the sender of the first three text messages in Atty. Madarang’s cellphone: “bkit, C rhodora to”; “CNO KAMAGANAK AT ANONG PANGALAN MO”; and “SINO K KC NAGHIWALAY N KAMI.”

As pointed out by the Investigating Officer, the respondent’s claim of “joking around” (“nakipaglokohan”) with an unknown sender of a text message by replying thereto is contrary to a normal person’s reaction. This is made even more apparent by the fact that the respondent even admitted that he called Atty. Madarang twice, and when asked why, gave a vague answer, and, when further questioned, even broke down in tears. 

The respondent’s claim that the admission of the text messages as evidence against him constitutes a violation of his right to privacy is unavailing. Text messages have been classified as “ephemeral electronic communication” under Section 1(k), Rule 2 of the Rules on Electronic Evidence, and “shall be proven by the testimony of a person who was a party to the same or has personal knowledge thereof.” Any question as to the admissibility of such messages is now moot and academic, as the respondent himself, as well as his counsel, already admitted that he was the sender of the first three messages on Atty. Madarang’s cell phone.

NAPOCOR vs. HON. CODILLA, JR. (G.R. No. 170491, April 4, 2007)

FACTS:

On 20 April 1996, M/V Dibena Win, a vessel of foreign registry owned and operated by private respondent Bangpai Shipping, Co., allegedly bumped and damaged petitioner’s Power Barge 209 which was then moored at the Cebu International Port. Thus, on 26 April 1996, petitioner filed before the Cebu RTC a complaint for damages against private respondent Bangpai Shipping Co., for the alleged damages caused on petitioner’s power barges.

Thereafter, petitioner filed an Amended Complaint dated 8 July 1996 impleading herein private respondent Wallem Shipping, Inc., as additional defendant, contending that the latter is a ship agent of Bangpai Shipping Co. On 18 September 1996, Wallem Shipping, Inc. filed a Motion to Dismiss which was subsequently denied by public respondent Judge in an Order dated 20 October 1998. Bangpai Shipping Co. likewise filed a Motion to Dismiss which was also denied by public respondent Judge in an Order issued on 24 January 2003.

Petitioner, after adducing evidence during the trial of the case, filed a formal offer of evidence before the lower court on 2 February 2004 consisting of Exhibits "A" to "V" together with the sub-marked portions thereof. Consequently, private respondents Bangpai Shipping Co. and Wallem Shipping, Inc. filed their respective objections to petitioner’s formal offer of evidence.

On 16 November 2004, public respondent judge issued the assailed order denying the admission and excluding from the records petitioner’s Exhibits "A", "C", "D", "E", "H" and its sub-markings, "I", "J" and its sub-markings, "K", "L", "M" and its sub-markings, "N" and its sub-markings, "O", "P" and its sub-markings, "Q" and its sub-markings, "R" and "S" and its sub-markings. According to the court a quo:

The Court finds merit in the objections raised and the motion to strike out filed respectively by the defendants. The record shows that the plaintiff has been given every opportunity to present the originals of the Xerox or photocopies of the documents it offered. It never produced the originals. The plaintiff attempted to justify the admission of the photocopies by contending that "the photocopies offered are equivalent to the original of the document" on the basis of the Electronic Evidence (Comment to Defendant Wallem Philippines’ Objections and Motion to Strike).

ISSUE:

Whether or not the photocopies offered by the petitioner as formal evidence before the trial court are the functional equivalent of their original based on petitioner’s interpretation of the Rules on Electronic Evidence that these photocopies are electronic evidence?

DECISION:

In order to shed light to the issue of whether or not the photocopies are indeed electronic documents as contemplated in Republic Act No. 8792 or the Implementing Rules and Regulations of the Electronic Commerce Act, as well as the Rules on Electronic Evidence, we shall enumerate the following documents offered as evidence by the petitioner, to wit:

1. Exhibit "A" is a photocopy of a letter manually signed by a certain Jose C. Troyo, with "RECEIVED" stamped thereon, together with a handwritten date;

2. Exhibit "C" is a photocopy of a list of estimated cost of damages of petitioner’s power barges 207 and 209 prepared by Hopewell Mobile Power Systems Corporation and manually signed by Messrs. Rex Malaluan and Virgilio Asprer;

3. Exhibit "D" is a photocopy of a letter manually signed by a certain Nestor G. Enriquez, Jr., with "RECEIVED" stamped thereon, together with a handwritten notation of the date it was received;

4. Exhibit "E" is a photocopy of a Standard Marine Protest Form which was filled up and accomplished by Rex Joel C. Malaluan in his own handwriting and signed by him. Portions of the Jurat were handwritten, and manually signed by the Notary Public;

5. Exhibit "H" is a photocopy of a letter manually signed by Mr. Nestor G. Enriquez, Jr. with "RECEIVED" stamped thereon, together with a handwritten notation of the date it was received;

6. Exhibit "I" is a photocopy of a computation of the estimated energy loss allegedly suffered by petitioner which was manually signed by Mr. Nestor G. Enriquez, Jr.;

7. Exhibit "J" is a photocopy of a letter containing the breakdown of the cost estimate, manually signed by Mr. Nestor G. Enriquez, Jr., with "RECEIVED" stamped thereon, together with a handwritten notation of the date it was received, and other handwritten notations;

8. Exhibit "K" is a photocopy of the Subpoena Duces Tecum Ad Testificandum written using a manual typewriter, signed manually by Atty. Ofelia Polo-De Los Reyes, with a handwritten notation when it was received by the party;

9. Exhibit "L" is a photocopy of a portion of the electricity supply and operation and maintenance agreement between petitioner and Hopewell, containing handwritten notations and every page containing three unidentified manually placed signatures;

10. Exhibit "M" is a photocopy of the Notice of Termination with attachments addressed to Rex Joel C. Malaluan, manually signed by Jaime S. Patinio, with a handwritten notation of the date it was received. The sub-markings also contain manual signatures and/or handwritten notations;

11. Exhibit "N" is a photocopy of a letter of termination with attachments addressed to VIrgilio Asprer and manually signed by Jaime S. Patino. The sub-markings contain manual signatures and/or handwritten notations;

12. Exhibit "O" is the same photocopied document marked as Annex C;

13. Exhibit "P" is a photocopy of an incident report manually signed by Messrs. Malaluan and Bautista and by the Notary Public, with other handwritten notations;

14. Exhibit "Q" is a photocopy of a letter manually signed by Virgilio Asprer and by a Notary Public, together with other handwritten notations.

On the other hand, an "electronic document" refers to information or the representation of information, data, figures, symbols or other models of written expression, described or however represented, by which a right is established or an obligation extinguished, or by which a fact may be proved and affirmed, which is received, recorded, transmitted, stored, processed, retrieved or produced electronically. It includes digitally signed documents and any printout, readable by sight or other means which accurately reflects the electronic data message or electronic document.

The rules use the word "information" to define an electronic document received, recorded, transmitted, stored, processed, retrieved or produced electronically. This would suggest that an electronic document is relevant only in terms of the information contained therein, similar to any other document which is presented in evidence as proof of its contents. However, what differentiates an electronic document from a paper-based document is the manner by which the information is processed; clearly, the information contained in an electronic document is received, recorded, transmitted, stored, processed, retrieved or produced electronically.

A perusal of the information contained in the photocopies submitted by petitioner will reveal that not all of the contents therein, such as the signatures of the persons who purportedly signed the documents, may be recorded or produced electronically. By no stretch of the imagination can a person’s signature affixed manually be considered as information electronically received, recorded, transmitted, stored, processed, retrieved or produced. Hence, the argument of petitioner that since these paper printouts were produced through an electronic process, then these photocopies are electronic documents as defined in the Rules on Electronic Evidence is obviously an erroneous, if not preposterous, interpretation of the law. Having thus declared that the offered photocopies are not tantamount to electronic documents, it is consequential that the same may not be considered as the functional equivalent of their original as decreed in the law.

Furthermore, no error can be ascribed to the court a quo in denying admission and excluding from the records petitioner’s Exhibits "A", "C", "D", "E", "H" and its sub-markings, "I", "J" and its sub-markings, "K", "L", "M" and its sub-markings, "N" and its sub-markings, "O", "P" and its sub-markings, "Q" and its sub-markings, and "R". The trial court was correct in rejecting these photocopies as they violate the best evidence rule and are therefore of no probative value being incompetent pieces of evidence. Before the onset of liberal rules of discovery, and modern technique of electronic copying, the best evidence rule was designed to guard against incomplete or fraudulent proof and the introduction of altered copies and the withholding of the originals. But the modern justification for the rule has expanded from the prevention of fraud to a recognition that writings occupy a central position in the law. The importance of the precise terms of writings in the world of legal relations, the fallibility of the human memory as reliable evidence of the terms, and the hazards of inaccurate or incomplete duplicate are the concerns addressed by the best evidence rule.

ZALDY NUEZ vs. ELVIRA CRUZ-APAO (A.M. No. CA-05-18-P, April 12, 2005)

FACTS:

Complainant’s case referred to above had been pending with the CA for more than two years. Complainant filed an illegal dismissal case against PAGCOR before the Civil Service Commission (CSC).  The CSC ordered complainant’s reinstatement but a writ of preliminary injunction and a temporary restraining order was issued by the CA in favor of PAGCOR, thus complainant was not reinstated to his former job pending adjudication of the case. Desiring an expeditious decision of his case, complainant sought the assistance of respondent sometime in July 2004 after learning of the latter’s employment with the CA from her sister, Magdalena David. During their first telephone conversation and thereafter through a series of messages they exchanged via SMS, complainant informed respondent of the particulars of his pending case.  Allegedly, complainant thought that respondent would be able to advise him on how to achieve an early resolution of his case.

However, a week after their first telephone conversation, respondent allegedly told complainant that a favorable and speedy decision of his case was attainable but the person who was to draft the decision was in return asking for One Million Pesos (P1,000,000.00).

Complainant expostulated that he did not have that kind of money since he had been jobless for a long time, to which respondent replied, "Eh, ganoon talaga ang lakaran dito, eh. Kung wala kang pera, pasensiya na." Complainant then tried to ask for a reduction of the amount but respondent held firm asserting that the price had been set, not by her but by the person who was going to make the decision.  Respondent even admonished complainant with the words "Wala tayo sa palengke iho!" when the latter bargained for a lower amount.

Complainant then asked for time to determine whether or not to pay the money in exchange for the decision. Instead, in August of 2004, he sought the assistance of Imbestigador. The crew of the TV program accompanied him to PAOCCF-SPG where he lodged a complaint against respondent for extortion. Thereafter, he communicated with respondent again to verify if the latter was still asking for the money and to set up a meeting with her.  Upon learning that respondent’s offer of a favorable decision in exchange for One Million Pesos (P1,000,000.00) was still standing, the plan for the entrapment operation was formulated by Imbestigador in cooperation with the PAOCC.

On 24 September 2004, complainant and respondent met for the first time in person at the 2^nd Floor of Jollibee, Times Plaza Bldg., the place where the entrapment operation was later conducted.  Patricia Siringan (Siringan), a researcher of Imbestigador, accompanied complainant and posed as his sister-in-law. During the meeting, complainant clarified from respondent that if he gave the amount of One Million Pesos (P1,000,000.00), he would get a favorable decision. This was confirmed by the latter together with the assurance that it would take about a month for the decision to come out. Respondent also explained that the amount of One Million Pesos (P1,000,000.00) guaranteed a favorable decision only in the CA but did not extend to the Supreme Court should the case be appealed later.

When respondent was asked where the money will go, she claimed that it will go to a male researcher whose name she refused to divulge. The researcher was allegedly a lawyer in the CA Fifth (5^th) Division where complainant case was pending. She also claimed that she will not get any part of the money unless the researcher decides to give her some.

Complainant tried once again to bargain for a lower amount during the meeting but respondent asserted that the amount was fixed.  She even explained that this was their second transaction and the reason why the amount was closed at One Million Pesos (P1,000,000.00) was because on a previous occasion, only Eight Hundred Thousand Pesos (P800,000.00) was paid by the client despite the fact that the amount had been pegged at One Million Three Hundred Thousand Pesos (P1,300,000.00). Complainant then proposed that he pay a down payment of Seven Hundred Thousand Pesos (P700,000.00) while the balance of Three Hundred Thousand Pesos (P300,000.00) will be paid once the decision had been released. However, respondent refused to entertain the offer, she and the researcher having learned their lesson from their previous experience for as then, the client no longer paid the balance of Five Hundred Thousand Pesos (P500,000.00) after the decision had come out.

Complainant brought along copies of the documents pertinent to his case during the first meeting.  After reading through them, respondent allegedly uttered, "Ah, panalo ka." The parties set the next meeting date at lunchtime on 28 September 2004 and it was understood that the money would be handed over by complainant to respondent then.

On the pre-arranged meeting date, five (5) PAOCTF agents, namely: Capt. Reynaldo Maclang (Maclang) as team leader, SPO1 Renato Banay (Banay), PO1 Bernard Villena (Villena), PO1 Danny Feliciano, and PO2 Edgar delos Reyes arrived at around 11:30 in the morning at Jollibee. Nuez and Siringan arrived at past noon and seated themselves at the table beside the one occupied by the two (2) agents, Banay and Villena. Complainant had with him an unsealed long brown envelope containing ten (10) bundles of marked money and paper money which was to be given to respondent. The envelope did not actually contain the One Million Pesos (P1,000,000.00) demanded by respondent, but instead contained paper money in denominations of One Hundred Pesos (P100.00), Five Hundred Pesos (P500.00) and One Thousand Pesos (P1,000.00), as well as newspaper cut-outs. There were also ten (10) authentic One Hundred Peso (P100.00) bills which had been previously dusted with ultra-violet powder by the PAOCTF. The three other PAOCTF agents were seated a few tables away and there were also three (3) crew members from Imbestigador at another table operating a mini DV camera that was secretly recording the whole transaction.

Respondent arrived at around 1:00 p.m. She appeared very nervous and suspicious during the meeting. Ironically, she repeatedly said that complainant might entrap her, precisely like those that were shown onImbestigador. She thus refused to receive the money then and there. What she proposed was for complainant and Siringan to travel with her in a taxi and drop her off at the CA where she would receive the money.

More irony ensued.  Respondent actually said that she felt there were policemen around and she was afraid that once she took hold of the envelope complainant proffered, she would suddenly be arrested and handcuffed. At one point, she even said, "Ayan o, tapos na silang kumain, bakit hindi pa sila umaalis?," referring to Banay and Villena at the next table. To allay respondent’s suspicion, the two agents stood up after a few minutes and went near the staircase where they could still see what was going on.

Complainant, respondent and Siringan negotiated for almost one hour. Complainant and Siringan bargained for a lower price but respondent refused to accede. When respondent finally touched the unsealed envelope to look at the money inside, the PAOCTF agents converged on her and invited her to the Western Police District (WPD) Headquarters at United Nations Avenue for questioning.

On the way to the WPD on board the PAOCTF vehicle, Banay asked respondent why she went to the restaurant. The latter replied that she went there to get the One Million Pesos (P1,000,000.00).

Respondent was brought to the PNP Crime Laboratory at the WPD where she was tested and found positive for ultra-violet powder that was previously dusted on the money.  She was later detained at the WPD Headquarters.

At seven o’clock in the evening of 28 September 2004, respondent called Atty. Lilia Mercedes Encarnacion Gepty (Atty. Gepty), her immediate superior in the CA at the latter’s house. She tearfully confessed to Atty. Gepty that "she asked for money for a case and was entrapped by police officers and the media." Enraged at the news, Atty. Gepty asked why she had done such a thing to which respondent replied, "Wala lang ma’am, sinubukan ko lang baka makalusot." Respondent claimed that she was ashamed of what she did and repented the same.  She also asked for Atty. Gepty’s forgiveness and help. The latter instead reminded respondent of the instances when she and her co-employees at the CA were exhorted during office meetings never to commit such offenses.

Atty. Gepty rendered a verbal report of her conversation with their division’s chairman, Justice Martin S. Villarama.  She reduced the report into writing and submitted the same to then PJ Cancio Garcia on 29 September 2004. She also later testified as to the contents of her report to the Committee.

ISSUE:

Whether or not the text messages are admissible in evidence?

DECISION:

Complainant was able to prove by his testimony in conjunction with the text messages from respondent duly presented before the Committee that the latter asked for One Million Pesos (P1,000,000.00) in exchange for a favorable decision of the former’s pending case with the CA.  The text messages were properly admitted by the Committee since the same are now covered by Section 1(k), Rule 2 of the Rules on Electronic Evidence which provides:

"Ephemeral electronic communication" refers to telephone conversations, text messages . . . and other electronic forms of communication the evidence of which is not recorded or retained."

Under Section 2, Rule 11 of the Rules on Electronic Evidence, "Ephemeral electronic communications shall be proven by the testimony of a person who was a party to the same or who has personal knowledge thereof . . . ." In this case, complainant who was the recipient of said messages and therefore had personal knowledge thereof testified on their contents and import.  Respondent herself admitted that the cellphone number reflected in complainant’s cellphone from which the messages originated was hers. Moreover, any doubt respondent may have had as to the admissibility of the text messages had been laid to rest when she and her counsel signed and attested to the veracity of the text messages between her and complainant. It is also well to remember that in administrative cases, technical rules of procedure and evidence are not strictly applied. We have no doubt as to the probative value of the text messages as evidence in determining the guilt or lack thereof of respondent in this case.